ARCO Vs. STATE OF W B

JUDGEMENT

(1.) The present writ petition has been filed by a Co-operative Housing Society registered under the West Bengal Co-operative Societies Act, 1973 and its Chairman with another member. There is a prayer for issuance of a Writ of Mandamus directing the respondents and each one of them to rescind, revoke, cancel and withdraw the impugned order of liquidation passed by the respondent No. 4 on 3-6-80 and also a subsequent order dated 7th of March, 1984 besides other consequential reliefs as elaborated in the writ petition itself. It is stated that on or about 4th of April 1969 the said Co-operative Society was duly registered with the object of primarily establishing on co-operative basis of settlement and/or housing schemes for persons with moderate income by affording various facilities for owning a house or flat The said Co-operative Society consisted of 11 (eleven) numbers and its registered office situated at 107, Dr. Megh Nath Saha Sarani, Calcutta. A Managing Committee of the said Co-operative Society was duly formed in terms of the said Co-operative Societies Act and the Rules framed thereunder and the petitioner No. 2 was the Chairman at all relevant and material points of time. It is further stated that the said Co-operative Society thereafter raised the funds to purchase a plot of Land measuring 20 Cottahs approximately at No. 9A, Judge's Court Road, Calcutta and it proposed construction of a multi-storeyed building thereon for the purpose of providing accommodation to its members. However, on the sudden demise of the main promoter of the said Society there was a set back and the Society lost its incentive to implement the project as was originally envisaged. As a result thereof, the construction of the building and/or development of the said property of the Co-operative Society was deferred. On or about February 1979, the said Society through its Chairman decided to sell the said plot of land upon an advice and/or opinion of the solicitor. Being so advised the said Society entered into an agreement for sale of the said property of the Co-operative Society with one Smt. Lakshmi Sivaraman for valuable consideration. It is further alleged that the said agreement for sale has, at present lost its force being barred by law of limitation. However, with the object and view, the said Society convened a general meeting of the members and resolved that the said Co-operative Society should voluntarily be wound up and the Chairman was authorised to submit the necessary application with the Registrar of Co-operative Societies, West Bengal. By an order dated 3rd June, 1980 the Deputy Registrar of Co-operative Societies (Calcutta Metropolitan Area Housing) alleged that in exercise of power conferred by Section 89 (1) of the West Bengal Co-operative Societies Act, 1973, there may be winding of the said Society. He appointed Sri Narayan Chandra Saha, Co-operative Development Officer to be the Liquidator of the said Society. The said order is alleged to have been passed on the basis of the result of the inspection held into the affairs of the said Society and also by exercising the power under Section 89 of the said Co-operative Societies Act. Pursuant to the said order the Liquidator so appointed being the respondent No. 3 took over possession of all the relevant papers and documents of the said Society but no steps have yet been taken in this regard to complete the task.

(2.) It is further stated that the petitioners were advised by the office of the respondent No. 4 that the provisions of the West Bengal Co-operative Societies Act and the Rules framed thereunder indicate that the surplus funds in the hands of the liquidator after meeting all the liabilities of the Oo-operative Society and after payment of the investment by the membees of the members of the said Society might be paid into the funds of the Co-operative Development Funds. It is stated that the members of the said Co-operative Society had sufficient reasons to change their minds and a procedure to dispose of the said land. Accordingly, a resolution was duly passed on 11th July, 1980 whereby all the members resolved for reviving the winding up order and undertook to proceed with the housing project of the Society after cancellation of the liquidation order. Realising that any step for winding up of the Society would be contrary to the interest of the members and as well as such resolution dated 2nd February 1979 was not passed in accordance with the bye-laws of the Society. They convened another general meeting of the members of the Society on 11th July 1980 and in the said meeting, it was unanimously resolved that the winding up order should be rescinded and/or annuled and necessary steps should be taken for the said purpose so that the said Society may be revived in order to carry out the original objects. Pursuant to the terms of the resolution dated 11th July, 1980 the petitioner No. 2 by an application dated 12th July 1980 requested the Deputy Registrar of Co-operative Societies, West Bengal to rescind and/or annul the said winding up order to enable the members of the said Society to revive the said Society in order to achieve its objects. It is alleged that the respondent No.4 did neither take up any step to rescind and/or cancel the order for winding up of the Society and being aggrieved by and dissatisfied with the inaction of the statutory autnorities the petitioners moved a writ application under Article 226 of the Constitution of India. The said writ application was disposed of on 11th of October, 1982 with the direction that the pending application should be disposed of as cxpeditiously as practicable, preferably within three months from the date of the order. There was further observation that the assets in the hands of the Liquidator may not be disposed of by him in the meantime. Thereafter, the petitioners took inspection of all relevant records relating to ARCO Co-operative Housing society Limited maintained by the office of the respondent No. 4 and in particular, with regard to the steps relating to the winding up proceedings. On July 30, 1983 the petitioners filed an application before the Deputy Registrar of Co-operative Societies (Diary, Fishery and Housing), West Bengal submitting farther materials for cancellation and/or revocation of the order of winding up of the Society. In the said application, the petitioners specifically pointed out that several irregularities and illegalities as detailed in the present writ petition. The said application was initially heard by the Deputy Registrar of Co-operative Societies being nominated by the Registrar of Co-operative Societies and while he was in seisin of the said proceedings the petitioners filed an application before the Registrar of Co-operative Societies for changing his nominee but the said prayer was turned down. However, the respondent No. 4 did not consider the application dated 30th July 1983 by way of amendment and/or additional grounds of the earlier petition dated 30th July, 1980 with the observation that the proposed amendment would change the basic nature and character of the original petition. The order dated 4th of October, 1983 disposing of the application dated July 12, 1980 was challenged by filing another writ application and by order dated 10th of February 1984 the same was disposed of by the Hon'ble Mr. Justice Asha Mukul Pal (as His Lordship then was) by directing the Registrar personally to hear the matter in course of one month in accordance with law and he will consider all the points including the maintainability of the application. Pursuant to the said order dated 10th February 1984 the petitioners appeared before the Registrar of Co-operative Societies on 27th February 1984 and submitted a written submission dated 20th February, 1984. It was made clear before the Registrar that in the event the winding up order is revoked, the said Society will take up the housing project as envisaged to enable the petitioners to fulfil their objects. However, considering all the points raised by the petitioners, the Registrar of Co-operative Societies by an order dated 7th of March. 1984 held that the revocation of the liquidation order is not justified. A copy of the said order has been annexed to the present writ petition by the letter "K". The petitioners' have challenged the said order dated 7th March, 1984 on the grounds that the authorities concerned failed to consider all the points raised by the petitioners in the application dated 30th July, 1983 as well as the written submission filed on 29th February 1984, the Registrar of Co-operative Societies should have appreciated the second petition dated 30th July 1983 seeking amendment of the petition dated 12th July 1980 and as if Registrar had proceed on a presumption that there is no scope for revocation of the liquidation order and thereby committed miscarriage of justice. Under Section 89 of the said Co-operative Societies Act it is obligatory on the part of the Registrar to afford an opportunity of hearing before making any order of liquidation and failure to do the same will certainly vitiate the entire proceedings. Section 89 of the said Act has further conferred power upon the Registrar to pass the order for liquidation and such power is discretionary indeed. Such a discretionary power cannot be delegated to any person and the Registrar ought to have revoked the liquidation order when all the members of the said Society unanimously resolved in the manner as provided under Section 93 of the Act praying revocation of the same. The petitioner, therefore, filed the present writ petition seeking reliefs as stated earlier.

(3.) The present writ petition was moved before the Hon'ble Mr. Justice A. K. Jana (as His Lordship then was) on 17th February, 1980 and an interim order as prayed for was granted for a period of three weeks and the matter appeared before the appropriate Bench and by order dated May 14, 1984 the Hon'ble Mr. Justice Ajit Kumar Seagupta gave direction for filing affidavits by the parties and the interim order was allowed to continue till the disposal of the writ petition. Subsequently, an application for addition of parties was made and by an order dated 3-2-88 the same was allowed by this Bench and the question of locus standi of the added parties was kept open.