Jharkhand High Court
M/S Tata Engineering And Locomotive ... vs The State Of Jharkhand on 19 May, 2023
Author: Anubha Rawat Choudhary
Bench: Anubha Rawat Choudhary
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W. P. (C) No. 1856 of 2007
M/s Tata Engineering and Locomotive Company Ltd. Now known
as Tata Motors Ltd. a Public Ltd. Company, Incorporated under
the Indian Companies Act, having its works at TELCO, P.S. Telco,
Town Jamshedpur, Dist.-Singhbhum East through Sri D. K.
Thakur, S/o Late G.K. Thakur, D.G.M. Finance of M/s Tata
Motors Ltd. ... ... Petitioner
Versus
1. The State of Jharkhand
2. The Registrar, Co-operative Societies, Jharkhand at Ranchi
3. The Deputy Registrar, Co-operative Societies, Jharkhand at Ranchi
4. The Assistant Registrar, Co-operative Societies, Jamshedpur-
Circle, Jamshedpur
5. Executive Officer, the Jamshedpur General Consumers' Central
Co-operative Stores Limited, Apna Bazar, Bistupur, Town
Jamshedpur, Dist. - Singhbhum East represented by its Executive
Officer, Anil Kumar Srivastava, having its office at Apna Bazar,
P.S. Bistupur, Town Jamshedpur, Dist. Singhbhum (East)
... ... Respondents
with
W. P. (C) No. 1616 of 2006
M/s Tata Motors Limited (Previously known as M/s Tata
Engineering and Locomotive Co. Ltd.) a Public Ltd. Company.
Incorporated under the Indian Companies Act, having its works at
TELCO, P.S. Telco, Town Jamshedpur, Dist.-Singhbhum East
through Sri D. K. Thakur, S/o Late G.K. Thakur, D.G.M. Finance
of M/s Tata Motors Ltd. Jamshedpur ... ... Petitioner
Versus
1. The Regional Provident Fund Commissioner, Sub Regional Office
Purulia Highway, P.O. Azadnagar, Mango, Jamshedpur
2. Executive Officer, the Jamshedpur General Consumers' Central
Co-operative Store Limited, Apna Bazar, Bistupur, Town
Jamshedpur, Dist - Singhbhum East represented by its Executive
Officer, Anil Kumar Srivastava, having its office at Apna Bazar,
P.S. Bistupur, Town Jamshedpur, Dist. Singhbhum (East).
... ... Respondents
---
CORAM: HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
---
For the Petitioners : Mr. V.P. Singh, Sr. Advocate : Mrs. Rashmi Kumar, Advocate For the Respondents : Mr. Sanjoy Piprawall, Advocate : Mr. Rupesh Singh, Advocate : Mr. Mrinal Kanti Roy, Advocate
---
15/19.05.2023
1. Heard the learned counsel for the parties.
22. W.P. (C) No. 1856 of 2007 has been filed for the following reliefs: -
"(i) The order dated 20.03.2007 passed by the Deputy Registrar, Co-
operative Societies, Ranchi/Respondent No. 3 in Appeal no. 8 of 2006, whereby he dismissed the Appeal and upheld the order dated 08.12.2005 passed by the Assistant Registrar, Co-operative Societies, Jamshedpur Circle, Jamshedpur/Respondent No. 4.
(ii) The order dated 08.12.2005 passed by the Assistant Registrar/Respondent No. 4 in Award Case No. 1 of 2002, whereby he allowed the claim of the Respondent No. 5 and ordered to this petitioner to restore the payment of handling charges including arrears and further directed to make above payments and its restoration within a month, failing which the certificate proceeding was to be initiated.
(iii) The whole proceeding being Award Case no. 1 of 2002 as not maintainable under Provisions of section 48 of Bihar and Orissa Co- operative Societies Act.
(B) For issuance of a writ of mandamus or in nature thereof commanding/restraining the respondents from enforcing the impugned order dated 20.03.2007 and 08.12.2005 against the petitioner.
AND/OR For issuance of any writ(s)/order(s)/direction(s)/rule(s) in the facts and circumstances of this case and in the interest of justice."
3. On 16.01.2023, I.A. No. 1173 of 2007 seeking amendment of the writ petition to bring on record subsequent development was allowed. The petitioner brought on record Annexure-11 showing initiation of certificate proceedings for realization of the amount and also letter dated 09.04.2007 issued by the Deputy Commissioner cum Administrator of the co-operative stores whereby the petitioner was directed to resume payment of the charges.
4. W.P. (C) No. 1616 of 2006 has been filed for the following reliefs: -
"a) For issuance of a writ of certiorari or in nature thereof for quashing/canceling/rescinding The order dated 23-2-2006 contained in No- JH/SRO/JSR.
Recovery Cell/jh/606/2006/4162 passed by Respondent No. 1 under section 8 F of Employees Provident Funds And Miscellaneous Provisions Act, 1952, (herein after to be referred as "The Act") whereby he has held that The Jamshedpur Consumers' Central Co-operative Stores Ltd (here in after to be referred as the "Respondent No. 2" or "Co-operative Stores" only) is having some account with the petitioner and has further directed the petitioner to pay an amount of Rs. 8,69,330/- (Rs. Eight Lacks sixty nine thousand three hundred thirty only) to the respondent no. 1. The demand notice dated 9-3-2006 vide letter no. JH/SRO/JSR/Recovery Cell/1606/4424 by the respondent No. 1 declaring the petitioner as "Deemed Defaulter" and further directing to treat it as demand notice.
b) For issuance of a writ of mandamus or in nature thereof commanding/restraining the respondent no. 1 from enforcing the order dt. 23-2-2006 & 9-3-2006 and notice dt. 9-3-2006 respectively and action/orders passed in pursuance to them.
AND/OR for issuance of any other appropriate writ(s)/order(s)/direction(s)/rule(s) in the facts and circumstances of this case and in the interest of justice."
35. Following interim order was passed in W.P.(C). No.1616 of 2016 on 26.02.2007: -
"Till further orders, no coercive steps shall be taken against the petitioner."
6. Following facts of W.P.(C). No.1856 of 2007 are not in dispute.
(a) The petitioner is a manufacturing Unit of Automobiles and its components and has one of its Unit at Jamshedpur.
(b) The Jamshedpur General Consumers Central Co-operative Stores Limited (hereinafter referred to as co-operative store) runs several "Fair Price Shops" and Sub Divisional Officer, Jamshedpur is its Executive Officer.
(c) The functions of the co-operative store are managed under the control and supervision of the local administration.
(d) The petitioner was neither a member of the co-operative store nor had taken any loan or amount from the co-operative store.
(e) Shops of the co-operative store are situated at different places at Jamshedpur and from such shops, the employees of the petitioner were also making purchases of items.
(f) It is the case of the petitioner that in the year 1964 on or about 24.11.1964, the petitioner in order to extend helping hand and giving facilities in socio economic development agreed to give some help to civil administration and to co-operative store as handling charges and rent for some shops and in course of time, altogether 16 shops became operational. Thereafter, the petitioner continued to make payment.
(g) However, on 11.11.1996 on account of some audit objection of the auditor of the petitioner, the petitioner regretted to make further payment of subsidy w.e.f. 01.12.1996 and later the supply and distribution of ration items from the shops of the co-operative store to ration card holder became Nil.
(h) On account of such step, a meeting was held on 29.06.2001 between the petitioner, the then Deputy Commissioner, District Co- operative Officer and Assistant Registrar, Co-operative Societies and thereafter on or about 18.08.2002 (Annexure-1) the Executive Officer of the co-operative stores filed an application under Section 4 48 of the Jharkhand Co-operative Societies Act, 1935 (hereinafter referred to as the Act of 1935) before the Assistant Registrar, Co- operative Societies, Jamshedpur against the petitioner demanding the alleged handing charges/subsidy from the petitioner for the period from December, 1996 to January, 2002 i.e. for an amount of Rs. 52,57,600/- and rental charges of different shops amounting to Rs. 1,75,748/- The said application was registered as Award Case No. 1 of 2002. Upon notice, the petitioner duly appeared and raised its objection including the objection that the proceeding was not maintainable either in fact or in law and there was no contract between the petitioner and co-operative stores which could be enforced in the proceedings and further plea that the petitioner was neither a member of the co-operative stores nor had taken any loan from it and therefore the dispute under Section 48 of the Act of 1935 was not maintainable. A plea of claim being time barred was also taken and also that the supply in distribution of ration items from the co-operative stores also become Nil.
(i) A specific stand was taken by the petitioner that the petitioner had extended its benevolent hand of helping the respondent No. 5 by giving various kinds of facilities in socio economic development of the citizen.
(j) Ultimately, the award in case No. 1 of 2002 was passed in favour of the Cooperative Store on the ground that there was an agreement between the parties in which the petitioner had agreed to pay handling charges and rent. The order dated 08.12.2005 (Annexure-
4) was communicated to the petitioner on 27.01.2006.
(k) The petitioner filed appeal against the said order which could not be taken up immediately due to non-availability of Registrar and consequently the petitioner also filed a writ petition challenging the order dated 08.12.2005 being W.P. (C) No. 1615 of 2006. The writ petition was disposed of on 12.04.2006 so that the petitioner could avail the remedy of appeal.
(l) The appeal being Appeal Case No. 8 of 2006 was dismissed vide order dated 20.03.2007 (Annexure-10) which has been challenged in the present writ petition being W.P. (C) No. 1856 of 2007. The 5 High Court had passed interim order in favour of the petitioner on 10.09.2007.
(m) On 18.04.2007 I.A. No. 1173 of 2007 seeking amendment of the writ petition to bring on record subsequent development was allowed. The petitioner brought on record Annexure-11 showing initiation of certificate proceedings for realization of the amount and also letter dated 09.04.2007 issued by the Deputy Commissioner cum Administrator of the co-operative stores whereby the petitioner was directed to resume payment of the charges.
WPC No. 1616 of 20067. So far as WPC No. 1616 of 2006 is concerned, the same is a sequel to the writ petition being W.P. (C) No. 1856 of 2007. The action of the authorities of employee's provident fund organization who have taken steps for realization of amount from the petitioner which has been adjudicated in the award in case No. 1 of 2002 (subject matter of challenge in WPC No. 1856 of 2007) on account of dues against the respondent cooperative stores by way of attachment of the amount payable by the petitioner to the cooperative stores vide adjudication under section 48 of the Act of 1935.
The following facts are not in dispute: -
a. After the passing of the award by the respondent cooperative department under section 48 of the Act of 1935 , a notice dated 23-02-2006 (Annexure-1) under section 8 F of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the employees P.F. Act ) was issued to the petitioner by the Respondent No.1 , inter alia, stating that the Regional Provident Fund commissioner (RPFC ) , Jamshedpur has reason to believe that the Co-operative store is having some accounts with the petitioner and accordingly, the petitioner was directed to immediately pay an amount of Rs.8,69,330.00 by demand draft to R.P.F.C., Jamshedpur. It was further stated in the notice that if the petitioner has no such amount on account of Co-operative stores, then a reply on oath to that extent has to be stated.6
b. An affidavit dated on 09-03-2006 (Annexure-2) was filed by and on behalf of the petitioner Company denying its liabilities and specifically stating that the Company does not hold any amount of the Co-operative store. It was submitted that the petitioner is not the employer or principal employer of the cooperative stores and the petitioner has no liability to pay the said amount covered under the notice.
c. In spite of above, the Respondent No.1 vide order dated 09-03- 2006 (Annexure-3) declared the petitioner as "deemed defaulter" under Section 8F of the P.F. Act and also directed to treat the said order as demand notice under certificate proceeding.
d. All this happened during the pendency of appeal being Appeal No.11 of 2006 before the Registrar Co-operative Society, Ranchi against the award passed under section 48 of the Act of 1935.
8. The following are the important points argued by the learned counsel for the petitioner: -
a. The impugned action and proceedings against the petitioners in terms of Section 48 of the Cooperative Societies Act, was not at all maintainable.
b. The petitioner was neither the member of the cooperative society nor had taken any loan from the cooperative society and merely because the petitioner was extending some amount by way of handling charge/rental charges etc., the same does not entitle the concerned respondents to file a case under Section 48 of the Act.
c. If the jurisdictional issue is decided in favour of the petitioner, then there may not be any need to enter into the merits of the matter. However, it is submitted that otherwise also, there is merit in the present cases even on facts. The learned senior counsel has also submitted that allegation of bias is also involved in the present case.
d. When the notice pursuant to the petition filed under Section 48 of the Act was issued, the petitioner had raised specific objection to the maintainability of the petition under Section 7 48 of the Act. The same was decided against the petitioner by a non-speaking order dated 08.12.2005, against which the petitioner filed appeal. The appellate authority has also not considered the jurisdictional aspect of the matter properly while referring to the specific provisions of Section 48 of the Act.
e. Respondent cooperative stores had submitted that though the petitioner had raised the point of maintainability of proceedings under section 48 of the Act, but at the later stage of the proceedings, the petitioner stopped appearing and therefore, it was not open to the petitioner to raise such point of jurisdiction at this stage.
f. However, it is not in dispute that the authority, who passed the order under Section 48 of the Act, has referred and rejected the plea of the petitioner on the point of jurisdiction. g. The follow-up action by the respondent authorities of employee's provident fund to realise the amount from the petitioner on account of dues to the cooperative store on the basis of quantified amount under the award passed under section 48 of the Act of 1935 is subject matter of challenge in WPC No. 1616 of 2006.
Arguments of the Respondent cooperative stores.
9. The learned counsel for the respondent cooperative store has also submitted that the petitioners had submitted to the jurisdiction of the authority and it is not open to them to question the jurisdiction. It is submitted that the petitioners are estopped from raising such dispute in this writ jurisdiction.
10. The learned counsel has heavily relied upon the explanation 1 to section 48 (1) of the aforesaid Act of 1935 to submit that by virtue of explanation 1 , the dispute involved in the present case falls within the purview of section 48 of the aforesaid Act of 1935. It is the case of the respondent cooperative store that in view of the specific provision of section 48 (1) of the Co-operative Societies Act read with explanation 1 the dispute will be covered by section 48(1) of the aforesaid Act of 1935. It is their specific case that even if the dispute 8 is not falling under any of the clauses of section 48(1) (a) to ( e) but by virtue of explanation 1 to section 48, the dispute will be covered as the matter relates to demand of the cooperative society from a non- member i.e the petitioner, who is admittedly neither a member, nor a past member , nor legal heir or legal representative of a deceased member, as the dispute touches upon the business of the cooperative society. Similar arguments have been advanced by the other respondents also.
11. The learned counsel has also submitted that the cooperative store had acted pursuant to the contract/agreement between the petitioners and the cooperative store and it was not open to the petitioners to suddenly stop payment of the handling charges which was being paid by them. He has also submitted that the employees of the cooperative societies have been affected on account of sudden stoppage of the payment of handling charges.
12. A written notes of argument has been filed on behalf of the co- operative store inter alia stating that the writ petition is not maintainable in view of the fact that after producing the agreement paper before the Assistant Registrar in Award Case No. 1 of 2002 on 10.06.2005, it would be evident that the petitioner never appeared before the Assistant Registrar, Co-operative Societies, Jamshedpur, in order to defend his stand and ultimately order at Annexure-4 was passed. Further case is that the petitioner had filed appeal against the order passed in Award Case No. 1 of 2002 instead of challenging the same before this Court under Article 226 and 227 of the Constitution of India on the ground of jurisdiction. The petitioner after filing of the appeal before the Registrar, Co-operative Societies filed the writ petition before this court being the W.P. (C) No. 1615 of 2006 for quashing the order dated 08.12.2005 passed in Award case No. 1 of 2002 by the Assistant Registrar and the writ petition was disposed of in terms of order dated 12.04.2006 with an observation that the petitioner had already preferred an statutory appeal and the order of the learned Registrar was yet to be tested by the appellate court. After passing of the order dated 12.04.2006 passed in W.P. (C) No. 1615 of 2006, the appeal was heard and thereafter order dated 20.03.2007 was passed and as such there is no illegality in Annexure-10. The order 9 dated 20.03.2007 passed in Appeal No. 8 of 2006 as well as the order dated 08.12.2005 passed in award Case No. 1 of 2002 are valid and legal. Further objection has been taken that the petitioner had participated in the proceeding without any objection and therefore the point of jurisdiction is not available and ultimately it has been submitted that the petitioner after availing the remedy under the provisions of Bihar/Jharkhand Co-operative Societies Act, 1935 has turned around and now the petitioner is saying that the present dispute cannot be adjudicated under the provisions of aforesaid Act of 1935. It has been submitted that after participating in the proceedings, the same cannot be challenged by the petitioner on the ground of jurisdiction.
13. The learned counsel for the respondent has relied upon a judgement passed by this court in the case of Indu Builders reported in 2003 (3) JCR 360 (JHR).
Arguments of the respondent state including cooperative department.
14. The learned counsel for the state has adopted the arguments of the respondent cooperative stores and has submitted that the impugned action and orders have been rightly passed and the dispute between the petitioner and respondent cooperative stores falls within the ambit of section 48 of the act of 1935.
Arguments of the counsel appearing for the Employees provident fund organization.
15. The learned counsel has submitted that the amount having been quantified under section 48 of the Act of 1935, the same has been rightly attached and realized by the authorities of Employees provident fund organization Rejoinder arguments of the petitioner. Rejoinder arguments of the petitioner.
16. In response, the learned Senior counsel for the petitioners has submitted that there can be no estoppel against the interpretation of statute. He has also submitted that the point of jurisdiction was raised before the authorities and the petitioner had appeared before the authority with a clear objection to the jurisdiction. The point of jurisdiction was raised but the same has not been addressed by the respondents, rather it has simply been said that the dispute is covered 10 under Section 48 of the Cooperative Societies Act, without any deliberation on the same. The learned counsel has also submitted that there was no written agreement between the parties and it was just a letter issued by the petitioners which was subsequently rescinded vide Annexure- 6 after giving due information to the respondent cooperative stores regarding the intention of the petitioners to discontinue with the arrangement.
17. It is not in dispute that so far as other writ petition being W.P.(C). No.1616 of 2006 is concerned, the same is entirely dependent upon the result of the writ petition being W.P.(C) No.1856 of 2007. It is not in dispute that the amount involved in the present case has already been recovered by the respondent-employees provident fund organization. The amount has been realized during the pendency of the present proceedings.
Findings of this Court :-
18. The principal question involved in the present case is whether the dispute between the co-operative store and the petitioner (who is said to have been rendering financial assistance to the respondent cooperative store by way of handling charges and rent) is a dispute covered under the provisions of Section 48 of the Jharkhand Co-operative Societies Act, 1935?
19. The provisions relevant for the purposes of this case from of Bihar Cooperative Societies Act , 1935 ( now JHARKHAND CO- OPERATIVE SOCIETIES ACT, 2000) are as under :-
Section-2 Definitions. -
In this Act, unless there is anything repugnant to the subject or context -
a. .....................
b. ...............................
c. "Financing Bank" means the State Bank of India, a nationalised Commercial Bank, a State Co-operative Bank, a Co- operative Bank, a Land Development Bank, a Regional Rural Bank or any other bank to be notified by the State Government the objects of which include the creation of funds out of which money is to be lent to the co-operative societies or other institutions or both;
... .... .... .... .....
(f) "member" includes a person joining in the application for the registration of a society and a person admitted to 11 membership after registration in accordance with the rules and the bye-laws of such society;
(ff) ....................
[(fff)] "nominal or associate member" means a member who possesses such privileges or rights of a member of a society, and who is subject only to such liabilities of a member as may be specified by the bye-laws;..........
16. Restrictions on lending.-
(1) Except with the general or special sanction of the Registrar and subject to such restrictions as he may impose, a registered society shall not-
(a) make a loan to any person other than a member, or
(b) lend money on the security of movable property. (2) The State Government may, by general or special order, prohibit or restrict the lending of money or mortgage of immovable property by registered society or class of registered societies.
[(3) Where the Registrar has accorded sanction to a financing bank under the provisions of sub-section (1), a registered society which is a member of such financing bank may, subject to the terms of the sanction and such other terms and conditions as may be prescribed by the Registrar, act as agent for the financing bank and as such agent carry out, with or without any commission, all or any transactions connected with loans or advances made or to be made by the financing bank.]
48.Disputes.-
(1) If any dispute touching the business of a registered society (other than a dispute regarding disciplinary action taken by the society or its managing committee against a paid servant of the society) arises-
(a) amongst members, past members, persons claiming through members, past members or deceased members, and sureties of members, past members or deceased members, whether such sureties are members or non-members; or
(b) between a member, past member, persons claiming through a member, past member or deceased member, or sureties of members, past members or deceased member, whether such sureties are members or non-members and the society, its managing committee or any officer, agent or servant of the society; or
(c) between the society or its managing committee and any past or present officer, agent or servant of the society; or
(d) between the society and any other registered society; [or] 12 [(e) between a financing bank authorised under the provisions of sub-section (1) of Section 16 and a person who is not a member of a registered society;] such dispute shall be referred to the Registrar:
Provided that no claim against a past member or the estate of a deceased member shall be treated as a dispute if the liability of the past member or of the estate of the deceased member has been extinguished by virtue of Section 32 or Section 63. Explanation. - (1) A claim by a registered society for any debt or demand due to it from a member,[non-member], past member or the nominee, heir or legal representative of a deceased member or[non-member] or from sureties or members, past members or deceased members, whether such sureties are members or non-members, shall be a dispute touching the business of the society within the meaning of this sub-section even in case such debt or demand is admitted and the only point at issue is the ability to pay or the manner of enforcement of payment.
Explanation. - (2) The question whether a person is or was a member of a registered society or not shall be a dispute within the meaning of this sub-section.
(2) The Registrar may on receipt of such reference -
(a) ....................
(b) .............................
(c) .............................
(3) ............................
(4) ...........................
(5) In the case of dispute involving property which is given as collateral security, it shall be competent to the person deciding such dispute to issue mortgage award which shall have the same force as a mortgage decree of a competent Civil Court. (6) Any person aggrieved by any decision given in dispute transferred or referred under clause (b) or (c) of sub-section (2) may, within three months from the date of such decision, appeal to the Registrar.
(7) The Registrar, in the case of dispute under this section, shall have the power of review vested in a Civil Court under Section 144 and under Order XL VII, rule 1 of the Code of Civil Procedure, 1908, and shall also have the inherent jurisdiction specified in Section 151 of the said Code.
(8)The Registrar may where it appears to him advisable, either of application or of his own motion, state a case and refer it to the District Judge for decision, and the decision of the District Judge shall be final.
13(9) Save as expressly provided in this section, a decision of the Registrar under this section, and subject to the orders of the Registrar on appeal or review, a decision given in a dispute transferred or referred under clause (b) or (c) of subsection (2) shall be final.
57. Bar of jurisdiction of Court:- (1) Save in so far as expressly provided in this Act, no Civil or Revenue Court shall have any jurisdiction in respect of any matter concerned with the winding up or dissolution of the registered society or suspension of the Managing Committee of a registered society under its act, or of any dispute required by section 48 to be referred to the Registrar or of any proceedings, under Chapter VII A.
20. Upon consideration of the section 48(1) (a) to 48(1) (e ) read with the definitions as quoted above, the dispute between the petitioner and the respondent cooperative stores does not fall within the disputes contemplated under clause (a) to (e ) of sub-section (1) of section 48 of the Act of 1935 . It is not even the case of the respondent that the dispute is covered by clause (a) to (e) of sub-section (1) of section 48 of the Act of 1935. Rather, it is the specific case of the respondents that the dispute involved in this case will fall within the ambit of section 48(1) when it is seen in the light of the explanation (1) i.e dispute regarding a claim by a registered society for any debt or demand due to it from a non-member, and the petitioner being not a member is a non- member. The argument is based on the proposition that explanation (1) widens the scope of the nature of disputes which are to be covered under section 48(1) of the aforesaid Act of 1935.
21. This court finds that exactly this point was under consideration of the Hon'ble Supreme Court in judgement reported in AIR 1962 SC 1367 and then in AIR 1967 SC 389 wherein it has been held that if a dispute is not covered by clause (a) to (e ) of sub-section (1) of section 48 of the Act of 1935, the dispute cannot be said to be covered under section 48(1) by resorting to explanation (1) of section 48(1) of the aforesaid Act of 1935. The ratio of the aforesaid two judgements cover the present case against the respondents and in favour of the case of the petitioner that the dispute involved in this case is outside the scope of section 48(1) of the aforesaid Act of 1935. The issue was first settled by the constitutional bench judgement reported in AIR 1962 SC 1367. The ratio was reiterated in the judgement reported in AIR 1967 SC 389 by rejecting the plea that the decision 14 rendered in judgement reported in AIR 1962 SC 1367 required re- consideration and also rejecting the plea that the words in the Explanation must be understood in their widest amplitude so that even if a dispute between a registered society and a non-member which did not fall within any of the categories (a) to (e) it would still be within the purview of the section by reason of the Explanation.
22. In the judgement Sugauli Sugar Works (P) Ltd. v. Asst. Registrar, Coop. Societies, 1962 Supp (3) SCR 804 : AIR 1962 SC 1367 it has been held as under :-
"9. From the provisions of the Act, set out above, it is manifest that the Act created a special tribunal, namely, the Registrar of Cooperative Societies, to deal with certain disputes specified in Section 48(1)(a) to (e). This special tribunal was created with a view to shortening litigation and providing speedy relief to registered societies and their members in their disputes inter se in respect of the business of the society. Before the amendments introduced by the Act of 1948, the disputes which could be entertained by the Registrar were disputes amongst members, past members or their heirs or their sureties, or between a society and its officers, agents or servants, or between a society and other registered societies (without meaning to exhaust all the categories.) But, before the amendments, one who was not a member of a society or was not claiming through a member or a past member or a deceased member, or was not a surety of a member or a deceased member, was not subject to the jurisdiction of the Registrar under Section 48. That is to say, any dispute between a society or its members, past members or deceased members or sureties of such members on the one hand and non- members on the other, was not within the purview of the section, so that the appellant Company, which is not a registered society or a member of a registered society, could not have its claim, or a claim against it by a registered society, referred to the Registrar for decision, under this section. Such a dispute by a society or its members against a non-member had to be taken to the ordinary courts for decision.
10. In our opinion, the contention raised on behalf of the appellant is correct. By the amending Act of 1948, the aforesaid relevant and important amendments were introduced into the Act. The effect of these amendments is that a claim by a financing bank against a non-member to whom the former may have made an advance in cash or kind, with the sanction of the Registrar Section 16(1), would be entertainable by the Registrar, on a reference. But that does not mean that a claim which is not of the description referred to in Section 16(1), read with Section 2(c), by a registered society against any non-member, who is not an agriculturist, is within the purview of Section 48(1), read with the Explanation. The Explanation cannot be read as adding a new head to the categories (a) to (e) under Section 48(1), of disputes which may be referred to the Registrar. Originally, the 15 Explanation had been added only to make it clear that even if a debt or a demand is admitted and the only point at issue is the ability to pay or the manner of enforcement of payment, the dispute would come within the purview of the main Section 48(1). The addition of the word "non-member", by the amending Act of 1948, to the first Explanation has not enlarged the scope of the main Section 48(1) so as to make all kinds of disputes between a registered society and a non-member cognizable by the Registrar, thus excluding the jurisdiction of the ordinary courts.
11. In the instant case, it is manifest that the dispute is between a registered society, the second respondent, and the appellant, a non-member, in respect of the claim for commission and interest thereon for supply of sugarcane, and the appellant alleges that it has a counter-claim of a lakh and fifty thousand rupees for short and irregular supply of sugarcane against that respondent. These are matters which, in our view, are wholly beyond the purview of Section 48 of the Act, when it is remembered that the second respondent is not a financing bank and that the appellant is not an agriculturist to whom any advances in cash or kind had been made or could have been made so as to bring the appellant within the purview of Section 48(1)(e), and consequentially of Explanation 1. The decision of the Patna High Court to the contrary is, therefore, not correct." (Emphasis supplied)
23. In the judgment passed by Hon'ble Supreme Court reported in AIR 1967 SC 389 (Bihta Co-operative Development and Cane Marketing Union Ltd. VS. Bank of Bihar and Ors.), the main question involved was whether the suit out of which, the appeal was arising, was entertainable by a civil court in view of the provision of Section 48 (1) read with Section 57 of Bihar and Orissa Co-operative Societies Act, 1935.
In the said case, as per the judgement impugned, the jurisdiction of civil court was ousted by combined operation of Section 48 (9) read with Section 57 of the aforesaid Act of 1935. There was no controversy that if the dispute in the suit is covered by Section 48 (1), it could not be agitated in civil court, but had to be referred to the Registrar Co-operative Societies. In this background, it was examined by the Hon'ble Supreme Court as to whether the dispute was covered by Section 48 (1) of the Co-operative Societies Act, 1935 read with its explanation (1). It has been held as under: -
"6. It will be noticed that not all disputes in which a registered society may be involved are within the mischief of the section. Assuming that the dispute in this case touches the business of the Union which is a registered society, the question is: is it one which comes under any of the heads mentioned in sub-cls. (a) to (e) of the subsection? Sub-clause (a) has no 16 operation if one of the disputants is the society itself. So far as sub-cl. (b) is concerned, a dispute between the society and a non-member would only fall within this clause if the non-member was a surety of a member. Clause (c) can have no operation unless one party to the dispute was a past or present officer, agent or servant of the society. Clause (d) is restricted to disputes between two societies. Clause (e) which was introduced by way of an amendment in 1948 (Bihar Act XVI of 1948) would certainly include a dispute in which one of the disputants is not a member of the society, but it is only operative when the other party to the dispute is a financing bank authorised under the provisions of sub-s. (1) of S. 16. The definition of 'financing bank" was included for the first time in the Act by S. 2 of the Bihar Co-operative Societies Act XVI of 1948. Under the definition, a 'financing bank means a registered society whose main object is to make advances in cash or kind to other registered societies or to agriculturists, etc. It is nobody's case that the dispute in this case is one between a financing bank and a non-member. The question the, arises whether the first Explanation to the section widens the scope of sub-s. (1) of S. 48 so as to include claims by registered societies against non-members even if the same are not covered by Cl. (e). It is to be noted that the word "non-member" was not to be found in the Explanation to the section before its Amendment of 1948. The history of legislation with regard to cooperative societies in general and Bihar and Orissa Co-operative Societies Act in particular was traced in a decision of this Court, i.e., Sugauli Sugar Works (Private) Ltd. v. Assistant Registrar, "Co-operative Societies, Motihari, AIR 1962 SC 1367......................"
It was argued in AIR 1967 SC 389 (supra) that the judgement passed in the judgement reported in AIR 1962 SC 1367 (supra) required re- consideration and the words in the Explanation must be understood in their widest amplitude so that even if a dispute between a registered society and a non-member which did not fall within any of the categories (a) to (e) it would still be within the purview of the section by reason of the Explanation. Such arguments were rejected as under:
"8. We find ourselves unable to accept this contention. Before the amendments introduced in 1948, the Explanation to the section made no mention of non-members and non-members had to be included in the Explanation because of the inclusion of this class of persons in category (e) of sub-s. (1) of S. 48. The Explanation must be read so as to harmonise with and clear up any ambiguity in the main section. It should not be so construed as to widen the ambit of the section. The scheme of sub-s. (1) of S. 48 seems to be that certain disputes touching the business of a registered society should not be taken to civil Courts and made the subject-matter of prolonged litigation. The legislature took pains to specify the persons whose disputes were to be subject-matter of reference to the Registrar. Non-members did not come into the picture at all. Non-members other than officers agents or servants of the society do not figure in sub-cls. (a) to (d) except as sureties of members. By sub-cl. (e) only those non-members who had disputes with a financing bank authorised under the provisions of sub-.s. (1) of S. 16 were made amenable to the jurisdiction of the Registrar. It 17 was probably thought desirable in the interest of the financing bank which might otherwise he faced with litigation in a civil Court in respect of its ordinal v day-to-day transactions of advances to agriculturists who were non-members that disputes between the society and this class of persons should be quickly and inexpensively adjudicated upon by the Registrar. Before the amendment of 1948. the Explanation only served to clear up the doubt as to whether a dispute was referable to the Registrar when the debt or demand was admitted and the only point at issue was the ability to pay or the manner of enforcement of payment As already pointed out by this Court, the Explanation had to include non-members after the insertion of category (e) in sub-s. (1) of S.
48. The purpose of the Explanation never was to enlarge the scope of sub-s. (1) of S. 48 and the addition of category (e) to that sub-section and the inclusion of non-members in the Explanation cannot have that effect." (Emphasis supplied) In para 9 of the said judgment, the suit was held to be maintainable and the dispute was held to be outside the purview of Section 48 (1) sub - clause (a) to (e) of the aforesaid Act of 1935. The Hon'ble Supreme Court was clearly of the view that the explanation 1 to Section 48 (1) does not widens the scope of sub-section 1 of section 48 so as to include claims by registered societies against non- members even if the same are not covered by clause (e). It was also held that clause - (e) which was introduced by way of amendment in 1948 would certainly include the dispute in which one of the disputants is not a member of the society, but it is only operative when the other party to the dispute is a financing bank authorized under the provisions of sub - section (1) of section 16. The definition of "financing bank" was included for the first time by amendment and under the definition of "financing bank", a financing bank means a registered society whose main object is to make advances in cash or kind to other registered societies or to agriculturists etc.
24. Although there has been amendment in the definition of "financing bank" but still the petitioner is not covered under such definition. It is not the case of the respondents that the petitioner is a financing bank or a registered co-operative society. The aforesaid judgments i.e AIR 1962 SC 1367 followed in AIR 1967 SC 389 fully applies to the facts and circumstances of the present case in support of the arguments of the petitioner that the dispute between the petitioner 18 and the respondent cooperative store is outside the purview of the section 48(1) of the aforesaid Act of 1935.
25. So far as the judgement relied upon by the respondents passed by this court in the case of Indu Builders reported in 2003 (3) JCR 360 (JHR) is concerned, the same does not apply to the facts and circumstances of this case. This would be apparent from the findings of the said case recorded in para 9 as under: -
"In the present case, apart from the fact that Sujit Lahiri through whom the petitioner had approached this Court, is a member of the Housing Cooperative Society, the present dispute touches the business of the Society. Under Section 48(1) of the Bihar Cooperative Societies Act, 1935, if any dispute touching the business of a registered Society between the Society or its Managing Committee and any past or present Member, Agent or Servant of the Society arises, the Registrar Cooperative Society has jurisdiction to decide the dispute.
In the present case, the petitioner is working as an Agent of the Cooperative Society to construct houses for its members over the land which belongs to the members. In view of the aforesaid provisions of law i.e. Section 48(1) of the Cooperative Societies Act, 1935 as also the Clause (10) of the memorandum of understanding dated 17th July 2002, it is always open for the Registrar, Cooperative Societies to take up the matter and decide the dispute."
In the present case, the petitioner is neither working as an agent or servant of the cooperative stores nor is a member, past member, heir of deceased member of the respondent cooperative store or a financial bank within the meaning of the aforesaid Act of 1935 in order to confer any jurisdiction upon the respondent authority to adjudicate dispute under section 48 of the aforesaid Act of 1935
26. This Court is of the considered view that the dispute involved in the present case does not fall under any of the sub clauses of Section 48 (1), the explanation relied upon by the respondents is of no use and the same cannot be of any purpose seeking to include the dispute within section 48. This Court finds that the question of jurisdiction involved in the present case is squarely covered by the aforesaid judgment rendered by Hon'ble Supreme Court against the respondents 19 and in favour of the petitioner. Consequently, it is held that the Registrar co-operative society had no jurisdiction to adjudicate the dispute between the petitioner and the co-operative store under Section 48 (1) of the Co-operative Societies Act of 1935. Meaning thereby that the impugned order passed under section 48(1) is wholly without jurisdiction and all consequential orders, recovery proceedings and recoveries arising therefrom are nonest in the eyes of law.
27. The point of jurisdiction was throughout taken by the petitioner right from beginning. Merely because the petitioner had participated in the proceedings under section 48 of the Act of 1935 and had also filed appeal and lost in appeal, the same cannot be a ground not to entertain the point of jurisdiction and decide in this writ petition. This court has gone through the impugned award passed under section 48 as well as the appellate order rejecting the appeal. The orders reflects that the petitioner had raised the point of jurisdiction, but the same has been rejected by a cryptic order without dealing with the legal issues involved on the point of jurisdiction. The appellate Authority has relied upon judgment passed in the case of Indu Builders (supra) which, as held above, does not apply to the facts and circumstances of this case. The issue involved in this case is squarely covered by aforesaid two judgments of the Hon'ble Supreme Court as held above. Accordingly, the argument of the respondents that the petitioner should be estopped from raising such plea of jurisdiction is devoid of any merit, hence rejected. The dispute entertained and decided under section 48(1) of the aforesaid Act of 1935 suffers from inherent lack of jurisdiction to decided such dispute involved in the present case.
28. As a cumulative effect of the aforesaid findings, the entire proceeding being Award Case no. 1 of 2002 as well as the final order passed in Award Case no. 1 of 2002 and also the appellate order dismissing the appeal arising out of Award Case no. 1 of 2002 are set- aside. The certificate proceedings initiated pursuant to recovery arising out of Award Case no. 1 of 2002 and all directions and actions taken pursuant to order passed in Award Case no. 1 of 2002 are set- aside. The impugned recovery proceedings initiated and the recovery 20 made by the office of employees' provident fund organization based on order passed in Award Case no. 1 of 2002 are set-aside. Consequently, the amount so recovered is directed to be refunded to the petitioner within a period of three months from the date of receipt of a copy of this judgement. On account of failure to refund the amount within the stipulated time of one month, the petitioner will be entitled to further interest of 9% from the date of realization of the amount till payment.
29. Both the aforesaid writ petitions are allowed.
30. It will be open to the respondent cooperative stores to have their remedy in accordance with law and as permissible under law.
(Anubha Rawat Choudhary, J.) Binit/Saurav