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PATNA HIGH COURT
S.N.Jha and Narayan Roy JJ.
Bindesh Kumar Singh
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 9328 of 1993 ;
Decided On : NOVEMBER 18, 1994
CO-OPERATIVE SOCIETIES - RECOVERY OF SUMS DUE - CERTIFICATE PROCEEDING - MAINTAINABILITY - REQUISITION FOR CERTIFICATE - COMPETENCY OF ADMINISTRATOR OF SOCIETY - DEEMING PROVISION - INTERPRETATION - SCOPE AND EXTENT - PURPOSE - LEGAL FICTION - EFFECT - AUTHORITY OF MANAGING COMMITTEE OR ADMINISTRATOR OF SOCIETY - EXTENT - NOMINEE OF MEMBER OR PAST MEMBER - INCLUSION - CERTIFICATE PROCEEDING - INITIATION IN RESPECT OF UNASCERTAINED SUM - PROPRIETY - CERTIFICATE OFFICER'S POWER TO DETERMINE LIABILITY AND APPORTION IT AMONGST CERTIFICATE-DEBTORS - CERTIFICATE PROCEEDING - COMPOSITE NATURE - CERTIFICATE OFFICER'S COMPETENCE TO GO BEHIND CERTIFICATE AND DETERMINE LIABILITY - DISTINCTION FROM EXECUTING COURT UNDER CIVIL PROCEDURE CODE.
Fact of the Case:
Petitioners challenged the maintainability of a certificate proceeding initiated for recovery of dues from them as certificate-debtors. The proceeding was initiated by the Administrator of the society without any authorization from the Registrar of Co-operative Societies. Petitioners contended that only the Registrar or an authorized person could send the requisition for the certificate. They also raised issues related to the inclusion of one petitioner as a nominee of a member, non-service of notice, and the initiation of the proceeding in respect of an unascertained sum.
Finding of the Court:
The Court held that the Administrator of the society was competent to send the requisition for the certificate. The legal fiction created by Sec. 52 of the Bihar Co-operative Societies Act, 1935, which deemed the Registrar or an authorized person as the person to whom the money was due and payable, did not extinguish the authority of the Managing Committee or the Administrator of the society. The purpose of the legal fiction was to provide an alternative to ensure that the interest of the society and its members was protected. The Court also held that the petitioner, who executed sale deeds on behalf of the Secretary of the society, was covered by Clause (f) of Sec. 52 as a nominee of the Secretary. The Court further held that the certificate proceeding could be initiated in respect of an unascertained sum, as Sec. 52 provided for recovery of money due from members, past members, and their nominees, without requiring a prior proceeding to ascertain the amount. The Court also clarified that the Certificate Officer had the power to determine the liability of the certificate-debtors and apportion it amongst them, if necessary.
Issues: 1. Whether the Administrator of the society was competent to send the requisition for the certificate. 2. Whether the petitioner, who executed sale deeds on behalf of the Secretary of the society, was covered by Clause (f) of Sec. 52 as a nominee of the Secretary. 3. Whether the certificate proceeding could be initiated in respect of an unascertained sum. 4. Whether the Certificate Officer had the power to determine the liability of the certificate-debtors and apportion it amongst them, if necessary.
Ratio Decidendi: 1. The legal fiction created by Sec. 52 of the Bihar Co-operative Societies Act, 1935, which deemed the Registrar or an authorized person as the person to whom the money was due and payable, did not extinguish the authority of the Managing Committee or the Administrator of the society. The purpose of the legal fiction was to provide an alternative to ensure that the interest of the society and its members was protected. 2. The petitioner, who executed sale deeds on behalf of the Secretary of the society, was covered by Clause (f) of Sec. 52 as a nominee of the Secretary. 3. The certificate proceeding could be initiated in respect of an unascertained sum, as Sec. 52 provided for recovery of money due from members, past members, and their nominees, without requiring a prior proceeding to ascertain the amount. 4. The Certificate Officer had the power to determine the liability of the certificate-debtors and apportion it amongst them, if necessary.
Final Decision: The writ petitions were dismissed.
S.N.Jha, J.
1. These three writ petitions arising out of a common proceeding under the Bihar Public Demands Recovery Act, 1914 ("the Public Demands Act" in short) have been heard together and are disposed of by this common order.
2. The petitioners have challenged the maintainability of the impugned proceeding which has been levied for recovery of sum of Rs. 1,17,17,903 said to be due to Shri Ram Nagari Sahkari Grih Nirman Samiti Ltd. (the Society in short). They also seek quashing of the order passed in the said proceeding directing recovery of the dues from their assets by auction sale. The petitioner in C.W.J.C. No. 9328 of 1993 Bindesh Kumar Singh is an Advocate by profession. He, however, figures as certificate-debtor not as an advocate or legal Advisor to the Society, as claimed by him, rather as the person who executed the sale deeds in favour of the members on behalf of the Secretary of the Society, received the consideration money but allegedly misappropriated the same. The petitioner in C.W.J.C. No. 9445 of 1993 Ramesh Bhagat was an employee of the society while the petitioner in C.W. J.C. No. 10569 of 1993 Bharat Tripathy was its member-Secretary. They have been arrayed as certificate-debtors for having misappropriated more than one crore of rupees of consideration money which they had received from the members of the Society for sale of plots of land to them. A number of point have been raised in support of the writ petitions. I shall first take up the point which is common to all the three cases.
3. The Public Demands Act has been enacted for recovery of public demand which is defined under Sec. 3(6) of the Act to mean "any arrear of money mentioned or referred to in Schedule I...". In terms of Entry 3 and Entry 4 of the Schedule, amongst others, any money which is declared by any law for the time being in force to be recoverable or realisable as arrear of revenue or land revenue and any money which is declared by any enactment for the time being in force to be a demand or a public demand or to be recoverable as demand or public demand are deemed to be public demand within the meaning of Sec. 3(6). Sec. 52 of the Bihar Co-operative Societies Act, 1935 (in short the Co-operative Act) provides for recovery of certain types of money payable by any person or by any registered society as public demand or as arrear of land revenue in the State of Bihar it is not in dispute that any money falling within the ambit of Sec. 52 is recoverable as a public demand under the Public Demands Act. The point urged on behalf of the petitioners, however, is that in terms of the said section only the Registrar, Co-operative Societies. Bihar, or the person authorised by him in that behalf is competent to send the requisition to the Certificate Officer for recovery of the dues. Since in the instant case the requisition was sent by the Administrator of the society without any authorisation by the Registrar in that behalf, the certificate and the resultant proceeding are illegal and without jurisdiction.
4. As the dispute involves interpretion of Sec. 52 of the Co-operative Act it would be proper to quote its provisions in extenso at the very out set.
52. Recovery of sums due. Any sum payable by any person or by any registered society (a) as fees for an audit held under Sec. 33.
(b) in accordance with an order of the Registrar under Sec. 39 apportioning the costs of an inquiry or inspections.
(c) in accordance with an order passed under Sec. 40.
(d) in accordance with an order of the Registrar or of a liquidator passed under Sec. 44, or
(e) in accordance with an order decision or award passed or made under Sec. 48.
(f) As an amount due from member, past member or the nominee, heirs or legal representative of the deceased member, of a primary co-operative society, shall be recoverable, as a public demand in any area, in which the Bihar and Orissa Public Demands Recovery Act, 1914 (B. and 0. Act 4 of 1914), is in force or as an arrea
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