M.S. Ratnaparkhi, J.
1. The order passed by the Joint Civil Judge, Senior Division, Akola on February 28, 1984 recording the finding on the preliminary issue that the suit is maintainable, in spite of the non-issuance of notice under Section 164 of the Maharashtra Co-operative Societies Act, has been challenged in this revision.
2. The respondent No. 1 -- State Bank of India, instituted Special Civil Suit No. 20/71 before the Civil Judge, Senior Division, Akola for recovery of Rs. 1,00,000/- and odd against the petitioners and respondent Nos. 2 to 7. The petitioner No. 1 is a Society registered under the Maharashtra Co-operative Societies Act, carrying out its business at Akola. A defence has been raised by the contesting defendants that no suit can be instituted against the Society for any act touching the business of the Society without a notice contemplated under Section 164 of Maharashtra Co-operative Societies Act. The plaintiff did allege that he had issued a notice contemplated under Section 164 of the said Act. Both these issues were treated as preliminary issues. The trial Court held that no notice under Section 164 of the Act was served. It further recorded a finding that though the notice under Section 164 of the Maharashtra Co-operative Societies Act was not served, still the suit is quite maintainable. This finding has been challenged before this Court in this revision.
3. Mr. Chandurkar, the learned advocate for the petitioner strenuously contended before me, that the trial Court has committed an error of law in recording a finding that the suit is maintainable in spite of the non-service of notice contemplated under Section 164 of the Co-operative Societies Act. According to Mr. Chandurkar, the loan was advanced by the Bank in favour of the Society and its office bearers and members for the purpose of the business of the Society, and therefore, the notice under Section 164 of the Maharashtra Co-operative Societies Act was a must, and as a result the suit has to be thrown away as not maintainable for want of notice.
4. It is an admitted position that the defendant Society is registered under the Co-operative Societies Act and the objects of the Society have been well denned by the Bye-laws. In paragraph 6 of the impugned order, the objects of the Society as are evidenced from the Bye-laws have been reproduced as follows:
The object of the society is to implement and speed up, economically and efficiently, the mechanically propelled agro-production in the area of its operation to achieve the promotion of the economic interests and general welfare of its members and of the public in accordance with Co-operative principles.
The details of the business to be carried by the Society are detailed in Chapter II of the Bye-laws and the relevant are:
(a) to lender, on payment in share of daily-hire or contract basis, by the customer to the society, the service to him of the types, namely ploughing, seeding, harrowing, winnowing and of all other agro-operations and of the drilling rig, compressor blasting unit and aerial spraying by means of machinery required there for;
(b) To effect, on payment by the customer to society, the speedy and efficient repair of every kind of agro-machinery indigeneous and imported in two ways, one being to effect repairs at Head Quarters of the Society and the other being to extend the work of repairs throughout the area of operation of the society by means of 'Repairs on wheels' in the shape of the mobile units, equipped there for.
(other purposes are not relevant for the present controversy.). Mr. Chandurkar, therefore, urged strongly before me that the main object, as revealed from the Bye-laws, was to implement and speed up economically and efficiently the mechanically propelled agro-production in the area of operation of the Society, and to render on payment basis by the customer, service to him in agricultural operations.
5. According to Mr. Chandurkar, for effectively rendering the service to its customers as proposed by the bye-laws, the Society was required to have some infrastructure viz. the tractors and such other mechanical devices which could help in the rendition of service. For these purposes an advance was taken from the Bank. Term No. 5 of the agreement entered into between the Bank on the one hand and the Society on the other reads:
The borrower shall utilize the monies advanced by the Bank under the agreement exclusively for the purpose of purchasing the said vessels specified in Schedule I hereto annexed to be used in the borrower's said business.
6. There is no dispute at this stage that from the amount advanced by the Bank, 4 Bolger tractors. Model 30-a and some other implements were purchased. This factual position is more or less undisputed. On the background of this factual position. Mr. Chandurkar, the learned advocate for the petitioner strenuously urged before me that advance was taken from the Bank for the purpose of its business which was permissible under the Bye-laws, and therefore, this act of lending the money touches the business of Society and as such the notice under Section 164 of the Maharashtra Co-operative Societies Act was a must and in the absence of such notice, the suit cannot be maintainable. This was in short the argument. On the other hand, it was strenuously contended by Mr. Modak, the learned advocate for the respondent No. 1 that the advancement of the amount though for the purpose of the business of the Society does not necessarily touch, the business of the Society and as such no notice was necessary. The main point that involves in this revision is, therefore, the meaning of the term ''an act touching the business of the society.'
7. There is difficulty in accepting the argument of Mr. Chandurkar, that the amount was advanced for the purpose of enabling the society to carry on its business permissible under the Bye-laws. The real controversy is, whether the money advanced, for the purpose of enabling the Society to carry out the business is itself an act touching the business of the Society.
8. This term has been used in two sections, viz. Section 91 and 164 of the Maharashtra Co-operative Societies Act. Section 91A(7) enumerates those disputes which the Registrar is obliged to refer to the Co-operative Court for decision. These disputes assume particular character, inasmuch as they are:
(i) Disputes touching the constitution;
(ii) Disputes touching the elections of the Committee or its officers other than the election Committees of the specified societies including its business;
(iii) Disputes touching the conduct of general meeting;
(iv) Disputes touching the management or business of the Society. Only such categories of disputes are required to be referred to the Co-operative Court for decision by the Registrar, in case other requirements in Sub-clause (a), (b), (c), (d) and (e) are complied with, though Section 164 also refers to 'any act touching the business of the society'. H the dispute comes within this category, then a notice under Section 164 is a must and no suit can be instituted without such notice.
9. Thus, the terms that arc used in Section 91(1) and 164 of the Maharashtra Cooperative Societies Act, are same as far as the context is concerned. This court had occasions to interpret these terms many times. While construing the provisions of Section 54 of the Bombay Co-operative Societies Act, 1925, the Full Bench of this Court in Farkhundali v. V.B. Potdar : AIR1962Bom162 :
The nature of business, which a society does, is to be ascertained from the objects of the society. But whatever the society does or is necessarily required to do for the purpose of carrying out its objects can be said to be part of its business. The word 'touching' is also very wide and would include any matter which relates to, concerns or affects the business of the society.
10. To clarify the position, these observations came to be made on the background of Section 54 of the Bombay Co-operative Societies Act as it stood then. Section 54(1) read as follows:
If any dispute touching the constitution or business of society arises between members or past members of the society or persons claiming through a member or past member or between members or past members or persons so claiming and any officer, agent or servant of the society past or present or between the society or its committee, and any officer, agent, member or servant of the society past or present, it shall be referred to the Registrar for decision by himself or his nominee.' In fact the dispute in that litigation also centered round the connotation of the term 'touching the business of the Society'. Thus, though the statutes may be different and wordings may be different, the term used in all Statutes carries the similar connotation.
The Full Bench of this High Court in Farkhundali v. V.B. Potdar (cited supra), laid down a very liberal construction, inasmuch as it was observed that whatever the Society does or is necessarily required to do for the purpose of carrying out its object, can be said to be a part of its business. The word 'touching' is also very wide and would include any matter which relates to, concerns or affects the business of the Society. The view of this Court was that anything which affects the business of the Society would also come within the meaning of 'business of the society.
11. This interpretation was not approved by the Supreme Court in Deccan Merchants Co-operative Bank Ltd. v. Dalichand Jugraj Jain [1970] Mh. L.J. 418 While commenting upon the observation of the Full Bench of this Court (cited supra), the Supreme Court in para 20 of their judgment observed [at p. 424 of 72 Bom. L.R. 418]:
While we agree that the nature of business which a society does can be ascertained from the objects of the society it is difficult to subscribe to the proposition that whatever 'he society does or is necessarily required to do for the purpose of carrying out its objects can. be said to be part of its business. We, however, agree that the word 'touching' is very wide and would include any matter which relates to or concerns the business of a society, but we are doubtful whether the word 'affects' should also be used in defining the scope of the word 'touching.
12. The Supreme Court, therefore, did not agree with a very liberal and wide construction put by the Full Bench of this Court. It only agreed with the part of that construction and expressed doubts regarding the others. The points of agreement were:
(i) That the nature of the business which the society does can be ascertained from the objects of the society; and
(ii) That the word 'touching' is very wide and would include any matter which relates to or concerns the business of the society.
The points of disagreement were.:
(i) The proposition that whatever the society does or is necessarily required to do for the purpose of carrying out its object can be said to be the part of the business;
(ii) The word 'affects' should not be used in defining the scope of the word 'touching'.
13. The sum and substance of what the Supreme Court has observed in Deccan Merchants Co-operative Bank Ltd. v. Dalichand (cited supra) is that anything that the society does or is necessarily required to do for the purpose of carrying out its objects need not necessarily be a part of the business of the Society and secondly, though the term ''touching' is wide, it would only include those matters which relate to or concern, the business of the society.
14. Thus, the construction of the term shall have to be within the parameters laid down by the Supreme Court in the above mentioned rule. We have now to examine whether the dispute as it stands, come within the parameters laid down by the Supreme Court.
15. Admittedly the business of the petitioner is to render service to their members and to the society at large with the help of the mechanical devices. The service to be rendered is in agriculture. An infra-structure was necessary for carrying out these businesses of the society. This infra-structure, in view of what the Supreme Court has held above, need not necessarily be the part of the business, nor it would touch the business of the Society. It is for this infrastructure that the Bank has advanced the loan and the loan was agreed to be utilised by the Society for the purpose of getting its infra-structure. The bald question that arises for decision of this controversy is, whether this infra structure in itself would be touching the business of the Society. In view of the construction put by the Supreme Court in para 20 of the judgment, it would be very difficult to accept the arguments of Mr. Chandurkar that this infra structure itself touches the business of the Society. In fact the business of the society starts or commences after the infra structure is in existence. Pre-infra structure act would not, therefore, become the part of the business of the Society which is to commence only after the infra structure is complete. That is why the Supreme Court found itself unable to agree with the view expressed by the Full Bench of this Court that any act which affects the business of the Society would be included in the act 'touching the business of the society'.
16. Looked from this angle, everything becomes crystalised. The amount has been advanced by the State Bank of India to the Society for the purpose of purchasing the tractors and some machinery which was required by the Society petitioner for carrying out its business. The liability which was created before the infra structure could be erected. This was a simple liability which the Society took upon itself in view of a contract of loan. There is no direct relationship of taking the debt with the business of the society in the real sense of the term. Therefore this act of borrowing the money from the Bank does not become an act touching the business of the society. Mr. Chandurkar, the learned advocate for the respondent invited my attention to the ratio laid down in Mohan Meakin Ltd. v. The Pravara Sahakari Sakhar Ktarkhana Ltd : (1987)89BOMLR356 . The ratio laid down in that case was that, when the act on which the suit is based touches the business of the Society, then the notice under Section 164 of the Cooperative Societies Act is a must and no suit can proceed in the absence of the notice. In fact nobody disputes that proposition, because that is the requirement of the Statute itself and no interpretation is required of that. The real question is, whether the act which becomes a basis of the litigation touches the business of the society. In the reported ruling a Sugar factory started a distillery. The distillation was taken to be the bye-product of the molasses and it was held as an allied business. There was no dispute as far as the factual position was concerned. It is on this background that the Court held that the 'act touches the business of the Society'. I have doubts regarding the applicability of this ratio in the present case. Similarly, the ratio laid down C.F. Marconi v. Madhav Co-operative Housing Society Ltd. : 1985(2)BomCR357 does not render any help as far as the present litigation is concerned.
17. The trial Court has correctly appreciated this controversy. It has also ably appreciated the ratio laid down in Deccan Merchants Co-op. Bank Ltd. v. Dalkhand and it has correctly come to the conclusion that the act on which the suit is based, does not touch the business of the Society. The conclusion of the trial Court that a notice contemplated under Section 164 of the Maharashtra Co-operative Societies Act is not a must in the present case, is correct.
18. The trial Court has recorded the finding that, alternatively, that the suit is not instituted only against the Society, but also against its members, and therefore, as far as the members are concerned, no notice is necessary and the whole suit does not become not maintainable. This proposition gets support from the ratio laid down in M.G. Tipnis v. Union of India : AIR1970MP5 . However, in view of the fact that the act on which the suit is based, does not touch the business of the society, no other finding is necessary.
19. The trial Court has rightly held that the notice is not necessary and the suit is maintainable. The order passed by the trial Court is quite correct and it needs no interference at the hands of this Court, with the result that the revision deserves to be dismissed and is accordingly dismissed. Rule is discharged. The record shall be sent to the trial Court immediately. The trial Court is directed to proceed with the matter and dispose it of according to law. There shall be no orders as to costs.