IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL No. 383 of 2010 In SPECIAL CIVIL APPLICATION No. 9849 of 2009 For Approval and Signature:
HONOURABLE THE CHIEF JUSTICE MR.BHASKAR BHATTACHARYA HONOURABLE MR.JUSTICE J.B.PARDIWALA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= JAGDISHBHAI ISHWARBHAI ROCHANI - Appellant(s) Versus COSMOS COOPERATIVE BANK LTD & 2 - Respondent(s) ========================================================= Appearance :
MR DHAVAL D VYAS for Appellant(s) : 1, MR GM JOSHI for Respondent(s) : 1, NOTICE SERVED BY DS for Respondent(s) : 2, MR SAURABH G AMIN for Respondent(s) : 3, ========================================================= CORAM :
HONOURABLE THE CHIEF JUSTICE MR.BHASKAR BHATTACHARYA and HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 26/09/2012 CAV JUDGMENT (Per : HONOURABLE MR.JUSTICE J.B.PARDIWALA) The present Appeal is at the instance of the original petitioner, a debtor, and is directed against the order dated 3rd December 2009 passed by a learned Single Judge of this Court in Special Civil Application No.9849 of 2009 and thereby the learned Single Judge rejected the writ-petition preferred by the appellant herein, challenging the notice dated 11th September 2009 issued by the respondent – Bank with regard to auction of the property mortgaged with the respondent – Bank in the year 1999 while availing of a loan facility to the tune of Rs.7 lac.
Facts relevant for the purpose of deciding this Appeal may be summarised as under :
(1) In the year 1999, the father of the appellant had availed of a cash credit facility from a cooperative bank registered under the Gujarat Cooperative Societies Act, 1961 (hereinafter referred to as, 'the Act of 1961') named Unnati Cooperative Bank Limited to the tune of Rs.7 lac.
(2) The appellant herein stood as a guarantor, and by way of security, mortgaged the property with the bank, being Shop No.13, admeasuring 31.78 sq.meters, situated at Bank Road, Mandvi, Vadodara.
(3) As the father of the appellant was unable to repay the outstanding amount availed under the cash credit facility, the Bank preferred a Lavad Suit No.251 of 2003 against the appellant and others under Section 96 of the Act of 1961.
(4) It appears as the record reveals that the aforesaid Lavad Suit was not contested, and on 4th August 2003, a consent award was passed, by which, the appellant and others were directed to pay a sum of Rs.10,41,746=00 to the Bank.
(5) Record also reveals that after the passing of the consent award, an amount of Rs.2,61,000=00 was paid to the Bank and the Bank was also requested for payment of the balance amount in monthly installment of Rs.15,000=00 each..
(6) It appears that the Bank acceded to the request of the appellant to make payment of the balance amount in monthly installment of Rs.15,000=00 and, accordingly, thereafter a further sum of Rs.2,30,000=00 was paid in installments.
(7) Record further reveals that on 10th April 2006 one Minesh Bhalchandra Pathak, Branch Manager of the bank was appointed as Special Recovery Officer under the provisions of the Act of 1961.
(8) As there was default in making monthly installment payment as agreed upon by the Bank, the possession of the mortgaged property was taken over by the Bank on 10th May 2006.
(9) It appears that thereafter a major development took place. On 18th June 2006, Unnati Cooperative Bank Limited, a Bank registered under the Gujarat Cooperative Societies Act, 1961, got merged with Cosmos Cooperative Bank Limited, a Multi Schedule Bank registered under the Multi-State Cooperative Societies Act, 2002 (hereinafter referred to as, 'the Act of 2002').
(10) Record further reveals that on 9th September 2009, the appellant preferred a representation to the Bank, namely, Cosmos Cooperative Bank Limited, pointing out that extensive damaged has been caused to the furniture, fixtures and stock lying in the property in question i.e. the shop. The appellant also showed his willingness to make the payment of the balance amount as was due and payable at the time of taking of possession of the mortgaged property.
(11) On 11th September 2009, the Bank i.e. Cosmos Cooperative Bank Limited, Pune, issued a public notice of auction in exercise of powers under Section 159 of the Act of 1961 read with Rule 96 of the Gujarat Cooperative Societies Rules, through its authorized officer.
(12) The auction notice dated 11th September 2009 issued by the Cosmos Cooperative Bank Limited in exercise of powers under Section 159 of the Act of 1961 was challenged by the appellant herein by filing Special Civil Application No.9849 of 2009, substantially on the ground that the appellant had obtained loan from Unnati Cooperative Bank Limited, a Bank registered under the Act of 1961 and the said Bank was taken over by a Multi- State Bank and, therefore, after the merger the provisions of a Multi-State Cooperative Societies Act, 2002 would apply and a Multi-State Bank would not be entitled to take resort to the provisions of Section 159 of the Act of 1961 and could take resort only to the provisions of the Act of 2002. The second ground of challenge in the main writ petition was that once the possession of the property is already taken over, the Bank is not entitled to charge interest and the inclusion of interest amount in the total outstanding amount would be an illegal act on the part of the Bank.
The main writ-petition was adjudicated by a learned Single Judge of this Court, and by an order dated 3rd December 2009, the learned Single Judge thought fit to reject the petition, holding that Section 17(4) of the Act of 1961 would save the situation for the Bank as the section itself provides for continuation or commencement of the proceedings, whereby the rights of the society merged as also the rights of the transferee society are saved. The learned Single Judge took the view that if the award or the certificate is obtained under the State Act by Unnati Cooperative Bank Limited then even after the merger, the enforcement under the State Act was permissible to the Multi-State Cooperative Bank.
Being dissatisfied, the appellant – original petitioner has come up with this Appeal under Clause 15 of the Letters Patent.
I. Contentions on behalf of the Appellant :
Mr.Dhaval D.Vyas, learned counsel appearing for the appellant, vehemently submitted that the learned Single Judge committed a serious error in holding that Section 17(4) of the Act of 1961 provides for continuation or commencement of the proceedings and saves the rights of the society, which has merged and also the rights of the transferee society.
Mr.Vyas submitted that the learned Single Judge committed a serious error in taking the view that if an award or a certificate has been obtained by a cooperative bank registered under the Act of 1961, then even after the merger of the bank registered under the Act of 1961 with a Multi-State Cooperative Bank registered under the Act of 2002, the enforcement of a decree obtained under the State Act of 1961 was permissible to the Multi-State Cooperative Bank.
According to Mr.Vyas, Section 17(1) of the Act of 1961 provides for a 'Society' to be amalgamated with another 'Society' subject to the provisions of the Rules and previous sanction of the Registrar, by a resolution passed by 2/3rd majority of Members present and voting at a special general meeting. Section 2(19) defines 'Society' to mean, 'Cooperative Society' registered or deemed to be registered under 'this Act'. Section 17(4) provides for commencement or continuation of proceedings by such amalgamated/new/ transferee society by the event of amalgamation, transfer, division or conversion made under 'this Section' i.e. Section 17. Therefore, according to Mr.Vyas, in substance, Section 17(4) could be resorted to, provided that the amalgamation or merger is under Section 17(1) read with Section 2(19) of the State Act.
Mr.Vyas submitted that the learned Single Judge ought to have appreciated an important question of law that the word 'Society' has been defined under the Act of 1961, wherein in a definition section of a statute, a word is defined to mean a certain things, wherever that word is used in that statute, it shall mean what is stated in the definition. The main plank of Mr.Vyas submission is that the term 'under this Act' in Section 17(4) would have to mean under Section 17 of the Act of 1961.
Mr.Vyas submitted that unless the essential requisites under Section 17(1) are complied with, resort to Section 17(4) would not be permissible. Mr.Vyas would contend that by effect of Section 20 of the Act of 1961, the legal existence of a State Cooperative Society would stand cancelled and there upon would seize to be a body corporate under Section 37, not to be entitled to institute and defend suits or other legal proceedings. If the interpretation of the term 'Society' as appearing under Section 2(19) of the Act of 1961 is to include a Multi-State Cooperative Society, then under such circumstances, the term 'Registrar' and 'subject to provisions of the Rules' will have to be given a wider meaning so as to include 'Registrar' under the Multi-State Cooperative Societies Act, 2002 which would change the entire complexion and scope of the provision.
Mr.Vyas would contend that if a Multi-State Cooperative Society is permitted to continue the proceedings under the State Act, the effect would be to grant a State Act an extra territorial operation and the Multi-State Cooperative Societies would be regulated by the State Cooperative Societies Act. If so, a Multi-State Cooperative Society would be subject to regulation by the Registrar of the State, which is otherwise not permissible.
Mr.Vyas submitted that it is true that the meaning of a word or expression defined may have to be departed from on account of the subject or context in which the word had been used and that will be giving effect to the opening sentence in definition section, namely, 'unless the context otherwise requires'. In view of this qualification, the Court has not only to look at the words but also to look at the context, the collocation and the object of such words relating to such matters and interpret the meaning intended to be conveyed by the use of a word in a particular section. But, where there is no obscurity in the language of the section, there is no scope for the application of the rule Ex Visceribus Actus. This rule is never allowed to alter the meaning of what is of itself clear and explicit. According to Mr.Vyas, the language of Section 2(19) of the Act of 1961 is very clear and explicit and, therefore, there is no question of altering the meaning so as to include or read Multi-State Cooperative Society also in Section 2(19). Mr.Vyas further submitted that the Gujarat Cooperative Societies Act is of the year 1961, whereas the Multi-State Cooperative Societies Act is of the year 2002. Therefore, at the time the Gujarat Cooperative Societies Act, 1961 was enacted, obviously the Legislature could never have intended a society proposed to be registered under some future Act to be covered. The Legislature was clearly emphasizing while defining the term 'Society', to mean 'a Cooperative Society registered or deemed to be registered under the Act of 1961'.
Mr.Vyas, therefore, urged that the Appeal deserves consideration, and prayed to set-aside the order passed by the learned Single Judge.
Mr.Vyas, in support of his contentions, relied upon the following decisions of the Supreme Court :
(1) Commissioner of Income-tax West Bengal, Calcutta v/s.
Benoy Kumar Sahas Roy, reported in AIR 1957 SC 768;
(2) The Shamrao Vithal Co-operative Bank Limited v/s. Kasargode Panduranga Mallya, reported in AIR 1972 SC 1248;
(3) Naresh Shankar Srivastava v/s. State of U.P. and others, reported in AIR 2009 SC 2450;
(4) Apex Co-operative Bank of Urban Bank of Maharashtra and Goa Limited v/s. Maharashtra State Co-operative Bank Limited and others, reported in AIR 2004 SC 141;
(5) State of Kerala and others v/s. Dr.S.G.Sarvothama Prabhu, reported in (1999)2 SCC 622;
(6) Nasiruddin and others v/s. Sita Ram Agarwal, reported in (2003)2 SCC 577.
II. Contentions on behalf of the respondent – Bank.
Mr.G.M.Joshi, learned counsel appearing for the Bank, vehemently submitted that a purposeful meaning is required to be attached to the definition of 'Society' under the Gujarat Cooperative Societies Act, 1961 so as to include a Multi-State Cooperative Society registered under the Multi-State Cooperative Societies Act, 2002.
According to Mr.Joshi, Section 2(19) of the Act of 1961 deserves to be given a contextual interpretation in view of the opening words to Section 2, namely, 'unless the context otherwise requires' and, therefore, on a purposeful reading, a Multi-State Cooperative Society should be read into the definition of the term 'Society' as provided in Section 2(19) of the Act of 1961.
According to Mr.Joshi, the Cosmos Bank was, at one point of time, a bank registered under the Cooperative Societies Act of the State of Maharashtra. At a later stage, it derived the status of being a Multi-State Cooperative Bank under the provisions of the Multi-State Cooperative Societies Act, 2002. The main plank of Mr.Joshi's submission is that a society whose registration is cancelled under the State Cooperative Societies Act, even then such a society should be read into the definition of Section 2(19) of the Act of 1961, which defines the term 'Society'. Mr.Joshi submitted that on 18th June 2006, Unnati Cooperative Bank Limited registered under the Act of 1961 was merged with the respondent Bank, which is a Multi-State Cooperative Bank. Not only that, possession of the property was also taken over on 10th May 2006 in the process of execution of a decree under the provisions of the Act of 1961. Mr.Joshi submitted that after the merger, the decree would remain a decree under the Act of 1961 and would be required to be executed in accordance with the provisions of the Act of 1961. Mr.Joshi submitted that in the present case there is no challenge to the legality and validity of the merger. According to Mr.Joshi, if the contention as canvassed by Mr.Vyas appearing for the appellant is accepted, it will result into chaos and anarchy inasmuch as the decree passed under the State Act would seize to be executable once a bank registered under the Gujarat Cooperative Societies Act, 1961 merges with a bank, which is a Multi-State Cooperative Bank, registered under the Multi-State Cooperative Societies Act, 2002. Mr.Joshi would contend that the interpretation of Section 17(4) as made by the learned Single Judge in its order is the correct interpretation being meaningful and in consonance with Section 17(4) of the Act of 1961.Mr.Joshi submitted that even by virtue of Ninety- Seventh Constitutional Amendment, the term 'Cooperative Society' as defined would have to be considered and the definition of the term 'Cooperative Society' as provided under the Ninety-Seventh Constitutional Amendment is wide enough to take within its ambit 'a Multi-State Cooperative Society'. Mr.Joshi, relying on Commentary from Craies on Legislation (Chapter XXI), contended that the meaning and intention of the Legislature must govern, and these are to be ascertained not only from the phraseology of the provision, but also by considering its nature, its design and the consequences which would follow from construing it one way or the other.
Mr.Joshi, in support of his contentions, relied upon the following decisions of the Supreme Court :
(1) The Vanguard Fire and General Insurance Company Limited, Madras v/s. M/s.Fraser and Ross and another, reported in AIR 1960 SC 971;
(2) Pushpa Devi and others v/s. Milkhi Ram (Dead) By his Lrs, reported in (1990)2 SCC 134.
III. Rejoinder of the Appellant to the submissions made on behalf of the Respondent – Bank :
Mr.Vyas, in rejoinder, submitted that the submissions made on behalf of the Bank as regards the Ninety-Seventh Constitutional Amendment would not be tenable as the Ninety- Seventh Constitutional Amendment would not apply to a merger effected in 2006, and in any view of the matter, Article 243ZT would not be applicable on the date of hearing, more particularly, when the State Government has yet to carry out the necessary amendments under the Act. According to Mr.Vyas, under Article 243ZH(c), 'a Cooperative Society' is defined to be 'a Society registered or deemed to be registered under any law relating to Cooperative Societies for the time being in force in any State'. Article 243ZH(d) defines 'Multi- State Cooperative Society' to mean, 'a Society with objects not confined to one State and registered or deemed to be registered under any law for the time being in force relating to such cooperative. Thus, according to Mr.Vyas, there is a conscious distinction drawn by the Legislature while defining a Cooperative Society and a Multi-State Cooperative Society and, therefore, a Multi-State Cooperative Society could not be read into the term 'Cooperative Society'. Mr.Vyas also submitted that Section 17(2) providing amalgamation under the Multi- State Cooperative Societies Act, makes a conscious omission of the term 'Cooperative Society', which is provided under Section 17(1)(a), which provides for transfer by the Multi-State Cooperative Society. Mr.Vyas submitted that the Reserve Bank of India Circular of February 2005 also supports the contention that neither of the Acts specifically provide for such amalgamation/merger and clarifies that the Reserve Bank of India would only be considering the financial and public interest aspects.
So far as the submission of Mr.Joshi as regards the difficulties which the respondent Bank would face if the contention of the appellant is accepted is concerned, Mr.Vyas submitted that the interpretation of a Statute would have to be made irrespective of the consequences, and the resultant effect of such interpretation may not weigh with the Court.
We have bestowed our thoughtful consideration to the submissions made on either side.
Before we proceed to enter into the merits of the submissions made on either side, it would be profitable and also necessary to look into various provisions of the Gujarat Cooperative Societies Act, 1961 as well as the Multi-State Cooperative Societies Act, 2002.
RELEVANT PROVISIONS OF THE GUJARAT COOPERATIVE SOCIETIES ACT, 1961
“Sec.1.: Short title, extent and commencement
(1) This Act may be called the Gujarat Co-operative Societies Act, 1961.
(2) It extends to the whole of the State of Gujarat.
(3) It shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint.
Sec.2(17). 'Registrar' means a person appointed to be the Registrar of Co-operative Societies under this Act; and includes to the extent of the powers of the Registrar conferred on any other person under this Act, such person and includes an Additional or Joint Registrar.
Sec.2(19). 'Society' means a co-operative society registered, or deemed to be registered, under this Act.
Sec.17. Amalgamation, transfer, division or conversion of societies
(1) Subject to the provisions of the rules and the previous sanction of the Registrar a society may, by resolution passed by two-third majority of the members present and voting at a special general meeting held for the purpose, decide -
(a) to amalgamate with another society;
(b) to transfer its assets and liabilities, in whole or in part, to any other society;
(c) to divide itself into two or more societies;
(d) to convert itself into another class of society; or
(e) to change its objects.
(2) Where the amalgamation, transfer, division or conversion referred to in sub-section (1) involves a transfer of the liabilities of society to any other society, the Registrar shall not sanction the resolution of the society unless he is satisfied that -
(i) the society, after passing such resolution, has given notice thereof in writing to all its members, creditors and other persons whose interests are likely to be affected (hereinafter, in this section referred to as 'other interested persons'), giving them the option, to be exercised within one month from the date of the receipt of such notice, of becoming members of any of the new societies, or continuing their membership in the amalgamated or converted society, or of withdrawing their investments in its shares, their deposits and loans and demanding payment of their other dues, if any.
(ii) all the members and creditors and other interested persons, have assented to the decision, or are deemed to have assented thereto by having failed to exercise the option within the period specified in clause (i), and
(iii) all claims of members and creditors and other interested persons, who exercise the option within the period specified, have been met in full.
(3) xxx xxx xxx
(4) The amalgamation, transfer, division or conversion made under this section shall not affect any right or obligation of the societies so amalgamated, or of the society so divided or converted, or of the transferee, or render defective any legal proceedings which might have been continued or commenced by or against the societies which have been amalgamated, or divided or converted; and accordingly such legal proceedings may be continued or commenced by or against the amalgamated society, the converted society, the new societies or the transferee, as the case may be.
Sec.20. Cancellation of registration.
(1) The Registrar shall make an order cancelling the registration of a society if it transfers the whole of its assets and liabilities to another society, or amalgamates with another society, or divides itself into two or more societies, or if its affairs are wound up or it has not commenced business within a reasonable time of its registration or has ceased to function.
(2) An order made under sub-section (1) shall be published in the Official Gazette.
(3) The society shall, from the date of such order of cancellation be deemed to be dissolved and shall cease to exist as a corporate body.
Sec.37. Societies to be bodies corporate.
A society on its registration shall be a body corporate by the name under which it is registered, with perpetual succession and a common seal and 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.
Sec.159. Registrar's powers to recover certain sums by attachment and sale of property.
(1) The Registrar or any officer subordinate to him and empowered by him in this behalf may, subject to such rules as may be made by the State Government but without prejudice to any other mode of recovery provided by or under this Act, recover -
(a) any amount due under a decree or order of a Civil Court obtained by a society,
(b) any amount due under a decision, award or order of the Registrar, his nominee or the Board of Nominees or Liquidator or Tribunal,
(c) any sum awarded by way of costs under this Act,
(d) any sum ordered to be paid under this Act as a contribution to the assets of the society, together with interest, if any, due on such amount or sum and the costs of recovering the same by the attachment and sale or by sale without attachment of the property of the person against whom such decree, decision, award or order has been obtained or passed.
(2) The Registrar or the officer empowered by him shall be deemed when exercising the powers under sub-section
(1) or when passing any order on any application made to him for such recovery, to be a Civil Court for the purposes of article 182 in the First Schedule to the Indian Limitation Act, 1908 (IX of 1908).
Sec.163. Branches etc. of societies outside the State.
(1) No society shall open a branch or a place of business outside the State of Gujarat, and no co-operative society registered under any law in any other State shall open a branch or a place of business in the State of Gujarat without the permission of the Registrar.
(2) Every co-operative society registered under any law in any other State and permitted to open a branch or a place of business in the State of Gujarat under sub- section (1) or which has a branch or a place of business in the State of Gujarat at the commencement of this Act shall, within three months from the date of the opening of such branch or place of business or from the date of the commencement of this Act, as the case may be, file with the Registrar a certified copy of the bye-laws and amendments and if these be not in English, a certified translation thereof in English or Hindi and shall submit to the Registrar such returns and information as are submitted by similar societies registered under this Act in addition to those which may be submitted to the Registrar of the State where such society is registered.
(3) The provisions of sub-section (1) and (2) shall not apply to co-operative societies to which the provisions of the Multi-Unit Co-operative Societies Act, 1942 (VI of 1942) applies.
(4) Nothing in sub-section (1) shall affect a society which has a branch or a place of business outside the State of Gujarat at the commencement of this Act.
RELEVANT PROVISIONS OF THE MULTI-STATE COOPERATIVE SOCIETIES ACT, 2002
The Multi-State Cooperative Societies Act, 2002 came to be enacted to consolidate and amend the law relating to co- operative societies, with objects not confined to one State and serving the interests of members in more than one State, to facilitate the voluntary formation and democratic functioning of co-operatives as people's institutions based on self-help and mutual aid and to enable them to promote their economic and social betterment and to provide functional autonomy and for matters connected therewith or incidental thereto.
Sec.3(h). 'Co-operative Society' means a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State.
Sec.3(p). 'Multi-State Co-operative Society' means a society registered or deemed to be registered under this Act and includes a national co-operative society and a federal co- operative;
Sec.17. Amalgamation or transfer of assets and liabilities, or division of Multi-State Co-operative Societies
(1) A Multi-State Cooperative Society may, by a resolution passed by a majority of not less than two-thirds of the members, present and voting at a general meeting of the society held for the purpose,-
(a) transfer its assets and liabilities in whole or in part to any other Multi-State Cooperative Society or Cooperative Society;
(b) divide itself into two or more Multi-State Cooperative Societies;
(c) divide itself into two or more cooperative societies.
(2) Any two or more Multi-State Cooperative Societies may, by a resolution passed by a majority of not less than two- third of the members present and voting at a general meeting of each such society,amalgamate themselves and form a new Multi-State Cooperative Society.
(3) The resolution of a Multi-State Cooperative Society under sub-sec. (1) or sub-sec. (2) shall contain all particulars of the transfer or division or amalgamation, as the case may be.
(4) When a Multi-State Cooperative Society has passed a resolution under sub-sec. (1) or sub-sec. (2), it shall give notice thereof in writing to all the members and creditors, and, notwithstanding anything contained in the bye-laws or contract to the contrary, any member or creditor shall, during the period of one month of the date of service of the notice upon him, have the option of withdrawing his shares, deposits or loans, as the case may be.
(5) Any member or creditor who does not exercise his option within the period specified in sub-sec. (4) shall be deemed to have assented to the proposals contained in the resolution.
(6) (a) A resolution passed by a Multi-State Cooperative Society under this section shall not take effect until the assent thereto of all the members and creditors has been obtained.
(b) The Multi-State Cooperative Society shall make arrangements for meeting in full or otherwise satisfying all claims of the members and creditors who exercise the option within the period specified in sub-sec. (4).
(7) On receipt of an application for the registration of new societies formed by division in accordance with the resolution passed under sub-sec. (1) or of a new society formed by amalgamation in accordance with the resolution passed under sub-sec. (2), the Central Registrar, on being satisfied that the resolution has become effective under sub-sec. (6) shall, unless for reasons to be recorded in writing he thinks fit to refuse so to do, register the new society or societies, as the case may be, and the bye-laws thereof.
(8) On the issue of an order under sub-sec. (7), the provisions of Sec.21 shall, so far as may be, apply to the Multi-State Cooperative Society so divided or the Multi- State Cooperative Societies so amalgamated.
(9) Where a resolution passed by a Multi-State Cooperative Society under this section involves the transfer of any assets and liabilities, the resolution shall, notwithstanding anything contained in any other law for the time being in force, be a sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance.
“THE CONSTITUTION (NINETY SEVENTH AMENDMENT) ACT, 2011 [12th January, 2012.] An Act further to amend the Constitution of India.
BE it enacted by Parliament in the Sixty-second Year of the Republic of India as follows:—
1. (1) This Act may be called the Constitution (Ninety- seventh Amendment) Act, 2011.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
2. In Part III of the Constitution, in article 19, in clause (1), in sub-clause (c), after the words “or unions”, the words “or co-operative societies” shall be inserted.
3. In Part IV of the Constitution, after article 43A, the following article shall be inserted, namely :-
“43B. The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies.”
4. After Part IXA of the Constitution, the following Part shall be inserted, namely :-
“PART IXB THE CO-OPERATIVE SOCIETIES 243ZH. In this Part, unless the context otherwise requires, —
(a) "authorised person" means a person referred to as such in article 243ZQ;
(b) "board" means the board of directors or the governing body of a co-operative society, by whatever name called, to which the direction and control of the management of the affairs of a society is entrusted to;
(c) "co-operative society" means a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State;
(d) "multi-State co-operative society" means a society with objects not confined to one State and registered or deemed to be registered under any law for the time being in force relating to such co- operatives;
(e) "officer bearer" means a President, Vice-President, Chairperson, Vice-Chairperson, Secretary or Treasurer of a co-operative society and includes any other person to be elected by the board of any co- operative society;
(f) "Registrar" means the Central Registrar appointed by the Central Government in relation to the multi- State co-operative societies and the Registrar for co-operative societies appointed by the State Government under the law made by the Legislature of a State in relation to co-operative societies;
(g) "State Act" means any law made by the Legislature of a State;
(h) "State level co-operative society" means a co- operative having its area of operation extending to the whole of a State and defined as such in any law made by the Legislature of a State.
243ZI. Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the incorporation, regulation and winding up of co-operative societies based on the principles of voluntary formation, democratic member-control, member-economic participation and autonomous functioning.
243ZT. Notwithstanding anything in this Part, any provision of any law relating to co-operative societies in force in a State immediately before the commencement of the Constitution (Ninety-seventh Amendment) Act, 2011, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is less.”
We may also look into the Circular issued by the Reserve Bank of India in February 2005 so far as the aspect of merger of a Cooperative Society under the State Act with that under the Central Act is concerned. The Circular reads as under :-
“Although, there are no specific provisions in the State Acts or the Central Act for the merger of a Cooperative Society under the State Acts with that under the Central Act, it is felt that, if all concerned including administrators of the concerned Acts are agreeable to order merger/amalgamation, the RBI may consider proposals on merits leaving the questions of compliance with relevant statutes to the administrators of the Acts. In other words, Reserve Bank will confine its examination only to financial aspects and to the interest of depositors as well as the stability of the financial system while considering such proposals”
Having heard learned counsel for the respective parties and having gone through the materials on record, the only question that falls for our consideration is as under :
“If a State Cooperative Bank registered under the Gujarat State Cooperative Societies Act, 1961 has obtained a money decree and subsequently the State Co-operative Bank merges with a Multi-State Cooperative Bank registered under the Multi-State Cooperative Societies Act, 2002, then under such circumstances, whether it is permissible for the Registrar under the Multi-State Cooperative Societies Act, 2002 to execute such a money decree under the provisions of the Gujarat State Cooperative Societies Act, 1961.”
To put it precisely, bearing in mind the facts of the present case, whether the respondent Bank herein, which is a Multi-State Cooperative Bank registered under the Act of 2002, having taken over a Cooperative Bank registered under the Act of 1961, could legally enforce a money decree under Section 159 of the State Act, which was obtained by the Cooperative Society registered under the State Act prior to its merger.
The State of Gujarat came to be formed in the year 1960 by virtue of the Bombay Reorganization Act, 1960. It consists of three regions mainly, viz., the Bombay area, the Saurashtra area and the Kutch area. The entire territory formed part of the Bombay State before its reorganization in the year 1960. Since 1st May 1960, the State of Gujarat is formed after bifurcating the State of Bombay. The remaining portion of the State of Bombay is now known as the State of Maharashtra. In the Bombay area, the Bombay Co-operative Societies Act, 1925 was in force and after formation of the Bombay State in the year 1956, for the first time in the year 1960, by Bombay Ordinance No.IV of 1960, the Bombay Co-operative Societies Act, 1925 was extended to the entire Bombay State. The said Bombay Act stood repealed by the Gujarat Cooperative Societies Act, 1961, which came into force from 1st May, 1962.
The short preamble shows that the Act was enacted to consolidate and amend the law relating to the co-operative societies in the State of Gujarat. Section 2 provides the legislative dictionary for the various terms used in the Act. Section 2 opens with the phrase 'unless the context otherwise requires'. Clause (7) thereof defines 'co-operative bank' to mean 'a society registered under this Act and doing the business of banking, as defined in clause (b) of sub-section (1) of Section 5 of the Banking Companies Act, 1949.
Section 2(19) defines 'Society'. As per the definition, 'Society' means 'a Cooperative Society, registered or deemed to be registered, under this Act'. A reference to a Society 'deemed to be registered' appears to be in the context of sub- section (2) of Section 169. Sub-section (2) of Section 169 provides as follows :
“169. Repeal, saving and construction.- (1) The Bombay Cooperative Societies Act, 1925 (VII of 1925) (hereinafter referred to as “the said Act”) is hereby repealed:
xxx xxx xxx (2) All societies registered or deemed to be registered under the said Act the registration of which was in force immediately before the commencement of this Act, shall on such commencement to be deemed to be registered under this Act; and all proceedings pending immediately before such commencement before any registrar, arbitrator, liquidator or tribunal or other officer, authority or person under the provisions of the said Act shall stand transferred where necessary, to the Registrar, arbitrator, liquidator or tribunal or other corresponding officer, authority or person under this Act and if no such officer, authority or person exists or if there be a doubt as to the corresponding officer, authority or person to such officer, authority or person as the State Government may designate and shall be continued and disposed of by such officer, authority or person in accordance with the provisions of this Act.”
Section 2(17) defines the term 'Registrar', which means 'a person appointed to be the Registrar of Cooperative Societies under this Act: and includes, to the extent of the powers of the Registrar conferred on any other person under this Act, such person and includes an Additional or Joint Registrar'. Bare reading of both the definitions would suggest that the Legislature has consciously used the words 'under this Act'. We find merit in the submission of Mr.Vyas that if the intention of the Legislature was to take within its sweep all societies under all laws relating to the Cooperative Societies in force, then there was no necessity to use the words 'under this Act'. The Legislature was clear in its intent that it is only the Cooperative Society registered under the Act of 1961 relating to Cooperative Societies which would be covered. Mr.Vyas is also right in contending that this interpretation is fortified by the fact that even Section 163 of the Act of 1961 provides that the restriction under Section 163(1) and Section 163(2) would not apply to 'Cooperative Societies' to which a Multi-Unit Cooperative Societies Act, 1942 applies [Act repealed by Section 110 of the 1984 Act]. We have noticed that Section 163 of the Act of 1961 distinctly identifies and distinguishes the terms 'Society' and 'Cooperative Society', to be registered under any law in other State to which the provisions of a Multi- Unit Cooperative Societies Act, 1942 apply.
In substance, it rules out the regulation of such Cooperative Societies incorporated under other Acts, by the Registrar under the Act of 1961 and a very conscious distinction has been made between the term 'Society' registered under the Local Act and that under a Multi-State Act. The Multi-Unit Cooperative Societies Act, 1942 terms a Multi- State Cooperative Bank to be a 'Cooperative Society', a term which is taken note of under Section 163 of the Act of 1961. It deserves to be noted that the State Act is of the year 1961, whereas the Multi-State Act is of the year 2002. Therefore, at the time the 1961 Act was enacted, obviously the Legislature could never have intended a society proposed to be registered under some future Act to be covered.
We are not at all impressed by the submission of Mr.Joshi that a purposive interpretation or a purposeful meaning should be attached to the definition of society under the Act of 1961 so as to include a Multi-State Cooperative Society by giving a contextual interpretation in view of the opening words to Section 2 of the Act of 1961. Where the intention of the Legislature is clearly to restrict the provisions of the Act of 1961 to Cooperative Societies which were registered under the Act of 1961, one cannot, by process of interpretation, expand the scope so as to even include and read a Multi-State Cooperative Society in the definition of the term 'Society' as provided under Section 2(19) of the Act of 1961.
There could not be any dispute with the proposition of law that the meaning of a word or expression defined may have to be departed from on account of the subject or context in which the word had been used and that will be giving effect to the opening sentence in definition section, namely, 'unless the context otherwise requires'. In view of this qualification, the Court has not only to look at the words but also to look at the context, the collocation and the object of such words relating to such matters and interpret the meaning intended to be conveyed by the use of the words in a particular section. But, where there is no obscurity in the language of the section, there is no scope for the application of the rule Ex Visceribus Actus. As held by the Supreme Court in Commissioner of Sales- Tax (supra), this rule is never allowed to alter the meaning of what is of itself clear and explicit.
The Court's jurisdiction to interpret a statute can be invoked when the same is ambiguous. It is well known that in a given case the Court can iron out the fabric but it cannot change the texture of the fabric. It cannot enlarge the scope of legislation or intention when the language of provision is plain and unambiguous. It cannot add or subtract words to a statute or read something into it which is not there. It cannot re-write or recast legislation. It is also necessary to determine that there exists a presumption that the Legislature has not used any superfluous words. It is well-settled that the real intention of the legislation must be gathered from the language used. The intention of the Legislature must be found out from the scheme of the Act.
At this stage, we would like to look into an important decision of the Supreme Court on the subject rendered in the case of The Shamrao Vithal Cooperative Bank Limited (supra). In that case, the appellant was a Cooperative Society registered in Bombay under the Bombay Act. The Head Office of the appellant was in Bombay and it had a branch in Mangalore. As the objects of the appellant were not confined to one State, it was governed by Multi-Unit Cooperative Societies Act, 1942, a Central Act. The appellant made a claim under Section 54 of the Bombay Act in respect of a transaction which had taken place in Mangalore against the respondent who was a resident of Kasaragod and was a Member of the appellant Society. Both Mangalore and Kasaragod were, at the relevant time, in Madras Presidency. The Deputy Registrar of Cooperative Societies, Bombay, gave an award regarding that claim. The award was sought to be executed as a decree in the Court of Subordinate Judge, Kasaragod. An objection to the execution of a decree was raised by the respondent on the ground that the Deputy Registrar of Cooperative Societies, Bombay, had no jurisdiction to pass the award and the same could not be executed as a decree in the Courts in Kerala. This objection was upheld by the Subordinate Judge and, accordingly, the execution application was dismissed. On appeal, the decision of the Subordinate Judge was affirmed by the High Court. Before the High Court, it was conceded that the appellant was governed by the provisions of the Central Act. The contention before the High Court on behalf of the appellant was that the passing of an award came within the expression 'control' occurring in sub-section (1) of Section 2 of the Central Act. This contention failed to find favour with the High Court, and the High Court accordingly dismissed the appeal. In the aforesaid background, the Supreme Court, dismissing the appeal, took the view that if the dispute between the appellant and the respondent were in respect of dealings relating to its Mangalore branch, then it is only the Registrar appointed under the Madras Act who can be said to be having jurisdiction to adjudicate the dispute. We rely on the following observations of the Supreme Court quoted hereinbelow :
“The appellant society, as would appear from the resume of facts given above, established a branch in Mangalore and had dealings there with the respondent who was a resident of Kasaragod. As the objects of the appellant society were extended to the Presidency of Madras, it should, in view of sub-section (1) of section 2 of the Central Act, be deemed to have been registered under the law in force in the Presidency of Madras relating to co-operative societies. The law which was then in force, according to Mr. Naik, was the Madras Co-operative Societies Act. 1932 (hereinafter referred to as the Madras Act). Clause (f) of section 2 of that Act defines a registered society to mean a society registered or deemed to be registered under that Act. Section 51 of the Madras Act provides inter alia that if any dispute touching the business of a registered society between a member and that society between a member and the society arises, such dispute shall be referred to the Registrar for decision. Registrar has been defined in clause (g) of section 2 of the Madras Act to mean "a person appointed to perform the duties of a Registrar of Co-operative Societies under this Act and includes a person on whom all or any of the powers of a Registrar under the Act have been conferred." It would, therefore, follow that a dispute between the appellant and the respondent in respect of its dealings relating to its Mangalore branch would normally have to be adjudicated upon by the Registrar appointed under the Madras Act. The fact that for the purpose of control, the appellant society was governed by the Bombay Act would not, in our opinion, justify a departure from the above normal rule. The word 'control' is synonymous with superintendence, management or authority to direct, restrict or regulate (See p. 442 of Words and Phrases (Vol. 9) Permanent Edition). Control is exercised by a superior authority in exercise of its supervisory power. Adjudication of disputes is a judicial or quasi-judicial function and it would, in our opinion, be unduly straining the meaning of the word 'control' to hold that it also covers the adjudication of disputes between a co-operative society and its members. There is a clear distinction between jurisdiction to decide a dispute which is a judicial power and the exercise of control which is an administrative power and it would be wrong to treat the two as identical or equate one with the other.”
One more submission was made before the Supreme Court that there was no inherent lack of jurisdiction in the Deputy Registrar appointed under the Bombay Act for adjudicating upon the dispute between the parties and that it would, at the best, a case of lack of territorial jurisdiction. Even this submission failed to find favour with the Supreme Court and the Supreme Court negatived the same by observing that there was inherent lack of jurisdiction in the Registrar appointed under the Bombay Act for dealing with the dispute arising out of the dealings of the Mangalore branch of the appellant society with the respondent. The Supreme Court proceeded to observe that the dispute between the parties as would appear from the facts could only be adjudicated upon in accordance with the provisions of the Madras Act.
We have to our advantage one more decision of the Supreme Court in the case of Apex Cooperative Bank of Urban Bank of Maharashtra and Goa (supra). In that case, the Supreme Court considered the provisions of National Bank for Agriculture and Rural Development along with the provisions of the Multi-State Cooperative Societies Act. Under Section 2(f) of the NABARD Act, a Cooperative Society is a society which is registered or deemed to be registered under the Cooperative Societies Act, 1912 or under any other law relating to Cooperative Societies for the time being in force in any State. The appellant – bank got itself registered as a Multi-State Cooperative Society under the Multi-State Cooperative Societies Act, 2002. Before the Supreme Court, it was conceded that the appellant-bank was not registered under the Cooperative Societies Act, 1912. The question which fell for consideration before the Supreme Court was that, whether the intention of the Legislature was clearly to restrict the provisions of the NABARD Act to Cooperative Societies which were registered either under the Cooperative Societies Act, 1912 or to Societies which were registered under the State laws relating to Cooperative Societies, then, whether under such circumstances, could it be said that the provisions of the NABARD Act could also be made applicable to the appellant – bank registered under the Multi-State Cooperative Societies Act. The submission before the Supreme Court was that a purposive interpretation should be given so that the definition of the term 'Cooperative Society' takes into consideration even new laws. The Supreme Court, dismissing the submission, held as under :
“28. Under the NABARD Act, a co-operative society is a society which is registered or deemed to be registered under the Co-operative Societies Act, 1912 or under any other law relating to co-operative societies for the time being in force in any State. It must be remembered that the Multi-Unit Act applied to co-operative societies registered under any Act relating to co-operative societies in force in any province. As seen above the Multi-Unit Act was clearly referring to Acts in force in the province. Now instead of the word "province" the word "State" has been used. Admittedly, the appellants are not registered under the Co-operative Societies Act, 1912. The question thus is whether they could be said to be a society registered under any other law relating to co- operative societies for the time being in force in any State. At first blush it would appear that the term "any other law relating to co-operative societies for the time being in force in any State" would include all laws relating to co-operative societies which are in force in any State. However, in that case, there would be no need to provide separately in respect of a society registered under the Co-operative Societies Act, 1912. The Co-operative Societies Act, 1912 is also a law relating to co-operative societies and it is in force in all States. Also why use the words "in any State". Mere use of the term "any other law relating to co-operative societies for the time being in force" would have been sufficient. It appears to us that the Legislature has provided separately in respect of the Co-operative Societies Act, 1912 and used the words "in any State" in order to indicate its intention that the term "any other law relating to co-operative societies for the time being in force in any State" did not include all laws relating to co-operative societies. If the intention was to rope in all societies registered under all laws relating to co-operative societies in force, then there was no necessity to use the additional words "in any State" or to separately provide for Co-operative Societies Act, 1912. As stated above, mere use of the words "any other law relating to co-operative societies for the time being in force" would have been sufficient. The legislature was clearly emphasizing that it is only co-operative societies registered under local or State laws relating to co- operative societies which would be covered. This interpretation is supported by the fact that the provision pertaining to a State co-operative bank provides for a declaration only by the State Government. If a declaration is by the State Government it must be in respect of a society which is registered in that State and which can be regulated by the Registrar of that State. A society which is registered under an Act, like the Multi- State Act, would not be under the regulation of the Registrar of the State. It was submitted that if the Legislature intended to restrict the application of NABARD Act to co-operative societies registered under local laws it would have used the words "of any State". It was submitted that the fact that the Legislature has not used the words "of any State" indicates that the co-operative society could be registered under any law in force in any State. We are unable to accept this submission. The Legislature could not have used the words "of any State". That would have meant that a co-operative society registered under a law in force in State 'A' could be considered as a co-operative society in States 'B', 'C' or 'D' also. That was not what the Legislature intended. The words "in any State" indicate that the co-operative society must be registered under the law in force in any State in which it wants to operate.
29. It must be mentioned that it was submitted by Mr. Andhyarujina that a co-operative society registered under the Co-operative Societies Act, 1912 can operate in more than one State. It was submitted that this showed that laws dealing with co-operative societies, which operate in more than one State, were meant to be covered. We are unable to accept this submission. As seen above under the provisions of the Co-opera above under the provisions of the Co-operative Societies Act, 1912 the registration could only be in one State. The Co-operative Societies Act, 1912 deals with local societies. As it was found, that even though the registration could only be in one State, the societies also operated in other States, the Legislature enacted the Multi-Unit Co-operative Societies Act, 1942 (hereinafter referred to as the Multi-Unit Act). Under the Multi-Unit Act if a society had objects not confined to one State then such a society was deemed to be registered even in other States, but for purposes of registration, control and dissolution it was the State law where it was first registered which continued to operate. Thus, after the enactment of the Multi-Unit Act it became clear that even though a society may be deemed registered under the Multi-Unit Act, but for purposes of registration, control and dissolution it continued to be bound by the law relating to co-operative societies for the time being in force in the State in which it was first registered. More importantly after the enactment of the Multi-Unit Act, the Co-operative Societies Act, 1912 only dealt with co-operative societies confined to one province. Societies with objects not confined to one province were deemed registered under the Multi-Unit Act. Thus the use of the words "Co-operative Societies Act, 1912" in the NABARD Act, also indicates that the definition is restricted to Societies registered under the law relating to co-operative societies in the State in which they want to operate. This is clear because significantly the Legislature has not provided that Societies registered under the Multi-Unit Act would be included.
30. The submission that a purposive interpretation should be given so that the definition takes into consideration even new laws cannot be accepted. Normally that is how one must interpret. However where the intention of the Legislature is clearly to restrict the provisions of the NABARD Act to co-operative societies which were registered either under the Co-operative Societies Act, 1912 or to societies which were registered under the State laws relating to co-operative societies one cannot by process of interpretation expand the scope.”
We find considerable force in the submission of Mr.Vyas that unless the requisites under Section 17(1) of the Act of 1961 are complied with, resort to Section 17(4) of the Act of 1961 would not be permissible. The words as they appear in Section 17(4) of the Act of 1961 'right to continue and commence' have to be given the same effect for interpreting the provision. Even by virtue of Section 20 of the Act of 1961, the legal existence of a State Cooperative Society would stand cancelled and there upon would cease to be a body corporate under Section 37 not to be entitled to institute and defend suits or other legal proceedings. If the interpretation of the term 'Society' as sought to be canvassed by Mr.Joshi, the learned counsel appearing for the respondent Bank, is accepted so as to include a Multi-State Cooperative Society within the definition under Section 2(19) of the Act of 1961, then under such circumstances, the term 'Registrar' and 'subject to provisions of the rules' would have to be given a wider meaning to even include the Registrar under the Multi-State Cooperative Societies Act, 2002, which would completely change the complexion and scope of the entire proceedings.
To put it differently, if the respondent Bank herein is permitted to continue the legal proceedings under the State Act of 1961 by virtue of the provisions of Section 159, the effect in substance would be to indirectly permit the State Act to have extra territorial operation and the Multi-State Cooperative Societies would be regulated by the State Cooperative Societies Act. If that be so, then a Multi-State Cooperative Society would be subjected to regulation by the Registrar of a State, which is impermissible.
We are fortified in taking the aforesaid view by a judgment of the Supreme Court in the case of Naresh Shanker Srivastave v/s. State of U.P. and others, reported in 2009 SC 2450. The observations made by the Supreme Court in paragraph 17 of the judgment are referred to and relied upon.
“17. As noted earlier, Section 95 of the Multi-State Act takes care of a situation arising out of re-organisation of States of certain class of co-operative societies. Indeed, the very rationale or legal justification of having such a provision in the statute book is to provide continuity to those co-operative societies, the objects of which were confined to one State immediately before the day on which the re-organisation takes place but as from the day of the re-organisation of the State its object extends to more than one State, by declaring that such co-operative societies shall be deemed to be a multi State co- operative societies, registered under the corresponding provisions of the Multi-State Act. The very purpose of having this kind of provision is to stop the applicability of a State Co-operative Societies Act over more than one State as a State Act cannot have extra-territorial operation and the multi-State co-operative societies cannot be regulated by a State Co-operative Societies Act.”
We are also not impressed by the submission of Mr.Joshi, learned counsel appearing for the respondent Bank, that by virtue of the Ninety-Seventh Constitutional Amendment, the term 'Cooperative Society' as may be defined should be considered, as according to Mr.Joshi, the definition of the term 'Cooperative Society' is wide enough to take in its ambit the Multi-State Cooperative Society.
First, the Ninety-Seventh Constitutional Amendment would not apply to a merger effected in 2006, and in any view of the matter, Article 243ZT would not be applicable as the State Government has till date not amended the definition of the term 'Cooperative Society' as suggested in the Constitution (Ninety Seventh Amendment) Act, 2011. On the contrary, Article 243ZT of the Ninety-Seventh Constitutional Amendment makes the position very clear. Article 243ZT is as follows :
“243ZT. Notwithstanding anything in this Part, any provision of any law relating to co-operative societies in force in a State immediately before the commencement of the Constitution (Ninety-seventh Amendment) Act, 2011, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is less.”
We are also not impressed by the submission of Mr.Joshi, the learned counsel appearing for respondent No.1 Bank that if a purposive interpretation or a purposeful meaning is not attached to the definition of the term 'Society' under the Act of 1961 so as to include a Multi-State Cooperative Society, then the same would lead to lot of difficulties and hardship on the part of the respondent No.1 Bank in recovering the dues from the petitioner. We may only say that in a case where the statutory provision is plain and unambiguous, the Court shall not interpret the same in a different manner, only because of harsh consequences arising therefrom. Reference may be made to a decision of the Supreme Court in E.Palanisamy v/s. Palanisamy, (2003)1 SCC 123, paragraph 5.
“The rent legislation is normally intended for the benefit of the tenants. At the same time, it is well-settled that the benefits conferred on the tenants through the relevant statutes can be enjoyed only on the basis of strict compliance of the statutory provisions. Equitable consideration have no place in such matters.”
Mr.Joshi also contended that the petitioner, who is a defaulter, is getting undue advantage of his own wrong and more particularly because of the merger of Unnati Cooperative Bank Limited with respondent No.1 Bank. According to Mr.Joshi, a defaulter of a bank should not be permitted to take advantage of such technicalities. We are afraid that such submission could ever be accepted. The function of the Court is to interpret law according to the intention of the Legislature and apply to facts of the case before it. Only with a view to suit the convenience of the bank, the court cannot interpret the law as suggested by Mr.Joshi. We may only say that the merger was not a subject matter of challenge in the main writ-petition, but we cannot overlook the fact that Section 17 of the Act of 2002 does not permit or empower a Multi-State Cooperative Society to take over any cooperative society.
Bare reading of Section 17 of the Act of 2002 would suggest that a Multi-State Cooperative Society may, by a resolution passed by majority of not less than two-third of the members present and voting at a general meeting of the society, transfer its assets and liabilities in whole or in part to any other multi-state cooperative society or a cooperative society; divide itself into two or more multi-state cooperative societies or divide itself into two or more cooperative societies.
This aforesaid fact is also confirmed by the Reserve Bank of India, the apex bank of this country, in its Circular dated 2nd February 2005 saying that there are no specific provision in the State Acts or the Central Act for the merger of a cooperative society under the State Acts with that under the Central Act.
We shall now look into the decisions relied upon by Mr.Joshi in support of his contentions.
In Vanguard Fire and General Insurance Company Limited, Madras (supra), the question before the Supreme Court was as to construction of the word 'insurer' as used in Sections 33(1) and 2-D of the Insurance Act, 1938, which reads as follows :
“33(1). The Central Government may, at any time, by order in writing, direct the Controller or any other person specified in the order, to investigate the affairs of any insurer and to report to the Central Government on any investigation made by him.”
“2-D. Every insurer shall be subject to all the provisions of this Act in relation to any class of insurance business so long as his liabilities in India in respect of business of that class remain unsatisfied and not otherwise provided for.”
Section 2(9) of the Insurance Act, 1938 defines an 'insurer' as a person carrying on the business of 'insurance'. The contention before the Supreme Court was that Sections 33(1) and 2-D did not apply to an insurer who had closed his business completely as the definition of the word insurer in Section 2(9) postulates actual carrying on of the business. Rejecting the above contention, the Supreme Court pointed out that in the context of Sections 33(1) and 2- D and 'taking into account the policy of the Act and the purposes for which the control envisaged by the Act was imposed on insurers', the word 'insurer' in the said Sections also refers to insurers who were carrying on the business of insurance but have closed it.
We may state that the decision of the Supreme Court in Vanguard Fire and General Insurance Company Limited, Madras (supra) was considered in the case of Apex Co-operative Bank of Urban Bank of Maharashtra and Goa Limited (supra), which we have relied upon and discussed in our judgment. The Supreme Court distinguished the decision rendered in Vanguard Fire and General Insurance Company Limited, Madras (supra) by observing as under :
“Similarly in Vanguard Fire Insurance Company's case the question was whether the word "Insurer" in Section 33 of the Insurance Act, 1938 included a company which had closed insurance business. This Court held that the word "Insurer" referred not only to a person who was actually carrying on business but also to one who has subsequently closed. Thus here also the party had actually carried on business. These are completely different situations from one where no business, of the type envisaged, has been carried on. If no business has been carried on, then mere intention to carry on in future would not bring it within the meaning of the term "carrying on business". Also as stated above to give such an interpretation would be to permit arbitrariness.”
Thus, the ratio of the decision of the Supreme Court in Vanguard Fire and General Insurance Company Limited, Madras (supra) would not be of any assistance or help to the client of Mr.Joshi.
In Pushpa Devi and others (supra), Supreme Court made the following observations in paragraphs 18, 19 and 20, which have been very heavily relied upon by Mr.Joshi. The said paragraphs read as under :
“18. It is true when a word has been defined in the interpretation clause, prima facie that definition governs wherever that word is used in the body of the Statute unless the context requires otherwise. "The context" as pointed out in the book Cross-Statutory Interpretation (2nd ed. 43) "is both internal and external". The internal context requires the interpreter to situate the disputed words within the section of which they are part and in relation to the rest of the Act. The external context involve determining the meaning from ordinary linguistic usage (including any special technical meanings) from the purpose for which the provision was passed, and from the place of the provisions within the general scheme of statutory and common law rules and principles.
19. The opening sentence in the definition of the section states "unless there is anything repugnant in the subject or context". In view of this qualification, the court has not only to look at the words but also to examine the context and collocation in the light of the object of the Act and the purpose for which a particular provision was made by the Legislature. Reference may be made to the observations of Wanchoo, J., in Vanguard Fire and General Insurance Co. Ltd.v. M/s. Fraser and Ross, (1960) 3 SCR 857 at p. 863 : (AIR 1960 SC 971 at p. 975) where the learned Judge said that even where the definition is exhaustive in as much as the word defined is said to mean a certain thing, it is possible for the word to have a somewhat different meaning in different sections of the Act depending upon the subject or context. In that case, the learned Judge examined the construction of the word 'insurer' as used in Sections 33(1) and 2-D of the Insurance Act,, 1938, in the light of the definition of that word under Section 2(9) thereof. The Insurance Act by Section 2(9) defines an 'insurer' as a person carrying on the business of 'insurance'. The question arose whether Section 33(i) and 2-D did not apply to an insurer who had closed his business completely as the definition of the word insurer in Section 2(9) postulates actual carrying on of the business. It was pointed out that in the context of Sections 33(1) and 2-D and taking into account the policy of the Act and the purposes for which the control was imposed on insurers, the word 'Insurer' in the said sections also refers to insurers who were carrying on the business of insurance but have closed it.
20. Great artistry on the Bench as elsewhere is, therefore, needed before we accept, reject or modify any theory or principle. Law as creative response should be so interpreted to meet the different fact situations coming before the court. For, Acts of Parliament were not drafted with divine prescience and perfect clarity. It is not possible for the legislators to foresee the manifold sets of facts and controversies which may arise while giving effect to a particular provision. Indeed, the legislators do not deal with the specific controversies. When conflicting interests arise or defect appears from the language of the statute, the Court by consideration of the legislative intent must supplement the written word with 'force and life'. See, the observation of Lord Denning in Seaford Estate Ltd. v. Asher, (1949) 2 KB 481 at p. 498.”
The observations of the Supreme Court came in the backdrop of the following fact situation. The respondent was the landlord of the premises consisting of a shop at Ludhiana. The shop was taken on rent by one Amar Chand. After the demise of Amar Chand, his brother Diwan Chand succeeded to the tenancy rights. Diwan Chand also died, leaving behind his widow and a minor son. The widow and the minor son of Diwan Chand were the appellants before the Supreme Court. The landlord brought an action for eviction under Section 13 of the Act on the ground of arrears of rent, subletting, etc. The case of the landlord was that the appellants inducted a sub-tenant and delivered exclusive possession of the shop premises. Before the Rent Controller, the appellants of that case which included the sub-tenant, on the first date of hearing, tendered the arrears of rent, with interest and cost determined by the Controller. The landlord did not accept the amount, saying that the tender was neither legal nor valid as appellant No.3 was a sub-tenant. The Rent Controller held that the tender was not legal and valid since Saligram was not a tenant, and accordingly, ordered eviction. An appeal preferred by the tenant was disposed of on a preliminary point, that is, on the validity of the amount deposited by the common counsel for the parties on the first date of hearing of the case. The appellate authority held that the amount deposited on behalf of the three appellants was not valid since Saligram, a sub- tenant, was a stranger. The High Court confirmed the order of the appellate authority by dismissing the tenant's revision in limine. The tenant, along with Saligram, sub-tenant, preferred appeal before the Supreme Court. The question before the Supreme Court was as to whether the word 'tenant' referred to in Section 13(2)(i) proviso of the East-Punjab Urban Rent Restriction Act, 1949 would carry the same meaning as given to it under the definition, and 'tenant' as defined thereunder whether was alone entitled to avail of the benefit of the proviso which provided that if the tenant, on the first hearing of the application for ejectment after due service, pays or tenders the arrears of rent and interest at 6% per annum on such arrears together with the cost of the application assessed by the Controller, the tenant shall be deemed to have duly paid or tendered the rent within the time aforesaid. Supreme Court took the view that there was no merit in the submission that the proviso was intended to protect the tenant as defined under the statute and not a person claiming to be a tenant. Supreme Court held that the persons who are not tenants could also be given the benefit of the proviso. In the peculiar facts of the case, Supreme Court held that if there are proceedings for eviction with persons claiming tenancy along with the undisputed tenant or to his exclusion, the acceptance of that submission may lead to arbitrary and unjust result.
It was in the peculiar facts of that case that the Supreme Court relied on the opening sentence in the definition of the section 'unless there is anything repugnant in the subject or context'. Supreme Court read into the legislative intent as evident from the provision itself and held that the governing principle of the proviso was that the tenant could pay and stay in an action for eviction for default and at the same time, the landlord is ensured payment of arrears, interest and the cost that he has incurred without the necessity of coming to civil court to recover it.
Thus, the ratio of Pushpa Devi (supra) would not be of any help to Mr.Joshi's client, as discussed above.
Thus, both the judgments of the Supreme Court relied upon by Mr.Joshi does not hint at suggesting of ignoring the definition altogether and to include something which is wholly outside the scope of the definition. The expression used in the definition is to be given meaning assigned to it unless context otherwise requires. Whether in the present case, the context otherwise so requires to give the definition a meaning other than what has been defined has been exhaustively examined by us and we have reached to the conclusion that the term 'society' under the Act of 1961 would mean under the Act of 1961 only and the context otherwise does not require to give the definition a meaning other than what has been defined.
For the foregoing reasons, we allow this Appeal. The judgment and order passed by the learned Single Judge is hereby set-aside. Special Civil Application No.9849 of 2009 is hereby allowed and it is hereby declared that the respondent no.1 has no power to proceed against the petitioner pursuant to the auction notice dated 11th September 2009 on the strength of a decree obtained by the erstwhile bank, namely, Unnati Cooperative Bank Limited, which stood merged with the respondent no.1 Bank. No order as to costs.
(BHASKAR BHATTACHARYA, CJ.)
/MOIN
(J.B.PARDIWALA, J.)