1973 Supreme(P&H) 157
PUNJAB & HARYANA HIGH COURT
Rajendra Nath Mittal, J.
Ishar Das
Versus
State Of Haryana
Civil Writ No. 1551 of 1973,
Decided On : OCTOBER 29, 1973
Section 67-A of the Punjab Co-operative Societies Act, 1961, is applicable to the recovery of loans specified therein, such as crop loans and seasonal agricultural finance, and is not violative of Article 14 of the Constitution of India.
Headnote:
CO-OPERATIVE SOCIETIES - WINDING UP - RECOVERY OF LOANS - SECTION 67-A OF THE PUNJAB CO-OPERATIVE SOCIETIES ACT, 1961 - APPLICABILITY - CONSTITUTIONALITY - ARTICLE 14 OF THE CONSTITUTION OF INDIA.
Fact of the Case:
The petitioners, members of a co-operative society under winding up, challenged the notices issued to them under Section 67-A of the Punjab Co-operative Societies Act, 1961, for recovery of alleged outstanding loans. They contended that the Liquidator should determine the amount due under Section 59 of the Act and that Section 67-A was inapplicable and violative of Article 14 of the Constitution.
Finding of the Court:
The court held that Section 67-A of the Act was applicable to the recovery of loans specified therein, such as crop loans and seasonal agricultural finance, and that the Liquidator could proceed under that section to recover such loans. The court also held that Section 67-A was not ultra vires Article 14 of the Constitution as it provided sufficient guidance for its application and did not confer arbitrary powers on the Registrar.
Issues: 1. Whether Section 67-A of the Punjab Co-operative Societies Act, 1961, is applicable to the recovery of loans from members of a co-operative society under winding up. 2. Whether Section 67-A of the Act is violative of Article 14 of the Constitution of India.
Ratio Decidendi: 1. Section 67-A of the Act provides a specific remedy for the recovery of certain types of loans, such as crop loans and seasonal agricultural finance, and does not exclude the jurisdiction of the Liquidator to recover such loans under Section 59 of the Act. 2. Section 67-A provides sufficient guidance for its application and does not confer arbitrary powers on the Registrar. The Registrar is required to make inquiries and provide an opportunity of being heard to the member concerned before granting a certificate for recovery of the amount due.
Final Decision: The writ petition was dismissed with costs.
1. This writ petition has been filed under Articles 226 and 227 of the Constitution of India for quashing the notices, dated April 17, 1973 (copies Annexures A and B to the petition) issued by the Assistant Registrar, Co-operative Societies, respondent. No. 3.
2. The facts of the writ petition are that the petitioners are the members of the Metlan Co-operative Agricultural Service Society, Metlan, tehsil and district Ambala (now under winding up) (hereinafter referred to as the Society ) which is registered under the Punjab Co-operative Societies Act, 1961 (hereinafter referred to as the Act ). Respondent No. 3 who directed the winding up of the Society appointed respondent No. 4 as its Liquidator under sub-section (1) of S. 58 of the Act. A few days before the notices, dated April 17, 1973, (Copies Annexures A and B ) were issued to the petitioners, respondents 4 and 5 came to their village and asked them to pay the loans which were alleged to be outstanding in their names in the records of the Society. The petitioners informed them that whatever loan they had taken from the Society had been repaid from time to time and no amount was then due to the Society from them. Respondents 4 and 5 moved an application under Sec. 67-A of the Act under which the amount could be recovered as arrears of land revenue. The Assistant Registrar sent the impugned notices, dated April 17, 1973, to the petitioners and asked the petitioners to appear before him on April 27, 1973, to represent their case. The case was adjourned on that date to May 3, 1973, and then to May 5, 1973. On May 5, 1973, a preliminary objection was raised by the petitioners before respondent No. 3 that as the Society was under winding up process, no action could be taken against them for recovery of any debt except by following a procedure under Section 59 of the Act read with Rules 58 and 59 of the Punjab Co-operative Societies Rules, 1963 (hereinafter referred to as the Rules ). They further stated that when a Society was under winding up, the loan due from any person could be recovered by the Liquidator, by an order passed under clause (b) of sub-section (2) of S. 59 of the Act. Respondent No. 3 overruled the objections of the petitioners. Respondent No. 3 has no jurisdiction and power to issue any notices to the petitioners in respect of the alleged loan. Section 67-A of the Act is violative of Article 14 of the Constitution of India, 1950, as uncontrolled and unbridled powers have been given to the Registrar under that section and no provision of appeal or revision against an order passed under that section has been provided in the Act. The petitioners have challenged the aforesaid notices marked as Annexures A and B on the ground that they are illegal, void and without jurisdiction. The respondents have contested the petition.
3. The first contention of the learned counsel for the petitioners is that the winding up of the Society has been ordered and a Liquidator has been appointed. He further submits that the amount which is recoveraable from the petitioners should be determined by the Liquidator under Section 59 of the Act and the same can be recovered under Section 64 of the Act. According to him, Section 67-A has no applicability to the present case. It is, therefore, argued by him that the notices issued under Section 67-A are illegal and without jurisdiction. In order to appreciate the argument of the learned counsel for the writ petitioners, it is necessary to reproduce sub-sections (1) and (2) of S. 58, sub-section (1) and clauses (a) and (b) of subsection (2) of Sec.59, Sec.64 and sub-sections (1) and (2) of Sec.67-A of the Act, which are as follows :-
"58 (1) Where the Registrar has made an order under Section 57 for the winding up of a co-operative society, he may appoint a liquidator for the purpose and fix his remuneration.
(2) A liquidator shall, on appointment take into his custody or under his control all the property, effects and actionable c