Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 13
PETITIONER:
DAMAN SINGH & ORS.
Vs.
RESPONDENT:
STATE OF PUNJAB & ORS.
DATE OF JUDGMENT04/04/1985
BENCH:
REDDY, O. CHINNAPPA (J)
BENCH:
REDDY, O. CHINNAPPA (J)
MISRA RANGNATH
CHANDRACHUD, Y.V. ((CJ)
DESAI, D.A.
VENKATARAMIAH, E.S. (J)
CITATION:
1985 AIR 973 1985 SCR (3) 580
1985 SCC (2) 670 1985 SCALE (1)644
ACT:
Constitution of India, Article 144-Affidavits of
underlings of the Executive usefulness for deciding the
vires of legislation-Compulsory amalgamation of co-operative
societies, constitutional validity of-Punjab Co-operative
Societies Act, 1961, sub-sections 8, 9, 10 and 11 of section
13-Whether The provisions thereof interfere with the Right
to form or to be a member of a society and therefore,
contravene Article 19(1)(c) of the Constitution and also
violate the principles of natural justice-Words and phrases-
"Corporations" meaning and what it comprehends in the scheme
of the Constitution of India-Constitution of India, 1950
Article 31-A(l)(c), Entries 43 and 44 of List I and Entry 32
of List II of the Seventh schedule and article 43-Superior
Courts cannot go into the question whether a certain ground
to which no reference is found in the judgment of the
subordinate court was argued before t/lat court or not-
Proper procedure in such case explained-Professional Ethics-
Counsel appearing in the Supreme Court-Duty to court
explained.
HEADNOTE:
Pursuant to a policy decision arrived at an All-India
Conference on Co-operative Societies, various State
Legislatures, roughly at about the same lime introduced
enactments providing for amalgamation of co-operative
societies. The vires of the provisions, contained in sub-
sections 8 to 11 of section 13 of the Punjab Co-operative
Societies Act, 1961- providing for compulsory amalgamation
of cooperative societies if it is necessary in the interests
cooperative societies, is challenged in these appeals by
special leave aud other special leave petitions.
Dismissing the appeals and petitions, the Cource,
^
HELD 1. The vires of legislation is not to be decided
on the basis of affidavits of underlings of the executive
who can hardly be described as authorised to speak for the
legislature. As usual in these and such cases,
581
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 13
the Counter-affidavits , where they have been filed , leave
much to be desired and arc least helpful to the Court.
[584F-G 585A] A
2.1 The law providing for amalgamation of co-operative
societies , in view of the constitutional bar contained in
Article 31-A (1) (c) cannot be struck down as violative of
the provisions of Article 19 (1) (c) of the Constitution ,
the right of a citizen to form a society or to be a member
of a certain cooperative society is not interfered with if
the society of which he has become a member is amalgamated
with another society consisting of members with whom he may
not be willing to be associated [588D-G]
In the cases here , the cooperative societies are
governed by statute from their inception. They are created
by statute , they are controlled by statute and so there can
be no objection to statutory interference with their
composition on the ground of contravention of the individual
right of freedom of association. j 594C-D]
Damyanti Naranga v. Union of India , [1971] 3 S.C.R..
840 , explained and distinguished.
2.2 The expression "Corporations" occurring in Article
31-A (I) (c) of the Constitution cannot be given such a
limited or narrow interpretations so as not to comprehend
cooperative societies in its expanse. 011 the other hand ,
the very requirement of the Corporation mentioned in Article
31-A (I) (c) requires the expression to be given a broad
interpretation since there can been higher interest than the
public interest.[589C-D]
2.3 Section 30 of the Punjab Cooperative Societies Act
, 1961 confers every registered co-operative society the
status of a body corporate having perpetual succession and a
common seal , with power to hold property enter into
contracts , institute and defend suits and other legal
proceedings and to do all things necessary the purposes for
which it is constituted Therefore , co-operative society is
a corporation as commonly understood [591G-H , 592A]
Board of Trustees , Ayurvedic , and Unani Tibia College
, Delhi v. The State of Delhi , [1962] Suppl. 1 SCR 156
applied.
2.4 The scheme of the Constitution as enjoined in
Entries 43 and 44 of List I of the Seventh Schedule an Entry
32 of List 11 does not make any difference either. The
mention of co-operative societies both in Entry 43 of List I
and Entry 32 of List II along with other corporations give
an indication that the Constitution makers were of the view
that co-operative societies were of the same genus as other
corporations and all were corporations. In fact the very
express exclusion; of co-operative societies from Entry 43
of List I is indicative of the view that but for such
exclusion , co-operative societies would be comprehended
within the expression "corporations".[592A , 592F-G]
2.5 The statement of Objects and Reasons of the
Constitution (4th)
582
amendment) Act and the report of the Joint Select Committee
relating thereto , do now show that initially it was
proposed to give protection to legislation pertaining to
amalgamation of companies only but later it was thought fit
to extend the protection to statutory corporations also and
therefore , the expression "corporations" was substituted in
the Act in the place of the expression "companies ’ which
had been mentioned in the Bill. It was obviously thought by
the Parliament that the protection should not be confined to
companies only but should extend to all corporations which
would naturally include Statutory Corporations. The more
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 13
generic expression "corporation" was used so that all
companies statutory corporations and the like may be brought
in. There is no indication that notwithstanding the use of
the generic expression "corporations" , the expression was
intended to exclude corporations other than companies and
statutory corporations. Parliament apparently chose the
broader expression not with a view to limit the protection
of the legislation relating to amalgamation to any class of
corporations but with a view to protect legislation
pertaining to amalgamation of all classes of corporations.
[592H , 593D-G]
2.6 The very philosophy and concept of the cooperative
movement is impregnated with the public interest and the
amalgamation of co-operative societies when such
amalgamation is in the interest of the co-operative
societies is certainly in the public interest or can only be
to secure the proper management of the societies. Therefore
, it cannot be said that the protection of Art , 31-A(l) (c)
was not available to section 13 (8) of the Punjab Co-
operative Societies Act , as the interest of a co-operative
society may not necessarily be in the public interest or for
the proper management of the society. [594D-G]
2.7 Notice to individual members of a co-operative
society , is opposed to the very status of a cooperative
society as a body corporate and is , therefore ,
unnecessary. Once a person becomes a member of a co-
operative society he loses his individuality qua the society
and he has no independent rights except those given to him
by the statute and the bye-laws He must act and speak
through the society or rather , the society alone can act
and speak for qua rights or duties of the society as a body.
So if the statute which authorises compulsory amalgamation
of cooperative societies provides for notice to the
societies concerned , the requirement of natural justice is
fully satisfied. The notice to the society will be deemed as
notice to all its members. That is why section 13 (9) (a)
provides for the issue of
notice to the societies and not to individual members.
Section 13 (9) (b) , however , provides the members also
with an opportunity to be heard if they desire to be heard
Further a member who objects to the proposed amalgamation
within the prescribed time is given , by section 31 (11) the
option , to walk-out , as it were , by withdrawing his share
, deposits or- loans as the case may be. [595A , C-A]
2,8 A fresh notification would not be necessary where
the Assistant Registrar even initially was authorised
generally to perform all the functions of a Registrar.A
fresh notification would probably be necessary where the
Assistant Registrar was authorised to perform certain
specified functions only of the Registrar. That is not
claimed to be the situation here. [596A-B]
583
2.9 It cannot be said that the dignity of a human being
is even remotedly affected by the amalgamation of a co-
operative society of which an individual is member with
another co-operative society. Therefore the contention that
both Article 31-A(l)(c) of the Constitution and section
13(8) of the Punjab Cooperative Societies Act , offended the
basic structure of the Constitution and therefore were void
is misplaced.
OBSERVATION:
[The Counsel appearing in the Supreme Court ,
particularly , when they appear before the Constitution
Bench must avoid advancing totally unsustainable
propositions. The time of the Supreme Court is public time
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 13
and as the mountainous arrears show that time is becoming
increasingly dear and precious. The counsel must carefully
examine with a greater sense of responsibility the
submissions which they propose to make before actually
advancing them in the Court]. [596G-H 593A-B]
3. It is not unusual for parties and counsel to raise
innumerable grounds in the petitions and memoranda of appeal
etc. but , later , confine themselves , in the course of
argument to a few only of those grounds , obviously because
the rest of the grounds are considered even by them to be
untenable. No party or counsel is thereafter entitled to
make a grievance that the grounds not argued were not
considered. If indeed any ground which was argued was not
considered it should be open to the party aggrieved to draw
the attention of the Court making the order to it by filing
a proper application for review or clarification. The time
of the superior Courts is not to be wasted in inquiring into
the question whether a certain ground to Which no reference
is found in the judgment of the subordinate court was argued
before that court or not .[596D-E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 206 ,
2861 , 250 , 320 , 1607 , 3548 , 379 , 769 1280 of , 979
and 1476-1483 Of 1985.
From the Judgments and Orders dated 10.1.79 , 28.9.79 ,
P 16.1.79 , 26.4 79 , 27.9.79 , 15.1.79 , 8.1.79.19.4.79 ,
of the Punjab and Haryana High Court in C.W.P. Nos. 4327/78
, 3430/79 , 4713/78 , 4937/78 , 1345/79 , 3217/79 , 5121/78
, 24/78 , 5195/18 , 4340/78 , 4613178 , 4793178 , 41J3/78 ,
4386/78 , 4545/18 , 4585/18 and 1257/79. G
M.K. Ranamurthi , R.C. Pathak , Arvind Kumar , Mrs.
Laxmi Arvind , Miss K. V. Lalitha , Arun Madan , Sarwa
Mitter , Manoj Swarup and Miss Lalita Kohli , for the
appearing Appellants.
M.S. Gujral , S.K. Bagga , Swaraj Kaushal , R.S. Sodhi
and M.P. Jha , for the appearing Respondents.
584
The Judgment of the Court was delivered by
CHINNAPPA REDDY , J. The opinion of the High Courts
appears to be unanimous on the question of the validity of
the relevant provisions of the Cooperative Societies Acts in
force in their respective States providing for the
compulsory amalgamation of Cooperative Societies. The Full
Benches of the High Courts of Andhra Pradesh , Karnataka ,
Punjab and Haryana and a Division Bench of the Patna High
Court (1) have upheld the validity of such provisions. But
litigants , particularly those who are in a position to
command funds arc rarely deterred by such unanimity of
judicial opinion. 11 So , several Co-operative Societies of
Punjab have chosen to prefer appeals to this Court
questioning the vires of sec. 13 (8) of the Punjab
Cooperative Societies Act which provides for the compulsory
amalgamation of cooperative societies if it is necessary in
the interests of the cooperative societies. The questions
raised are simple and straight and are capable of but single
, straight forward answers. Unfortunately a large number of
appeals have piled up in this court on these questions and
we are told that a large number of writ petitions said to
involve these or similar questions are pending in the
various High Courts in the country awaiting the decision of
this Court. We earnestly hope that this decision will put an
end to this branch of the litigation and will serve to push
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 13
forward the cooperative movement We think it is needless to
refer to the nature and history of the cooperative movement
except to say that the promotion of the cooperative movement
is one of the Directive principles of State Policy (see
Art.43 of the Constitution)- As usual in these and such
cases , the counter-affidavits , where they have been filed
, leave much to be desired and are least helpful. But , as
pointed out by us often enough , the vires of legislation is
not to be decided on the basis of affidavits of underlings
of the executive who can hardly be described as authorised
to speak for the legislature. But even from the , meagre
material available to us from the record , it is
(1). AIR 1978 AP 121 (FB)
AIR 1978 KARNATAKA 148 (FB)
1976 Punjab Law Journal 302 (FB)
AIR 1968 PATNA 211
There is also an excellent discussion by Vaidya , J. in
ILR 1972 AP 1140.
585
Obvious that the provisions relating to amalgamation of
Cooperative Societies in different State , enactments were
introduced pursuant to a policy decision arrived at an All
India Conference. This is evident from the circumstance that
these provisions were enacted by the various State
legislatures roughly at about the same time.A reference to
the policy decision at an All India Conference may be found
in the Full Bench Judgments of the Andhra Pradesh and
Karnataka High Courts. It is unnecessary to say more on this
aspect of the case.
The Punjab Co-operative Societies Act , 196t which
replaced the earlier Act was enacted , so it is stated in
the Statement of Objects and Reasons , "In pursuance of the
policy of the Government of India to simplify co-operative
law and procedure in order to remove all bottlenecks in the
way of development of co-operative movement in the country."
It is further stated in the Statement of Objects and
Reasons.
"The important provisions , such as relating to change
of liability , amalgamation of societies , splitting up of
societies , settlement of disputes and winding up of
societies , etc. were found to be of a dilatory and
complicated nature , and , therefore , creating problems in
the day to day working of the co-operative societies.
Special care has , therefore , been taken. to cut out all
unnecessary delays particularly in registration of societies
and the provisions to this effect have been simplified.
Another approach influencing a change is to make the Co-
operative Law comprehensive. Moreover consistent with our
national policy to promote the organisation and growth of
the co-operative Societies in the various fields of economic
activity , more difficult and complicated forms of co
operative societies are to spring up as compared to Co-
operative Credit Societies.. "
Section 2(c) defines "co-operative society" as meaning
"a Society registered or deemed to be registered under this
Act." Chapter II (secs. 3 to 14) deals with registration of
co-operative societies. In particular sec. 8 prescribes the
conditions pre-requisite to registration and authorises the
Registrar to register a society and its Bye laws if he is
satisfied that the conditions are fulfilled , Section 13
provides for the amalgamation , transfer of assets and
586
liabilities and division of co-operative societies. While
sec. 13(2) provides for voluntary amalgamation , Sec. 13 (8)
provides for compulsory amalgamation if the Registrar is
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 13
satisfied that it is necessary in the interests of the co-
operative societies. Sec. 13(9) (a) requires the Registrar
to send a copy of the proposed order to the societies
concerned and the creditors and sec. 13 (9) (b) requires the
Registrar to consider the objections received from the
societies concerned or from any member or creditor of such
societies. Section 13 (11) gives to the member or creditor
Who has objected to the proposed order under sub-sec. 9 the
option of withdrawing his share , deposits or loans as the
case may be on an application to be made to the society to
which his share , deposits or loans stand allocated by
virtue of the order under sub-sec. 8 within a period of 30
days from the date of such order. It is the vires of these
provisions , that is in question in these appeals and it
will be useful to extract at this juncture , sub-sections 8
, 9 , 10 and 11 of sec 13 of the Punjab Co-operative
Societies Act. They are as a follows:-
"13.(1) - - - - - - - - - - - - - - - - - - - - -
(2) ...........................
(3).........
(4)...........................
(5) ...........................
(6)
(7) ...........................
(8) Where the Registrar is satisfied that it is
necessary in the interest of the co-operative society or co-
operative societies that-
(i) any co-operative society be divided to form two or
more co-operative societies; or
(ii) one or more co-operative societies be amalgamated
with any other co-operative society; or
587
(iii) two or more co-operative societies be
amalgamated to form a new co-operative society , then ,
notwithstanding anything herein before contained , the
Registrar may , after consulting the financing
institution , if any , provide for-
(a) the division of that co-operative society into two
or n more co-operative societies: or
(b) the amalgamation of the society or societies-
(i) With any other co-operative society , or
(ii) to form a new co-operative society , with
such constitution including representation on the
committee , property rights , interests ,
liabilities , duties and obligations , as may be
specified in the order.
(9) No order shall be made under sub-section (8)
, unless-
(a) a copy of the proposed order has been sent
under certificate of posting to the society or
societies concerned and the creditors;
(b) the Registrar has considered the objections
received from the society or societies concerned or
from any member or creditor of such society or
societies within such period , being not less than
fifteen days from the date of posting of the proposed
order , as may be specified by the Registrar in this
behalf in the pro posed order.
(10) the Registrar may , after considering the
objections referred to in sub-section (9) , make such
modification in the proposed order as he may deem fit
and the order may contain such incidental ,
consequential and supplemental provisions as the
Registrar may deem necessary to give effect to the
same.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 13
(11) A member or creditor who had objected to the
pro posed order under sub-section (9) shall have the
option
588
of withdrawing his share , deposits or loans as the
case may be , on an application which shall be made to
the society to which his share , deposit or loan stands
allocated by virtue of the order under sub-section(8) ,
within a period of thirty days of the date of such
order
(12) ....... "
Chapter V of the Act deals with privileges of
Cooperative Societies and in particular sec. 30 states
"The registration of a co-operative society shall
render it a body corporate by the name under which it
is registered having perpetual succession and a common
seal , and with power to hold property , enter into
contract , institute and defend suits and other legal
proceedings and to do all things necessary for the
purposes for which it is constituted."
The foremost submission of Shri M.K. Ramamurthi ,
learned counsel for the petitioners was that any law
providing for the amalgamation of co-operative societies
directly contravenes Art. 19 (1) (c) which guarantees to all
citizens the right to form associations or unions. According
to Shri Ramamurthi , the right of a citizen to form a
society or to be a member of a certain cooperative society
is interfered with if the society of which he has become a
member is amalgamated with another society consisting of
members with whom he may not be associated. Article 31(A)
(I) (c) furnishes a complete answer to this submission. It
provides that no law providing for the amalgamation of two
or more corporations either in the public interest or in
order to secure the proper management of any of the
corporations shall be deemed to be void on the ground that
it is inconsistent or takes away or abridges any of the
rights conferred by Art l l or Art. 19. Shri Ramamurthi
attempted to cross the stile by arguing that co-operative
societies were not corporations within the meaning of that
expression in Art. 31-(A) (I) (c). According to him , the
Constitution discloses a scheme which separates co-operative
societies from Corporations , and ’never the twain shall
meet’. To substantiate his submission , he invited our
attention to Entries 43 and 42 of List-I and Entry 32 of
list-II of the Seventh Schedule to the Constitution. He also
read
589
Out to us the Statement of Objects and Reasons and the Joint
Select Committee’s report relating to the Constitution
(Fourth Amendment) Act , 195S by which clause (c) of Art.31-
A(1) was introduced. His submission was that the legislative
intent was merely to render legislation providing for
amalgamation of companies and statutory corporations alone
immune to challenge on the ground of conflict with the
fundamental rights guaranteed by Articles 14 and 19.
According to him the protection afforded by Art. 31-A(l)(c)
was not available and was never intended to be made
available to co-operative societies , since the expression
’corporations’ did not comprehend co-operative societies in
its expanse.
We are unable to find any justification for giving such
a limited or narrow interpretation to the expression
’corporations’ occurring in Art. 31-A(I) (c). On the other
hand , we think that the very requirement of public interest
or proper management of the corporation mentioned in Art.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 13
31-A(l) (c) requires the expression to be given a broad
interpretation since there can be no higher interest than
the public interest. We do not however desire to quibble
with rules of construction since we propose to examine what
a ’corporation’ means and comprehends ordinarily and in the
scheme of the Constitution.
What is a corporation ? In Halsbury’s Laws of England ,
4th Edition , Volume 9 , Paragraph 1201 , it is said ,
"A corporation may be defined as a body of persons (in
the case of a corporation aggregate) or in office (in
the case of a corporation sole) which is recognised by
the law as having a personality which is distinct from
the separate personalities of the members of the body
or the personality of the individual holder for the
time being of the office in question."
A corporation aggregate has been defined in paragraph
1204 as , "A corporation of individuals united into one
body under a special domination having perpetual
succession under an artificial form , and vested by the
policy of law with the capacity of acting in several
respects as an individual , particularly of taking and
granting property , of contracting
590
obligations and of suing and being sued , of enjoying
privileges and immunities in common and of exercising a
variety of political rights , more or less extensive ,
according to the design of its institution , or the
powers conferred upon it , either at the time of its
creation or at any subsequent period of its existence."
This court in the Board of Trustees , Ayurvedic and
Unani Tibia College , Delhi v. the State of Delhi(1) was
required to answer the question whether the Board of
trustees which was originally registered under the Societies
Registration Act , 1860 and a new Board of trustees which
was incorporated by an Act of the legislature called the
Tibbia College Act , 1952 by which the old Board was
dissolved and a new Board constituted were corporations. The
court held that the old Board was not but the new Board was.
Posing the question what is a corporation , the court
answered it with the statements contained in Halsbury’s Laws
of England already extracted by us and added ,
"A corporation aggregate has therefore only one
capacity , namely , its corporate capacity.A
corporation aggregate may be a trading corporation or a
non-trading corporation. The usual examples of a
trading corporation are (1) character companies , (2)
companies incorporated by special acts of Parliament ,
(3) companies registered under the Companies Act , etc.
Non-trading corporations are illustrated by (1)
municipal corporations , (2) district boards , (3)
benevolent institutions , (4) universities etc. An
essential element in the legal conception of a
corporation is that its identity is continuous , that
is , that the original member or members and his or
their successors are one. In law the individual
corporators , or members , of which it is composed are
something wholly different from the corporation itself;
for a corporation is a legal person just as much as an
individual. Thus , it has been held that a name is
essential to a corporation , that a corporation
aggregate can , as a general rule , only act or express
its will by deed under its common seal; that at the
present day in England a corporation is created by one
or other of two methods ,
(1) [1962] SUPPL. 1. SCR 156
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 13
591
namely , by Royal Charter of incorporation from the
Crown or by the authority of Parliament that is to say
, by or by virtue of statute. There is authority of
long standing for saying that the essence of a
corporation consists in
(1) lawful authority of incorporation ,
(2) the persons to be incorporated ,
(3) a name by which the persons are incorporated ,
(4) a place and
(5) words sufficient in law to show incorporation. No
particular words are necessary for the creation of a
corporation : any expression showing an intention to
incorporate will be sufficient."
The court then noticed the various provisions of the
Societies Registration Act , 1860 which according to them
contained no sufficient words to indicate an intention to
incorporate but on the contrary contained provisions showing
that there was an absence of such intention. Therefore ,
they observed , "We have , therefore , come to the
conclusion that the provisions aforesaid do not establish
the main essential characteristic of a corporation aggregate
, namely , that of an intention to incorporate the society."
Considering next the question whether the new Board was a
corporation , the court had no difficulty in answering the
question with reference to sub-section 2 of section 3 which
stated that the Board shall be a body corporate having
perpetual succession and common seal and shall by the said
name sue and be sued. The court observed , "Subsection 2 of
sec. 3 says in express terms that the new Board constituted
under the impugned Act is given a corporate status; in other
words , the new Board is a corporation in the full sense of
the term. "
We have already extracted sec. 30 of the Punjab Act
which confers on every registered co-operative society the
status of a body corporate having perpetual succession and a
common seal , with power to hold property , enter into
contracts , institute and defend suits and other legal
proceedings and to do all things necessary for the purpose
for which it is constituted. There cannot , therefore , be
592
the slightest doubt that a co-operative society is a
corporation as commonly understood. Does the scheme of the
Constitution make any difference ? We apprehend not.
Entry 43 of List I of the Seventh Schedule is as
follows:
"43. Incorporation , regulation and winding up of
trading corporations , including banking , insurance
and financial corporations but not including co-
operative societies."
Entry 44 of the same list is as follows:
"44. Incorporation , regulation and winding up of
corporations , whether trading or not , with objects
not confined to one State , but not including
universities.
Entry 32 of List II is as follows:
"32. Incorporation , regulation and winding up of
corporations , other than those specified in List I and
universities incorporated trading , literature ,
scientific , religious and other societies and
associations; co-operative societies ,"
According to Mr. Ramamurthi the express exclusion of
co-operative societies in Entry 43 of List [ and the express
inclusion of co-operative societies in Entry 32 of List II
separately and apart from but along with corporations other
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 13
than those specified in list I and universities , clearly
indicated that the constitutional scheme was designed to
treat co-operative societies as institutions distinct from
corporations. On the other hand one would think that the
very mention of co-operative societies both in Entry 43 of
List I and Entry 32 of List II along with other corporations
give an indication that the Constitution makers were of the
view that co-operative societies were of the same genus as
other corporations and all were corporations. In fact the
very express exclusion of co-operative societies from Entry
43 of List I is indicative of the view that but for such
exclusion , co-operative societies would be comprehended
within the meaning of expression "corporations".
The statement of Objects and Reasons of the
Constitution (4th amendment) Act and the report of the Joint
Select Committee relating thereto do not carry Mr.
Ramamurthi’s argument any
593
further. The statement of Objects and Reasons says , in
relation to Art. 31-A (1) (c) ,
"The reforms in company law now under
contemplation like the progressive elimination of the
managing agency system , provision for the compulsory
amalgamation of two or more companies in the national
interest , the transfer of an undertaking from one
company to another , etc. , require to be placed above
challenge."
The report of the Joint Select Committee , is so far as
it is relevant , says ,
"In sub-clauses (c) and (d) , the word
"corporations" has been substituted for the word
"companies" in order to cover statutory corporations as
well as companies."
According to Mr. Ramamurthi , the statement of Objects
and Reasons and the report of the joint Select Committee
show that initially it was proposed to give protection to
legislation pertaining to amalgamation of companies only but
later it was thought fit to extend the protection to
statutory corporations also and therefore the expression
"corporations" was substituted in the Act in the place of
the expression "companies" which had been mentioned in the
Bill. There is no substance in this submission. It was
obviously thought by the Parliament that the protection
should not be confirmed to companies only but should extend
to all corporations which would naturally include Statutory
Corporations. The more generic expression "corporations" was
used so that all companies , statutory corporations and the
like may be brought in. There is no indication that
notwithstanding the use of the generic expression
"corporations" , the expression was intended to exclude
corporations other than companies and statutory corporations
Parliament apparently chose the broader expression not with
a view to limit the protection of the legislation relating
to amalgamation to any class of corporations but with a view
to protect legislation pertaining to amalgamation of all
classes of corporations.
The answer to the principal question raised by Shri
Ramamurthi appears to us to be so plain as to merit , no
further discus
594
sion. We must however notice here Damyanti Naranga v. Union
of India on which reliance was placed by the learned counsel
on the basis that Art. 31-A (1) (c) did not afford any
protection to s. 13(8) , (9) etc. That case has no
application whatever to the situation before us. It was a
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 13
case where an unregistered society was by statute converted
into a registered society which bore no resemblance whatever
to the original society. New members could be admitted in
large numbers so as to reduce the original members to an
insignificant minority. The composition of the society
itself was transformed by the Act and the voluntary nature
of the association of the members who formed the original
society was totally destroyed. The Act was , therefore ,
struck-down by the court as contravening the fundamental
right guaranteed by Art. l9(1)(f). In the cases before us we
are concerned with co-operative societies which from the
inception are governed by statute. They are created by
statute , there are controlled by statute and so , there can
be no objection to statutory interference with their
composition on the ground of contravention of the individual
right of freedom of association.
The second submission of the learned counsel was that
s.13(8) of the Punjab Co-operative Societies Act provided
for amalgamation of Co-operative Societies if the Registrar
was satisfied that it was necessary to do so in the interest
of the Co-operative Societies whereas the Constitutional
protection was available only if the legislation was in the
public interest or in order to secure the proper management
of any of the corporations. According to the learned counsel
the protection of Art. 31-A (1) (c) was , therefore , not
available to s. 13 (8) of the Punjab Cooperative Societies
Act as the interest of a Cooperative
Society may not necessarily be in the public interest or for
the proper management of the society. This submission is no
more than a play with words. The very philosophy and concept
of the Cooperative movement is impregnated with the public
interest and the amalgamation of Co-operative Societies when
such amalgamation is in the interest of the Co-operative
Societies is certainly in the public interest or can only be
to secure the proper management of the societies. The
argument of the learned counsel is an attempt at hair-
splitting and is rejected.
(1) [1971] 3. S.C.R. 840.
595
The next submission of the learned counsel was that s.
13 A (8) , (9) and (10) did not make express provision for
the issue of notice to the members of the concerned Co-
operative Societies and were , therefore , violative of the
principles of natural justice. He argued that in the absence
of any provision , the rules of natural justice may be read
into the provisions and notice to the members of the
affected societies was imperative. Otherwise , he argued ,
13 members of one society would be formed against their will
and without being heard to associate themselves with members
of another society. We have no hesitation in rejecting this
submission also. Once a person becomes a member of a co-
operative society , he loses his individuality qua the
society and he has no independent rights except those given
to him by the statute and the by-laws. He must act and speak
through the society or rather , the society alone can act
and speak for him qua rights or duties of the society as a
body , So if the statute which authorises compulsory
amalgamation of cooperative societies provides for notice to
the societies concerned , the requirement of natural justice
is fully satisfied. The notice to the society will be deemed
as notice to all its member. That is why s. 13 (9) (a)
Provides for the issue of notice to the societies and not to
individual members. Section 13(9)(b) , however , provides
the members also with an opportunity to be heard if they
desire to be heard. Notice to individual members of a.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 13
cooperative society , in our opinion , is opposed to the
very status of a cooperative society as a body corporate and
is , therefore , unnecessary. We do not consider it
necessary to , further elaborate the matter except to point
out that a member who objects to the proposed amalgamation
within the prescribed time is given , by s. 31(11) , the
option to walk-out , as it were , by withdrawing his share ,
deposits or loans as the case may be.
Another submission of the learned counsel was that the
notification authorising the Assistant. Registrar of Co-
operative Societies to exercise all the powers of Registrar
under the Act could enable the Assistant Registrar to
perform only such functions as the Registrar was authorised
to perform under the Act as on the date of the notification.
The Assistant Registrar would not be entitled to exercise
the powers entrusted to the Registrar
596
by amendment of the Act subsequent to the date of the
notification unless a fresh notification was issued. We do
not think that a fresh notification would be necessary where
the Assistant Registrar even initially was authorised
generally to perform all the functions of a Registrar.A
fresh notification would probably be necessary where the
Assistant Registrar was authorised to perform certain
specified functions only of the Registrar. That is not
claimed to be the situation here.
The final submission of Shri Ramamurthi was that
several other questions were raised in the writ petition
before the High Court but they were not considered. We
attach no significance to this submission. It is not unusual
for parties and counsel to raise innumerable grounds in the
petitions and memoranda of appeal etc. , but , later ,
confine themselves , in the course of argument to a few only
of those grounds , obviously because the rest of the grounds
are considered even by them to be untenable. No party or
counsel is thereafter entitled to make a grievance that the
grounds not argued were not considered. If indeed any ground
which was argued was not considered it should be open to the
party aggrieved to draw the attention of the court making
the order to it by filing a proper application for review or
clarification. The time of the superior courts is not to be
wasted in inquiring into the question whether , a certain
ground to which no reference is found in the judgment of the
subordinate court was argued before that court or not ?
Shri Arvind Kumar , learned counsel for one of the
appellants very airily made a submission that Art. 31-A (1)
(c) introduced by the Constitution (64th amendment) Act and
s. 13(8) of the Punjab Co-operative Societies Act offended
the Basic Structure of the Constitution as they affected the
dignity of the human being and were therefore void. We find
overselves unable to appreciate how the dignity of a human
being can even remotely be said to be affected by the
amalgamation of a cooperative society of which an individual
is a member with another cooperative society. We expect
counsel appearing in this court , particularly when they
appear before the Constitution Bench , to avoid advancing
such totally unsustainable propositions , The time of
597
this court is public time and as the mountainous arrears
show the time is becoming increasingly dear and precious. We
can only appeal to counsel to carefully examine with a
greater sense of responsibility the submission which they
propose to make before actually advancing them in court. All
the appeals are dismissed with costs which we quantify each
Rs. 2,500 in each appeal.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 13
S.R. Appeals & Petitions dismissed.
598