JOSHI INDULAL VALLABRAM Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The petitioner herein on behalf of himself and 28 other share-holders similarly situated like him has filed this petition in representative capacity under Order I Rule 8 of the Civil Procedure Code challenging the coercive recovery proceedings initiated by respondent No. 4 herein who is Additional Special Recovery Officer Co-operative Societies of Mehsana district at the instance of respondent No. 3 who happens to be Liquidator of the society known as Kheralu Taluka Utpan Kharid Vechan Sangh Limited for recovery of contributions remaining unpaid by the petitioner and other share-holders represented by him since they happen to be share-holders of the aforesaid society.

(2.) In order to appreciate the contentions which have been urged by Miss V. P. Shah the learned Advocate appearing on behalf of the petitioner a few facts need be stated.

(3.) The aforesaid society was registered under the Sahakari Mandali Nibandh (a law pertaining to Co operative Societies) as was in force In the erstwhile State of Baroda on October 6 1947 The said society was registered as a society limited by guarantee and according to Clause 6 of the Bye-laws of the said society the liability of the members was limited and each member was liable to pay five times the nominal value of the shares of the society. The authorised share-capital of the said society was Rs. 50 0 into 2000 shares of Rs. 25/each. On merger of the erstwhile State of Baroda in pre-reorganised State of Bombay on 1-8-1949 the Bombay Co-operative Societies Act came to be applied to the area of the old State of Baroda by adaption of Bombay Merged State (Laws) Act 1950 on 30th March 1950 and consequentlY the Act pertaining to Co-operative Societies as was in force in the erstwhile State of Baroda came to be repealed. The societies registered under the said Act as was in force in the old Baroda State were deemed to be societies registered under the Bombay (Co-operative Societies Act 1925 It appears that on October 21 1956 a resolution was passed by the Special General Meeting of the aforesaid society for voluntary liquidation. The Registrar of Co-operative Societies. therefore passed an order of voluntary liquidation on 19th March 1957 under sec 47 of the Bombay Co-operative Societies Act 1925 Respondent No. 3 who happened to be the Manager of the Mehsana District Central Co-operative Bank Limited Mehsana was appointed as a liquidator of this society since the said Bank was the only creditor of the society. Respondent No. 3 took over charge as Liquidator on 23rd March 1957 He submitted a proposal to the Deputy Registrar Co-operative Societies to recover contributions from the members on March 6 1959 The Deputy Registrar by his order of 18th April 1961 sanctioned the said proposal. Meanwhile the old State of Bombay was bifurcated and the new State of Gujarat came into existence in its wake on May 1 1960 The Gujarat Co-operative Societies Act came in force on 1st May 1962 repealing the Bombay Cooperative Societies Act. It appears that respondent no. 3 had issued notices to the share-holders under sec. 110(h) of the Bombay Co-operative Societies Act 1925 of different dates calling upon them that since they were liable to pay five times the value of the shares held by them it has been decided that an amount 2* times the value of the shares be recovered from them and therefore they should make arrangement to make payments of the respective amounts within thirty days from the receipt of the notices. These notices were issued on different dates between 1st June 1961 and 15th June 1961 to the different share-holders. So far as the petitioner is concerned he was served with a notice on 14th June 1961 intimating that since he was holding four shares of the value of Rs. 100/he was liable to pay Rs. 500/by way of contribution but it has been decided to recover at the rate of 2* times the total value of the shares he should. therefore arrange to pay a sum of Rs. 250/and Rs. 6/by way of interest and should therefore show cause within thirty days of the receipt of the notice as to why the said amount should not be recovered from him failing which necessary legal action for recovery of the said amount would be taken.