ALJIBHAI NARSINHBHAI SOLANKI Vs. CHHAGANBHAI K PATEL

JUDGEMENT

(1.) There are several points raised in this petition but it is possible to dispose of the petition on a short ground and we will therefore state only so much of the facts as are necessary in order to appreciate that ground. The petitioner was at all material times the Honorary Secretary and the fourth respondent was the chairman of the Sidhapur Taluka Vankar Audyogik Society Ltd. a Society registered under the Bombay Co-operative Societies Act 1925 It appears that the cash of the Society used to remain with the fourth respondent and out of that cash a sum of Rs. 4 0 was retained by the fourth respondent and was not returned by him to the Society. An inquiry into the constitution working and financial condition of the Society was ordered by the Assistant Registrar of Co-operative Societies on 28th July 1953 and the Inquiry Officer also reported that the fourth respondent was guilty of illegal retention of Rs. 4 0 and that this amount should be recovered from him with interest from 1st December 1952. The Assistant Registrar of Co-operative Societies thereupon made an order directing that legal steps should be taken against the fourth respondent for recovery of the sum of Rs. 4 0 together with interest. In the meantime however the Society passed a resolution that the petitioner was liable for the sum of Rs. 4 30 and that he should be directed to pay up that amount to the Society and if the petitioner failed to do so arbitration proceedings should be commenced against him for recovery of that amount. According to the petitioner this resolution was passed by the Society at the instance of the fourth respondent who was in a position to dominate the members of the Society. The Assistant Registrar however objected to the commencement of arbitration proceedings against the petitioner since the claim of the Society underlying the proposed arbitration proceedings was directly contrary to the finding of the Inquiry Officer. The Society therefore passed another resolution for commencement of arbitration proceedings not only against the petitioner but also against the fourth respondent and the dispute was referred for arbitration to the Registrar under sec. 54 of the Act. The Assistant Registrar referred the dispute to Shri R. H. Malek as his nominee but Shri R. H. Malek failed to decide the dispute and the dispute was therefore withdrawn from him and was referred to another nominee namely Shri R. Y. Deshpande. Shri R. Y. Deshpande also failed to decide the dispute even though time for doing so was extended upto 5th September 1958 and he returned the papers to the Assistant Registrar on 30th June 1958 on the plea that the case was of a complicated nature and should better be tried by a Civil Court. Nothing further transpired thereafter until 2nd March 1959 when an order was passed by the Registrar directing winding up of the Society and appointing Shri I. B. Naik as Liquidator of the Society. The Liquidator made an application to the Deputy Registrar for Industrial Co-operatives Ahmedabad for an order that the arbitration should be withdrawn and that the case should be examined under sec. 50A of the Act. On the application the Assistant Director for Industrial Co-operatives made an order dated 29th June 1959 withdrawing the arbitration case entrusted to Shri R. Y. Deshpande. The Liquidator thereafter made another application to the Deputy Registrar for Industrial Co-operatives on 1st July 1959 under sec. 50A of the Act to examine the conduct of the fourth respondent and to make an order requiring him to pay to the Society the sum of Rs. 4 0 together with interest thereon at the rate of four per cent per annum from 1st December 1952. The Deputy Registrar for Industrial Co-operatives thereupon made an order dated 6th August 1959 under sub-sec. (1A) of sec. 50A authorizing Shri H. V. Shah a Retired Deputy Collector to examine the conduct of the fourth respondent. The fourth respondent feeling aggrieved by this order preferred an appeal against the same to the Registrar of Co-operative Societies under sec. 64 of the Act. The Registrar of Co-operative Societies entertained the appeal and passed an order in the appeal on 30th August 1960 setting aside the order dated 6th August 1959 passed by the Deputy Registrar for Industrial Co-operatives and directing that the arbitration proceedings filed by the Society against the petitioner and the fourth respondent which had been withdrawn from the Registrars nominees Sarvashri R. H. Malek & R. Y. Deshpande and were kept in abeyance by the Assistant Registrar for Industrial Co-operatives should be revived. Since this order affected the petitioner by directing revival of the arbitration proceedings the petitioner preferred the present petition challenging the order on various grounds and praying for a writ of certiorari to quash and set aside the order.

(2.) Two contentions in the main were advanced by Mr. R. K. Patel learned advocate appearing on behalf of the petitioner in support of the petition. One was that no appeal lay against the order dated 6th August 1959 passed by the Deputy Registrar for Industrial Co-operatives and that the impugned order passed by the Registrar of Co-operative Societies was therefore without jurisdiction and the other was that the petitioner not being a party to the appeal it was not competent to the Registrar of Co-operative Societies to direct revival of the arbitration proceedings against the petitioner. On the second contention the answer given on behalf of the respondents was that though it was no doubt true that the petitioner was not made a party to the appeal it was not correct to say that the order was passed by the Registrar of Co-operative Societies without complying with the principles of natural justice since the petitioner was heard in the appeal before the order was passed by the Registrar of Co-operative Societies. This raised a dispute whether the petitioner was given a fair opportunity to show cause against the proposed order directing revival of the arbitration proceedings and the order could be said to be passed in compliance with the principles of natural justice but it is not necessary for us to enter upon a consideration of that dispute since we are of the view that the first contention urged on behalf of the petitioner is wellfounded and he must succeed on that contention.

(3.) The first contention raises a question of construction of secs. 50A and 64 of the Act. The question is whether an appeal lies to the Registrar of Co-operative Societies against an order made by the Deputy Registrar for Industrial Co-operatives under sub-sec. (1A) of sec. 50A authorizing a person to examine the conduct of any of the persons specified in sub-sec. (1) of sec. 50A. The right of appeal is provided by sec. 64 which is in the following terms :-