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Judgment
S.S. Kang, J.—Whether the membership of the petitioner Cooperative Society stands terminated on the members transferring their land within the Society area to someone else, is the interesting question raised in this writ petition.
S/Shri Ram Rakha Mal and Shankar Dass Kataria are members of Kachrauli Co operative Garden Society Limited, Tehsil Panipat, District Karnal (the Society, for short). The Society was set up under the Rehabilitation Scheme and registered under the Punjab Cooperative Societies Act, 1961 (for short, the Act). The members of the Society were allotted plots of land in villages Kacharauli and Mehmadpur under the Garden Colony conditions to plant garden. This land was allotted in lieu of the lands abandoned by the members in West Pakistan. Each member was allotted 171/2 acres of land. Every member of the Society surrendered about one standard acre area to the Society for the common purposes of the members. This land reserved for common purposes was indivisible and no member had any right to claim its partition or even to ask for his share out of this land. The common purpose area measuring about 70 acres was brought under the plough in 1968. The profits or the net income yielded by these agricultural operations on the common land were divided amongst the members.
S/Shri Ram Rakha Mal and Shankar Dass Kataria respondents No. 2 and 3, who were members of the Society and allottees of the Garden Colony transferred their right, title and interest in the land in 1963 and 1958 respectively. After that they do not own any land in the Garden Colony. Since disputes arose between the Society and respondents No. 2 and 3, the matter was referred to the arbitration of the Assistant Registrar, Cooperative Societies, Panipat, under section 56 of the Act. The Society contended that the said respondents had transferred their land in the area of the Society, they ceased to be members of the Society. Their membership stood terminated under byelaw 6 of the Society which reads as under :
"6. Membership shall be terminated by : (i) death; (ii) sale or transfer of right in land to any person. In both cases the heir or successor in interest of a deceased or past member shall be eligible to join the society subject to the approval of the general meeting.''''
On the other hand, respondents No. 2 and 3 argued that they were members of the Society. On the transfer of their land in the Society area they did not cease to be members of the Society. Their share money was still lying with the Society. It had not and could not have been returned to them. Their membership had not been terminated by the general body of the Society or the Registrar of Societies. They continued to be the members and were entitled to the profits earned by the Society. The Assistant Registrar accepted the plea of respondents No. 2 and 3. He held that the petitionerSociety had not been able to adduce any evidence in proof of the plea that the membership of respondents No. 2 and 3 has been terminated. They had not put in a copy of any resolution passed in the general meeting, terminating the membership of the said respondents. Under byelaw 12 of the Byelaws of the Society provides that the general body of the Society was the supreme body. So it was the general body who could terminate the membership of respondents No. 2 and 3. The membership was interconnected with their share in the Society and not with the plots of land. He further held that respondents No. 2 and 3 continued to be the members of the Society. The Society went up in appeal and the same was dismissed by the Deputy Secretary to Government, Haryana, Department of Cooperation (exercising the powers of the State Government under the Act). He affirmed the findings of the Assistant Registrar. He was of the view that the membership of a Society had to be terminated. It did not cease automatically. Byelaw 6 enjoins upon the authorities of the Society to terminate the membership of those shareholders who have sold out or transferred their right in the land to any other person. Byelaw 11 supports this view. The general body only could terminate the membership of the shareholders but that was not done in the present case. Aggrieved by these orders, the Society had filed this writ petition.
Shri Ram Rang, learned counsel for the petitioner, has argued that a conjoined reading of byelaws 6 and 11 of the Byelaws of the Society makes it manifest that the membership of a member of the Society stands terminated on his transferring his land. In the cases of death of a member or transfer of land by a member, the consequences are identical. In both cases, the membership stands terminated. If a formal order had to be passed for the purpose of termination, then a member of the Society who had actually died shall continue to remind as a member till his membership is terminated by a formal resolution of the general body. This may in certain circumstances take months. The rule making authority surely did not intend any such result. The membership ceases automatically with the termination. Byelaw 11 lays down that the shares shall not be withdrawn, repaid or transferred otherwise than to the heirs or successors of the deceased or past members (whose admission is sanctioned by the general body under byelaw 6). This also indicates that the cessation of membership is automatic with death or transfer of land. I find no merit in this contention. It will be useful to read byelaws having a bearing on the controversy :
"3. Every person to whom land is allotted in the Garden Colony at Kachrauli will be a member of the Society.
(reproduced earlier)
Every member must hold at least one share for every one standard acre of land allotted to him in the Garden Colony. No member shall hold share of which the nominal value exceeds Rs. 1,000/ or exceeds 1/5th of the total share capital actually subscribed. If any member by inheritance or otherwise becomes possessed of more than the maximum holding permitted by this rule, the M.C. shall have power to buy the excess on behalf of the Society and to hold the proceeds at his disposal.
Shares shall not be withdrawn, repaid or transferred otherwise than to the heir or successor of the deceased or past member (whose admission is sanctioned by the G.M. under byelaw 6).
In a general meeting the following business shall be transacted :
(1) The election, suspension and removal of the elected members of the Managing Committee including a President and one or more VicePresidents.
(2) (i) To determine the amount of loans and grants to be arranged from the Government; (ii) to fix the limit upto which loan may be obtained from the Government, Cooperative Banks or deposits from members and non members; (iii) to fix maximum credit limit for individual members subject to the approval of the Registrar.
(3) (i) To chalk out a planned scheme for the development of horticulture in consultation with the Department of Agriculture; (ii) to decide the arrangement for the production and supply of plants; (iii) to consider and sanction the plants for cooperative packing, grading and marketing of produce; (iv) to formulate the general policy for the following schemes; (a) construction of godowns and cold storage; (b) Dehydration and preservation of vegetables and fruits; (c) setting up of plants for the manufacture of squashes, jellies, jams, morabas and other allied fruit and vegetable products; (v) To decide what other allied industries like bee keeping, poultry and dairying etc. could be promoted among the members; (vi) to decide and sanction the schemes necessary for the development of gardening of modern lines, to arrange for the training of members and the expansion of the activities of the society to the best economicadvantage of the members as a whole.
(4) The election of a treasurer to keep the money of the society.
(5) The consideration of the annual statement of accounts and the balance sheet and the auditor''s reports and the inspection note of the Officers of the Cooperative and Agriculture Departments and reports of other experts deputed by Government to help the society in its stated objects.
(6) The disposal of the profits in accordance with the Cooperative Societies Act, the notified rules and these bylaws.
(7) The amendment of bylaws, subject to the sanction of the Registrar.
(8) The sanction of the admission of new members under byelaw 6.
(9) Subject to the approval of the Registrar, fixing of the rate of interest on which loans shall be issued to the members.
The language and the scheme of the byelaws suggest that the membership has to be terminated by an express resolution. Membership confers certain rights on the members. There has to be some conscious and express decision terminating the membership. Rule 26 of the Punjab Cooperative Societies Rules takes care of a similar situation as is faced by us in this case. It provides that a member of the Committee shall cease to hold his office in certain eventualities enumerated in the rule. A dispute arose as to whether with the happening of one of the contingencies envisaged by rule 26 a member of the Cooperative Society automatically would cease to be its member. It culminated in the filing of a writ petition by one Lakha Singh which was disposed of by a Division Bench of this Court. The case is now reported as Lakha Singh v. Registrar Cooperative Societies, Punjab and others, 1972 PLJ 363. It was held :
"The above mentioned observation (in Harishankar Khanna v. Union of India and another, 1971 S.L.R. 332) clearly lay down that some order had to be made stating therein that the public servant ceased to have any lien on any appointment. When the making of an order is envisaged, then it can safely be inferred that some authority competent to pass that order was also within contemplation of the court. If we apply this analogy to rule 26, then it becomes obvious that a member does not cease to hold office unless and until a competent authority passes an order in that behalf. It has already been noticed that the powers to take action under rule 26, have not been conferred upon any subordinate officer of the Department. Since the ultimate control vests in the Registrar, it can safely be inferred that it is he alone who is competent to pass such an order.''''
I am in respectful agreement with the above observations of their Lordships of the Division Bench. The Assistant Registrar as well as the Deputy Secretary to Government have correctly interpreted the byelaws of the Society and have rightly held that respondents No. 2 and 3 continued to be the members and shall continue to do so till a resolution terminating their membership is passed by general body of the Society. This petition is dismissed. There shall be, however, no order as to costs.