1975 (7) TMI 150 - SC - Indian Laws

Supreme Court upholds attachment of Co-op Society funds & dissolution, decree-holder can pursue claims.

The Supreme Court upheld the attachment of Rs. 4,50,000 belonging to the Co-operative Society, validating it as a debt due to the Society. Additionally, ... - Issues Involved:1. Validity of attachment of property of the Hyderabad Co-operative Commercial Corporation Ltd.2. Competence of the dissolution of the Hyderabad Co-operative Commercial Corporation Ltd. by the Registrar of Co-operative Societies.Summary:1. Validity of Attachment of Property:The first issue was whether there was any property of the Hyderabad Co-operative Commercial Corporation Ltd. (the Co-operative Society) that could be attached by the decree holders. The decree holder obtained a decree for a sum of Rs. 6,91,293.11 with interest and filed an Execution Petition for attachment of Rs. 4,50,000/- belonging to the Co-operative Society in the custody of the Commissioner of Civil Supplies and the Accountant General, Hyderabad. The City Civil Court issued a prohibitory order to hold the sum until further orders. The High Court held that the attachment was not valid as the amount did not become the property of the Co-operative Society in the hands of the Commissioner of Civil Supplies. However, the Supreme Court found that the documents, including a letter dated 12 June 1959, established a debt due to the Co-operative Society and validated the attachment. The Court stated that the budget provision had ripened into a debt payable to the Co-operative Society, and the attachment was perfected by bringing the money to the Court.2. Competence of Dissolution:The second issue was whether the dissolution of the Co-operative Society by the Registrar of Co-operative Societies was competent. The State Registrar cancelled the registration of the Co-operative Society u/s 53 of the Hyderabad Co-operative Societies Act, 1952, and appointed a liquidator. The decree-holder challenged the validity of the order of liquidation, but the High Court upheld it. The Supreme Court examined the provisions of the Multi-unit Co-operative Societies Act, 1942, and found that the State Registrar was competent to dissolve the Co-operative Society and appoint a liquidator. The delegation of powers by the Central Government to the State Registrar was valid u/s 5B of the 1942 Act, allowing the State Registrar to exercise powers under the State Act of 1952.Conclusion:The Supreme Court set aside the judgment of the High Court, upheld the attachment of Rs. 4,50,000, and validated the dissolution of the Co-operative Society and the appointment of the liquidator. The decree-holder was allowed to prefer the claim before the liquidator and, if necessary, take up execution against the Government for any remaining amount due. The appeals filed by the State were dismissed, and the decree-holder was entitled to costs. The amount of Rs. 90,000 withdrawn by the decree-holder was to be refunded to the liquidator.