Calcutta High Court (Appellete Side)
Member Secretary & Project Director vs The West Bengal State Co-Operative … on 11 April, 2025
Author: Debangsu Basak
Bench: Debangsu Basak
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IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Appellate Side
Present:
The Hon'ble Justice Debangsu Basak
And
The Hon'ble Justice Md. Shabbar Rashidi
MAT 1574 of 2024
IA NO: CAN 1 OF 2024
IA NO: CAN 2 OF 2024
Member Secretary & Project Director, Sunderban Development Board
Vs.
The West Bengal State Co-operative Marketing Federation Ltd. & Ors.
For the Appellant : Mr. Pradip Kumar Roy, Sr. Adv.
Mr. Partha Sarathi Pal, Adv.
For the Respondent Nos. 1 : Mr. Malay Kr. Roy, Adv.
and 2
For the Respondent No. 4 : Mr. Srijan Nayak, Adv.
Mr. Ankit Sureka, Adv.
Mr. Biplab Das, Adv.
For GAHN : Mr. Sukanta Chakraborty, Adv.
Mr. Anindya Halder, Adv.
Hearing Concluded on : February 12, 2025
Judgement on : April 11, 2025
DEBANGSU BASAK, J.:-
1. Appellant has assailed an order dated April 10, 2024
passed in WPA 12905 of 2019 by which, learned Single Judge,
directed the appellant to make payment of a sum of Rs. 20,66,
315/- to West Bengal State Co-operative Marketing Federation
Limited (BENFED) within four weeks. Learned Single Judge has
subha
karmakar allowed BENFED to realise its margin and to make payment within
Digitally signed by
subha karmakar
Date: 2025.04.11
12:38:58 +05’30’
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a fortnight thereafter to Global Agri Horti Nursery (GAHN). Learned
Single Judge has also directed payment of interest.
2. Learned Senior Advocate appearing for the appellant has
contended that, the appellant challenged the order of the Co-
operative Appellate Tribunal dated August 16, 2018 affirming the
award dated March 8, 2016 passed Dispute Case No. 11/RCS of
2012 by the Registrar Co-operative Societies by way of a writ
petition being WPA 8995 of 2019 which was dismissed for default.
BENFED had also filed a writ petition being WPA 12905 of 2019
challenging the same order dated August 16, 2018 of the Co-
operative Tribunal in which the impugned order was passed. He
has submitted that, application for restoration as well as an
application for condonation of delay are pending in WPA 8995 of
2019.
3. Learned Senior Advocate appearing for the appellant has
submitted that, a writ petition directed against an order of the
Tribunal is not maintainable as neither a judicial order nor a
quasi-judicial order is amenable under Article 226 of the
Constitution of India.
4. Referring to the merits of the case, learned Senior Advocate
appearing for the appellant has contended that, a work order was
issued by BENFED to GAHN on December 28, 2001 for supply of
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Moog seeds. GAHN had submitted two bills with BENFED for
payment on January 14, 2002 and January 15, 2002. Alleging
that, BENFED had not made payment of the supplies GAHN raised
a dispute under the West Bengal Co-operative Societies Act, 2006
being Dispute Case No. 11/RCS of 2012 in which, the appellant
was made a party.
5. Learned Senior Advocate appearing for the appellant has
contended that, there is no privity of contract between his client
and GAHN. He has referred to the definition of ‘dispute’ appearing
in Section 4 (25) of the Act of 2006 and contended that, claimant
in the dispute case being GAHN is not a person having a
transaction with the appellant for a dispute case to be raised
within the parameters of the Act of 2006. He has also referred to
Section 102 (1) (d) of the Act of 2006 in this regard. He has
contended that, a dispute case under the Act of 2006 can be
initiated by against a co-operative society provided there exists a
transactional relationship between the parties. He has pointed out
that, appellant is not a co-operative society and did not have any
contractual dealings with GAHN that would warrant invocation of
the Act of 2006. Consequently, since no dispute case would be
raised validly, as against the appellant, the award that has been
passed in such dispute case is void ab initio.
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6. Learned Senior Advocate appearing for the appellant has
contended that, the claim of GAHN is barred by limitation. He has
contended that, the alleged cause of action arose in 2002 when
GAHN had supplied the consignment and submitted its bills in
2002 itself. He has pointed out that the dispute case was filed in
2012 well outside the prescribed period of limitation.
7. Learned Senior Advocate appearing for the appellant has
contended that, the awarded case was not disposed of within the
stipulated period of six months from the date of initiation.
Therefore, according to him, the award passed was also invalid on
such score.
8. Learned Senior Advocate appearing for the appellant has
contended that, the Moog seeds supplied under the agreement
were grossly sub-standard and not conforming to the prescribed
standard quality and were unfit for agricultural use. He has
contended that, his client received widespread complaints from
farmers regarding poor quality seeds which promoted a high level
enquiry by the Agricultural Department. He has referred to a
complaint lodged by small and marginal farmers with regard to the
defective seeds under false certification claims. He has pointed out
that, an independent enquiry was undertaken which established
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the substance of the complaints of sub-standard quantity of the
Moog seeds supplied by GAHN.
9. Learned Senior Advocate has relied upon All India
Reporter 2015 SC 3623 (Jogendrasinhji Vijaysinghji vs. State
of Gujarat), 2015 Volume 5 Supreme Court Cases 423 (Radhey
Shyam and Another vs. Chhabi Nath and Others) and 2003
Volume 6 Supreme Court Cases 675 (Surya Dev Rai vs. Ram
Chander Rai and Others) in support of his contentions.
10. Learned advocate appearing for GAHN has submitted that,
the appeal is not maintainable. He has contended that, the
contentions raised by the appellant are hit by the principles of res
judicata since, the appellant filed another writ petition challenging
the same order of the Tribunal which was dismissed for default on
February 7, 2024. Such writ petition has not been restored till
date.
11. Learned advocate appearing for GAHN has contended that,
a writ of certiorari can be issued against an order passed by an
inferior Tribunal. In support of such contention, he has relied
upon 2023 SCC OnLine SC 996 (Central Council for Research
in Ayurvedic Sciences and Another vs. Bikartan Das and
Others).
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12. On the issue of limitation, learned advocate appearing for
GAHN has contended that, the claim in the disputed case was not
barred by limitation. He has pointed out that, GAHN submitted
two bills dated January 14, 2002 and January 15, 2002
amounting to Rs. 20,66,315.50/-. The Principal Secretary had
issued a letter dated May 24, 2005 to the appellant accepting the
quality of the seed supplied. BENFED had acknowledged the
liability by letters dated December 13, 2007, January 19, 2009,
May 11, 2011 and May 26, 2016. The dispute case had been filed
in 2012 well within the period of limitation.
13. Learned advocate appearing for GAHN has relied upon
Section 52 of the Act of 2006 on the issue of limitation. He has
contended that, the closure of the transaction became complete
once the goods sold undisputedly and the controversy as to supply
of seeds came to an end by virtue of the letter dated May 24, 2005.
According to him, the claim is well within the period of limitation
as extended by Section 18 of the Act of 1963.
14. Learned advocate appearing for GAHN has contended that,
the appellant issued order in favour of BENFED for supply of
67,266.0 Kg Moog seed by a letter dated December 21, 2001 for
delivery to its 22 growth centres. Such work order had specifically
mentioned that BENFED shall procure the seeds from third party
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and that the third party shall send seeds directly to different
growth centres of the appellant. BENFED shall have to forward the
bills of GAHN to the appellant for payment. BENFED on the basis
of the order dated December 21, 2001 of the appellant had issued
further order for supply in favour of GAHN wherein the two orders
of the appellant were specifically mentioned.
15. Learned advocate appearing for GAHN has relied upon
Section 40 of the Indian Contract Act, 1872. He has contended
that, BENFED authorised GAHN to employ third person to perform
the promise of BENFED which GAHN did. Consequently, the
appellant is liable to pay BENFED who in turn should have to pay
GAHN. He has also relied upon Section 70 of the Indian Contract
Act, 1872 and contended that, GAHN did not intend to sell the
good gratuitously. Appellant has utilized the benefits of the moog
seeds supplied and therefore is liable to pay for the same. BENFED
had forwarded two bills dated 14, 2002 and January 15, 2002 of
GAHN to the appellant requesting for release of payment as GAHN
had never intended to supply the moog seeds gratuitously.
16. Learned advocate appearing for GAHN has relied upon
2022 Volume 8 Supreme Court Cases 42 (ONGC Ltd. vs.
Discovery Enterprises (P) Ltd.), 2024 Volume 4 Supreme Court
Cases 1 (Cox & Kings Ltd. Vs. SAP India (P) Ltd.) and 2013
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Volume 1 Supreme Court Cases 641 (Chloro Controls India
Private Limited vs. Severn Trent Water Purification Inc. and
Others) on the issue that the appellant is both a necessary and
proper party in the arbitration proceedings.
17. Learned advocate appearing for GAHN has contended that,
any claim against third parties can be adjudicated upon by the
Registrar under the provisions of Section 102 of the West Bengal
Co-operative Societies Act, 2006. In this regard, he has drawn the
attention of the Court to the provisions of Section 102 of the Act of
2006 as also the ratio laid down in Discovery Enterprises (P) Ltd.
(supra) and 2023 SCC OnLine Cal 5713 (Vikram Constructions
vs. Anustup Co-operative Housing Society Ltd.).
18. Learned advocate appearing for GAHN has contended that,
High Court can modify the award passed in a dispute case while
disposing of a mandamus appeal. In support of his contention he
has relied upon Order 41 Rule 33 of the Code of Civil Procedure,
1908, and Rule 53 of Rules of the High Court relating to the
application under Article 226 of the Constitution of India.
19. Learned advocate appearing for BENFED has submitted
that, the order of the Co-operative Tribunal dealing with an order
of the Registrar acting under the Act of 2006 is amenable to writ
jurisdiction. In support of such contention, he has relied upon
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2017 SCC OnLine Cal 10207 (Haji Hanif Hakam vs. Debt
Recovery Appellate Tribunal at Kolkata & Ors.).
20. Learned advocate appearing for BENFED has relied upon
AIR 1967 Calcutta 310 (Union of India vs. Lal Chand and
Sons) and AIR 1962 Supreme Court 779 (State of West Bengal
vs. M/s B. K. Mondal and Sons) on the applicability of Section 70
of the Contract Act.
21. Appellant had issued a work order in favour of BENFED for
the purpose of procuring moog seeds. BENFED had engaged GAHN
for the purpose of supply thereof. GAHN has claimed that it duly
supplied such moog seeds to BENFED and submitted bills with
BENFED for payment. Both BENFED and GAHN has contended
that BENFED forwarded such bills of GAHN to the appellant for
payment and that, appellant did not pay the same.
22. So far as the status of the appellant is concerned, it has
been admitted at the bar and also independent of that, appellant is
not a co-operative society while BENFED is one.
23. GAHN has raised disputes with regard to the supply of
moog seeds to BENFED and the appellant before the Registrar, Co-
operative Society, under the provisions of the Act of 2006. Parties
have referred to various provisions of the Act of 2006 which
provide for resolution of disputes within the framework thereof.
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The relevant provisions are Section 4 (25) and 102 which are as
follows:-
“4 (25) “dispute” means any matter capable of being the
subject of civil litigation, and includes a claim in respect of any
sum payable to or by a co-operative society”
“102. Disputes to be filed before Registrar.- (1) Any dispute
concerning the management or business or affairs of a co-
operative society other than the dispute relating to election in a
co-operative society as and when such election is conducted by
the Co-operative Election Commission and disciplinary action
taken by co-operative society against its paid employees
regarding the terms and conditions of the service shall be filed
before the Registrar for settlement if it arises-
(a) Among members, past members and persons claiming
through members and deceased members or then sureties: or
(b) Between member, past member or a person claiming
through a member, past member or deceased member
representing through heirs or legal representatives and the co-
operative society, its board or any officer, agent or employees of
the co-operative society or liquidator, past or present; or
(c) Between the co-operative society or its board and any
past board, any officer, agent or employee or any past officer,
past agent; or past employee or the nominee, heirs or legal
representatives of any deceased officer or deceased employee of
the co-operative society; or
(d) Between two co-operative societies or between a co-
operative society and a liquidator of another co-operative or
between liquidator of two different co-operatives or between a co-
operative society and any person having transaction with it or
between a co-operative society and its financing bank.
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(2) Any dispute mentioned in sub-section (1) other than a
dispute relating to recovery of money shall be filed before the
Registrar within three months from the date on which the cause
of action arises.
(3) Notwithstanding anything contained in this section or in
any other law for the time being inforce, the Registrar may admit
any dispute after the expiry of the period of limitation provided in
sub-section (2), if the applicant can show sufficient cause for not
filing the dispute within such period of limitation and the dispute
so admitted shall not be barred by limitation.
(4) Any civil court or any Consumers’ dispute Redressal Forum
shall not have any jurisdiction to try any dispute as mentioned in
sub-section (1).
(5) Any dispute to be filed before the Registrar shall be made in
writing to be called the plaint and it shall be filed in such manner
and form as may be prescribed.”
24. Section 4 (25) of the Act of 2006 has defined a dispute to
mean any matter capable of being the subject matter of civil
litigation and includes a claim in respect of any sum payable to or
by a co-operative society.
25. Subsection (1) of Section 102 has allowed any dispute
concerning the management or business or affairs of a co-
operative society other than the dispute relating to election in a co-
operative society conducted by the Co-operative Election
Commission and disciplinary action taken by co-operative society
against its paid employee regarding the terms and conditions of
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the service to be filed before the Registrar for settlement if it arises
amongst the persons delineated in sub-section (a) to (d) thereof.
26. Sub-section (2) of Section 102 has laid down a period of
limitation within which, the dispute relating to recovery of money
shall be filed before the Registrar. It has prescribed a period of
limitation of 3 months from the date of which the cause of action
arises.
27. Sub-section (3) of Section 102 of the Act of 2006 has
allowed the Registrar to admit any dispute after the period of
limitation provided in sub-section (2) if the applicant can show
sufficient cause for not filing the dispute within the period of
limitation.
28. Sub-section (4) of Section 102 of the Act of 2006 has
ousted the jurisdiction of Civil Court or any Consumer Dispute
Redressal Forum to try any dispute as mentioned in sub-section
(1) of Section 102 of the Act of 2006.
29. Sub-section (5) of Section 102 of the Act of 2006 has
prescribed the procedure of the filing a dispute before the
Registrar.
30. Admittedly, appellant is not any of the persons delineated
in sub-section 102 (1) (a) to (d) of the Act of 2006. It is an authority
within the meaning of Article 12 of the Constitution of India.
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31. Discovery Enterprises (P) Ltd. (supra) has considered the
provision of the Arbitration and Conciliation Act, 1996. It has
considered the issue as to whether a company within a group of
companies which is not signatory to an arbitration agreement
could nonetheless be bound by it.
32. Admittedly, neither the appellant nor BENFED can be said
to be a company and more certainly, appellant and BENFED
cannot be said to come within “a group of companies”.
33. Chloro Controls India Private Limited (supra) has
considered the applicability of “Group of Companies” doctrine in
an arbitration governed under the Arbitration and Conciliation Act,
1996. It has expressed the view that, the “Group of Companies”
doctrine should be retained in the Indian arbitration jurisprudence
considering its utility in determining the intention of the parties in
the context of complex transaction involving multiple parties and
multiple agreements.
34. Cox & Kings Ltd. (supra) has considered a factual matrix
governed under the Arbitration and Conciliation Act, 1996. It has
considered the definition of parties under Section 2 (1) (h) read
with Section 7 of the Act of 1996. It has expressed the view that,
the definition of parties under the Act of 1996 includes both the
signatory as well as non-signatory parties.
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35. There are fundamental differences between resolution of
dispute through arbitration under the aegis of the Arbitration and
Conciliation Act, 1996 and the resolution of dispute under the
West Bengal Co-operative Societies Act, 2006. Arbitration under
the Act of 1996 is voluntary. It is at the instances at least two
parties, voluntarily agreeing to refer their disputes to arbitration,
in writing. The Act of 2006 mandates a compulsory reference of
disputes delineated in Section 102 (1) between the persons
specified in Section 102 (1) (a) (d) thereof. Sub-section (4) of
Section 102 of the Act of 2006 ousts the jurisdiction of the Civil
Courts and Consumer Disputes Redressal Forum to adjudicate
any dispute mentioned in sub-section (1) of Section 102.
36. It is trite law that, a statutory authority can take such
action as empowered by the statute or not at all. Under Section
102 of the Act of 2006, a dispute falling within the categories of
persons delineated in Section 102 (1) (a) to (d) can be referred to
the Registrar of the Co-operative Society for decision. Registrar
acting under the provisions of the Act of 2006 can decide such
disputes as are permitted under Section 102 and between such
parties as such Section 102 provides.
37. In the present case, GAHN and BENFED comes within the
purview of “any person having transaction with it” as appearing in
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Section 102 (1) (d) of the Act of 2006. As noted above, appellant
before us is not a co-operative society and it did not refer any
dispute to arbitration in respect of any transaction between it and
BENFED. So also BENFED did not refer any dispute between it
and the appellant to the Registrar for decision under Section 102
of the Act of 2006.
38. In our view, the GAHN being a person having transaction
with BENFED, which is a co-operative society, is entitled to
approach the Registrar for settlement of the disputes, in terms of
Section 102 (1) (d) of the Act of 2006 which it did. In such
proceedings therefore, GAHN could not have made the appellant a
party as, appellant does not come within the purview of Section
102 (1) (d) of the Act of 2006.
39. There is no privity of contract between the appellant and
GAHN. There is no jural relationship between the appellant and
GAHN. Issue of Section 40 and Section 70 of the Indian Contract
Act, 1872 could not be decided by the Registrar, Co-operative
Society in view of the appellant not falling within Section 102 (1)
(d) of the Act of 2006 vis-à-vis GAHN and the appellant not being a
co-operative society.
40. Registrar, Co-operative Society acting under the provisions
of the Act of 2006 passed an award against the appellant in a
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proceeding initiated by GAHN which was sought to be
implemented by the Tribunal. Judgment of the Tribunal was
affirmed by the impugned judgment and order.
41. In our view, Registrar did not have jurisdiction over a
proceeding against the appellant before us as the appellant did not
come within the purview of any of the persons delineated under
Section 102 (1) of the Act of 2006. Consequently, its order as
affirmed by the Tribunal and concurred to by the impugned
judgment and order cannot be sustained.
42. Jogendrasinhji Vijaysinghji (supra) has considered the
issue of maintainability of Letters Patent appeals against orders of
the learned single judge exercising jurisdiction under Article 226
and 227 of the Constitution of India. In the facts and
circumstances of the present case, the learned single judge has
exercised jurisdiction under Article 226 of the Constitution of
India.
43. Radhey Shyam and Another (supra) has discussed the
scope of jurisdiction under Article 226 and 227 of the Constitution
of India. It has held that the scope of jurisdiction under Article 227
is distinct from that of Article 226.
44. Surya Dev Rai (supra) has dealt with the effect of
amendment to section 115 of the Code of Civil Procedure, 1908 on
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the jurisdiction of the High Court under Articles 226 and 227 of
the Constitution of India. It has held that such amendment cannot
and does not in any manner affect the jurisdiction under Articles
226 and 227 of the Constitution of India.
45. Central Council for Research in Ayurvedic Sciences
and Another (supra) has explained the meaning nature and scope
of a writ of certiorari under Article 226 of the Constitution of India.
It has held that, a writ of certiorari under Article 226 of the
Constitution of India can be issued against a tribunal to confine
the inferior tribunal within its jurisdiction so as to avoid the
irregular exercise or the non-exercise or the illegal assumption of it
and not to correct errors of finding of fact or interpretation of lock
committed by them in the exercise of powers vested in them under
the statute.
46. In Haji Hanif Hakam (supra) an interim order had been
passed on the grounds that the Debts Recovery Tribunal had
interfered with the possession of a Receiver in respect of
immovable properties, appointed by a civil court.
47. Lal Chand and Sons (supra) and M/s B. K. Mondal and
Sons (supra) have considered the applicability of section 70 of the
Indian Contract Act, 1872 in a suit filed for price of goods sold and
delivered.
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48. In view of the discussions above, impugned judgment and
order to the extent that it directs the appellant to pay any sum to
BENFED, is set aside. Direction on BENFED to pay the GAHN, is
however not interfered with.
49. MAT 1574 of 2024 along with all connected applications
are disposed of without any order as to costs.
[DEBANGSU BASAK, J.]
50. I agree.
[MD. SHABBAR RASHIDI, J.]