1985 (4) TMI 322 - SC - Indian Laws

Society has no independent right qua the Society and it is the Society that is entitled to represent as the corporate aggregate.

Issues Involved:
1. Validity of compulsory amalgamation provisions under the Punjab Cooperative Societies Act.
2. Alleged violation of Article 19(1)(c) of the Constitution.
3. Interpretation of the term "corporations" under Article 31(A)(1)(c).
4. Compliance with principles of natural justice.
5. Authority of the Assistant Registrar under the Act.
6. Consideration of additional grounds raised in the writ petition.
7. Alleged violation of the Basic Structure of the Constitution.

Detailed Analysis:

1. Validity of Compulsory Amalgamation Provisions:
The court addressed the validity of Section 13(8) of the Punjab Cooperative Societies Act, which allows for the compulsory amalgamation of cooperative societies if deemed necessary by the Registrar. The court noted that similar provisions had been upheld by Full Benches of the High Courts of Andhra Pradesh, Karnataka, Punjab, and Haryana, as well as a Division Bench of the Patna High Court. The court observed that these provisions were introduced pursuant to a policy decision at an All India Conference, aimed at promoting the cooperative movement in line with Article 43 of the Constitution.

2. Alleged Violation of Article 19(1)(c):
The primary submission was that the compulsory amalgamation provisions contravened Article 19(1)(c), which guarantees the right to form associations or unions. The court found that Article 31(A)(1)(c) provides a complete answer to this submission, as it states that no law providing for the amalgamation of corporations in the public interest or for proper management shall be deemed void on the grounds of inconsistency with Articles 14 and 19. The court rejected the argument that cooperative societies are not "corporations" under Article 31(A)(1)(c), citing the broad interpretation required by the public interest.

3. Interpretation of the Term "Corporations":
The court examined whether cooperative societies fall under the term "corporations" in Article 31(A)(1)(c). It referred to Halsbury's Laws of England and previous judgments, concluding that cooperative societies are indeed corporations as they possess perpetual succession, a common seal, and the capacity to hold property and enter into contracts. The court also noted that the exclusion of cooperative societies from Entry 43 of List I and their inclusion in Entry 32 of List II of the Seventh Schedule indicated that they were considered a type of corporation.

4. Compliance with Principles of Natural Justice:
The argument was made that Sections 13(8), (9), and (10) did not provide for notice to individual members of the cooperative societies, thus violating natural justice. The court held that notice to the societies, as provided in Section 13(9)(a), suffices as notice to all members. It emphasized that once an individual becomes a member of a cooperative society, they lose their individual rights qua the society and must act through the society. The court also noted that members who object to the amalgamation have the option to withdraw their shares, deposits, or loans under Section 13(11).

5. Authority of the Assistant Registrar:
The contention was that the Assistant Registrar could only exercise powers conferred on the Registrar as of the date of the notification and not any subsequent amendments. The court dismissed this argument, stating that a fresh notification would only be necessary if the Assistant Registrar was initially authorized to perform specific functions, which was not the case here.

6. Consideration of Additional Grounds:
The appellants argued that several other questions raised in the writ petition were not considered by the High Court. The court dismissed this submission, noting that it is common for parties to raise numerous grounds but later confine their arguments to a few. The court emphasized that any grievance regarding unconsidered grounds should be addressed through a proper application for review or clarification.

7. Alleged Violation of the Basic Structure:
A submission was made that Article 31-A(1)(c) and Section 13(8) of the Punjab Cooperative Societies Act violated the Basic Structure of the Constitution by affecting the dignity of human beings. The court found this argument to be without merit, stating that the amalgamation of a cooperative society does not remotely affect human dignity.

Conclusion:
The Supreme Court dismissed all the appeals, upholding the validity of the compulsory amalgamation provisions under the Punjab Cooperative Societies Act. The court found no violation of Article 19(1)(c), affirmed that cooperative societies are "corporations" under Article 31(A)(1)(c), and held that the principles of natural justice were adequately complied with. The authority of the Assistant Registrar was upheld, and the court found no merit in the additional grounds or the argument regarding the Basic Structure of the Constitution. The appeals were dismissed with costs quantified at Rs. 2,500 each.

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