Punjab-Haryana High Court
Nanak Chand, Inspector Cooperative ... vs The State Of Haryana on 8 November, 1996
Equivalent citations: (1997)115PLR498
Author: R.L. Anand
Bench: R.L. Anand
JUDGMENT R.L. Anand, J.
1. Nank Chand, Inspector, Cooperative Societies, Sohna, District Gurgaon, and formerly Inspector, Cooperative Societies, Gharaunda, District Karnal, has filed the present writ petition under Articles 226 and 227 of the Constitution of India, praying for the issuance of a writ in the nature of certiorari/mandamus or any other direction quashing the order dated 7.7.1980 (Annexure P2) passed by the Joint Secretary, Government of Haryana, Cooperation Department, exercising the powers of the Government under Section 68 of the Punjab Cooperative Societies Act, 1961 (for short (the Act'), as applicable to the State of Haryana, vide which respondent No. 1 gave directions that the petitioner be arrayed as one of the respondents in the arbitration proceedings.
2. It is alleged by the petitioner that he earlier used to work as Inspector, Cooperative Societies, Gharaunda, during the years 1968-69. Respondent No. 4 Sajjan Singh was the Secretary of the Mor Majra Cooperative Agricultural Service Society Limited and used to recover loans from the members of the Society and had been embezzling the same. The Mor Majra Cooperative Agricultural Service Society Limited (for short the Society') started recovery proceedings against respondent No. 4. Thereupon, Sajjan Singh (respondent No. 4 made a reference before the Registrar for the settlement of the dispute between him and the society by impleading the present petitioner as one of the respondents. Before the Arbitrator the petitioner raised an objection that since no dispute between an officer and an officer could be referred to the Arbitrator under Section 55 of the Act, and as such no dispute was maintainable, and as such no arbitration proceedings could be initiated against him. This contention of the petitioner was accepted by the Arbitrator, who vide order dated 13.9.1978 (Annexure P1) ordered for the deletion of the name of the petitioner as party from the arbitration proceedings. Aggrieved by this order, respondent No. 4 Sajjan Singh filed an appeal under Section 68 of the Act before the Government, which was allowed by respondent No. 1 without caring for the provisions of the law and the order (Annexure P1) was set aside vide order dated 7.7.1980 (Annexure P2). The petitioner alleges that it was not proper on the part of respondent No. 1 to interfere with the well reasoned order passed vide Annexure P1. It was wrong on the part of respondent No. 1 to hold that the case in hand was not a finding under Section 55(3) but a decision or order under Section 56 of the Act. Respondent No. 1 also took the erroneous view that the petitioner being an officer of the Society can be proceeded against in the arbitration proceedings, which were primarily between the Society and respondent No. 4. It has also been pleaded that no dispute was maintainable between the two officers.
3. With the above main averments, it has been prayed for the quashment of the order (Annexure P2) by restoring the order (Annexure P1).
4. Notice of the writ petition was given to the respondents. The Society, i.e., respondent No. 3, filed a written statement and it was pleaded that the present writ petition was not maintainable as no substantial right of the petitioner had been infringed. The petitioner could only challenge the award given by the Arbitrator and he had no locus standi to challenge the interim order, which had been passed by respondent No. 1. The petitioner had approached the High Court with tainted hands as he had embezzled huge amount of the Society and in these circumstances the writ petition was not maintainable on the grounds of the principles of justice, equity and good conscience. It is further pleaded that the intention of the petitioner is to thwart the action, which is likely to be taken against him under the Act and in these circumstances no writ petition is maintainable when the sole purpose is to get the verdict of the Court to circumvent the provisions of the law of the land. It is pleaded that had respondent No. 4 not started the arbitration proceedings under Section 55 of the Act, in that eventuality the said proceedings could be maintained by the Society against the petitioner. Justifying the order (Annexure P2), the Society has prayed for the dismissal of the petition.
5. Separate written statement was also filed by Sajjan Singh, respondent No. 4. His stand is also in consonance with the stand taken by respondent No. 3. Additionally, this respondent has pleaded that the petitioner has not suffered any manifest injustice with the passing of the order (Annexure P2). This respondent handed over Rs. 49,253.62 to the petitioner, who issued a valid receipt in token having received thereof. The petitioner did not deposit this amount in the account of the Society and misappropriated the same. In fact, he is liable to refund the amount to the Society. In the proceedings under Section 55 of the Act, the liability, if any, would be of the petitioner and he cannot be permitted to take the advantage of his own wrongs.
6. I am disposing of this writ petition with the assistance of Shri Prem Singh and Shri C.R. Dahiya, Advocates, appearing on behalf of the petitioner; Shri Azad Singh, A.A.G. Haryana, appearing on behalf of respondents Nos. 1 and 2, and Shri V.K. Jain, Senior Advocate, with Mr. Raman Sharma, Advocate, and Mr. J.L. Malhotra, Advocate, who appeared on behalf of respondent No. 4, and with their assistance have gone through the record of the case.
7. Subsection (1) of Section 55 of the Act reads as under:-
"55. Disputes which may he referred to arbitration.-
(1) Notwihstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a cooperative society arises -
(a) among members, past members and persons claiming through members, past members and deceased member; or
(b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer agent or employee of the society or liquidator, past or present; or
(c) between the society or its committee and any past committee, any officer, agent or employee; or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the society; or
(d) between the society and any other cooperative society, between a society and liquidator of another society or between the liquidator of one society and the liquidator of another society;
such dispute shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute."
A perusal of the above would show that as per clause (c) of sub-section (1) of Section 55 of the Act, the dispute touching the constitution of management or the business of a co-operative society arising between the Society on the one hand and its officer on the other hand, can be referred to the arbitration of the Registrar of the Society for decision and that no Court shall have any jurisdiction to entertain any proceedings in respect of such dispute. In the present case also initially the dispute was referred at the instance of respondent No. 4, whose stand is not against the Society or the Registrar, as envisaged under Section 55 of the Act. The petitioner was added as a respondent. The point for determination in these circumstances would be whether there can be any reference under Section 55 of the Act between an officer and another officer of the Society. The answer of this Court would be in the negative be- cause Section 55(1)(c) of the Act does not cover a dispute touching the management or business of the Society between an officer and another officer and in that regard . the objection of the petitioner before the Registrar was correct and justified and it ; was rightly held by the Registrar vide Annexure P1 that the petitioner be deleted from the list of respondents as no dispute can be referred vis-a-vis him by virtue of the provisions of Section 55. Section 56 of the Act states that the Registrar on receipt of the reference under Section 55 may decide the dispute himself or transfer it for disposal to any other person or refer it for disposal to another arbitrator. The Registrar or any other person to whom a dispute is referred for decision under Section 56 of the Act has the power to pass interlocutory orders as he may deem necessary in the interest of justice. Section 68 of the Act deals with the matter of appeals and the appeal is maintainable against any decision or award made under Section 56 of the Act. Respondent No. 4 filed an appeal against the order (Annexure P1), and the Government, i.e., the appellate authority, set aside the order (Annexure P1) and passed the directions by holding that Shri Nanak Chand, present petitioner, would be arrayed as respondent in the arbitration proceedings and in this regard the operative part of the order (Annexure P2) is reproduced as follows:-
"3. The next point arises as to whether the Inspector Coop. Societies, Karnal, is or is not an officer of the Mor Majra Coop. Agrl. Service Society, Mor Majra, Tehsil and District Karnal within the meaning of Section 2(h) of the Pb. Coop. Societies Act, 1961. The learned counsel for the respondents has agitated that an Inspector has no authority to give any order of any worthwhile consequence or importance of a Coop. Society. In other words, the learned counsel for the respondents has impliedly suggested that an Inspector is merely a reporting agency. At the most he can be deemed to be an auditor or a messenger or at the most a watch-dog. The learned counsel for the appellant on the other hand has raised the plea that all the powers under the Pb. Coop. Societies Act are vested in the Registrar but the Registrar cannot personally function so far as thousand and thousand of Coop. Societies are concerned. He impliedly suggests that the Registrar functions and acts through subordinate officers including the Inspectors. The Inspector is the representative of the Registrar for all the functions and rights and duties of the Coop. Deptt. He means to suggest that an Inspector is not merely an ear or the eye of the Registrar but also the hand of the Registrar. I personally feel that the latter interpretation of the learned counsel of the role of an Inspector. The Inspector by his designation is an Inspector and has a right to inspect and take such action against a Coop. Society as he means and can obtain orders of his superiors when his own authority is deficient. I cannot persuade myself to Relieve that an Inspector holds zero authority over the cooperative society under his charge. In the Government system powers are always shared between various officers in an hierarchy. No single officer is fully competent to issue all orders to an individual or a society. If the interpretation given by the learned counsel for the respondent is stretched logically then no officer of the Coop. Department except the Registrar would at all be deemed to be an officer within the meaning of section 2(h) of the Act. The learned counsel for the respondent has drawn my-attention to rule 45 read with Section 3 of the said Act. I am, however, disinclined to agree with him that an Inspector ceases to be an officer merely because he has not been specifically mentioned u/s 3. The words 'other person' in section 3(2) are significant Taking an overall view of the matter, I hold that an Inspector is certainly an officer within the meaning of section 2(h) of the Act and he cannot be excluded from the proceedings on the technical grounds that he is not an officer of the society."
A perusal of the operative portion of the impugned order would show that the Government took a completely erroneous view of the matter by holding that since the petitioner is also an officer of the Society and, therefore, the reference is competent against him. Section 55(1) (c) only envisaged a dispute between a Society and its officer. In the present case the dispute was initiated at the instance of respondent No. 4 against the Society. To that extent it is covered by clause (c) of sub-section (1) of Section 55 of the Act, but the joining of the petitioner as a respondent is not permissible because the dispute between an officer and another officer cannot be referred to arbitration by virtue of this Section. The Society could independently make a reference against the petitioner. The entire dispute revolves between the petitioner and respondent No. 4. The latter alleges that he after receiving the amount had parted it to the petitioner, who failed to deposit the amount with the Society and had embezzled it. Respondent No. 4 also alleges that he had receipt issued to him by the petitioner and in these circumstances the responsibility cannot fall on his shoulders rather it should be the petitioner who is liable to account for the alleged embezzled amount.
8. Faced with this difficulty, learned counsel for the respondents had tried to convince me by stating that under Section 69 of the Act, while exercising the revisional jurisdiction, the State Government could pass the order, in order to see the legality or propriety of any decision or order passed by the arbitrator. The contention is devoid of any merit. So far as the power of revision is concerned, there is no dispute but it was incumbent upon the part of the Government to see whether any reference could proceed against the petitioner at the instance of respondent No. 4 when the dispute is between the two officers of the Society.
9. The answer of this Court is in the negative and from this angle the order (Annexure P2) passed by respondent No. 1 cannot be sustained in the eyes of law and has to be interfered with in the writ jurisdiction.
10. It was also contended by the learned counsel for the respondents that the impugned order (Annexure P2) is an interim order. The dispute is still pending before the arbitrator. The petitioner cannot be allowed to agitate the order (Annexure P2) at this stage till the arbitration proceedings concluded with an award. It was also pleaded that the petitioner had approached the Court with soiled hands. As he himself was guilty of embezzlement, therefore, extraordinary jurisdiction under Article 226 of the Constitution of India should not be invoked in the present matter. The argument is not convincing. This Court cannot endorse an order passed by respondent No. 1 when the Arbitrator had no jurisdiction to proceed against the petitioner. This Court is only the proper forum when the State Government had assumed the jurisdiction not conferred upon it.
11. Resultantly, this writ petition is hereby allowed. The order Annexure P2 dated 7.7.1980 passed by respondent No. 1 is hereby quashed. Directions are given to delete the name of the petitioner from the arbitration proceedings. It may be made clear that the society can independently proceed against the petitioner by resorting to the provisions of Section 55 of the Punjab Co-operative Societies Act, 1961 and any decision or award given by the Arbitrator between the proceedings of the Society and respondent No. 4 will not have any bearing so far as the liability, if any, of the present petitioner vis-a-vis the Society is concerned.
12. With the above directions the writ petition stands disposed of with no order as to costs.