1. This is an application in revision against a judgment of 13. Birendra Pratap Sahi, Deputy Magistrate, 1st Class, sentencing the accused applicants to pay fines of Rs. 25 each under Sections 353 and 225, I.P.C. for assaulting an amin and rescuing one Ram Charitra, from arrest.
2. The application for revision raises the important point whether the liquidator of a Co-operative bank can arrest the heir of a deceased member of a co-operative society for an arrear due from his deceased father. I am in considerable doubt whether under the law he can do so. It appears to me that the liquidator can proceed only against the assets of the heir, vide the now sub-para, 9-A, after para. 167 (9) on p. 148 of the Manual of Co-operative Society, Vol. 1. I am, therefore of opinion that the heir cannot be made personally liable and that the arrest in the present case was not warranted by law.
3. I, therefore, forward the record to the Honourable High Court with the recommendation that the conviction and sentence passed by the Deputy Magistrate be set aside if the Honourable High Court agrees with my views. The Deputy Magistrate is asked to let me have an explanation within a week.
4. With reference to your order, dated 25th July 1927, on the application for revision No. 61 of 1927, directing me to submit an explanation regarding a point of law raised in connexion with a case decided by me I beg to submit as follows:
5. The sole question which has been raised as it appears from your order of reference to Hon'ble High Court is
whether a liquidator of a co-operative bank can arrest the heir of a deceased member of a co-operative society for an arrear due from his deceased father.
6. For a decision of this question the following considerations seem important.
7. Section 42 (2)(b), Co-operative Societies Act, 1912, empowers a liquidator to determine the contribution
to be made by the members and past members of the society respectively to the assets of the society.
8. Under the Co-operative Societies (Amendment) Act, 1919 (U.P. Act 3, 1919), Section 2, any sum ordered by the liquidator under Section 43, Co-operative Societies Act, 1912, to be recovered as a contribution to the assests of the society or as costs of liquidation may be recorded, on a requisition being made in this behalf to the Collector by the Registrar of Cooperative Societies in the same manner as arrears of land revenue: vide Section 146 Land Revenue Act, which provides the manner in which arrears of land revenue are to be realized.
9. Now a reference to Rule 31 (4) and (10) of the rules framed by the Local Government under Section 43, Co-operative Societies Act, 1912, pp. 37-38, Co-operative Societies Manual, Vol. (1), will show that a liquidator is authorized to frame contributions not only against members and past members of the society, but also against their legal representatives. The procedure which has to be followed is laid down in Sub-rule (4), (5) and (8) of Rule 31 and where sum assessed as contribution against any member under the liquidator's order (under Sub-rule 4) cannot be recovered, the liquidator is authorized to draw up
subsidiary order or orders against any other member or members or their legal representative
and these orders are to be executed in the same manner as the original order. When the Collector receives a copy of the order passed by the liquidator under Sub-rule (1) or (10) through the Registrar with a requisition from the latter to recover the amount from the person named in the liquidator's order in the same manner as arrears of land revenue under Section 42 (4A) of the Act (vide Sub-rule (8) of Rule 31) he (or the Deputy Collector to whom he may have entrusted with the co-operative duties on his behalf as is the casein this district) forthwith proceeds to recover the amount from the person noted in the liquidator's contribution order in the same manner as is laid down for the recovery of the arrears of land revenue, one of the modes of the realization of which is the arrest and detention of the defaulter: vide Clause (b) of Section 146, U.P. Land Revenue Act. Anybody who feels aggrieved with the liquidator's contribution order can go up to the Registrar and seek redress for his grievances from him (vide Sub-rule (11), Rule 31) but the Collector has no business to enquire into the validity of the liquidators' contribution order and has no authority to meddle with it. I am attaching to this note a copy of the form prescribed by the Registrar, Co-operative Societies, which liquidators are required to use in sending their contribution order to Collector through the Registrar, and from its perusal it will be plain that liquidators are not even required to furnish information to the Collector as to whether the person from whom the sum named therein is to be recovered by the Collector is a member, past member or the legal representative of a member or past member. A Collector (or a Deputy Collector put in charge of the cooperative work of the district by him) is thus fully justified in taking measures to recover the sum mentioned in the contribution order as arrears of land revenue from the persons mentioned therein without entering into the merits of the contribution order as framed by the liquidator and forwarded to him by the Registrar. A liquidator too, as I have pointed out above, is fully authorized (vide Sub-rules (4) and (10) of Rule 31. pp. 37 and 38, Co-operative Societies Manual, Vol. 1) to frame a contribution order, original or subsidiary as the case may be against the legal representative of a member or a past member.
10. In your order of reference you say that 'the liquidator can proceed only against the assests of the heir' and you base this opinion on the new sub-para. 9-A after para. 167 (9) on p. 148, Manual of Co-operative Societies, Vol. 1. In answer to this argument I beg most respectfully to submit that the rule referred to by you is included in part 4 of the Manual which contain certain general instructions laid down by the Local Government for the guidance of its officers. These departmental instructions thus can by no means have the force of law. In fact they are expressions of opinion only for which the Local Government assumes no responsibility: vide para. 4 of the preface to the first edition of the Manual and para. 3 of the preface to the 1923 edition of the Manual. Strictly speaking, therefore, this sub-para referred to by you should not have been relied upon in interpreting the law. This, however is merely technical. The rule enunciated in the new sub-para. 9-A, referred to by you (p. 148 of Vol. 1 of the Manual) is itself based on the new proviso to Sub-rule (4), Rule 31, p. 37 of Vol. 1 of the Manual framed by the Local Government under Section 43, Co-operative Societies Act, 1912. The new proviso, however, in my opinion only limits the liabilities of the legal representatives to the extent of the assets which have gone to their hands, as such from the deceased member or past member but it does not absolve them from all liability. Previous to the enactment of this proviso it used to happen that liquidators realized the contributions due from a deceased member from the property of his legal representative even other than that which he had inherited from the deceased and this caused much hardship and inequity in those cases where the assets inherited by the legal representative of a deceased member from him fell short of the contribution due from him.
11. The new proviso was added to do away with this inequity and to mitigate this hardship. It places a limiton the property from which the contribution is to be realized but the liability of a legal representative, personal or otherwise, to the extent of the property which he inherits from the deceased member continues as before. The contribution may still be realized from him to the extent of the assets of the deceased in his hands in the same manner as arrears of land revenue under rules already given above, That being so the arrest and detention of the defaulter, which is one of the modes of the recovery of arrears of land revenue can still be enforced against him. There is nothing in the proviso to show that this particular mode of the recovery of arrears of land revenue cannot be enforced against him. The proviso does, how ever, provide, as I have pointed out above, that the legal representative of a deceased member is liable to pay up the contribution only to the extent of the assets inherited by him from the deceased member and when he has done so he will not be any more liable to pay any portion of the contribution that then remains unpaid oven though he has got other property from which the unpaid amount could be recovered. Thus where the contribution due from a deceased member exceeds the assets of the deceased in the hands of his legal representative only that portion of the contribution which equals the assets inherited by the legal representative from the deceased member can be recovered from him under Sub-rule 4, Rule 31 read with Sub-rule 8 of that rule (pp. 37, 38, Vol. 1 of the Manual of Co-operative Societies) as arrears of land revenue and the liquidator is required to frame his contribution order against him accordingly with this fact in view. There is nothing however, to show that the portion which equals the assets of the deceased member in the hands of his legal representative or the entire contribution, if it be less than this, cannot be recovered by his arrest and detention under Clause (b) Section 146, Land revenue Act. This is how I interpret the new proviso to Sub-rule 4, Rule 31, p. 37, Vol. 1 of the Manual of the Co-operative Societies.
12. Taking into consideration all the above mentioned facts I come to the conclusion that the heir of a deceased member of a co-operative society too can be arrested for an arrear due from his deceased father subject to the restriction given above by me which follows as a corollary from the new proviso to sub Rule (4), Rule 31, p. 37, Vol. 1 of the Manual of Co-operative Societies. I, therefore, beg to differ from the contrary conclusion arrived at by you
13. It seems to me that the Magistrate was right. I reject the reference and direct the record to be returned to the Court below.