Shamrao Vithal Co-Operative Bank Ltd. v. Kasargod Pandhuranga Mallya

Judgment

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1312 of 1967. Appeal by special leave from the judgment and decree dated October 22, 1962 of the Kerala High Court in Appeal Suit No. 804 of 1969. B. R. Naik and K. Rajendra Chowdhary, for the appellant. The respondent did not appear. The Judgment of the Court was delivered by Khanna, J. This is an appeal by special leave against the judgment of Kerala High Court affirming an appeal, the order of the Lower Court whereby the appellant Bank's application for execution of an award made under the Bombay Co-operative Societies Act, 1925 (hereinafter referred to as the Bombay Act) was dismissed. The appellant is a Co-operative Society registered in Bombay under the Bombay Act. The Head Office of the appellant is in Bombay and it has a branch in Mangalore. As the objects of the appellant were not confined to one State, it'was governed by Multi-Unit Co-operative Societies Act of 1942 (herinafte1 referred to as the Central Act).

The appellant made a claim under section 54 of the Bombay Act in respect of a transaction which took place in Mangalore against the respondent who is a resident of Kasaragod, and was a member of the appellant socieiy. Roth Mangalore and Kasaragod were at the relevant time in Madras Presidency. The Deputy Registrar of Co-operative Societie3, Bombay gave an award regarding that claim. The award was sought to be executed as a decree in the Court of Subordinate Judge, Kasaragod. An objection to the execution of the decree was raised by the. respon~el!t on the ground that the Deputy Registrar of Co-operauve Soc1et1es. Bombay had no jurisdiction to pass the award and the same could not be executed as a decree in the Courts in Kerala. This objection was upheld by the Subordinate Judge ~l!d he dismissed the execution application. On appeal, th~ dec1S1on of the learned Subordinate Judge was affirmed bv the High Court.

It was not disputed before the High Court that the 'appellant was governed by the provisions of the Central Act. SUPREME. COURT REPORTS [1972] 2 S.C.R .. The contention raised on behalf of the appellant was that the passing of an award came within the expression 'control' occurring in 5ub-section ( 1) of section 2 of the Central Act. This contention did not find favour with the High Court and in the result. the .appeal was dismissed. We have heard Mr. Naik on behalf of the appellant. No one has appeared on beha1f of the respondent. Before dealing with the argument advanced on behalf of the appellant, it would be apposite to reproduce section 2 of the Central Act. The same teads as under:- "2. ( 1)

A co-operative society to which this Act applies which has been registered in any State under the law relating to co-operative societies in force in that Slate shall be deemed in any other State to which its objects extend to be duly registered in that other State under the Jaw there in force relating to co-operative societies, but shall, save as provided in sub-section$ ( 2) and ( 3), be subject for all the purposes of registration, control and dissolution tO the law relating to co-operative societie> in force for the time being in the State in which it is actually registered. ( 2)

Where any such co-operative society has established before the commencement of this Act or establishes after the commencement m this Act a branch or place ·of business in a State other than in which it is actually registered, it shall, within six months from the commencement of this Act or the date of establishment of the branch or place of business, as the case may be, furnish to the Registrar of Co-operative Societies of the State in which such branch or place of business is situated a ·copy of its registered by-laws, and shall at any time it is required to do so by the said Registrar submit any returns and supply any in.formation which the said Registrar might require to be submitted or supplied to him by a co-operative society actually registered in that State. ( 3)

The Registrar of Co-operative Societies of the State in which a branc)l or place of business such as is referred to in sub-section (2) is situated may exercise in respect of that branch or place of business any powers of audit and of inspection which he might exercise in respect of a co-operative society actually registered in the State". According to sub-sectiol\. (3) of section l, the Central Act "applies to all co-operative societies with. objects not confiiled to one State incorporated before the -commencement of this Act under s. v. COOPERATIVE BANK v. K. P. MALLYA (Khanna./.) the Co-operative Societies Aet, 1912, or under any Act relating to co-operative societies in force in any State, and to all co-operative societies with objects not confined to one State to be incorporated after the commencement of this Act."

As the objects of the appellant society were not confined t~ one State, it was not disputed before the High Court that it is governed by -the provisions of the Central Act. Plain perusal of sub-section ( 1) of section 2 reproduced above makes it manifest that if the objects of a co-operative society registered in State 'A' extend to State 'B', the Society shall be deemed to be registered in State 'B' under the law in force in State 'B' relating to co-operative societies.

Despite this deemed registration in State 'B' for three purposes, namely, registration 1 control and dissolution, the society shall be subject to the law relating to co-operative societies in force in State 'A'., Sub-section (2) makes it obligatory on a co-operative society which establishes a branch· or place . of business, in a State other than that in which it is actually regis- D tered· to furnish within the prescribed time to the Registrar of the co-operative societies of the State in which such branch or place of business is situated, a copy of its by-laws and to submit such return and supply such information as the Registrar might require in respect of a co-operative society actually registered in that State.

Sub-section ( 3) gives a limited control to the Registrar of Co-operative Societies of the State in which a "branch or place of business of a co-operative society is established by authorising him to exerc;ise in respect of that branch or place of business any powers of audit and of inspection which he might exercise in respect of a co-operative society actually registered in that StMe. The contention which has been advanced on behalf of the appellant society by its learned counsel, Mr. Naik, is that as the appellant was registered !n Bombay, it is the Bombay Act which govern. the ~ppellant .society f?r purposes of registration, control and d1ssolut10n. It 1s not disputed that the adjudication of a claim by the appellant against its members does· not fall under !he head 'registration' or "dissolution". What is, however, urged 1~ that the ~ord 'control' comprehends within .itself the adjudieat10~ of a ~!aim made by the society against its members.

Such a claim havmg been made .by the_ appellant against the respondent, th~ s~me could, accordmg to the learned counsel, have been ad1ud1cated upon under section 54 of the Bombav Act. The award m~de by . the Deputy Registrar of Co-operative Societies, Bombay m the c!rcum~tances, the counsel submits, did not suffer from any legal mfinmty. [l 912] ;? S.C.R. There is, in our opinion, no force in the above ~ontention because we do not agree with the underiying assumption of the above argument that the word 'control' comprehends within itself the adjudication of a claim made by a co-operative society against its members. The appellant society, as would appear trom the resume of facts given above, established a branch in Mangalore and had dealings there with the respondent who was a resident of Kasaragod.

As the objects of the appellant society were extended to the Presidency of Madras, it should, in vie.v o[ subsection ( l) of sectiou 2 of the Central Act, be deemed to have been registered under the law in force in the Presidency of Madras relating to co-operative societies. The law which was then in force, according to Mr. Naik, was the Madras Co-operative Societies Act, 1932 (hereinafter referred to as the Madras Act). Clause (f) of section 2 of that Act defines a registered society to mean a society registered or deemed to be registered under that Act: Section 51 of the Madras Act provides in.ter alia that if any dispute touching the business of a registered society between a member and the society arises, such dispute shall be referred 0 to the Registrar for decision.

Registrar has been defined in dause ( g) of section 2 of the Madras Act to mean "a person appointed to perform the duties of a Registrar of Co-0perative Societies under this Act and includes a person on whom all or any of the powers of a Registrar under the Act have been conferred". It would, therefore, follow !Mt a dispute between the appellant and the respondent in respect of its dealings rdating to its Mangalore branch would normally have to be adjudiC'ated upon by the Registrar appointed under the Madras Act. The fact that for the purpose of control, the appellant society was governed by the Bombay Act would not, in our opinion, justify a departure from the above normal rule. The word 'control' is synonymous with superintendence, management or authority to direct, restrict or regulate (See p. 442 of Words and Phrases (Vol 9) Permanent Edition). Control is exercised by .a superior authority in exercise of its supervisory power.

Adjudication of disputes is a judicial or quasi-judicial function and it would, in our opinion, by unduly straining the meaning of the word 'control" to hold .that it also covers the adjudication of disputes between a co-operative society and its members. There is a clear distinction between jurisdiction to decide a dispute which is a judicial power anCl the exercise of control which is an administrative power .and it would be wrong to treat the two as identical or equate one with the other. · Reference has been made on behalf of the appellant to the case of Panchshila Industrial Co-operative Societies (Multi.Unit) s. v. COOPERATIVE BANK v. K. P. MALLYA (Khanna,!.) 167 The Gurgaon Central Co-operative Bank Ltd., Gurgaon(I ). In that case, Deputy Registrar of Co-operative Societies, Rohtak had given an award in favour of the respondent bank whicl1 was a co-operative society governed by the provisions of Punjab Cooperative Societies Act.

The appellant filed an appeal against that award before the Central Registrar. The Central Registrar dismissed the appeal on the ground that he was not the appropriate appellate authority in respect of the said award. On appeal to this Court, the decision of the Central Registrar was alfirmed. It was held that the dispute between the parties fell within section 55 of the Punjab Co-operative Societies Act and those provisions were not affected by the Central Act. It would appear from the above that the question involved in that case was entirely different and the appellant can derive no assistance from it. Argument has also been advanced that there was no inherent lack of jurisdiction in the Deputy Registrar appointed under the Bombay Act for adjudicating upon the dispute between the parties and that it was at the best a case of lack of territorial jurisdiction.

We find ourselves unable to accede to this contention becau>e we are of the opinion that there was inherent lack oJ' jurisdiction in the Registrar appointed under the Bombay Act for dcalin~ with the dispute arising out of the dealings of the Mangalore branch of the appellant society with the respondent. The dispute between the parties as would appear from what has been discussed above. could only be adjudicated U!JOn in accordance with the provisions of the Madras Act. The appeal consequently fails and is dismissed. As no one has appeared on behalf of the respondent, we make no order as to costs. G.C. Appeal dismissed. (I) p97J] (2) 2.S.C.C. 500.