In RSA-5029-2019 (O&M)-PUNJ HC- Nothing is stated u/s 128 of Haryana Cooperative Societies Act regarding bar of jurisdiction of Civil Court, if suit is filed based on fraud, reaffirms P&H HC
Justice Arvind Singh Sangwan [20-09-2022]

Read Order: M.R. Gupta and Others v. The Luxmi Cooperative Group Housing Society Ltd. and Others

Monika Rahar

Chandigarh, October 4, 2022:  While dealing with an appeal involving the question of whether in view of Section 102 read with Section 128 of the Haryana Cooperative Societies Act, 1984, the jurisdiction of the Civil Court is barred, the High Court of Punjab and Haryana has reaffirmed that nothing is stated under Section 128 of the Act that jurisdiction of the Civil Court will be barred, if a suit is filed on the basis of fraud.

The Bench of Justice Arvind Singh Sangwan, while finding no fault with the impugned decision of the first appellant Court opined, 

"The lower appellate Court also recorded a finding that Section 102 read with Sections 128 & 130 of the Act deals with reference of the dispute to an Arbitrator and regarding bar of jurisdiction of the Courts, however, nothing is stated under Section 128 of the Act that jurisdiction of the Civil Court will be barred, if a suit is filed on the basis of fraud."

In this case, a suit was filed by the first respondent (then plaintiff-society) for the grant a decree of mandatory injunction directing the first defendant to hand over the complete documents with a consequential relief of declaration to the effect that conveyance deed in favour of defendants (first three) was illegal and liable to be set aside. 

In response, the defendants (no appellants) filed an application under Order 7 Rule 11 CPC for rejection of the plaint on the ground that the jurisdiction of the Civil Court was barred in terms of Section 102 of the Act. 

The trial Court allowed the application, however, in appeal, the order was set aside vide impugned judgement and decree. Hence, the defendants filed the instant appeal. 

After hearing the parties, the Court did not find any merits in the instant appeal. At the very outset the Court reiterated that the lower appellate Court recorded a finding that since in the civil suit, there was pleading of fraud with regard to execution of the conveyance deed, on the basis of certain documents, which were prepared by the defendants in collusion with each other, therefore, the Civil Court will have jurisdiction and the plaint was not liable to be rejected under Order 7 Rule 11 CPC.

Further, the Court observed that the lower appellate Court also recorded a finding that Section 102 read with Sections 128 & 130 of the Act deals with reference of the dispute to an Arbitrator, but, regarding bar of jurisdiction of the Courts, nothing is stated under Section 128 of the Act mentioning that jurisdiction of the Civil Court will be barred, if a suit is filed on the basis of fraud.

Lastly, the Court held that at the stage of deciding the application under Order 7 Rule 11 CPC, the Court is primarily to see the pleadings in the plaint or the documents attached with the plaint. 

"In para No.5 of the plaint, it is specifically pleaded that conveyance deed has been executed in favour of defendant No.2 by playing fraud. Therefore, the question of law is decided in favour of respondent No.1-plaintiff", the Bench held.