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Panchshila Industria... v. Gurgaon Central Co-O...
Factual and Procedural Background
Panchshila Industrial Cooperative Society (Multi-Unit) was registered in 1955 under the Punjab Cooperative Societies Act, 1955. After the States Reorganisation Act, 1956, the society became a “multi-unit” cooperative society falling under the Multi-Unit Cooperative Societies Act, 1942. Despite this change, it remained a member of the Gurgaon Central Cooperative Bank Ltd., a society governed by the Punjab Cooperative Societies Act, 1961.
A dispute arose between the Bank and the appellant concerning monies owed. Under Section 56 of the 1961 Punjab Act, the Registrar of Cooperative Societies, Haryana, referred the dispute to the Deputy Registrar (Rohtak) for arbitration. On 7 October 1969, the arbitrator awarded the Bank Rs 16,05,658.20 plus interest on the principal sum of Rs 11,52,535 at 6.5% per annum until realisation.
The appellant filed an appeal before the Central Registrar of Cooperative Societies, New Delhi. The Central Registrar dismissed the appeal, holding that he lacked jurisdiction. The appellant obtained special leave to appeal to the Supreme Court of India, challenging that dismissal.
Legal Issues Presented
- Whether, on the facts of the case, the Central Registrar of Cooperative Societies was the competent appellate authority to entertain an appeal against an arbitral award rendered under Section 56 of the Punjab Cooperative Societies Act, 1961.
- Whether, assuming lack of jurisdiction, the Central Registrar ought to have returned the memorandum of appeal for presentation to the proper authority instead of outright dismissing it.
Arguments of the Parties
Appellant's Arguments
- Because the appellant became a “multi-unit” cooperative society under the Multi-Unit Cooperative Societies Act, 1942, it is no longer governed by the Punjab Cooperative Societies Act, 1961; therefore, the Central Registrar is the appropriate appellate authority.
- Even if the Central Registrar lacked jurisdiction, he should have returned the memorandum of appeal so it could be presented to the correct forum, rather than dismissing it.
Respondent's Arguments
The opinion does not contain a detailed account of the respondent’s legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court, per Sikri C.J., held that the dispute “undoubtedly” fell within Section 55 of the Punjab Cooperative Societies Act, 1961, and was validly referred to arbitration under that provision. Although the appellant had become a multi-unit cooperative society by virtue of post-reorganisation legislation, nothing in the Multi-Unit Cooperative Societies Act, 1942, barred such a society from remaining a member of a cooperative society governed by the Punjab Act of 1961. Consequently, as a continuing member of the respondent Bank, the appellant remained subject to Section 55.
Under Section 68 of the Punjab Act, an appeal from an award made by “any other person” (here, the Deputy Registrar acting as arbitrator) lies to the Registrar of Cooperative Societies, and not to the Central Registrar. Therefore the Central Registrar correctly concluded that he lacked appellate jurisdiction.
On the procedural point, the Court noted the absence of any statutory provision empowering the Central Registrar to return a mis-filed appeal. Nonetheless, it observed that if the appellant chooses to file before the appropriate authority under the Punjab Act, that authority may consider the benefit of Section 14 of the Limitation Act, 1963, read with Section 29(2), when deciding whether to entertain a belated appeal.
Holding and Implications
The Supreme Court dismissed the appeal with costs.
Immediate Effect: The Central Registrar’s order of dismissal stands affirmed; the appellant must seek relief, if any, before the competent appellate authority under the Punjab Cooperative Societies Act, 1961.
Broader Implications: The decision clarifies that a multi-unit cooperative society can still be subject to state cooperative legislation when it is a member of a state-registered cooperative society, and that appeals from arbitral awards under the Punjab Act lie only to the forums specified in that Act. No new precedent was otherwise set.
S.M Sikri, C.J— This appeal by special leave is against the order of the Central Registrar of Cooperative Societies, New Delhi, dismissing the appeal filed by Panchshila Industrial Cooperative Society (Multi Unit), appellant before us, against the award passed by the arbitrator (Deputy Registrar of Cooperative Societies, Rohtak), dated October 7, 1969, in respect of the dispute between the Gurgaon Central Cooperative Bank Ltd., Gurgaon, respondent before us, and the appellant. The Central Registrar held that he was not the appropriate Appellate Authority against the award in question.
2. The only question which arises before us is whether the Central Registrar was the appropriate authority on the facts of this case. The relevant facts are these. The respondent Bank approached the Registrar of Cooperative Societies, Haryana, for resolving a dispute between the Bank and one of its members, appellant before us. The Registrar, by his order, dated February 17, 1968 in exercise of the powers vested in him under Section 56 of the Punjab Cooperative Societies Act, 1961, referred the dispute to the Deputy Registrar, Cooperative Societies, Rohtak, for decision. The arbitrator gave the award on October 7, 1969 directing that the appellant do pay to the respondent in all Rs 16,05,658.20 together with interest at the rate of six and a half per cent per annum until the realisation of the principal amount viz. Rs 11,52,535.00.
3. The appellant, as mentioned above, filed an appeal against this award before the Central Registrar. The respondent Bank is a Cooperative society governed by the provisions of the Punjab Cooperative Societies Act, 1961. Section 55(1) of this Act inter alia provides that if any dispute touching the constitution, management or the business of a Cooperative society arises between a member and the society, such dispute shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. Section 55(2) provides that for the purposes of sub-section (1) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not, shall be deemed to be a dispute touching the constitution, management or the business of the Cooperative society. Sub-section (3) of Section 55 provides that “if any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution, management or the business of a Cooperative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court”.
4. There is no doubt that the dispute between the respondent Bank and the appellant fell within Section 55 and was properly referred to arbitration under that section. It is, however, contended that the appellant was registered in December, 1955, under the Punjab Cooperative Societies Act, 1955, and by virtue of the States Reorganisation Act, 1956, and Section 5-A of the Multi-Unit Cooperative Societies Act, 1942, the appellant has ceased to be governed by the provisions of the Punjab Cooperative Societies Act because it has become a multi-unit Cooperative society. There is no doubt that by virtue of the State Reorganisation Act, 1956, and Section 5-A of the Multi-Unit Cooperative Societies Act, 1942, the appellant has become a multi-unit Cooperative society and the Multi-Unit Cooperative Societies Act applies to it. But that Act is for the incorporation, regulation and winding up of Cooperative societies with objects not confined to one State, and it has no impact on Section 55 of the Punjab Cooperative Societies Act, 1961, inasmuch as the appellant remains a member of the Cooperative society, namely, the respondent Bank. There is nothing in the provisions of the Multi-Unit Cooperative Societies Act to indicate that a Multi-Unit Cooperative society cannot be a member of a Cooperative society governed by the Punjab Act of 1961. If the appellant continues to be a member, then the terms of Section 55 apply and a dispute can be referred to arbitration under that section. An appeal against that award lies under Section 68 of the Punjab Act of 1961 to the Government if the decision or order was made by the Registrar, and to the Registrar if the decision or order was made by any other person. It is quite clear, therefore, that the Central Registrar had no jurisdiction to hear the appeal.
5. The learned Counsel next contends that the Central Registrar should not have dismissed the appeal but returned the memorandum of appeal for presentation to the proper authority. There is no statutory provisions enabling the Central Registrar to do so. At any rate, if an appeal is filed before the appropriate authority under the Punjab Cooperative Societies Act, 1961, that authority will no doubt take into consideration the provisions of Section 14 of the Limitation Act, 1963, read with Section 29(2) and decide whether the appeal should be entertained or not.
6. In the result the appeal fails and is dismissed with costs.
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