M. K. INDRAJEET SINHJI COTTON P.LTD. versus NARMADA COTTON COOP. SPG. MILLS LTD. & ORS.

Citation: [2016] 2 S.C.R. 357 · Decided: 26-04-2016 · Supreme Court of India · Bench: S.A. BOBDE · Disposal: Appeal(s) allowed

Judgment (excerpt)

' -
[2016] 2 S.C.R. 357 
M. K. INDRAJEET SINHJI COTTON P.LTD. 
v. 
NARMADA COTTON COOP. SPG. MILLS LTD. & ORS. 
' 
(Civil Appeal No. 766of2016) 
APRIL 26, 2016 
[S. A. BOBDE AND AMITAVA ROY, JJ.] 
Gujarat Co-operative Societies Act, 1961 - ss.112 and 167 -
Whether the Registrar, Cooperative Societies, in exercise of its power 
uls 112, can decide the tenability of a suit filed before civil court on 
the ground of non-issuance of notice uls 167 - Held: Decision as 
to tenability of a suit is judicial in nature -Such decision is purely 
within the jurisdiction and competence of the civil court and outside 
the scope of Registrars power - In the present case, order of 
Registrar deciding about the tenability ·of the suit is without 
jurisdiction. 
Allowing the appeal, the Court 
HELD: 1. Section 167 of Gujarat Co-operative Societies 
Act, 1961 is preceded by Section 166 of the Act which bars the 
jurisdiction of Courts in any matter concerned with the winding 
up and dissolution of the Society, vide Section 166 (l)(c). The 
clear intention of the legislature is to bar a civil court from 
entertaining any matter concerned with the winding up and 
dissolution of the society. In order to give effect to this provision, 
the legislature has enacted Section 167 which makes it mandatory 
for a plaintiff who intends to institute a suit against a society or 
any of its officers in respect of an act touching the business of the 
society to give a clear notice of bis intention to sue. The Section 
prohibits a plaintiff from instituting a suit until the expiration of 
two months after notice in writing bas been delivered to the 
Registrar. The question whether Section 167 is attracted to a 
particular suit or not depends upon an inquiry into the nature of 
the suit, in particular whether it affects the business of the society 
and the parties to the suit. Such a decision is obviously within the 
jurisdiction and competence of the civil court where the suit is 
instituted and must therefore be regarded as judicial. [para 9] 
(361-D-G] 
357 
A 
B 
c 
D 
E 
F 
G 
H 
358 
A 
13 
c 
D 
E 
F 
SUPREME COURT REPORTS 
(2016] 2 S.C.R. 
2. Section 112 bars a Civil Court from taking coguizauce of 
any matter connected with winding up of a society. It further 
confer. the power on the Registrar to grant or refuse leave to 
institute a suit against such society or the liquidator where a 
winding up order has been made against the sociely. Such power 
is conferred 011 the Registrar to consider whether a suit should 
be filed against a society which is under liquidation. The obvious 
considerations that must be taken into account are whether the 
suit would have the effect of dissipating the properties or diverting 
the properties of the society in liquidation towards one creditor 
i.e. the plaintiff instead of being equitably distributed amongst 
the whole body of creditors as contemplated by the provisions 
for winding up of the society. The Registrar is not concerned 
with the merits or the tenability of the suit which is, in any case 
not before him, and indeed cannot be because such a snit can 
only be tried and conclusively decided by a Civil Court. Naturally 
it is the Civil Court which can alone decide whether the suit is 
triable and tenable. It would thus be outside the scope of the 
Registrar's power to take into account the factor whether the 
suit is tenable in law or not. The question of tenability being 
judicial is purely within the jurisdiction and competence of the 
court where the suit is pending. Ther~fore, a question whether a 
suit is tenable under Section 167 of the Co-operative Societies 
Act for want of notice under the said provision is a question within 
the exclusive competence of a Civil Court. In the present case 
the Registrar having refused leave to continue the suit on the 
ground that the suit pending before the Court is not preceded by 
a notice under Section 167 of the Act has acted without 
jurisdiction. (paras 11 and 12] (362-B-F, H; 363-A( 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 766 of 
2016 
From the Judgment and Order dated 24.02.2011 of the Division 
G 
Bench of the High Court of Gujarati t Ahmedabad in Letters Patent 
Appeal No. I 065 of20 I 0 
Abhijat P. Medh, Rauf Rahim, Poulami Das, Advs., for the 
Appellant. 
Ms. Hemantika Wahi. Ms. Jesal Wahi, Shiv Man gal Shanna, Vivek 
H 
R. Mohanty,Ankit Shah, Puneet Parihar, Ms. Sharmila Upadhyay,Advs., 
M. K. INDRAJEET SINHJI COTTON P. LTD. v. NARMADA 

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