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PETITIONER: EVEREST APARTMENTS CO-OPERATIVE HOUSINGSOCIETY LTD.

       Vs.

RESPONDENT: STATE OF MAHARASHTRA & ORS.

DATE OF JUDGMENT: 18/01/1966

BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. SUBBARAO, K. BACHAWAT, R.S.

CITATION:  1966 AIR 1449            1966 SCR  (3) 365  CITATOR INFO :  D          1984 SC1048  (16)

ACT: Maharashtra  Co-operative Societies Act, 1960(24  of  1961), ss.23(2)  154--Orders  of Deputy Registrar under  s.  23(2)- Whether  final--state  Government  whether  has   revisional jurisdiction  over  them under s,  154-Parties  whether  can invoke revisional jurisdiction.

HEADNOTE: The appellant was a registered co-operative Housing Society, registered under the Maharashtra Co-operative Societies Act, 1960.   S, respondent no. 4, applied for membership  of  the society but this was refused.  He appealed under s. 23(2) of the  Act to the Deputy Registrar Co-operative societies  who decided  in his favour.  The appellant filed an  application before  the State Government for revision purporting  to  be under  s.  154 of the Act which was rejected on  the  ground that  Government  had  no  revisional  jurisdiction  against orders under s. 23(3).  The appellant then went to the  High Court under Arts. 226 and 227 and failing there also came to this Court by special leave.  The questions that fell to  be decided were. (i) Is the finality under s. 23(3) subject to s.   154  and  (ii) Has a. party a right to move  the  State Government under s. 154 ? HELD  : (i) There is no doubt that s. 154 is  potential  but not compulsive.  Power is reposed in Government to intervene to  do justice when occasion demands it and of the  occasion for its exercise Government is made sole judge.  This  power can  be exercised in all cases except in a case in  which  a similar  power  has already been exercised by  the  Tribunal under  s. 149(9) of the Act.  The exception  was  considered necessary  because  the legality or propriety  of  an  order having  been  considered  once,,  it  would  be  an  act  of superetogation  to  consider the matter twice.  it  follows, therefore, that Government can exercise its powers under  s. 154  in  all  cases with one exception only,  and  that  the finality  of the order under s. 23(3) does not restrict  the exercise  of  the power.  The word ’final’ in  this  context means that the order is not subject to an ordinary appeal or revision   but   it  does  not  touch  the   special   power

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legislatively conferred on Government, ’Me Government was in error  in  considering that it had no jurisdiction  in  this case for it obviously had. [371 B-D] Commissioner of Income-tax West Punjab v. The Tribune Trust, Lahore,   (1948)   16  I.T.R.  214  (P.C.)   and   Sheffield Corporation v. Luxford, (1929] 2 K.B. 180, referred to. (ii)The fact that s. 154 does not expressly permit a  party to invoke the revision jurisdiction under that section  does not  mean  that  a  party  is  prohibited  from  moving  the Government.   But  as Government is not  compelled  to  take action,  unless  it  thinks  fit the  party  who  moves  the Government  cannot  claim that he has a right of  appeal  or revision.  On the other hand Government should welcome  such applications  because  they draw its attention to  cases  in some of which it may be interested to intervene. [371 F] 366 Sheffield  Corporation  v.  Luxford,  119291  2  K.B.   180, distinguished.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1 of 1966. Appeal  by special leave from the order dated June 30,  1965 of  the Bombay High Court in Special Civil  Application  No. 1027 of 1965. S.V. Gupte, Solicitor-General and N. N. Keswani, for  the appellant. Niren  De,  Additional  Solicitor-General and B.  R.  G.  K. Achar, for respondent No. 1. The judgment of the Court was delivered by Hidayatullah, J. In this appeal by special leave we are  not concerned  with  the merits of the controversy  between  the appellant and the fourth respondent, who are the  contesting parties,  because only two short questions of law arise  for our  decision.  The appellant is a  registered  co-operative Housing  Society,  registered  under  the  Maharashtra   Co- operative  Societies Act, 1960 (XXIV of 1961).  The  Society was  promoted by two individuals for the construction  of  a block  of flats in Bombay.  Shivdasani (respodent 4)  claims to have paid the entrance fee, share money and other demands and  complaints that his membership was wrongly rejected  by the  Society.  The Society denies these statements  and  the claim.   We  are  not concerned with  the  details  of  this dispute.   What  we  are concerned with is  this:  On  being informed of the rejection of his application for membership, Shivdasani filed an appeal under s. 23(2) of the above  Act, which  was heard and decided in his favour by  the  District Deputy  Registrar,  Co-operative  Societies,  Bombay.    The Society filed an application before the State Government for revision  purporting  to be under s. 154 of the  Act.   This application  was rejected.  The Society was  intimated  this result   by  the  Under  Secretary  to  the  Government   of Maharashtra (Agriculture and Cooperative Department) and the communication (CAR/1064/426590/ C-42, 17th May, 1965) was as follows               "Sir,               I  am  directed to state  that  following  the               hearing to you by the Deputy Secretary of this               Department on 10th March, 1965, in  connection               with  the  subject  noted above,  a  note  was               received  in this Department from Shri  M.  G.               Mani,  Advocate  wherein it was  claimed  that               though an order was final under Section  23(3)               of the Maharashtra Cooperative Societies  Act,

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             1960,  Government  had  inherent   revisionary               powers  under Section 154 of the said  Act  to               entertain in such representations against such               an order.  I am to inform you that the  matter               has  been examined by Government and to  state               that in such cases orders given                             367               under  Section 23(3) are final and  Government               has  no  revisional  jurisdiction  in  such  a               matter.,                             Yours faithfully,                Sd/- (D.  A. EKBOTE)                      Under Secretary to Government." The Society filed a petition under Arts. 226 and 227 of  the Constitution  in  the High Court of Bombay  which  was  also rejected  (S.C.A. 1027/65, 30 June, 1965).  The  High  Court passed a short and laconic order which reads:               "Government    right    in    declaring     no               jurisdiction.    It  is  wrong  to  say   that               respondent   had  withdrawn  the   application               voluntarily.  Attitude of the Society  unjust.               Admittedly  the  promoters  were  members   of               Everest  Co.  and they wanted Rs.  3,000  from               each one for themselves.               Societies    are    not   meant    for    self               aggrandizement.  No ground to interfere.                                 REJECTED." It  is  against the last order that the present  appeal  has been   brought  and  the  first  question  is  whether   the Government is right in law in declining to interfere because it  has "no revisional jurisdiction in such a  matter."  The answer to this question depends upon the construction of  s. 154  of  the  Act but before we attempt  it,  we  shall  say something  about  the Act and the provisions  applicable  to this case. The  Maharashtra Co-operative Societies Act, which  replaced the  Bombay Co-operative Societies Act, 1925 was  passed  to provide  for  the orderly development  of  the  co-operative movement  in  the  State of Maharashtra.   It  deals,  among others,  with housing societies, the object of which  is  to provide  their members with dwelling houses.  Every  society having  as  its  objects  the  promotion  of  the   economic interests or general welfare of its members, or of the  pub- lic, in accordance with co-operative principles and which is economically  sound  may  register  under  the  Act.    This entitles  the  societies to obtain  certain  benefits.   The State  Government  appoints  a  Registrar  of   Co-operative Societies,  who has numerous powers under the Act,  and  may appoint one or more persons to assist him and may confer all or any of the powers of the Registrar upon them.  Chapter II of the Act then deals with registration of societies and all matters  connected therewith.  Chapter III next  deals  with members  and  their rights and liabilities.  Section  22  in that Chapter lays down who may become a member of a  society and by its second sub-section provides: 368 .lm15 "22.  Person who may become member. (2)Where  a  person is refused admission as a  member  of  a society, the decision (with the reasons therefore) shall  be communicated to that person within fifteen days of the  date of  the decision, or within three months from the’  date  of the application for admission,-whichever is earlier." Section 23 then gives a right of appeal to a member who  has been refused admission.  It provides:

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"23.  Open membership. (1)No  society  shall, without  sufficient  cause,  refuse admission  to  membership  to  any  person  duty   qualified therefore under the provisions of this Act and its by-laws. (2)Any  person  aggrieved by the decision  of  a  society, refusing him admission to its membership, may appeal to  the Registrar. (3)The decision of the Registrar in appeal, shall be final and  the  Registrar shall communicate his  decision  to  the parties within fifteen days from the date thereof." The  appeal of Shivdasani was made under the above  section. After  the order in appeal was passed by the Registrar,  the Society moved the State Government under s. 154 to  exercise its powers under that section.  It reads:               "154.  Power of State Government and Registrar               to call for proceedings of subordinate officer               and to pass orders thereon.               The  State  Government and the  Registrar  may               call for and examine the record of any inquiry               or the proceedings of any other matter of  any               officer  subordinate  to  them,  except  those               referred to in sub-section (9) of section  149               for the purpose of satisfying themselves as to               the  legality or propriety of any decision  or               order passed, and as to the regularity of  the               proceedings of such officer.  If in any  case,               it  appears  to the State Government,  or  the               Registrar,  that  any  decision  or  order  or               proceedings so called for should be  modified,               annulled or reversed, the State Government  or               the  Registrar, as the case may be, may  after               giving persons affected thereby an opportunity               of  being heard pass such order thereon as  to               it or him may seem just." The  State  Government held that it had no  jurisdiction  as orders given under s. 23(3) were final.  Two questions arise here: (i) Is 369 the finality under s. 23(3) subject to s. 154, and (ii)  Has a party a right to move the State Government under s. 154? Mr. Niren De defending the order of the State Government  as well  as  that  of the High Court,  admits  that  the  State Government  has been given a power to call for  and  examine the  record of any enquiry or the proceedings of  any  other matter  of  any  officer subordinate  to  it,  except  those referred  to  in sub-section 9 of S. 149, and  that  as  the present  is not a matter under S. 149(9) the power could  be exercised by Government for the purpose of satisfying itself as  to  the legality or propriety of the  order.   In  other words,  he does not contest that the finality stated  by  s. 23(3) does not affect the power of the State Government.  In making  this  admission he is clearly right.   The  Act  has provided  for appeals in other sections and the decision  on appeal   is   stated  to  be  final.   Yet  the   power   of superintendence is given to the State Government in  general terms in respect of any inquiry or proceeding with only  one exception, namely, the proceedings of the Maharashtra  State Tribunal,  when  the  Tribunal calls for  and  examines  the record of any proceeding in which an appeal lies to it,  for the  purpose  of  satisfying itself as to  the  legality  or propriety  of any decision or order passed.   By  mentioning one  specific  exception to the general power, the  Act  has indicated  an  intention to include every other  inquiry  or proceeding within the action by Governments as  contemplated by  s.  154.  Mr. De, however, contends, firstly,  that  the

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action by Government is intended to be on its own motion and not  by application, and, secondly, that the power need  not be  exercised  unless  Government  itself  feels  that   its exercise  is necessary.  He refers, by way of  contrast,  to the  opening  words of s. 150 where provision  is  made  for review of orders of the Tribunal in these words : "150.  Review of orders of Tribunal.               (1)The   Tribunal   may,  either   on   the               application  of  the  Registrar,  or  on   the               application  of any party  interested,  review               its  own  order  in  an  case,  and  pass   in               reference  thereto  such order  as  it  thinks               just:               Provided that, no such application made by the               party interested shall be entertained,  unless               the Tribunal is satisfied that there has  been               the  discovery of new and important matter  of               evidence,  which  after the  exercise  of  due               diligence was not within the knowledge of  the               applicant  or could not be produced by him  at               the  time  when its order was  made,  or  that               there has been some mistake or error  apparent               on  the face of the record, or for  any  other               sufficient reason: 370 Mr.  De next submits that this power not being coupled  with any  duty need not be exercised by Government even if  moved to take action, unless Government itself feels inclined.  He relies  upon the Commissioner of Income Tax, West Punjab  v. The  Tribune Trust, Lahore.’ In that case the  question  was whether  s.  33  of the Indian Income Tax  Act,  1922  which conferred   revisional  jurisdiction  on  the   Commissioner established  a  right  to relief on the  application  of  an assessee.   It was contended by the assessees in  that  case that  the  relief claimed by them under s.  33  was  wrongly denied to them.  In dealing with this contention Lord Simond (later  Viscount)  observed, at page 225 of the  report,  as follows:-               "The  fallacy  implicit in this  question  has               been made clear in the discussion of the first               two  questions.   It assumes that  Section  33               creates  a  right in the assessee.   In  their               Lordships’  opinion it creates no such  right.               On  behalf  of the respondent  the  well-known               principle  which  was discussed in  Julius  v.               Bishop of Oxford-(1880) 5 App.  Cas.  214--was               invoked  and  it was urged  that  the  section               which  opens with the words "The  Commissioner               may of his own motion" imposed upon him a duty               which  he  was  bound  to  perform  upon   the               application  of an assessee.  It  is  possible               that  there might be a context in which  words               so inept for that purpose would create a duty.               But  in  the  present case there  is  no  such               context.   On the contrary Section 33  follows               upon a number of sections which determine  the               rights  of the assessee and is itself, as  its               language   clearly  indicates,   intended   to               provide  administrative machinery by  which  a               higher  executive officer may review the  acts               of  his  subordinates and take  the  necessary               action upon such review.  It appears that as a               matter of convenience a practice has grown  up               under which the Commissioner has been  invited               to  act "of his own motion" under the  section

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             and  where  this occurs a  certain  degree  of               formality has been adopted.  But the  language               of   the   section  does   not   support   the               contention,  which  lies at the  root  of  the               third   question   and   is   vital   to   the               respondent’s case, that it affords a claim  to               relief.   As  has been  already  pointed  out,               appropriate  relief is specifically  given  by               other   sections:  it  is  not   possible   to               interpret  Section  33 as  conferring  general               relief." Mr.  De  also relies upon certain passages  from  Julius  v. Bishop  of Oxford2 which show the distinction between  power which is discretionary in its exercise and power which  must be  exercised  every  time the  occasion  for  its  exercise arises.  He contends in the words of Talbot J. in  Sheffield Corporation v. Luxford 3 that the (1)  (1948)  16 I.T.R. 214 P.C.               (2)  (1880)  5 App.  Cas. 214.                (3). (1929) 2 K.B. 180 at 183. 37 1 word  "may"  always  means "may" which is  a  permissive  or enabling  expression  and that there  are  no  circumstances either  in the Act or in the facts here, by which it can  be said  that  Government was under a duty  to  interfere.   He submits  that  the  order  of Government  must  be  read  as indicating  the  above  position  and not  that  it  had  no jurisdiction. There  is  no  doubt  that  S.  154  is  potential  but  not compulsive.  Power is reposed in Government to intervene  to do justice when occasion demands it and of the occasion  for its exercise, Government is made the sole judge.  This power can  be exercised in all cases except in a case in  which  a similar  power  has already been exercised by  the  Tribunal under  s. 149(9) of the Act.  The exception  was  considered necessary because the legality or the propriety of an  order having  been  considered  once,  it  would  be  an  act   of supererogation  to consider the matter twice.   It  follows, therefore, that Government can exercise its powers under  s. 154  in  all  cases with one exception  only  and  that  the finality  of the order under s. 23(3) does not restrict  the exercise  of  the power.  The word ’final’ in  this  context means that the order is not subject to an ordinary appeal or revision  but it does not touch the special  power  legisla- tively conferred on Government.  The Government was in error in considering that it had no jurisdiction in this case  for it obviously had. There  remains the question whether a party has a  right  to move Government.  The Tribune Trust case is  distinguishable and  cannot  help the submission that Government  cannot  be moved  at  all.   The words of the two  enactments  are  not materially  equal.  The Income-tax Act used the  words  ’suo motu’ which do not figure here.  It is, of course, true that the  words "on an application of a party" which occur in  s. 150 of the Act and in similar enactments in other Acts,  are also  not to be found.  But that does not mean that a  party is prohibited from moving Government.  As Government is  not compelled  to take action, unless it thinks fit,  the  party who  moves  Government cannot claim that he has a  right  of appeal  or revision.  On the other hand,  Government  should welcome such applications because they draw the attention of Government  to  cases in some of which,  Government  may  be interested  to intervene.  In many statutes, as for  example the  two major procedural Codes, such language has not  only not inhibited the making of applications to the High  Court,

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but  has  been considered to give a right to  obtain  inter- vention, although the mere making of the application has not clothed a party with any rights beyond bringing a matter  to the notice of the Court.  After this is done, it is for  the court  to  consider  whether to act  or  not.   The  extreme position  does not obtain here because there is no right  to interference  in the same way as in a  judicial  proceeding. Government  may  act  or  may not  act;  the  choice  is  of Government.  There is no right of relief as in an appeal 372 or revision under the two Codes.  But to say that Government has no jurisdiction at all in the matter is to err, and that is what Government did in this case. The   order  of  the  High  Court  in  these   circumstances overlooked’  that  the  Government had denied  to  itself  a jurisdiction  which it undoubtedly possessed by  considering that  the  finality of the order under  s.  23(3)  precluded action under s. 154.  The High Court ought to have issued  a mandamus  to Government to deal with the application  before it  within  its jurisdiction under s.  154.   That  mandamus shall now issue to Government. The appeal is thus allowed with costs. Appeal allowed. 373