Jadu Prasanna Bhattacheriee v. Government of Union Territory of Tripura Agartala
1968-01-30
C.JAGANNADHACHARYULU
body1968
DigiLaw.ai
C M. Ps 45, 174 and 207 of 1967 are applications filed by the petitioner in the Writ Petition for an interim injunction restraining the respondents 1 to 9 from functioning the Apex Marketing Co-operative Society, Agartala or for appointment of a Receiver for the management of the Society or for some other orders which are considered to be proper. C. M, P. 244 of 1967 is an objection petition filed by the respondents 1 to 3, while C. M. P. 245 of 1967 is an objection petition filed by the respondents 5 to 9 and C. M. P 246 of 1967 is an objection petition filed by the 4th respondent to the prayers of the petitioner contained in his C. M. pp. 45 of 1967 174 of 1967 and 207 of 1967 (2) The brief facts of the cr- j, bereft ot all the details, which led to the institution of the Writ Petition and C. M. Ps 45 of 1967 174 of 1967 and 207 of 1967 are as follows: (a) The Tripura Central Marketing Cooperative Society was formed in Agartala in 1957 under the Tripura Co-operative Societies Act of 1358 T. E. with the object of buying storing and selling agricultural products to the members of the Society. It has been dealing in rice, paddy, jute, of seeds, cotton and G. C. I. sheets. The total number of individual members in the Society is 30 who hold shares of Rs. 5,025. 60 Society members have shares worth Rupees 15,950 The Government of Tripura hold s 3200 shares worth Rs 80,000 The Society started with elected Board of Directors on 13-4-1957 The second Board of Directors was elected on 1-1-1960. which was, however dissolved on 17-8-60 and an Administrator was appointed to run the Society from that date (vide Ext. A-l) in accordance with S. 46B sub-section (2) of the Bombay Cooperative Societies Act (Act 7 of 1925) (hereinafter called as the Act) as extended to the Union Territory of Tripura. The name of the Society was changed as Tripura Apex Marketing Co-operative Society. (b) On 16-8-1963 a new Board of Directors was formed with 9 members nominated by the Government of which 4 were representatives of the departments of the Government. The petitioner herein was elected as President of the Board of Directors. This Board was to function for 3 years upto 15-8 66.
(b) On 16-8-1963 a new Board of Directors was formed with 9 members nominated by the Government of which 4 were representatives of the departments of the Government. The petitioner herein was elected as President of the Board of Directors. This Board was to function for 3 years upto 15-8 66. But, in the meanwhile on 12-5-66 the Government of Tripura reconstituted the entire Board of Directors. Vide Ext. A-2. On an appeal filed by the petitioner the second respondent Cthef Commissioner rescinded the order on 8-6-66. Vide Ext. A-3. (c) On 11-7-66 the Tripura Government issued are order withdrawing the nomination of 4 members of the Board including the petitioner and nominated 4 members in their place under byelaw 20 of the bye-laws of the Society Vide Ext A-4. On 14-7-66 the petitioner served a notice on the first respondent claiming that the order was illegal. In the meanwhile on 13-7-66 the Tripura Government issued a corrigendum (see Ext. A-5) to read bye-law 2] in the place of bye-law 20 in the said memorandum. On 16-7-66 the Government issued a fresh memorandum cancelling the order dated 11-7-66 along with the memorandum and withdrawing the nomination of the 4 Directors including the petitioner and nominated 4 new Directors in their place Vide Ext. A-6. (d) As the term of office of the Board of Directors was for 3 years from the date of the appointment and as it was due to expire on 16-8-66. the Tripura Government issued an order on 12-8-Pfi extending the tenure of the office of the nominated Board by two month- from 15-8-66 and the life of the nominated Board was thus due to expire on 15-10-66 (e) The new Board of Directors met on 17-8-66 and elected office beggars. Vide Ext. B-3 The sixth respondent was appointed as the Executive Officer in the place of the tenth respondent On 17-8-66 the new office bearers went to take charge of the office from the tenth respondent. But, the latter did not agree to make over charge. He filed a criminal case again** the respondents 5. 6 and others under S. 395 I. P. C alleging that they had forcibly taken money and valuable documents from the office in his absence.
But, the latter did not agree to make over charge. He filed a criminal case again** the respondents 5. 6 and others under S. 395 I. P. C alleging that they had forcibly taken money and valuable documents from the office in his absence. As the new Board of Directors passed resolution No 6 on 17-8-66 (Vide Ext B-3) stating that in the event of the tenth respondent declining to hand over charge the fourth respondent Registrar Cooperative Society should be requested to take over complete charge of the Society. On 21-8-66 the President of the new Board requested the fourth respondent to take over complete charge of the Society. On 23-8-66 the fourth respondent passed an order under S. 47 of the Act liquidating the Society (Vide Ext. A-7). He appointed a liquidator. Vide Ext. A-8. The petitioner filed an appeal (vide Ext. A-9) before the second respondent under S. 64 of the Act against the orders of the fourth respondent liquidating the Society and appointing a liquidator. The then Cthef Commissioner allowed the appeal and set aside the order of the fourth respondent. Vide Ext. A--10. The petitioner filed the Writ Petition challenging the validity of the order as per Ext. A-6 dated 16-7-6(1 and contending that as the second respondent set aside the order of the fourth respondent, the Society regained its status quo prior to the. liquidation that the Board of Directors with the petitioner as its President and the Society with the tenth respondent as its Executive Officer were restored to their previous positions and that they should accordingly be reinstated (3) The petitioner alleges that the respondents 1 to 9 are causing loss to the Society and that either a temporary injunction restraining them from working the Society should be issued or that a Receiver should be appointed to take charge of the Society and to manage the same or to nass appropriate orders. (4) The petitions were opposed by the respondents 1 to 9. The tenth respondent, who was the previous Executive Officer supported the petitioner's contentions (5) The Points for determination are: (i) Whether respondents 1 to 9 should be restrained by a temporary injunction until the Writ Petition is disposed of from managing the Society?
(4) The petitions were opposed by the respondents 1 to 9. The tenth respondent, who was the previous Executive Officer supported the petitioner's contentions (5) The Points for determination are: (i) Whether respondents 1 to 9 should be restrained by a temporary injunction until the Writ Petition is disposed of from managing the Society? (ii) Whether a Receiver should be appointed to take charge of the property of the Society and to manage it until the Writ Petition is disposed of? (iii) To what relief is the petitioner entitled? (6) POINT (i): The petitioner's Counsel Shri R. Ghosh stated that he did not press the petitions regarding interim injunction and yet stated that though the order of interim injunction passed on 7-3-67 was served on the fourth respondent he allowed the Society to withdraw a sum of Rs 50,000. The fourth respondent denied haying received any notice of the interim injunction. The petitioner did not mention any provision of law under which he prayed for temporary injunction. The interim injunction, granted ex parte on 7-3-67, when the Writ petition was admitted is liable to be varied or set aside as the case may be. after the respondents are heard. It is not as though the respondents 1 to 4, who were the only parties to C.M.P 45 of 1967 on 7-3-67 when the order was passed were restrained absolutely without being heard. Inasmuch as the petitioner's Counsel did not press the prayer for temporary injunction Point (i) is found against the petitioner (7) POINT (ii): Under Order 40 Rule 1 C. P. C. the Court may appoint a Receiver of any property, whether before or after the decree. if it appears to it that the appointment of a Receiver is just and convenient. There are, however, certain well settled principles which have to be satisfied before a Receiver is appointed, as can be gathered from the rulings relied on by both the parties.
if it appears to it that the appointment of a Receiver is just and convenient. There are, however, certain well settled principles which have to be satisfied before a Receiver is appointed, as can be gathered from the rulings relied on by both the parties. Firstly the petitioner has to show that he, has a strong case and a prima facie title to the property; secondly, the petitioner has to show that the property in dispute is in danger of being wasted away or damaged thirdly, the appointment is a matter of judicial discretion, intended to safeguard the rights of the parties and the ends of justice are not defeated Vide Kochu Bava Muhammad Kasim v. Kalu Amma Karthiyavani Amma AIR 1952 Trav Co 330, Madhu Lal v. Ramii Das Chironji Lal, AIR 1958 Madh Bha 85, D K. Raja v. P. S. Kumaraswami Raia AIR 1955 Mad 360 : T. Krishnaswamy Chetty v. C Thangavelu Chetty, AIR 1955 Mad 430 ; P K Mannan Ezhuthachen v. V. K. Madhavan Nair, AIR 1957 Mad 7o3; Ishwara Jolsha v Saraswathi Amma, AIR 1959 Mys 35; Balbir Anand v. Ram Jawava Kapoor, AIR 1960 Raj 192 and Chavali Venkateswami v Chavali Kotayya, AIR 1962 Andh Pra 14 relied on by the learned Counsel for the petitioner and Satis Chandra Giri v. Benoy Krishna Mukhopadhya, AIR 1926 Cal 1092; Benoy Krishna Mukerjee v Satish Chandra Giri, AIR 1928 PC 49; Tirath Singh v. Shromani Gurdwara Prabandhak Committee. AIR 1931 Lah 688; Sitaram Kundan-lal v. Pannalal Kundanlal, AIR 1957 Nag 1 relied on by the learned Counsel for the respondents (8) Regarding the first principle that the petitioner must prove that he has a strong case and prima facie title the petitioner's Counsel stated that the respondents 3 and 4 are brothers, that the notification as per Ext. A-6 dated 16-7-66 was issued by the third respondent Secretary to the Government of Tripura, Co-operation, purporting to be under the orders of the second respondent, but that the second respondent was not in the station from 12-7-66 to 24-7-66 and that, therefore it was an unauthorised notification of an appointment of new Directors of the Board. He further argued that this allegation was not denied by the second respondent by filing any counter affidavit. In the main Writ Petition the respondents did not vet file their counters.
He further argued that this allegation was not denied by the second respondent by filing any counter affidavit. In the main Writ Petition the respondents did not vet file their counters. The respondents 1 to 3 produced Ext B-6 office note, which shows that the office opened a continuous note file from 14-6-66. It shows that on 11-7-1966 the then Cthef Commissioner approved the office note to change the Directors of the Board. So a notification as per Ext A-6 dated 16-7-66 appears to have been issued in pursuance of Ext. B-3. As such, there is no force in the contention of the petitioner s Counsel that the notification changing the directors was issued without the knowledge of the second respondent. This matter has still to be probed into in the Writ Petition. But, the contention of the petitioner's Counsel that after the second respondent set aside the order (as per Ext. A-7) of the fourth respondent liquidating the Society, the status quo ante was restored and that the Board, which was superseded, should have been restored has some force and has to be gone into in the main Writ petition. So, prima facie there is some force in his contention. The further contention of the petitioner's Counsel that the petitioner was not heard before he was removed from the Board of Directors also appears to have some force, in view of the provisions of S. 46B of the Act, which enjoins on the second respondent to give notice to the Committee to show cause why it should not be dissolved and notice to its members why they should not be removed from the office, if the second respondent had reason to believe that the Committee was mismanaging the affairs of the Society or was otherwise acting in a manner likely to be prejudicial to the interests of the Society, if he wanted to remove them These are all matters to be gone into in the Writ petition in a greater detail and I refrain from further diving deep into them at this stage. Suffice it to say that the petitioner has an arguable prima facie case.
Suffice it to say that the petitioner has an arguable prima facie case. (9) The contention of the learned Counsel for the contesting respondents is that the Act provides for remedies for the disposal of disputes by the fourth respondent and that the petitioner should have referred the matter to the fourth respondent for his decision under Section 54 of the Act. They further argued that the petitioner should have sought hi? remedies under Sections 43 and 46B of the said Act, if he thought that the Society was being mismanaged and that, therefore, neither the Writ Petition nor the present petitions for the appointment of a Receiver are maintainable in a Civil Court. They relied on old decisions reported in Saibesh Chandra Sarkar v. Bejoy Chand Mohatop Bahadur. AIR 1922 Cal 4; Shivmal v. Ramchandra Bapu, AIR 1933 Nag 322 and Fateh Mahomed Idan v. Thariomal Jetho-mal, AIR 1939 Sind 66 in support of their contention that the Writ petition is not maintainable and that the prayer for the appointment of the Receiver is barred by Section 46B of the Act. These are old decisions, which were rendered before the Constitution of India came into force. It is now too late in the day to contend that an alternative remedy is an absolute bar to the exercise of jurisdiction by the High Court under Article 226 of the Constitution of India. Vide M. G. Abrol, Addl. Collector of Customs Bombay v. Shantilal Chhotelal and Co., AIR 1966 SC 197 and P. Venkata Somraju v. Principal Munsif Magistrate, Bhima-varam, W. Godavari DisU, AIR 1&68 Andh Pra 22. Madan Mohan Sen Gupta v. State of W Bengal. AIR 1966 Cal 23 has direct bearing on this case. It was held that the existence of an alternative remedy of reference of dispute to the Registrar of Co-operative Societies under Section 86 of the Bengal Co-operative Societies Act (Act 21 of 1940) was no bar to the maintainability of a Wilt Petition against the Society's Managing body. So, prima facie the Writ petition lies and consequently the provisions of Order 40 Rule 1 C. P C. are attracted. The question of maintainability of the Writ petition has, of course, to be gone into in greater detail in the Writ petition (10) Then, the next requisite is that there must be some danger or damage or loss to the property of the Society.
The question of maintainability of the Writ petition has, of course, to be gone into in greater detail in the Writ petition (10) Then, the next requisite is that there must be some danger or damage or loss to the property of the Society. The learned Counsel for the petitioner urged the following 3 grounds to show that the property of the Co-operative Society is in danger of being wasted away and misappropriated. (11) Firstly, he stated that the fourth respondent Registrar of Co-operative Societies is not an honest person, inasmuch as he stated in a petition in this Court, filed by him praying for time for filing his counter to the Writ petition, that hi:- mother died on 22-10-67, but that he submitted a bill in the Agartala Treasury claiming political pension for her for the entire month of October. 1967 The respondents 10 and 11 filed CMP. No. 30 of 1968 in this Court with these allegations The fourth respondent filed his reply to it stating that the deceased was his step-mother, that through inadvertence the political pension of his step-mother was drawn by him on 8-11-67 for the full month of October 1967 and that after he discovered the mistake he rectified it by depositing the pension of his deceased step-mother in the Treasury on next day. He produced the challan which shows that he deposited the entire pension of Rs. 150 on 9-11-67 which was drawn for his deceased step-mother. This is p .rely a personal affair and I do not consider that this has any relevancy on the official conduct of the fourth respondent. Besides, the fourth respondent has to supervise the Society in question in his official capacity in the same way in which he supervises other Societies in the territory. (12) The second contention of the petitioner's Counsel is that the sixth respondent is a negligent officer, that the sixth respondent stated in C. M P. No. 245 of 1967 (objection to the petitioner's petition for the appointment of Receiver) that he was one of the members of the Board of Directors of the Tripura Apex Marketing Co-operative Society Ltd. and that he was also its Executive Officer but that, in fact, he was not a member Ext. A-11 is the said C. M. P No. 245 of 1967 filed by the sixth respondent. Later on.
A-11 is the said C. M. P No. 245 of 1967 filed by the sixth respondent. Later on. he filed C. M. P. No. 243 of 1967 stating that he committed a mistake and admitted that he was not a member of the Board and prayed for deletion of the words "that he was a member" in his petition. It was allowed and C M. P. No. 245 of 1967 was amended This also cannot be considered to be a ground for the appointment of a Receiver. (13) Thirdly, the petitioner's Counsel Pointed out that the respondents 5 to 11 were added in the Writ petition on 11-5-67, but that even on 14-3-67 the Board passed a resolution appointing an Advocate to defend it, that it again passed another resolution on 17-5-67 authorising the advocate to defend the Board that thus the Board incurred heavy expenditure for litigation, but that no such expenditure was incurred by the petitioner when he was the President of the Board, that as can be seen from Ext. B-5 relating 10 the Annual report for 1966-67 the respondents 5 to 9 incurred heavy net loss of Rs. 69,580 90 nP and that, there fore if they are allowed to manage the Society further it is bound to be ruined. Ext B-l contains the balance sheet for the year 1964-65 i.e. from 1-7-64 to 30-6-65 It shows that when the petitioner was the President of the Society it earned a net profit of Rupees 28.519.58 nP There is a preface in Bengali language that due to the proper management of the Board and the untirine efforts and vigilant supervision of the petitioner herein, the Society had been able to earn the said profits in spite of various troubles and that, in appreciation of his Qualities and his business equipment, the Board requested the general member shares of the Society to convey their appreciation and vote of thanks to him Ext B-l therefore prima facie shows that there must have been some proper management of the Society. Ext.
Ext. B-4 is a printed copy of the annual report for 1965-66 when also the petitioner *vas the President But, it was published after the new Board and the sixth respondent took charge They showed in the profit and loss account that there was a net loss of Rupees 17,812.89 N P The preface reads that on account of want of proper management and compensation paid for non-delivery of jute as per agreement in time and further due to delay in giving deliveries of potato seeds imported from Shillong and due to extra staff there was net loss of Rupees 17,812.89 Paise But it shows that the account for loss was manipulated. It shows that a gross profit of Rs 49.752.34 Paise was earned and that vet a net loss was manipulated by showing that a_ sum of Rupees 23,15279 Paise was incurred woards depreciation on land and buildings, dead stock, baling machine jeep and library These are all common things which depreciate every year But. there v as no loss in the actual marketing of the goods dealt with by the Society On the other hand, there was a profit. It is clear that a manipulation was made to show that loss was incurred, when the petitioner was the President, while in fact no loss was incurred. (14) Ext B-5 is the printed annual report for 1966-67 This relates to the period of 1-7-66 to 30-6-67, when the new Board of Directors was in office. The profit and loss account therein shows that a sum of Rupees 3,932 was incurred towards law charges while no such expenditure was incurred in the previous years. It further shows that a net loss of Rs. 69,580.90 N.P. was incurred. The learned Counsel for the contesting respondents 5 to 9 stated that this loss was due to two reasons. Firstly 1 e stated that, as the fourth respondent appointed a liquidator and as he was subsequently removed by the second respondent the society did not transact business for 6 months. There may be some force in his contention that on account of the confusion created by the| alleged liquidation proceedings the Society might not have transacted business for some period.
There may be some force in his contention that on account of the confusion created by the| alleged liquidation proceedings the Society might not have transacted business for some period. But his second explanation is that the petitioner purchased the stock at high prices, that subsequently their prices fell down in the market and that a loss of about one lakh of rupees was incurred in the sale of cotton II is impossible to believe that in recent times, when the prices of all commodities are going up, the price of cotton and other goods disposed of by the Society fell in the market It is rather astounding that the fourth respondent anointed a liquirla-should have been incurred by the new management Even if the sum of Rupees 20,000 debited towards depreciation of buildings etc is deducted, still there was a net loss of about Rs 50.000 It is, therefore, evident that, if the new management continues, the property of the Society will be flittered away and that its members are bound to face heavy loss. So, there if force in the petitioner's contention that the property in dispute is in peril and that is likely to be wasted away or damaged and that it is just and convenient that a Receiver should be appointed to take over charge of the Society and to function It (15) The learned Counsel for the contesting respondents 4 to 9 urged that the petitioner did not mention specifically the various allegations in his petition and that therefore, no Receiver should be appointed. He relied on AIR 1926 Cal 1092 and ATR 1955 Mad 430. Under Order 40 Rule 1 C P C it is the judicial discretion of the Court to appoint a Receiver, if it finds that it is just and convenient to appoint one having .regard to the circumstances of the case. The fact that during the management for the Society by the respondents 5 to 9 the Socrety suffered a net loss of about Rupees 50.000 is proved by Ext B-5 though the petitioner vaguely mentioned in his petition that the respondents 1 to 9 were causine loss, to the Society. So the fact that specific allegations we're not made is not of much importance in the interests of the Society.
So the fact that specific allegations we're not made is not of much importance in the interests of the Society. Secondly, he argued that under Order 40, Rule 1, sub-rule (2) Civil P. C. the petitioner is not entitled to dispossess the respondents 5 to 9 from the property or the Society. But, as can be seen from the Commentary in Note 49 at page 4089 of AIR Commentaries on Civil P. C,, 1963 Edition, sub-rule (2) of Order 40 Rule 1 Civil P. C. applies to third persons in possession of the property and is no bar to the removal of any party to the suit from possession. 16. Thus, in the larger interests of the members of the Society and to prevent further loss to it, it is just and convenient that a Receiver should be appointed to take possession of the property of the Society and to manage the same, until the disposal of the Writ Petition, The learned Counsel for the tenth respondent stated that the tenth respondent should be appointed as Receiver or Executive Officer, that he is a graduate, that he underwent training in co operation and that he is a tit person. The respondents 1 to 9 (iled Ext. B-2 to show that the petitioner himself removed him. But, according to the tenth respondent, the petitioner subsequently reinstated him. How ever I do not consider that any party to the proceeding is fit to be appointed. An independent Receiver has to be appointed as can be seen from Sripati Dutta v. Bibhuti Bhusan Dutta, AIR 1926 Cal 593. 17. I direct both the parties to suggest some names for appointment of the Receiver Call C. M. P 45 of 1967 on f7-2-68 for suggestion of names C. M. P. 174 of 1967 is allowed in part. C. M P. 207 of 1967 is dismissed. C. M. Ps. 244 of 1967, 245 of 1967 and 246 of 1967 (objection petitions) are dismissed I direct the parties to bear their respective costs. Ordered accordingly