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Anant Laxman Purohit Vs. the Indore Parasper Sahakari Bank Ltd., Indore and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. Cases Nos. 77, 97 and 270 of 1975
Judge
Reported inAIR1977MP217
ActsMadhya Pradesh Co-operative Societies Act, 1961 - Sections 64(1) and 77; Madhya Pradesh Land Revenue Code - Sections 7
AppellantAnant Laxman Purohit
RespondentThe Indore Parasper Sahakari Bank Ltd., Indore and ors.
Appellant AdvocateA.K. Chitale, Adv.
Respondent AdvocateR.G. Waghmare, ;G.S. Solanki, Advs. (for No. 1) and ;Dy. G.A. (for No. 2)
DispositionPetitions dismissed
Cases ReferredThirnmasamudram Tobacco Co. v. Assistant Collector of Central Excise
Excerpt:
.....co-operative societies act, 1960 (hereinafter referred to as 'the act') and (ii) whether the appellate authority has jurisdiction under section 77 of the act to remand the matter before it to the file of the deputy registrar for disposal according to law? the board of revenue upheld the preliminary objection and found that the assistant registrar was not competent to entertain the dispute and, consequently, allowed the appeal and set aside the orders of the assistant registrar as well as of the joint registrar and remanded the dispute to the deputy registrar for disposal in accordance with law, by its impugned order dated march 7, 1974. hence miscellaneous petitions nos. the view taken by the board of revenue, while disposing of the appeal preferred by the society, to theeffect..........co-operative societies act, 1960 (hereinafter referred to as 'the act') and (ii) whether the appellate authority has jurisdiction under section 77 of the act to remand the matter before it to the file of the deputy registrar for disposal according to law?2. in order to appreciate the scope of the question, it is necessary to briefly refer to the material facts which are not only not in dispute but lie in a short compass that gave rise to this question.3. petitioner anant, in miscellaneous petition no. 270 of 1975, was a member of the indore paraspar sahakari bank ltd., indore, the first respondent herein. by resolution no. 63 passed by its board, the respondent-society expelled the petitioner from the society, on july 16, by removing the petitioner under rule 18 sub-rule (1) of the.....
Judgment:

Kondaiah, J.

1. This bunch of miscellaneous petitions, by the petitioners, gives rise to two short but interesting questions of law, (i) whether the Assistant Registrar is competent to determine a dispute between the financing bank and its members under Section 64 (1) of the Madhya Pradesh Co-operative Societies Act, 1960 (hereinafter referred to as 'the Act') and (ii) whether the appellate authority has jurisdiction under Section 77 of the Act to remand the matter before it to the file of the Deputy Registrar for disposal according to law?

2. In order to appreciate the scope of the question, it is necessary to briefly refer to the material facts which are not only not in dispute but lie in a short compass that gave rise to this question.

3. Petitioner Anant, in Miscellaneous Petition No. 270 of 1975, was a member of the Indore Paraspar Sahakari Bank Ltd., Indore, the first respondent herein. By Resolution No. 63 passed by its Board, the respondent-Society expelled the petitioner from the Society, on July 16, by removing the petitioner under Rule 18 Sub-rule (1) of the Rules framed under the Act. Aggrieved by the order of his expulsion from the respondent-society, the petitioner disputed the correctness of the order of expulsion under Section 64 (1) of the Act, before the Assistant Registrar, Co-operative Societies -- the second respondent herein. The Assistant Registrar decided the dispute on November 13, 1968 in favour of the petitioner-Anant holding the expulsion order to be wrongful. The first respondent-Society preferred an appeal against the order of the Assistant Registrar to the Joint Registrar who, by his order dated September 3, 1970 dismissed the appeal. The respondent-Society preferred a further appeal under Section 77 of the Act to the Board of Revenue, before whom a preliminary objection to the effect that the Assistant Registrar had no jurisdiction to entertain the dispute, was raised. The Board of Revenue upheld the preliminary objection and found that the Assistant Registrar was not competent to entertain the dispute and, consequently, allowed the appeal and set aside the orders of the Assistant Registrar as well as of the Joint Registrar and remanded the dispute to the Deputy Registrar for disposal in accordance with law, by its impugned order dated March 7, 1974. Hence Miscellaneous Petitions Nos. 97 of 1975 and 77 of 1975 by the Society. The petitioner Anant filed Miscellaneous Petition No. 270 of 1975 challenging the correctness of the order of the Board of Revenue entertaining the objection regarding the jurisdiction for the first time,

4. Shri Chitale, learned counsel for the petitioner-Anant contended that the order of the Board of Revenue holding that the Assistant Registrar has no jurisdiction to decide the dispute is illegal and erroneous and liable to be quashed. Shri R. G. Waghmare, learned counsel for the society, contends that the Assistant Registrar is incompetent to decide the dispute under Section 64 of the Act, that the Board of Revenue has no jurisdiction to remand the matter to the Deputy Registrar as Section 77 of the Act has not specifically empowered the appellate authority to remand a case but at the most to direct the party to approach the competent authority for proper presentation and decision of the dispute,

5. The first question that rewires to be decided is whether the Assistant Registrar is or is not competent to decide a dispute between a financing bank and its member, under Section 64 (1) of the Act Section 64 (1) of the Act, provides for any dispute touching the constitution,management or business of a society or the liquidation of a society being referred to the Registrar by any of the parties to the dispute if the parties thereto are among those specified in Clauses (a) to (f) thereof. Clause (b) to Sub-section (1) of Section 64 of the Act, applies to a case of member of a society. The petitioner-Anant was admittedly a member of the respondent-society. The dispute now raised between the member and the society pertains to the management or business of the society. The petitioner-Anant has been expelled from the society by the society. He is questioning the validity and correctness of the action of the society in expelling him. Therefore, a dispute touching the management or business of the society between a member and the society has arisen in the present case within meaning of Section 64 (1) of the Act.

6. Section 2 (1) of tihe Act defines a 'Financing Bank' as a society the objects of which include the creation of funds to be lent to other societies or its individual members, and includes a Land Mortgage Bank and a State Co-operative Bank. The first respondent society, is a primary resource society, tihe object of which is to create funds and finance its members. The bye-laws of the respondent-society also include such a provision and support the stand taken by the respondent-society that it is a financing bank.

7. Section 3 of the Act, empowers the State Government to appoint a Registrar of Co-operative Societies for the State and the State may also appoint one or more officers of the categories viz., Additional Registrar, Joint Registrar, Deputy Registrar, Assistant Registrar and such other categories of officers, as may be prescribed, to assist him in the discharge of his duties. Sub-section (2) to Section 3 of the Act, empowers the State Government to specify the powers and duties conferred and imposed on the Registrar by or under the Act. The proviso to Sub-section (2) to Section 3 of the Act, indicates that no officer other than the Additional Registrar or Joint Registrar shall be directed to exercise the powers to hear appeals under Section 77 of the Act, In the exercise of the powers conferred upon the State Government under Section 3 (2) of the Act, the State Government has issued Notification No. 2421-7060-XV-62 dated 16-6-62 delegating the above powers of the Registrar' to the DeputyRegistrar and Assistant Registrar and the nature and extent of those powers. As per notification referred to above, the Deputy Registrar has been conferred powers of the Registrar in respect of all types of societies except financing bank, State Co-operative Union, Divisional Cooperative Institutes, under Section 6 (1) of the Act.

8. We may now notice the nature and extent of the powers of the Registrar under Section 64 of the Act, which have been delegated to Deputy Registrar and Assistant Registrar. The notification leaves no doubt in our minds to indicate that all powers of Registrar in respect of societies conferred under Section 64 of the Act, have been delegated to or conferred on Deputy Registrar. There is no restriction or limitation on the exercise of the powers, under Section 64 of the Act, now conferred on Deputy Registrar for deciding the disputes. The Deputy Registrar is, therefore, competent to decide any dispute that could have been decided by the Registrar under Section 64 of the Act. To put it differently, what the Registrar under Section 64 of the Act could have done, the Deputy Registrar can equally decide and determine a dispute that falls within the purview of Section 64 of the Act. Consequently, the Deputy Registrar is entitled and empowered to decide a dispute between a financing bank and its members. It is also pertinent to notice that column No. 4 of the notification puts limits to the powers of the Assistant Registrar to such a society which he can register. In other words, the Assistant Registrar is incompetent and has no jurisdiction to decide any dispute between any society, which he cannot register and its members. The Assistant Registrar is empowered under Section 6 (1) of the Act to register only Primary Resource Societies, Primary Consumers' Societies, Primary Multi-purpose Societies. Primary Producers' Societies and Primary Industrial Societies. He is not, therefore, specifically conferred powers to register financing societies. From the narration of facts referred to above, we have no hesitation to hold that the Assistant Registrar has no jurisdiction to entertain the dispute between the first respondent-society which is a financing bank, and its member -- the petitioner-Anant who has been expelled from the society. The view taken by the Board of Revenue, while disposing of the appeal preferred by the Society, to theeffect that the Assistant Registrar has no jurisdiction to decide the dispute in the present case, is perfectly justified and is in accordance with law. We are, therefore unable to agree with Shri A. K. Chitale, learned counsel for the petitioner-Anant, that the Board of Revenue has committed a grievous error in law in finding that the Assistant Registrar is not entitled to decide the dispute in question. For these reasons, we answer the first question in the affirmative and against the petitioner-Anant.

9. This brings us to examine the question relating to the powers of the appellate authority to remand the case to the Deputy Registrar. The answer of this question depends upon the provisions of Section 77 (2) of the Act, which reads thus:--

'77 (2).--A second appeal shall lie against any order passed in first appeal by the Registrar, Additional Registrar or Joint Registrar to the State Government on any of the following grounds and no other, namely:--

(i) that the order is contrary to law, or

(ii) that the order has failed to determine some material issue of law, or

(iii) that there has been a substantial error or defect in the procedure as prescribed by this Act which may have produced error or defect in the decision of the case upon merits.'

Section 7 of the Madhya Pradesh Land Revenue Code, 1959, (hereinafter referred to as the Code), empowers the State Government by a specific notification to confer upon the Board of Revenue to exercise certain powers and discharge the functions of the State Government. Pursuant to the powers vested in the Government under Section 7 of the Code, the State Government by Notification No. 4327-CR-271-VII-N-1, dated 15/10/1969 has conferred on the Board of Revenue the powers (i) to hear appeals under Clause (b) of Sub-section (1) of Section 77, and second appeals under Sub-section (2) of Section 77 of the Act. against the order passed in first appeal against the original order passed by the Registrar, Assistant Registrar or Joint Registrar under Sections 17, 55 (2), 62, 67 (3), 68, 71 and 84 and also (ii) to hear appeals against the orders passed by the Registrar or any officer subordinate to him invested with the powers of the Registrar under Sub-section (3) of Section 63 of the Act.

10. In the present case the order appealed against has been passed by theJoint Registrar under Section 77 (1) (a) of the Act. A second appeal under Sub-section (2) of Section 77 of the Act is provided to the State Government on any one of the grounds indicated in Clauses (i) to (iii) thereof. The Board of Revenue, therefore, is conferred with a jurisdiction to hear appeals and second appeals under Section 77 (1) and (2) respectively, against the orders of the Registrar, Additional Registrar or Joint Registrar by virtue of the notification referred to above. The Board of Revenue has taken the place of the State Government as first appellate or second appellate authority while entertaining appeals under Section 77 of the Act. Appeals preferred under Section 77 of the Act, must be presented in the prescribed manner to the concerned appellate authority within thirty days of the date the order appealed against, was communicated to the concerned party. Section 77 of the Act does not specifically indicate the nature and extent of the powers that can be exercised by the appellate authority. It only provides for first appeal as well as second appeal to the respective appellate authorities specified therein,

11. It is not disputed by Shri R. G. Waghmare, learned counsel for respondent-society that the appellate authority under Section 77 of the Act, is empowered to either allow the appeal of to dismiss it, but, disputes only with regard to its power to remand the case. The statute is silent with regard to the power of dismissal or allowing the appeal. Though Rule 59 of the Madhya Pradesh Co-operative Societies Rules, prescribes the procedure to be followed while disposing of the appeals, we do not find any specific indication therein that the appellate authority may allow, dismiss or remand the case. Sub-rule (11) of Rule 59 of the Madhya Pradesh Co-operative Societies Rules, on which strong reliance has been placed by the respondent-society's counsel, does not indicate the exact nature and extent of the power of the appellate authority. It only reads as follows:--

'(11) When the hearing of the appeal is completed, the appellate authority shall announce its judgment forthwith or may fix a date for the same, after giving due notice to the appellant or the other parties to the appeal.'

We may, in this regard, notice Sub-rule (9), which says:--

''On the date go fixed the appellate authority shall go through the relevantpapers, hear the appellant or his agent, if present, and pass suitable order on the appeal.'

It gives a true clue to the nature and extent of the powers of the appellate authority to dispose of the appeal under Section 77 of the Act. The expression 'suitable order on the appeal' must be widely construed to include either to dismiss or allow the appeal or remand the case to an appropriate authority with a direction to dispose of the same in accordance with law. We cannot but observe that the provision of Section 77 has not been properly drafted. The legislature could have been more sipecific and could have clearly enumerated the powers and functions of the appellate authority in the statute itself, which is no doubt clumsily drafted. The section is silent about the exact nature of the powers and functions of the appellate Court. However, normally, the powers of the appellate Court would include not only to dismiss or allow the appeal but also to remand the case to the appropriate authority, if necessary. The power of remand must be held to have been invested in the appellate authority under Section 77 of the Act, as, such power is necessary and inherent for the proper and effective exercise of appellate powers. In other words, without such power the appellate authority could not effectively function and justify its existence as appellate authority. A Full Bench of this Court in Surendra Mohan Chaurasiya v. State Transport Appellate Authority, M. P. Gwalior (AIR 1970 Madh Pra 230) held that the appellate authority under Section 64 of the Motor Vehicles Act, read with Rule 73 of the C. P. & Berar Motor Vehicles Rules (1940) is empowered to remand a case when its record is found to be insufficient and the appellate authority was not in a position to record the evidence itself. Section 64 of the Motor Vehicles Act, also does not specifically indicate power to remand although it has indicated power to dismiss or allow the appeal. The present case is much stronger one. Here is no indication under Section 77 of the Act, empowering the appellate authority even to allow or dismiss the appeal. It is silent about the actual manner of disposal. In such circumstances, we have no hesitation to hold that the Legislature could have thought it fit and proper to confer power to dismiss or allow the appeal, including the power of remand of the case, so that there can be no exception. However, the respondent-society cannottake advantage of the specific omission in Section 77 of the Act with regard to the actual nature and extent of the powers of appellate authority. We may also add that a Division Bench of the Andhra Pradesh High Court in Thirnmasamudram Tobacco Co. v. Assistant Collector of Central Excise (AIR 1961 Andh Pra 324) expressed the view that the appellate authority has inherent power to remand a case to the original authority for a fresh enquiry in spite of the absence of such provision in Section 35 of the Central Excises and Salt Act (1944).

12. In the present case, we have already pointed out that the statutory rule-making authority has empowered and conferred on the appellate authority, under Section 77 of the Act, power to pass suitable order on the appeal and the expression 'suitable order on the appeal' is comprehensive enough not to mean to allow or dismiss the appeal but also to remand the case. Such an interpretation is, in our opinion, proper in the interest of justice. The limited interpretation sought to be made by the respondent-society counsel cannot be accepted.

13. The further submission of Shri R. G. Waghmare learned counsel for the respondent-society is that, even while exercising the power of remand, the Board of Revenue has gone wrong in sending the matter to the Deputy Registrar with a direction to decide the dispute and, at the most, the party might have been directed to approach the appropriate authority for proper presentation and disposal of the dispute. This submission is devoid of any merit. It has no legs to stand. Our view of 'suitable order' would Include any kind of order that is just and proper which would meet the ends of justice. The second appellate authority, while disposing of the second appeal under Section 77 (2) of the Act, has also unlimited jurisdiction to pass any just and proper order, which the facts and circumstances of the case would justify, so as to bring it within the category of 'suitable order'. The Board of Revenue, in the present case, thought it proper to remand the case to the Deputy Registrar to give a decision under Section 64 (1) of the Act, by virtue of notification issued by the State Government noted above and this decision of the Board of Revenue, in our opinion, is not only valid and proper but is also just and equitable.

14. In the result, all the three petitions are hereby dismissed. But, in thecircumstances of the case, we pass no order as to costs. The security deposits are directed to be refunded to the petitioners in each petition.


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