Madan Mohan Awasthi vs Secretary Co-op. Department and Others

M.R. Sharma, J.—On January 31, 1979, the Liquidator of Chandigarh Automobile Co-operative Production cum-sale Industrial Society Ltd., Chandigarh, which was a society registered under the Punjab Co-operative Societies Act, 1961 (hereinafter referred to as the Act) passed an order against the Petitioner to the effect that he was a member of the society holding shares worth Rs. 650/

and on its liquidation was liable to pay sum of Rs. 3250/- as contribution towards the assets of the society. This figure was arrived at on the basis of Bye-Law 15 of the Society which lays down that the liability of a member shall extend to five time the value of the shares-Capital subscribed by him. This order passed by the Liquidator was approved by the authorised Registrar on April 23, 1979. The intimation about this matter was sent by post to the Petitioner on May 3, 1979. It appears that the Petitioner was not present at his house when the Postman went to deliver that letter for about six times whereafter the letter was sent back to the sender. Another intimation about the liability of the Petitioner was sent on June 14 979 and this letter was served on the Petitioner on July 5, 1979. The Petitioner filed an appeal against the order of the Liquidator as approved by the authorised Registrar which was held to be barred by time. However, on merits, the Appellate Authority made the following observations:

Unless he shows any documentary proof that he ceased to be a member of the society, he cannot absolve himself from the liability which he has to discharge. Section 59 of the Punjab Co-operative Societies Act. 1961, determines the quantum of liability of the member of the society. His share is Rs. 650/- and under bye-law of the Act ibid, the member can be assessed upto 5 times of the share value of the member. Thus according to the bye-laws framed under the Act ibid, he is liable to Rs. 3250/-

The Petitioner has come up in challenge against the order dated April 29, 1980, passed by the Appellate Authority by filing the instant petition.

The learned Counsel for the Petitioner has vehemently argued that the decision rendered by the Appellate Authority on the question of limitation was contrary to law and that it had not given any finding on the merits of the controversy. It was further submitted that the Appellate Authority, having come to the conclusion that the appeal was barred by time did not properly apply its mind to the merits of the controversy.

The first point to be considered is whether the appeal filed by the Petitioner was barred by time or not. Rule 59 of the rules made under the Act lays down that an order passed by the Liquidator against a member of the society has to be submitted by him to the Registrar for approval and becomes effective only after the said officer has accorded his approval to it. This implies that the order passed by a Liquidator does not become operative by virtue of its own force. Such an order becomes executable only after it has received that approval of the Registrar. Consequently, time for appeal begins to run from the date when the Registrar accords approval to the order passed by the Liquidator if the affected party is present before the Registrar at the time when the order is passed, or from the date when order approved by the Registrar is duly conveyed to such a party. From a perusal of the affidavit filed by the Liquidator, it becomes apparent that the Petitioner was for the first time, served about this order on July 5, 1979. The limitation for filing the appeal would accordingly start running with effect from that date. It is conceded at the Bar that if this is so, the appeal filed by the Petitioner was within time. The finding recorded by the Appellate Authority on this point is, therefore, reversed.

4 On the merits of the controversy, however, the finding recorded by the Appellate Authority is unexceptional. It was not the case of the Petitioner that he never became a member of this society, nor did he deny that he held shares worth Rs. 65/-. He only asserted on the date when the Liquidator passed the order he had ceased to be a member. On the point whether he ceased to be a member or not, he did not produce any evidence either before the Liquidator or before the Appellate Authority. I might add at this place that the Petitioner did not appear before the Liquidator inspite of service and the latter had to issue a citation in the press before passing an exparte order against him. It is also in evidence that the record of the society was in possession of the members of the Managing Committee and they did not produce it before the Liquidator inspite of many demands. The Liquidator and the Appellate Authority have determined the liability of the Petitioner on the basis of the statutory bye-law and while exercising this jurisdiction, it is not open to me to interfere with this determination. The finding regarding the liability of the Petitioner is, therefore, affirmed subject to the observation which follows hereinafter.

In his grounds of appeal, it is claimed on behalf of the Petitioner that some members of the society had been exonerated of the liability on the ground that they had ceased to be members thereof on the date when the society went into liquidation On this point no finding has been recorded by the Appellate Authority. It is quite possible that liability of the Petitioner might come down if the total burden of the society falls on more persons than those determined by the Liquidator to be liable under the law. I, therefore, allow this petition and remand this case to the Appellate Authority for determination on merits, on the point whether the other persons exonerated by the Liquidator of the liability whose names are mentioned in the grounds of writ petition filed by the Petitioner have been rightly exonerated or not. The parties through their counsel are directed to appear before the Appellate Authority on March 23,1981. In other respects, the petition shall be deemed to have been dismissed. In view of the limited success of the petition, there shall be no order as to costs.