Shamrao Vithal Cooperative Bank Ltd. v. Kasargod Pandhuranga Mallya .

H.R Khanna, J.— This is an appeal by special leave against the judgment of Kerala High Court affirming an appeal, the order of the lower court whereby the appellant Banks application for execution of an award made under the Bombay Cooperative Societies Act, 1925 (hereinafter referred to as “the Bombay Act”) was dismissed.

2. The appellant is a Cooperative Society registered in Bombay under the Bombay Act. The head office of the appellant is in Bombay and it has a branch in Managalore. As the objects of the appellant were not confined to one State, it was governed by Multi-Unit Cooperative Societies Act of 1942 (hereinafter referred to as “the Central Act”). The appellant made a claim under Section 54 of the Bombay Act in respect of a transaction which took place in Managalore against the respondent who is a resident of Kasaragod, and was a member of the appellant Society. Both Managalore and Kasaragod were at the relevant time in Madras Presidency. The Deputy Registrar of Cooperative Societies, Bombay gave an award regarding that claim. The award was sought to be executed as a decree is the Court of Subordinate Judge, Kasaragod. An objection to the execution of the decree was raised by the respondent on the ground that the Deputy Registrar of Cooperative Societies, Bombay had no jurisdiction to pass the award and the same could not be executed as a decree in the courts in Kerala. This objection was upheld by the Subordinate Judge and he dismissed the execution application. On appeal, the decision of the learned Subordinate Judge was affirmed by the High Court. It was not disputed before the High Court that the appellant was governed by the provisions of the Central Act. The contention raised on behalf of the appellant was that the passing of an award came within the expression “control” occurring in sub-section (1) of Section 2 of the Central Act. This contention did not find favour with the High Court and in the result, the appeal was dismissed.

3. We have heard Mr Naik on behalf of the appellant. No one has appeared on behalf of the respondent. Before dealing with the argument advanced on behalf of the appellant, it would be apposite to reproduce Section 2 of the Central Act. The same reads as under: —

“2. (1) A cooperative society to which this Act applies which has been registered in any State under the law relating to Cooperative Societies in force in that State shall be deemed in any other State to which its objects extend to be duly registered in that other State under the law there in force relating to Cooperative Societies, but shall, save as provided in sub-sections (2) and (3), be subject for all the purposes of registration, control and dissolution to the law relating to Cooperative Societies in force for the time being in the State in which it is actually registered.

(2) Where any such cooperative society has established before the commencement of this Act or establishes after the commencement of this Act a branch or place of business in a State other than in which it is actually registered, it shall, within six months from the commencement of this Act or the date of establishment of the branch or place of business, as the case may be, furnish to the Registrar of Cooperative Societies of the State in which such branch or place of business is situated a copy of its registered by laws, and shall at any time it is required to do so by the said Registrar submit any returns and supply any information which the said Registrar might require to be submitted or supplied to him by a cooperative society actually registered in that State.

(3) The Registrar of Cooperative Societies of the State in which a branch or place of business such as is referred to in sub-section (2) is situated may exercise in respect of that branch or place of business any powers of audit and of inspection which he might exercise in respect of a cooperative society actually registered in the State.”

According to sub-section (3) of Section 1, the Central Act “applies to all Cooperative Societies with objects not confined to one State incorporated before the commencement of this Act under the Cooperative Societies Act, 1912, or under any Act relating to Cooperative Societies in force in any State, and to all Cooperative Societies with objects not confined to one State to be incorporated after the commencement of this Act.

4. As the objects of the appellant society were not confined to one State, it was not disputed before the High Court or in this Court that it is governed by the provisions of the Central Act. Plain perusal of sub-section (1) of Section 2 reproduced above makes it manifest that if the objects of a cooperative society registered in State “A” extend to State “B”, the Society shall be deemed to be registered in State “B” under the law in force in State “B” relating to Cooperative Societies. Despite this deemed registration in State “B” for three purposes, namely, registration, control and dissolution, the society shall be subject to the law relating to Cooperative Societies in force in State “A”. Sub-section (2) makes it obligatory on a cooperative society which establishes a branch or place of business in a State other than that in which it is actually registered to furnish within the prescribed time to the Registrar of the Cooperative Societies of the State in which such branch or place of business is situated, a copy of its by-laws and to submit such return and supply such information as the Registrar might require in respect of a cooperative society actually registered in that State. Sub-section (3) gives a limited control to the Registrar of Cooperative Societies of the State in which a branch or place of business of a cooperative society is established by authorising him to exercise in respect of that branch or place of business any powers of audit and of inspection which he might exercise in respect of a cooperative society actually registered in that State.

5. The contention which has been advanced on behalf of the appellant society by its learned Cousel, Mr Naik is that as the appellant was registered in Bombay, it is the Bombay Act which would govern the appellant society for purposes of registration, control and dissolution. It is not disputed that the adjudication of a claim by the appellant against its members does not fall under the head “registration” or “dissolution”. What is, however, urged is that the word “control” comprehends within itself the adjudication of a claim made by the society against its members. Such a claim having been made by the appellant against the respondent, the same could, according to the learned Counsel, have been adjudicated upon under Section 54 of the Bombay Act. The award made by the Deputy Registrar of Cooperative Societies, Bombay in the circumstances, the counsel submits, did not suffer from any legal infirmity.

6. There is, in our opinion, no force in the above contention because we do not agree with the underlying assumption of the above argument that the word “control” comprehends within itself the adjudication of a claim made by a cooperative society against its members. The appellant society, as would appear from the resume of facts given above, established a branch in Mangalore and had dealings there with the respondent who was a resident of Kasaragod. As the objects of the appellant society were extended to the Presidency of Madras, it should, in view of sub-section (1) of Section 2 of the Central Act, be deemed to have been registered under the law in force in the Presidency of Madras relating to Cooperative Societies. The law which was then in force, according to Mr Naik, was the Madras Cooperative Societies Act, 1932 (hereinafter referred to as “the Madras Act”). Clause (f) of Section 2 of that Act defines a registered society to mean a society registered or deemed to be registered under that Act. Section 51 of the Madras Act provides inter alia that if any dispute touching the business of a registered society between a member and the society arises, such dispute shall be referred to the Registrar for decision. Registrar has been defined in clause (g) of Section 2 of the Madras Act to mean “a person appointed to perform the duties of a Registrar of Cooperative Societies under this Act and includes a person on whom all or any of the powers of a Registrar under the Act have been conferred”. It would, therefore, follow that a dispute between the appellant and the respondent in respect of its dealings relating to its Mangalore branch would normally have to be adjudicated upon by the Registrar appointed under the Madras Act. The fact that for the purpose of control, the appellant society was governed by the Bombay Act would not, in our opinion, justify a departure from the above normal rule. The word “control” is synonymous with superintendence, management or authority to direct, restrict or regulate [see p. 442 of Words and Phrases (Vol. 9) Permanent Edition]. Control is exercised by a superior authority in exercise of its supervisory power. Adjudication of disputes is a judicial or quasi-judicial function and it would, in our opinion, be unduly straining the meaning of the word “control” to hold that it also covers the adjudication of disputes between a cooperative society and its members. There is a clear distinction between jurisdiction to decide a dispute which is a judicial power and the exercise of control which is an administrative power and it would be wrong to treat the two as identical or equate one with the other.

7. Reference has been made on behalf of the appellant to the case of Panchshila Industrial Cooperative Societies (Multi-Unit) v. Gurgaon Central Cooperative Bank Ltd., Gurgaon (1971) 2 SCC 500. In that case, Deputy Registrar of Cooperative Societies, Rohtak had given an award in favour of the respondent bank which was a Cooperative Society governed by the provisions of Punjab Cooperative Societies Act. The appellant filed an appeal against that award before the Central Registrar. The Central Registrar dismissed the appeal on the ground that he was not the appropriate Appellate Authority in respect of the said award. On appeal to this Court, the decision of the Central Registrar was affirmed. It was held that the dispute between the parties fell within Section 55 of the Punjab Cooperative Societies Act and those provisions were not affected by the Central Act. It would appear from the above that the question involved in that case was entirely different and the appellant can derive no assistance from it.

8. Argument has also been advanced that there was no inherent lack of jurisdiction in the Deputy Registrar appointed under the Bombay Act for adjudicating upon the dispute between the parties and that it was at the best a case of lack of territorial jurisdiction. We find ourselves unable to accede to this contention because we are of the opinion that there was inherent lack of jurisdiction in the Registrar appointed under the Bombay Act for dealing with the dispute arising out of the dealings of the Mangalore branch of the appellant society with the respondent. The dispute between the parties as would appear from what has been discussed above, could only be adjudicated upon in accordance with the provisions of the Madras Act.

9. The appeal consequently fails and is dismissed. As no one has appeared on behalf of the respondent, we make no order as to costs.,