Punjab-Haryana High Court
Balbir Singh And Others vs State Of Punjab And Others on 18 February, 2013
Author: Ajay Kumar Mittal
Bench: Ajay Kumar Mittal, G.S. Sandhawalia
LPA No.1146 of 2010 ::1::
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Date of Decision: February 18, 2013
(i) LPA No.1146 of 2010
Balbir Singh and others
....Appellants
Versus
State of Punjab and others
.... Respondents
(ii) LPA No.1302 of 2010
Kashmiri Lal and others
....Appellants
Versus
State of Punjab and others
.... Respondents
CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
HON'BLE MR. JUSTICE G.S. SANDHAWALIA
Present: Mr. D.V. Sharma, Sr. Advocate,
with Ms. Shivani Sharma, Advocate,
for the appellants.
Mr. Aman Bahri, Addl.A.G., Punjab.
Mr. Ashwani Prasher, Advocate,
for respondent No.3.
Mr. A.S. Manaise, Advocate,
for respondent No.4.
Mr. H.S. Bedi, Advocate,
for respondents. No.4 to 10 (in LPA No.1302 of 2010).
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AJAY KUMAR MITTAL, J.
This order shall dispose of two Letters Patent Appeals No.1146 and 1302 of 2010 as according to learned counsel for the parties, the issue involved therein is similar. Briefly, the facts as narrated in the appeals, which are relevant for the adjudication of the dispute, be noticed. The facts are being taken from LPA No.1146 of 2010.
2. The appellants are the employees of The Dinanagar Cooperative Marketing-cum-Processing Society Ltd., Dinanagar LPA No.1146 of 2010 ::2::
(hereinafter referred to as 'Cooperative Society'), which is a registered Cooperative Society under the provisions of the Punjab Co-operative Societies Act, 1961 (for short 'the Act'). A representation was given by the Employees' Union of Cooperative Marketing-cum-Processing Societies to the Registrar, Cooperative Societies, Punjab, requesting for amalgamation of their Cooperative Societies with the Punjab Cooperative Supply and Marketing Federation Limited, Chandigarh (for short 'the MARKFED'). In pursuance of the representation which had been submitted by the Employees' Union, a meeting was held on 24th August, 2006 under the Chairmanship of the Financial Commissioner, Cooperation, Punjab, and a decision was taken to merge the Cooperative Societies with the MARKFED. The Registrar, Cooperative Societies on 14th September, 2006 (Annexure P-2) passed the following order:-
"Subject: To amalgamate the Cooperative
Marketing Societies in the Markfed.
Memo
Representation was received from the
Employees Union of the Marketing Societies in which they requested to merge the Marketing Societies with the Markfed, Punjab. This was considered in the meeting Chaired by the Financial Commissioner (Cooperation) on 24.08.2006 in which a decision had been taken that those Marketing Societies which want to merge with the Markfed should pass the resolution under Section 13(1) of the Act and they can send the resolution alongwith their letters to the Markfed. After that, Markfed by getting it approved from the General Body will send the same to this office for approval."
3. As a consequence thereof, a General House Meeting of the Cooperative Societies was held on 7th October, 2006 and a unanimous resolution (Annexure P-5) was passed approving the amalgamation of the LPA No.1146 of 2010 ::3::
Cooperative Societies with MARKFED due to decreasing business of the Cooperative Societies. It was further resolved that after the merger, the whole responsibility of lending/borrowing transactions shall be of the MARKFED. The aforesaid resolutions were passed by 27 Societies. The matter was placed before the MARKFED relating to the merger. The MARKFED did not accept the proposal of voluntary merger, however, it opined that a proposal relating to the merger shall be left to the discretion of the Registrar, Cooperative Societies under Section 13(8) of the Act. The resolution passed by the MARKFED reads thus:-
"Resolved and approved the merger/amalgamation of 27 member Cooperative Marketing Societies, as mentioned at Annexure 'A' with the agenda note, in Markfed. The matter may be further taken up with the office of Registrar, Cooperative Societies, Punjab for further necessary action as per Section 13(8) of the Punjab Co-operative Societies Act, 1961. The terms & conditions of merger of these CMSs may be decided by the Managing Director, Markfed. In case any other CMS comes forward for their merger with Markfed, the request of such CMS may be considered keeping in view the overall viability and availability of vacancies in Markfed as it may not be possible to absorb all the employees in future.
4. At this stage, it would be appropriate to refer to Sub-sections (1), (8) and (9) of Section 13 of the Act which are material for the purposes of resolving the present controversy. The relevant provision reads thus:-
Amalgamation, transfer of assets and liabilities and division of Co-operative Societies:-
13(1) A co-operative society may with the previous approval of the Registrar and by a resolution passed by a two-thirds majority of the members present and voting at a general meeting of the society:-
(a) transfer its assets and liabilities in whole or part to LPA No.1146 of 2010 ::4::
another co-operative society provided the co-operative society to which the assets and liabilities are to be transferred also passes a resolution in the aforesaid manner to accept such assets and liabilities in whole or in part, as the case may be;
(b) divide itself into two or more co-operative societies. (2) to (7) xxxxxx (8) Where the Registrar is satisfied that it is necessary in the interest of the co-operative society or co- operative societies that--
(i) any co-operative society be divided to form two
or more co-operative societies; or
(ii) one or more co-operative societies be
amalgamated with any other co-operative society; or
(iii) two or more co-operative societies be amalgamated to form a new co-operative society, then, notwithstanding anything herein before contained, the Registrar may, after consulting the financing institution, if any, provide for -
(a) the division of that co-operative society into two or more co-operative societies; or
(b) the amalgamation of society or societies -
(i) with any other co-operative society; or
(ii) to form a new co-operative society;
with such constitution including representation on the committee, property rights, interests, liabilities, duties and obligations, as may be specified in the order.
(9) No order shall be made under sub-section (8), unless -
(a) a copy of the proposed order has been sent under certificate of posting to the society or societies concerned and the creditors;
(b) the Registrar has considered the objections received from the society or societies concerned or from any member or creditor of such society or LPA No.1146 of 2010 ::5::
societies within such period, being not less than fifteen days from the date of posting of the proposed order, as may be specified by the Registrar in this behalf in the proposed order.
(10) to (12) xxxxxx
5. Sub-sections (1) to (7) of Section 13 deals with the voluntary amalgamation, transfer of assets and liabilities and division of Co-operative Societies whereas Sub-sections (8) to (12) of Section 13 of the Act has given power to the Registrar, Co-operative Societies to order compulsory amalgamation or division of Co-operative Societies or Co-operative Society. Under Section 13(1)(a) of the Act, the Co-operative Society may be amalgamated with another Co-operative Society where two thirds majority of the member present and voting at a general meeting of the Society agree to transfer its assets and liabilities in whole or part to another Co- operative Society. The previous approval of the Registrar is also required to be obtained and similar resolution is to be passed by the Society to which the assets and liabilities are to be transferred. Clause (b) of Sub- section (1) of Section 13 of the Act, provides for division of Society into two or more Co-operative Societies.
6. A reading of Section 13(8) of the Act shows that the Registrar, Co-operative Societies is empowered to pass an order of amalgamation or division of Co-operative Societies or a Co-operative Society. The Registrar, Co-operative Societies under these provisions is required to be satisfied that it is essential or desirable in the interest of the Society or Societies that two or more Societies be amalgamated or any Society should be divided to form two or more Societies. Sub-section (9) of Section 13 of the Act provides the procedure where the Registrar of Co-operative Societies directs merger or division of Co-operative Societies under Section 13(8) of LPA No.1146 of 2010 ::6::
the Act.
7. A notice as required under Section 13(9)(a) of the Act was directed to be served on the necessary parties. The relevant portion thereof reads as under:-
"The Registrar, Cooperative Societies, Punjab, Chandigarh is satisfied that it is necessary and in the interest of the above Cooperative Marketing Societies and Markfed that these Marketing Societies to amalgamate into Markfed U/s 13(8) of Punjab Co- operative Societies Act, 1961 and whereas the proposed order of amalgamation shall be subject to the following terms and conditions......"
8. Thereafter, the Registrar, Cooperative Societies, Punjab, in exercise of powers under Section 13(8) of the Act passed an order for merger of the Cooperative Society with the MARKFED. The said order was passed on 24th December, 2008 (Annexure P-15) regarding merger of 27 Societies with the MARKFED. The relevant portion thereof reads as under:-
"From the above mentioned societies, Sh. Ajit Singh Babbehali, Chairman of the Gurdaspur Cooperative Marketing Society Ltd. District Gurdaspur filed a representation in writing on 21.11.2008 taking objection regarding the merger of this society in the Markfed. Along with this, the other elected committee members of this society had requested in writing that if this society is also merged like other marketing societies in the Markfed in accordance with the earlier general body, then they have no objection. In this way, the representation filed by Sh. Ajit Singh Babbehali, Chairman was rejected without consideration.
Besides the above, no other objection is received regarding the merger of the above noted cooperative marketing societies in the Markfed from any party."
LPA No.1146 of 2010 ::7::
9. It may be noticed that out of 27 Societies, 23 Societies had accepted the merger under Section 13(8) of the Act whereas members/office bearers of 04 societies preferred revision petitions before the Financial Commissioner, Cooperation, Punjab, who adjudicated the same vide order dated 19th October, 2009 (Annexure P-20). The Financial Commissioner while accepting the revision petitions held that the merger of the Cooperative Society with the MARKFED was not in accordance with the proposed amalgamation, i.e., passing a valid resolution by the general body of the Society and merger would result in defeating the objective enshrined in the Co-operative movement. The appellants feeling aggrieved by the order of the Financial Commissioner approached this Court by way of civil writ petition No.19293 of 2009 impugning the aforesaid order.
10. Learned Single Judge while disposing of the writ petition on 18th August, 2010, noticed that the Financial Commissioner had erred in passing the order on 19th October, 2009 by treating the same to be under Section 13(1) of the Act whereas the merger had taken place under Section 13(8) of the Act. The learned Single Judge held that the necessary ingredients as prescribed under Section 13(8) of the Act relating to recording of satisfaction by the Registrar that the merger was necessary in the interest of the Co-operative Society or Co-operative Societies had not been recorded. The learned Single Judge set aside the order of the Financial Commissioner and remanded the matter back to the Registrar, Cooperative Societies to pass a fresh order after hearing the necessary parties. This order of learned Single Judge has been assailed in this Letters Patent Appeal.
11. Learned counsel for the parties are ad idem that the amalgamation of Co-operative Societies be taken to be one under Section 13(8) of the Act as has been held by the learned Single Judge.
LPA No.1146 of 2010 ::8::
Accordingly, there is consensus between them that the order of learned Single Judge be upheld qua the appellants to that extent. However, the Registrar, Cooperative Societies, Punjab, may be directed to pass a fresh order and till then status quo existing as on today be maintained. It was further agreed that the affected and necessary parties may be allowed to submit any additional ground before the Registrar, Cooperative Societies, Punjab.
12. The present Letters Patent Appeals, thus, stand disposed of in the above terms. It is, however, directed that the Registrar, Cooperative Societies shall make sincere efforts for the disposal of the petition and pass a fresh order within a period of three months from the date of receipt of certified copy of the order after affording necessary opportunity to the concerned parties and status quo shall be maintained by the parties till the matter is adjudicated by the Registrar, Cooperative Societies.
(AJAY KUMAR MITTAL)
JUDGE
(G.S. SANDHAWALIA)
February 18, 2013 JUDGE
sukhpreet