Hoshiar Singh and others V. Assistant Registrar Co-operative Societies, Una and others and Society

CMPMO/409/2023

AI Insights

The case involves a petition filed by Hoshiar Singh and others against the Assistant Registrar Co-operative Societies, Una, and others, concerning the management and financial dealings of a Co-operative Society. The petitioners alleged financial mismanagement and unauthorized management by respondent No.3-Society, particularly focusing on the misappropriation of TDS refunds. The court examined whether the Assistant Registrar had taken appropriate action on the complaints and whether the petitioners had the locus standi to file the petition. The court concluded that the petitioners could not maintain the petition due to the existence of an alternative statutory remedy and the previous disposal of a similar petition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 808457 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 13-09-2023
• Assessment Year: misc
• Other Referred Cases: Shalini Shyam Shetty and another vs. Rajendra Shankar Patil
• Laws Referred To: Himachal Pradesh Co-operative Societies Act, 1968
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ANUP RATTAN; PUSHPENDER JASWAL; RAHUL THAKUR; PRIYANKA CHAUHAN; BIMAL GUPTA; KUSUM CHAUDHARY; VARUN THAKUR
• Assessee Lawyers: AJAY SHARMA; AJAY THAKUR
• Keywords: Co-operative Society; Financial mismanagement; Misappropriation of funds; TDS refund; Executive Inaction
• Section: 93; 72(1)(b); 94; 69(1)

Judgement Text

" IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CMPMO No. 409 of 2023 Reserved on: 31.08.2023 Decided on: 13.09.2023 ------------------------------------------------------------------------------------- Hoshiar Singh and others ......Petitioners Versus Assistant Registrar Co-operative Societies, Una and others .......Respondents ------------------------------------------------------------------------------------- Coram The Hon’ble Mr. Satyen Vaidya, Judge Whether approved for reporting?1No For the Petitioners : Mr. Ajay Sharma, Senior Advocate, with Mr. Ajay Thakur, Advocate. For the Respondents : Mr. Anup Rattan, Advocate General, with Mr. Pushpender Jaswal, Addl. A.G., Mr. Rahul Thakur and Ms. Priyanka Chauhan, Dy. A.Gs., for respondents No. 1 and 2. Mr. Bimal Gupta, Senior Advocate with Ms. Kusum Chaudhary and Mr. Varun Thakur, Advocates, for respondent No.3. ------------------------------------------------------------------------------------ Satyen Vaidya, Judge By way of instant petition, petitioners have prayed for the following reliefs: (a) That respondents No. 1 & 2 may very kindly be directed to take immediate action on the complaint pending before them with respect to getting the inquiry against respondents No.3- 1 Whether reporters of print and electronic media may be allowed to see the order? 2 Society conducted in a time bound manner and to take action as per inquiry report so submitted before respondent No.1 by the Inquiry Officer. (b) That impugned act of respondent No.1 in not taking any further action against respondent No.3-Society on the basis of the complaints as filed with respect to opening of new current account in Punjab & Sind Bank, Amb, District Una, H.P. as the said action of respondent No.2 is in violation of orders passed by this Hon’ble Court on 31.05.2023 and so also orders dated 01.06.2023 passed by respondent No.1 himself. (c) That respondent No.1 having failed to take cognizance of the matter that respondent No.3- Society got new Managing Committee elected just to bypass the inquiry and started functioning out of its area of operation and despite complaints, no action has been taken, thus, respondent No.1 may very kindly be directed to look into the matter and take action as per rules. (d) That impugned act of respondent No.2 amounts to executive inaction in not taking any cognizance of the complaints filed by the petitioners, annexed supra as Annexure P-5 (colly.), with directions to said respondent to proceed in the matter in accordance with law and get the new current account No.01371100000840 of respondent No.3-Society in Punjab & Sind Bank, Amb, District Una, H.P. closed forthwith without any further delay. 3 (e) That respondent No.1 may very kindly be directed to file action taken report against respondent No.3-Society on the basis of the inquiry report submitted before him by the Inquiry Officer on the records of this case within time as deemed fit by this Hon’ble Court. 2. Petitioner No.1 claims himself to be the member of respondent No.3-Society (hereinafter referred to as ‘the Society’), whereas petitioners No. 2 and 3 have preferred the petition as Presidents of ‘The Jai Shankar Truck and Tanker Co-operative Transport Society’ and ‘The Shiva Co- operative Transport Society Ltd.’ respectively. As per petitioners, some of the members of the Society and the members of The Jai Shankar Truck and Tanker Co- operative Transport Society’ and ‘The Shiva Co-operative Transport Society Ltd.’ are common and their memberships overlap. 3. The grievance of the petitioners firstly is that despite repeated complaints with respect to financial mis- management/mis-appropriation of funds of the Society, no action has been taken by respondents No. 1 and 2 and secondly, the respondent No.3-Society is being managed by unauthorised persons. 4 4. It is specifically alleged that the Society provides Goods Carriage Vehicles to its customers against payment of freight charge. The ‘Income Tax Deducted at Source’ (TDS) by the customers is credited to the account of the Society after long durations. The amount of refund on prorata basis belongs to the members of the society/transporters. A sum of Rs.16,00,000/- approximately was credited to the account of the Society on 19.8.2019 on account of TDS refund for the financial year 2016-2017, but the entire amount was misappropriated by the office bearers of the Society without disbursing the same to the actual right-holders. Repeated complaints have fallen on deaf ears. Though, the inquiry was initiated by respondent No.1, but the office bearers of the Society are so resistant that they did not even appear before the Inquiry Officer. 5. The instructions on behalf of respondent No.1 have been placed on record. It is stated that a short inquiry was got conducted by respondent No.1 and it transpired that the TDS payable had not been paid to the members of the Society. It is explained that the TDS is not paid directly to the members by the Society, but it is paid through 5 facilitator. As per practice, the facilitator pays the tariff without deducting tax to the members/transporter and on refund being received by the Society, the same is paid to the facilitator. The Society had not maintained proper records with respect to disbursal of the tariff or TDS amount to the members or facilitator as the case may be. As per respondent No.1, the surcharge proceedings under Section 69 (1) of the Himachal Pradesh Co-operative Societies Act, 1968 (for short, ‘the Act’), have already been initiated by his office on 14.06.2023. 6. Respondent No.3 has filed its separate reply. An objection as to maintainability of the petition has been taken. Petitioners have been accused of suppressing material facts. Their locus-standi has also been challenged. The petition is also said to be not maintainable in view of the orders earlier passed on the same issue firstly in CWP No. 1797 of 2018 and thereafter in CMPMO No.268 of 2023. The fact that the freight charges in the first instance are paid to the members of Society/transporters by the facilitator and for such reason the amount of refund of TDS is disbursed to the facilitators only has been reiterated. The intent of petitioners in preferring the instant petition has 6 also been said to be malafide. Their purpose is alleged to scuttle smooth functioning of the Society. 7. I have heard learned counsel for the parties and have also gone through the records of the case carefully. 8. Keeping in view the nature of present proceedings, this Court is not required to detain itself in factual controversy. The reliefs sought in the petition aim at inducing action at the end of official respondents, however, without going into the question of jurisdiction to grant such relief(s) under Article 227 of the Constitution of India, this Court finds petitioners not entitled to maintain the instant petitions for reasons as detailed hereafter. 9. The directions as sought against the respondent No.2 are wholly misconceived as the said respondent is neither a Court nor the Tribunal against whom supervisory jurisdiction may be exercised under Article 227 of the Constitution of India. Even otherwise, the Code of Criminal Procedure provides for specific procedural remedies and without exhausting such remedies petitioners could not have straight away knocked at the doors of this Court. 7 10. Further, the petitioners themselves have disclosed the factum of filing and disposal of an earlier petition by them being CMPMO No. 268 of 2023. As a matter of fact, the copy of earlier petition and annexures filed therewith have also been relied upon in the instant petition as Annexure P-2 (colly). The Registrar and the Society were impleaded as respondents 1 and 2 in said petition. 11. CMPMO No. 268 of 2023 was disposed of by a co- ordinate bench of this Court on 31.05.2023 in following terms: “By way of instant petition filed under Article 227 of the Constitution of India, very innocuous prayer has been made on behalf of the petitioners to direct Assistant Registrar Cooperative Society, Una, District Una, to take immediate action on the various complaints dated 24.8.2020, 29.6.2021, resolution dated 15.2.2020 mentioned in (Annexure P-8) made to him against illegal acts of the member of managing committee of respondent No.2-Society. 2. Having regard to the nature of the order proposed to be passed in the instant proceedings, there appears to be no justification to issue notice to respondent No.2, who otherwise in the event of notice being issued would unnecessarily be called upon to engage a lawyer to defend itself in the proceedings, which can 8 be otherwise disposed of on the basis of the material already available on record. 3. Mr. Rajan Kahol, learned Additional Advocate General representing respondent No.1 has no objection to aforesaid innocuous prayer made in the petition. He states that action, if any, if not already taken on the complaints made against respondent No.2 Society, shall be taken promptly without there being any delay. 4. Careful perusal of the averments contained in the petition, which is duly supported by an affidavit as well as other material available on record reveal that petitioner No.1 alongwith other similar situate persons filed complaint before Assistant Registrar Cooperative Society, Una with regard to embezzlement of funds against respondent No.2-Society, more particularly with respect to TDS as was deducted at source from the fare of the trucks having delivered material. Though, such complaints were filed/ submitted somewhere in the year 2019 onwards, but till date those have been not taken to logical end. 5. Consequently, in view of the above, the present petition is disposed of with a direction to respondent No.1-Assistant Registrar, Cooperative Society, Una to consider and decide the complaints with regard to embezzlement of funds by respondent No.2 and its members of managing committee expeditiously, preferably within a period of two weeks. Since issue with regard to deduction of TDS is involved in the present case, Assistant Registrar, Cooperative Society, Una at first instance may consider prayer for freezing 9 of account, so that in future no dispute remains interse parties with regard to deduction of TDS. 6. Learned Additional Advocate General undertakes to apprise aforesaid authority during the course of the day, enabling it to do the needful expeditiously. 7. Learned counsel representing the petitioners undertakes to cause presence of the petitioners and other complainants before the authority concerned on 2.6.2023, enabling it to do the needful well within stipulated time. Pending applications, if any, also stand disposed of.” 12. The subject matter and reliefs prayed in CMPMO No. 268 of 2023 were substantially the same as prayed in the present petition. The petitioners having remained satisfied with redressal of their alleged grievance and without liberty being reserved in their favour to approach this Court on the same cause of action, the petitioners cannot maintain the instant petition on the same grounds and for markedly identical reliefs. In fine, the remedy, if any, available to the petitioners would be in respect of alleged disobedience to the orders passed in CMPMO No. 268 of 2023. 13. Another aspect of the matter is that the entire case of the petitioners revolves around the fact that there is a financial mis-management and mis-appropriation of 10 funds in the Society and respondent No.1 being the Registrar under the Act, though duty bound to take action, has failed to do so. 14. Section 72 (1) (b) of the Act, reads as under: “72. Disputes which may be referred to arbitration. - (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a cooperative society arises- (a) xxx xxx xxx (b) between a member, past member or person claiming through a member, past member, or deceased member and the society, its committee or any officer, agent or employee of the society or liquidator, past or present.” (c) XXX XXX XXX (d) XXX XXX XXX (e) XXX XXX XXX Such dispute shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute.” 15. The petitioners claim themselves to be the members of the Society. The dispute allegedly raised by them definitely touches the Management and Constitution 11 of a Co-operative Society. That being so the dispute raised by them is referable to the Arbitration. 16. It is well settled that where an alternative efficacious remedy is available under a statute, this Court will refrain from exercising jurisdiction under Article 227 of the Constitution of India. In Shalini Shyam Shetty and another vs. Rajendra Shankar Patil (2010) 8 SCC 329, it has been held as under: “49. In an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the Constitution may be formulated: (a) XXX XXX XXX. (b) XXX XXX XXX (c) High Courts cannot, on the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or Courts inferior to it. Nor can it, in exercise of this power, act as a Court of appeal over the orders of court or tribunal subordinate to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court. (d) XXX XXX XXX (e) XXX XXX XXX (f) XXX XXX XXX (g) XXX XXX XXX 12 (h) XXX XXX XXX (i) XXX XXX XXX (j) XXX XXX XXX (k) XXX XXX XXX (l) XXX XXX XXX (m) XXX XXX XXX (n) XXX XXX XXX (o) XXX XXX XXX”. 17. It can further be perceived that under Section 93 of the Act, the decision or award made on the arbitration under Section 73 of the Act is appealable. Section 94 of the Act also provides for the remedy of revision before the State Government in cases where the appeal has not been preferred. Thus, the Act itself contains a complete mechanism and in this view of the matter, this Court finds another reason to refrain itself from exercising jurisdiction under Article 227 of the Constitution of India in the given facts of the case. 18. Last but not the least, I am not inclined to interfere for another reason that none of the petitioner has come forward with a cause personal to him. The non- distribution/ disbursement of prorata share of members by 13 the Society from amount received by it on account of TDS refund, though has been used as a plank for attack in the petition, but no details whatsoever have been provided to infer atleast prima facie the truth behind the allegations. No details as to the persons/members of Society and their entitlement in the amount of TDS refund have been provided. Supervisory jurisdiction of this court cannot be used as a mode for roving factual inquiry. 19. In view of above discussion, no ground for interference is made out and the petition is accordingly dismissed, so also the pending application(s), if any. It is, however, clarified that this order shall not come in the way of petitioners in seeking any relief or remedy, as may be available to them, in compliance to order dated 31.05.2023 passed by a co-ordinate Bench of this Court in CMPMO No. 268 of 2023. (Satyen Vaidya) 13th September, 2023 Judge (GR) "