THE HONBLE SRI JUSTICE RAMESH RANGANATHAN AND THE HONBLE SRI JUSTICE M.SATYANARAYANA MURTHY
WRIT PETITION NOs.31138 OF 2012 AND BATCH
31-12-2014
The Prudential Cooperative Bank Ltd..Petitioner
The A.P. Cooperative Tribunal at MJ Market, Nampally, Hyderabad and others. .
Respondents
Counsel for the petitioner: Sri Anand Kumar Kapoor
Counsel for respondents: Learned Advocate General and the
Learned Additional Advocate General for the State of
Telangana;
Sri R.N.Hemendranath Reddy.
<GIST:
>HEAD NOTE:
? Citations:
1) 2003 (6) ALD 516
2) (2002 (4) ALD 700
3) AIR 1988 SC 1531 = (1988) 2 SCC 602
4) (1972) 2 SCC 427
5) (1969) 2 AC 147
6) AIR 1965 SC 1449
7) (1995) 2 SCC 326
8) [1969] 2 SCC 793
9) (1864) 10 HLC 704 (HL)
10) (2003) 4 SCC 200
11) (1983) 2 SCC 82
12) (2011) 3 SCC 1
13) (1886) 31 Ch D 607
14) 191 App. Div. 850, 112 N.Y.S 249, 251
15) (2013) 5 SCC 470
16) (2004) 4 SCC 113
17) AIR 1998 SC 1334
18) AIR 2000 SC 1771
19) (2004) 5 SCC 1
20) 1932 AIR(PC) 165
21) 1899 (22) ILR (Mad) 68
22) (1969) 2 SCC 74
23) AIR 1983 SC 1272
24) 1952 SCR 28 : AIR 1952 SC 12
25) AIR 2003 SC 2676
26) AIR 1999 SC 1455
27) (1885) Vol.X AC 364
28) (1989) 3 SCC 709
29) (1971) 1 SCC 85
30) (1997) 8 SCC 89
31) (1988) 1 SCC 440
32) (2003) 4 ALL ER 209
33) (2004) 2 SCC, 657
34) (2010) 4 SCC 301
35) AIR 1981 SC 711
36) (1988) 2 SCC 351
37) (1974) 1 SCC 608
38) (1961) 2 SCR 679
39) (2003) 10 SCC 421
40) AIR 1996 SC 1356
THE HONBLE SRI JUSTICE RAMESH RANGANATHAN
AND
THE HONBLE SRI JUSTICE M.SATYANARAYANA MURTHY
WRIT PETITION NOs.31138 AND 31974 OF 2012
ORDER: (per Honble Sri Justice Ramesh Ranganathan)
By his order dated 29.10.2012 the Learned Single Judge,
before whom W.P.Nos.31138 of 2012 and 31974 of 2012 were
listed, observed that the earlier judgment, in S. Varalakshmi v.
District Co-operative Office, Hyderabad , required
reconsideration by a Division Bench for rendering an authoritative
pronouncement on the aspect whether Section 36 of the A.P.
Mutually Aided Co-operative Societies Act, 1995 (for short the
1995 Act) intended to extend the application of the provision of
an appeal, under Section 76 of the A.P. Co-operative Societies Act,
1964 (for short the 1964 Act), to an order passed in execution
proceedings under Section 36 of the 1995 Act. The Learned Single
Judge was also of the opinion that the issue, whether Rule 52 of
the Andhra Pradesh Cooperative Societies Rules, 1964 (for short
the 1964 Rules), which was made in the exercise of the powers of
delegated legislation conferred on the State Government under
Section 130 of the 1964 Act and was not incorporated by reference
by any of the provisions of the 1995 Act, could be invoked for
execution of the awards passed under the 1995 Act, also required
consideration by the Division bench.
Elaborate submissions were put forth by Sri Anand Kumar
Kapoor, Learned Counsel for the petitioner-Bank; the Learned
Advocate General and the Learned Additional Advocate General for
the State of Telangana and Sri R.N.Hemendranath Reddy, Learned
Counsel for the petitioner in W.P.No.31794 of 2012.
Facts, to the limited extent necessary to answer the
reference, are that the Prudential Co-operative Bank Limited, (the
petitioner in W.P. No.31138 of 2012 and a Co-operative Society
registered under the 1995 Act), advanced loans to the 5th
respondent therein for which respondent Nos.2, 6 and 7 stood as
guarantors. As the 5th respondent defaulted in repayment of the
loan amount, proceedings in O.P. No.408 of 2001 were instituted
before the Andhra Pradesh Co-operative Tribunal (for short the
Tribunal) by the petitioner bank under Section 37 of the 1995 Act.
An award was passed by the Tribunal on 06.01.2011 for
Rs.48,62,201.99 Ps with future interest at 22% per annum on the
principal amount of Rs.39,25,000/-. The petitioner-bank filed E.P.
No.64 of 2011, before the Tribunal, on 05.09.2011 to execute the
award. The Tribunal transmitted the execution proceedings to the
Divisional Co-operative Officer, Secunderabad who, in turn,
delegated his powers to the Sales Officer, Prudential Co-operative
Bank, Secunderabad (the 3rd respondent).
The 3rd respondent brought the immovable properties to sale
and, pursuant thereto, they were put to sale on 31.08.2012.
However, before the sale was confirmed, one of the guarantors
preferred an appeal, in CTA No.72 of 2012, before the Tribunal
questioning the validity of the sale proceedings. Thereafter the
appellant in CTA No.72 of 2012 filed I.A. No.188 of 2012 seeking
stay of all further proceedings. By its order dated 28.09.2012, the
Tribunal granted interim stay subject to the appellant depositing
Rs.50 lakhs by 19.10.2012. Aggrieved thereby both the petitioner
bank, and the appellant in CTA No.72 of 2012, filed W.P.
Nos.31138 and 31974 of 2012 respectively. Before the Learned
Single Judge it was contended, on behalf of the petitioner-bank,
that no appeal lay, much less to the Tribunal, against orders
passed in execution proceedings instituted pursuant to an order
passed under Section 37 of the 1995 Act. On the other hand it
was contended, on behalf of the petitioner in W.P. No.31974 of
2012, that, if this contention was accepted, it would mean that the
1964 Rules (more particularly Rule 52 thereof), which were made
under Section 130 and did not form part of Chapter X of the 1964
Act, would also not apply to execution of an award passed under
the 1995 Act.
In A. Vemanaidu v. Erracheruvupalle Primary Coop.
Society, Chittoor District , the petitioner had obtained
agricultural loans from the respondent, a society registered under
the A.P. Cooperative Societies Act, 1964. A public auction notice
was issued proposing to bring the immovable properties of the
petitioner to sale in a public auction in execution of the recovery
certificate issued by the competent authority under Section 71(1)
of the A.P. Cooperative Societies Act, 1964. Aggrieved thereby, the
petitioner invoked the jurisdiction of this Court. It is in this
context, that this Court held:-
..A reading of Sub-section (2) of Section 70 as well as Rule 52 of the
Rules, it becomes clear that the amount covered by a certificate for recovery of
the debt granted by the Registrar of Co-operative Societies under Section 71(1)
of
the Act can be executed in accordance with Sub-section (2) of Section 70 of the
Act duly following the procedure under Rule 52 of the Rules. The Act is a self-
contained Code.
It provides for constitution of Cooperative 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.
..The learned Counsel for the petitioners, 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 petitioners 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 petitioners cannot be
accepted. There are adequate powers conferred. It is well-settled that 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 petitioners are brought to sale. (emphasis
supplied)
Relying on A. Vema Naidu2, wherein it was held that an
order for execution of a certificate of recovery under Section 71 of
the A.P. Cooperative Societies Act, 1964, and the auction notice
issued consequent thereto, could only have been made under
Section 70(2) read with sub-rule (11) of Rule 52 and, therefore, the
impugned action was clearly appealable under Section 76 of the
Act, the Learned Single Judge, in S. Varalakshmi1, held that, in
view of the above decision, it must be held that the petitioner has
an effective alternative remedy and the two issues raised in the
Writ Petition could not be gone into at this stage by the Court.
Having so held, the Learned Single Judge further observed:-
.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 followed is 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.
..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..
... 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.
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.
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...
(emphasis supplied)
Section 36 of the 1995 Act relates to execution of decisions,
decrees and orders. It stipulates that, in regard to execution of
decisions, decrees and orders, all the provisions of Chapter X of
the A.P. Co-operative Societies Act, 1964 shall, mutatis mutandis,
apply to Co-operative Societies registered under the 1995 Act such,
however, that all references to the Registrar in the 1964 Act shall
be construed to be a reference to the Co-operative Tribunal in their
application to Co-operative Societies registered under the 1995 Act.
Chapter X of the 1964 Act relates to execution of decisions, decrees
and orders. Sections 70 to 74 fall under Chapter X. Section 70
confers power on the Registrar to recover certain amounts by
attachment and sale of property, and execution of orders. Section
70-A relates to execution of non-monetary orders. Section 71
relates to recovery of debts, and Section 72 provides that the
Registrar, or the person authorised by him, shall be a Civil Court
for certain purposes. Section 73 relates to attachment of property
before decision or order, and Section 74 relates to recovery of
amounts due to the Government. Chapter XI of the 1964 Act
relates to appeal, revision and review. Section 75, thereunder,
relates to the constitution of a Co-operative Tribunal. Section 76,
which also forms part of Chapter XI of the 1964 Act, relates to
appeals and, under sub-section (1) thereof, any person or society
aggrieved by any decision passed or order made under Sections 6,
9A, 9B, 9C, 12A, 13, 16, 17, 19, 21, 21A, 21AA, 23, 32(3), 34, 34A,
60, 62, 64, 66, 70, 71, 73 and 117 of the 1964 Act may appeal to
the Tribunal. While Section 76 does not fall under Chapter X of
the 1964 Act, an appeal is provided thereunder against an order
passed under Sections 70, 71 and 73 of the 1964 Act all of which
fall under Chapter X thereof.
The 1995 Act does not explicitly provide for an appeal
against the decision of the Tribunal on a dispute referred to it
under Section 37 of the said Act. The power to create or enlarge
jurisdiction is legislative in character, so also the power to confer a
right of appeal or to take away a right of appeal. (A.R. Antulay v.
R.S. Nayak ; M.L. Sethi v. R.P. Kapur ; Anisminic Ltd. v.
Foreign Compensation Commission ; Halsburys Laws of
England, 4th Edn., Vol. 10, page 327 at para 720; Amnon
Rubinstein - Jurisdiction and Illegality (1965 Edn., pages 16-
50); Raja Soap Factory v. S.P. Shantharaj ). A right of appeal is
always statutory. The Court cannot confer or infer it. What is
legislatively not permitted cannot be read by implication, in any
event not in respect of a right of appeal as it 'is a creature of
Statute. A right of appeal is conferred by statute or equivalent
legislative authority. It is not a mere matter of practice or
procedure. (U.P. Awas Evam Vikas Parishad v. Gyan Devi (dead)
by LRs ; Shankar Kerba Jadhav v. The State of Maharashtra ;
Halsbury's Laws of England Vol. 37 Para 677). The creation of a
right to an appeal is an act which requires legislative authority,
neither an inferior court nor the superior court nor both combined
can create such a right or take away such a right, it being one of
limitation and extension of jurisdiction. (Attorney General v.
Herman James Sillem ; A.R.Antulay3). While the absence of a
specific provision in the 1995 Act, conferring a right of appeal
against the decision of the Tribunal on the dispute referred to it
under Section 37 thereof, would mean that there is no statutory
remedy of an appeal against such decisions or orders, the Learned
Single Judge, in S. Varalakshmi1, read into Section 36 of the 1995
Act, such a remedy. By the order under reference, another
Learned Single Judge has doubted the correctness of the
Judgement in S. Varalakshmi1. It is necessary for us, therefore,
to examine the scope of Section 36 of the 1995 Act.
Section 36 of the 1995 Act provides that all the provisions of
Chapter X of the 1964 Act shall, mutatis mutandis, apply to co-
operative societies registered under the 1995 Act. 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. When such a legislative device is adopted, the
relevant provisions of the earlier Act will apply mutatis mutandis to
matters governed by the later Act. (Maharashtra SRTC v. State of
Maharashtra ). 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. (M/s.Ashok Service Centre v.
State of Orissa ). The legal incidents of legislation by
incorporation is that it becomes part of the existing law which
implies bodily lifting provisions of one enactment and making them
part of another. (Girnar Traders v. State of Maharashtra ). If a
subsequent Act brings into itself by reference some of the clauses
of a former Act, the legal effect of that, as has often been held, is to
write those sections into the new Act as if they had been actually
written in it with the pen, or printed in it. (Wood's Estate, Ex
parte, Works and Buildings Commrs.. Re. ). Consequently all
the provisions of Chapter X of the 1964 Act, i.e., Sections 70 to 74
thereof, must be read as part and parcel of Section 36 of the 1995
Act.
The next question which necessitates examination is what do
the words mutatis mutandis in Section 36 of the 1995 Act mean?
Earl Jowitt's 'The Dictionary of English Law (1959)' defines
'mutatis mutandis' as 'with the necessary changes in points of
detail'. In Bouvier's Law Dictionary (3rd Revision, Vol. II), and
in Black's Law Dictionary (Revised 4th Edn. 1968) 'mutatis
mutandis' is defined to mean 'with the necessary changes in point
of detail, meaning that matters or things are generally the same,
but to be altered when necessary. (Houseman v. Waterhouse ).
The phrase mutatis mutandis implies that a provision contained
in another part of the statute or other statutes would have
application as it is, with certain changes in points of detail.
(Rajasthan State Industrial Development & Investment Corpn.
v. Diamond & Gem Development Corpn. ; Prahlad Sharma v.
State of U.P. ; Mariyappa v. State of Karnataka ; Janba (dead)
v. Gopikabai (Smt.) ; M/s.Ashok Service Centre11). Extension
of an 'earlier Act, mutatis mutandis, to a later Act brings in the
idea of adaptation, but so far only as it is necessary for the
purpose, making a change without altering the essential nature of
the thing changed, subject of course to express provisions made in
the later Act. (M/s.Ashok Service Centre11). Chapter X of the
1964 Act has been made applicable mutatis mutandis to co-
operative societies registered under the 1995 Act with the limited
change that wherever there is a reference to the Registrar in
Chapter X of the 1964 Act, such provisions shall be construed as
referring to the Tribunal in the application of such provisions to
co-operative societies registered under the 1995 Act. In effect the
word Registrar, as used in the different provisions of Chapter X of
the 1964 Act, must be substituted with the word co-operative
Tribunal, when the provisions of Chapter X of the 1964 Act are
applied to co-operative societies registered under the 1995 Act.
In S. Varalakshmi1, the Leaned Single Judge failed to notice
that it is only Chapter X of the 1964 Act which has been made
applicable, mutatis mutandis, to co-operative societies registered
under the 1995 Act, and not Chapter XI of the 1964 Act or Section
76 thereof. As it is only the provisions of Chapter X of the 1964
Act which have, mutatis mutandis, been made applicable to co-
operative Societies registered under the 1995 Act, the remedy of an
appeal under Section 76 of the 1964 Act, which is in Chapter XI
thereof, has not been incorporated by reference in Section 36 of the
1995 Act. Consequently no statutory remedy of appeal is available
to co-operative societies registered under the 1995 Act, against the
decision or order passed by the Tribunal in the exercise of its
jurisdiction under Section 37 of the 1995 Act.
This question can be examined from yet another angle. The
appeal provided to the co-operative Tribunal under Section 76 of
the 1964 Act is, among others, against orders passed by the
Registrar under Chapter X of the 1964 Act which include Sections
70, 71 and 73 thereof. As Chapter X of the 1964 Act has been
made applicable to co-operative Societies registered under the
1995 Act, with the limited change that the Registrar, in Chapter X
of the 1964 Act, stands substituted by the co-operative Tribunal in
its application to co-operative societies registered under the 1995
Act, extending the remedy of an appeal under Section 76 of the
1964 Act, to orders passed under Section 37 of the 1995 Act,
would mean that a remedy of an appeal is provided to the Co-
operative Tribunal against its own orders. An appeal is an
application by a party to an appellate court asking it to set aside or
revise a decision of a subordinate court. (Tirupati Balaji
Developers (P) Ltd. v. State of Bihar ; and Nagendra Nath Dey.
v. Suresh Chandra Dey ). Appeal implies, in its natural and
ordinary meaning, the removal of a cause from any inferior court
or tribunal to a superior judge or court for re-examination or
review, more so for the purpose of testing the soundness of the
decision and proceedings of the inferior court or tribunal. (Tirupati
Balaji Developers (P) Ltd.19; Chappan v. Moldin Kutti ). The
removal of a cause is for the purpose of testing the soundness of
the decision of the inferior court. The words appellate jurisdiction
mean the power of a superior court to review the decision of an
inferior court. (Tirupati Balaji Developers (P) Ltd.19; Whartons
Law Lexicon).
An appeal gives the right of entering the superior court and
invoking its aid and interposition to redress the error of the court
below. There are two important postulates of constituting the
appellate jurisdiction: (i) the existence of the relationship of a
superior and an inferior court; and (ii) the power in the former to
review decisions of the latter. An appeal removes a cause, entirely
subjecting the facts as well as the law, to a review and a retrial. Its
purpose is to test the soundness of the decision and proceedings of
the inferior court or tribunal. The essential criterion of the
appellate jurisdiction is that it revises and corrects the proceedings
in a cause already instituted, and does not create that cause. In
reference to judicial tribunals, an appellate jurisdiction necessarily
implies that the subject-matter has already been instituted and
acted upon, by some other court/tribunal, whose judgment or
proceedings are sought to be revised. The superior forum has the
jurisdiction to reverse, confirm, annul or modify the order of the
forum appealed against and, in the event of a remand, the lower
forum is required to rehear the matter and comply with such
directions as may accompany the order of remand. The appellate
jurisdiction inherently carries with it a power to issue corrective
directions binding on the forum below. (Tirupati Balaji
Developers (P) Ltd.19; Shankar Ramchandra Abhyankar v.
Krishnaji Dattatreya Bapat ). As an appeal lies from an inferior
body or an authority or Tribunal to a superior forum or Court or
Tribunal, an appeal lay, under Section 76 of the 1964 Act, to the
Co-operative Tribunal against the order of the Registrar. As the
Co-operative Tribunal stands substituted for the Registrar, in the
application of Chapter X of the 1964 Act to co-operative societies
registered under the 1995 Act, there cannot be an appeal from the
order of the Tribunal to itself. The judgment in S. Varalakshmi1,
to the extent it held to the contrary, cannot be treated as laying
down the correct law.
It is well settled that interim relief is granted during the
pendency of proceeding so that, while granting final relief, the
court is not faced with a situation that the relief becomes
infructuous or that, during the pendency of the proceeding, an
unfair advantage is not taken by the party in default or against
whom interim relief is sought. The object behind granting interim
relief is to maintain status quo so that the final relief can be
appropriately moulded without the party's position being altered
during the pendency of the proceedings. (Cotton Corporation of
India v. United Industrial Bank Ltd. ). An interim relief can be
granted only in aid of, and as ancillary to, the main relief which
may be available to the party on final determination of his rights in
a proceedings. If this be the purpose to achieve which power to
grant temporary relief is conferred, it is inconceivable that where
the final relief cannot be granted in the terms sought for, because
the statute bars the granting of such a relief, ipso facto the
temporary relief of the same nature can be granted. (State of
Orissa v. Madan Gopal Rungta ; Cotton Corporation of
India23). As no appeal lies to the Tribunal against its own orders,
the necessary corollary thereto is that the Tribunal can neither
entertain an appeal against its own decision, decree or order
passed under Section 37 of the 1995 Act, nor can it pass any
interim orders in such an appeal filed before it. Sri R.N.
Hemendranath Reddy, Learned Counsel, would submit that the
order now passed by us, holding that there is no right of appeal
against the orders passed by the Tribunal in execution
proceedings, would open the floodgates, result in dismissal of
several hundreds of appeals now pending before the Tribunal, and
all the appellants therein being forced to invoke the extra-ordinary
jurisdiction of this Court under Article 226 of the Constitution of
India. As the remedy of an appeal can only be statutorily
prescribed, the problem, as presented by Sri R.N.Hemendranath
Reddy, can only be addressed by the Legislature. Suffice it to
record the submission of the Learned Advocate General for the
State of Telangana that he would request the Government to take
steps to resolve this issue.
The second question referred for our opinion is whether the
1964 Rules, more particularly Rule 52 thereof, can be invoked for
execution of awards passed under the 1995 Act. The 1995 Act
does not confer any rule making power on the Government.
However, Section 130 of the 1964 Act relates to the power to make
rules and, under sub-section (1) thereof, the Government may, by
notification published in the Andhra Pradesh Gazette, make rules
for carrying out all or any of the purposes of the 1964 Act for the
whole or any part of the State, and for any class of societies. In the
exercise of the powers conferred by Section 130, the Government of
A.P. made the 1964 Rules which were published in the A.P.
Gazette on 30.07.1964.
Rule 52 of the 1964 Rules prescribes the procedure in
execution of decrees, decisions or orders. Rule 52(14)(v) thereof
provides that, after confirmation of the sale, the Registrar shall
grant a certificate of sale, bearing his seal and signature, to the
purchaser; such certificate shall state the property sold and the
name of the purchaser; it shall be conclusive evidence of the fact of
purchase, in all courts and tribunals where it may be necessary to
prove it; and no proof of the seal or signature of the Registrar of
the district shall be necessary unless the authority, before whom it
is produced, shall have reason to doubt its genuineness. Rule
52(14)(vi), which was inserted by G.O.Ms. No.37 dated 28.01.2002,
provides that any order made under clause (v) of Rule 52(14) shall,
subject to an appeal under Section 76 of the A.P. Co-operative
Societies Act within ninety days from the date of the order, be final
and shall not be liable to be questioned in any suit or other legal
proceedings.
As noted hereinabove, Section 76 of the 1964 Act provides
the remedy of an appeal only against orders passed under the
provisions specifically referred to therein. Rule 52(14)(vi) merely
provides that, unless and until set aside in an appeal filed within
90 days, the order passed under Rule 52(14)(v) is final. Like Rule
52(14)(vi) of the 1964 Rules, Section 153 of the Patna Municipal
Corporation Act, 1951 provided that "every valuation made by the Chief
Executive Officer -- -- shall, subject to the provisions of Sections 151 and
152,
be final". In Rai Vimal Krishna v. State of Bihar , the Supreme
Court held that the phrase 'subject to' in Section 153 meant that,
until and unless the assessment list was revised or amended
under Section 151 or 152, the assessment list would continue to
be final. Rule 52(14)(vi) merely gives finality to the order passed
under Rule 52(14)(v) subject to an appeal under Section 76 of 1964
Act, and cannot be understood as conferring a right of appeal.
It is no doubt true that the Rule making power of the
Government in Section 130 of the 1964 Act is in Chapter XIV
thereof, and not in Chapter X which alone is incorporated in
Section 36 of the 1995 Act. The 1995 Act does not also confer any
power on the Government to make rules. Does that mean that the
statutory provisions in Chapter X of the 1964, relating to execution
of decisions, decree or orders, cannot be enforced in the absence of
Rules? In understanding the scope and purport of Chapter X of
the 1964 Act, which has been incorporated by reference in Section
36 of the 1995 Act, it is permissible to refer to the other provisions
of the 1964 Act. Even though only particular sections of an earlier
Act are incorporated into the latter Act, in construing the
incorporated sections it may, at times, be necessary and
permissible to refer to other parts of the earlier statute which are
not incorporated. (M/s. Surana Steels Pvt. Ltd. v. Dy.
Commissioner of Income-tax ). Where a single Section/Chapter
of an Act is introduced into another Act, it must be read in the
sense which it bore in the original Act from which it is taken, and,
consequently, it is perfectly legitimate to refer to all the rest of that
Act in order to ascertain what the section/chapter meant, though
those other sections are not incorporated in the new Act. (The
Mayor, Aldermen, And Burgesses of the Borough of
Portsmouth (acting as the Urban Sanitary Authority of the said
Borough v. Charles Bovill Smith, James Goldsmith, (the
Younger) and John Baker Goldsmith) ).
A reference to the other provisions of the 1964 Act, and the
Rules made thereunder, is necessary to give a meaning to the
machinery provisions in Chapter X of the 1964 Act, and to
interpret them in such a manner as to ensure that such provisions
are not rendered futile. A court of construction dealing with the
language of a statute, in order to ascertain from and accord to the
statute the meaning and purpose which the legislature intended
for it, strongly leans against any construction which tends to
reduce a statute to futility. The provisions of a statute must be so
construed as to make it effective and operative, on the principle "
ut res magis valent quam pereat". (Tinsukhia Electric Supply Co.
Ltd. Vs. State of Assam ; Madhav Rao Jivaji Rao Scindia v.
Union of India , Union of India v. B.S. Agarwal ; Paradise
Printers v. Union Territory of Chandigarh ). The court will
presume that the Legislature did not intend a statute to have
consequences which are objectionable or undesirable, or absurd or
unworkable, or impracticable or inconvenient, or anomalous or
illogical, or futile or pointless. (R. v. Central Valuation Officer ).
The provisions of Chapter X of the 1964 Act, which are
machinery provisions, must be construed in such a manner as to
make it workable having regard to the doctrine " ut res magis
valeat quam pereat". (Andhra Bank v. B. Satyanarayana ; (H.S.
Vankani v. State of Gujarat ). They must be construed so as to
give them a sensible meaning. The legislature expects the court to
observe the maxim ut res magis valeat quam pereat (it is better for
a thing to have effect than to be made void). If the obvious
intention of the statute gives rise to obstacles in implementation,
the court must do its best to find ways of overcoming those
obstacles, so as to avoid absurd results. The Rule making
authority also expects the rule framed by it to be made workable
and never visualises absurd results. (H.S. Vankani34). It would
not be improper for this Court to refer to the scope of the Rule
making power under Section 130 of the Act and the Rules made
thereunder i.e., the 1964 Rules, more particularly to Rule 52
thereof which prescribes the procedure in execution of decrees,
decisions or orders, in understanding the scope of Chapter X of the
1964 Act which has been incorporated by reference in Section 36
of the 1995 Act.
For the purpose of interpreting Chapter X of the 1964 Act,
it is permissible to read Rule 52 of the 1964 Rules as if it was in
Chapter X of the 1964 Act. The complex demands on modern
legislation necessitates the plenary legislating body to discharge its
legislative function by laying down broad guidelines and standards,
to lead and guide as it were, leaving it to the subordinate
legislating body to fill up the details by making necessary rules and
to amended the rules from time to time to meet unforeseen and
unpredictable situations, and within the framework of the power
entrusted to it by the plenary legislating body. (State of T.N. v.
M/s. Hind Stone etc. ). Rules framed, under the provisions of a
statute, form part of the statute. But before a rule can have the
effect of a statutory provision, two conditions must be fulfilled,
namely, (1) it must conform to the provisions of the statute under
which it is framed; and (2) it must also come within the scope and
purview of the rule making power of the authority framing the rule.
(General Officer Commanding-in-Chief v. Subhash Chandra
Yadav ).
The rule making power conferred on the Government, for
carrying out all or any of the purposes of the Act, must be confined
to such of the purposes as are indicated in any of the provisions of
the Act. (A.P. Coop. Bank v. Chittoor Primary Coop. Bank ). A
statutory rule, while ever subordinate to the parent statute, is,
otherwise, to be treated as a part of the statute, and as effective.
"Rules made under the Statute must be treated for all purposes of
construction or obligation exactly as if they were in the Act and are
to be of the same effect as if contained in the Act and are to be
judicially noticed for all purposes of construction or obligation.
(State of U.P. v. Babu Ram Upadhya ; Maxwell; Interpretation
of Statutes, 11th Edn. pp. 49-50; M/s.Hind Stone etc.35).
As Rule 52 of the 1964 Rules prescribes the procedure for
execution of decisions, decrees or orders as stipulated in Chapter X
of the 1964 Act, it is not impermissible to read Rule 52 of the 1964
Rules as a part of Chapter X of the 1964 Act, in which event the
procedure prescribed in Rule 52 of the 1964 Rules, along with
Chpater X of the 1964 Act, can be treated as having been
incorporated by reference in Section 36 of the 1995 Act. The 1995
Act was notified on 27.05.1995 and came into force on 01.06.1995.
Both the 1964 Act and the 1964 Rules were in existence when the
1995 Act was made. As the State Legislature cannot be said to be
unaware of the 1964 Act and the 1964 Rules when it incorporated
Chapter X of the 1964 Act by reference in Section 36 of the 1995
Act, and as the Rules made under the 1964 Act must be construed
as part of the Act itself, the legislature can be presumed to have
intended to incorporate the 1964 Rules, to the extent they relate to
Chapter X of the 1964 Act (i.e., Rule 52 of the 1964 Rules), also in
Section 36 of the 1995 Act. On such a construction, it is
permissible for the Tribunal to invoke Rule 52 of the 1964 Rules in
the execution of the awards passed under the 1995 Act.
Even, in the absence of Rules prescribing the procedure for
executing decrees, decisions or orders, the provisions of Chapter X
of the 1964 Act, which have been incorporated by reference in
Section 36 of the 1995 Act, must be given effect to. The whole
working and functioning of Chapter X of the 1964 Act, as
incorporated in Section 36 of the 1995 Act, cannot be withheld and
rendered nugatory only for the reason of absence of the rules
prescribing the procedure. Absence of Rules will not render the Act
inoperative, and would not curtail the power conferred under the
Act. The power vested under the Act would still be exercisable as
provided under the provision. (Orissa State (Prevention &
Control of Pollution) Board v. Orient Paper Mills ). While the
power conferred by the Act can be exercised even in the absence of
rules, such power should be exercised on well settled principles
and norms which would satisfy the test of Article 14 of the
Constitution. (Delhi Science Forum v. Union of India ). It is not
even urged before us that the procedure prescribed for execution of
decisions, decrees and orders in Rule 52 of the 1964 Rules is in
violation of Article 14 of the Constitution of India.
Even in the absence of Rules, the Tribunal, while executing
awards under Section 36 of the 1995 Act, can follow any
reasonable procedure. As Rule 52 of the 1964 Rules is also a
reasonable procedure for execution of awards, it is not
impermissible for the Tribunal to follow the procedure prescribed
therein. It must be borne in mind that the onus, to demonstrate
that a decision of the Tribunal is vitiated for adopting a procedure
not sanctioned by the 1995 Act, is on the person who questions
the validity thereof. This onus is discharged only by satisfying the
court that the authority has adopted a procedure which does not
satisfy the test of Article 14 of the Constitution or which is against
the provisions of the statute in question. (Delhi Science Forum40).
It has not even contended before us that the procedure, prescribed
under Rule 52 of the 1964 Rules, does not satisfy the test of Article
14 of the Constitution or is against the provisions of the 1964 Act.
The Tribunal is, therefore, not disabled from following the
procedure prescribed in Rule 52 of the 1964 Rules in executing
awards under the 1995 Act.
In the result, we answer the reference holding that a person
aggrieved by a decision of the Tribunal under Section 37 of the
1995 Act, has no statutory remedy of an appeal thereagainst,
much less to the Tribunal itself, and the judgment in S.
Varalakshmi1, to the extent it held that an appeal lies to the
Tribunal, does not lay down the correct law. The Tribunal is also
entitled to invoke Rule 52 of the 1964 Rules, and to follow the
procedure prescribed therein, in executing awards under the 1995
Act.
In the normal course, we would have directed placing the
matter before the Learned Single Judge but, as the result of both
the Writ Petitions, are solely based on the questions referred to us,
W.P.No.31138 of 2012 is allowed. As C.T.A.No.72 of 2012, filed
before the Tribunal by the petitioner in W.P.No.31974 of 2012, is
itself not maintainable, both W.P.No.31974 of 2012 filed before this
Court, and C.T.A.No.72 of 2012 filed before the Tribunal, are
dismissed. As C.T.A.No.72 of 2012 is dismissed as not
maintainable, I.A.No.188 of 2012 filed in C.T.A.No.72 of 2012 shall
also stand dismissed. The proceedings in E.P.No.64 of 2011 shall
continue, and the Tribunal shall adjudicate the same in
accordance with law. The Miscellaneous Petitions pending, if any,
in both the Writ Petitions shall stand disposed of. No costs.
_____________________________
RAMESH RANGANATHAN, J
___________________________
M. SATYANARAYANA MURTHY, J
Date: 31-12-2014.
WRIT PETITION NOs.31138 OF 2012 AND BATCH
31-12-2014
The Prudential Cooperative Bank Ltd..Petitioner
The A.P. Cooperative Tribunal at MJ Market, Nampally, Hyderabad and others. .
Respondents
Counsel for the petitioner: Sri Anand Kumar Kapoor
Counsel for respondents: Learned Advocate General and the
Learned Additional Advocate General for the State of
Telangana;
Sri R.N.Hemendranath Reddy.
<GIST:
>HEAD NOTE:
? Citations:
1) 2003 (6) ALD 516
2) (2002 (4) ALD 700
3) AIR 1988 SC 1531 = (1988) 2 SCC 602
4) (1972) 2 SCC 427
5) (1969) 2 AC 147
6) AIR 1965 SC 1449
7) (1995) 2 SCC 326
8) [1969] 2 SCC 793
9) (1864) 10 HLC 704 (HL)
10) (2003) 4 SCC 200
11) (1983) 2 SCC 82
12) (2011) 3 SCC 1
13) (1886) 31 Ch D 607
14) 191 App. Div. 850, 112 N.Y.S 249, 251
15) (2013) 5 SCC 470
16) (2004) 4 SCC 113
17) AIR 1998 SC 1334
18) AIR 2000 SC 1771
19) (2004) 5 SCC 1
20) 1932 AIR(PC) 165
21) 1899 (22) ILR (Mad) 68
22) (1969) 2 SCC 74
23) AIR 1983 SC 1272
24) 1952 SCR 28 : AIR 1952 SC 12
25) AIR 2003 SC 2676
26) AIR 1999 SC 1455
27) (1885) Vol.X AC 364
28) (1989) 3 SCC 709
29) (1971) 1 SCC 85
30) (1997) 8 SCC 89
31) (1988) 1 SCC 440
32) (2003) 4 ALL ER 209
33) (2004) 2 SCC, 657
34) (2010) 4 SCC 301
35) AIR 1981 SC 711
36) (1988) 2 SCC 351
37) (1974) 1 SCC 608
38) (1961) 2 SCR 679
39) (2003) 10 SCC 421
40) AIR 1996 SC 1356
THE HONBLE SRI JUSTICE RAMESH RANGANATHAN
AND
THE HONBLE SRI JUSTICE M.SATYANARAYANA MURTHY
WRIT PETITION NOs.31138 AND 31974 OF 2012
ORDER: (per Honble Sri Justice Ramesh Ranganathan)
By his order dated 29.10.2012 the Learned Single Judge,
before whom W.P.Nos.31138 of 2012 and 31974 of 2012 were
listed, observed that the earlier judgment, in S. Varalakshmi v.
District Co-operative Office, Hyderabad , required
reconsideration by a Division Bench for rendering an authoritative
pronouncement on the aspect whether Section 36 of the A.P.
Mutually Aided Co-operative Societies Act, 1995 (for short the
1995 Act) intended to extend the application of the provision of
an appeal, under Section 76 of the A.P. Co-operative Societies Act,
1964 (for short the 1964 Act), to an order passed in execution
proceedings under Section 36 of the 1995 Act. The Learned Single
Judge was also of the opinion that the issue, whether Rule 52 of
the Andhra Pradesh Cooperative Societies Rules, 1964 (for short
the 1964 Rules), which was made in the exercise of the powers of
delegated legislation conferred on the State Government under
Section 130 of the 1964 Act and was not incorporated by reference
by any of the provisions of the 1995 Act, could be invoked for
execution of the awards passed under the 1995 Act, also required
consideration by the Division bench.
Elaborate submissions were put forth by Sri Anand Kumar
Kapoor, Learned Counsel for the petitioner-Bank; the Learned
Advocate General and the Learned Additional Advocate General for
the State of Telangana and Sri R.N.Hemendranath Reddy, Learned
Counsel for the petitioner in W.P.No.31794 of 2012.
Facts, to the limited extent necessary to answer the
reference, are that the Prudential Co-operative Bank Limited, (the
petitioner in W.P. No.31138 of 2012 and a Co-operative Society
registered under the 1995 Act), advanced loans to the 5th
respondent therein for which respondent Nos.2, 6 and 7 stood as
guarantors. As the 5th respondent defaulted in repayment of the
loan amount, proceedings in O.P. No.408 of 2001 were instituted
before the Andhra Pradesh Co-operative Tribunal (for short the
Tribunal) by the petitioner bank under Section 37 of the 1995 Act.
An award was passed by the Tribunal on 06.01.2011 for
Rs.48,62,201.99 Ps with future interest at 22% per annum on the
principal amount of Rs.39,25,000/-. The petitioner-bank filed E.P.
No.64 of 2011, before the Tribunal, on 05.09.2011 to execute the
award. The Tribunal transmitted the execution proceedings to the
Divisional Co-operative Officer, Secunderabad who, in turn,
delegated his powers to the Sales Officer, Prudential Co-operative
Bank, Secunderabad (the 3rd respondent).
The 3rd respondent brought the immovable properties to sale
and, pursuant thereto, they were put to sale on 31.08.2012.
However, before the sale was confirmed, one of the guarantors
preferred an appeal, in CTA No.72 of 2012, before the Tribunal
questioning the validity of the sale proceedings. Thereafter the
appellant in CTA No.72 of 2012 filed I.A. No.188 of 2012 seeking
stay of all further proceedings. By its order dated 28.09.2012, the
Tribunal granted interim stay subject to the appellant depositing
Rs.50 lakhs by 19.10.2012. Aggrieved thereby both the petitioner
bank, and the appellant in CTA No.72 of 2012, filed W.P.
Nos.31138 and 31974 of 2012 respectively. Before the Learned
Single Judge it was contended, on behalf of the petitioner-bank,
that no appeal lay, much less to the Tribunal, against orders
passed in execution proceedings instituted pursuant to an order
passed under Section 37 of the 1995 Act. On the other hand it
was contended, on behalf of the petitioner in W.P. No.31974 of
2012, that, if this contention was accepted, it would mean that the
1964 Rules (more particularly Rule 52 thereof), which were made
under Section 130 and did not form part of Chapter X of the 1964
Act, would also not apply to execution of an award passed under
the 1995 Act.
In A. Vemanaidu v. Erracheruvupalle Primary Coop.
Society, Chittoor District , the petitioner had obtained
agricultural loans from the respondent, a society registered under
the A.P. Cooperative Societies Act, 1964. A public auction notice
was issued proposing to bring the immovable properties of the
petitioner to sale in a public auction in execution of the recovery
certificate issued by the competent authority under Section 71(1)
of the A.P. Cooperative Societies Act, 1964. Aggrieved thereby, the
petitioner invoked the jurisdiction of this Court. It is in this
context, that this Court held:-
..A reading of Sub-section (2) of Section 70 as well as Rule 52 of the
Rules, it becomes clear that the amount covered by a certificate for recovery of
the debt granted by the Registrar of Co-operative Societies under Section 71(1)
of
the Act can be executed in accordance with Sub-section (2) of Section 70 of the
Act duly following the procedure under Rule 52 of the Rules. The Act is a self-
contained Code.
It provides for constitution of Cooperative 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.
..The learned Counsel for the petitioners, 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 petitioners 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 petitioners cannot be
accepted. There are adequate powers conferred. It is well-settled that 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 petitioners are brought to sale. (emphasis
supplied)
Relying on A. Vema Naidu2, wherein it was held that an
order for execution of a certificate of recovery under Section 71 of
the A.P. Cooperative Societies Act, 1964, and the auction notice
issued consequent thereto, could only have been made under
Section 70(2) read with sub-rule (11) of Rule 52 and, therefore, the
impugned action was clearly appealable under Section 76 of the
Act, the Learned Single Judge, in S. Varalakshmi1, held that, in
view of the above decision, it must be held that the petitioner has
an effective alternative remedy and the two issues raised in the
Writ Petition could not be gone into at this stage by the Court.
Having so held, the Learned Single Judge further observed:-
.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 followed is 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.
..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..
... 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.
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.
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...
(emphasis supplied)
Section 36 of the 1995 Act relates to execution of decisions,
decrees and orders. It stipulates that, in regard to execution of
decisions, decrees and orders, all the provisions of Chapter X of
the A.P. Co-operative Societies Act, 1964 shall, mutatis mutandis,
apply to Co-operative Societies registered under the 1995 Act such,
however, that all references to the Registrar in the 1964 Act shall
be construed to be a reference to the Co-operative Tribunal in their
application to Co-operative Societies registered under the 1995 Act.
Chapter X of the 1964 Act relates to execution of decisions, decrees
and orders. Sections 70 to 74 fall under Chapter X. Section 70
confers power on the Registrar to recover certain amounts by
attachment and sale of property, and execution of orders. Section
70-A relates to execution of non-monetary orders. Section 71
relates to recovery of debts, and Section 72 provides that the
Registrar, or the person authorised by him, shall be a Civil Court
for certain purposes. Section 73 relates to attachment of property
before decision or order, and Section 74 relates to recovery of
amounts due to the Government. Chapter XI of the 1964 Act
relates to appeal, revision and review. Section 75, thereunder,
relates to the constitution of a Co-operative Tribunal. Section 76,
which also forms part of Chapter XI of the 1964 Act, relates to
appeals and, under sub-section (1) thereof, any person or society
aggrieved by any decision passed or order made under Sections 6,
9A, 9B, 9C, 12A, 13, 16, 17, 19, 21, 21A, 21AA, 23, 32(3), 34, 34A,
60, 62, 64, 66, 70, 71, 73 and 117 of the 1964 Act may appeal to
the Tribunal. While Section 76 does not fall under Chapter X of
the 1964 Act, an appeal is provided thereunder against an order
passed under Sections 70, 71 and 73 of the 1964 Act all of which
fall under Chapter X thereof.
The 1995 Act does not explicitly provide for an appeal
against the decision of the Tribunal on a dispute referred to it
under Section 37 of the said Act. The power to create or enlarge
jurisdiction is legislative in character, so also the power to confer a
right of appeal or to take away a right of appeal. (A.R. Antulay v.
R.S. Nayak ; M.L. Sethi v. R.P. Kapur ; Anisminic Ltd. v.
Foreign Compensation Commission ; Halsburys Laws of
England, 4th Edn., Vol. 10, page 327 at para 720; Amnon
Rubinstein - Jurisdiction and Illegality (1965 Edn., pages 16-
50); Raja Soap Factory v. S.P. Shantharaj ). A right of appeal is
always statutory. The Court cannot confer or infer it. What is
legislatively not permitted cannot be read by implication, in any
event not in respect of a right of appeal as it 'is a creature of
Statute. A right of appeal is conferred by statute or equivalent
legislative authority. It is not a mere matter of practice or
procedure. (U.P. Awas Evam Vikas Parishad v. Gyan Devi (dead)
by LRs ; Shankar Kerba Jadhav v. The State of Maharashtra ;
Halsbury's Laws of England Vol. 37 Para 677). The creation of a
right to an appeal is an act which requires legislative authority,
neither an inferior court nor the superior court nor both combined
can create such a right or take away such a right, it being one of
limitation and extension of jurisdiction. (Attorney General v.
Herman James Sillem ; A.R.Antulay3). While the absence of a
specific provision in the 1995 Act, conferring a right of appeal
against the decision of the Tribunal on the dispute referred to it
under Section 37 thereof, would mean that there is no statutory
remedy of an appeal against such decisions or orders, the Learned
Single Judge, in S. Varalakshmi1, read into Section 36 of the 1995
Act, such a remedy. By the order under reference, another
Learned Single Judge has doubted the correctness of the
Judgement in S. Varalakshmi1. It is necessary for us, therefore,
to examine the scope of Section 36 of the 1995 Act.
Section 36 of the 1995 Act provides that all the provisions of
Chapter X of the 1964 Act shall, mutatis mutandis, apply to co-
operative societies registered under the 1995 Act. 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. When such a legislative device is adopted, the
relevant provisions of the earlier Act will apply mutatis mutandis to
matters governed by the later Act. (Maharashtra SRTC v. State of
Maharashtra ). 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. (M/s.Ashok Service Centre v.
State of Orissa ). The legal incidents of legislation by
incorporation is that it becomes part of the existing law which
implies bodily lifting provisions of one enactment and making them
part of another. (Girnar Traders v. State of Maharashtra ). If a
subsequent Act brings into itself by reference some of the clauses
of a former Act, the legal effect of that, as has often been held, is to
write those sections into the new Act as if they had been actually
written in it with the pen, or printed in it. (Wood's Estate, Ex
parte, Works and Buildings Commrs.. Re. ). Consequently all
the provisions of Chapter X of the 1964 Act, i.e., Sections 70 to 74
thereof, must be read as part and parcel of Section 36 of the 1995
Act.
The next question which necessitates examination is what do
the words mutatis mutandis in Section 36 of the 1995 Act mean?
Earl Jowitt's 'The Dictionary of English Law (1959)' defines
'mutatis mutandis' as 'with the necessary changes in points of
detail'. In Bouvier's Law Dictionary (3rd Revision, Vol. II), and
in Black's Law Dictionary (Revised 4th Edn. 1968) 'mutatis
mutandis' is defined to mean 'with the necessary changes in point
of detail, meaning that matters or things are generally the same,
but to be altered when necessary. (Houseman v. Waterhouse ).
The phrase mutatis mutandis implies that a provision contained
in another part of the statute or other statutes would have
application as it is, with certain changes in points of detail.
(Rajasthan State Industrial Development & Investment Corpn.
v. Diamond & Gem Development Corpn. ; Prahlad Sharma v.
State of U.P. ; Mariyappa v. State of Karnataka ; Janba (dead)
v. Gopikabai (Smt.) ; M/s.Ashok Service Centre11). Extension
of an 'earlier Act, mutatis mutandis, to a later Act brings in the
idea of adaptation, but so far only as it is necessary for the
purpose, making a change without altering the essential nature of
the thing changed, subject of course to express provisions made in
the later Act. (M/s.Ashok Service Centre11). Chapter X of the
1964 Act has been made applicable mutatis mutandis to co-
operative societies registered under the 1995 Act with the limited
change that wherever there is a reference to the Registrar in
Chapter X of the 1964 Act, such provisions shall be construed as
referring to the Tribunal in the application of such provisions to
co-operative societies registered under the 1995 Act. In effect the
word Registrar, as used in the different provisions of Chapter X of
the 1964 Act, must be substituted with the word co-operative
Tribunal, when the provisions of Chapter X of the 1964 Act are
applied to co-operative societies registered under the 1995 Act.
In S. Varalakshmi1, the Leaned Single Judge failed to notice
that it is only Chapter X of the 1964 Act which has been made
applicable, mutatis mutandis, to co-operative societies registered
under the 1995 Act, and not Chapter XI of the 1964 Act or Section
76 thereof. As it is only the provisions of Chapter X of the 1964
Act which have, mutatis mutandis, been made applicable to co-
operative Societies registered under the 1995 Act, the remedy of an
appeal under Section 76 of the 1964 Act, which is in Chapter XI
thereof, has not been incorporated by reference in Section 36 of the
1995 Act. Consequently no statutory remedy of appeal is available
to co-operative societies registered under the 1995 Act, against the
decision or order passed by the Tribunal in the exercise of its
jurisdiction under Section 37 of the 1995 Act.
This question can be examined from yet another angle. The
appeal provided to the co-operative Tribunal under Section 76 of
the 1964 Act is, among others, against orders passed by the
Registrar under Chapter X of the 1964 Act which include Sections
70, 71 and 73 thereof. As Chapter X of the 1964 Act has been
made applicable to co-operative Societies registered under the
1995 Act, with the limited change that the Registrar, in Chapter X
of the 1964 Act, stands substituted by the co-operative Tribunal in
its application to co-operative societies registered under the 1995
Act, extending the remedy of an appeal under Section 76 of the
1964 Act, to orders passed under Section 37 of the 1995 Act,
would mean that a remedy of an appeal is provided to the Co-
operative Tribunal against its own orders. An appeal is an
application by a party to an appellate court asking it to set aside or
revise a decision of a subordinate court. (Tirupati Balaji
Developers (P) Ltd. v. State of Bihar ; and Nagendra Nath Dey.
v. Suresh Chandra Dey ). Appeal implies, in its natural and
ordinary meaning, the removal of a cause from any inferior court
or tribunal to a superior judge or court for re-examination or
review, more so for the purpose of testing the soundness of the
decision and proceedings of the inferior court or tribunal. (Tirupati
Balaji Developers (P) Ltd.19; Chappan v. Moldin Kutti ). The
removal of a cause is for the purpose of testing the soundness of
the decision of the inferior court. The words appellate jurisdiction
mean the power of a superior court to review the decision of an
inferior court. (Tirupati Balaji Developers (P) Ltd.19; Whartons
Law Lexicon).
An appeal gives the right of entering the superior court and
invoking its aid and interposition to redress the error of the court
below. There are two important postulates of constituting the
appellate jurisdiction: (i) the existence of the relationship of a
superior and an inferior court; and (ii) the power in the former to
review decisions of the latter. An appeal removes a cause, entirely
subjecting the facts as well as the law, to a review and a retrial. Its
purpose is to test the soundness of the decision and proceedings of
the inferior court or tribunal. The essential criterion of the
appellate jurisdiction is that it revises and corrects the proceedings
in a cause already instituted, and does not create that cause. In
reference to judicial tribunals, an appellate jurisdiction necessarily
implies that the subject-matter has already been instituted and
acted upon, by some other court/tribunal, whose judgment or
proceedings are sought to be revised. The superior forum has the
jurisdiction to reverse, confirm, annul or modify the order of the
forum appealed against and, in the event of a remand, the lower
forum is required to rehear the matter and comply with such
directions as may accompany the order of remand. The appellate
jurisdiction inherently carries with it a power to issue corrective
directions binding on the forum below. (Tirupati Balaji
Developers (P) Ltd.19; Shankar Ramchandra Abhyankar v.
Krishnaji Dattatreya Bapat ). As an appeal lies from an inferior
body or an authority or Tribunal to a superior forum or Court or
Tribunal, an appeal lay, under Section 76 of the 1964 Act, to the
Co-operative Tribunal against the order of the Registrar. As the
Co-operative Tribunal stands substituted for the Registrar, in the
application of Chapter X of the 1964 Act to co-operative societies
registered under the 1995 Act, there cannot be an appeal from the
order of the Tribunal to itself. The judgment in S. Varalakshmi1,
to the extent it held to the contrary, cannot be treated as laying
down the correct law.
It is well settled that interim relief is granted during the
pendency of proceeding so that, while granting final relief, the
court is not faced with a situation that the relief becomes
infructuous or that, during the pendency of the proceeding, an
unfair advantage is not taken by the party in default or against
whom interim relief is sought. The object behind granting interim
relief is to maintain status quo so that the final relief can be
appropriately moulded without the party's position being altered
during the pendency of the proceedings. (Cotton Corporation of
India v. United Industrial Bank Ltd. ). An interim relief can be
granted only in aid of, and as ancillary to, the main relief which
may be available to the party on final determination of his rights in
a proceedings. If this be the purpose to achieve which power to
grant temporary relief is conferred, it is inconceivable that where
the final relief cannot be granted in the terms sought for, because
the statute bars the granting of such a relief, ipso facto the
temporary relief of the same nature can be granted. (State of
Orissa v. Madan Gopal Rungta ; Cotton Corporation of
India23). As no appeal lies to the Tribunal against its own orders,
the necessary corollary thereto is that the Tribunal can neither
entertain an appeal against its own decision, decree or order
passed under Section 37 of the 1995 Act, nor can it pass any
interim orders in such an appeal filed before it. Sri R.N.
Hemendranath Reddy, Learned Counsel, would submit that the
order now passed by us, holding that there is no right of appeal
against the orders passed by the Tribunal in execution
proceedings, would open the floodgates, result in dismissal of
several hundreds of appeals now pending before the Tribunal, and
all the appellants therein being forced to invoke the extra-ordinary
jurisdiction of this Court under Article 226 of the Constitution of
India. As the remedy of an appeal can only be statutorily
prescribed, the problem, as presented by Sri R.N.Hemendranath
Reddy, can only be addressed by the Legislature. Suffice it to
record the submission of the Learned Advocate General for the
State of Telangana that he would request the Government to take
steps to resolve this issue.
The second question referred for our opinion is whether the
1964 Rules, more particularly Rule 52 thereof, can be invoked for
execution of awards passed under the 1995 Act. The 1995 Act
does not confer any rule making power on the Government.
However, Section 130 of the 1964 Act relates to the power to make
rules and, under sub-section (1) thereof, the Government may, by
notification published in the Andhra Pradesh Gazette, make rules
for carrying out all or any of the purposes of the 1964 Act for the
whole or any part of the State, and for any class of societies. In the
exercise of the powers conferred by Section 130, the Government of
A.P. made the 1964 Rules which were published in the A.P.
Gazette on 30.07.1964.
Rule 52 of the 1964 Rules prescribes the procedure in
execution of decrees, decisions or orders. Rule 52(14)(v) thereof
provides that, after confirmation of the sale, the Registrar shall
grant a certificate of sale, bearing his seal and signature, to the
purchaser; such certificate shall state the property sold and the
name of the purchaser; it shall be conclusive evidence of the fact of
purchase, in all courts and tribunals where it may be necessary to
prove it; and no proof of the seal or signature of the Registrar of
the district shall be necessary unless the authority, before whom it
is produced, shall have reason to doubt its genuineness. Rule
52(14)(vi), which was inserted by G.O.Ms. No.37 dated 28.01.2002,
provides that any order made under clause (v) of Rule 52(14) shall,
subject to an appeal under Section 76 of the A.P. Co-operative
Societies Act within ninety days from the date of the order, be final
and shall not be liable to be questioned in any suit or other legal
proceedings.
As noted hereinabove, Section 76 of the 1964 Act provides
the remedy of an appeal only against orders passed under the
provisions specifically referred to therein. Rule 52(14)(vi) merely
provides that, unless and until set aside in an appeal filed within
90 days, the order passed under Rule 52(14)(v) is final. Like Rule
52(14)(vi) of the 1964 Rules, Section 153 of the Patna Municipal
Corporation Act, 1951 provided that "every valuation made by the Chief
Executive Officer -- -- shall, subject to the provisions of Sections 151 and
152,
be final". In Rai Vimal Krishna v. State of Bihar , the Supreme
Court held that the phrase 'subject to' in Section 153 meant that,
until and unless the assessment list was revised or amended
under Section 151 or 152, the assessment list would continue to
be final. Rule 52(14)(vi) merely gives finality to the order passed
under Rule 52(14)(v) subject to an appeal under Section 76 of 1964
Act, and cannot be understood as conferring a right of appeal.
It is no doubt true that the Rule making power of the
Government in Section 130 of the 1964 Act is in Chapter XIV
thereof, and not in Chapter X which alone is incorporated in
Section 36 of the 1995 Act. The 1995 Act does not also confer any
power on the Government to make rules. Does that mean that the
statutory provisions in Chapter X of the 1964, relating to execution
of decisions, decree or orders, cannot be enforced in the absence of
Rules? In understanding the scope and purport of Chapter X of
the 1964 Act, which has been incorporated by reference in Section
36 of the 1995 Act, it is permissible to refer to the other provisions
of the 1964 Act. Even though only particular sections of an earlier
Act are incorporated into the latter Act, in construing the
incorporated sections it may, at times, be necessary and
permissible to refer to other parts of the earlier statute which are
not incorporated. (M/s. Surana Steels Pvt. Ltd. v. Dy.
Commissioner of Income-tax ). Where a single Section/Chapter
of an Act is introduced into another Act, it must be read in the
sense which it bore in the original Act from which it is taken, and,
consequently, it is perfectly legitimate to refer to all the rest of that
Act in order to ascertain what the section/chapter meant, though
those other sections are not incorporated in the new Act. (The
Mayor, Aldermen, And Burgesses of the Borough of
Portsmouth (acting as the Urban Sanitary Authority of the said
Borough v. Charles Bovill Smith, James Goldsmith, (the
Younger) and John Baker Goldsmith) ).
A reference to the other provisions of the 1964 Act, and the
Rules made thereunder, is necessary to give a meaning to the
machinery provisions in Chapter X of the 1964 Act, and to
interpret them in such a manner as to ensure that such provisions
are not rendered futile. A court of construction dealing with the
language of a statute, in order to ascertain from and accord to the
statute the meaning and purpose which the legislature intended
for it, strongly leans against any construction which tends to
reduce a statute to futility. The provisions of a statute must be so
construed as to make it effective and operative, on the principle "
ut res magis valent quam pereat". (Tinsukhia Electric Supply Co.
Ltd. Vs. State of Assam ; Madhav Rao Jivaji Rao Scindia v.
Union of India , Union of India v. B.S. Agarwal ; Paradise
Printers v. Union Territory of Chandigarh ). The court will
presume that the Legislature did not intend a statute to have
consequences which are objectionable or undesirable, or absurd or
unworkable, or impracticable or inconvenient, or anomalous or
illogical, or futile or pointless. (R. v. Central Valuation Officer ).
The provisions of Chapter X of the 1964 Act, which are
machinery provisions, must be construed in such a manner as to
make it workable having regard to the doctrine " ut res magis
valeat quam pereat". (Andhra Bank v. B. Satyanarayana ; (H.S.
Vankani v. State of Gujarat ). They must be construed so as to
give them a sensible meaning. The legislature expects the court to
observe the maxim ut res magis valeat quam pereat (it is better for
a thing to have effect than to be made void). If the obvious
intention of the statute gives rise to obstacles in implementation,
the court must do its best to find ways of overcoming those
obstacles, so as to avoid absurd results. The Rule making
authority also expects the rule framed by it to be made workable
and never visualises absurd results. (H.S. Vankani34). It would
not be improper for this Court to refer to the scope of the Rule
making power under Section 130 of the Act and the Rules made
thereunder i.e., the 1964 Rules, more particularly to Rule 52
thereof which prescribes the procedure in execution of decrees,
decisions or orders, in understanding the scope of Chapter X of the
1964 Act which has been incorporated by reference in Section 36
of the 1995 Act.
For the purpose of interpreting Chapter X of the 1964 Act,
it is permissible to read Rule 52 of the 1964 Rules as if it was in
Chapter X of the 1964 Act. The complex demands on modern
legislation necessitates the plenary legislating body to discharge its
legislative function by laying down broad guidelines and standards,
to lead and guide as it were, leaving it to the subordinate
legislating body to fill up the details by making necessary rules and
to amended the rules from time to time to meet unforeseen and
unpredictable situations, and within the framework of the power
entrusted to it by the plenary legislating body. (State of T.N. v.
M/s. Hind Stone etc. ). Rules framed, under the provisions of a
statute, form part of the statute. But before a rule can have the
effect of a statutory provision, two conditions must be fulfilled,
namely, (1) it must conform to the provisions of the statute under
which it is framed; and (2) it must also come within the scope and
purview of the rule making power of the authority framing the rule.
(General Officer Commanding-in-Chief v. Subhash Chandra
Yadav ).
The rule making power conferred on the Government, for
carrying out all or any of the purposes of the Act, must be confined
to such of the purposes as are indicated in any of the provisions of
the Act. (A.P. Coop. Bank v. Chittoor Primary Coop. Bank ). A
statutory rule, while ever subordinate to the parent statute, is,
otherwise, to be treated as a part of the statute, and as effective.
"Rules made under the Statute must be treated for all purposes of
construction or obligation exactly as if they were in the Act and are
to be of the same effect as if contained in the Act and are to be
judicially noticed for all purposes of construction or obligation.
(State of U.P. v. Babu Ram Upadhya ; Maxwell; Interpretation
of Statutes, 11th Edn. pp. 49-50; M/s.Hind Stone etc.35).
As Rule 52 of the 1964 Rules prescribes the procedure for
execution of decisions, decrees or orders as stipulated in Chapter X
of the 1964 Act, it is not impermissible to read Rule 52 of the 1964
Rules as a part of Chapter X of the 1964 Act, in which event the
procedure prescribed in Rule 52 of the 1964 Rules, along with
Chpater X of the 1964 Act, can be treated as having been
incorporated by reference in Section 36 of the 1995 Act. The 1995
Act was notified on 27.05.1995 and came into force on 01.06.1995.
Both the 1964 Act and the 1964 Rules were in existence when the
1995 Act was made. As the State Legislature cannot be said to be
unaware of the 1964 Act and the 1964 Rules when it incorporated
Chapter X of the 1964 Act by reference in Section 36 of the 1995
Act, and as the Rules made under the 1964 Act must be construed
as part of the Act itself, the legislature can be presumed to have
intended to incorporate the 1964 Rules, to the extent they relate to
Chapter X of the 1964 Act (i.e., Rule 52 of the 1964 Rules), also in
Section 36 of the 1995 Act. On such a construction, it is
permissible for the Tribunal to invoke Rule 52 of the 1964 Rules in
the execution of the awards passed under the 1995 Act.
Even, in the absence of Rules prescribing the procedure for
executing decrees, decisions or orders, the provisions of Chapter X
of the 1964 Act, which have been incorporated by reference in
Section 36 of the 1995 Act, must be given effect to. The whole
working and functioning of Chapter X of the 1964 Act, as
incorporated in Section 36 of the 1995 Act, cannot be withheld and
rendered nugatory only for the reason of absence of the rules
prescribing the procedure. Absence of Rules will not render the Act
inoperative, and would not curtail the power conferred under the
Act. The power vested under the Act would still be exercisable as
provided under the provision. (Orissa State (Prevention &
Control of Pollution) Board v. Orient Paper Mills ). While the
power conferred by the Act can be exercised even in the absence of
rules, such power should be exercised on well settled principles
and norms which would satisfy the test of Article 14 of the
Constitution. (Delhi Science Forum v. Union of India ). It is not
even urged before us that the procedure prescribed for execution of
decisions, decrees and orders in Rule 52 of the 1964 Rules is in
violation of Article 14 of the Constitution of India.
Even in the absence of Rules, the Tribunal, while executing
awards under Section 36 of the 1995 Act, can follow any
reasonable procedure. As Rule 52 of the 1964 Rules is also a
reasonable procedure for execution of awards, it is not
impermissible for the Tribunal to follow the procedure prescribed
therein. It must be borne in mind that the onus, to demonstrate
that a decision of the Tribunal is vitiated for adopting a procedure
not sanctioned by the 1995 Act, is on the person who questions
the validity thereof. This onus is discharged only by satisfying the
court that the authority has adopted a procedure which does not
satisfy the test of Article 14 of the Constitution or which is against
the provisions of the statute in question. (Delhi Science Forum40).
It has not even contended before us that the procedure, prescribed
under Rule 52 of the 1964 Rules, does not satisfy the test of Article
14 of the Constitution or is against the provisions of the 1964 Act.
The Tribunal is, therefore, not disabled from following the
procedure prescribed in Rule 52 of the 1964 Rules in executing
awards under the 1995 Act.
In the result, we answer the reference holding that a person
aggrieved by a decision of the Tribunal under Section 37 of the
1995 Act, has no statutory remedy of an appeal thereagainst,
much less to the Tribunal itself, and the judgment in S.
Varalakshmi1, to the extent it held that an appeal lies to the
Tribunal, does not lay down the correct law. The Tribunal is also
entitled to invoke Rule 52 of the 1964 Rules, and to follow the
procedure prescribed therein, in executing awards under the 1995
Act.
In the normal course, we would have directed placing the
matter before the Learned Single Judge but, as the result of both
the Writ Petitions, are solely based on the questions referred to us,
W.P.No.31138 of 2012 is allowed. As C.T.A.No.72 of 2012, filed
before the Tribunal by the petitioner in W.P.No.31974 of 2012, is
itself not maintainable, both W.P.No.31974 of 2012 filed before this
Court, and C.T.A.No.72 of 2012 filed before the Tribunal, are
dismissed. As C.T.A.No.72 of 2012 is dismissed as not
maintainable, I.A.No.188 of 2012 filed in C.T.A.No.72 of 2012 shall
also stand dismissed. The proceedings in E.P.No.64 of 2011 shall
continue, and the Tribunal shall adjudicate the same in
accordance with law. The Miscellaneous Petitions pending, if any,
in both the Writ Petitions shall stand disposed of. No costs.
_____________________________
RAMESH RANGANATHAN, J
___________________________
M. SATYANARAYANA MURTHY, J
Date: 31-12-2014.
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