Case: The Hyderabad Co-Operative Commercial Corpn. Ltd. and Ors Vs. Syed Mohiuddin Khadir (Dead) By L.Rs. and Ors

3. Syed Mohiuddin Khadri, hereinafter referred to as the decree holder , obtained on 24 August, 1959 a decree from the City Civil Court, Hyderabad against the Co-operative Society for a sum of Rs. 6, 91, 293 11 Ps. with interest4. On 23 November, 1959, the decree holder filed an Execution- Petition before the City Civil Court against the Co-operative Society for attachment inter alia of a sum of Rs. 4, 50, 000/- belonging to the Co operative society and in the custody of the Commissioner of Civil Supplies and the Accountant General, Hyderabad. On 27 November, 1959, the City Civil Court issued a prohibitory order to the Commissioner of Civil Supplies to hold the said sum until further orders. Pursuant to the order, on 2; December, 1959, the accountant General wrote to the Commissioner of Civil Supplies that in view of the order of the Court, no payment relating to the Co-operative Society would be made by his office without the concurrence of the Court. The decree holder contends that the attachment is valid. The State contend s that there was no debt due to the Co-operative Society and therefore, there was no valid attachment.5. The facts and circumstances under which the City Civil Court made an order for attachment are these. The State budget for 19 59-60 provides for payment of Rs. 4, 50, 000/- to the Co-operative Society. In the Execution Application, the decree holder stated that the sum of Rs. 4, 50, 000/- mentioned in the budget was a debt due to the Co operative Society. The decree holder further alleged that the sum Of Rs. 4, 50, 000/- belonging to the Co-operative Society was in the custody and control of the Commissioner of Civil Supplies and the Accountant General, Hyderabad as evidenced by the budget provision and a letter dated 12 June, 1959 issued by the Commissioner of Civil Supplies to the District Treasury officers. The letter dated 12 June, 1989 written by the Assistant Chief Accounts officer and approved by the Commissioner and addressed to District Treasury officers stated that:The following provisions for the Civil Supplies department are made under the above major head (meaning thereby Trading Civil Supplies) in the budget estimates for the year 1959-60: (1) payment to Hyderabad Co-operative Commercial Corporation- Rs. 4,50,000/ . You are requested to kindly make the payments under the above heads as per rules and intimate to this office the full particulars of the amounts and expenditure incurred in your district every fortnight on the 5th and 20th of the succeeding month to which they relate for watching the expenditure as a whole against the above provision6. The City Civil Court on these facts issued a prohibitory order on 27 November, 1959 directing the Commissioner of Civil Supplies to hold the sum until further orders. The Accountant General, pursuant to the said prohibitory order, wrote to the Court on 2 December, 1959 that no payment relating to the Co-operative Society would be made by his office without the concurrence of the Court.7. The High Court held that the mere fact that the Commissioner of Civil Supplies directed the Treasury officer to make payments to the Co-operative Society as and when occasion arose did not mean that the amount as a whole became the property of the Co-operative Society in the hands of the Disbursing officer namely, the Commissioner of Civil Supplies. The High Court held that the provisions of order 21, Rule 52 of the Code of Civil Procedure did not apply and the attachment affected and the prohibitory order made by the City Civil Court and the directions to deposit the amount were not valid8. It may be stated here that the State filed a suit C. S. No. 1 of 1962 under order 21, Rule 63 of the Code of Civil Procedure challenging the order of attachment. The suit was withdrawn by the Government. The High Court held that the withdrawal of the suit did not preclude the Government from questioning the validity of the attachment.

Court's reasoning:
10. The documents in the present case and in particular the letter dated 12 June, 1959 and the letter dated 2 December, 1959 written by the Accountant General to the Court establish that there was a debt due to the Co-operative Society and the attachment was validly made. The letter dated 12 June, 1959 provided for payment and the payment was approved by the Commissioner. The officers disbursing the amount were to pay in accordance with the rules and inform the Department about the expenditure incurred in that behalf. There is intrinsic evidence in the letter dated 12 June, 1959 that the approval by the Commissioner is not only sanction of the payment but also approval of the same. Payment in accordance with rules means that documents are to be vouched and there should be particulars of payment and identification of the persons to whom payment is to be made.11. The letter dated 2 December, 1959 written by the Accountant General to the Court is tantamount to the money being nationally brought to the Court. The Accountant General said that the payment was not to be made except with the concurrence of the Court. Thus it came into the control of and was held on behalf of the Court. The amount of Rs. 4, 50, 000/- was not a mere budget provision but the documents show that the amount had ripened into a debt and an order for payment to the Co-operative Society. The sum of Rs. 4,50,000/- was impressed with the character of a debt due to the Co-operative Society and it was validly attached12. The contention on behalf of the State that the amount was not brought into Court and there fore, the provision lapsed is devoid of substance13. The letter dated 12 June, 1959 provided for payment of the sum of Rs. 4, 50, 000/-. The letter of the Accountant General dated December 2, 1959 indicated that the Accountant General pursuant to the order of the Court dated 27 November, 1959 brought the money to the CourtIn the present case, the letter dated 12 June, 1959 proves that there is an obligation to pay the specified sum of Rs. 4, 50, 000/- to the Co-operative Society. The budget provision fastened on to the claim of the Co-operative Society against the State and it ripened into a debt payable t o the Co-operative Society. Therefore, in the circumstances, the attachment levied by he City Civil Court was perfected by bringing money to the Court.16. Though the High Court dismissed the writ petition, the High Court had to deal with the question of liquidation of the Co-operative Society in C.M.A. No. 210 of 1967 and C.M.A. No. 374 of 1967 . These two out of the order of the City Civil Court dated 11 July, 1967 in the decree-holders Execution Petition No. 95 of 1959. The City Civil Court held that the judgment of the High Court upholding the validity of the order of dissolution and appointment of the liquidator in Writ Petition No. 763 of 1960 did not prevent the decree-holder from contending that the State Registrar had no jurisdiction to pass the order of liquidation. The High Court in the appeal in C.M.A. No. 210 of 1967 and C.M.A. No. 374 of 1967 held that though the High Court had decided in Writ Petition No. 763 of 1960 upholding the validity of the liquidation yet the order of liquidation could not be sustained because the delegation made under section SB of the Multiunit Co-operative Societies Act, 1942 was incompetentThe Co-operative Society was a Society registered before the Re-organisation of the States in 1956. As such the Society is a Multi-unit Society governed by the 1942 Act. The decree-holder did not challenge this position21. The State Registrar was admittedly competent to exercise in respect of the Co-operative Society all powers under the Hyderabad Co-operative Societies Act, 1952 referred to as the 1952 State Act. Under the 1952 State Act, the State Registrar had the power to dissolve the Cooperative Society and appoint a liquidator22. The Central Government appointed a Central Registrar of Co operative Societies for the first time on 29 December, 1956. If the matters had rested there, the State Registrar would have been divested of his powers over the Society under the State Act as from that date. The matters, however, did not rest there. Section 5B of the 1942 Act empowers the Central Government to delegate any power or authority exercisable by the Central Registrar under the Act to State Registrars and certain other officers by a Notification published in the official Gazette. Simultaneously with the appointment of the Central Registrar, the Central Government published a Notification on 29 December, 1956 delegating the powers or authority under the 1942 Act in relation to certain, matters including dissolution to the State Registrars and other officers mentioned in the Notification in respect of Societies registered in their respective States. The Registrar of Societies, Andhra Pradesh was specifically mentioned in the Notifications.23. The result of the Notification was that the powers under the State Act of 1952 of which the State Registrar was divested by the appointment of the Central Registrar were immediately restored to him. [It is in exercise of these powers under the State Act of 1952 which were restored to the State Registrar that he passed the order of dissolution of the Society and appointed a liquidator on 6 September, 196025. The simultaneous introduction of section 5A and section 5B into the 1942 Act in the year 1956 with effect from 1 November, 1956 point to the fact that section 5B follows section SA but does not confine section SB only to matters mentioned in section 5A of the 1942 Act. The contention on behalf of the decree-holder that the expression any power or authority exercisable by the Central Registrar of Co-operative Societies under this Act in section SB means only powers o r authority under section 5A of the Act is unsound. Section 5A of the 1942 act is a transitional provision regarding certain Cooperative Societies affected by the Re-organisation of States. The provisions contained in section 5B of the 1942 Act do not have any words of restriction in their application only to Section 5A of the 1942 Act. on the contrary, the provisions in section 5B of the 1942 Act speak of delegation of power or authority exercisable by the Central Registrar under the 1942 Act. Whatever powers are exercisable by the Central Registrar by reason of section 4(2) of the 1942 Act are capable of being delegated by reason of provisions contained in section SB of the 1942 Act. The delegation by the Central Government of the powers exercisable by the Central Registrar to be exercised by the State Registrar is supported by the provision of the 1942 Art. The order of delegation being valid, the State Registrar was competent to dissolve the Co-operative Society by the order dated 6 September, 1960.26. It is, therefore, not necessary to express any opinion as to whether the contention of the decree-holder challenging the validity of the order of dissolution of the Co-operative Society and appointment of liquidator is barred by reason of constructive resjudicata on account of the dismissal of the Writ Petition No. 763 of 1960 filed by the decree holder in the High Court.