MALLESWARAM CO-OPERATIVE SOCIETY v. KARNATAKA APPELLATE TRIBUNAL
1986-03-07
CHANDRAKANTARAJ URS
body1986
DigiLaw.ai
CHANDRAKANTARAJ URS, J. ( 1 ) FIRST petitioner is the Malleswaram Co-operative Society Ltd. , while the 2nd petitioner is one of its Directors on the Board of Management, What really falls for determination in this Writ petition is a short question and that is, whether a co-operative society is precluded from being represented in legal proceedings by a person other than the Secretary who is the designated person under one of its bye-laws to sue or to be sued in the name of the society ? ( 2 ) THE facts leading to the case may be briefly stated as follows :-The 3rd respondent herein was an employee of the Co-operation Department of the State of karnataka. He was for a lime deputed to function as Secretary of the first petitioner co-operative society. In the period he was functioning as such, he claimed certain increase in emoluments said to be payable by the society. Therefore, after his deputation ceased, he raised a dispute which was referred to the 2nd respondent Joint Registrar of Co-operative Societies under Section 70 of the Karnataka Co-operative Societies Act 1959 (hereinafter referred to as 'the Act' ). During the pendency of the dispute, on 15-6-1985 the 2nd respondent while permitting the 3rd respondent to engage the services of a Counsel to represent him and present his case in the dispute before the 2nd respondent, rejected the request of the 2nd petitioner to appear for and on behalf of the first petitioner society. 2 (i) Aggrieved by that order, the petitioners herein preferred Revision Petition No. 25/85 to the 1st respondent Karnataka Appellate Tribunal, Bangalore (hereinafter referred to as 'the Tribunal') unfortunately, the members of the Bench of the Tribunal consisting of a Co-operation Member and a Judicial Member did not agree with each other and reached divergent conclusions. While the Cooperation Member concurred with the conclusion reached by the 2nd respondent that only secretary can represent the society and not the 2nd petitioner, the Judicial Member took the view that other authorised person may also represent the society. As a result of the dissent, as per the regulations of the Tribunal, the matter was referred to a Full Bench of the Tribunal. The Full bench has concurred with the Cooperation member and the 2nd respondent Joint Registrar and has held that none bat the Secretary shall represent the first petitioner society.
As a result of the dissent, as per the regulations of the Tribunal, the matter was referred to a Full Bench of the Tribunal. The Full bench has concurred with the Cooperation member and the 2nd respondent Joint Registrar and has held that none bat the Secretary shall represent the first petitioner society. I will advert to the reasons given by them later in the course of this order. 2 (ii ). Aggrieved by that Full Bench opinion rejecting the region, the present petition is presented by the first petitioner society and the 2nd petitioner who is its Director inter alia contending that the order is erroneous in law and quite contrary to the provisions of the Act as well as the bye-Laws of the first petitioner society itself. ( 3 ) THE Judgment of the Full Bench of the Tribunal is a long one. The Bench has been constituted with two Judicial Members and one Co-operation Member and therefore, it is some what shocking to this Court that the two Judicial Members, instead of giving some assistance to the co-operation Member on the Bench in making a proper legal approach to decide the question referred to them, have in fact misguided the other Member also to reach the conclusion in a manner which does not befit their experience in the higher cadre of the subordinate judiciary of the State, I am constrained to make this remark on account of the ease with which the learned members of the Bench of the Tribunal have chosen to ignore the rulings of this Court and other high Courts in some what similar circumstances by resorting to the simple explanation that those cases had been decided on different set of facts, though I do not see any such difference in the over-all picture with which the Arbitrator was originally confronted by the request of the 2nd petitioner that he had been authorised by the society and therefore he could represent it. ( 4 ) SRI Kadidal Manjappa, learned Counsel for the petitioners drew my attention to the Bye-Laws which have fallen for consideration by the Full Bench of the Tribunal as well as one other bye-law which has not at all been considered by them.
( 4 ) SRI Kadidal Manjappa, learned Counsel for the petitioners drew my attention to the Bye-Laws which have fallen for consideration by the Full Bench of the Tribunal as well as one other bye-law which has not at all been considered by them. It would be proper at this stage to make it clear that bye-laws of the society are not 'laws' which have statutory force as held by the supreme Court in the case of Co-operative Credit Bank v. Industrial Tribunal, Andhra Pradesh, AIR1970 SC 245 , [1970 ]40 Compcas206 (SC ), [1969 (19 )FLR56 ], 1970 Lablc285 , (1969 )II LLJ698 SC , (1969 )2 SCC43 , [1970 ]1 SCR205. They are at best comparable to the Articles of Association of a Company and no more. The Supreme Court made it clear that they have no statutory force like the Rules made by the Government under a specific enactment, which becomes part and parcel of the enactment itself after the Rules are framed. ( 5 ) BYE-LAWS at best, as held by this Court in more than one case, does no more than determine the relationship between the members of the society. A stranger to the society cannot rely upon the bye-laws either to curtail or enlarge the rights of the co-operative society. 5. Among other things, bye-law 13 of the Bye-Laws of the first petitioner society provides for management which is vested in a Committee of Management duly elected by the members. Bye-law 14 provides for the powers and duties of the Committee. The Committee interalia under clause (g) of that bye-law may delegate any of its powers to the Business Committee, sub-Committee, Officer and Director. Under Clause (p) of the said bye-law, the Committee may institute, defend or compromise legal proceedings in the name of the society. Bye-law 16 (4) provides for there being a Secretary and his duties and powers are enumerated. Under Clause (j) of bye-law 16 (4) he has to represent the society in all legal proceedings. Under Bye-law 30 the society shall sue and be sued in the name of the society represented by its secretary.
Bye-law 16 (4) provides for there being a Secretary and his duties and powers are enumerated. Under Clause (j) of bye-law 16 (4) he has to represent the society in all legal proceedings. Under Bye-law 30 the society shall sue and be sued in the name of the society represented by its secretary. ( 6 ) THE 2nd respondent Joint Registrar/arbitrator by his order dated 15-6-1985 refused permission to the 2nd petitioner despite his submitting a copy of the Board Resolution of the first petitioner society dated 12-6-1985 authorising him to represent the society in the case, because the bye-laws' of the society permitted only the Secretary to sue or be sued on behalf of the society. The 2nd respondent also gave reason that the 2nd petitioner not being a lawyer cannot be permitted to represent the society. It is that order that was ultimately referred to the Full bench of the Tribunal and there the reasons were given by the Full Bench of the Tribunal. ( 7 ) THE Full Bench of the Tribunal raised as many as 6 questions to answer. The formulation of the questions leaves much to be desired. Perhaps, that is the reason why the Full Bench was led to meander in a maze of reasoning from which it could not get out except by ignoring the correct legal position as enunciated by more than one decision cited before it rendered by this Court as well as another High Court. ( 8 ) TO summarise the reasoning of the Full Bench, it would suffice to state the following :-Section 117 (2) of the Act imposes a bar for appearance of a legal practitioner in proceedings before the Arbitrator. That is a statutory bar removable only by the permission granted in the discretion of the Registrar. Otherwise the bar is total. From that it cannot be inferred that other persons who are not lawyers but who arc duly authorised cannot appear in those proceedings. It would be a totally unwarranted inference. One should not fail to see that a co-operative society being a incorporated body is a juristic person competent to create agency and that competence is not taken away except to prohibit a legal practitioner to appear before an Arbitrator. Even that inhibition is subject to the discretionary power of the Registrar.
It would be a totally unwarranted inference. One should not fail to see that a co-operative society being a incorporated body is a juristic person competent to create agency and that competence is not taken away except to prohibit a legal practitioner to appear before an Arbitrator. Even that inhibition is subject to the discretionary power of the Registrar. Therefore, this Court has no hesitation to come to the conclusion that like any other individual, a juristic person also has a right to create an agency in favour of another person; necessarily an individual who can speak for the principal. Fortunately, this was the reasoning adopted by the learned Judicial Member who first had occasion to hear the question in the Tribunal, but who necessarily did not agree with the Co-operation Member. ( 9 ) THE Full Bench of the Tribunal has not done justice to this approach at all. They have been impressed by the arguments advanced for the department about the bye-law ; particularly bye-law 30 read with bye-law 16 (j) which provided for the society to sue or be sued in the name of the society by its Secretary and Secretary having as one of his duties to represent the society in legal proceedings. ( 10 ) THAT is only an arrangement conveniently made by the framing of the bye-laws for the management of the affairs of the society. How either bye-law 30 or bye-law 16 (j) takes away the power of the Managing Committee to delegate its authority is not explained by the Tribunal. One should see the over-all authority of management under bye-law 14 (g) and (p ). A Director can be delegated the power of the Committee. That is clear from the language of bye-law 14 (g), which is as follows :-" to delegate any of their powers to the Business Committee, Sub-Committee, Officer and director. " similarly, under Clause (p) of bye-law 14, it is part of the function of the management to institute, defend or compromise legal proceedings in the name of the society. If the Committee has the right to defend, certainly it can delegate its authority to defend to one of its own directors, if the circumstances warrant.
" similarly, under Clause (p) of bye-law 14, it is part of the function of the management to institute, defend or compromise legal proceedings in the name of the society. If the Committee has the right to defend, certainly it can delegate its authority to defend to one of its own directors, if the circumstances warrant. ( 11 ) THE Resolution dated 12-6-1985 of the society which was produced before the 2nd respondent Arbitrator on 15-6-1985 makes it abundantly clear that Sri B. Krishnappa, the 2nd petitioner was duly authorised to defend the action in Dispute No. 25/84-85. The genuineness of the resolution has never been questioned. What has been held by the Full Bench of the Tribunal is that the resolution is contrary to the bye-laws and therefore not valid. That is a very strange reasoning. ( 12 ) SITUATIONS cannot be ruled-out that it will not be possible for the Secretary to represent the interests of the society. Say for instance, the Secretary himself is a claimant against the society and a dispute is raised and he has not ceased to be the Secretary. Then, he cannot represent both his interest and the society's interest. Such a contingency in the working of the societies in this country cannot be ruled out. ( 13 ) IN some-what similar situation this Court in the case of Large Sized Co-operative Society limited -v.- H. N. Raju and Anr. , 2. 1974 (1) KLJ 421 ruled that :-" under Section 70 of the Act any-one competent could raise -a dispute by making a reference. Proceedings under Section 70 of the Act before the Registrar should not be assimilated to suits before the Civil Courts and so read bye-law 33 (4) has relation to suits in Courts only and not to reference under Section 70 of the Act. Therefore, it was concluded that bye-law was no more than an enabling provision and did not exclude the authority of the President to act in matters pertaining to society. " the above ruling of this Court has been brushed aside by the Full Bench of the Tribunal on the ground that the Secretary in the case in question before the High Court was under suspension and therefore it was permissible for the President to represent the society.
" the above ruling of this Court has been brushed aside by the Full Bench of the Tribunal on the ground that the Secretary in the case in question before the High Court was under suspension and therefore it was permissible for the President to represent the society. By doing so, what the learned members of the Full Bench of the Tribunal did was to overlook the fact that bye-law 33 (4) refers to suits,. e. , in relation to the expression "sue and be sued" was relatable to Civil court and not to a reference before the Arbitrator under Section 70 of the Act. I have culled-out the ruling of this Court, above, but that appears to have been lost sight of by the Tribunal totally. If they had noticed it, I have no doubt in my mind that they would not have committed the error which they have committed. ( 14 ) SIMILARLY, the decision of the High Court of Madras in the case of Educational Society, tirunelveli -v.- Madurai University, 1975 (1) Madras Law. Journal 297 was brushed-aside by the tribunal that the educational society therein had no Secretary and therefore the President was competent to file the Petition, Facts may distinguish a case, but one should not lose sight of the legal principle of the right of a party to choose his representative in one forum or the other. ( 15 ) I have already pointed-out that bye-laws do not have statutory force. Nor is there any conflict between bye-law 14 and bye-law 16. After-all, the Secretary can only perform such duties as arc enumerated and are binding on him. But, by mere assigning of the duty or mere mention in the bye-law, it cannot be said that the power of the Committee of Management under bye-law 14 is in a way whittled down or taken away. If this had been borne in mind, the Tribunal would not have committed the error of denying the right of representation to the 2nd petitioner. ( 16 ) THE Tribunal has needlessly misdirected itself in construing the bye-laws as being sacrosanct and over-riding provisions of general law of this Country concerning the law of agency.
If this had been borne in mind, the Tribunal would not have committed the error of denying the right of representation to the 2nd petitioner. ( 16 ) THE Tribunal has needlessly misdirected itself in construing the bye-laws as being sacrosanct and over-riding provisions of general law of this Country concerning the law of agency. ( 17 ) THERE is total misdirection with the purpose of Section 117 (2) of the Act, I therefore do not find any reason to hesitate to strike-down the order of the Tribunal as being contrary to law and without proper application of mind. ( 18 ) SRI Veerabhadrappa, Learned Counsel appearing for the 3rd respondent relied upon the provisions of Section 33 of the Advocates Act to support the opinion of the Full Bench of the tribunal. Section 33 of the Indian Advocates Act 1961 provides thai; no person shall practice in any Court after the appointed date or before any authority unless he is enrolled as an Advocate under that Act. ( 19 ) THE expression "practice" clearly contemplates practicing as a profession for gain. That neither precludes a party in person in Court to argue his own case or appoint an agent who is acceptable to the Court to present his cases other than a lawyer. Prohibition is to practice as a profession and not for mere appearance in an isolated case. ( 20 ) IN the case on hand, the 2nd petitioner is a Director and an ex-President of the first petitioner society. Society being a body corporate cannot speak itself as earlier stated except through human agency. Lawyer is prohibited under Section 117 (2) of the Act generally and therefore, one of the Directors speaking for the society cannot be said to be hit by Section 33 of the advocates Act. ( 21 ) FOR the foregoing reasons, this petition is allowed and the order of the Tribunal as also the order of the 2nd respondent dated 15-6-1985 are quashed. The 2nd petitioner shall be permitted to represent the first petitioner society in Dispute No. 25/84-83 pending before the 2nd respondent and the matter shall be adjudicated expeditiously hereafter.