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Judgment
Sawant, J.—Normally this Court does not interfere with orders such as the one impugned in the present case, more so in a writ petition. However, the point which falls for consideration in the present case is of a general public importance and unless it is decided proceedings under the Maharashtra Co-operative Societies Act, 1960 (hereinafter referred to as the Act) may become a plaything in the hands of the parties interested in protracting them. The facts in the present case prove the apprehension.
The petitioner is the Official Liquidator of a Co-operative Bank called Dadhich Sahakari Bank Limited. It was registered under the Act on September 17, 1980 and commenced work from November 3, 1980. Respondents Nos. 1 to 15 to the petition were the Directors of the Bank with Respondent No. 1 as the Chairman of the Board of Directors. For reasons which are as yet not known and to investigate which the present proceedings u/s 88 have been instituted the Bank functioned unsatisfactorily with the result that on July 7, 1982, i.e. within less than two years, the Board of Directors was superseded and an Administrator was appointed. Subsequently on February 14, 1984, the bank was ordered to be wound up and the present petitioner was appointed its Official Liquidator. On July 17, 1985, the petitioner made his report to the District Deputy Registrar in which, among other things, he pointed out that there was a defalcation of an amount of Rs. 8,46,251-80. In view of this report, the District Deputy Registrar, Bombay appointed Respondent No. 16 to conduct inquiry u/s 88 of the Act against the Board of Directors. The proceedings commenced on December 1, 1985. All the Directors, i.e. Respondents 1 to 15 filed their written statements. They were also represented by their lawyers. The recording of evidence commenced with examination-in-chief of the petitioner-liquidator being completed on March 15, 1986 prior to the framing of the charge. The proceedings were thereafter adjourned to June 7, 1986 on which day the petitioner adopted his evidence recorded prior to the framing of charge. He was cross-examined by the lawyer of Respondent No. 2 Shri Natekar. The lawyer for respondent No. 1 also started his cross-examination and after a part of his cross-examination was over, he applied to the Inquiry Officer, i.e., respondent No. 16 for adjournment on the ground that he was not prepared and ready to cross-examine the witness any further. He also showed his willingness to pay reasonable costs of the adjournment. Respondent No. 16 adjourned the hearing to June 14, 1986, on the condition that Respondent No. 1 paid a sum of Rs. 100/- to each of the delinquents who were present and a sum of Rs. 200/- to the claimant bank, i.e., the petitioner as the costs of adjournment. While making this order, respondent No. 16 observed that the matter was part-heard and the witness was in the box and other Advocates were not willing to cross-examine the witness unless the cross-examination on behalf of respondent No. 1 was complete. He also stated that it was difficult to adjourn the hearing as there was no other work which could be transacted.
Against this order of June 7, 1986, respondent No. 1 preferred an appeal to the Cooperative Appeal Court and the Appeal Court by its impugned order of July 25, 1986 set aside the order of costs by exercising its revisional powers. The reasons given for setting aside the order were that the order of costs had cast a very heavy burden on Respondent No. 1 inasmuch as the total costs came to Rs. 1,600/- which had caused injustice to respondent No. 1 because his lawyer was not ready to cross-examine the witness further. The Court further observed that the record did not show that the other parties were opposing the application for adjournment and hence the costs were unnecessary and also unreasonable. It is aggrieved by this order that the present petition has been filed.
The point raised before us on behalf respondent No. 1 is not so much with regard to the amount of costs but whether the Inquiry Officer had at all power to grant the costs while adjourning the matter. In this connection our attention is invited to the fact that there are no express provisions in the Act on the subject. The only provision which deals with the powers of the Inquiry Officer conducting the inquiry is contained in Section 89 of the Act which reads as follows : --
"Section 89. The Registrar or the person authorised by him, when acting u/s 83, 84 or 88 shall have the power to summon and enforce the attendance of any person (and examining him on oath or affirmation or by affidavit) or to compel the production of any document or other material object by the same means and in the same manner as is provided in the case of a Civil Court under the Code of Civil Procedure, 1908."
It is contended that this provision gives the Inquiry Officer powers under the CPC only for summoning the persons and witnesses, and for producing documents, etc. Besides these powers there is no power given to the officer either under the Act or the Rules made under the Act.
3A. According to us, besides the aforesaid provisions, the provisions of Section 88 have also a bearing on the subject. But before we deal with them, we may point out that to read the provisions of Section 89 in the narrow manner in which respondent No. 1 wants us to do will lead to startling consequences. In the first instance, it will mean that the Inquiry Officer has no power even to grant adjournments of the hearing, for there is nothing in this section which enables him to grant such adjournment. Such a construction of the said section will undoubtedly be unreasonable. If therefore the power to grant adjournment has to be read as implicit in the said provision, then the terms and conditions on which the adjournment may be granted has also to be read into it. Thus read, there should be no difficulty in holding that the Inquiry Officer will have the power to grant costs, if necessary, for adjourning the hearing before him. What is more, when a party appears in the proceedings, he is supposed to be ready to render his assistance or to defend himself. When therefore the provisions of Section 89 give the Inquiry Officer the same powers as are given to the Civil Court under the CPC to enforce the attendance of a person and of examining him on oath, it is implicit that all the powers which the Civil Court exercises in making that power effective would be available to him. Order XVII of Civil P.C. deals with adjournments of hearings. Sub-clause (2) of Rule 1 of the said order empowers the Civil Court to make an order with respect to the costs occasioned by the adjournment. There is no reason why this power of granting costs occasioned by the adjournment at the instance of a party should not be read into the power of summoning and compelling the attendance of the witness or any person etc. which is explicitly given by Section 89. We are, therefore, satisfied that even u/s 89 the Inquiry Officer has the power not only to grant adjournment but also to grant costs of adjournment if necessary.
But besides Section 89, as stated earlier. Section 88 itself also confers powers on the Inquiry Officer to grant not only adjournments but also costs of adjournments. Section 88 gives power to the officer to conduct misfeasance proceedings against the persons concerned. The proceedings are quasi-criminal in nature in that if the charges framed are proved the persons concerned are saddled with a penal liability, though civil in nature. The Officer has therefore to conduct the inquiry as a full-fledged trial in conformity with the principles of natural justice. Hence he must have all powers necessary to conduct and complete the inquiry expeditiously. In the course of the inquiry further, he may have to pass several orders from time to time, including orders for adjournment for one reason or the other. Sub-section (2) of Section 88 gives specific powers for granting costs while making any order under the section. There is no reason to exclude either the order of adjournments or costs of such adjournments from the provisions of the said sub-section. Thus both, under Sections 88 and 89, the Officer has power to grant both adjournments and the costs of adjournments.
This however leaves us still with the question as to whether the particular order for costs made by the Inquiry Officer in the present case was reasonable. As stated at the outset this Court does not normally interfere with the orders of costs. It however appears that for want of guidelines on the subject the Inquiry Officer has granted costs quite arbitrarily. As the lower Appellate Court has observed, the record does not show that any of the parties were opposed to the granting of adjournment. That was therefore one of the factors the Inquiry Officer ought to have taken into consideration before directing respondent No. 1 to pay the costs to each of the delinquents. Further respondents 2 to 15 had more or less a common cause with respondent No. 1. It however, appears that the petitioner was all along opposed to the granting of adjournment to the respondents. Costs in favour of the petitioner would have met the ends of justice and it was therefore unnecessary to grant costs to the other contesting respondents. We will therefore modify the order passed both by the Appellate Court as well as the Inquiry Officer and direct that the. Inquiry Officer''s order of costs of Rs. 200/- in favour of the petitioner Bank will stand and respondent No. 1 should pay the said costs to the petitioner. The order of costs in favour of the other respondents is however quashed as the lower Appellate Court has done and we do not wish to interfere with that part of the order. The rule is made absolute as above with no order as to costs.