UTTAR GUJARAT S.R.V. SANGH LTD.versusM/S. MEHSANA DIST. CENT. CO-OP. BANK LTD. & ORS.

                         [2008] 4 S.C.R. 760
                                                                     •
A             UTTAR GUJARAT S.R.V. SANGH LTD.
                                  V.
    M/S. MEHSANA DIST. CENT. CO-OP. BANK LTD. & ORS.
              (Civil Appeal No. 1892 of 2008)
                         MARCH 11, 2008
B
          [DR. ARIJIT PASAYAT, C.K. THAKKER AND
               LOKESHWAR SINGH PANTA, JJ.]

        Principles of natural justice - Opportunity of hearing -
c Denial of - Pursuant to injunction order obtained by
  respondent no.3, appellant was restrained from making
  payment to respondent No. 1 - Thereafter Court of Nominees
  passed decree ordering appellant to make payment to
  respondent no.3 with interest@ 18% p.a. - Writ petition by
  respondent no. 1 and 2 wherein though appellant impleaded
0
  but not served with notice - Writ petition dismissed - Review
  also dismissed on the ground that no adverse order was
  passed against appellant - On appeal, held: Though appellant
  was party in Writ petition, matter was disposed of without
  hearing appellant - In Review Application, High Court
E proceeded on entirely erroneous premises - Since appellant,
  without getting an opportunity of being heard and/or presenting
  its case has been saddled with the liability, matter is remitted
  to High Court for fresh disposal.
F      Certain bales of cotton belonging to the respondent
  no. 3 were pledged with the respondent no. 1. However,
  the respondent no. 3 handed over the said goods to the
  respondent no. 2 for ginning. The respondent no. 2 ginned
  the cotton and gave these goods to a Cooperative Society
G for pressing and making bales which were then supplied
  to the appellant for sale in market. The goods were
  accordingly sold by the appellant after obtaining approval
  from the respondent no. 1 on the condition that the sale
  proceeds of the goods would be paid to the respondent

H                                760
      UTTAR GUJARAT S.R.V. SANGH LTD. v. M/S. MEHSANA        761
           DIST. CENT. CO-OP. BANK LTD. & ORS .
..
      no.1. Accordingly the appellant handed a part of the sale     A
      proceeds to the respondent no. 1. The appellant was,
      about to hand over the remaining money. Meanwhile the
      respondent no. 3 filed a suit before the Court of Board of
      Nominees against the respondent no. 2, and the appellant
      claiming Rs. 77,786/-being the sale proceeds of the goods     B
      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 another suit was filed by the
      respondent No. 1, against the appellant and the               c
      respondent No.3 before the Court of Board of Nominees.
      Both the suits were tried together.
           By common order, the Court of Board of nominees
      ordered that the amount of Rs.77, 786/- lying with the
      appellant be paid to the respondent no.3 with interest at D
·-<
      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.                                              E
            Respondent no.1 and Respondent no.2 filed Writ
      Petitions before the High Court. 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 did not remain present at the lime of hearing   F
      of the Writ Petitions. Both the Writ Petitions were heard
      and dismissed.
          Appellant filed review application which was
      dismissed on the ground that no 'adverse order' was           G·
      passed against the appellant. Hence the present appeal.
          Allowing the appeal and remitting the matter to High
      Court, the Court
           HELD: Pursuant to the order of restraint passed by
                                                                    H
    762       SUPREME COURT REPORTS                 [2008] 4 S.C.R.


A   tile Board of Nominees, the appellant was restrained from
    gi•ting or making payment to respondent No.1. Though
    appellant was a party in the Special Civil Application, the
    matter was disposed of without hearing the appellant. hi
    the neview Application the High Court proceeded on
B   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. [Para 9] [765-F, G, H; 766-A]
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
C   1892 of 2008 ·
         From the final Judgment and Order dated 13.05.2005 of
    the High Court of Gujarat at Ahmedabad in Misc. Civil
    Application (Stamp Number) No. 231of2005
D         MahendraAnand, Rajan Narain, fortheAppellant.
          Sarla Chandra for the Respondents.
          The Judgment of the Court was delivered by
E         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.
    231 of 2005.
F
         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
G 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. Asnoknagar Cooperative Society had
H pressed and made bales and the same were supplied to the
  (
____,._
          .,
   "'
                UTTAR GUJARAT S.R.V. SANGH LTD. v. MIS. MEHSANA              763
                DIST. CENT. CO-OP. BANK LTD. & ORS. [PASAYAT, J.]
          ~

                present appellant to be sold in the market. The said g.oods were    A
                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 tt:ie 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,      8
                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            c
                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        D
          _.,   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      E
                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
          y
                appellant. Therefore, the appellant has nothing to do with either
                the respondent no.3 or with the respondent no.2. Therefore, in      F
                both the suits, the appellant did not remain present.
                      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
                                                                                    G
                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          H
    764       SUPREME COURT REPORTS                  [2008] 4 S.C.R.


A 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,
B 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
C Writ Petitions. Both the Writ Petitions were heard and dismissed
  by a Single Judge of the High Court of Gujarat by order dated
  2.12.2004.
       Thereafter the appellant filed a review appl.ication in the
  High Court of Gujrat bearing No. Misc. Civil Application (Stamp
D 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 the appellant.
E      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.
F
         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.
G         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
H
UTTAR GUJARAT S.R.V. SANGH LTD. v. MIS. MEHSANA                765
DIST. CENT. CO-OP. BANK LTD. & ORS. [PASAYAT, J.]

     to be recovered from defendant No. 2 and the order below         A
     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           B
     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                        C
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
                                                               0
     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."                              E

     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           F
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, Ahmetlabad Division as
quoted above, the defendant No. 2 i.e. present appellant was G
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.
                                                                      H
    766        SUPREME COURT REPORTS                 [2008] 4 S.C.R.


A   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
B withlaw.
           11. The appeal is allowed with no order as to costs.
    D.G.                                           Appeal allowed.