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PETITIONER: SHAMRAO VITHAL CO-OPERATIVE BANK LTD.

       Vs.

RESPONDENT: KASARGOD PANDHURANGA MALLYA

DATE OF JUDGMENT21/10/1971

BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS RAJ HEGDE, K.S.

CITATION:  1972 AIR 1248            1972 SCR  (2) 162

ACT: Multi--Unit Co-operative Societies Act, 1942--Word ’Control’ in  s 2(1) of Act--Whether passing of award under s.  54  of Bombay  Co-operative  Societies Act,  1925  is  comprehended within word ’control’.

HEADNOTE: The  appellant  was  a co-operative  society  registered  in Bombay  under the Bombay Co-operative Societies  Act,  1925. 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  MultiUnit Cooperative   Societies  Act,  1942  a  Central  Act.    The appellant  made  a claim under s. 54 of the  Bombay  Act  in respect  of  a  transaction which took  place  in  Mangalore against  the respondent who was a resident of Kesaragod  and was  a member of the appellant society.  Both Mangalore  and Kesaragod  were at the relevant time in  Madras  Presidency. The  Deputy Registrar of Co-operative Societies Bombay  gave an  award regarding that claim.  The award was sought to  be executed  as  a decree in the Court  of  Subordinate  Judge, Kesaragod.    The  respondent  took  an  objection  to   the execution on the ground that the Deputy Registrar of  Bombay bad no jurisdiction to pass the award and the same could not be executed as a decree in the courts in Kerala.   Upholding the objection the Subordinate Judge dismissed the  execution application.   The  High Court affirmed  the  decision.   In appeal  by  special leave before this  Court  the  appellant contended  that since it was registered in Bombay  State  it was the Bombay Act which would govern the appellant  society for  purposes  of registration, control and  dissolution  as laid down in s. 2(1) of the Central Act.  The word  ’control it was urged comprehends within itself the adjudication of a claim  made by the society against its members, and  in  the circumstances the award under, s. 54 of the Bombay Act  made by  the Deputy Registrar Co-operative Societies  Bombay  did not suffer from any legal infirmity. HELD,  :  As  the  objects of  the  appellant  society  were extended  to the Presidency of Madras it should in  view  of sub s. (1) of s. 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 was the Madras Co-operative Societies Act,

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1932.   Under  s.  51  of that Act  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 justify  a departure from the above normal rule. [166 B-E] The  word  ’control’  is  synonymous  with  superintendence, management,  or authority, to direct restrict  or  regulate. Control is exercised by a superior authority in exercise  of its  supervisory  power.   Adjudication  of  disputes  in  a judicial  or quasi-judicial function and it would 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. [166 F-G] 163 Panchshila Industrial Co-operative Societies (Multi-unit) v. Gurgaon  Central Co-operative Bank Ltd., Gurgaon,  [1971]  2 S.C.C. 500, distinguished. Since, as held above, the dispute between the parties  could only  be adjudicated upon in accordance with the  provisions of the Madras Act the Registrar under the Bombay Act  lacked inherent jurisdiction to decide the dispute and it was not a case of lack of territorial jurisdiction only [167 D-E]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1312 of 1967. Appeal by special leave from the judgment and decree  dated’ October  22,  1962 of the Kerala High Court in  Appeal  Suit No.804 of 1969. B. R. Naik and K. Rajendra Chowdhary, for the appellant. The respondent did not appear. The Judgment of the Court was delivered by Khanna,  J. This is an appeal by special leave  against  the judgment of Kerala High Court affirming an appeal, the order of the Lower Court whereby the appellant Bank’s  application for execution of an award made under the Bombay Co-operative Societies  Act, 1925 (hereinafter referred to as the  Bombay Act) was dismissed. The appellant is a Co-operative Society registered in Bombay under  the Bombay Act.  The Head Office of the appellant  is in Bombay and it has a branch in Mangalore.  As the  objects of  the  appellant were not confined to one  State,  it  was governed  by Multi-Unit Co-operative Societies Act  of  1942 (herinafter referred to as the Central Act).  The  appellant made  a claim under section 54 of the Bombay Act in  respect of  a transaction which took place in Mangalore against  the respondent who is 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 Co-operative 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 the decree was  raised  by the  respondent on the ground that the Deputy  Registrar  of Co-operative  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   he   dismissed   the   execution

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application.   On  appeal,  the  decision  of  the   learned Subordinate  Judge was affirmed by the High Court.   It  was not  disputed before the High Court that the  appellant  was governed by the provisions of the Central Act.- 164 The  contention raised 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 ,did not find favour with  the  High Court and in the result, the appeal was dismissed. We  have heard Mr. Naik on behalf of the appellant.  No  one has  appeared on behalf of the respondent.   Before  dealing with  the argument advanced on behalf of the  appellant,  it would be apposite to reproduce section 2 of the Central Act. The same reads as under :- "2.  (1)  A co-operative society to which this  Act  applies which  has  been  registered  in any  State  under  the  law relating  to co-operative societies in force in  that  State shall  be  deemed in any other State to  which  its  objects extend  to be duly registered in that other State under  the law  there in force relating to co-operative societies,  but shall,  save  as provided in sub-sections (2)  and  (3),  be subject  for all the purposes of registration,  control  and dissolution to the law relating to co-operative societies in force  for the time being in the, State in which it  is  ac- tually registered.               (2)  Where any such co-operative  society  has               established  before the commencement  of  this               Act  or establishes after the commencement  of               this  Act a branch or place of business  in  a               State  other  than  in which  it  is  actually               registered,  it shall, within six months  from               the  commencement of this Act or the  date  of               establishment  of  the  branch  or  place   of               business,  as the case may be, furnish to  the               Registrar  of  Co-operative Societies  of  the               State  in  which  such  branch  or  place   of               business is situated a copy of its  registered               by-laws, and shall at any time it is  required               to  do  so by the said  Registrar  submit  any               returns and supply any in-formation which  the               said  Registrar might require to be  submitted               or  supplied to him by a co-operative  society               actually registered in that State.               (3) The Registrar of Co-operative Societies of               the  State  in  which a  branch  or  place  of               business such as is referred to in sub-section               (2)  is  situated may exercise in  respect  of               that branch or place of business any powers of               audit   and  of  inspection  which  he   might               exercise in respect of a co-operative  society               actually registered in the State". According  to sub-section (3) of section 1, the Central  Act "applies  to  all co-operative societies  with  objects  not confined  to one State incorporated before the  commencement of this Act under  165 the  Co-operative  Societies  Act, 1912, or  under  any  Act relating  to co-operative societies in force in  any  State, and to all co-operative societies with objects not  confined to  one State to be incorporated after the  commencement  of this Act." As the objects of the appellant society were not confined to one State, it was not disputed before the High Court that it is  governed  by the previsions of the Central  Act.   Plain

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perusal  of sub-section (1) of section  2  reproduced  above makes  it  manifest that if the objects  of  a  co-operative society  registered  in State ’A’ extend to State  ’B’,  the Society shall be deemed to be registered in State ’B’  under the  law  in  force in State ’B’  relating  to  co-operative societies.   Despite this deemed registration in  State  ’B’ for,  three  purposes,  namely,  registration,  control  and dissolution,,  the  society  shall be  subject  to  the  law relating  to co-operative, societies in force in State  ’A’. Sub-section  (2)  makes  it  obligatory  on  a  co-operative society which establishes a branch or place of business in a State other than that in which it is actually registered  to furnish  within the prescribed time to the Registrar of  the cooperative  societies of the State in which such branch  or place of business is situated, a copy of its by-laws and  to submit  such  return  and supply  such  information  as  the Registrar might require in respect of a co-operative society actually registered in that State.  Sub-section (3) gives  a limited  control to the Registrar of Co-operative  Societies of the State in which a branch or place of business of a co- operative  society  is  established by  authorising  him  to exercise in respect of that branch or place of business  any powers of audit and of inspection which he might exercise in respect  of  a co-operative society actually  registered  in that State. The  contention  which has been advanced on behalf  of  the, appllant  society by its learned counsel, Mr. Naik, is  that as the appellant was registered in Bombay, it is the  Bombay Act  which  govern  the appellant society  for  purposes  of registration,  control and dissolution.  It is not  disputed that  the adjudication of a claim by the  appellant  against its members does not fall, under the head ’registration’  or "dissolution".   What  is, however, urged is that  the  word ’control’  comprehends within itself the adjudication  of  a claim  made  by the society against its  members.   Such  a, claim  having  been  made  by  the  appellant  against   the respondent,  the  same  could,  according  to  the   learned counsel, have been adjudicated upon under section 54 of  the Bombay  Act.  The award made by the Deputy Registrar of  Co- operative  Societies,  Bombay  in  the  circumstances,   the counsel submits, did not suffer from any legal infirmity. 166 There  is, in our opinion, no force in the above  contention because  we do not agree with the underlying- assumption  of the  above  argument  that the  word  ’control’  comprehends within  itself  .the adjudication of a claim made by  a  co- operative  society  against  its  members.   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 subsection  (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  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

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"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, by 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. Reference  has been made on behalf of the appellant  to  the case  of Panchshila Industrial Co-operative Societies  (Mult Unit)  167 v.  The Gurgaon Central Co-operative Bank Ltd.,  Gurgaon(1). In  that case, Deputy Registrar of  Co-operative  Societies, Rohtak  had given an award in favour of the respondent  bank which was a co-operative society governed by the  provisions of Punjab Cooperative Societies Act.  The appellant filed an appeal against that award before the Central Registrar.  The Central Registrar dismissed the appeal on the ground that he was  not the appropriate appellate authority in  respect  of the  said award.  On appeal to this Court, the  decision  of the  Central Registrar was affirmed.  It was held  that  the dispute  between the parties fell within section 55  of  the Punjab Co-operative Societies Act and those provisions  were not  affected by the Central Act.  It would appear from  the above  that the question involved in that case was  entirely different  and the appellant can derive no  assistance  from it. Argument  has also been advanced 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 was at the best a case of  lack  of territorial  jurisdiction.   We  find  ourselves  unable  to accede to this contention because we are of the opinion 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 dispute  between the  parties  as would appear from what has  been  discussed above, could only be adjudicated upon in accordance with the provisions of the Madras Act. The  appeal consequently fails and is dismissed.  As no  one has  appeared on behalf of the respondent, we make no  order as to costs. G.C.                                     Appeal dismissed. (1) [1971] (2) 2.S.C.C. 500. 168