CENTRAL CO Vs. THE STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) This writ petition raises a question of some importance relating to the interpretation of section 57 of the Madras Co-operative Societies Act (VI of 1932) (hereinafter referred to as the Act.)

(2.) The petitioner is the Central Co-operative Stores, Ltd., Vizianagaram, which will hereafter be referred to as the Stores. The Stores was appointed an agent for procuring paddy and other food-grains (millets) in the district of Visakhapatnam as per G.O. No. 1142 (Food) dated 13th December, 1946, by the then Provincial Government. The Stores,in its turn, appointed several sub-agents, one of them being the Firm of Thota Lakshmana Rao and Puppala Venkata Rao. There was an agreement between the Stores and the said-Firm on 1st February, 1947. Under the terms of the agreement, the sub-agents themselves had to find funds for purchasing the food-grains from the cultivators. However, as these sub-agents were not possessed of sufficient funds to enable them to make the purchase, they requested the Stores to advance the necessary funds from time to time which could be adjusted against deliveries of food-grains, to be made later. Accordingly, the petitioner-Stores advanced a sum of Rs. 10,000 on 12th July, 1947 and obtained a voucher therefor. Later on, Puppala Venkata Rao (the sub-agent in question) supplied the Stores paddy valued at Rs. 15,754-7-7. According to the Stores, the advance made by them was not deducted out of the amount due to the sub-agent on that occasion, as it was represented that the sub-agent was hard-pressed for money, that he had still a lot of paddy procured and kept ready in the villages to be delivered and that the advance made by the Stores could be adjusted against future payments to be made to him for the grain to be delivered by him. It is added that the Stores acceded to this request and paid the full cost of paddy. But there were no further deliveries of food-grains by the sub-agent, nor did he pay back the amount of Rs. 10,000 received by him in spite of repeated demands.

(3.) This had led the Stores to file a claim before the Deputy Registrar of Cooperative Societies for the recovery of a sum of Rs. 10,000, besides Rs. 392 being the cost of gunny-bags retained by the sub-agent. The Stores was obliged to invoke the jurisdiction of the Deputy Registrar in this behalf, as the sub-agent was also a member of the Stores. The Deputy Registrar, Visakhapatnam, referred the claim to the Co-operative Sub - Registrar. By his order, dated 31st May, 1949, the Sub-Registrar allowed the claim over-ruling the objection of the respondent therein, i.e., the sub-agent, that the amount of Rs. 10,000 due and payable to the Stores was deducted from the cost of the paddy. The sub-agent carried the matter in revision under section 57 of the Act to the Additional joint Registrar of Co-operative-Societies. The latter remitted the matter to the Deputy Registrar, Visakhapatnam, as he thought that it had not received that attention which it ought to have at the hands of the Sub-Registrar. After a fresh enquiry, the Deputy Registrar decreed the claim of the petitioner. Once again, the sub-agent preferred a revision petition to the Additional Joint Registrar of Co-operative Societies under section 57 of the Act. The Additional Joint Registrar, after a lapse of several months, reversed the entire decree of the Deputy Registrar, notwithstanding the fact that there was no dispute as regards the value of the gunny-bags.