{"id":94427,"date":"2002-09-21T00:00:00","date_gmt":"2002-09-20T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-vaish-co-operative-adarsh-vs-the-registrar-of-co-operative-on-21-september-2002"},"modified":"2015-12-13T13:58:53","modified_gmt":"2015-12-13T08:28:53","slug":"the-vaish-co-operative-adarsh-vs-the-registrar-of-co-operative-on-21-september-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-vaish-co-operative-adarsh-vs-the-registrar-of-co-operative-on-21-september-2002","title":{"rendered":"The Vaish Co-Operative Adarsh … vs The Registrar Of Co-Operative … on 21 September, 2002"},"content":{"rendered":"
Delhi High Court<\/div>\n
The Vaish Co-Operative Adarsh … vs The Registrar Of Co-Operative … on 21 September, 2002<\/div>\n
Author: S Sinha<\/div>\n
Bench: S Sinha, A Sikri<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
S.B. Sinha, C.J.<\/p>\n
1. The authority of Lieutenant Government in issuing a
\nnotification dated 27.06.1990 and\/or validity or otherwise
\nthereof exempting the petitioner, a co-operative society
\nfrom the limitation of the period of six years as provided in
\nSection 59(1) of the Delhi Co-operative Societies Act, 1972
\n(hereinafter for the sake of brevity referred to as, ‘the said
\nAct’) falls for consideration in this writ petition.\n<\/p>\n
2. The said notification reads thus :-\n<\/p>\n
“GOVERNMENT OF NCT OF DELHI <\/p>\n
(COOPERATIVE DEPARTMENT)<\/p>\n
No. F.42\/76\/BKG\/Coop.\/96\/246-253<\/p>\n
dt. 27.6.96<\/p>\n
 NOTIFICATION<\/p>\n
In exercise of the powers conferred
\nunder Section 88 of the Delhi Cooperative
\nSocieties Act, 1972 (35 of 1972), the Lt.
\nGovernor of NCT of Delhi is pleased to exempt
\nthe Vaish Cooperative Adarsh Bank Ltd., 3,
\nNetaji Subhash Marg, Daryaganj, New Delhi:-
\n110002 from the restriction of the period of
\nsix years as provided in Section 59(1) of the
\nsaid act for holding an enquiry against the
\nbank.”\n<\/p>\n
3. The said notification was issued in the following
\ncircumstances :-\n<\/p>\n
  The first respondent herein in the year 1991 initiated an
\nenquiry against the petitioner herein, which is a co-operative
\nsociety registered under the said Act on certain
\ncomplaints. Allegedly the order passed, if any, by the
\ncompetent authority pursuant to and in furtherance of the
\nsaid enquiry had never been communicated to the
\npetitioner herein. Only on 16.01.1991, the petitioner
\nherein was informed about the appointment of the Enquiry
\nOfficer. Allegedly his report, which was made on
\n03.06.1992, had not been forwarded to the petitioner. It,
\nhowever, forwarded the summary of inquiry in terms of
\nSection 55(4) of the said Act, whereto the petitioner herein
\nreplied inter alia informing, that the bank did not have a
\nregular and established practice of preparing a ‘scrutiny
\nnote in each and every case’. No further action in terms of
\nSection 55 of the said act was allegedly taken thereafter.
\nHowever, only on 30.10.1995, the first respondent herein
\nissued the impugned notice in exercise of its power
\nconferred upon it under Section 59 of the said Act,
\nwhere after the respondent No. 2 was sought to be
\nappointed as an Enquiry Officer to inquire into the alleged
\nirregularities pointed out in the inquiry report and to
\nestablish the extent to which the persons who were or
\nmight have been officers\/employees of the petitioner
\nherein had made any payment contrary to the said Act,
\nRules or bye-laws or had caused any deficiency in the
\nassets of the Bank by breach of trust or willful negligence
\nor had misappropriated or had fraudulently retained any
\nmoney or other property belonging to the Bank.\n<\/p>\n
Only at that time, the detailed inquiry report of the
\nEnquiry Officer dated 03.06.1992 was supplied to the
\npetitioner.\n<\/p>\n
4. It is not in dispute that the said proceeding was initiated
\nafter the expiry of the prescribed period of limitation. On
\nthe said ground, the petitioner raised a contention about
\nmaintainability of the said proceeding.\n<\/p>\n
However, pursuant to or in furtherance of the impugned
\norder dated 30.10.1995, the respondent No. 2 herein
\nissued the impugned notice dated 10.01.1996 thereby
\nproposing to go ahead with the inquiry under Section 59 of
\nthe said Act. The said notice dated 10.01.1996 is in the
\nfollowing terms:-\n<\/p>\n
“OFFICE OF THE ENQUIRY OFFICER : OFFICE
\nOF THE REGISTRAR COOPERATIVE  SOCIETIES :
\nGOVT. OF DELHI: NEW DELHI – 110001.\n<\/p>\n
No. F.RCS\/Coop.\/Acctts.\/E-59\/95-96\/635<\/p>\n
Dated:- 10\/1\/96<\/p>\n
 NOTICE<\/p>\n
Whereas an enquiry under Section 55
\nof the Delhi Coop. Societies Act, 1972 was
\nconducted in respect of irregularities
\ncommitted by the Management of Vaish Coop.
\nAdarsh Bank Ltd. in sanctioning\/
\ndisbursement of loans to some members.
\nAnd whereas, Enquiry Report dated 3\/6\/92
\nwas submitted to the Registrar, Cooperative
\nSocieties wherein a gross irregularities of
\nsanction\/disbursement of loans to 24
\nmembers\/borrowers involving an amount of
\nRs. 4,46,40,000\/- has been shown.\n<\/p>\n
And whereas the undersigned has been
\nappointed under Section 59(1) of Delhi Coop.
\nSocieties Act, 1972 as enquiry officer vide
\nOrder No. F.42\/76\/ARB\/Coop.\/170 dated
\n30.10.95 (copy endorsed to you) to enquire
\ninto the irregularities, pointed out in the
\nenquiry report and to establish the extent to
\nwhich the persons who have taken part in the
\nOrganization\/Management of the Bank or any
\ndeceased, past or present officer of the Bank
\nhad made any payment contrary to the Act,
\nthe rules or the bye-laws or had caused any
\ndeficiency in the assets of the Bank by breach
\nof trust or willful negligence or had
\nmisappropriated or fraudulently retained any
\nmoney or other property belonging to the
\nbank.\n<\/p>\n
Now, therefore, I, N.L. Sharma, in
\nexercise of the powers vested in me, direct
\nyou to appear before me on 29.1.96 at
\n11.00 A.M. Along with the necessary
\ndocuments\/records and comments pertaining
\nto the above charges.\n<\/p>\n
(N.L. SHARMA) <\/p>\n
ENQUIRY OFFICER\/SR.A.O.”\n<\/p>\n
5. The respondents do not deny or dispute that the
\nproceeding was barred by limitation, but as indicated
\nhereinbefore relied upon the purported notification dated
\n27.06.1990, as noticed supra.\n<\/p>\n
6. Section 59 of the said Act reads thus :-\n<\/p>\n
“59. Surcharge.\n<\/p>\n
(1) If in the course of an audit inquiry,
\ninspection or the winding up of a cooperative
\nsociety it is found that any person who is or
\nwas entrusted with the organization or
\nmanagement of such society or who is or has
\nat any time been an officer or an employee of
\nthe society had made any payment contrary
\nto this Act, the rules or the bye-laws or has
\ncaused any deficiency in the assets of the
\nsociety of breach of trust or willful negligence
\nor has misappropriated or fraudulently
\nretained any money or other property
\nbelonging to such society the Registrar may of
\nhis own motion or on the application of the
\ncommittee liquidator or any creditor inquire
\nhimself or direct any person authorised by
\nhim by an order in writing in his behalf to
\ninquire into the conduct of such person:\n<\/p>\n
Provided that no such inquiry shall be
\nheld after the expiry of six years from the date
\nof any act or omission referred to in this sub-section.\n<\/p>\n
(2) Where an inquiry is made under Sub-section (1)
\nthe Registrar may, after giving the
\nperson concerned an opportunity of being
\nheard make an order requiring him to pay or
\nrestore the money or property or any part
\nthereof with interest at such rate of to pay
\ncontribution and costs or compensation to
\nsuch extent as the Registrar may consider
\njust and equitable.”\n<\/p>\n
7. A bare perusal of the aforesaid provision would clearly go
\nto show that the inquiry must be directed against a person,
\nwho is said to be guilty of alleged omissions and
\ncommissions specified therein. Proviso appended thereto
\nin no uncertain terms states that no enquiry shall he held
\nafter the expiry of six years from the date of any act or
\nomission referred to in Sub-section (1) thereof. The said
\nproviso is couched in a negative language. It bars
\ninitiation of proceeding after the expiry of six years. The
\nsaid provision is, therefore, imperative in character. Thus,
\nany proceeding initiated beyond the prescribed period of
\nlimitation would undoubtedly be a nullity.\n<\/p>\n
8. In that view of the matter, the question, which now arises
\nfor consideration is as to whether in a situation of this
\nnature, the provisions of Section 88 of the said Act can be
\ninvoked. The answer to the said question must be
\nrendered in negative.\n<\/p>\n
9. The power of the Lieutenant Governor to exempt any co-operative
\nsociety from the provisions of the said Act or
\ndirections would apply with certain modifications ex facie
\nis meant to be exercised in favor of the co-operative
\nsociety and not for excluding the period of limitation.\n<\/p>\n
10. The said Act is regulatory in nature. It also provides for
\nrights and liabilities of the co-operative societies. The
\nLegislature in its wisdom though it fit that in the interest
\nof co-operative societies, inquiry in certain irregularities, if
\nany, should not be initiated after the expiry of period of
\nlimitation prescribed for therein.\n<\/p>\n
Once the statute of repose comes into operation, the
\ncompetent authority ceases to have any jurisdiction in the
\nmatter. The jurisdiction of the concerned authority to
\ninitiate a proceeding could be invoked only within the
\nprescribed period and not thereafter.\n<\/p>\n
The statutory authority, as is well known, must exercise its
\njurisdiction within the four corners of statue and upon
\nfollowing the procedure(s) established thereby, of which it
\nis the creature or not at all.\n<\/p>\n
In  Taylor v. Taylor, (1875) 1 Ch.D. 426, Jessel M.R. adopted the rule that
\nwhere a power is given to do a certain thing in a certain
\nway, the thing must be done in that way or not at all. The
\nsaid rule was applied by the Privy Council in  Nazir Ahmed
\nv. Emperor, 63 Ind App. 372 at 381.\n<\/p>\n
Furthermore, in  Vitarelli v. Seaton, (1959) 359 US 535 : 3 L. Ed 2d 1012, it has clearly been held
\nthat one who takes the procedural sword shall perish with
\nthe sword.\n<\/p>\n
Section 88 of the said Act must be read having regard to
\nthe aforementioned legal position.\n<\/p>\n
11. The Legislature may have a right to make retrospective
\nlaw, but yet unless it is done expressly or by necessary
\nimplication, statutes dealing with substantive rights must
\nnot be applied retrospectively. Evidently, an executive
\norder cannot take away a vested right upon giving the
\nsame a retrospective effect.\n<\/p>\n
Instead of referring to a large number of decisions, we are
\nof the opinion that suffice it to state the following passage
\nfrom  Principles of Statutory Interpretation, Seventh Edn.,
\n1999 from Justice G.P. Singh, Former Chief Justice Madhya
\nPradesh High Court, at page 380:-\n<\/p>\n
 “Statutes of limitation are regarded as
\nprocedural and the law of limitation which
\napplied to a suit is the law in force at the date
\nof the institution of the suit irrespective of the
\ndate of accrual of the cause of action. The
\nobject of a statute of limitation is not a create
\nany right but to prescribe periods within
\nwhich legal proceedings may be instituted for
\nenforcement of rights, which exists under the
\nsubstantive law. But, after the expiry of the
\nperiod of limitation, the right of suit comes to
\nan end, therefore, if a particular right or
\naction had become barred under an earlier
\nLimitation Act, the right is not revived by a
\nlater Limitation Act even if it provides a larger
\nperiod of limitation than that provided by the
\nearlier Act. On the same principle, if right to
\nexecute a decree or judgment gets barred
\nunder an earlier Act, the right is not revived
\nby a later Act.\n<\/p>\n
12. In that view of the matter, an order of execution would be
\nprospective in nature. It cannot be retrospective in nature.
\nThus, even assuming that the Lieutenant Governor could
\nissue an exemption notification in a case of this nature in
\nexercise of its power conferred upon him under Section 88
\nof the said Act, the same will have only prospective
\noperation it can neither have a retrospective operation nor
\ncan it be retro-active in nature. Once the period of
\nlimitation as provided for in Section 59 of the said Act
\nexpires, it confers a right upon the society and any liability
\nthere under is statutorily removed. It in the aforementioned
\nsituation must be held that no such notification could be
\nissued, which will have a retrospective operation.\n<\/p>\n
13. In  strawboard Manufacturing Co., Ltd. v. Gutta Mill
\nWorkers’ Union,<\/a> (1953) S.C.R. 439, it was observed :-\n<\/p>\n
 “….. If, therefore, the amending order
\noperates prospectively, i.e., only as from the
\ndate of the order, it cannot validate the award,
\nwhich had been made after the expiry of the
\ntime specified in the original order and before
\nthe date of the amending order, during which
\nperiod the adjudicator was functus officio and
\nhad no jurisdiction to act at all.”\n<\/p>\n
14. In  Deep Chand v. Mst. Bhago and Ors., 1964 (66) Punjab Law Reporter 1047, it was clearly held
\nthat Section 30 of the Limitation Act, 1963 would not apply
\nin a case where the period of limitation prescribed under
\nthe Act of 1908 had expired before the commencement of
\nthe new Act.\n<\/p>\n
15. In  Hukum Chand etc. v. Union of India and Ors., , the Apex
\nCourt held :-\n<\/p>\n
 “7. The learned Solicitor General has not
\nbeen able to refer to anything in Section 40,
\nfrom which power of the Central Government
\nto make retrospective rules may be inferred.
\nIn the absence of any such power, the Central
\nGovernment in our view, acted in excess of its
\npower in so far as it gave retrospective effect
\nto the Explanation to Rule 49. The
\nExplanation, in our opinion, could not
\noperate retrospectively and would be effective
\nfor the future from the date it was added in
\nFebruary 1960.”\n<\/p>\n
16. Yet again in  Regional Transport Officer, Chittor, etc. v.
\nAssociated Transport, Madras (P) Ltd. and Ors., , the Apex
\nCourt clearly held that no rules could be made with
\nretrospective effect and such an action cannot be upheld
\nonly on the ground that such rules are required to be
\nplaced before the Parliament.\n<\/p>\n
17. For the reasons aforementioned, the impugned order
\ncannot be sustained, which is set aside accordingly. This
\nwrit petition is accordingly allowed. However in the facts
\nand circumstances of the case, there shall be no order as
\nto costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court The Vaish Co-Operative Adarsh … vs The Registrar Of Co-Operative … on 21 September, 2002 Author: S Sinha Bench: S Sinha, A Sikri 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 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-94427","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nThe Vaish Co-Operative Adarsh ... vs The Registrar Of Co-Operative ... on 21 September, 2002 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-vaish-co-operative-adarsh-vs-the-registrar-of-co-operative-on-21-september-2002\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Vaish Co-Operative Adarsh ... vs The Registrar Of Co-Operative ... on 21 September, 2002 - 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