The Morinda Co-operative Sugar Mills Limited Morinda vs Khem Singh and others

J.V. Gupta, J.—This is Defendant''s second appeal against whom suit for recovery of Rs. 5200/- has been decreed by the two courts below. The Plaintiffs filed this suit for recovery of Rs. 5200/- on account of damages caused by the Defendant--Morinda Cooperative Sugar Mills to their rabi 1979 and kharif 1979 crops by discharging the waste water with sulphur and sugar contents from the Sugar Mill towards the railway track which entered the suit land of the Plaintiffs. The suit was contested, inter alia, on the pleas that no notice under the provisions of Punjab Co-operative Societies Act, 1961, was served upon the Defendant. Hence the suit as such was not maintainable.

On merits, it was denied that the water of the Mill entered the fields of the Plaintiffs and caused any damage to their crops. The trial Court after discussing the evidence, came to the conclusion that the Plaintiffs had been able to prove that Defendant No. 1 had discharged the waste water with sulphur and sugar contents from Sugar Mill to the suit land belonging to them and caused damage to the same as alleged. As a result of this finding, the Plaintiffs suit was decreed for a sum of Rs. 5200/-.

In the appeal filed on behalf of the Defendant--Morinda Co-operative Sugar Mills, a preliminary objection was raised on behalf of the Plaintiffs that the appeal as such was not maintainable in the absence of any resolution of the Co-operative Sugar Mill taking a decision to file the appeal as such. This objection prevailed with the learned Additional District Judge and consequently, he dismissed the appeal as not maintainable.

Learned Counsel for the Appellant submitted that the view taken by the lower appellate Court that a separate resolution was required by the Co-operative Sugar Mill as such for filing the appeal was wrong and illegal. No such separate resolution was required in view of the bye-laws of the society which clearly provides that the Managing Director shall have the powers and responsibility to sue or to be sued on behalf of the Mills and sign all bonds and agreements in favour of or on behalf of the Mills. Thus, argued the learned Counsel, the appeal filed by the Managing Director on behalf of the Morinda Co-operative Sugar Mills Limited, was competent and could not be dismissed as not maintainable.

After hearing the learned Counsel for the Appellant, I find merit in his contentions. Section 2(c) of the Punjab Co-operative Societies Act, 1961 (for short the ''Act'') defines "Co-operative Society" which means a society registered or deemed to be registered under this Act. Section 23 thereof provides that the final authority in a cooperative society shall vest in the general body of the members provided that where the bye-laws of a co-operative society provide for the constitution of smaller body consisting of delegates of members of the society elected or selected in accordance with such bye-laws, the smaller body shall exercise such powers of the general body as may be prescribed or as may be specified in the bye-laws of the society. Section 30 of the Act provides that the Co-operative Societies, will be a corporate body and will have the power to institute and defend suits and other legal proceedings etc. u/s 85 of the Act, rules could be framed by the State Government, because Clause (2) of Sub-clause (iv) of Section 85 of the Act provides "the matter in respect of which the society may or shall make bye-laws and for the procedure to be followed in making, altering and abrogating bye-laws and the condition to be satisfied prior to such making, alteration or abrogation." Consequently, the bye-laws were framed by the Defendant-Society. Bye-laws 21 provides that the Managing Director shall have the powers to sue or to be sued on behalf of the Mills etc. Reference may also be made to Rule 8 of the Punjab Co-operative Societies Rules, 1963, which provides for framing the bye-laws by a Co-operative Society. Clause (1) of Rule 8 provides power and duties of the committee and the officers of the co-operative society. Thus, taking into consideration the provisions of the Act and the rules framed therein and the bye-laws framed by the Society, it is quite evident that the Managing Director has the powers to sue or to be sued on behalf of the mill. The question of a separate resolution by the society as such did not arise. Moreover, u/s 23 of the Act the final authority vests in the general body of the society. The annual meeting of the society is held u/s 24 of the Act whereas special meetings are to be called u/s 25 of the Act. Under bye-laws 13, the general body shall meet atleast once in every year and within a period of three months next after the date fixed for making up of its accounts for the year or within such time as may be extended by the Registrar in this behalf. It also provides that the general body of the mills shall comprise all the individual members and representatives of the affiliated member society duly authorised by their Managing Committee. That being so, it was not possible to hold meeting of the general body for passing a resolution before filing the appeal against the decree of the trial court. In these circumstances, the powers vest in the Managing Director under the bye-laws to file the appeal. The view taken by the learned Additional District Judge in this behalf was wrong. The authorities of Municipal Committee Bhatinda v. Sadhu Singh (1986-2) 90 P.L.R. 1 and Punjab Wakf Board v. Darb Singh (1988-1) 93 P.L.R. 525 relied upon by the learned lower Appellate Court are not applicable to the facts of the present case. Moreover, it will be a question of fact in each case as to whether a separate resolution is required for filing the appeal or not. There cannot be a general proposition in this behalf.

In view of this finding, the appeal should have ordinarily been sent back to the lower Appellate Court for decision on merits, but in order to avoid any further delay, I heard the learned Counsel for the Appellant on merits. No meaningful argument could be raised on behalf of the Appellant to challenge the findings of the trial Court in this behalf. In these circumstances, though it is held that the appeal as such was maintainable filed on behalf of the Morinda Co-operative Sugar Mills Ltd. through its Managing Director, yet since there is nothing on merit in favour of the Defendant, this appeal is dismissed as such with no order as to costs.