P.G. Tilak vs The Deputy Registrar of Co-operative Societies and Others

B. Subhashan Reddy, J.—This writ petitioner raises an important point for consideration as to whether an order which is appealable under a statute before a particular forum is made appealable to a different forum because of the amendment in the statute.

The matter arises under the A.P. Co-operative Societies Act, 1964 (in brief ''the Act''). The cause arose because of the surcharge order passed by the 1st respondent herein in exercise of his powers contained u/s 60 of the Act. The petitioner, who was the ex-President of the Primary Agriculture Cooperative Society, Julurupadu of Khammam District, was again elected as the Director of the said Society from Ward No. 5 during committee elections held in the month of January, 1992. The 1st respondent served him with surcharge orders u/s 60 of the Act on 6-2-1992 and the same pertains to the earlier period of Managing Committee and not to the present period after January, 1992. Challenging the said surcharge order, the petitioner filed an appeal in C.M.A. No. 1 of 1992 in the Appellate Tribunal (Principal District Munsif, Kothagudem), who by an interim order stayed the operation of the surcharge order issued by the 1st respondent. But, inspite of the said orders of the court being subsisting the 1st respondent has again issued orders dated 5-5-1992 in Rc.No. 582/90-D disqualifying the petitioner from being the Director of the 4th respondent-society. The same is impugned in this writ petition.

The merits relating to surcharge proceedings are in no way concerned in this writ petition as the appellate forum is ceased of the matter. But now the question raised is that the appellate forum i.e., the court of the Principal District Munsif Kothagudem is not having jurisdiction in view of the amendment to the provisions contained u/s 75 of the Act changing the appellate forum. Now, there is a change in the appellate forum taking away the power from the District Munsif and vested the same in a Judicial officer not below the rank of a District Judge as Chairman with two members and one member being not below the rank of Additional Registrar of Co-operative Societies.

Mr. Rajamalla Reddy, the counsel for the petitioner, contended that as the period for which the surcharge proceedings were anterior to the amendment of the Act, the previous appellate tribunal i.e., the District Munsif has jurisdiction to try the matter and not the new appellate forum which is constituted. Mr. A. Ramalingeswara Rao as also the Government Pleader appearing for the respondents contended otherwise. Their contention is that though the period for which the surcharge proceedings related and the initiation of the proceedings were anterior in time to the relevant amendments effected in the Act, still the new appellate forum under the amended Act assumes jurisdiction. Then what is relevant is, as to whether the matter relating to appeals is substantive or procedural. While it is true that nobody can claim an appeal as of right, but when a statute provides an appeal, there is a right to avail of such an appeal remedy where both factual and legal aspects are again reappreciated and reconsidered. It is a settled law that an appeal provision is a substantive provision and not a procedural one.

The facts, briefly stated, are thus:

Show-cause notice u/s 60 of the Act was issued on 30-1-1991 by the1st respondent in his proceedings Rc.No. 582/90-D calling upon the petitioner to appear and show-cause on 20-2-1991 as to why he should not be surcharged for the amount mentioned therein. Another show-cause notice was issued in the same proceedings on 6-6-1991 in continuation of the earlier one. The petitioner appeared before the 1st respondent on 28-6-1991 and contested as he was not liable to be surcharged. But the 1st respondent has passed the surcharge order against the petitioner on 21-12-1991 which was served on the petitioner on 6-2-1992. The petitioner filed an appeal before the District Munsiff, which was constituted as a Tribunal and which was the forum under the principal Act of 1964 before the amendment Act 15 of 1991 came into force. It is not in dispute that the said amended provision came into force with effect from 6-8-1991.

In Hoosein Kasam Dada (India) Ltd. Vs. The State of Madhya Pradesh and Others, the Supreme Court held as follows:

"A right of appeal is not merely a matter of procedure. It is a matter of substantive right. This right of appeal from the decision of an inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in and before a decision is given by the inferior court. Such a vested right cannot be taken away except by express enactment or necessary intendment. An intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication."

That case arose under C.P. and Berar Sales Tax Act 1947 where under there was no embargo or restriction placed for an appeal filed by a subsequent legislation an amendment was brought forth making it imperative for necessity to deposit the disputed amount of tax at the time of preferring the appeal. Repelling the contention advanced on behalf of the State that the amended provision alone governs the situation and mat the assessee was not entitled to file the appeal without deposit of the amount as contemplated under the unamended provision, the Supreme Court held as follows:

"The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created the right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal, that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to Section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist."

The above view of the Supreme Court was affirmed in a later Supreme Court judgment in Garikapatti Veeraya Vs. N. Subbiah Choudhury, . It was held by the Supreme Court as follows:

"The legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. The right of appeal is not a mere matter of procedure, but is a substantive right. The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date and its commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise."

Repelling the contention that the language to Article 133 in which the jurisdiction vested after the Constitution, impliedly takes away the right of appeal, the Supreme Court cautioned that in construing the articles of the Constitution, courts must bear in mind a cardinal rule of construction that statutes should be interpreted, if possible, so as to respect vested right. The Supreme Court further held that the golden rule of construction is that in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed.

Similar questions also arose for consideration before this court on more than one occasion. In V. Venkayamma v. P. Ramalakshmi 1973 (1) APLJ 97 , it was held that a decree passed in a suit which was instituted in a court having pecuniary jurisdiction on the date of institution was appealable to High Court as provided under the unamended statute i.e., Hyderabad Civil Court Act inspite of the fact that the A.P. Civil Court Act, 1972 was enacted making a provision that a decree with such a pecuniary value was appealable to the court of the District Judge. That was on the legal principles stated by the two decisions of the Supreme Court referred to above holding that the appellate forum existing on the date of institution of original action governs the situation and not otherwise. The same view was affirmed by the Division Bench of this Court in Saraswathula Kameswaramma and Another Vs. Radhakrishna and Co. and Others, . Mr. A. Ramalingeswar Rao, cited a decision rendered in K. Ramachandra Naidu Vs. Govt. of Andhra Pradesh and Others, in support of his contention that the appellate forum under the amended statute will have jurisdiction even if the original action was initiated earlier. But the said judgment of the Full Bench did not lay down any principle to such an effect as sought to be projected by Mr. A. Ramalingeswar Rao. On the other hand, the said Full Bench emphatically holds that appeal right is a substantive right and not a procedural one and that the appellate forum under the amended legal provision was the one and the same, but composition of the same was changed. The said Full Bench judgment of this court, while holding the appeal remedy is a substantial remedy and that the same cannot divested except by express words or by necessary implication under the amended statute, has held that the appellate forum not having been changed, a change in composition of the appellate Tribunal do not amount to deprivation of a vested right. It is apt to extract the relevant portion of the said judgment.

"The aggrieved party, persons have got a vested right of appeal. However, the State has ample power and jurisdiction to change the constitution or composition of the appellate authority, keeping in fact, at the same time the right of the party to prefer appeal. The right of appeal is a vested right which cannot be taken away except by the legislature by specific terms. The change of forum is different from the change in the constitution or composition of the forum. The right to have the forum of appeal is substantive right, which is vested in the party, whereas the right to change the composition or constitution of forum of appeal is a procedural one, which can be made retrospectively and the subject cannot validly challenge or attach its competence or validity."

In K. Annapurna v. Prl. Dt. Judge, East Godavari, 1987 (2) ALT 186 also, a Division Bench of this court has taken the similar view in consonance with the dicta laid down by the Supreme Court and the earlier decisions of this court.

In view of what is stated supra, the legal position which emerges is that the appeal is a substantive right and not a procedural one and that the appellate forum prescribed on the date of initiation of original action continues to be the same regardless of a later amendment changing the said appellate forum or even abrogating the same, unless the amending statute expressly states so or it is so manifest by necessary implication. Having scanned through the provisions of the amended Act contained under A.P. Act No. 15/91, touching upon Section 75 of the principal Act of A.P. Co-operative Societies, 1964, amending the appellate forum, taking away two different forums such as District Munsiff and Subordinate Court basing on the distinction of primary societies and larger societies and constituting only one appellate forum irrespective of the nature of the societies with District Judge as Chairman with two other members, operates only prospectively for any original action initiated under the Act on or after 6-8-1991, but not before.

There is yet another aspect to be consider in view of the contention of Mr. A. Ramalingeswar Rao that even assuming that the District Munsiff has got jurisdiction to entertain the appeal and the stay of operation of surcharge order is subsisting, yet the same will not enure to the benefit of the petitioner to file a nomination and that the petitioner having been at default was disqualified from contesting the election. For his argument, he seeks support of the judgment in K. Rama Rao, In Re 1988 (1) ALT 103. In that case, a learned single Judge of this court held that once surcharge order is passed the principle is that the person is disqualified to file a nomination inspite of the fact that the appellate authority has suspended the said order. But that case is distinct from the facts of this case as in that case the matter related to right of filing nomination and the learned Judge felt that merely because surcharge order was stayed, did not authorise the persons suffering the said surcharge order to file a nomination ignoring the effect of the said surcharge order completely. But, here is a case where elections were already held and the petitioner was already elected as a Director and the surcharge order was served upon him after such an election and in consonance with the rule of law and as the rule of law takes in its fold the sanctity to be given to judicial orders and as such so long as the appeal is pending and the interim stay of surcharge order is intact, it has got to be given effect to or otherwise it will lead to dichotomy and result in anomalous circumstances. A statute or rule framed thereunder has to be interpreted harmoniously and not to result in anamolies. If the contention of the respondent is accepted that irrespective of stay of the surcharge order, the petitioner gets disqualified, even though recently elected and even though still a period more than 2 years to continue, what would be the result in the event of the appeal being allowed as in that event there is no provision made under the statute, to reinstate him or restore his position. As such, I reject the contention advanced by Mr. A. Ramalingeswar Rao in this regard and hold that the stay of operation of surcharge order enures to the benefit of the petitioner to continue in office for which he was elected during the elections of January, 1992 so long as the said surcharge order continued to be stayed and if annulled later. It is needless to mention that if either stay is vacated or the appeal is dismissed, the petitioner has to vacate his office.

In the circumstances, I hold that the surcharge order passed by the 1st respondent on 21-12-1991 was appealable only to the court of the Principal District Munsiff, Kothagudem and that CM. A.No. 1 /1992 was validly filed and that the said authority alone should dispose of the said appeal and so long as the stay order passed by the said authority is in operation, the petitioner shall not be deemed to have been disqualified for holding the post to which he was elected during the month of January,1992 to the committee of the society.

The writ petition is accordingly allowed to the extent indicated above. No costs.