RAM NANDAN SINGH AND ORS. v. AG OFFICE EMPLOYEES CO-OP HOUSE CONSTRUCTION SOCIETY, RANCHI AND ORS

Citation: [2007] 10 S.C.R. 646

Court: Supreme Court of India

Bench: S.B. SINHA, H.S. BEDI

Case summary

RAM NANDAN SINGH AND ORS. v. AG OFFICE EMPLOYEES CO-OP HOUSE CONSTRUCTION SOCIETY, RANCHI AND ORS.pdf

Judgment text

RAM NANDAN SINGH AND ORS. ~ v. AG OFFICE EMPLOYEES CO-OP HOUSE CONSTRUCTION SOCIETY, RANCHI AND ORS. SEPTEMBER 28, 2007 [S. B. SINHA AND H. S. BEDI, JJ. ] ~ Constitution ofIndia, 1950: Article 136-Right ofintervener to file appeal-Held: Appellants were impleaded as intervener before Single Judge and also in Letters Patent Appeal-They were also persons aggrieved-Hence they had right to appeal. Judicial restraint: Enquiry report by competent authority as also by retired High Court Judge-Challenged-High Court remitted matter to Statutory authority-Observations passed to the effect that y it would invite objections and have liberty to differ with report ofthe retiredJudge-Propriety of-Held: It isfor the statutory authority to take decision in the matter and it was not necessaryfor High Court to make any observation as to how the said statutory authority should proceed in the matter-Administrative law-Statutory authority- Bihar Cooperative Societies Act, 1935.

Appellants are members ofrespondent No. I-society. In 1970, the society was allotted land for the benefits ofits members. In 1983, yamendments were made in the rules whereby outsiders were allowed allotment of land by the said society. These amendments were questiened. Meanwhile, serious irregularities by the members ofthe Managing Committee were pointed out. An enquiry was ordered. Enquiry officer submitted its report to the Registrar. On the basis ofthe report, Managing Committee ofthe society was placed under ~ suspension. The Managing Committee filed Writ Petition before High Courtwhich was dismissed. Thereafter they filed Letter Patent Appeal. The Division Bench of the High Court by order dated 18. 5. 2004 directed the enquiry to be made by the Registrar of HOUSE CONSTRUCTION SOCIETY, RANCHI 'r Cooperative Societies. With these directions the appeal was dismiss·ed. However, the question relating to correctness of the enquiry report was again raised. On 2. 9.

2005, the Division Bench ofthe High Court ordered appointment ofa former Judge ofHigh Court to hold an enquiry. Pursuantthereto an enquiry was made and report filed. The Managing Committee again questioned the correctness ofthe said report by filing another application in the said letters patent appeal. ~__,, By impugned order, the Division Bench ofHigh Court held that letters patent appeal was heard and disposed ofby an order dated 18. 5. 2004 and thus the Court had become functus officio yet proceeded to make observations that the case is remitted to Registrar Cooperative Societies who would not rely on earlier report submitted by the Registrar having been superseded by the report ofthe retired High Court Judge and invite objections1n the inquiry report submitted by the retired judge, would apply his independent mind and as to whether he differs with the enquiry report or accepts the same and the action required to be taken.

Appellants were impleaded as interveners before the Single Judge. They, by this petition for grant of special leave, have questioned the justifiability ofthe impugned order. Allowing the appeal, the Court HELD: 1. 1. Appellants are members ofthe Society. They have ~ been pursuing their cause before the High Court. They were impleaded as parties in the Letters Patent Appeal. Not only in the capacity of interveners but also as persons aggrieved, they are entitled to file petition for grant ofspecial leave. The preliminary objection in regard to maintainability ofthe appeal is rejected. [Para 13] [654~EJ ~J.. N Swain and Anr. v. B. K. Mahapatra and Ors. , [1970) 3 SCC 321 and Ravi Rao Gaikwad and Ors. v. Rajajinagar Youth Social Welfare Assn. and Ors. , [2006] 5 SCC 62, referred to. 1. 2.

Indisputably, the Registrar of Cooperative Societies appointed under the Bihar Cooperative Societies Act, 1935 which was adopted by the State ofJharkhand on bifurcation ofthe State as per provisions of the State Organisation Act is a statutory authority. The Registrar ofCooperative Societies in exercise of his powers conferred upon him in terms of Section 41 and/or Section 48 ofthe said Act is entitled to pass an appropriate order. The orders passed by the Registrar, Cooperative Societies are appealable. [Para 14] [654-F-G] 2. 1. Whosoever had enquired into the charges levelled against the erstwhile members of the Managing Committee, indisputably the inquiry report is to be placed before the Registrar so as to enable him to arrive at a decision. An order by a statutory authority, therefore, must be passed in terms ofthe provisions of the Act wherefor the inquiry report must be looked into. The report ofa retired Judge ofthe High Court, indisputably will carry great weight.

It must be given an effective consideration. y [Para 15] [654-H; 655-A] 2. 2. No observation was required to be made in relation thereto Suffice, it to say that it is for the Registrar, Cooperative Societies to take a decision in the matter and for that purpose it was wholly unnecessary for the Division Bench ofthe High Court to make any observation as to how the said statutory authority should proceed in the matter. The statutory authority is duty-bound to proceed in accordance with law and exercise its jurisdiction within the four corners ofthe Statute. [Para 17] [655-D-E] 3. The Registrar, Cooperative Societies would now proceed to determine the issue pending before him on the basis of the inquiry report placed before him and all other relevant materials, without in any way being influenced by the observations of the High Court in its impugned judgment. [Para 18] [655-F] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4586 of2007. From the Judgment and final Order dated 06. 01.

2006 ofthe High '/ _J HOUSECONSTRUCTIONSOCIETY,RANCHI[SINHA,J. ] Court ofJudicature at Ranchi in Letter Patent Appeal No. 101 of2904. Vijay Kumar, C. Jay Raj, Mayuri Vats and Vishwajit Singh for the Appellants. Nagendra Rai, Ankul Raj, S. Chandra Shekhar, Abhishek Kumar, Saket Singh, B. B. Singh. Nisha Bagchi, Vishal Kumar and Vikas Mehta for the Respondents. ,__,; ~ The Judgment ofthe Court was delivered by S. B. SINHA, J. Leave granted. 1. This appeal is directed against the judgment and order dated 6. 1. 2006 ofthe Division Bench of the Jharkhand High Court in Letters Patent Appeal No.

101 of2004 whereby and whereunder it was directed: "Having heard the parties, we are ofthe view that this Court having become functus officio, after disposal ofthe appeal, is not required to decide any question in the present appeal, but only with a view to enable the competent authority to pass order under Section 41 ofthe Co-operative Societies Act and the other related provisions ofthe said Act and to find out whether nullification ofsome ofthe allotments is to be made or any appropriate steps in that behalf will have to be taken, the case is remitted to the competent authority i. e. Registrar, Co-operative Societies, Government of Jharkhand, Ranchi, who will not rely on the earlier report, ->.. ( submitted by the Registrar, Co-operative Societies, Government of Jharkhand, Ranchi, having been superseded by the report, submitted by Mr. Justice (Retd. ) Vikramaditya Prasad.

The Registrar, Co-operative Societies, Ranchi, will look into the enquiry report and after giving opportunity to the appellants and other necessary parties, will determine the question as to what action, if any, is required to be taken in accordance with law, -- -~ preferably within four months from the date ofreceipt/production of a copy of this order. It will be open to the appellants to point out the defect, ifany, in the enquiry report, submitted by Mr. Justice (Retd. ) Vikramaditya Prasad. The Registrar, Co-operative Societies, will apply its independent mind and will determine as to - -\. _ whether he will differ with the enquiry report or will accept the same or part thereofand what action is required to be taken Wlder the law. No further order is required to be passed in the present case. " 3. Lands were acquired in the year 1970 for the benefit of the members ofRespondent No. I-Society.

It is stated that in the year 1983 by purported amendments carried out in the Rules, outsiders were also allowed allotment of lands by the said Society. When the question ~ whether such amendments should be permitted or not was pending consideration before the competent authorities, serious irregularities by the members ofthe Managing Committee were pointed out. An inquiry was directed to be made by the Joint Registrar ofCooperative Societies on the intervention ofthe ChiefSecretary ofthe State. The said authority submitted its report. On the basis of the said report, the Managing Committee ofthe Society was placed under suspension. 4. A writ petition filed thereagainst by the Managing Committee of y the Society was dismissed. On an intra court appeal having been preferred thereagainst being Letters Patent Appeal No. IOI of2004, the Division Bench ofthe High Court passed the following order on 10. 3.

2004: "It is seen that the learned single Judge has directed the Circle Officer, Ranchi to be in-charge of the affairs of the Society temporarily. We direct him to take charge temporarily as per the direction ofthe learned single Judge, ifhe has not alread)Vdone so. Ifwarranted, the Superintendent ofPolice, Ranchi is directed to give him the necessary protection to comply with the direction issued by the learned Single Judge in the judgment Wlder appeal. He will also make a search to find out whether the concerned amendment ofthe By-laws ofthe Society had been approved by the Registrar and whether any document is available in the Society in that behalfand ifsuch a document is available, make it available to the Government counsel for being produced in this Court. " 5. By another order dated l 8. 5. 2004(CAV on 20. 4. 2004),the Division Bench upon consideration ofall aspects ofthe matter directed as under: ... "Then, the question is, who wolJ}d conduct the inquiry.

According to learned senior counsel appearing for the appellants, it can only be conducted by the Registrar ofCooperative Societies. Counsel for the intervener went to the extent ofsubmitting that the inquiry should be entrusted to the Central Bureau ofInvestigation (CBI), since it cqn be seen that it was sought to be thwarted by influentialpersons at every stage. Consistent with our finding that the Government has the power to make an enquiry, the same canoe entrusted to any agency. The learned Advocate General submitted that the inquiry must be ordered by this Court, so that any possible impediment to the inquiry could be eliminated. From the submissions of the learned Advocate General, the impression we gather is that it is possible that every attempt would be made to scuttle a proper inquiry into the complaint, unless there is backing ofthe authority ofthis Court for the conduct ofthe inquiry.

We do not think that at this stage, we should entrust the inquiry to the Central Bureau oflnvestigation. We think that it will be appropriate to direct the inquiry to be made _ by the Registrar of Cooperative Societies as authorized by this order ofthis Court. The Registrar of Cooperative Societies will be directly answerable to this Court for the proper conduct ofthe inquiry and he will ensure that athorough inquiry is conducted after adhering to all principles of natural j\. istice. Ifthe finding at the inquiry to be submitted before this Court, justifies action under section 41 of the Act and the other related provisions of the Cooperative Societies Act and the nullification of some of the allotments made, appropriate steps in that behalfwill have to be taken by the Registrar. These aspects can also be taken up and considered by this Court after the inquiry is completed.

Suffice it to say that in suppression ofthe direction ofthe learned Single Judge, we direct thorough inquiry to be made into the complaints by the Registrar of Cooperative Societies, after giving ari opportunity ofbeing heard to the appellants and to the interveners. The report ofthe inquiry in a sealed cover will be produced. before this Court by the Registrar of Cooperative Societies and appropriate follow up orders obtained. The enquiry will be completed in three months. The Registrar ofCooperative Societies will be answerable to this Court for the conduct ofthe enquiry. On the completion of the inquiry, it will also be open to the appellants to move this Court for an appropriate direction regarding the management ofthe Society... " (emphasis supplied) With the aforementioned directions, the appeal was dismissed. '::. I. , 6.

However, the question in regard to the correctness or otherwise of the report ofthe Registrar; Cooperative Societies again having been raised, the Division Bench ofthe High Court by an order dated 2. 9. 2005 directed as under: "4. Having heard the learned counsels ofthe respective parties on the said report and after considering the provisions of Section 41 ofthe Bihar Cooperative Societies Act, and having further regard to the suggestions made by Mr. Y. V. Giri appearing for the yappellants that the report of the enquiry by the Registrar of Cooperative Societies was biased and did not present a true picture of the situation, we are ofthe view that a fresh enquiry may be made by a retired High Court Judge at the expense of the appellants so that the controversy can be set at rest. 5. Having regard to the above, we appoint Mr.

Vikramaditya Prasad, a former Judge ofthis Court to hold an enquiry into the allegations made against the Managing Committee and the irregularities said to have been committed even during the holding ofthe elections and to submit a report to this Court within a month from the date on which he chooses to enter upon the reference, which we hope will be not later than one week after receipt of this order. For the purpose ofenquiring into the allegations, the learned Judge may be assisted by the parties involved and their learned Advocates who are all requested to cooperate with the learned Judge. The learned Judge will be paid a consolidated remuneration ofRs. 30,000/- to be deposited by the appellants with the Registrar General ofthis Court within a week from date. The learned Judge will be entitled to withdraw the said amount towards RAMNANDANSINGH v. AG OFFICE EMPLOYEES CO-OP 653 his remuneration. " (emphasis supplied) 7. Pursuant thereto, an inquiry was made and a report filed.

Respondent No. 2 herein - the Managing Committee of the Society questioned the correctness ofthe said report by filing another application in the said Letters Patent Appeal. A Division Bench of the High Court although noticed that the Letters Patent Appeal was heard and disposed ofby an order dated 18. 5. 2004 and,thus, the Court had become functus officio, yet proceeded to make certain observations which, in our opinion, were wholly unwarranted. The said observations are as under: ".... the case is remitted to the competent authority i. e. Registrar, Co-operative Societies, Government ofJharkhand, Ranchi, who will not rely on the earlier report, submitted by the Registrar, Cooperative Societies, Government ofJharkhand, Ranchi, having been · superseded by the report, submitted by Mr. Justice (Retd. ) D Vikramaditya Prasad.

The Registrar, Co-operative Societies, Ranchi, will look into the enquiry report and after giving opportunity to the appellants and other necessary parties, will determine the , question as to what action, if any, is required to be taken in accordance with law, preferably within four months from the date ofreceipt/production ofa copy ofthis order. It will be open to the appellants to point out the defect, ifany, in the enquiry report, submitted by Mr. Justice (Retd. ) Vikramaditya Prasad. The Registrar, Co-operative Societies, will apply its independent mind and will detennine as to whether he will differ with the enquiry report or will accept the same or part thereofand what action is required to be taken under the law. No further order is required to be passed in the present case. " 8. Appellants before us were impleaded as interveners before the l~arned Single Judge.

They, by this petition for grant ofspecial leave, have questioned the justifiability or otherwise ofthe aforementioned observations ofthe Division Bench. 9. Ms. Bagchi, learned Counsel appearing for the erstwhile Managing Committee questions the locus of the appellants to prefer this appeal relying on the decisions_ of this Court in N Swain and Anr. v. B. K Mohapatra and Ors. , (1970] 3 SCC 321 and Ravi Rao Gaikwad and Ors. v. Rajajinagar Youth Social Welfare Assn. and Ors. , [2006] 5SCC 62. 10. The interveners in this case were not only permitted to intervene by the learned Single Judge but as is evident from the records that they were parties in the Letters Patent Appeal. also. 11. InN Swain's case (supra), this Court was concerned with grant ofa certificate in terms ofArticle 133(1)(c) ofthe Constitution oflndia and in that context it was observed that the interveners having no statutory right to 'prefer an appeal such certificate could not have been granted by the High Court. 12.

IIi Ravi Rao Gaikwad's case (supra), this Court observed that the purpose of grant of application for intervention is to entitle the interveners to address arguments in support ofone or the other side. 13. Appellants~ members ofthe Society. They have been pursuing their cause before the High Court. They were impleaded as parties in the Letters Patent Appeal. Not only in the capacity ofinterveners but also as persons aggrieved, they are, therefore, entitled to file petition for grant of special leave. The preliminary objection in regard to maintainability ofthe appeal raised by Ms. Bagchi is rejected. 14. Indisputably, the Registrar ofCooperative Societies appointed under the Bihar Cooperative Societies Act, 1935 which was adopted by the State ofJharkhand on bifurcation ofthe State as per provisions of the State Organisation Act is a statutory authority.

The Registrar of Cooperative Societies in exercise ofhis powers conferred upon him in terms ofSection 41 and/or Section 48 ofthe said Act is entitled to pass an appropriate order. The orders passed by the Registrar, Cooperative Societies are appealable. · 15. Whosoever had enquired into the charges levelled against the erstwhile members ofthe Managing Committee, indisputably the inquiry report is to be placed before the Registrar so as to enable him to arrive , HOUSE CONSTRUCTION SOCIETY, RANCHI [SINHA, J. ] at a decision. An order by a statutory authority, therefore, must be passed in terms ofthe provisions ofthe Act wherefor the inquiry report must be looked into. The report ofa retired Judge ofthe High Court, indisputably will carry great weight. It must be given an effective consideration. 16. The State ofJharkhand in its counter affidavit stated as under: ...

Directing the Registrar Cooperative Societies to invite objections and having the liberty ofdiffering with the report ofMr. / Justice (Retd. ) Vikramaditya Prasad has opened a pandora's box and at the same time set a bad precedent as the executive wing does not override the report submitted by a committee duly constituted by the Hon'ble Jharkhand High Court and moreover headed by a retired judicial authority. " 17. We are, thus, ofthe opinion that no observation was required to be made in relation thereto. Suffice, it to say that it is for the Registrar, Cooperative Societies to take a decision in the matter and for that purpose it was wholly unnecessary for the Division Bench ofthe High Court to make any observation as to how the said statutory authority should proceed in the matter. The statutory authority is duty-bound to proceed in accordance with law and exercise its jurisdiction within the four comers ofthe Statute. 18.

We are, therefore, ofthe opinion that the Registrar, Cooperative Societies shall now proceed to determine the issue pending before him -'-•( on the basis ofthe inquiry report placed before him and all other relevant materials, without in any way being influenced by the observations ofthe High Court in its impugnedjudgment. 19. The appeal is allowed with the aforementioned observations. No costs. D. G. Appeal allowed. - ,k