Gujarat S.R. V. Sangh Ltd Vs. M/S. Mehsana Dist. Cent. Co-Op. Bank Ltd & Ors
 INSC 419 (11 March 2008)
Dr. ARIJIT PASAYAT & C.K. THAKKER & LOKESHWAR SINGH PANTA 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 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
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
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
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."
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.