P.P. Raman Menon vs The State of Madras and Others

Rajagopala Ayyangar, J.—This is a petition for the issue of a writ of certiorari, to quash an order passed by the State of Madras, in its

Department of Industries, Labour and Co-operation. The order was passed u/s 57 of the Madras Co-operative Societies Act, in these

circumstances.

The petitioner was the Secretary of a Producer Gum Consumer Co-operative Society in Ponnani, Malabar District. He occupied this post on

various dates from 26th August, 1946 to 28th December, 1948. During this period, he was stated to have been guilty of misappropriation of some

amounts belonging to the society by using forged and irregular vouchers, in conspiracy with an accounts clerk of the same society. On the basis of

these allegations, an application was made by the President of the Society to the Registrar, for arbitration u/s 51 of the Cooperative Societies Act.

The amount claimed by the society as having been lost to it by this misappropriation, was a sum of Rs. 4,567-2-7. In proof of and as evidence of

this misappropriation, the society filed before the arbitrator 82 vouchers whose authenticity, as well as propriety were disputed by the society. The

arbitrator went into the dispute, and by his award held that 74 of these vouchers related to a period beyond 2 years covered by the proviso to

Rule 15(1) of the Rules made under the Co-operative Societies Act, which prescribes a period of 2 years for a claim by the society against a past

officer or servant. In regard to the other 8 of the vouchers, the arbitrator held that the society might prefer a separate claim in regard thereto, and

seek a separate reference.

The society took the matter in an appeal to the Collector who was the District Registrar u/s 51 of the Act. The Collector by his order, dated

19th March, 1953, dismissed this appeal. The society thereupon filed before the Government, a revision u/s 57 of the Act, and this is the order

which has been passed in this revision petition, which is the subject-matter of this writ petition. By this order, now impugned, which was passed on

15th September, 1954, the Government have held that the period of limitation applicable for the claims made by the society against the petitioner

was not 2 years as he contended, but that a fraud had been committed by him which was not within the knowledge of the society and which, it

stated, enlarged the period of limitation by the application of the principle contained in Section 18 of the Limitation Act. On this ground, the

Government held that the entire claim was within time. As a result of this finding it set aside the order of the arbitrator and Registrar, and remanded

the reference to the arbitrator, to be disposed of in accordance with law.

It is the validity and legality of this order that is challenged in this writ petition. Mr. Sundara Iyer, learned Counsel for the petitioner, has urged

before me various grounds. But as I find that one of the grounds taken by him is well-founded, I do not think it necessary to even set out the other

grounds urged.

The order now impugned starts its preamble by stating that the order was passed after considering (1) the petition from the President of the

Ponnani Producers Cum Consumer''s Society, dated 28th May, 1953, i.e., the revision petition to Government by the society; and (2) from the

Collector of Malabar, Ar. 2/6065/53 CS. dated 1st August, 1953. The Collector here referred to was the appellate authority who had disposed of

the appeal by the society from the orders of the arbitrator. It is therefore clear, to start with, that the Government had referred the matter to the

Collector, and had considered some communication from him before passing the order which they passed. The matter is made more than clear by

a subsequent passage in the same order where, before starting the operative part of it, Government say,

The Government have examined the contentions of the petitioner, in consultation with the Collector of Malabar and in the light of the explanation of

the respondents and pass the following orders.

It is therefore proved beyond doubt that the order which they have passed u/s 57, they did after consultation with the Collector. He was certainly

an external authority, who should not have been consulted before the Government exercised their statutory powers u/s 57. Under this provision

they are performing quasi-judicial functions, and no quasi-judicial authority can take into consideration the opinions of any external authority, unless

the statute makes provision therefore. If therefore, the order of the Government had been passed after taking into account a communication from

the Collector, and as the order itself says, ""in consultation with the Collector"", the order cannot stand. In this view, which I have taken of the

legality of this order, it is not, necessary as I have said before, to deal with the other contentions raised regarding the validity of this order.

As the order was one passed not strictly in terms of Section 57 of the Co-operative Societies Act, this order has to be quashed. The rule is

therefore made absolute and the order of Government, dated 15th September, 1954, G.O. Ms. No. 2525 is set aside. The Government will

consider the matter strictly in accordance with the terms of Section 57 of the Act. The first respondent will pay the petitioner''s costs. Counsel''s

fee Rs. 100.