Registrar of Co-Operative Societies not empowered to decide the question as to tenability of the suit

Supreme Court: In a case where a Company was refused permission to continue the suit filed by it before the City Civil Court, Ahmedabad by the Registrar of Co-operative Societies on the ground that the suit is not tenable because notice of its institution required by Section 167 of the Gujarat Co-operative Societies Act, 1961, the question that came before the Court for consideration was whether the Registrar, while considering whether leave should be granted can hold that the suit itself is not tenable for want of notice.

The bench of S.A. Bobde and Amitava Roy, JJ took note of Section 112 of the Act that bars a Civil Court from taking cognizance of any matter connected with winding up of a society. It further confers the power on the Registrar to grant or refuse leave to institute a suit against such society or the liquidator where a winding up order has been made against the society. Deciding the scope of the Registrar’s power, it was said that such power is conferred on the Registrar to consider whether a suit should be filed against a society which is under liquidation. It was held that the Registrar is not concerned with the merits or the tenability of the suit which is, in any case not before him, and indeed cannot be because such a suit can only be tried and conclusively decided by a Civil Court. It is the Civil Court which can alone decide whether the suit is triable and tenable.

The Court hence held that there is no doubt that a question whether a suit is tenable under Section 167 of the Co-operative Societies Act for want of notice under the said provision is a question within the exclusive competence of a Civil Court, as indeed all questions of tenability are. [M.K. Indrajeet Sinhji Cotton P. Ltd. v. Narmada Cotto Coop. SPG. Mills LD., 2016 SCC OnLine SC 360decided on 26.04.2016]

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