Anipur Co-operative Society Ltd. vs Shri Sudarsan Sen and Others

T.N. Singh, J.—Co-operative institutions with their egalitarian base fulfil an important social need underscored by the Directive Principles If, however, they serve merely as vehicles of noble ideals their impact on the social life of the nation will only have an esthetical value; they must serve as powerful (sic)giness of production and national re-construction to boost national prosperity and justify their existence. Laws enacted to regulate the functioning of these institutions must therefore be allowed to have their full play and invested with a meaningful content so that these institutions flourish and prosper and do not waste and withes away consuming both wealth and moral health of the nation.

By issuing a temporary injunction the court below, it is complained in this revision, has thwarted the purpose of the Assam Co-operative Societies Act, 1949 (shortly, the Act), The Petitioner in this Court is a co-operative society registered under the Act and figured as the principal Defendant (No. 1) in T.S. No. 231 of 1983 instituted by the opposite parties (Plaintiffs) in the court of Munsiff, Karimganj on 28.7.83. The Plaintiffs alleged that they were share-holders members of the Defendant-society (hereinafter Society) and their names appeared in the register of members maintained by the Society. On 8.7.83 the Society published and notice for holding the meeting of the General Assembly on 29.7.83 and on 30.7.83 the election of the new executive body for the year 1983-84. The Govrnment of the charge against the Society was that Plaintiffs'' names were not included in the voters'' list which on the other hand included names of persons who were not eligible to cast votes. Against the illegal action of the Society the Plaintiffs had made representation to the Assistant Registrar of Co-operative Societies, Karimganj, who was arrayed as a pro-forma Defendant (No. 3) in the suit, In the meantime the society cancelled the election fixed for 30.7.83 and by a notice dated 19.7.83 re-fixed the same for 6.8.83 without correcting the "voters'' list". The Plaintiffs, therefore, prayed for the relief''s of declaration and permanent injunction to restrain the Society from holding the election without correcting the voters lift. An application for temporary injunction was also filed the proceeding these of has given rise to this revision.

Learned Munsiff issued notice to the Society to show cause against the prayer for temporary injunction. The Society submitted its objection pleading inter alia the bar of Section 79(2) of the Act against entertaining the suit, On thesis the Society submitted that the 1st Plaintiff was not a shareholder member of the Society and that the 2nd Plaintiff was a defaulter and therefore he was disqualified to vote under the Byelaws of the Society, it was also averred the voters list was duly published according to Society''s Byelaw after the same was approved by its Managing Committee on 28.6.83. The prayer for injunction was, the Society alleged, politically motivated with a view to "dislocate the internal administration of the Society". It appears that though notices were issued to the other Defendants also, none also entered appearance or filed any objection. However, the Society as well an the Plaintiffs filed documents in support of their respective cases.

Upon hearing the contesting parties learned Munsiff rejected the prayer for temporary injection by an exhaustive and reasoned order passed on 5.8.83. He rightly held that the Plaintiffs, in order to get a temporary injunction, must establish their prima facie case for which they had to satisfy the court that they must be share-holders of the society and further they must not be defaulters. He found that except their statements made on affidavit, the Plaintiff placed no material before the court, not a single document, in support of this legal requirement. He also found, on a perusal of the documents filed in the case that the 2nd Plaintiff was a defaulter and the 1st Plaintiff''s name did not appear in the Register of Members of the society at serial No. 498 though so averred in the plaint. According to learned Munsiff the Plaintiffs had no prima facie case to go to trial while on the other hand a large number of people will be deprived from exercising their legal right if the election was stopped for no fault of their: the balance of convenience was against the Plaintiffs.

It appears that on 5.8.83 the Society held its annual general meeting wherein 245 members of the Society took part. On 6.8.83, as scheduled, the election commenced at 10 a.m. but it had to be stopped at 1.20 p.m. after 452 votes were cast and a "good number of voters were then standing in the queue, as per Annexure 2 to the revision petition. It happened so because the Plaintiffs preferred an appeal on 5.8.83 and on 6.8.83 they obtained an order from the learned Assistant District Judge, Karimganj, passed in Misc. Appeal No. 40/83 directing the Defendants to postpone the proceeding of the election meeting. In passing the impugned order the learned Judge held that the name of the 1st Plaintiff was illegally struck off by a resolution dated 28.7.83 while the suit was instituted on 25.7.83 and therefore the action of the Society was prima facie unjustified", He also held that the 2nd Plaintiff was not a defaulter as no resolution was passed branding him as a defaulter, It is against this order that the Society has come up in revision to this Court.

What is strikingly surprising about the impugned order, is that the appellate court granted the temporary injunction holding that there was "prima facie merit in the appeal" on the basis of a cryptic finding confining only to Plaintiffs'' prima facie case without applying its mind to the other requisite tests, of balance of convenience and irreparable injury, It was not a case in which the trial court had issued ad-interim injunction and then vacated the same which order could be stayed pending disposal of the appeal under Order 41, Rule 5(1) read with Order 43, Rule (2) Code of Civil Procedure. Although the appellate court acting under Order 41, Rule 33 could take notice of subsequent events if could not, in my opinion, pass order there under in derogation of the provisions of Order 39, Rule 2 which, in the instant case, governed the list in appeal. The mere fact that 1st Plaintiff''s name was struck off subsequent to the filing of the suit which it held to be "unjustified" did not invest the court with jurisdiction to pass the impugned order. As the court was passing an order of temporary injunction, though in virtue of its powers under Order 41, Rule 33, it could do so only after exercising its discretion judicially according to established legal principles as the relief of injunction was a discretionary remedy but to be granted only on recognised principles. Therefore, even in adjudging Plaintiff''s prima facie case the court below ought to have coma to a clear finding as to whether the Plaintiffs could complain of any "injury" being caused to them by the Defendant as contemplated under Order 39, Rule 2. In my opinion, when infraction of a statutory right is said to have caused the "injury", it is necessary for the court to consider the relevant provisions of the statute concerned to determine the scope and nature of the right and the remedy available there under against infraction of the right and other provisions having a bearing on the matter, It will be an improper exercise of jurisdiction by the court if the discretionary relief is granted extra-judicially without directing its attention to the relevant statutory provisions in such case because Plaintiffs prima facie case of such ''injury'' cannot be determined dehorns the provisions.

Learned Counsel for the Petitioner, Mr. M.A. Laskar, slightly drew my attention, therefore, to the relevant provisions of the Act and the Rules made there under, Chapter IV of the Act is headed "Management" of which Section 31 deals with "General Assembly" and Section 32 with "Annual Meeting of the General Assembly". All persons "eligible to vote at general meeting of the society" comprise the general assembly and its annual general meeting is held "at least once in every co-operative year": such meeting must be held within 15 months from the date of last preceding meeting unless on "special grounds" the period is extended by the Registrar. The business to be transacted at such a meeting includes a variety of matter and, among others, electing members to the managing body. Under Rule 26, all proceeding of the General Assembly shall be submitted, to the Registrar or to the person/persons in the manner as may be prescribed, for approval and "until such approval is obtained, proceedings of such meetings shall not be valid". While submitting the proceeding ''a list showing the total number of members on the date of holding the meeting and the number of members present thereat with their names shall be attached thereto, in virtue of Section 86, "any register or list of numbers or shares kept by any society" is to be considered prima facie evidence of the particulars entered therein. Section 17 dealing with "votes of members" provides that "subject to any temporary disqualification from voting which may be prescribed in the byelaws a member of the society shall have one vote only "in the affairs of the society". By Section 8 it is provided that "all disputes" regarding membership for the purpose of "formation, registration continuance of the society" shall be decided by the Registrar, u/s 3 the Registrar is invested with a special (missionary''s) role. He is not to act as boated bureaucrat functioning like any other windy or wooden top brass of administration as he is to provide "supervision, assistance and counsel" to the societies in addition to his power of "control". Delegation of all or any of the powers and functions of the Registrar to other persons and officers is also contemplated there under, Chapter XIV is captioned "Jurisdiction" of which Section 79 deals with "Bar to jurisdiction of courts". Sub-section (2), which is relevant for the case bears extraction;

(2) Save as provide in this Act, no order decision or award under this Act, or working or the affairs of a registered society shall be liable to be challenged, set aside, modified, revised (sic) void in any court on any ground whatsoever kept on grounds of jurisdiction.

It will be difficult to dispute that the court below ought to have, but has not directed its attention to any of the above provisions while passing the impugned order. In my opinion, it will be patently erroneous for any civil court to consider any prayer for temporary injection interfering with a process of any "election" under the Act, without direction its attention to the above and other (sic)vant provisions of the Act. If the Plaintiff has any right (sic)ble right under the Act out no remedy or after he has (sic) the remedy provided under the Act and he has his "injury" left unremedied then and then only, in my opinion, it will be open to him as specified u/s 79(2) to invoke the ju(sic) of a civil court. In the instant case, 1 have no manner of doubt that the Plaintiffs could not complain of any "injury" for which they could seek redress in the injunction proceeding as indicated by my underlining the provisions discussed (herein printed in italic-Ed) Because, in the first place, their right, if any, to challenge the election could only be an inchoate and not an enforceable right in view of the provisions of Rule 26. The election was a part only of the annual meeting of the General Assembly and the proceedings thereof until approved by the Registrar had no validity in law. They had a right u/s 8 of the Act to press their claim and insist that the proceedings were liable to be annulled. And. even it their claim was rejected they had a right of appeal u/s 80. If the Assistant Registrar, to whom they had made the representation had rejected the claim, they could appeal to the Registrar and there was further a right of review even against the decision rendered by the Registrar. Reliance, in this connection, on tea decision in N.P. Ponnuswami Vs. Returning Officer, Namakkal Constituency and Others, by Mr. Laskar is, in my opinion, most apposite. The court held, indeed ceiling with an election matter, that "when a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by the statute must be availed of".

On behalf of the opposite party (Plaintiff), learned Counsel Mr. C.R. Dc, has drawn my attention to decision of this Court reported in AIR 1970 Assam and Nagaland 96 Abdul Gafur v. Mustakin Ali, A suit was filed for declaration that Defendant''s election as the Chairman of the Society was void and illegal end a prayer for temporally injunction was made for restraining him from taking over charge and functioning as the Chairman. The prayer was allowed by the learned Munsiff and on appeal the order was upheld. This Court dismissed the petition for revision by the Defendant. However, in that case the election had been approved by the Registrar and the contention raised before the court was that the suit could not be entertained u/s 79(2) of the Act, M.C. Pathak, J. as be then was, in rejecting the contention held that the approval by the Registrar would itself be a matter for consideration in the suit. I am in respectful agreement with this view because, in my opinion, the term "jurisdiction" which is explicitly excluded in specified category of cases from the purview of the bar u/s 79(2) refers to jurisdictional error of a functionary acting under the Act in deciding any matter. What would therefore, be open to challenge in a civil suit, should be an act, "order", "decision" or "award" of a statutory functionary, and that too on the score of jurisdictional error, t This decision cannot, therefore, be of any assistance to Mr. De. In the instant ease, admittedly, the Plaintiffs did not wait until the Assistant Registrar accorded his approval. I do not read in the decision cited anything contrary to the view expressed by me.

I have therefore no hesitation to hold that the impugned order, for reasons alluded, suffers from a jurisdictional infirmity and has to be act aside, in doing so bearing in mind the proviso to Section 115, I feel confident to observe further that if the order is allowed to stand it could occasion a failure of justice in the facts and circumstances of the case. The object of the Act must not be frustrated and litigative malaise in adversarial context must not be allowed to afflict the institutions conceived by the legislature for the economic. upliftment of the poor and needy. To hold annual general meeting timely and regularly is a salutary provision imbibing democratic ethos. If the annual elections are held up, management and business of the society will suffer. None shall gain; every one shall lose.

In the result this application succeeds. The rule is made absolute. But in the facts and circumstances of the case I make no order as to costs.

Before parting with the case I feel it necessary to speak a few words on the role of pref, Defendant No. 5. As Assistant Registrar, being delegate of the Registrar, be should have played an active role in the matter. He appeared neither in this Court nor in the courts below, I am confident that if he had represented the legal position in the court below there may not have been occasion for the court to pass the impugned order. I would like to stress again Registrar''s statutory role under the Act which ii that of a feted, philosopher and guide add as such he and his delegates must act, when necessary, in the interest of the movement Public money in the form of share capital, grants, subsidy etc. besides the small (sic)''s saving which go in the making of a co-operative society, will be washed dewa by the negative burden if he or they did not react suitably and promptly in such situations. The Register of the legislature has intended, in the best judge of the interest of both, a "member" and his "society". Indeed, the common interest of both lies in the furtherance of the movement which can be best ensured by an honest and efficient management of the affairs of the society.

Let a copy of this order be sent to the Registrar of Co-operative Societies, Assam, Gauhati.