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2014 DIGILAW 533 (PAT)

Subansh Sahni v. State of Bihar

2014-04-30

NAVANITI PRASAD SINGH

body2014
ORDER By this writ petition, the petitioners have challenged the order passed by the Divisional Commissioner, Tirhut Division, Muzaffarpur, as contained in Annexure 1 in Sairat Settlement Appeal No 173 of 2013 being order dated 28.10.2013. This was passed at the instance of respondent No 7 Rajju Sahni who had filed the appeal on behalf of the Fisheries Cooperative Society, namely, Katra Prakhand Matasyajivi Sahyog Samiti Limited (hereinafter referred to as the Samiti) against the order of the District Fisheries Officer, as contained in Memo No 418 dated 05.09.2012 (Annexure 10) by which he had made settlement of 169 Jalkars in favour of the Samiti on short term settlement for seven years beginning from 01st July, 2012 to 30th June, 2019 for an amount of Rs 8,86,445/- as yearly settlement amount. Pursuant to notice issued, respondent No 7 appeared. There have been spate of counter affidavits and rejoinders. In the last supplementary counter affidavit filed by respondent No 7, the order dated 28.03.2014 passed by the Registrar, Cooperative Societies, Bihar, Patna in Miscellaneous Case No 243 of 2012 filed by respondent No 7 as against petitioner No 1 is annexed as Annexure Z which has been passed in purported exercise of power under Section 48 of the Bihar Cooperative Societies Act, 1935. 2. It may be noted here that in course of these writ proceedings, petitioners were asked to add Registrar, Cooperative Societies as a party respondent and upon notice being issued, the Registrar, Cooperative Societies, Bihar has filed a counter affidavit as well. The records of the case have become extremely bulky. 3. However, with consent of parties being Shri Ram Suresh Ray, learned Senior Counsel for the petitioners and Shri Shashi Anugrah Narain, learned Senior Counsel for respondent No 7, the writ petition had been heard at length for its final disposal at this stage itself. 4. As noted above, the challenge in these writ proceedings was to the jurisdiction and consequently the order passed by the Divisional Commissioner, Tirhut Division, Muzaffarpur, as contained in Annexure 1. On behalf of petitioners, it was submitted that the Divisional Commissioner had no jurisdiction to interfere in the matter. 4. As noted above, the challenge in these writ proceedings was to the jurisdiction and consequently the order passed by the Divisional Commissioner, Tirhut Division, Muzaffarpur, as contained in Annexure 1. On behalf of petitioners, it was submitted that the Divisional Commissioner had no jurisdiction to interfere in the matter. On behalf of respondent No 7, it was submitted that he had approached the Divisional Commissioner, Tirhut Division in terms of Section 14 (i) of the Bihar Fish Jalkar Management Act, 2006 (hereinafter referred to as the Jalkar Act) pursuant to directions of this Court in CWJC No 17353 of 2012 disposed of on 12.03.2013 (Annexure C to the first counter affidavit of respondent No 7). This is contested on behalf of petitioners. 5. Therefore, the first question to be seen is whether there was any direction of this Court to respondent No 7 to prefer an appeal before the Divisional Commissioner or not? A bare perusal of the order of this Court as passed in CWJC No 17353 of 2012 being order dated 12.03.2013 would show that the contention of respondent No 7 is not correct. There was no such direction. That would be obvious from the operative portion of the order of the Court, the relevant part thereof is quoted hereunder:— “… … … However, keeping in view the fact that against the order of settlement there is statutory provision of appeal under Section 14 (1) of the Bihar Fish Jalkar Management Act, 2006, learned counsel for the petitioners makes a prayer for allowing the petitioners to approach the appellate authority. Keeping in view the fact that during the pendency of the present writ petition, settlement order was passed, the Court is of the opinion that writ petition can be disposed of granting liberty to the petitioners to file statutory appeal. If the appeal is filed within a period of one month from today, the appellate authority shall not dismiss the appeal on the ground of limitation, but decide the same on merit.” 6. A reference to the aforesaid order would clearly indicate that it was the petitioners of that writ petition who sought leave not to pursue the writ petition but to go in appeal in terms of Section 14 (1) of the Jalkar Act. The leave was granted. There was no direction of the Writ Court directing the petitioners to prefer an appeal. The leave was granted. There was no direction of the Writ Court directing the petitioners to prefer an appeal. Thus, it cannot be said that it was this Court that directed respondent No 7 to avail any such statutory appeal. 7. Now the main question as to legality of the order impugned as passed by the Divisional Commissioner, Tirhut Division, as contained in Annexure 1 to the writ petition. Shri Ram Suresh Ray appearing for the writ petitioners submits that in Katra Block of District Muzaffarpur, there is one and only one Fisheries Cooperative Society as required by law that is Katra Prakhand Matasyajivi Sahyog Samiti Limited (hereinafter referred to as the Samiti). When the question for making a short term settlement, which is for seven years, of the Jalkars falling within the Katra Block arose which Jalkars were 169 in number, the said Cooperative applied. The District Fisheries Officer considered the matter and by order, as communicated by letter No 418 dated 05.09.2012, as contained in Annexure 10, he made settlement for a period of seven years starting from 01st July, 2012 to 30th June, 2019 of the 169 Jalkars in favour of the Samiti. In the order, beyond stating that the settlement was so made with the Cooperative Society, the Samiti, there were various terms and conditions indicated therein. 8. At this stage, I may notice that when the matter was pending before the District Fisheries Officer, Muzaffarpur, who was not taking a decision in the matter, respondent No 7 and the Cooperative Society filed CWJC No 17353 of 2012 for a direction to the District Fisheries Officer to finalise the matter. While the writ petition was pending, the settlement order, as contained in Annexure 10 was passed. Accordingly, the writ petitioners of that writ petition sought disposal of the writ petition and it was disposed of by order dated 12.03.2013 (Annexure C to the counter affidavit of respondent No 7), as aforesaid. 9. The grievance of respondent No 7 appears to be that the District Fisheries Officer was not correct in making settlement of the fisheries with petitioner No 1 who claimed himself to be Secretary of the Samiti as by then he and the Chairman, i e, Bhogendra Sahni had been unceremoniously suspended from even the primary membership of the Cooperative Society. The grievance of respondent No 7 appears to be that the District Fisheries Officer was not correct in making settlement of the fisheries with petitioner No 1 who claimed himself to be Secretary of the Samiti as by then he and the Chairman, i e, Bhogendra Sahni had been unceremoniously suspended from even the primary membership of the Cooperative Society. The Divisional Commissioner, pursuant to the observation of this Court in the writ petition aforesaid, entertained the appeal. He went to great lengths in noticing various facts about the internal management dispute and tussle between various groups of Cooperative Society and the Management Committee of the Cooperative Society and by the impugned order, as contained in Annexure 1, held that petitioner No 1 Subansh Sahni and Bhogendra Sahni had ceased to be Secretary and the Chairman of the Cooperative Society by virtue of they being suspended by the newly constituted Managing Committee of the Cooperative Society and, as such, settlement ought to have been made by the District Fisheries Officer through Rajju Sahni, respondent No 7. In substance, the submission of Shri Ram Suresh Ray, learned Senior Counsel is that in terms of Section 14 (i) of the Jalkar Act, the appeal would lie to the Divisional Commissioner from an order passed by the District Fisheries Officer if the order is with regard to settlement. He submits that settlement has been made in favour of the Cooperative Society and not in favour of any individual as evident from Annexure 10 and Shri Shashi Anugrah Narain, learned Senior Counsel for respondent No 7 is wrong when he submits that settlement was made in favour of Subansh Sahni. On behalf of petitioners, it is submitted that the dispute, essentially being between the management and the members of the Cooperative Society with regard to the management of the Cooperative Society, it was a dispute which was amenable exclusively under Section 48 of the Bihar Cooperative Societies Act before the Registrar, Cooperative Societies and not by the Divisional Commissioner under Section 14 (1) of the Jalkar Act. On behalf of petitioners, it was pointed out that even if we see the order of the Divisional Commissioner, ultimately he also commits the same mistake in considering the settlement to be in favour of an individual rather than the Society. 10. On behalf of petitioners, it was pointed out that even if we see the order of the Divisional Commissioner, ultimately he also commits the same mistake in considering the settlement to be in favour of an individual rather than the Society. 10. Having gone through the entire order of the Divisional Commissioner, to me, the problem is simple. There is a serious misconception that prevails in the mind of officials including high officials such as Commissioner with regard to the legal status of Cooperative Society. The Divisional Commissioner has proceeded as if Cooperative Society is the property or the fiefdom of some individual. It is either the property of the writ petitioner Subansh Sahni or the personal property of respondent No 7 Rajju Sahni or the personal property of Bhogendra Sahni, the Chairman of the Cooperative. Regrettably, all the authorities lack the fundamental knowledge of law which had been settled more than a century and a half back in the celebrated case of Saloman Vs. Saloman and Company Limited, (1897) Appeal Cases 22. A registered Cooperative Society like a Company is body corporate distinct from its office bearers or members. It is neither the property of the members nor the property of the Managing Committee or any officer bearer. Being an independent juristic entity, it has its own seal and succession independent of its members or office bearers. This position in law is well settled but, however, as the matter was extensively argued as if the settlement was made in favour of an individual rather than the Cooperative Society, in whose name the settlement was made, I can only cite two decisions. One, the case of Smt Sarla Devi Agrawala Vs. State of Bihar & Others being Division Bench judgment of this Court since reported in 1979 BBCJ 213 wherein referring to the case of Saloman Vs. Saloman and Company Limited and other cases, this position in law that a Company being body corporate and distinct entity from its members and shareholders and, therefore, there is absolute legal distinction between the two, the writ petition was decided. The second is the judgment of the Apex Court in the case of Electronics Corporation of India Limited & Others Vs. The second is the judgment of the Apex Court in the case of Electronics Corporation of India Limited & Others Vs. Secretary, Revenue Department, Government of Andhra Pradesh & Others since reported in (1997) 4 Supreme Court Cases 458 wherein while dealing with a Company wholly owned by the Government, there being only one shareholder, this is what their Lordships held in paragraphs 15, 16, 17, 18, 19:— “15. A clear distinction must be drawn between a company and its shareholder, even though that shareholder may be only one and that the Central or a State Government. In the eye of the law, a company registered under the Companies Act is a distinct legal entity other than the legal entity or entities that hold its shares. 16. In Western Coalfields Ltd Vs. Special Area Development Authority this Court reviewed earlier judgments on the point. It held that even though the entire share capital of the appellant before it had been subscribed by the Government of India, it could not be predicated that the appellant itself was owned by the Government of India. Companies, it was said, which are incorporated under the Companies Act, have a corporate personality of their own, distinct from that of the Government of India. The lands and the buildings in question in that matter were vested in and owned by the appellant. The Government of India only owned the share capital. 17. In Rustom Cavasjee Cooper Vs. Union of India it was held: (SCC p 273, para 11) “11. A company registered under the Companies Act is a legal person, separate and distinct from its individual members. Property of the Company is not the property of the shareholders. A shareholder has merely an interest in the Company arising under its Articles of Association, measured by a sum of money for the purpose of liability, and by a share in the distributed profit.” 18. In Heavy Engineering Mazdoor Union Vs. State of Bihar this Court held that an incorporated company has a separate existence and the law recognizes it as a juristic person, separate and distinct from its members. 19. We are, in the premises, left in no doubt that the State Government was entitled to levy non-agricultural assessment upon the said land and recover it from the appellant Company.” 11. 19. We are, in the premises, left in no doubt that the State Government was entitled to levy non-agricultural assessment upon the said land and recover it from the appellant Company.” 11. The sooner the misconception amongst the administrators that Cooperative Society can be and are personal fiefdom or the property of individual or a group of individuals, the better it is. On this short issue itself, Annexure 1 has to be held to be misconceived. The stand of respondent No 7 is totally misconceived because the settlement is, admittedly, in favour of the Cooperative Society. There is nothing wrong in law. It could only be made in favour of the Cooperative and it was duly made. The dispute is as to who is managing the Cooperative. Thus, the dispute essentially was as to the management of the Cooperative which is a subject squarely covered by Section 48 of the Cooperative Societies Act, 1935 and all such disputes have to be settled not by the Divisional Commissioner under Section 14 (1) of the Jalkar Act but exclusively under Section 48 of the Cooperative Societies Act. Thus, the order, as contained in Annexure 1, cannot be sustained. It was wholly without jurisdiction and it is, accordingly, quashed. 12. The question then arises that what was the jurisdiction of the Registrar (Cooperative). It is, during pendency of this writ petition, that the Registrar had been moved by respondent No 7. In my view, the Registrar was the appropriate authority to decide the dispute as to the constitution of the Managing Committee and the dispute inter se between the members and/or the Managing Committee of the Cooperative. By Annexure Z to the supplementary counter affidavit, the Registrar has resolved the said dispute. Shri Ram Suresh Ray, learned Senior Counsel for the petitioner rightly submits that that not being subject matter of the writ petition, he would be at liberty to challenge the same before appropriate forum and/or authority as the law would permit. 13. For the reasons aforesaid, I do not consider it appropriate to decide the legality of the said order in these proceedings. Thus, the liberty is granted to the petitioners to challenge the order, if so advised of the Registrar, Cooperative in the manner in which they may be advised. 14. 13. For the reasons aforesaid, I do not consider it appropriate to decide the legality of the said order in these proceedings. Thus, the liberty is granted to the petitioners to challenge the order, if so advised of the Registrar, Cooperative in the manner in which they may be advised. 14. Let a copy of this order be sent to the Registrar, Cooperative Societies, Bihar, Patna for communicating to the Divisional Commissioners and District Fisheries Officers for proper appreciation in regard to the law of status of a cooperative as distinct from its members so that these mistakes, which are frequently being committed, are not so committed. 15. This writ petition, with the aforesaid directions and observations, stands disposed of. ?