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1971 Supreme(AP) 187
Andhra Pradesh High Court
Judges : A.V.KRISHNA RAO, GOPALRAO EKBOLE
Madadi Chennakesava Reddy - Appellant
Versus
Divisional Co-operative Officer, karimnagar - Respondent
Decided On : 09-13-71
A classification of debts for the purpose of providing different procedures for their recovery is permissible under Article 14 of the Constitution of India, provided that the classification is reasonable and the procedures prescribed are not arbitrary or discriminatory.
Headnote:
COOPERATIVE SOCIETIES - ANDHRA PRADESH COOPERATIVE SOCIETIES (AMENDMENT) ACT, 1970 - SEC. 71 - CONSTITUTION OF INDIA, ART. 14 - VALIDITY - CLASSIFICATION OF DEBTS - PROCEDURE FOR RECOVERY - WHETHER ARBITRARY AND DISCRIMINATORY - PRINCIPLES OF NATURAL JUSTICE - NOTICE - REASONABLE OPPORTUNITY OF BEING HEARD.
Fact of the Case:
The petitioners, members of a cooperative society, challenged the validity of Section 71 of the Andhra Pradesh Cooperative Societies (Amendment) Act, 1970, arguing that it violated Article 14 of the Constitution of India by providing a different procedure for the recovery of certain specific debts than that prescribed under Section 61 of the Act. They also contended that the procedure followed by the department under Section 71 was arbitrary and did not provide them with a reasonable opportunity of being heard.
Finding of the Court:
The court held that Section 71 of the Act was not violative of Article 14 of the Constitution as it did not confer unguided discretion on the authority to choose between different procedures and the procedure prescribed under Section 71 was not more despotic than that prescribed under Section 61. However, the court found that the notices issued by the department under Section 71 were inadequate and did not provide the petitioners with a reasonable opportunity of being heard, thereby violating the principles of natural justice.
Issues: 1. Whether Section 71 of the Andhra Pradesh Cooperative Societies (Amendment) Act, 1970, violates Article 14 of the Constitution of India by providing a different procedure for the recovery of certain specific debts than that prescribed under Section 61 of the Act. 2. Whether the procedure followed by the department under Section 71 is arbitrary and does not provide the petitioners with a reasonable opportunity of being heard.
Ratio Decidendi: 1. The court held that Section 71 of the Act did not violate Article 14 of the Constitution as it did not confer unguided discretion on the authority to choose between different procedures and the procedure prescribed under Section 71 was not more despotic than that prescribed under Section 61. 2. The court found that the notices issued by the department under Section 71 were inadequate and did not provide the petitioners with a reasonable opportunity of being heard, thereby violating the principles of natural justice.
Final Decision: The court allowed the writ petition of two petitioners and quashed the certificates issued against them. The court dismissed the writ petition in regard to other petitioners.
( 1 ) TWO questions have to be answered in this enquiry. The first is whether Sec 71 of the ANDHRA PRADESH CO-OPERATIVE SOCIETIES ACT, 1964 1964 hereinafter called the Act is ultra vires of Art. 14 of the Constitution. The second question is whether before grant of Certificate under Sec. 71 (1) of the Act in the absence of any rule made in that behalf the enquiry postulated by that Section is to be conducted according to the principles of natural justice.
( 2 ) WE have before us a petition filed by 68 persons seeking the issue of a writ of Mandamus declaring that Secs. 70 and 71 of the Act are ultra vires of the Constitution and as such cannot be enforced. The petitioners are the members of the Multi-purpose Co-operative society Kannaram, Huzurabad taluk, Karimnagar District. The said co-operative society has been advancing crop loans and mid-term loans to various ryots in its area of operation. In pursuance of relevant schemes the petitioners also were given loans by the above said society ranging from Rs. 300/- to Rs- 3,000/ -. The crop loans are generally issued between the said range. The Mid-term loans however are generally given in a sum of Rs. 3,000/ -. The crop loans are to be repaid within a period of one year and the mid-term loans are to be returned within a period of three years.
( 3 ) IT is contended that these loans were collected under Sec. 61 of the Act which section and the rules made thereunder provide procedure for determining as to what debt is due as well as for their recovery. Inspite of the presence of these provisions Sec. 71 was introduced by way of Amendment Act 10 of 1970 published in the Gazette of 22-7-1970. It is contended that the said section is discriminatory in its character and offends Art. 14 of the Constitution. Sec. 71 reads :" (1) Notwithstanding anything in this Actor in any other law for the time being in force and without prejudice to any other mode of recovery svhich is being taken or may be taken the Registrar may on the application made by primary agricultural credit society for the recovery of arrears of any sum advanced by it to any of its members for seasonal agricultural operations or for medium term purposes, and on its furnishing a statement of accounts in respect of the arrears and after making such enquiry as it deems fit issue a certificate for the recovery of the amount stated thereto to be due as arrears. (2) Where the Registrar is satisfied that a primary agricultural credit soctety has failed to take action under sub-section (1) in respect of any amount due as arrears he may on his own motion and after making such enquiry as he deems fit issue a certificate for the recovery of the amount stated therein to be due as arrears and such a certificate shall be deemed to have been issued on an application made by the society concerned (3) A certificate issued by the Registrar under sub section (1) or sub-section (2) shall be final and conclusive proof of the arrears stated to be due therein and the certificate shall be executed in the manner specified in sub-section (2) of Sec. 70", section 70 (2) is as follows : -"every order of decision made under Section 60, Sec. 71, Sec. 76, Sec. 77 or Sec. 78 for the recovery of any amount may be executed in the following manner : (a) by the Civil Court having local jurisdiction on a Certificate signed by the Registrar or any person authorised by him in his behalf as if the order or decision were a decree of the court ; or (b) by the collector on an application made to him within twelve years from the date fixed for payment in the order ; or decision and if no such date is fixed from the date of the order or decision along with a certificate signed by the registrar or by any person authorised by him in this behalf as if the amount due under the order or decision were an arrear of land revenue ; or (c) by the Registrar or any other person authorised by him in this behalf in the manner provided under sub-section (1)". A
