Punjab State Electricity Board v. Barnala Co-operative Spinning Mills Ltd.
2013-07-26
K.KANNAN
body2013
DigiLaw.ai
JUDGMENT Mr. K. Kannan J. (Oral):- The revision petition is against the order passed by the Civil Court before which a suit for recovery of Rs. 20,34,491/- had been filed by the petitioner as plaintiff that was said to represent the electricity dues payable by the society. An application had been filed for stay of proceedings at the instance of the society through the liquidator contending that the society had been ordered to be wound up by the order of the Registrar of Cooperative Societies on 17.09.1999 and a liquidator had been appointed. The stay was sought by invoking the provisions of Section 82(2) of the Punjab Cooperative Societies Act that reads as under:- 82. Bar of jurisdiction of Court:- (1) Save as provided in the Act, no civil or revenue Court shall have any jurisdiction in respect of xxxx xxxxx xxxxx (2) While a co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with or instituted against the liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose. 2. The contest was entered by the Electricity Board stating that the bar would operate only with reference to the proceedings to business of society and a monetary claim by Electricity Board against the society cannot be treated as a matter referring to the business of the society. This objection had been rejected and the Court found that further proceedings in suit would be barred. It is this order which is in revision before this Court. 3. The learned counsel argues that expression used under Section 82 must be so construed that unless the recovery of the outstanding by the Electricity Board had a direct bearing to the business of the society itself, the operation of the bar of the civil suit ought not to be applied against the Electricity Board. The counsel would also refer me to the provisions of the Punjab Cooperative Societies Act set out through Sections 57 to 59 that dealt with the winding up provisions in Chapter IX.
The counsel would also refer me to the provisions of the Punjab Cooperative Societies Act set out through Sections 57 to 59 that dealt with the winding up provisions in Chapter IX. The counsel points out particularly to the provisions under Section 58 that appoints a liquidator and clause (2) of Section 58 that empowers the liquidator to take custody under his control of the property, effects and actionable claims to which the society was entitled and should take steps to prevent loss or deterioration of or damage to such property. The counsel would also point out Section 59 (2) (a) that reads as under:- “59. Powers of Liquidator:- (2) Such liquidator shall also have powers, subject to the control of the registrar. (a) to institute and defends suits and other legal proceeding on behalf of the co operative society by the name of his office.” 4. The counsel would read this provision to mean that the liquidator was at all times entitled to defend the suit which was instituted against the society and the liquidator cannot secure to himself the duty of settling claims unless the society itself was admitting the claims wholly. 5. Learned counsel appearing for the respondent-Society through the liquidator points out that the powers of the liquidator were not merely to institute and defend the suit on behalf of the society but the provisions of clauses (c) and (d) of Section 59 specifically spell out the role of the liquidator with reference to investigation of all claims against the cooperative society and pay up the claims. The relevant provisions would require to be reproduced as under:- “(c) To investigate all claims against the co operative society and subject to the provision of this Act, to decide question of priority arising between claimants. (d) to pay claims against the co-operative society, interest up to the date of winding up according to their respective priorities, if any, in full or ratably, as the assets of the society may permit; the surplus, if any remaining after payment of the claims being applied in payment of interest from the date of such order of winding up at a rate fixed by him but not exceeding the contract rate in any case.” 6.
The counsel would also refer to me the relevant Rules under Rule 58(2) of the Punjab Cooperative Societies Rules, which sets out the procedure to be followed by the liquidator. The relevant Rule reads as under:- “58. Procedures to be followed by liquidators:- xxxxx xxxxx xxxxx (2) The liquidator shall, be after setting the assets and liabilities of the co-operative society as they stood on the date on which the order for winding up is made proceed next to determine the contribution to be made by each of its members, past members or by the estates or nominees, heirs or legal representatives of deceased member or by any officers or former officers to the assets of the Co-operative Society under clause (b) and (e) of sub section (2) of section 59. Should necessity arise, he may, make a subsidiary order regarding such contributions and such order shall be enforceable in the same manner as the original order.” 7. The learned counsel argues that the procedure includes the power of the liquidator to cause a notice to be issued requiring all claims placed before him for his consideration. The liquidator shall then draw up the assets and liabilities of the Cooperative Society as stood on the date on which the order of the winding up was made and proceed to determine the contribution to be made by each of its members, past members or by the estates or nominees, heirs or legal representatives of deceased member or by any officers or former officers to the assets of the Co-operative Society. Rule 63 also refers to the power of the liquidator to distribute the realized assets in such manner and in such priority as the Registrar may direct. The counsel refers me also to some circulars which had been periodically issued that sets out the manner of ascertainment of liability of the society under liquidation and the priorities which have to be applied for repayment of debt due by the society. 8.
The counsel refers me also to some circulars which had been periodically issued that sets out the manner of ascertainment of liability of the society under liquidation and the priorities which have to be applied for repayment of debt due by the society. 8. I find that the provisions relating to liquidation and the powers of the liquidator as found in the relevant provisions of the Act and the Rules are a complete code in itself and it will result in a gross inconsistency if we must allow for an adjudication to take place before the Civil Court as well, when the liquidator is empowered to receive claims made against the society and for realization of all the assets and distribution of the assets to several creditors in the order of certain priorities. 9. In a particular expression used under Section 85 constituting a bar of Civil Court to the affairs of the society must be understood, in the context of winding up, to include also the affair of distribution of assets of the society for satisfaction of the liabilities due with the society to the creditors. The bar as applied by the Court below was perfectly justified and the Electricity Board will only be competent to move an application for lodging a claim for the alleged dues of the society to the Electricity Board. If there is any particular time before when a claim should have been lodged and the same has not been done so far, the petitioner will also have the liberty to apply to the liquidator for extension of time. If such an application is made, the liquidator may consider the fact of pendency of the civil revision before this Court and exclude the time and adjudicate the claim in accordance with law. 10. With these observations, the civil revision is dismissed.