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CASE NO.: Appeal (civil)  1892 of 2008

PETITIONER: Uttar Gujarat S.R.V. Sangh Ltd

RESPONDENT: M/s. Mehsana Dist. Cent. Co-op. Bank Ltd & Ors

DATE OF JUDGMENT: 11/03/2008

BENCH: Dr. ARIJIT PASAYAT & C.K. THAKKER & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T

CIVIL APPEAL No.   1892        OF 2008 (Arising out of SLP (C) 1374 OF 2006)

Dr. ARIJIT PASAYAT, J

1.      Leave granted. 2.      Challenge in this appeal is to the order passed by learned  Single Judge of the Gujarat High Court in Special Civil  Application No. 5660 of 1998 and Misc. Civil Application No.  231of 2005.

3.      Background facts as projected by appellant in a nutshell  are as follows: Certain bales of cotton belonging to Respondent No. 3  were pledged with the respondent no. 1. However, the  respondent no. 3 had handed over the said goods to the  respondent no. 2 for ginning. The respondent no. 2 had ginned  the cotton but they were not having any facility of pressing.  Therefore, the said goods were given to Ashoknagar  Cooperative Society. Ashoknagar Cooperative Society had  pressed and made bales and the same were supplied to the  present appellant to be sold in the market. The said goods  were accordingly sold by the appellant after approval was  granted by the respondent no. 1 on the condition that the sale  proceeds of the goods would be paid to the respondent no. 1.  Accordingly the appellant handed a part of the sale proceeds  to the respondent no. 1. For the remaining amount, the  appellant was, about to hand over the said money. In the meantime, Civil Suit No. 1808/1990 was filed by  the respondent no. 3, before the Court of Board of Nominees at  Mehsana against the respondent no. 2, and the present  appellant claiming a sum of Rs. 77,786/- being the sale  proceeds of the goods sold.  In the said suit, Respondent No. 3  obtained an order of injunction against the appellant thus  preventing the appellant from handing over the said amount to  Respondent No. 1.  Similarly, Civil Suit No. 1809 of 1990 was  filed by the respondent No. 1, against the appellant and the  respondent No.3 herein before the Court of Board of Nominees  at Mehsana.  Both the suits were tried together.       Thus the appellant though having money and prepared to  pay the said money to respondent no.1 was prevented from  paying the same by the injunction order obtained by  respondent no.3 against the present appellant. According to  appellant it has no privity of contract with the respondent  no.3. The goods were handed over by Ashok Nagar Cooperative

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Society to the appellant. Therefore, the appellant has nothing  to do with either the respondent no.3 or with the respondent  no.2. Therefore, in both the suits, the appellant did not remain  present. The said suits were decreed by common order dated  18.7.1994 and it was ordered that the amount of Rs.77, 786/-  lying with the appellant be paid to the respondent no.3 with  interest at the rate of 18% per annum. The appellant was thus  saddled with large amount of interest though it was holding  money as per court’s direction only and for no reason of its  own or for any dispute with any of the Respondents.

The aforesaid order of the Court of Board of Nominees  was challenged before the Cooperative Tribunal by way of  Appeal Nos. 243/94 and 216/94. The said appeals were  dismissed by the Cooperative Tribunal by its order dated  31.5.1998 and order of the Court of Board of Nominees was  confirmed. Against the said order of the Cooperative Tribunal,  Respondent no.1 and Respondent no.2 moved Writ Petitions  before the High Court of Gujarat. In the said Writ Petition,  even though the appellant was impleaded as a party  respondent, it was not served with notice and therefore the  appellant could not remain present at the time of hearing of  the Writ Petitions.  Both the Writ Petitions  were heard and   dismissed by a Single Judge of the High Court of Gujarat by  order dated 2.12.2004.

Thereafter the appellant filed a review application in the  High Court of Gujrat bearing No. Misc. Civil Application  (Stamp No. 231/2005) interalia on the ground that no notice  was served and hence no opportunity of hearing was given to  it. The said review application was dismissed by the present  impugned order dated 13.5.2005 on the ground that no  ’adverse order’ was passed against the appellant.  

       After the review petition was dismissed Respondent No. 3  filed execution proceedings in the Small Causes Court,  Ahmedabad, being Darkhast No. 378 of 2005 and obtained ex  parte garnishee orders against the appellant. The appellant’s  account in Respondent No. 1 Bank was seized.

4.      Learned counsel for the appellant submitted that the  High Court proceeded on erroneous premises.  In the special  Civil application appellant was impleaded as respondent No. 2,  but no notice was issued to it.

5.      In para 4 of the Order it was observed as follows: "I have heard learned counsel for the  parties and perused the relevant documents  on record.  The Board of Nominees Court, after  hearing the advocates for the parties, passed a  decree by which an amount of Rs.77,786/-  was ordered to be recovered from defendant  No. 2 and the order below Exh. 6 was  confirmed.  The Tribunal has rightly upheld  the order passed by the Board of Nominees  Court.  Mehsana, as is clear from the  reasonings given by it in para 12 of its order, I  find no infirmity in the orders  passed by the  Board of Nominees Court and the Tribunal,  since the same are just and proper and do not  require any interference from this Court in this  petition.  Hence, the petitions are required to  be dismissed."

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6.      The Board of Nominees of Cooperative Societies at  Ahmedabad, in Case No. LVD/2629/82.93292 dated  15.10.1982, directed as follows: "From Amongst that amount the  defendant No. 1 is hereby restrained from  recovering any amount from the balance  amount of Rs.77,786.82 which remains  after deducting the amount of  Rs.60,604.76 from the total price which  is to be recovered by the defendant No. 1  from the plaintiff and the defendant No. 2  is also restrained from giving or making  give the said amount to the defendant No.  1 and such order of interim injunction is  being passed against the defendant Nos.  1 and 2."

7.      In the Revision Petition the High Court noted as if the  appellant was to receive some money from Respondent No. 1.   The case of the respondents was to the contrary.

8.      There is no appearance on behalf of the respondents Nos.  1 and 2 in spite of notice.

9.      It needs to be noted that pursuant to the order of  restraint passed by the Board of Nominees, Ahmedabad  Division as quoted above, the defendant No. 2 i.e. present  appellant was restrained from giving or making payment to  defendant No.1.  Though appellant was a party i.e. respondent  No. 2 in the Special Civil Application, the matter was disposed  of without hearing the appellant.  In the Review Application  the learned Single Judge of the High Court proceeded on  entirely erroneous premises.  The ultimate result is that the  appellant, without getting an opportunity of being heard  and/or presenting its case has been saddled with the liability.

10.     We, therefore, set aside the impugned order and remit  the matter to the High Court for fresh disposal in accordance  with law.

11.     The appeal is allowed with no order as to costs.