J. N. Patel, J.
1. The appellant is the original plaintiff who filed Special Civil Suit No. 164 of 1986 in the Court of Civil Judge, Sr. Dn., Amravati, against defendant No. 1 which is a co-operative society and at the relevant time was under the management of the Administrator. Defendants No. 2 and 3 are the President and Secretary of the Managing Committee whereas defendant No. 4 to 7 are the guarantors and defendant No. 8 is the Registrar, Co-operative Societies.
2. It was the case of the plaintiff that it has to recover Rs. 11,06,937=85 from defendants 1 to 8 and prayed that the Court be pleased to pass a decree for Rs. 11,06,937=85 in favour of the plaintiff rendering defendants 1 to 7 liable jointly and severally with interest at 15% per annum from the date of filing of the suit till realisation and costs. In addition to this, the plaintiff also prayed for ancillary relief in respect of disposal of hypothecated property in case the said proceeds of the stock are found to be insufficient to satisfy the claim of the plaintiff and that the plaintiff be granted leave to execute the decree against defendants 2 to 7 and against the property standing in their names towards the satisfaction of the suit claim.
3. Before the defendants entered their defence, they filed an application raising preliminary objection under Section 107 of the Maharashtra Co-operative Societies Act, 1960 (for short the Societies Act). According to defendant No. 1, the defendant No. 1 is under liquidation as per the orders passed on 02-12-1986 whereas the suit is filed by the plaintiff/bank on 06-12-1986 against the bank and, therefore, it is barred under Section 107 of the Societies Act, The defendant No. 1 also took a plea that no suit can be instituted against the Society or its Member except with the leave of the Registrar as contemplated under Section 163(2) of the Societies Act and, therefore, the suit be dismissed as not tenable for want of jurisdiction. In reply to this, the plaintiff submitted that the provisions of Section 163(2) of the Societies Act are not attracted in this case and there is no bar or obstacle for trial of the suit. According to them, the plaintiff had no notice about such proceedings relating to liquidation or winding up of defendant No. 1/society and, therefore, there was no question for approaching the Registrar for seeking the leave to prosecute defendant No. 1. The plaintiff also took an alternative plea that if at all this Hon'ble Court holds that permission from the Registrar, Co-operative Societies is necessary then in that event the plaintiff be granted time to apply for and obtain such permission and till then the interim applications be heard and decided so as to protect and preserve the property. It was the case of the plaintiff that even if it is accepted that the plaintiff would not be able to prosecute the suit against defendant No. 1 for want of leave of the Registrar, there is no legal impediment in their way to continue their suit against the guarantors who are party-defendants to the suit. Further, the plaintiff also raised the issue of being in a position of secured creditor and in such a contingency even if there are liquidation proceedings, though without admitting the same, still the plaintiff can proceed with the suit and, therefore, they sought that the applications be rejected.
4. On hearing, the trial Court framed preliminary issue, 'whether this Court has jurisdiction to entertain the present suit?' and gave a finding that the suit is not maintainable for want of leave from the Registrar of the Co-operative Societies as the Society has wound up in liquidation on 02-12-1986. Relying on the xerox copy of the order and by referring to the provisions of Section 107 of the Societies Act, the trial Court passed an order on 05-09-1990 that the suit stands rejected for want of jurisdiction. Against this order, the original plaintiff/bank has preferred an appeal.
5. The question which arises before us for consideration is, whether the plaintiff could have been permitted to seek the leave from the Registrar of the Co-operative Societies during the pendency of the suit, as claimed by them. When this preliminary issue was raised and it was brought to the notice of the plaintiff that the original defendant No. 1 is under liquidation and further whether the suit filed without taking the leave from the Registrar could proceed against the remaining defendants for whom there was no such necessity of seeking the leave from the Registrar as they do not enjoy the protection provided under Section 107 of the Societies Act.
6. Mr. Bhangde, learned counsel, for the appellant submitted that in view of the decision of this Court in Vysya Bank Ltd. v. Official Liquidator of Shreeniwas Cotton Mills Ltd. : (1992)94BOMLR303 leave as required under Section 107 of the Societies Act can be granted post facto as the provisions of Section 446 of the Companies Act (1 of 1956) and Section 107 of the Societies Act are pari materia and in the decision rendered in Vysya Bank this Court has held that Section 446 of the Companies Act does not expressly provide for nullification of the proceedings as a consequence of non compliance with the requirement of the section. From the clear and unambiguous language of Section 446, it can be seen that the leave required is not a condition precedent and can be granted post facto. Section 446 cannot be stretched to non-suit a plaintiff whose suit when filed is otherwise within limitation. Bar of limitation is a creature of statute and cannot be imposed or read into an otherwise unambiguous language of Section 446.
7. Mr. Bhangde further submitted that even the plaintiff may suffer legal impediment in prosecuting the suit against defendant No. 1 for want of leave from the Registrar, as contemplated under Section 107 of the Societies Act, this alone would not have been sufficient for the trial Court to reject the plaint so as to deny the plaintiff of its right to prosecute the suit against the remaining defendants who do not enjoy such protection. Therefore, the impugned order is erroneous and without proper application of mind and deserves to be quashed and set aside.
8. Mr. Bhangde further contended that during the pendency of this appeal, the Recovery of Debts due to the Banks and Financial Act, 1993 (for short the Act of 1993) came to be passed and came into effect from 27-8-1993 and to all the suits which were pending in respect of the claim of amount of debts due to any bank or financial institutions, this Act of 1993 would be applicable and in the definition clause in Section 2(d) of the said Act of 1993, bank includes State Bank of India, which is the original plaintiff.
9. According to Mr. Bhangde Section 31 of the Act of 1993 provides for transfer of pending cases and, therefore, the proper course which now can be adopted is that the Civil Court can transfer the suit to the Debts Recovery Tribunal, which is a Tribunal constituted for recovery of debts under the Act of 1993. Therefore, in the aforesaid circumstances, the impugned order deserves to be quashed and set aside and the matter be remanded to the trial Court to enable the appellant to prosecute their suit by granting them opportunity to seek leave of the Registrar under Section 107 of the Societies Act or take recourse to the remedies provided under the Act of 1993.
10. Mrs. Khade, learned A.G.P., for respondents 1 and 9 submitted that insofar as the prosecution of the suit by the appellant/plaintiff against respondent No. 1, who is the original defendant No. 1, is concerned, the plaintiff can be permitted to seek leave of the Registrar subject to the law of limitation. Insofar as other defendants are concerned, i.e. the guarantors, the suit could have proceeded against them as there is no bar to the jurisdiction of the Court to take cognizance of the suit against individuals and, therefore, the trial Court ought not to have rejected the plaint as a whole against all the defendants.
11. Mr. Kasat, learned counsel, appearing for defendants 4 to 8, i.e. the guarantors, submitted that if the suit is not tenable against defendant No. 1 then the plaintiff cannot prosecute the suit against the guarantors on the premise that if the plaintiff is legally prevented from prosecuting the suit against the principle debtor then the guarantors cannot be saddled with the liability under the guarantee executed by them.
12. As regards the contention of the guarantors that the appellant/bank could not have prosecuted the suit against them without claiming it from the principal debtor, i.e. defendant No. 1, it is well settled law that the guarantors alone can be sued even without suing the principal debtor so long as the creditor satisfies the Court that the principal debtor is in default. This is well sum up in the decision rendered by the Supreme Court in State Bank of India v. Indexport Registered and Ors., : AIR1992SC1740 . Therefore, this contention made on behalf of the original defendants No. 4 to 8 cannot be accepted and to that extent we have no hesitation to hold that the trial Court ignored this settled proposition of law and rejected the plaint as a whole even against the guarantors.
13. The contention of the appellant that the trial Court ought to have given them permission to seek leave from the Registrar as contemplated under Section 107 of the Societies Act finds favour with this Court as there was no reason for the trial Court to have outrightly rejected the plaint merely on raising a preliminary issue. The appellant/plaintiff in reply to the application made by original defendant No. 1 have categorically stated that it was only when the preliminary issue came to be raised that they came to know that the order of liquidation has been passed in respect of original defendant No. 1 and therefore they sought the permission of the Court to seek leave of the Registrar under Section 107 of the Societies Act. The trial Court without granting them an opportunity to approach the Registrar, who was also a defendant before the Court, should not have rejected the application and, therefore, we find that the impugned order cannot be sustained in law and deserves to be quashed and set aside.
14. We, therefore, quash and set aside the impugned order. As a consequence of this, the suit would stand restored. We permit the appellant/plaintiff to take appropriate steps, i.e. to apply to the Registrar, Cooperative Societies, to seek leave under Section 107 of the Societies Act to prosecute the suit against defendant No. 1 and/or prosecute the suit against other defendants who do not enjoy protection under Section 107 of the Act or even apply to the Civil Court to get the proceedings transferred to the Debts Recovery Tribunal at Nagpur under Section 31 of the Act of 1993. The appeal is allowed in aforesaid terms. No costs.