Delhi High Court High Court

Tilak Upbhokta Sahkari Store Ltd. vs Registrar Cooperative Societies … on 25 July, 2002

Delhi High Court
Tilak Upbhokta Sahkari Store Ltd. vs Registrar Cooperative Societies … on 25 July, 2002
Equivalent citations: AIR 2003 Delhi 1, 99 (2002) DLT 551
Author: J Kapoor
Bench: B Khan, J Kapoor


JUDGMENT

J.D. Kapoor, J.

1. Petitioner-store is aggrieved of the winding up orders passed by the Registrar. Matter is lingering on since 1982 and winding up proceedings dragged on culminating in various remand orders in appeals. Be that as it may, last order of winding up was passed by the Registrar on 20.8.1982. It was by way of appeal to the Tribunal the petitioner challenged the order of the Registrar on the ground that Registrar has relied upon three grounds which were not contained in any of the show cause notices issued to the petitioner. On this score it is submitted that petitioner was denied an opportunity of meeting those grounds.

2. It transpires that petitioner-Society has been in the business for more than ten years inspite of winding up orders in terms of provisions of Section 66(3) of DCS Act because this provision automatically stays the Registrar’s winding up orders the moment appeal is filed. In this manner winding up orders passed from time to time against the society have become as good as redundant and have lost their sting. As the society has been happily carrying on its affairs, therefore, it appears proper to us, at this stage, to put an end to the litigation because it is not known whether the situation has changed for good or bad during all these years. Instead of remanding the case back to the Registrar to decide the three grounds which did not figure in the show cause notices as it militates against the principles of natural justice, we quash the winding up proceedings that commenced more than a decade ago particularly in view of the fact that no fresh irregularities have come to the notice of the Registrar.

3. There is no doubt that liquidation of a society is extreme punitive measure and therefore should be resorted to if there is no scope of any other curative or corrective measure. Under Section 32 of DCS Act. Registrar is empowered to supersede the Managing Committee of the Society if he finds that it is not functioning properly or it is either working against the interests of the members of the society or for personal gains. Again before taking such an action Registrar is expected to act as he has the powers in this regard to attract the attention of the committee and other members to cure the defects for its efficient and proper functioning. Everybody should always be given chance and opportunity to remove his defects or failings. The remedy is not to finish him at first go and that too with the sledge of hammer. If all such measures prove futile, Registrar may go to the length of liquidating the society which is the ultimate the extreme step. Here too the Registrar took the step of liquidation at first instance which was last measure. This aspect of the matter has also persuaded us to quash the proceedings.

4. As a consequence, the writ is allowed and the impugned order is set aside. However, this would not come in the way of the Registrar/competent authority to take up any fresh proceedings under law on fresh ground or grounds subsequent to the last show cause notice which was in perpetration of the original notice.