JUDGMENT
S.B. Sinha, C.J.
1. The authority of Lieutenant Government in issuing a
notification dated 27.06.1990 and/or validity or otherwise
thereof exempting the petitioner, a co-operative society
from the limitation of the period of six years as provided in
Section 59(1) of the Delhi Co-operative Societies Act, 1972
(hereinafter for the sake of brevity referred to as, ‘the said
Act’) falls for consideration in this writ petition.
2. The said notification reads thus :-
“GOVERNMENT OF NCT OF DELHI
(COOPERATIVE DEPARTMENT)
No. F.42/76/BKG/Coop./96/246-253
dt. 27.6.96
NOTIFICATION
In exercise of the powers conferred
under Section 88 of the Delhi Cooperative
Societies Act, 1972 (35 of 1972), the Lt.
Governor of NCT of Delhi is pleased to exempt
the Vaish Cooperative Adarsh Bank Ltd., 3,
Netaji Subhash Marg, Daryaganj, New Delhi:-
110002 from the restriction of the period of
six years as provided in Section 59(1) of the
said act for holding an enquiry against the
bank.”
3. The said notification was issued in the following
circumstances :-
The first respondent herein in the year 1991 initiated an
enquiry against the petitioner herein, which is a co-operative
society registered under the said Act on certain
complaints. Allegedly the order passed, if any, by the
competent authority pursuant to and in furtherance of the
said enquiry had never been communicated to the
petitioner herein. Only on 16.01.1991, the petitioner
herein was informed about the appointment of the Enquiry
Officer. Allegedly his report, which was made on
03.06.1992, had not been forwarded to the petitioner. It,
however, forwarded the summary of inquiry in terms of
Section 55(4) of the said Act, whereto the petitioner herein
replied inter alia informing, that the bank did not have a
regular and established practice of preparing a ‘scrutiny
note in each and every case’. No further action in terms of
Section 55 of the said act was allegedly taken thereafter.
However, only on 30.10.1995, the first respondent herein
issued the impugned notice in exercise of its power
conferred upon it under Section 59 of the said Act,
where after the respondent No. 2 was sought to be
appointed as an Enquiry Officer to inquire into the alleged
irregularities pointed out in the inquiry report and to
establish the extent to which the persons who were or
might have been officers/employees of the petitioner
herein had made any payment contrary to the said Act,
Rules or bye-laws or had caused any deficiency in the
assets of the Bank by breach of trust or willful negligence
or had misappropriated or had fraudulently retained any
money or other property belonging to the Bank.
Only at that time, the detailed inquiry report of the
Enquiry Officer dated 03.06.1992 was supplied to the
petitioner.
4. It is not in dispute that the said proceeding was initiated
after the expiry of the prescribed period of limitation. On
the said ground, the petitioner raised a contention about
maintainability of the said proceeding.
However, pursuant to or in furtherance of the impugned
order dated 30.10.1995, the respondent No. 2 herein
issued the impugned notice dated 10.01.1996 thereby
proposing to go ahead with the inquiry under Section 59 of
the said Act. The said notice dated 10.01.1996 is in the
following terms:-
“OFFICE OF THE ENQUIRY OFFICER : OFFICE
OF THE REGISTRAR COOPERATIVE SOCIETIES :
GOVT. OF DELHI: NEW DELHI – 110001.
No. F.RCS/Coop./Acctts./E-59/95-96/635
Dated:- 10/1/96
NOTICE
Whereas an enquiry under Section 55
of the Delhi Coop. Societies Act, 1972 was
conducted in respect of irregularities
committed by the Management of Vaish Coop.
Adarsh Bank Ltd. in sanctioning/
disbursement of loans to some members.
And whereas, Enquiry Report dated 3/6/92
was submitted to the Registrar, Cooperative
Societies wherein a gross irregularities of
sanction/disbursement of loans to 24
members/borrowers involving an amount of
Rs. 4,46,40,000/- has been shown.
And whereas the undersigned has been
appointed under Section 59(1) of Delhi Coop.
Societies Act, 1972 as enquiry officer vide
Order No. F.42/76/ARB/Coop./170 dated
30.10.95 (copy endorsed to you) to enquire
into the irregularities, pointed out in the
enquiry report and to establish the extent to
which the persons who have taken part in the
Organization/Management of the Bank or any
deceased, past or present officer of the Bank
had made any payment contrary to the Act,
the rules or the bye-laws or had caused any
deficiency in the assets of the Bank by breach
of trust or willful negligence or had
misappropriated or fraudulently retained any
money or other property belonging to the
bank.
Now, therefore, I, N.L. Sharma, in
exercise of the powers vested in me, direct
you to appear before me on 29.1.96 at
11.00 A.M. Along with the necessary
documents/records and comments pertaining
to the above charges.
(N.L. SHARMA)
ENQUIRY OFFICER/SR.A.O.”
5. The respondents do not deny or dispute that the
proceeding was barred by limitation, but as indicated
hereinbefore relied upon the purported notification dated
27.06.1990, as noticed supra.
6. Section 59 of the said Act reads thus :-
“59. Surcharge.
(1) If in the course of an audit inquiry,
inspection or the winding up of a cooperative
society it is found that any person who is or
was entrusted with the organization or
management of such society or who is or has
at any time been an officer or an employee of
the society had made any payment contrary
to this Act, the rules or the bye-laws or has
caused any deficiency in the assets of the
society of breach of trust or willful negligence
or has misappropriated or fraudulently
retained any money or other property
belonging to such society the Registrar may of
his own motion or on the application of the
committee liquidator or any creditor inquire
himself or direct any person authorised by
him by an order in writing in his behalf to
inquire into the conduct of such person:
Provided that no such inquiry shall be
held after the expiry of six years from the date
of any act or omission referred to in this sub-section.
(2) Where an inquiry is made under Sub-section (1)
the Registrar may, after giving the
person concerned an opportunity of being
heard make an order requiring him to pay or
restore the money or property or any part
thereof with interest at such rate of to pay
contribution and costs or compensation to
such extent as the Registrar may consider
just and equitable.”
7. A bare perusal of the aforesaid provision would clearly go
to show that the inquiry must be directed against a person,
who is said to be guilty of alleged omissions and
commissions specified therein. Proviso appended thereto
in no uncertain terms states that no enquiry shall he held
after the expiry of six years from the date of any act or
omission referred to in Sub-section (1) thereof. The said
proviso is couched in a negative language. It bars
initiation of proceeding after the expiry of six years. The
said provision is, therefore, imperative in character. Thus,
any proceeding initiated beyond the prescribed period of
limitation would undoubtedly be a nullity.
8. In that view of the matter, the question, which now arises
for consideration is as to whether in a situation of this
nature, the provisions of Section 88 of the said Act can be
invoked. The answer to the said question must be
rendered in negative.
9. The power of the Lieutenant Governor to exempt any co-operative
society from the provisions of the said Act or
directions would apply with certain modifications ex facie
is meant to be exercised in favor of the co-operative
society and not for excluding the period of limitation.
10. The said Act is regulatory in nature. It also provides for
rights and liabilities of the co-operative societies. The
Legislature in its wisdom though it fit that in the interest
of co-operative societies, inquiry in certain irregularities, if
any, should not be initiated after the expiry of period of
limitation prescribed for therein.
Once the statute of repose comes into operation, the
competent authority ceases to have any jurisdiction in the
matter. The jurisdiction of the concerned authority to
initiate a proceeding could be invoked only within the
prescribed period and not thereafter.
The statutory authority, as is well known, must exercise its
jurisdiction within the four corners of statue and upon
following the procedure(s) established thereby, of which it
is the creature or not at all.
In Taylor v. Taylor, (1875) 1 Ch.D. 426, Jessel M.R. adopted the rule that
where a power is given to do a certain thing in a certain
way, the thing must be done in that way or not at all. The
said rule was applied by the Privy Council in Nazir Ahmed
v. Emperor, 63 Ind App. 372 at 381.
Furthermore, in Vitarelli v. Seaton, (1959) 359 US 535 : 3 L. Ed 2d 1012, it has clearly been held
that one who takes the procedural sword shall perish with
the sword.
Section 88 of the said Act must be read having regard to
the aforementioned legal position.
11. The Legislature may have a right to make retrospective
law, but yet unless it is done expressly or by necessary
implication, statutes dealing with substantive rights must
not be applied retrospectively. Evidently, an executive
order cannot take away a vested right upon giving the
same a retrospective effect.
Instead of referring to a large number of decisions, we are
of the opinion that suffice it to state the following passage
from Principles of Statutory Interpretation, Seventh Edn.,
1999 from Justice G.P. Singh, Former Chief Justice Madhya
Pradesh High Court, at page 380:-
“Statutes of limitation are regarded as
procedural and the law of limitation which
applied to a suit is the law in force at the date
of the institution of the suit irrespective of the
date of accrual of the cause of action. The
object of a statute of limitation is not a create
any right but to prescribe periods within
which legal proceedings may be instituted for
enforcement of rights, which exists under the
substantive law. But, after the expiry of the
period of limitation, the right of suit comes to
an end, therefore, if a particular right or
action had become barred under an earlier
Limitation Act, the right is not revived by a
later Limitation Act even if it provides a larger
period of limitation than that provided by the
earlier Act. On the same principle, if right to
execute a decree or judgment gets barred
under an earlier Act, the right is not revived
by a later Act.
12. In that view of the matter, an order of execution would be
prospective in nature. It cannot be retrospective in nature.
Thus, even assuming that the Lieutenant Governor could
issue an exemption notification in a case of this nature in
exercise of its power conferred upon him under Section 88
of the said Act, the same will have only prospective
operation it can neither have a retrospective operation nor
can it be retro-active in nature. Once the period of
limitation as provided for in Section 59 of the said Act
expires, it confers a right upon the society and any liability
there under is statutorily removed. It in the aforementioned
situation must be held that no such notification could be
issued, which will have a retrospective operation.
13. In strawboard Manufacturing Co., Ltd. v. Gutta Mill
Workers’ Union, (1953) S.C.R. 439, it was observed :-
“….. If, therefore, the amending order
operates prospectively, i.e., only as from the
date of the order, it cannot validate the award,
which had been made after the expiry of the
time specified in the original order and before
the date of the amending order, during which
period the adjudicator was functus officio and
had no jurisdiction to act at all.”
14. In Deep Chand v. Mst. Bhago and Ors., 1964 (66) Punjab Law Reporter 1047, it was clearly held
that Section 30 of the Limitation Act, 1963 would not apply
in a case where the period of limitation prescribed under
the Act of 1908 had expired before the commencement of
the new Act.
15. In Hukum Chand etc. v. Union of India and Ors., , the Apex
Court held :-
“7. The learned Solicitor General has not
been able to refer to anything in Section 40,
from which power of the Central Government
to make retrospective rules may be inferred.
In the absence of any such power, the Central
Government in our view, acted in excess of its
power in so far as it gave retrospective effect
to the Explanation to Rule 49. The
Explanation, in our opinion, could not
operate retrospectively and would be effective
for the future from the date it was added in
February 1960.”
16. Yet again in Regional Transport Officer, Chittor, etc. v.
Associated Transport, Madras (P) Ltd. and Ors., , the Apex
Court clearly held that no rules could be made with
retrospective effect and such an action cannot be upheld
only on the ground that such rules are required to be
placed before the Parliament.
17. For the reasons aforementioned, the impugned order
cannot be sustained, which is set aside accordingly. This
writ petition is accordingly allowed. However in the facts
and circumstances of the case, there shall be no order as
to costs.