PRAFULLA KUMAR ROUTRAY Vs. CERTIFICATE OFFICER

JUDGEMENT

(1.) THE simple question that has cropped up its head in this case for answer is if the members of a society, registered under the Societies Registration Act, 1860 (Central Act 21 of 1860):are individually liable and can be sued for liability of the society.

(2.) MESSRS Cuttack Motor, Association was a society registered under the Societies Registration Act, 1860, for short 'the Act', with effect from 8 -1 -1972. This aspect re not in dispute in view of the statement contained in the order passed by, the Regional Provident Fund Commissioner - opp. party No. 3. Petitioner No. 1 was member of the society and its Assistant Secretary at the relevant time. Petitioner No. 2 was a member. Opp. party No. 3 raised a demand Under Section 7 -A of the Employees Provident Fund and Miscellaneous Provisions Act, 1952, in the sum of Rs. 2,74,425,40 and passed an order against the society. The requisition was sent to the Certificate Officer -opp. party No. ! for initiation of a proceeding under the provisions of the Orissa Public Demands Recovery Act. The petitioners were proceded against in Certificate Case No, 35 (RF) of 1981. They denied their liability in their objection' tiled Under Section 8. They specifically pleaded that it was the society against whom an order had been passed but there was no order against them. They called upon the certificate -holder to produce the order of assessment and the records of the proceeding. They also pleaded violation of principles of natural justice. On behalf of the certificate -holder, it was contended that the certificate Court was an executing Court and it could not go behind the order of the certificate -holder. If the cetifcate -debtors were aggrieved by the order, remedies are provided under the Central Act for redressal of their grievances. The question relating to the legality or correctness of the order could not be raised. The certificate officer accepted the stand of the certificate -holder, vide Annexure -2 in appeal, it was urged on behalf of the certificate -holder that the Cuttack Motor , Association was a firm. Hence, the certificate -debtors who are partners were individually liable. The contention found favour with the appellate authority who by his judgment in Certificate Appeal No. 14 of 1984 , nagatived the contentions urged by the certificate -debtors, vide Annexure -3

(3.) DESPITE notice, there was no appearance for the certificate - holder. Section 6 of the Societies Registration Act provides that a society can sue or be sued in the name of the president, chairman, or principal, secretary, or trustees, as shall be determined by the rules and regulations of the society, and, in default of such determination, in the name of such person as shall be appointed by the governing body for the occasion. The proviso enables a person having a claim or demand against the society, to sue the president or chairman, or principal, secretary or the trustees thereof, if on application to the governing body some other officer or person is not nominated to be the defendant. The question came up for consideration before some of the High Courts. Analysing Section 6, the Patna High Court held that once a society is registered under the Act, the society enjoys the status of a legal entity apart from its members constituting the same and is capable of suing or being sued. A society registered under the Act may not be a body corporate, quite distinct from its members, yet it has got a separate existence for many purposes. It has its own identity, personality or entity which, for all purposes is not identical with that of the members constituting it. (See K. C. Thomas v. R. L. Gadeock, AIR 1970 Pat. 163).