S. Varalakshmi Vs. District Co-operative Office and ors. - Court Judgment

Excerpt:
trust and societies - scope of writ petition - article 226 of constitution of india, sections 16 and 70 (2) of a.p. co-operative societies act, 1964 and section 37 of a.p. mutually aided co-operative societies act, 1995 - writ petition challenging execution proceeding - decree passed under a.p. mutually aided co-operative societies act - execution and decree can be challenged in appeal - writ court not to entertain petition as alternative remedy available. - specific relief act, 1963 [c.a. no. 47/1963]. sections 31 & 34: [bilal nazki, v.v.s. rao & g. chandraiah, jj] [per court] cancellation of registered sale deed inherent power of registering authority - fraudulent transfer of property sale taking place by reason of fraud played by transferor and transferee held, it is void. true.....orderv.v.s. rao, j.1. the petitioner is the wife of one satyanarayana. it appears, the third respondent availed a loan in an amount of rs. 3,50,000/- from the second respondent for the purpose of dairy business. the petitioner's husband mortgaged the property being a residential house to secure the loan. there was a default in payment of the loan amount. the second respondent bank which is a co-operative bank, governed by the a.p. mutually aided co-operative societies act, 1995 (for short 'a.p.mac act'), filed original petition being o.p.no. 8 of 2000 under section 37 of the said act before the a.p. co-operative tribunal, hyderabad (hereafter called 'the tribunal') for recovery of the loan. the said o.p. was filed against the petitioner's husband, her son and herself. even after receipt.....

Judgment:
ORDER

V.V.S. Rao, J.

1. The petitioner is the wife of one Satyanarayana. It appears, the third respondent availed a loan in an amount of Rs. 3,50,000/- from the second respondent for the purpose of dairy business. The petitioner's husband mortgaged the property being a residential house to secure the loan. There was a default in payment of the loan amount. The second respondent bank which is a Co-operative Bank, governed by the A.P. Mutually Aided Co-operative Societies Act, 1995 (for short 'A.P.MAC Act'), filed original petition being O.P.No. 8 of 2000 under Section 37 of the said Act before the A.P. Co-operative Tribunal, Hyderabad (hereafter called 'the Tribunal') for recovery of the loan. The said O.P. was filed against the petitioner's husband, her son and herself. Even after receipt of the notice, the petitioner and others did not appear before the Tribunal. Therefore, the Tribunal passed an order directing the third respondent and the petitioner herein to pay a sum of Rs. 15,17,641/-together with interest at 6% from the date of the said Award. The Award dated 26-8-2000 became final.

2. After obtaining the order/award of the Tribunal, the second respondent approached the first respondent for executing the award in O.P. No. 8 of 2000. But, by a demand notice dated 16-7-2003 the first respondent called upon the petitioner and others to pay an amount of Rs. 6,96,143/-with interest at 23% from 1-4-2003 within ten days. The petitioner was also informed that if she fails to pay the amount in execution of the award, the property will be attached. As there was no compliance with the demand notice, dated 16-7-2003, the first respondent issued the notice prior to sale of mortgaged immovable property in Form No. 6 under Rule 52(11)(b) and (c) of the A.P. Co-operative Societies Rules, 1964, ('the Rules') calling upon the petitioner to pay an amount of Rs. 6,33,172/- with interest at 23% per annum from 1-7-2003. This notice also informs the petitioner and others that if the advice is not heeded, the property mortgaged shall be attached and sold. This notice is challenged in this writ petition.

3. Learned Counsel for the petitioner, Sri Y. Srinivasa Reddy, submits that even before receiving the demand notice, the petitioner submitted a representation on 24-5-2003 and without considering the same, the impugned notice was passed. He nextly contends that when the award was passed by the Tribunal under Section 37 of the A.P. MAC Act, resort to execution procedure under Section 70 of the A.P. Co-operative Societies Act, 1964 'the 1964 Act') read with Rule 52 of the Rules is without jurisdiction. He lastly would contend that- the award was passed by the Tribunal for an amount of Rs. 3,72,341/-whereas the amount sought to be recovered in execution is Rs. 6,31,172/-, which is at variance with the award/decree and, therefore, that cannot be treated as award. He placed reliance on the judgment of the Supreme Court in Rameswar Das Gupta v. State of U.P., : AIR1997SC410 .

4. Before dealing with the question of jurisdiction, the two contentions raised need to be disposed of. The submission that the decree is at variance with the original award cannot be accepted. An award was passed for an amount of Rs. 3,75,341/-with future interest at 6% per annum till the date of realization. The award was passed on 26-8-2000. Therefore, there cannot be any surprise if the award amount goes up by another about Rs. 3 lakhs. Even if the petitioner has any grievance about the amounts sought to be realized in execution, nothing prevents him to make an application under Sub-rule (21) of Rule 52 of the Rules raising this point with a request to properly calculate the amount payable by him. The remedy before this Court cannot be proper to adjudicate this issue. Secondly, the submission that the petitioner's representation was not considered and, therefore, the award cannot be executed in law, is stated only to be rejected. In the application dated 24-5-2003 while raising dispute as to the amount payable by the petitioner to the second respondent bank she requested for waiver of the entire interest component. The Counsel for the petitioner did not bring to the notice of this Court any provision of law which enables the first respondent to waive the interest. If the petitioner is aggrieved on this score, she ought to have challenged the award passed by the Tribunal before proper forum. Having not done so she cannot be heard to say that her representation was not disposed of. For that reason alone, the action initiated by the first respondent cannot be held to be illegal.

5. Learned Counsel for the petitioner, Sri Y. Srinivasa Reddy, vehemently contended that no appeal would lie in relation to the execution taken up by the Registrar under Section 70 of the 1964 Act read with the Rules. The question is no more res integra and covered by a judgment delivered by me.

6. In A. Vema Naidu v. Erracheruvupalle Primary Co-operative Society, Chittoor, : 2002(4)ALD700 , after obtaining recovery certificate under Section 71 of the 1964 Act, Erracheruvuripalle PACS initiated execution in accordance with Section 70 read with Rule 52 of the Rules. Those notices were challenged before this Court. A contention was raised that there is no effective efficacious alternative remedy under the 1964 Act to challenge the execution proceedings pursuant to a recovery certificate issued by the Registrar either under Section 71 or under Section 101 of the 1964 Act and/or pursuant to an award passed by the arbitrator (jurisdictional Registrar of Co-operative Societies) under Section 61 of the 1964 Act. After referring to the relevant provisions of the 1964 Act, especially Sub-section (2) of Section 70 of the 1964 Act and the Rules as well as the decisions of the Supreme Court in Carl Still G.M.B.H, v. State of Bihar, : [1962]2SCR81 , and Whirlpool Corporation v. Registrar of Trade Marks, Mumbai, : AIR1999SC22 , I Have laid down as under;

It provides for constitution of Co-operative Tribunal and Section 76 of the Act provides that any person aggrieved by any decision passed or order made under various provisions of the Act, inter alia, may file appeal to the Tribunal. An order for execution of a certificate of recovery under Section 71 of the Act and auction notice consequent thereto can only be under Section 70(2) of the Act read with Sub-rule (11) of Rule 52 of the Rules. Therefore, the impugned action is clearly appealable under Section 76 of the Act. A reference may be made to Section 76(1) of the Act which reads as under:

76(1). Any person or society aggrieved by any decision passed or order made under Section 6, Section 9A, Section 9B, Section 9C, Section 12A, Section 13, Section 15A, Sectionl6, Section 17, Section 19, Section 21, Section 21A, Section 21AA, Section 23, Sub-section (3) of Section 32, Section 34, Section 34A, Section 60, Section 62, Section 64, Section 66, Section 70, Section 71, Section 73 and Section 117 may appeal to the Tribunal:

Provided that nothing in this sub-section shall apply to any order of withdrawal or transfer of a dispute under Sub-section (3) of Section 62.

It is well settled that ordinarily when there is effective alternative remedy provided by Statute especially by a Statutory Tribunal duly constituted under the Act, this Court ordinarily does not entertain the writ petition at the initial stages. This Rule, is no doubt, has certain exceptions like, blatant violation of law and rules, violation of principles of natural justice and in cases where the very provision of Statute itself is questioned. {See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai : AIR1999SC22 }. In the case on hand, none of these things exist. In my considered opinion, there are disputed questions of fact, which require evidence to be adduced by both the parties. The learned Counsel for the petitioner, however, lastly submits that auction in one case is scheduled to be held on 22-6-2002 and in another case on 24-6-2002. Pending the appeal before the Co-operative Tribunal that may be filed by the petitioner the Court may stay the auction. Having regard to the provisions of Section 76(6) of the Act read with Rule 11 of the Co-operative Tribunal Appeal Provision Rules, 1994 the request of the petitioner cannot be accepted. There are adequate powers conferred. It is well-settled when an enactment creates a Statutory Tribunal and entrusts certain matters to be agitated by way of appeal at the first instance and also confers adequate incidental and supplemental powers to stay and suspend the orders, it is not for this Court to interdict the process of the law, in accordance to which, the properties of the petitioner are brought to sale.

7. In view of the above decision, it must be held that the petitioner has an effective alternative remedy and the two issues adverted to hereinabove cannot be gone into at this stage by this Court.

8. The submission of the learned Counsel for the petitioner that the procedure contemplated under Section 37 of the AP MAC Act is altogether different and, therefore, the procedure for execution of awards/recovery certificates passed under the 1964 Act under Section 71 and Rule 52 of the Rules cannot be followers without any basis. The learned Counsel submitted that though the provisions of the 1964 Act have been made part of the AP MAC Act by incorporation, when an award is passed under Section 37 by the Tribunal, the same cannot be executed under the 1964 Act. This submission is devoid of any merit.

9. Sections 36 and 37 of the AP MAC Act read as under.

36. Execution of decisions, decrees and orders :--In regard to execution of decisions, decrees and orders, all the provisions of Chapter-X of the Andhra Pradesh Cooperative Societies Act, 1964 shall mutatis mutandis apply to Co-operative Societies registered under this Act, such however, that all references to the Registrar in the said Act shall be construed to be a reference to the Co-operative Tribunal in their application to Co-operative Societies registered under this Act.

37. Settlement of disputes :--(1) If any dispute arises touching the constitution, management or business of a Co-operative Society, and matters connected therewith or incidental thereto:-

(a) among members, past members or persons claiming through members, past members and deceased members; or

(b) between a member, past member or a person claiming through a member, past member or deceased member and the Co-operative Society, its Board, Director, office-bearer or liquidator, past or present; or

(c) between the Co-operative Society or its Board and any past Board, Director, office bearer, or the nominee, heirs, or legal representatives of any deceased Director, deceased officer of the Co-operative Society; or

(d) between the Co-operative Society and any other Co-operative Society; or

(e) between the promoters of a Co-operative Society and the Registrar or a Cooperative Society and the Registrar; or

(f) between a Co-operative Society and liquidator of another Co-operative Society, or between the liquidators of two or more Co-operative Societies;

such disputes may be referred to the Cooperative Tribunal for decision;

Provided that no dispute shall be referred under this section to the Co-operative Tribunal unless the disputing parties exhausted all remedies that may be available in the bye-laws for the settlement of disputes.

(2) Any dispute relating to elections held to a Co-operative Society may be referred to the Co-operative Tribunal for decision,

10. A plain reading of the above provisions would show that the provisions of the 1964 Act shall mutatis mutandis apply to the mutually aided Co-operative Societies as well, with regard to execution of decisions, decress and orders. It is a case of legislation by reference and, therefore, all the provisions of the A.P.Co-operative Societies Act before dealing with execution will apply mutatis mutandis in execution of awards/orders passed under the AP MAC Act. In a number of cases, the Supreme Court considered the difference between the 'legislation by incorporation' and 'legislation by reference'.

11. In Nagpur Improvement Trust v. Vasantrao, : [2002]SUPP2SCR636 , the question that arose for consideration before the apex Court was whether the provisions of the Land Acquisition Act, 1894, particularly Sections 6, 23(2) and 28 thereof stood incorporated in the three State Acts, viz., the Punjab Town Improvement Act, 1922, the Nagpur Improvement Trust Act, 1936 and the U.P. Avas Evam Vikas Parishad Adhiniyam, 1965, or were merely referred to therein. The Supreme Court observed that the provisions of the Land Acquisition Act with certain modifications are applicable to acquisitions made for purposes of execution of the schemes under those three Acts. The apex Court ruled thus:..................When an earlier Act or certain of its provisions are incorporated by reference into a later Act, the provisions so incorporated become part and parcel of the later Act as if they had been bodily transposed into it. The incorporation of an earlier Act into a later Act is a legislative device adopted for the sake of convenience in order to avoid verbatim reproduction of the provisions of the earlier Act into the later. But this must be distinguished from a referential legislation which merely contains a reference or the citation of the provisions of an earlier statute. In a case where a statute is incorporated, by reference, into a second statute, the repeal of the first statute by a third does not affect the second. The later Act along with the incorporated provisions of the earlier Act constitute an independent legislation which is not modified or repealed by a modification or repeal of the earlier Act. However, where in later Act there is a mere reference to an earlier Act, the modification, repeal or amendment of the statute that is referred, will also have an effect on the statute in which it is referred. It is equally well settled that the question whether a former statute is merely referred to or cited in a later statute, or whether it is wholly or partially incorporated therein, is a question of construction.

12. In a recent judgment reported as Maharashtra SRTC v. State of Maharashtra, : [2003]2SCR530 , the Supreme Court, after referring to its earlier decision in Nagpur Improvement Trust v. Vasantrao (supra) etc., observed as under:

It is a well established legislative practice to borrow the provisions of an earlier Act on a particular subject by making a broad reference to the earlier Act or some or most of its provisions therein so as to make them applicable to the relevant subject-matter dealt with by the later statute. This is done primarily as a matter of convenience in order to avoid verbatim repetition of the provisions of the earlier Act. Very often such reference is followed by certain modifications subject to which the earlier Act should apply. Those modifications may be few or numerous. When such legislative device is adopted, the relevant provisions of the earlier Act will apply mutatis mutandis to the matters governed by the later Act. But, the difficulty in construction would arise when the earlier Act is repealed or amended/modified. The intricate question then would be whether the repeal or amendments should be ignored and the borrowed provisions should be read as they were at the time of enactment of later Act OR the provisions of earlier Act should be applied subject to subsequent amendments/modifications. If there is a definite indication in the later Act as to the applicability or otherwise of subsequent amendments in the Act referred to, no difficulty arises; but, the problem arises when there is no such indication. It is here that we come across two allied but qualitatively different concepts of statutory interpretation known as incorporation by reference and mere reference or citation of earlier statute in the later Act. In the former case, any change in the incorporated statute by way of amendment or repeal has no effect on the incorporating statute. In other words, the provisions of the incorporated statute as they stood at the relevant time when incorporating statute was enacted will ever continue to be read into that later statute unless the Legislature takes a positive step to amend the later statute in tune with the amendments. However, the legal effect is otherwise in the case of a statute which merely makes a reference to the provisions of an earlier statute. In that case, the modification of the statute from time to time, will have its impact on the statute in which it is referred to. The provisions in the earlier statute with their amendments will have to be read into the later enactment in which they are referred to unless any such subsequent amendment is inconsistent with a specific provision already in existence.

13. Whether the relevant rules dealing with execution of awards/recovery certificates/decisions/orders as contained in the A.P. Co-operative Societies Rules, 1964 made under Section 130 of the 1964 Act are also applicable for execution of orders/decrees under Section 36 of the AP MAC Act. It is well settled principle of law that when in exercise of powers conferred on them to make delegated legislation, the Government makes statutory rules, they form part of the main statute. Those rules have to be read along with the provisions in the main statute.

14. Therefore, though Section 36 of the AP MAC Act does not specifically refer to the A.P. Co-operative Societies Rules, by reason of settled principles of law, as the said Rules become part of the 1964 Act, those Rules also are applicable to the proceedings taken up for execution of decisions/orders passed by the Tribunal under the AP MAC Act.

15. The procedure for execution of decree in the 1964 Act is laid down in Section 70. The said provision empowers the Registrar or any person authorized by him to recover any amount due under a decision or order of the Registrar. The method of recovery under Section 70 of the 1964 Act is 'without prejudice to any other mode of recovery provided by or under the 1964 Act'. Sub-section (2) of Section 70 specifically provides that if an order or decision made either under Section 60 or Section 71 or Sections 76, 77 or 78 may be recovery by execution by the Civil Court, by the Collector, or by the Registrar in the manner provided under Section 71. Section 130 empowers the Government to make Rules for carrying out of purpose under the 1964 Act. In furtherance thereof, 1964 Rules were made. Rule 52 is a self contained code in itself for execution of decrees, decisions or orders. Necessarily, when the Registrar undertakes to execute a decision or decree under the 1964 Act, he has to follow the procedure under Rule 52. Rule 52 is intended to avoid arbitrary or high-handed execution. This procedure is applicable even to execution of decisions or decrees passed by the Tribunal under Section 37 of the AP MAC Act. Therefore, it must be held that the first respondent has ample power and jurisdiction to execute the decrees/decisions and orders passed by the Tribunal under Section 37 of the AP MAC Act in accordance with Section 71(1) or 71(2)(c) of the A.P. Co-operative Societies Act, 1964 read with Rule 52 of the A.P. Co-operative Societies Rules, 1964.

16. The writ petition, for the above reasons, fails and is accordingly dismissed at the admission stage.