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Amitananda Roy Vs. State of West Bengal and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Civil
CourtKolkata High Court
Decided On
Case NumberMatter No. 195 of 1973
Judge
Reported inAIR1976Cal408
ActsBengal Co-operative Societies Act, 1940 - Sections 82 and 89; ;Code of Civil Procedure (CPC) , 1908 - Section 2(14); ;Constitution of India - Article 226; ;Calcutta High Court Rules, Rule 36
AppellantAmitananda Roy
RespondentState of West Bengal and ors.
Appellant AdvocateA.P. Chatterjee, Adv.
Respondent AdvocateP. Banerjee, Adv.
Cases ReferredCal and Bariam Chemicals v. Company Law Board
Excerpt:
- order1. in this application under article 226 of the constitution of india the petitioner is challenging an order passed by the registrar of co-operative societies, west bengal on the 19th of march, 1973, in exercise of power conferred under section 89 of the bengal co-operative societies act 1940 (hereinafter referred to as the said act).2. this application is by one amitananda roy claiming himself to be the share-holder and secretary of the writers buildings employees' co-operative canteen and stores limited which is a society registered under the said, act (hereinafter referred to as the said society) in respect of which the impugned order of liquidation was passed. the petitioner's case as made out in the petition is as follows: it is stated that the said society was founded in 1964.....
Judgment:
ORDER

1. In this application under Article 226 of the Constitution of India the petitioner is challenging an order passed by the Registrar of Co-operative Societies, West Bengal on the 19th of March, 1973, in exercise of power conferred under Section 89 of the Bengal Co-operative Societies Act 1940 (hereinafter referred to as the said Act).

2. This application is by one Amitananda Roy claiming himself to be the share-holder and Secretary of the Writers Buildings Employees' Co-operative Canteen and Stores Limited which is a society registered under the said, Act (hereinafter referred to as the said Society) in respect of which the impugned order of liquidation was passed. The petitioner's case as made out in the petition is as follows: It is stated that the said society was founded in 1964 and since its inception it is functioning as a non-profit making concern. The Managing Committee at the time of making of this application was elected on 30th January, 1973. and it assumed charge on 7th February, 1973. It is stated that since the assumption of the charge by the present Managing Committee, the said Society has been functioning smoothly and without blemish, and trying to reduce the liability of the society. It is alleged that a large number of members of the new Managing Committee belong to different employees' associations affiliated to the State Co-ordination Committee, the functions of which are among others to Co-ordinate the functions of different employees' organisations. The office-bearers of the new Managing Committee also belong to different employees' associations affiliated to the State Co-ordination Committeee. It is alleged that this Co-ordination Committee as well as the different employees' associations are now an eyesore to the Ministers who belong to the Congress and wrongly believe that the Co-ordination Committee and its affiliated organisations are carried on in the interest of the C. P. I. (M). It is alleged that there is another employees' association under the name and style of State Government Employees' Federation, Writers' Buildings Unit (hereinafter referred to as the said Federation) which is a pro-congress organisation and rival to and intensely hostile to State Co-ordination Committee and which has the blessing of the present West Bengal Cabinet and its ministers. It is alleged that one Gour Mohan Sarkar, representing himself to be the Secretary of the said Federation made some false and concocted complaints to Sri Jainal Abedin. Minister-in-charge, Co-operative Department, Government of West Bengal on 27th November, 1972, against the present Managing Committee. It is alleged that the said Gour Mohan Sarkar is not even a share-holder of the said Society for which he has no locus standi to make any complaint against the present Managing Committee. It is alleged that soon after his complaint, there seems to have been some correspondence between the Co-operative Department and the Minister-in-charge. It is alleged that even before giving any inspection report the order for liquidation was virtually issued. In this context certain extracts from notes and orders in the Co-op. Department file are relied on, copies of which are annexed to the petition including a note in the file by the Secretary of the Department concerned after a discussion with the Minister concerned on the 30th of January, 1973. It is stated that what happened thereafter is merely an eyewash. It is stated that on 19th March, 1973, the impugned order under Section 89 of the said Act was passed whereby it was directed that the said society be wound up and in exercise of the power conferred by Section 90 of the said Act, the Inspector-Liquidator of Co-operative Societies No. 1 Calcutta was appointed the Liquidator of the said society. This is the order challenged in this proceeding. Upon the application of the petitioner herein this Rule was issued on 23rd of March, 1973 when an ad-interim order of injunction was also passed.

3. Mr. A. P. Chatterji, learned Advocate appearing in support of the Rule made various submissions before me. The first and main submission of Mr. Chatterjee was that the impugned order was made mala fide. Mala fide was alleged against the Federation, the Registrar and the Minister, It was vehemently argued that the order was passed at the instance and dictation of the Minister concerned which would be apparent from the notes in the file referred to above. It was further submitted that the said order was made at the instance of Gour Mohan Sarkar on behalf of the said Federation. Allegation of mala fide against the Registrar was to the effect that the order which was signed by him was actually the order of the Minister and the Secretary; the Registrar merely put his signature on it, that is, he merely acted as a rubber stamp. It was submitted that the Registrar did not. apply his mind but merely carried out the order of the Secretary of the Department and the Minister concerned. In support of his contention that the Registrar did not apply his mind Mr. Chatterjee also submitted that though the decision to make such order was in fact taken on the 30th January, 1973, a further order was passed on the 7th March, 1973, for inspection of the said Society. It was submitted that if the decision taken on the 30th January, 1973, was in fact based on application of mind by the Registrar, then the question of further inspection as directed by the subsequent letter dated 7th March, 1973, could not arise. Accordingly, it was submitted that original decision taken on the 30th January, 1973, did not reflect the independent application of mind on the part of the Registrar. For the aforesaid reasons it was submitted that the order for liquidation of the Society was passed mala fide and should be set aside. It was next submitted that the copy of the Inspection Report was not furnished to the Society and that no opportunity was given to the Society to make representations. Lastly, it was sought to be submitted that the original order passed for inspection of the Society was valid upto 24th Dec. 1972, whereas the report of the Inspector pursuant thereto was made on the 15th January, 1973, which was submitted on the 31st January, 1973. Accordingly, the said Report was made and submitted beyond the authorised period and accordingly the order of liquidation passed on the basis of the same must be held to be invalid. There were some other minor submissions, sought to be made by Mr. Chatterjee which I shall indicate later.

4. It would appear that the main allegation is that the order has been passed mala fide and that the Registrar who has passed the order did not apply his mind independently.

5. Before I consider the same it is necessary to set out the relevant facts in this connection as they would appear from the records of the case. It appears that on the 27th November, 1972, a representation was made by one Gour Mohan Sarkar, describing himself as the General Secretary of the said Federation, which was addressed to the Minister-in-Charge, Co-operation Department In this representation various allegations of corruptions and malpractices were alleged against the said Society and its office bearers. In his affidavit affirmed on 9th May, 1973, Gour Mohan Sarkar has stated that many members of the Federation are also share-holders of the said Society and, 33 such, they are very much interested in the management and control and/or proper administration of the said Society. He had received various complaints from such members/share-holders about the corrupt and malpractices of the Managing Committee of the said Society. He has given the names of 29 persons who are such members of the said Society. He has stated that he received complaints from all these persons and in his capacity as the General Secretary of the said Federation thought that it was his duty to draw the attention of the Minister-in-Charge about the same and he, in the said capacity, made a representation on behalf of the Federation. It was stated that each and every complaint regarding corrupt and malpractice received by him was set out in the said representation. It was denied that in the said representation any allegation was made against the present Managing Committee. It was pointed out in this context that the present Managing Committee came into existence on 30th January, 1973, only which was some time after such representation was made. It appears that thereafter an order was made on the 9th December, 1972, by the Assistant Registrar of Co-operative Societies, Calcutta, under Section 82 of the said Act, authorising the Inspector of Cooperative Societies, Calcutta (Central Circle) to inspect the said society. A copy of the said order was forwarded to the Society with a request to make books and records and pro forma account available to the Inspector for the proposed inspection. Pursuant thereto the inspection took place in the presence of the office bearers of the said society. Pursuant to such inspection a report was submitted by the Inspector on the 15th January, 1973. In the said report various allegations of mismanagement were made against the said Society and its Managing Committee.

6. It appears from the notes and orders in the Co-operative Department File, that there was a letter on the 24th January, 1973 from the Registrar of Cooperative Societies. In this connection there was a discussion and certain nothings in the file which I set out hereinbelow:

'Ref. No. 54-C dated 24-1-1973 from R. C. S., W. B. Discussed with M I. C. where R. C. S. was also present. In view of heavy liabilities far exceeding the assets, the society to be put to liquidation. If another society can be formed, we may help that Society.

Sd/- S. Dutta, 30-1-1973.

It should be communicated to all concerned.

Sd/- Z. Abedin. 30-1-1973. D. R. (Liquidation).

Sd/- A. K Chatterjee.

1-2-1973.

A. R. Calcutta may be requested to comply with the formalities for putting the society to liquidation i.e.. sending of the inspection note to the society and thelike. For R's order.

Sd/- J. Banerjee.

2-2-1973.

Sd/- A. K. Chatterjee.

2-2-1973.

Kindly put up in file at once. S. Halder, 2-2-1973.' By forwarding letter dated 31st January, 1973, the copy of the Report of the inspection under Section 82 was forwarded to the said society by the Assistant Registrar. On the 15th and 17th February 1973, respectively two written representations were sent by the society regarding the Inspection Report. The Registrar of Co-operative Societies has stated in his affidavit that after going into the said representations he decided that another inspection may be made personally by the District Auditor of Co-operative Societies, Calcutta, to verify the correctness of the statements made in such representations to enable him to come to a decision as to the fate of the society. Accordingly he caused a letter to be written to the Assistant Registrar on 6th March, 1973. Thereupon on the 7th March, 1973 a letter was sent to the said society by the District Auditor of Co-operative Societies stating that he would visit the said society on the 8th March, 1973, as desired by the Registrar. The Society was therefore requested to keep ready all relevant books, records and documents of the Society for his inspection. Such inspection took place on the 8th of March, 1973, pursuant to the said notice. On the 14th March, 1973, a report was submitted by the District Auditor on the basis of such inspection. It is stated by the Registrar of Co-operative Societies that as a result of such inspection and after due consideration and after applying his own mind he decided that the society should be put to liquidation. Accordingly, on the 19th March, 1973, he passed an order of liquidation under Section 89 of the said Act which is challenged in this proceeding.

7. These are the relevant facts in this connection. From the same I am unable to hold that the impugned order has been passed mala fide. It is to be pointed out that this order has been passed by the Registrar and there is no allegation of actual malice against him. The only allegation against him is that he had not applied his mind before making his order. The suggestion is that he has acted at the behest and at the directon of the Minister concerned. This is not borne out by the facts of this case. I am satisfied from the facts stated hereinbefore that he had applied his mind independently and made his own decision and that he did not act merely as a rubber stamp. It is true that in this particular case at one stage there has been a discussion with the Minister concerned wherein it was decided that the said Society should be put into liquidation but from that I cannot come to a conclusion that the Registrar, who is the proper authority in this connection, had abrogated his function and merely acted xas a rubber stamp. It is to be remembered in this connection that the original representation by Gour Mohan Sarkar was addressed to the Minister concerned. What has merely happened in this case is that after the report of inspection was received this matter was discussed with the Minister-in-Charge. The result of the discussion was that the society was to be put to liquidation. That does not suggest that the Registrar acted at the behest of the Minister or the Secretary concerned. Merely because suggestions might have been made by the Minister or the Secretary it is not possible to hold that the order has not in fact been made by the Registrar. In this context it should be, remembered that the Registrar also participated in that discussion. Therefore the suggestion of putting the society into liquidation cannot be said to be the suggestion of Minister and the Secretary alone. The Registrar also was a party to the same. Accordingly it cannot be said that the decision was taken by the Minister and the Secretary alone and that the same was thrust upon the Registrar. The incorrectness of the allegation, that the Registrar acted at the behest of the Minister and the Secretary, would also be borne out by the subsequent facts. As I have stated earlier, the order was not passed automatically after this discussion with the Minister. This discussion took place on 30th January, 1973; but the order was not passed until 19th March, 1973. If the Registrar had acted at the behest of the Minister and the Secretary, he would have passed the order immediately after 30th January, 1973. But he did not 'do so. After such discussion with the Minister an opportunity was given to the Society concerned to make representation and upon receiving such representation another person was deputed to enquire into the matter and to find out the facts relating to such representation as made on behalf of the society. Only after receipt of such fresh report and after consideration of the same as also the representations, that the Registrar passed the order. In my opinion, this belies the allegation that the Registrar had acted mechanically and that he did not apply his independent mind but acted merely at the behest of the Minister or the Secretary.

8. So far as the allegation against the Minister is concerned, I ought to point out that excepting a vague allegation that the office bearers of the Society are affiliated to Co-ordination Committee which is an eyesore to the Ministers who belong to Congress and who wrongly 'believe that the Committee is carried on with at the interest of C. P. I. (M), there is no specific allegation of mala fide against the Minister concerned in the petition. It is not specifically alleged that the Minister concerned had any malice against the petitioner society or any of its office bearers and, accordingly, the petitioner is not entitled to agitate any such question in this proceeding. However, the only relevant question is whether the person who has passed the order has acted bona fide or not. In this case the order has been passed by the Registrar of Co-operative Societies and I have held that he has acted bona fide after independent application of mind. Even if the Minister concerned had any malice against the Society, which I am unable to hold, that would not make the order passed by the Registrar bad. In any event in the facts of this case I am unable to hold that the Minister concerned was actuated by malice or that he has acted mala fide. What has merely happened is that after receiving certain complaints on behalf of certain members of the Society, which was addressed to the Minister, the matter was enquired into and after the report of inspection, the Registrar was consulted by the Minister along with his Secretary and certain suggestions were made. That cannot and does not show any mala fide. He is the Minister-in-Charge of the Department of Co-operation. He has acted within his power. No mala fide has been established.

9. Regarding the allegation that this order has been made at the instance of the Employees' Federation, the same has no merits. I have already set out the circumstances under which Gour Mohan Sarkar had made such representation. He was entitled to do so inasmuch as he was the Secretary of the Federation, some of the members of which were also the members of the said society. Having regard to the same it cannot be said that they had any motive or that they acted mala fide. In any view of the matter even if they had made this representation out of malice that by itself will not make the order of liquidation, which was passed by the Registrar, bad. What has got to be shown is that there was malice, either in fact or in law, on the part of the person who had actually made the order and not any one else.

10. I shall next deal with the submission of Mr. Chatterji that the decision of the Registrar to direct liquidation of the Society was not proper or bona fide because even after such decision was taken on 30th January, 1973, the Registrar directed a subsequent inspection of the society and for which the order dated 7th March, 1973, was passed. In my opinion, there is no merit in this contention. I have already explained the circumstances under which the order for further inspection was made on the 7th March, 1973. After the discussion took place on the 30th January, 1973, and after the representations were received from the Society on the 15th and 17th February, 1973, respectively, the Registrar felt that another inspection should take place in view of such representations. If, under such circumstances, he has directed a further inspection, it cannot be said that the decision already arrived at was not correct or bona fide. He has stated in his affidavit that as a result of the said inspection and after due consideration of the representations and after applying his mind he decided that the Society should be put to liquidation. What has actually happened is that after the initial discussion and decision in this matter, the Registrar thought it fit to enquire into the matter further in view of the representations received from the society after the copy of the report was sent to the Society. Under these circumstances he directed a further inspection. For that it cannot be said that the decision taken by the Registrar to direct winding up of the said Society is illegal or mala fide. As a matter of fact the final decision was taken by the Registrar only after receipt and consideration of the representation and the subsequent report of inspection and the question of any earlier decision cannot strictly arise.

11. The next submission of Mr. Chatterji was regarding the principle of natural justice. I have already set out the facts from which it is clear that before the order was actually passed ample opportunity was given to the petitioner Society to make representation which they had availed of. In this particular case the first inspection was held after notice to the Society. The inspection was of their own books of accounts. The Inspection Report was forwarded to them for their comments. They made their representations in respect of such inspection report. Such representations were not merely considered but in view of such representations another inspection was directed and only after the receipt of the report of such further inspection held in view of such representation, that the Registrar applied his mind independently and bona fide and took the decision to pass an order of winding up. This shows that not only that there was no violation of the principles of natural justice but that the same was complied with more than it was necessary. Accordingly, there is no merit in this contention.

12. In this connection I may deal with another submission of Mr. Chatterji. It was submitted that the order of inspection, on the basis of which the order of winding up was passed, was made at the instance of the Employees' Federation and on the basis of their representation. It was submitted that under Section 82 of the said Act no such order of inspection could have been directed at the instance of the Federation or any other third party. Attention was drawn in this connection to Sections 82, 83 and 84 of the said Act. Accordingly it was submitted that the said order of liquidation was bad. There is no merit in this contention. Section 82 provides, amongst others, that a society shall be liable any time to be inspected by the Registrar or any person authorised by him in this behalf by general or special order. In this particular case the inspection has been authorised by the Assistant Registrar of Co-operative Society, Calcutta who has got the same powers as the Registrar to this effect. It is not necessary that in respect of any inspection under Section 82, such power has got to be exercised by him on his own, or that he cannot rely on any information or representation of a third party. In this particular case the Registrar, on receipt of such information or representation, has directed such inspection. The order cannot be challenged on the ground that he has acted beyond his jurisdiction in directing such inspection on the basis of such information from a third party.

13. It was also sought to be contended by Mr. Chatterji that the order was actually made on the 30th January, 1973, when it was decided that the Society was to be put into liquidation. There is no merit in this contention. What happened was that on the 30th January, 1973 there was a discussion between the Minister-in-Charge. Registrar and the Secretary concerned, wherein a suggestion was made to put this Society to liquidation. This was not given effect to until the 19th March, 1973, and until the Registrar, who was the competent authority, had applied his mind after furnishing the petitioner Society with the copy of the inspection report and after hearing their representations and the further report on further inspection. Before a decision can amount to an order so as to bind a person, not only that an order is to be passed but it must be communicated to the person concerned. Mere noting in a file cannot amount to an order. Acordingly, this contention of Mr. Chatterji is rejected.

14. Mr. Chatterji also sought to contend that the order of winding up was bad because it was based on an inspection report submitted beyond time provided for the same. By the earlier order of inspection, the authority of the officer was conferred upto the 25th December, 1972. According to Mr. Chatterji the report was dated and submitted beyond that period and accordingly it was invalid. Accordingly any order for liquidation passed on such invalid report must also he held to be invalid. In my opinion there is no merit in this contention. It is true that the authority of the Inspector was stated to be upto 25th December, 1972, and that the report was submitted on the 15th January, 1973, but that, in my opinion, cannot invalidate the order. It was merely an internal arrangement between the officer and the Inspector concerned. There is no provision in Section 82 for specifying any period during which the inspection is to be carried out. Further Section 82 does not require that any such period is to be specified in the relevant order of inspection. Accordingly even if the Inspector concerned has submitted his report beyond the period specified in the order of inspection that does not and cannot, in my opinion, make the inspection report invalid and, in any event, if any order is passed under Section 89 relying on such inspection report, the order of liquidation cannot be challenged as invalid on that ground alone.

15. Various decisions were cited at the bar on the question of mala fide. Mr. Chatterji referred to the decisions in Commissioner of Police v. Gordhandas, reported in : [1952]1SCR135 , Mahadayal Premchandra v. Commercial Tax Officer, Calcutta, reported in : [1959]1SCR551 , Oriental Paper Mills v. Union of India, reported in : 1978(2)ELT382(SC) , State of Gujarat v. Krishna Cinema, reported in : [1971]2SCR110 , State of Punjab v. Hari Kishan, reported in : [1966]2SCR982 . Mrs. Banerji also relied on the case of Commissioner of Police v. Gordhandas (supra). She also relied on the case of Bibhuti Bhusan v. State of West Bengal, reported in : (1969)ILLJ300Cal and Bariam Chemicals v. Company Law Board, reported in : [1967]1SCR898 . It is not necessary to deal with these cases separately. The principle is now well settled. If mala fide is alleged it should be alleged specifically and with sufficient materials. There should be proper and specific pleading regarding the same. Allegation of mala fide cannot be held established except on clear proof thereof. Mala fide can be of two kinds, malice in fact and malice in law. So far as malice in fact is concerned, this need not be explained. So far as malice in law is concerned, it can be said that merely taking the advice of somebody else or consulting someone else cannot invalidate an order. It would not be improper for the authority concerned to take into consideration the views and wishes of any other person or the Government provided he did not surrender his own judgment and provided that he made the order himself. If the competent authority has applied his mind and acted responsibly in making the order it cannot be said that he has acted mala fide. If he has not acted merely at the behest of or in accordance with the instructions of others, if there is no abdication of power and no absence of application of mind or exercise of his own judgment, an order cannot be challenged on the ground of mala fide merely because some other person has given some advice or because the matter was discussed with someone else or because opinion or guidance of others were taken. For the reasons aforesaid, the application is dismissed and the Rule discharged. All interim orders are vacated. No order as to costs. At the prayer of Mr. Chatterji the operation of the order is stayed till 2 P. M. tomorrow.

16. Before I conclude I must mention one thing. During the course of hearing as I wanted to look into the records of the Government in this connection, after some persuasion, certain records were produced before me. When subsequently I again wanted to look into the same, they were not so produced throughout the hearing on that occasion which lasted for 3/4 hours. This is happening quite frequently in this Court. Records of the respondents are not available when the case is being heard. Even if they are galled for, and the case is adjourned for that purpose, in most of the cases the learned Government advocates fail to produce the same. It is stated by the learned Government Advocates that in spite of instructions and requests to that effect, the records are not being made available to them.

17. In this connection I may point out that under Rule 36 of the Rules of this Court relating to applications under Article 226, in the case of rule nisi relating to writs of certiorari, it is the duty of the Tribunal or authority concerned, to transmit the records -of the case or proceedings to the High Court. It would be a sufficient compliance with such Rule, if the advocate or attorney appearing for such a party, intimates in writing to the Registrar of this Court that he has received such records which are in his possession and will be produced at the time of the hearing; and in matters concerning the revenue if the advocate or attorney appearing for the revenue authorities similarly intimates that the record will be produced at the hearing. This rule is very seldom complied with. Very seldom records are sent to this Court. It is at least expected that the records would be kept with the Government Solicitor or the Advocates concerned. That is also not done. As a result of the same during the hearing of the Rule the Government records cannot be looked into to ascertain the true position and unnecessary delay takes place. There is a possibility of miscarriage of justice also.

18. I direct that a copy of these observations he sent to the Remembrancer of Legal Affairs of the Government of West Bengal.


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