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Judgment
G.R. Udhwani, J.—Aggrieved by order dated 07.12.2004 passed in H.R.P. Suit No. 1325 of 1995 below Exh. 128 by the learned Small Causes Court, Ahmedabad impleading the Registrar, Cooperative Societies, Gujarat State as a party to the Suit filed by the landlord for arrears of the land, etc. this Special Civil Application is preferred. It is an admitted position that initially an Administrator was appointed to administer the affairs of Prabhunagar Cooperative Housing Society Limited, a society registered under the Gujarat Cooperative Societies Act, 1961 ("the Act" for short) being one of the defendants before the Trial Court, and thereafter, the liquidator came to be appointed u/s 107 of the Act. After the appointment of the liquidator, the Suit was pending for more than 7 years. An application for joining the liquidator was made on 29.06.2004 at Exh. 118 on the record of the Trial Court which came to be rejected on the ground that the maximum period of 7 years of the existence of liquidator, as contemplated u/s 114 of the Act, was over. Thereafter, application Exh. 128 came to be submitted with a prayer to join the Registrar, Gujarat State being the administrative head of the societies. The petitioner resisted the said application with various contentions. However, by impugned order, the Court below deemed it appropriate to join the Registrar as party.
Having heard the learned counsel for the parties and perused the papers, it appears that the factual position on which the relevant legal provisions of the Act could be applied, was in limbo inasmuch as neither of the parties were aware of it. Section 107 of the Act empowers the Registrar, Cooperative Societies to form an opinion as to whether the society should be wound up or not and if he opines that the society should be wound up, he is empowered to pass either interim or final order. It is not on record as to whether the order passed by the Registrar for appointment of liquidator, was interim or final order. This fact will have a bearing on the matter inasmuch as Section 107(3) of the Act obliges the Registrar; after giving an opportunity to the society of being heard, to make a final order, either vacating or confirming the interim order. Thus, if the interim order is vacated by the Registrar, the society would not have to be wound up and if the interim order is confirmed, further necessary procedure for liquidation shall have to be resorted to. In the eventuality of vacation of the interim order, there may not be a necessity to join any of the statutory authorities to represent the case. Therefore, it was material to examine that aspect.
u/s 108 on interim order or final order being passed, the necessary exercise of handing over the custody of various properties, etc. was required to be followed and ultimately, on winding up of the society, the society would lose its existence. Even this factual aspect was not asserted. If the society loses its existence then perhaps the Suit itself may not survive and the question of bringing on record the liquidator may, therefore, have a bearing on this fact. Further, Section 111 contemplates an appeal against the order passed under sub-section (3) of Section 107 of the Act. Even that fact was not brought on record of the Trial Court and Section 114 prescribes the aggregate duration for which the winding up proceedings can be alive. According to this provision, the winding up proceedings must be closed within three years from the date of the order of the winding up, unless the period is extended by the Registrar and as per the proviso to that section, Registrar is empowered to extend the period by one year at a time aggregating to seven years from the date of winding up of the society and the proviso also contemplates deemed termination of the liquidation proceedings and passing of formal order terminating the liquidation proceedings. Thus, the question as to whether the society was finally wound up or whether the period of seven years expired without winding up the society were not brought on record of the Trial Court. The appointment of the statutory authority thus depended upon this factual aspect as well.
The Court below opined that it was not necessary to decide the question as to whether, under the Act, after the expiry of term of the liquidator, the assets/liabilities vested in the Registrar, being an administrative head of the societies, on the ground that it was an academic question. I am afraid, such a finding cannot be sustained for a moment for the simple reason that it was a core question which was required to be adjudicated.
For statutory authority to come on record, legal source for such entry was necessary. A person under Order-1 Rule-10 cannot be joined for no reason. It must be shown that presence of such party was necessary or he was a proper party in the presence of whom all the issues arising in the Suit can finally be settled. Unless such finding is rendered, it was not permissible for the Court below to have joined the Registrar. Therefore, the finding of the learned Trial Judge that because the Court is invested with the power under Order-1 Rule-10 of the Code of Civil Procedure, it can suo-moto also join a person as a party is a misconception of law.
The only aspect that weighed with the trial court in joining the Registrar of the Co-operative Societies as party was that he was the administrative head of the Co-operative Societies of the State. The trial court lost sight of Section 37 of the Act which declares a society to be a body corporate and can sue and can be sued in its own name; it has perpetual succession and a common seal with power to acquire, hold and dispose of property, to enter into contract, to institute and defend suits and other legal proceedings, and to do all such things as are necessary for the purpose for which it is constituted, and as per Section 73, subject to the provisions made in the Act and Rules, the final authority of every society shall vest in the general body of members in general meeting summoned in such a manner as may be specified in the bye-laws. There are various provisions under the Act contemplating the control or supervision over the society by the Registrar or other competent officer. Subject to that general control and supervision, the society has independent existence as indicated above, and therefore, it is a legal misconception to say that because the Registrar is administrative head, he can manage the affairs of the society under the direction of the Court.
It is true that the Registrar of Co-operative Societies is administrative head but an administrative/head can exercise only those powers which are vested in it by the act to have a general supervision and control over the societies. His job is to see that the societies conduct themselves in accordance with law, and if he has reason to believe that an action is necessitated under any of the provisions of the Act under which he is entitled to take action, the Registrar can take such action and control and supervise the society. He has no authority to meddle with the affairs of the society. In the event of appointment of the liquidator, as indicated above, the property/assets/liabilities of a society shall vest in the liquidator but that is only for a period of seven years as contemplated u/s 114 of the Act. Thus, under the above provisions, the Registrar is authorised to control the affairs of the society through liquidator only for a period of seven years, and as indicated above, without ascertaining the factual position, asking him to exercise his statutory power beyond the period of seven years by court''s order would be illegal. Therefore also the impugned order cannot be sustained.
Under the above circumstances, this Court is unable to find any substance in arguments advanced by the learned counsel for the respondents that the Trial Court was justified in passing the impugned order. However, as observed in the earlier portion of this order, before moving an application for bringing on record any of the statutory authority under the Act, it will be open for the petitioners-original plaintiffs to ascertain the above relevant facts and the facts as may be advised to them and move an application afresh before the Trial Court and the Trial Court will decide the same after giving appropriate opportunity to all concerned, in accordance with law. In view of the above discussion, the petition is required to be allowed. It is, therefore, allowed. Rule is made absolute. No order as to costs.