1998 Supreme(Bom) 170

IN THE HIGH COURT OF BOMBAY
(PANAJI BENCH)
R.M.S. Khandeparkar, J.
Shri Gajanan Pandurang Shet Parkar others..... Petitioners.
Versus
L.D. Authorised Person of the Registrar
of Co-op. Societies others.... Respondents.
Writ Petition Nos. 188, 192 and 490 of 1996, decided on 17-3-1998.
Advocates appeared :
Sudin Usgaonkar in W.P. Nos. 188 192 of 1996, for the petitioner and in W.P. No. 490 of 1996, for the respondent Nos. 3 and 4.
Smt. A. Agni in W.P. Nos. 188 192 of 1996, for the respondent No. 3 and in W.P. No. 490 of 1996, for petitioner.

Headnote:Section 88 (As applicable to State of Goa)-Initiation of proceeding against the members of society by Registrar for misfeasance-Individual proceeded against must be guilty of improper performance of some act which has lawfully done-Bye-laws not followed-Caused loss to society -Delinquent guilty of improper performance of act-Section 88 prohibits the maintainability of proceeding-Once it is clear that the acts of misfeasance would restrict to improper action on the part of the person in management and would not include non-performance of the duty and charge in the instant case being entirely relating to failure to perform the duty. It was held that there was no scope for proceeding against the petitioners for the offence of misfeasance under Section 88 of the said Act, and there fore, the proceeding under Section 88 for misfeasance against the petitioners are to be held as bad in law.

       Section 88-Proceedings to be initiated for misfeasance under Section 88 of Act-Under this section, person concerned must be guilty of improper performance of same act which he has lawfully done-In present case, delegation is of failure to perform duty-No disclosure of any positive lawful act having been done improperly-Effect-Held, proceeding for misfeasance under Section 88 of Act not tenable.-Plain reading of Section 88 of the said Act discloses that the Registrar is empowered to frame charges against any person who has taken part in the organisation or management of the society and who has been prima facie found guilty of misapplication or retention of any money or property of the Society, or has been guilty of misfeasance or breach of trust in relation to the Society and further provides that after giving reasonable opportunity to the person to answer the charges and, if same are found proved, then to make an order requiring him to repay or restore the money as the case may be to the Society. There cannot be any dispute as rightly submitted by the learned advocate for the petitioners Gajanan and Lavchandra that Section 88 certainly makes difference between the misapplication of funds or misfeasance or being liable or accountable for money to the Society. On plain reading of the said Section 88, therefore, it cannot be said that the term misfeasance in the said section would apply to any and every sort of offence which can be taken note of for initiating proceedings under Section 88 of the said Act. The expression misfeasance has specific and distinct meaning and the said term has not been used in the said section so as to include all types of offences for which a person in the management of the Society can be proceeded against under the said section. Otherwise, the Legislature would not have used different expressions for different types of acts and omissions in the said section. Indeed, the said section refers to six types of offences, namely, misapplication or retention of money or liability or accountability for money or property of the Society as well as misfeasance and breach of trust. Some of those offences would require performance of certain positive acts, whereas certain offences can be said to have been committed on account of non-performance of some other acts. The offence of misapplication or retention of money would necessarily result from performance of certain acts may be in contravention of certain duties and obligations whereas liability or accountability for money arise either from performance of certain other acts or an account of omission to perform certain duties. Besides, undoubtedly the term misfeasance has not been defined in the said Act. According to the learned Advocate for Gajanan and Lavchandra, therefore, one has to fall back on dictionary meaning to understand the term misfeasance. The term misfeasance is defined in the Blacks Law Dictionary means the improper performance of some act which a person may lawfully do. Where as the term nonfeasance means omission of an act which a person ought to do and the term malfeasance is the doing of an act which a person ought not to do at all. In other words, the terms misfeasance, nonfeasance and malfeasance have different meanings and they are not synonymous or similar. On the contrary misfeasance requires performance of some act whereas nonfeasance would mean non-performance of an act. When a person is required to do certain things lawfully but performs it improperly, it cannot be said that he is guilty of nonfeasance. However, certainly he can be accused of an offence of misfeasance. Similarly, if a person is required to do certain acts in terms of the provisions of law and he fails in his obligation, he can be accused of an offence of nonfeasance. In other words, for the proceedings to be initiated for misfeasance under Section 88, it is necessary that such person must be guilty of improper performance of some act which he has lawfully done. The contention of advocate Mrs. Agni that Section 888 is wide enough to encompass all sorts of offences including misfeasance and nonfeasance is equally true, not because the term misfeasances found in the said section would include all such offences but because of inclusion of various other acts and omissions as offences which can warrant action under the said section. Indeed, various other acts and omission referred to in the said section can certainly be classified an acts of nonfeasance and malfeasance and in that case no fault can be found with the submission of learned advocate for the said Society that Section 88 encompass all sorts of offences misfeasance as well as nonfeasance. But that does not justify grouping of all the offences mentioned in the said section under the single head of misfeasance and accordingly persons cannot be accused of offences of misfeasance when the allegation against them are of failure to perform their duties. Perusal of the charge framed by the Registrar and tried by the Authorised Officer would show that the petitioners Gajanan and Lavchandra were accused of failure to discharge some of their duties under the Bye-laws of the Society. The charge specifically refers to nonperformance of certain functions resulting in loss to the Society, Clause (7) of the charge-sheet speaks of failure to perform the duties laid down in Byelaw 46(8). Clause (8) thereof speaks of non-performance of the functions which are required to be performed. Once it is clear that the acts of misfeasance would restrict to improper action on the part of the person in management and would not include non-performance of the duty and charge in the instant case being entirely relating to failure to perform the duty, in my considered opinion, there was no scope for proceeding against the petitioners Cajanan and Lavchandra for the offence of misfeasance under Section 88 of the said Act, and therefore the proceeding under Section 88 for misfeasance against the petitioners Cajanan and Lavchandra are to be held as bad in law.

       Sections 88 and 91-Society-Misfeasance-Liability under Section 91-Proceeding initiated under Section 88 of Act for improper performance-Loss to society also by members of Managing Committee-Held-Charge against does not disclose any positive lawful act having been done improperly so as to accused them of the offence of misfeasance.-In the present case there cannot be any dispute as rightly submitted by the learned advocate for the petitioners that Section 88 certainly makes difference between the misapplication of funds or misfeasance or being liable or accountable for money to the society. On plain reading of said Section 88, therefore, it can-

       not be said that the term misfeasance in the said section would apply to any and every sort of offence which can be taken note of for initiating proceedings under Section 88 of the said Act. The expression misfeasance has specific and distinct meaning and the said term has not been used in the said section so as to include all types of offences for which a person in the management of the society can be proceeded against under said section otherwise the Legislature would not have used different expressions for different types of acts and omissions in the said section. Indeed, the said section refers to six types of offences, namely, misapplication or retention of (money) or liability or accountability for money or property of the society as well as misfeasance and breach of trust, undoubtedly the term misfeasance has not been defined in the said Act. According to the learned advocate for G and L, therefore, one has to fall back on dictionary meaning to understand the term misfeasance. The term misfeasance is defined in the Black Law dictionary means the improper performance of some act which a person may lawfully do. Whereas, the term nonfeasance means omission of an act which a person ought to do and the term malfeasance is the doing of an act which a person ought not to do at all. In other words, for the proceedings to be initiated for misfeasance under Section 88, it is necessary that such person, must be guilty of improper performance of some act which he has lawfully done, The contention of advocate that Section 88 is wide enough to encompass all sorts of offences including misfeasance and nonfeasance is equally true, not because the term misfeasance found in the said section would include all such offences but, because of inclusion of various other acts and omissions as offences which can warrant action under the said section. Perusal of the charge framed by the Registrar and tried by the authorised officer would show that the petitioners t and L were accused of failure to discharge some of their duties under the Bye-laws of the Society. The charge specifically refers to non-performance of certain functions resulting in loss to the society. The clause 7 of the charge-sheet speaks of failure to perform the duties laid down in Bye-law 46(8) thereof, speaks of non-performance of the functions which are required to be performed. Bye-law 46(8) provides that the Committee shall arrange to take down account at right time, inspedion may be held frequently of the account of the Society sale of goods, books for account of goods other books of account and cash balance. Bye-law 61 provides that the balance amount of Rs. SO/-of the society can be deposited with the Secretary. More than that amount but, upto Rs. 100/- shall be in possession of the Chairman and if, more than the said amount is collected the same shall, within 3 days from the collection (excluding public holidays) be deposited with Central Bank or its nearest branch and the responsibility of deposit shall lie on the Chairman. The charge against G and L, therefore, exercise discloses that the same relates to non-performance of certain duties under the Bye-laws and it does not disclose any positive lawful act having been done improperly by the Managing Committee or the members thereof, so as to cause them of commission of the offence of misfeasance.