Gram Panchayat Rajipur Jhujna vs The Punjab State (Now Haryana State)

Gurdev Singh, J.—In the two Letters Patent Appeals 693 and 694 of 1970, the sole question for our consideration is whether a Gram Panchayat in the State of Haryana can sue or be sued is its own name ? As the same question arose in R.S.As. 774 and 775 of 1961 and 749 of 1966, they have also been directed to be placed before us by the teamed Judges sitting in Single Bench.

The appreciate the controversy that has arisen, it will suffice to refer to the material facts giving rise to L.P.A. 693 of 1970 It arises out of a suit brought on 20th of February, 1962, by the Gram Panchayat Rajipur Jhajra (now in the State of Haryana) against the State not to interfere with its rights, title or interest of collecting, selling or auctioning sand, stones etc. found in the property vested in the Gram Panchayat in various villages within its jurisdiction. No objection to the locus standi of the plaintiff Panchayat was taken and finding its case established, the suit was decreed by the Senior Subordinate Judge. Ambala, on the 31st of July, 1962. The learned Second Additional District Judge, to whom an appeal was taken against this decree by the State of Punjab, being of the opinion that the Gram Panchayat was neither a juristic person nor a corporate body held that it could not sue or be sued in its own name. On that short ground the State appeal was dismissed as not maintainable against the Panchayat. The correctness of this decision was challenged by the State of Punjab by way of second appeal (R.S.A. 1040 of 1964). D.K. Mahajan J. before whom it was laid, while agreeing with the learned Additional District Judge that the Gram Panchayat being not a corporate body could not sue or be sued, however, accepted the appeal, holding that even the suit brought by the Gram Panchayat was not proper as the Panchayat could not sue in its own name but should have sued in the name of all its members By the same judgment R.S.A. 1041 of 1964, out of which L.P.A 694 of 1970 has arisen, was similarly disposed of. The three Regular Second Appeals that have been ordered by the learned Single Judge to be heard with these two Letters Patent Appeals also state to the lands situate in the State of Haryana vesting in the various Gram Panchayats in that State. Thus, we will examine the question that has arisen before us with reference to the law as it prevails in the State of Haryana.

In recording the finding that a Gram Panchayat cannot sue or be sued, the learned Additional District Judge referred to sections 5 and 6 of the Punjab Gram Panchayat Act, 1952 (Punjab Act No, 4 of 1953) (hereinafter referred to as the Act), summed up his conclusions in these words:

The reading of both these sections would indicate That Gram Sabha and Gram Panchayat are different bodies The Gram Panchayat u/s 6 of the Act is only an executive Committee of 5 or 7 members, elected from the Gram Sabha and the latter only is competent u/s 5 of the Act to acquire, hold, administer and transfer property and to enter into contracts and to sue or to be sued and do all such things as are necessary for which it is constituted. There is, under the circumstances, no doubt that only Gram Sabha constituted by the votes on the electoral roll of the State Legislative Assembly for the time being in force pertaining to the Sabha area, is entitled to sue and liable to be sued and not the Gram Panchayat. The Gram Panchayat has its duties, functions and certain powers as given is Chapter 3 of the Act which are purely of an administrative nature.

These duties, functions and powers nowhere include a right to sue or liable to be sued.

D.K. Mahajan, J., while referring to this finding and relying upon G.I.P. Railway Senior Institute v. Mohit Kumar AIR 1954 Nag 29, observed:

It was open to the members of the Gram Panchayat to have brought the suit. This they did not do. It is also conceded that the Gram Sabha being a juridical person could have brought a suit of the present kind. Even that was not done. It is not disputed that the Gram Panchayat is not a corporate body and that being so, no suit by such a body is permissible on this short ground that appeal must succeed. The view 1 have taken of the matter also finds support from a large number of decisions and I need only refer to The N.W.P Club v. Sadullah, ILR 20 All 97.

It has been urged before us that only a natural or juridical person can sue or be sued in its own name, and if the suit is brought by an association or body consisting of more than one person and for the benefit of all of them, the suit will have to be instituted in the name of all such persons unless such an association or society is a corporate body or is specifically empowered by law to sue or be sued in its own name, or is vested with the attributes of a juridical person. To appreciate the contentions raised and to resolve the controversy, it is necessary to refer to the statute under which the Village Panchayats have been constituted.

The Punjab Gram Panchayat Act (IV of 1953) was enacted, as its preamble states, "to provide for better administration in the rural areas of Punjab by Panchayats". It repealed the Punjab Village Panchayat Act, 1939, and extended it to the whole of the State of Punjab. Later on the merger of the State of Patiala and East Punjab States Union, by Act No. 26 of 1960 it was made applicable to the areas which formerly formed part of that Union. On reorganisation of the State of Punjab on the 1st of November, 1986, a considerable part of its area was taken away and the State of Haryana was created, but the provisions of the Act, as amended upto that date, continued to apply to such areas. Under this Act Gram Sabhas and Gram Panchayats were constituted. Section 5 thereof, which relates to the establishment and constitution of? Gram Sabha, provides:

Establishment and Constitution of Gram Sabha :--

(1) Government may, by notification, establish a Gram Sabha by name in every Sabha area.

(2) Every Gram Sabha shall, by the name notified under subsection (1), be a body corporate having perpetual successions and a common seal, and, subject to any restriction by or under this Act or any other law, shall have power to acquire, hold, administer and transfer property, movable or immovable, and to enter into contracts, and shall by the said name sue or be sued and do all such things as are necessary for which it is constituted.

(3) Every person who, for the time being, is entered as a voter on the electoral roll of the State Legislative Assembly for the time being in force, and pertaining to the Sabha Area, shall be a member of the Sabha of that Sabha area.

Provision for constitution of Gram Panchayats is made in section 6, the relevant part of which runs thus :

Constitution of Gram Panchayats and Disqualification to be Members thereof.--(1) Every Sabha shall, in the prescribed manner, elect from amongst Its members a chairman of the Sabha and an executive committee consisting of such number of persons not being less than five or more than nine including the Sarpanch of the Executive Committee as the Government may determine taking into account the population of the Sabba area :

Provided that if no woman is elected as a Panch of any Sabha, the woman candidate securing the highest number of votes among the woman candidates in that election shall be co-opted by the Panchayat as a Panch of that Sabha and where no such woman candidate is available the prescribed authority shall co-opt as such Panch a woman member of the Sabha who is qualified to be elected as a Panch.

(2) The Chairman shall also be called the Sarpanch of the Executive Committee which shall be styled as the Gram Panchayat, the members whereof to be called Panches.

It is, thus, evident that a Gram Panchayat is only the Executive Committee of a Gram Sabha and it is this latter body which alone has been constituted into a corporate body, capable of acquiring and holding property and competent to sue or be sued in its own name. So far as a Gram Panchayat is concerned, section 6, under which it is constituted, has neither made it a corporate body nor specifically empowered it to acquire or hold property or to sue or be sued in its own name.

Consequent upon the decision of D.K. Mahajan J. in Gram Panchayat Rajipura Jhujna''s ease (1970 P. L. J. 752), out of which L. P. A. 693 of 1970 is now before us, the State of Haryana seems to have realised the handicap with which the Gram Panchayats were faced and the relevant provisions were got amended. By the Gram Panchayat (Haryana Amendment) Act, 1971 (Haryana Act No. 19 of 1971), which came into force on the 4th of May, 1971, sections 5 and 6 of the Principal Act were substituted by new provisions. The new section 6 runs thus :--

Transfer of assets and liabilities.--On the commencement of the Punjab Gram Panchayat (Haryana Amendment) Act, 1971, all assets and liabilities and all property, movable or immovable, and all other rights and interests arising out of such property as were "immediately before the commencement of this Act in the ownership, possession, power or control of the Sabhas shall be transferred to, and shall vest in, the corresponding Gram Panchayat.

The new section 8 inserted by the amending Act then provides :

Incorporation of Gram Panchayat.--Every Gram Panchayat shall, by the name notified under sub-section (1) of section 5, be a body corporate having perpetual succession and a common seal, and subject to any restriction by or under this Act or any other law, shall have power to acquire, hold, administer and transfer property, movable or immovable, and to enter into contracts, and shall by the said name sue or be sued and do all such things as are necessary for which it is constituted.

In view of this specific provision, it is abundantly clear that under the law as it stands, as a result of the amending Act, which came into force on 4th May, 1971, a Gram Panchayat in the State of Haryana is competent to sue or be sued in its own name.

The appeals before us, however, arose out of the suits that were instituted between the year 1958 and 1964 prior to the amending Act of 1971. We have, thus, to consider what is the effect of the amending provisions on those suits and if we come to the conclusion that the question that the competence of suits by or against those Gram Panchayats has to be settled with reference to the law as it prevailed prior to the amendment of 1971, then we have further to consider what was the position under that law.

There is no specific provision in the amending Act regarding the pending proceedings. Transitional provision is, however, contained in Section 19, which runs thus :--

Nothing in this Act shall affect the continuance of the Sabhas and Panchayats under the principal Act which are in existence immediately before the commencement of this Act, or the exercise by them of the powers and functions under the principal Act as amended by this Act, till such time as the Gram Panchayats are established and constituted in accordance with the provisions of this Act, and the aforesaid Sabhas and Panchayats shall continue so to exist as if this Act had not been passed and to exercise the powers and functions accordingly.

It will be seen that though the Gram Sabhas and the Gram Panchayats constituted under the principal Act have been allowed to continue, their exercise of powers and functions is specifically mentioned subject to the Act as amended. This clearly means that during the transitional period, the Gram Panchayats in accordance with the provisions of Section 8 of the Act could sue or be sued.

Section 6 as substituted by the amending Act and which has been reproduced earlier is relevant in this connection, It provides that on the commencement of the amending Act all assets and liabilities and all property, movable or immovable, and all other rights and interests arising out of such property as were immediately before the commencement of this Act in the ownership, possession, power or control of the Sabhas shall be transferred to and shall vest in the corresponding Gram Panchayats. As a result of this provision with effect from 4th May, 1971 when the amending Act came into force, all assets liabilities, all property and all other rights and interests arising out of such property which previously were of the Sabhas vested in the Gram Panchayats. It can, thus, very well be urged that in the pending proceedings, the Gram Panchayat could claim to he impleaded as a party to safeguard its rights and Interests in the property that vested in it and be substituted for the Sabha as its successor under the law. This contention seems to receive support from the decision in AIR 1941 5 (Federal Court) the principle of which has been re-affirmed by their lordships of the Supreme Court. According to this authority "the hearing of an appeal under the procedural law of India is in the nature of rehearing and therefore in molding the relief to he granted in a case on appeal, the appellate Court is entitled to take into account even facts and events which have come into existence after the decree appealed against, and consequently the appellate Court is competent to take into recount legislative changes since the decision in appeal was given and its powers are not confined only to see whether the lower Court''s decision was correct according to the law as it stood at the time when its decision was given.

As full arguments were not advanced on this aspect of the matter and Only a passing reference was made to Section 19 of the amending Act, we would not proceed any further with it, more so, when we find that even under the law as it stood before the amending Act, 1971, there was nothing to prohibit a Gram Panchayat to sue or be sued in its own name.

The argument that prior to 1971, the Gram Panchayat could not sue or be sued in its own name proceeds merely on the fact that in the principal Act, there is no provision that a Gram Panchayat can sue or be sued in its own name, whereas such provision, is specifically made in Section 5(2) with regard to the Gram Sabhas, which also gives powers to the Gram Sabhas "to acquire, hold, administer and transfer property, movable or immovable and to enter into contracts." It is argued that if the legislature intended that a Gram Panchayat may sue or be sued in its own name, it could have specifically said so as it did in the case of Gram Sabha. There is no denying the fact that such a specific provision for suits by or against the Gram Panchayat is not there, but the question that has to be considered is whether in the absence of such a provision a Gram Panchayat is incompetent to sue or be sued in its own name in respect of its interests and rights in the properties vested in it. Admittedly, there is no prohibition in the present Act against a Gram Panchayat being made a party to such suits. It has, however, been strenuously urged before us that it is well settled law that a body or association consisting of several persons cannot sue or be sued In its own names if it is not a corporate body or a juristic person and the course open to it is to sue or be sued in the name of alt its members. This proposition has been accepted by D.K. Mahajan J. on the basis of the decisions in The N.W.P. Club v. Sadullah ILR 20 All. 497 G.I.P. Railway Senior Institute v. Mohit Kumar. In G.I.P. Railway Senior Institute''s case what has been held by Mudholkar J. is "An unregistered and non-proprietary club is not a juridical person and as such cannot sue or be sued. Where it has to be made liable the proper course is to sue individually the members thereof or to sue only those persons who have rendered themselves personally liable in respect of a contract or tort as the case may be". Relying upon this decision, it is argued that since Panchayat is a body constituted by several persons and is not a body corporate, it is no better than an association or a club.

In The N.W.P. Club''s case ILR 20 All. 497 it was ruled that where a contract was for the benefit of the club, the liability was of the Secretary of the club

Coming to the various authorities that have been cited before us, in The Punjab State Club, Simla v. The Municipal Committee Simla ILR 1958 Pb. 210. Bishan Narain J. while dealing with a petition under Article 226 of the Constitution brought by the Punjab State Club, Simla, observed as follows:--

Admittedly the Punjab Services Club is an unregistered members Club. Such a club has no legal status. It is neither a company nor a partnership. It is a social club for relaxation and recreation of its members. Un-registered members clubs are societies, the members of which are perpetually changing and are merely aggregates of individuals, called for convenience by a common name. It is well established that such association of members cannot sue or be sued in the association''s name and all its members must sue or be sued.

This authority is clearly inapplicable to the facts before us. The Panchayats with which we are dealing are not voluntary associations which perpetually changing membership, but bodies constituted under a statute. Members of the Panchayat are elected according to the provisions and rules made thereunder and the Panchayats are entrusted with certain functions administrative as well as judicial. They can in no case be equated with members of a voluntary association or a dab or other unregistered body. For the same reasons, the decisions in Bhagwandas Singh and Others Vs. Pinjra Pole Pashu Anathalaya , Mahabir Prasad Mawandia Vs. Satyanarain Kotriwala, and Nalin Behari Roy and Another Vs. Bisweswar Bhattacharjya, are of no assistance.

In Bhagwandas''s case (supra) a Division Bench of the Allahabad High Court ruled that "unregistered society such as branch of Arya Samaj could be sued by impleading all its members as parties." This judgment contains no discussion of the law on the subject, but merely relied on an earlier decision of that Court in Nathu and Another Vs. Ram Sarup and Others observing as follows :--

It is not the law and never has been the law that an unregistered society cannot hold property. It is not the law and never has been the law that it cannot sue or be sued. There are great difficulties about suing it because it is necessary to sue it as a joint body, and to implead all the members thereof. That was what was decided by the first Bench quite recently in Ram Sarup Vs. The Arya Samaj and Others,

In Bishweswar''s case (supra), the learned Judges of that Court held that "where a person incurs loans on promissory notes in his capacity as secretary of a co-operative society which is unregistered and it is shown that the loans were utilised by the society, a suit by the creditor to recover the money due on the pronotes should be brought against all the members of the society. No one particular member can be singled out for recovering the claim of the creditor." Reliance in this connection was placed upon the Allahabad decision in Bhagwandas'' case that has been discussed above.

Mahabir Prasad Mawandia Vs. Satyanarain Kotriwala, , is again a Single Bench authority for the proposition that an unincorporated members'' club, not being a partnership or legal entity, cannot sue or be sued in the name of the club, or can even the Secretary or any other officer of such a club sue or be sued in the name of the club, even if the rules were to give him power to sue or be sued, unless this was permitted by statute.

Reference may here be made to a Division Bench decision in Roller Flour Mills v. income tax Officer AIR 1953 Pepsu 88, where it was held that Order 30, Rule 1, Civil Procedure Code, which enables any two or more persons claiming or being liable as partners and carrying on business in British India to sue or be sued in the name of the firm, is an exception to the rule that only a natural or a juristic person can move the Court of law.

Now, we proceed to consider the decisions, which have been relied upon in a support of the proposition that the Gram Panchayat could sue or be sued in its own name In The The District School Board Vs. Bhagwan Vasudev Marathe, , it has been held that the District School Board created u/s 3 of the Primary Education Act, being a creature of the (sic), having separate independent existence, is a corporation and as such is liable to be sued. A reference in this connection was made to the definition of ''Corporation'' given in Haisbury''s Laws of England, Volume VIII page 683. This decision was followed by a Division Bench of the Bombay High Court subsequently in The District School Board Vs. Parameshwar Gattu Naik,

In Parameshwar Dayal v. The Barh Local Board AIR 1951 Pat 607, it was held that though a Local Board constituted under Bihar and Orissa Local Self Government Act III(3) of 1885, is not treated by the Act as a corporate body, it was a quasi corporation and thus could sue through its Chairman, without making all the members of the Board plaintiffs in the case.

The decision in Nagar Panchayat Jhajha (Nagar Sabha) Bhoj v. The State of Punjab 13 (1967) 69 P.L.R. 375 is however, more in point. That case arose out of a suit brought by the Nagar Panchayat of Jhajha against the State of Punjab. The Panchayat was constituted under the Pepsu Panchayat Raj Act No. VIII of 2008 Bikrami. S.K. Kapur, J. held that though under the definition of the Panchayat Nagar-Panchayat was an executive committee of the Nagar Sabha, but that alone did not confer any right on the Nagar Sabha to institute any suit on behalf of the Nagar Panchayat with respect to the property vesting in a Gram Panchayat and the suit brought by the Nagar Panchayat itself in its own name was competent. In coming to this conclusion, the learned Judge referring to the scheme of the Act found that there was nothing in it to debar the Panchayat from filing such suits. He further held that Nagar Panchayat was a local authority within the meaning of sub section (31) of section 3 of the General Clauses Act and considering the functions that it was required to discharge under the statute as a local authority it was possessed of capacity to sue.

The leading authority on the point is the decision of the House of Lords in The Taff Vale Railway Company v. The Amalgamated Society of Railway Servants 1901 A.C. 426. In that case a trade union, registered under the Trade Union Acts, 1871 and 1876, was sued It was objected that it could not be sued in its own name. It was contended that the defendant union was neither a Corporation nor an individual and could not be sued in a quasi-corporate or any other capacity. Farewell J. overruled the objection, but the Court of Appeal held that a trade union society could not be sued in its registered name, (1901) 1 K B 170. It was pointed out that there was no provision in the Acts either expressly or impliedly enabling the trade union to sue or be sued in its own name, but on the other hand in section 9 of the Act of 1871 it was provided that the trustee of a trade union or any other officer of the Union authorised so to do by the Rules thereof would have the power to bring or defend any action in a Court of law concerning the property of the Trade Union. This decision of the Court of Appeal was reversed by the House of Lords. Earl of Halsbury L.C. entirely agreed with Farewell J. and adopting that judgment observed as follows:

If the Legislature has created a thing which can own property, which can employ servants, and which can inflict injury, it must be taken, I think, to have impliedly given the power to make it suable in a Court of Law for injuries purposely done by its authority and procurement.

Lord Macnaughten dealt with the question in these words :

The further question remains : May a registered trade union be sued in and by its registered name? For my part I cannot see any difficulty in the way of such a suit. It is quite true that a registered trade union is not a corporation, but it has a registered name and a registered office. The registered name is nothing more than a collective name for all the members. The registered office is the place where it carries on business. A partnership firm which is not a corporation, nor, I suppose, a legal entity, may now be sued in the firm''s name. And when I find that the Act of Parliament actually for a registered trade union being sued in certain cases for penalties by its registered name, as a trade union, and does not say that the cases specified are the only cases in which it may be so sued, � can see nothing contrary to principle, or contrary to the provisions of the Trade Union Acts, in holding that a trade union may be sued by its registered name.

Endorsing this opinion Lord Shand said :

A registered trade union has an exclusive right to the name in which it is registered, a right to hold a limited amount of real estate and unlimited personal estate for its own use and benefit and the benefit of its members, the power of acting by its agents and trustees and is liable to be sued for penalties as it appears to me in the society''s name. I am clearly of opinion that these and the provisions generally of the statutes imply a liability on the society to be sued in its trade union name, and a privilege of thus suing.

Lord Brampton, while entirely concurring in the judgment and words of the Lord Chancellor in adopting the judgment of Farewell, J. said:

I see no reason why this question should not also be answered in the affirmative. I think that a legal entity was created under the Trade Union Act, 1871, by the registration of the society in its present name in the manner prescribed, and that the legal entity so created, though not perhaps in the strict sense a corporation, is nevertheless a newly created corporate body created by statute, distinct from the unincorporated trade union, consisting of many thousands of separate individuals, which no longer exists under any other name. The very omission from the statute of any provision authorizing and directing that it shall sue and be sued in any other name than that given to it by its registration appears to me to lead to no other reasonable conclusion than that in so creating it, it was intended by the Legislature that by that name and by no other it should be known, and that for all purposes that name should be used and applied to it in all legal proceedings unless there was any other provision which militated against such a construction, as, for instance in the case of trustees, by Section 9 of the same Act, who hold real and personal property of the society.

Referring to the rule which provided that funds of every branch shall be the common property of the society. Lord Brampton further observed:

That being so, I do not see how it would be possible for these funds to be made applicable for remuneration or recompense or redress for any wrongful act done by a body of men like the society unless the society can be sued on the way in which it is proposed to sue them, and as I think it may be.

Lord Lindley, agreeing with the restoration of the order of Farewell J., expressed himself thus :

My Lords, a careful study of the Act leads me to the conclusion that the Court of Appeal held, and rightly held, that trade unions are not corporations; but the Court held further that, not being corporations, power to sue and be sued in their registered name must be conferred upon them; and further that the language of the statutes was not sufficient for the purpose. Upon this last point I differ from them. The Act appears to me to indicate with sufficient clearness that the registered name is one which may be used to denote the union as an unincorporated society in legal proceedings as well as for business and other purposes The use of the name in legal proceedings imposes nO duties and alters no rights : it is only a more convenient mode of proceeding than that which have to be adopted if the name could not be used I do not say that, the use of the name is compulsory, but it is at least permissive.

As a result of this high authority it is idle to contend that since a Panchayat is not a corporation, it cannot sue or be sued in its own name, having not been empowered by the Act, under which it was constituted, to so sue or be sued In absence of any express provision in the Act debarring a Gram Panchayat to sue or be sued in its own name, it would be unreasonable to hold that a Panchayat cannot be impleaded as a party in its own name. Though it has not been specifically constituted as a corporation under the Act, a study of the various provisions of the Gram Panchayat Act relating to its powers, functions, etc., would leave no doubt that it has most of the attributes of a corporate body. Section 18 of the Act provides :

A Gram Panchayat may, in accordance with rules made under this Act--

(a) establish and maintain a provident fund on behalf of its servants; and

(b) grant a gratuity to any servant subject to the previous approval of the Director.

Section 19 enjoins performance of a large number of administrative duties, including that of medical relief and first-aid, construction, repair and maintenance of public places and buildings of public utility and the development of agriculture and village industries, all of which require huge expenditure. Section 20 enables the District Board to delegate some of its duties to the Gram Panchayat, including the maintenance of improvement of any property under its control or management. u/s 25, a Gram Panchayat is empowered to enter into contract with Government or a local body to collect land revenue or any taxes or dues payable to Government or a local body.

A Gram Panchayat is not a voluntary association of persons but a statutory body elected in accordance with the provisions'' of law. Though u/s 5 of the Act, as it stood before the amendment of the year 1971, it is the Gram Sabha that has been made a body corporate having perpetual succession and a common seal and having power to acquire, hold or administer property, u/s 4(1) (a) of the Punjab Village Common Lands (Regulation) Act, 1961, a Gram Panchayat as constituted under the Punjab Gram Panchayat Act, 1952, a Panchayat is invested with rights in certain types of property, including shamrlal deh and abadi deh. Even prior to it Panchayat had some property vested in them under the shamilat law. The power conferred by this provision is expressly stated to be "notwithstanding anything to the contrary contained in any other law for the time being inforce or in any agreement, instrument, custom of usage or any decree or order of any court or other authority". It is thus abundantly clear that even before the Amending Act of 1971, Gram Panchayats were holding property, and that property never vested in the Gram Sabhas, nor were they given authority to manage or administer the same. In these circumstances, we fail to see why a Gram Panchayat, at least with regard to the property which vested in it, should be debarred from suing or being sued in its own name.

In Jug Lal v. The Gram Panchayat of village Siwa (1971) 73 P.L.R. 556 A.D. Koshal, J. held that an application u/s 7 of the Punjab Village Common. Lands (Regulation) Act, which is not a suit governed by the Code of Civil Procedure, can be brought by the Village Panchayat in its own name even though it is neither a natural nor a juristic person; as section 7 itself states in unmistakable terms that the Assistant Collector may be moved on an application made by a Panchayat. With regard to the decision of Mahajan J. in State of Punjab (now Haryana) v. Gram Panchayat Rajipura, 1970 PLJ 752, which is the subject-matter of L.P.A. 693 of 1970 before us, the learned Judge, however, observed:

With very great respect I would say that no fault can be found with the dictum of Mahajan. J., or with the observations on which it is based but I do not see that it lends any assistance to the case of the petitioner

Section 7, to which reference is made in the judgment of A.D. Koshal, J., that has been noticed above, specifically empowers the Panchayat to make an application to the Collector to put the Panchayat in possession of land that had been vested or deemed to have been vested in it. There is, however, no provision in this Act regarding other legal proceedings and the procedure for the same. u/s 15, the State is empowered, by notification in the official Gazette, to make rules for carrying out the purposes of this Act. In sub section (2) thereof, one of the matters on which Rules be framed is: "the regulation of procedure where a Panchayat is sued in its representative capacity". It indicates that the Legislature contemplated that a Panchayat could be sued and it is on that assumption that rule 16 of the Punjab Village Common Lands (Regulation) Rules, 1964, framed under the Act, provides the procedure in cases where a Panchayat sues or is sued in its representative capacity. Though in the earlier Rules of the year 1955, there was no corresponding provision, yet at the same time there is nothing to prohibit a Panchayat to sue or being sued in its own name.

Reliance in this connection is placed upon the decision of S.K. Kapur, J. in Nagar Panchayat Jhajha (Nagar Sabha) Bhoj v. The State of Punjab (1967) 69 P.L.R. 375 to which a reference has already been made. That was a case of Nagar Panchayat constituted under the Pepsu Panchayat Raj Act (8 of 2008). The learned Judge held that there is no provision in the Pepsu Village Common Lands Act (15 of 1955) or Pepsu Panchayat Raj Act (8 of 2008) with respect to the lands vested in the Panchayat that the suits must be instituted by the Nagar Sabha, While recognising the fact that under the definition of Panchayat, Nagar Panchayat is an executive committee of the Nagar Sabha, the learned Judge observed that this alone would not confer any right on the Nagar Sabha to institute suits on behalf of Nagar Panchayat with respect to properties vesting in the Nagar Panchayat.

Examining the question, whether or not the Panchayat can sue being a local authority as defined in section 33(1) of the General Clauses Act, the learned Judge said:

Under section 28 the Panchayat is competent, with respect to the Sabha area, to enter into contracts with the Government or local body to collect land revenue or taxes or dues payable to the Government and with any Proprietor to collect rent on his behalf. Under Sections 111 to 113 the Panchayat can levy various taxes and the government has to assign every year to every Panchayat a portion of the land revenue realised within the limits of the Sabha area. By section 116 a Panchayat is enjoined to apply the Sabha funds in accordance with the provisions of the Act. Rule 120 forbids a Panchayat from transferring any immovable property belonging to a Panchayat by sale, gift, mortgage etcetera except by a resolution of the Panchayat and with the sanction of the Director. Under Rule 145 the administration of the Sabha funds is vested in the Panchayat subject to the general control of the Director. Panchayat is a creation of Legislature. It has a name, a place and a certain quantum of designation of persons. It has statutory powers. The absence of specification of a seal or a name in which to sue or be sued would be indifferent if it be a corporation otherwise. It appears from the scheme of the Act that the members of the Panchayat have to act collectively and are capacitated to act as an individual. Panchayat is, in my opinion, a local authority possessed of capacity to sue.

Dealing with Legal Persons, it is stated as follows at page 305 of Salmond''s Jurisprudence, 12th Edition:

Corporations are undoubtedly legal persons, and the better view is that registered trade unions and friendly societies are also legal persons though not regarded as corporation. A corporation is a group or series of persons which by a legal fiction is regarded and treated as itself a person A trade union is an association of workmen or employers for the purpose, among other things of collective bargaining ....If however, we take account of other systems than our own, we find that the conception of legal personality is not so limited in its application, and that there are several distinct varieties.

These observations were recently notice 1 by a Full Bench of this Court in D.A.V. College, Hoshiarpur Society v. Sarvada Nand Anglo Sanskrit Higher Secondary School, Managing Committee, Bassi Kalan (1972) 74 P.L.R. 673, dated 20th September, 1971, where a similar question arose. On consideration of the matter in the light of various authorities, the Full Bench held:

there is hardly any doubt that an endowment can be made to an institution created for religious or charitable purposes and such institutions known by different names are regarded as possessing juristic capacity and gifts of property can be made to them eo nomine.

In view of the legal position that emerges from the above discussion of relevant provisions and various authorities, there is no escape from the conclusion that there is nothing to debar a Gram Panchayat from suing or being sued in its own name, especially when the proceedings relate to rights and interests in the property that vests in it.

In view of the above finding, I would accept both the Letters Patent Appeals 693 and 694 of 1970, and setting aside the judgments and decrees of the learned Single Judge as well as those of the learned Additional District Judge, remand Civil Appeals 16/13 and 15/13 of 1964 to the learned Additional District Judge for their disposal on merits.

The question whether a Gram Panchayat can sue or be sued in its own name having been answered, the Regular Second Appeals 774 and 775 of 1961 and 749 of 1966 shall be placed before the Single Benches concerned for hearing on merits. There will be no order as to costs.

Gopal Singh J

I agree.