Punjab Rehabilitation Cooperative Housing Society Ltd. vs Raj. State Cooperative Tribunal and Others

Ajay Rastogi, J.—Instant intra-court appeal has been filed against order of the learned Single Judge impugned herein Dt. 25.07.2014 holding that resolution No. 5 of the Society Dt. 07.03.1957 was not open to be examined u/S. 32(1) of the Rajasthan Cooperative Societies Act, 1965 ("Act of 1965") or Sec. 125 of Rajasthan Cooperative Societies Act, 2001 ("Act of 2001").

Brief facts of the case are that a parcel of land was allotted to Punjab Rehabilitation Cooperative Housing Society ("the society") by the Director (Rehabilitation), Government of Rajasthan on 12.02.1953. The members of the society thereafter in its meeting held on 21.02.1957 while considering the issue regarding construction of community hall for the use of members proposed it to part with the piece of land to the Adarsh Hitkarni Trust ("Trust") and the member of the society jointly held that management of the trust always vests in the interest of the persons or successors forming the Society and copy of the minutes of the meeting was sent to the Secretary, Society for allotment of plot and the Society in its meeting held on 07.03.1957 finally decided vide its resolution No. 5 to allot a piece of land to the trust, pursuant thereto triangular plot measuring 44200 sq.ft., marked as ''DBCE; north-south on its west side 133 fts., east west- on its north side 152 ft. and east-west on its south side 475 ft., and that came to be allotted on the terms and conditions vide communication Dt. 26.03.1957 which was unanimously accepted and approved by the board of management of the Trust and it is relevant to note that noone was aggrieved either by the resolution No. 5 dt. 07.03.1957 or action being taken for allotment in furtherance thereof or there was any complaint of any kind or any violation of the terms and conditions of allotment/transferred to the trust and it is also not the case of the appellant society that the piece of land allotted has not been utilized for public purposes as per terms and conditions on which it was allotted and after the land has been fully developed and utilised for public purposes for which it was allotted and after almost 42 years, the Administrator-cum-General Manager of the Raj. State Cooperative Press Ltd. on examining the audit para as alleged of the financial year 1994-95 sent a letter to the Chairman, trust Dt. 21.08.1999 for information and simultaneously also sent to the Deputy Registrar, Cooperative Societies, Jaipur City u/S. 32(1) of the Act of 1965 to rescind the resolution No. 5 Dt. 07.03.1957 vide communication Dt. 21.08.1999, copies of both the communications are placed on record and marked as Annx. 5 and 6 respectively.

The correspondence between the society and Mr. M.R. Sethi who was the Ex-Chairman of the Society as also one of the trustee of the trust took place and by that time the Act of 1965 came to be repealed and the Deputy Registrar, Cooperative Societies, Jaipur City referred the proposal to the co-operative tribunal for rescinding the resolution No. 5 dt. 07.03.1957 u/S. 125 of the Act of 2001. It may be noticed that the trust to whom the piece of land was allotted/transferred pursuant to the resolution No. 5 Dt. 07.03.1957 holding the property for almost 42 years, nothing transpired and Mr. Sethi was holding the correspondence of its own and the Rajasthan State Cooperative Tribunal, Jaipur ("tribunal") consisting of two members in a cursory manner initiated ex parte proceedings and accepted the reference vide its order Dt. 25.09.2008 rescinding the resolution No. 5 Dt. 07.03.1957.

At this moment it may be noticed that the tribunal under its order Dt. 25.09.2008 must have noticed regarding the details pertaining to resolution No. 5 which was the subject matter to be examined, still there was no mention and the society appellant filed an application u/S. 106 of the Act, 2001 seeking necessary correction in the order of the tribunal Dt. 25.09.2008 and that review application No. 5/2010 came to be allowed by the tribunal vide its order Dt. 03.02.2012 and when this fact came to the notice of respondent No. 3 trust that the very resolution No. 5 Dt. 07.03.1957 stands rescinded by the tribunal vide order Dt. 25.9.2008 the respondent No. 3 (Trust) also filed a review application u/S. 106 of the Act, 2001 along with an application seeking condonation of delay u/S. 5 of Limitation Act and preliminary objection was that the tribunal u/S. 105 of Act 2001 consist of a Chairman and two other members to be appointed by the State Government to form the coram and indisputably the order was passed by the tribunal Dt. 25.09.2008 was not by a validly constituted tribunal as such the order was void ab initio bad, the learned tribunal condoned the delay and while overruling the objections raised by the appellant society finally allowed the review petition preferred at the instance of respondent No. 3 trust holding that resolution No. 5 Dt. 07.03.1957 passed cannot be rescinded under the provisions of the Act of 1965, at the same time also observed that opportunity of hearing has not been afforded to the trust and the ex parte order of the tribunal Dt. 25.09.2008 being void and the reference sent by the Deputy Registrar Dt. 21.08.1999, both came to be set aside vide order Dt. 18.09.2013, which was challenged by the present appellant by filing writ petition and that came to be dismissed by the learned Single Judge under order impugned herein Dt. 25.07.2014 which is the subject matter of challenge in the instant intra-court appeal.

The main thrust of submission of counsel for appellant is that the tribunal has committed an apparent error while holding that the provisions of Sec. 32(1) will not apply to the resolution No. 5 Dt. 07.03.1957 and could not be rescinded under the Act of 1965 and while doing so the learned tribunal failed to consider the mandate of Sec. 153 of the Act of 1965 and Sec. 153(2) clearly provides that anything done or action taken under the repealed act (Act, 1953) shall be deemed to have been done in view of the repealed Act of 1953 and Sec. 153(3) further envisage that Registrar shall be deemed to have been the Registrar repealed under the Act of 1965 and further submits that it does not save all the previous resolutions if any passed under the Act of 1953.

According to counsel for appellant in view of Sec. 153(2) of the Act of 1965 Sec. 32(1) would apply to the resolution No. 5 Dt. 07.03.1957 passed under the old Act of 1953 and in support of submission placed reliance upon the judgments of Apex Court in Bishambar Nath Kohli and Others Vs. State of Uttar Pradesh and Others, and Nar Bahadur Bhandari etc. Vs. State of Sikkim and Others, and taking assistance thereof submits that the respondent trust was not entitled to seek any opportunity of hearing and according to him Sec. 32(1) of the Act of 1965 or Sec. 125 of the Act of 2001 mandates opportunity of hearing to the society and that has been afforded, thus the respondent trust was not entitled for any opportunity of hearing and the finding which has been recorded by the learned tribunal holding that fair opportunity of being heard was not afforded to the trust is not in conformity with the mandate of Sec. 32(1) of the Act of 1965 or Sec. 125 of the Act of 2001 and further submits that if the original order of the tribunal Dt. 25.09.2008 was void being passed by the tribunal not being properly constituted that indisputably could not be considered to be a valid order and hit by the doctrine of coram non judice, being passed by the improperly constituted tribunal and being void and non-existent in the eye of law it was not open to scrutiny and that being so the order was not reviewable and the trust is not holding any legal entity in the eye of law and hence not entitled to maintain legal proceedings in its own way, at the same time counsel has further tried to persuade this Court that the very allotment of the land to the respondent trust by the appellant society vide its resolution No. 5 Dt. 07.03.1957 being in contravention of law and otherwise also such transfers are not legally sustainable by operation of law.

Sh. Garg appearing for respondent while supporting order impugned of the learned Single Judge submits that the very appellant society is harping upon and litigating the matter for a sufficient long time had at one time made an allotment of a piece of land to the trust vide its resolution No. 5 dt. 07.03.1957 and after the land being allotted to the trust vide communication No. 26.03.1957 and it has been fully developed in last 42 years neither the society nor its agent or member or any person if affected has ever taken any recourse or objection or complaint if any but the Administrator-cum-General Manager of State Cooperative Press Limited based on some audit para of the year 1994-95, which was never made available to the trust, sent the letter to the Deputy Registrar Cooperative Societies on 21.08.1999 holding that the resolution No. 5 Dt. 07.03.1957 being not in the interest of the members of the society to be rescinded u/S. 32(1) of the Act of 1965 and further submits that after resolution No. 5 Dt. 07.03.1957 of the society has been upheld by the tribunal may be at the instance of the respondent trust vide its order Dt. 18.09.2013 at least the appellant society who is harping upon could not be considered to be aggrieved by the order of learned tribunal in filing writ petition and further the special appeal before this Court and submits that there was no such corresponding provision like Sec. 32(1) of the Act of 1965 under the old Act of 1953 and the so called resolution No. 5 Dt. 07.03.1957 could not be rescinded u/S. 32(1) of 1965 and further submits that resolution No. 5 Dt. 07.03.1957 was never a subject to scrutiny with the Registrar Cooperative Societies under the Act of 1953, that being so Sec. 153(2) of the Act of 1965 has no application and such resolutions could not be open to scrutiny after the Act 1953 stands repealed under the scope of Sec. 32(1) of the Act of 1965 or u/S. 127 of the Act, 2001.

Sh. Garg further submits that this Court may also take note of the fact that the resolution No. 5 Dt. 07.03.1957 is open to litigation after almost 57 years and that too at the instance of the society on whose recommendations and resolution the land was allotted to the trust in March, 1957 and under these facts and circumstances the learned Single Judge has rightly not exercised its equitable jurisdiction u/Art. 226 and 227 of the Constitution taking note of the order passed by the tribunal on review application preferred by the trust impugned in the proceedings Dt. 18.09.2013 and declined to interfere under order impugned assigning cogent reasons and that may not require any interference by this Court at least in the instant intra-court appeal.

We have considered the submissions made by counsel for respective parties and with their assistance perused the material on record.

Indisputably the facts came on record which in nutshell we have narrated (supra) that the Director (Rehabilitation) of Raj. Govt. initially allotted a piece of land to the appellant society on 12.02.1953 and the management committee of the appellant society vide its resolution No. 5 Dt. 07.03.1957 allotted small parcel of land to the trust on certain terms and conditions vide letter Dt. 26.03.1957 and accepted by the board of management of the trust and for almost 42 years it is admitted between the parties that no complaint of any kind whatsoever was made either by the members of the society or by the trust or any other person who feels himself aggrieved by the allotment to the trust Dt. 26.3.1957 and it was for the first time that the Administrator-cum-General Manager of the Rajasthan State Cooperative Press Limited (as Administrator of the society) sent a letter to the Chairman of the trust pointing out audit para of the year 1994-95 dt. 21.08.1999 and simultaneously sent to the Deputy Registrar, Cooperative Societies, for rescinding the resolution No. 5 Dt. 07.03.1957 u/S. 32(1) of the Act of 1965 which remained pending and by that time the Act of 1965 stood repealed by the Act of 2001 and the Deputy Registrar Cooperative Societies referred the proposal to the Cooperative Tribunal for rescinding the resolution u/S. 125 of the Act of 2001. However, at one stage two members of the tribunal not being properly constituted rescinded the resolution No. 5 Dt. 07.03.1957 vide ex parte order Dt. 25.09.2008 and that came to be set aside in a review petition preferred u/S. 106 of the Act of 2001 at the instance of respondent No. 3 trust vide order Dt. 18.09.2013 and the tribunal duly constituted u/S. 105 of the Act of 2001 upheld the resolution No. 5 Dt. 07.03.1957 and arrived to a conclusion that the impugned resolution could not have been rescinded u/S. 32(1) of the Act of 1965 followed with Sec. 125 of the Act of 2001.

The appellant society is registered under the Rajasthan Cooperative Societies Act, 1953 and at that time when the resolution No. 5 Dt. 07.03.1957 pursuant to which the land was allotted to the Trust on certain terms and conditions agreed by the parties on 26.03.1957 it was the Act of 1953 which was in force and either of the party has not brought to the notice of this Court about any corresponding provision which holds authority of the Registrar to rescind the resolution of the cooperative societies if it opposed and prejudicial to the interest of the society or its members and at the same time under Chapter 7 of the Act of 1953 power is vested with the Registrar to hold enquiry in safeguarding the interest of the members and ensuring to them some method of ascertaining as to the constitution, working and financial conditions of their society and such a provision appears to be inevitable in view of the responsibility of the Registrar for holding proper working of the societies and also serves a prevention for a committee or group of members from acting prejudicially to the interest of other members who may be in a minority.

The Registrar holds the complete control over the functioning of the society, keep vigil and to inspect regarding its constitution, working and financial condition of the society. Indisputably under the Act 1953 neither there was any complaint pending nor the Registrar deems to conduct enquiry provided u/S. 46 of the Act of 1953 at any point of time and it was never the case of the appellant society that resolution No. 5 of the appellant society Dt. 07.03.1957 was in violation or in contravention of the provisions of the Act of 1953 which came to be repealed by Act of 1965 and while repealing the Act of 1953 it saved all actions done or taken under the Act of 1953 under the provisions of the repealed Act or was deemed to be taken or done under the corresponding provisions of the Act of 1965.

Indisputably the proceedings for the first time were initiated on a letter sent by the Administrator-cum-General Manager of the Cooperative Press Ltd. Dt. 21.08.1999 to the Deputy Registrar Cooperative Society for rescinding the resolution No. 5 Dt. 07.03.1957 u/S. 32(1) of the Act, 1965 and the Act, 1965 came to be repealed by the Act of 2001 indisputably all actions done or taken under the Act of 1965 have been saved u/S. 127 of the Act of 2001 but in the instant case after passing of resolution No. 5 Dt. 07.03.1957 and transfer of land to the trust by the appellant society on 26.03.1957 on certain terms and conditions agreed by the parties nothing remained pending or under scrutiny with the department of cooperative societies under the Act of 1953 and when the Act of 1953 came to be repealed by the Act of 1965 all actions or anything done or action taken under the Act of 1953 was saved but in the instant case no action was taken by any of the authority under the Act of 1953 or pending on the date the Act of 1965 came into force and the initiation at the instance of the Administrator-cum-General Manager, Cooperative Press Ltd. in August, 1999 for taking action to rescind the resolution No. 5 Dt. 07.03.1957 u/S. 32(1) of the Act of 1965 in our considered view could not have been considered to be an action taken under the Act of 1953 which as alleged to be saved by Sec. 153(2) of the Act of 1965.

We further make it clear that if there was any action taken or pending under the Act 1953 on the date when the Act of 1965 came into force certainly those action taken under the Act of 1953 stood saved by Sec. 153(2) of the Act of 1965 but in a case where no action was taken or nothing done under the Act 1953 or pending on the date when the actions are repealed by the Act of 1965, Sec. 153(2) in our considered view the resolutions of the society under the Act of 1953 which was nowhere pending at any point of time either in the form of enquiry or before the appropriate state authorities are not open for initiation or for scrutiny under the Act of 1965 and it is true that all actions taken or deemed to have been done or taken under the Act 1965 it is indeed saved by Sec. 127 of Act of 2001.

In the instant facts of the case we are of the considered view that when nothing was pending with respect to the resolution 5 Dt. 07.03.1957 either in the form of complaint or enquiry or sub-judice before the statutory authority, created by the State Government or before the cooperative society as the case may be such resolutions in our considered view are not open to be examined on action being saved u/S. 153(2) taking decision for rescinding resolution No. 5 Dt. 07.03.1957 u/S. 32(1) of the Act of 1965 initiated at the instance of the Administrator of the appellant society.

The learned tribunal has not discussed in detail regarding the application of Sec. 153 of the Act 1965 or Sec. 127 of the Act 2001 but as we have examined the scheme of the Act 1953 followed with the Act of 1965 and the Act of 2001 in our considered view the proceedings initiated for rescinding the resolution No. 5 Dt. 07.03.1957 at the instance of the society through Administrator-cum-General Manager, Cooperative Press Ltd. in August, 1999 invoking Sec. 32(1) of the Act of 1965 was not legally sustainable in the eye of law.

In the judgment reported in Bishambar Nath Kohli and Others Vs. State of Uttar Pradesh and Others, it was a case where the subject property was declared evacuee property by an order Dt. 12.10.1949 u/S. 6 of the UP Administration of Evacuee Property Ordinance 1 of 1949 as continued in force by Central Ordinances 12 and 20 of 1949 and the Central Government vide notification Dt. 27.05.1955 acquired the property which was put to public auction and came to be purchased by a private entrepreneur and during pendency of proceedings Administration of Evacuee Property Act (31 of 1950) came into force and all the proceedings initiated under Ordinance 27 of 1949 or Ordinance 12 of 1949 stood saved u/S. 58(3) of the Act 31 of 1950 and by operation of law the repealed statute survives the repeal.

In the later case reported in Nar Bahadur Bhandari etc. Vs. State of Sikkim and Others, the question was in reference to jurisdiction of the special court in regard to the cases registered under the Prevention of Corruption Act, 1947 whether could be tried by a special court constituted u/S. 3 of 1988 and since the Act, 1988 saved the earlier actions initiated under the Act of 1947 with the aid of Sec. 6 of General Clauses Act unless different intention appears in the repealing Act, the Apex Court finally arrived to a conclusion that special court constituted u/S. 3 of the Act, 1988 holds competence to try the offences under the Act of 1947. Both the judgments relied upon by counsel for appellant of which reference has been made supra may not be of any assistance to the appellant.

In the instant case as already observed the resolution No. 5 Dt. 07.03.1957 of the society was never a subject matter of scrutiny in the form of enquiry provided under chapter VII of the Act 1953 by the Registrar and the resolution in itself cannot be considered open for scrutiny after 42 years of the Act 1953 stood repealed invoking Sec. 153(2) of the Act 1965.

So far the submission made by counsel for appellant that the trust was not entitled to be afforded opportunity of hearing it is true that Sec. 32(1) of the Act, 1965 or Sec. 125(1) of the Act, 2001 does entitle the society whose resolution has come under scrutiny to be afforded opportunity of being heard but in the instant case the Administrator of the society referred the matter to the Deputy Registrar (Cooperative Societies) vide its letter Dt. 21.08.1999 to rescind the resolution No. 5 Dt. 07.03.1957 u/S. 32(1) of the Act, 1965 and its copy was endorsed to the trust and for all practical purposes the opportunity to the society on whose instance the matter was referred to the Deputy Registrar (Cooperative Societies) to rescind the resolution if alone was supposed to be afforded opportunity of hearing it remains an empty formality and indisputably the rights of the trust to whom the land was transferred pursuant to resolution No. 5 dt. 07.03.1957 on terms and conditions vide communication dt. 26.03.1957 are going to be adversely affected and under the settled principles of administrative law no-one should be condemned unheard gives justification to provide opportunity of hearing to the trust and that being in compliance of the principles of natural justice, opportunity of hearing has to be afforded to the trust. It can be further noticed that u/S. 32(1) of the Act, 1965, initiation in respect of resolution of the cooperative society or committee thereof is by the Registrar of the Cooperative Societies and not to be initiated by the society itself and if the Registrar in its opinion arrives to prima facie satisfaction that the resolution passed at the meeting of any cooperative society or committee thereof is opposed to the objects of the society or is prejudicial to the interests of the society or is in excess of the powers of the society, the Registrar may, after giving the cooperative society an opportunity of being heard may take decision to rescind the resolution in whole or in part specifying the reasons therefor and it is the requirement u/S. 125 of the Act, 2001 as well and as we have noticed in the instant case the appellant society vide its resolution No. 5 Dt. 07.03.1957 part with the subject land to be allotted on the terms and conditions vide communication Dt. 26.03.1957 to the trust and after the Administrator was appointed over the society he referred the matter to the Deputy Registrar (Cooperative Societies) to rescind the resolution No. 5 Dt. 07.03.1957 u/S. 32(1) of the Act, 1965, the very initiation at the instance of the society through its Administrator appears to be illogical and not in conformity with the mandate of Sec. 32(1) of the Act, 1965.

Indisputably the initial order of the Tribunal Dt. 25.09.2008 was passed by the improperly constituted tribunal and that being non-existent in the eye of law appropriate orders were required to be obtained from the competent tribunal and the trust being aggrieved filed review application u/S. 106 of the Act, 2001 and after the parties being heard the resolution No. 5 Dt. 07.03.1957 was upheld by the tribunal.

As already noticed by this Court it is the society itself who is harping upon the matter before this Court in the instant intra court appeal through its Administrator who sent a letter to the Deputy Registrar (Cooperative Societies) to rescind the resolution No. 5 Dt. 07.03.1957 after carried out for almost 42 years and even before this Court no prima facie tangible evidence has come on record to project as to how the resolution No. 5 Dt. 07.03.1957 is opposed to the objects of the society or prejudicial to the interest of the society or is in excess of the powers of the society who in fact is the author and under whose competence the resolution No. 5 Dt. 07.03.1957 came to be passed by its members, pursuant to which a piece of land carved out was allotted to the trust on certain terms and conditions vide letter Dt. 26.03.1957 and this Court can infer that it is amongst the members of the society who are litigating for their personal cause and this what the learned Single Judge also considered in detail and rightly approved order of the tribunal Dt. 18.09.2013 under its order impugned Dt. 25.07.2014.

The appeal is devoid of merit and accordingly dismissed. No cost.