Chanan Ram vs Haryana State Through Collector Hissar

Pritpal Singh, J.

This is plaintiff''s second appeal against the judgment and decree of the lower Appellate Court dated July 16, 1976, whereby the plaintiff''s first appeal against the dismissal of his suit by the trial Court was disallowed.

The facts of this case are not disputed. The plaintiff is a member and shareholder of the Haryana Hand Made Paper Chemical and General Works, Productioncumsale, Industrial Cooperative Society Limited, Mandi Dabwali (hereinafter called the Society). He executed a registered sale deed (Exhibit D. 1) dated June 14, 1962 in respect of some land in favour of the Society. The sale deed was executed on an unstamped paper and no registration fee was paid. This instrument was produced in evidence in the Court of Sub Judge, Sirsa. The Court impounded the document and sent it to the Collector holding that it was required to be executed on stamped paper and the registration fee was payable thereon. The Collector, Hissar, vide an order dated January 11, 1967 (Exhibit P. 1) ordered recovery of Rs. 15, 780/ as stampduty, Rs. 100/ as penalty and Rs. 352.05 Paise as registration fee from the Society. Subsequently, the Society went into liquidation. The Collector, Hissar, initiated proceedings for recovery of the aforesaid stampduty, penalty and registration fee from the plaintiff as a member of the Society. Aggrieved thereby the plaintiff brought the instant suit for permanent injunction restraining the defendant Haryana State from realising the said amount from him.

The suit was contested by the defendantrespondent. The trial Court holding the plaintiff liable to pay the aforesaid amount to the State, as member and shareholder of the Society, dismissed the suit. The plaintiff''s first appeal against the judgment and decree of the trial Court also failed and, as mentioned earlier, it was dismissed by the Senior Sub Judge, Hissar.

On hearing the learned counsel for the parties I find that the impugned judgment and decree of the lower appellate Court cannot be upheld. After the impounding of the sale deed (Exhibit D.1) by the Civil Court, an order dated January 11, 1967 (Exhibit P. 1) was passed by the Collector, Hissar, holding the Society liable to pay a total amount of Rs. 16,232.05 Paise including the stampduty, penalty and registration fee. The sole question for determination in this appeal is if in pursuance of this order the Collector could start recovery proceedings against the appellant as a member of Society. The lower appellate Court has held that the State Government could recover his amount from the plaintiff as member of the Society under section 67 of the Punjab Cooperative Societies Act, 1961 (hereinafter called ''the Act''). This finding is plainly erroneous. The State Government under section 67 of the Act can recover as arrears of land revenue, only those amounts from a member of the Cooperative Society regarding which a certificate is issued by the Registrar. In the instant case it is admitted that no such certificate has been issued by the Registrar and so it is manifest that the State Government could not legally proceed to recover the amount in pursuance of the order (Exhibit P.1) from the plaintiff.

It is then contended that under Rule 15 of the Society''s Byelaws (Exhibit P. 5) a member is liable to discharge liability of the Society to the extent of five times of capital contribution made by him. The plaintiff''s capital contribution has been found to be Rs. 5,000/ and so his liability to discharge the liability of the Society is held to be extending upto Rs. 25,000/. It is not disputed that the Society has been directed to be wound up and a Liquidator has been appointed under section 58 of the Act. Now, even if the Byelaws require the plaintiff to make any contribution towards discharging the liability of the Society, it is only the Liquidator who can determine the contribution to be made by the plaintiff in this regard in view of section 59 of the Act. The State Government has no right to recover any amount pertaining to the order (Exhibit P. 1) directly from the plaintiff. Since in the order (Exhibit P.1) the liability to make payment has been fixed on the Society, the State Government can only proceed to recover the amount from the assets of the Society, in the liquidation proceedings, in accordance with the appropriate law and procedure. There is, however, not the least doubt that in execution of the order (Exhibit P. 1) the respondent State Government is not entitled to recover the amount directly from the appellant.

Taking this view, this appeal is allowed, the judgment and decree of the lower appellate Court are set aside and a decree for permanent injunction is granted in the appellant''s favour restraining the defendantrespondent Haryana State from recovering the aforesaid amount of Rs. 16,232.05 Paise pertaining to the order Exhibit P. 1 from him. The appellant will be entitled to receive the costs of the appeal from the respondent.