- (1.) Punjab State Cooperative Supply & Marketing Federation Limited has filed this intra court appeal under Clause X of the Letters Patent against the order dated November 19, 2013, passed by the learned Single Judge, allowing the writ petition (CWP No. 17760 of 1991) filed by Gurbux Singh, who died during the pendency of the petition and whose legal representatives (respondents No.1 to 3 herein) were impleaded to pursue the petition. Vide the said order, the award dated June 22, 1989 (Annexure P-8) passed by the Deputy Registrar, Cooperative Societies, Sangrur; order dated April 19, 1990 (Annexure P-9) passed by the Joint Registrar (Milk Supply) Cooperative Societies, Punjab, on appeal against the said award; and the order dated February 07, 1991 (Annexure P-13) passed by the Commissioner (Appeals), Jalandhar, on revision, were set aside with costs of Rs. 10,000/-.
(2.) Though there is a delay of 102 days in re-filing and 77 days in filing the appeal and the appellant has filed applications (CM Nos. 2623- LPA and 2624-LPA of 2014) for condoning the delay, yet we have heard the learned counsel for the appellant on merits, and have gone through the order, passed by the learned Single Judge.
(3.) Undisputedly, on verification in the year 1975, shortage of certain fertilizers was found, which was in the custody and control of Salesman Gurbachan Singh (now deceased). At that time, Gurbux Singh, who has also died, was the Manager of the Society. The Society sought a reference only against Gurbachan Singh, finding him guilty for the shortage, by initiating proceedings under Section 55 of The Punjab Cooperative Societies Act, 1961 (hereinafter referred to as 'the Act'). It is pertinent to mention here that no reference was sought against Gurbux Singh, as according to the Society, he was not responsible at all for the alleged shortage. Even a resolution to recover the money was also passed only against Salesman Gurbachan Singh. Though during the pendency of the said reference before the Deputy Registrar, an application was filed by the Society to implead Gurbux Singh as respondent, but it is a fact that the said application was never allowed by the Arbitrator (Deputy Registrar). Ultimately, the Arbitrator passed the award. By that time also, no decision was taken on the application to implead Gurbux Singh as party in the proceedings. A reading of the award shows that the entire text of the award only finds the sales person as responsible for the loss. However, a sweeping observation was made that Gurbux Singh being Manager and the supervising authority of the Society at the relevant time was also responsible for the alleged shortage. The respondents challenged the said award and they did not remain successful before the appellate and the revisional authorities. However, the learned Single Judge set aside the said award, while observing as under : "The arbitrator was appointed through a reference brought in the year 1975 as Ex. P.2 would show and the initial reference was only for recoveries sought to be initiated against Gurbachan Singh, the salesman as per the resolution. There was no reference in the resolution to the petitioner as a person responsible for the loss or as a person acting in connivance with the sales person. If there was a liquidated sum which was required to be adjudicated, then again reference must be for ascertainment of the sum. The impleadment made of the petitioner on a wide observation that he was the Manager and hence he must be taken as acting in connivance, if it is tenable at all, it should have been done within a period of three years when the inspection revealed that there had been a loss. If the recovery is by way of damages by loss caused, then it must be again from the time when the loss was detected and when action was sought to be taken. The Cooperative Society Act which provides for a forum for adjudication must obtain an enforceable award only in respect of the claim which is legally enforceable and enforceable claim cannot be brought against the petitioner at a whimsical time nearly six years after proceedings were initiated before the arbitrator. I will not take a contention that the petitioner had not raised the objection regarding the limitation or the impleadment is any way relevant, for, the duty of the court to ensure that only enforceable claims are brought before the adjudication authority must be seen as something which is fundamental, irrespective of absence of objection regarding limitation. If Section 3 of the Limitation Act is any guidance, it sets out that the plea shall be examined whether the objection was taken specifically or not. 7. I do not see anything specifically under Section 55 of the Act that a resolution must have been passed by the Society before arbitral reference but the reference on subject in Brij Kishore Arora's case was only a re-production of an argument made by the counsel that the proceedings could not go without resolution. The issue of whether an arbitral reference could be made without a resolution of the Society was not directly in issue in the said case, for, it was with reference to a suspension of a committee and an action sought to be taken in terms of Section 27 of the Act. Any observation with reference to the absence of the resolution must be taken as obiter and I leave it to some future case for proper consideration. To me the case must be rest on the facts that no recovery for the alleged debt was possible beyond a period of six years from the time when loss was detected and that too, when the arbitral reference itself had been made only for ascertainment and for recovery against the salesman pursuant to the inspection made in the year 1975. The claim against the petitioner was stale and the arbitrator could not have passed the award against the petitioner. 8. Even as regards the connivance of the petitioner for the loss caused, it is more in the nature of a possible inference that a Manager ought to have known the misappropriation made by the sales person and, therefore, such a huge loss of the value of fertilizers of a few tonnes could not have been possible without the connivance. This shall be on appropriate proof brought on specific evidence tendered before the arbitrator. The judgment in Yash Raj Goyal was actually considering the extent of interference under Article 226 of the Constitution in a case where an employee was sought to be dismissed from service for causing loss of bitumen. The court was observing that even though no direct evidence of connivance would be possible, there has to be specific evidence and proof regarding the same. Though the matter related to the proceedings for discharge of an employee, the case was being considered in the light of an alleged misappropriation which the court said cannot be inferred by the only fact that particular official was a supervisor or Manager at that time and, therefore, misappropriation must be taken as in connivance with subordinate officials. The law that can be extracted from this decision is that the misappropriation cannot be merely a passive inference against a particular person without that particular person being charged with such misappropriation or specific instances had been brought against him to infer a case of connivance. I have gone through the entire text of the award passed by the Deputy Registrar and there is not a reference in one word except in the final paragraphs that there was connivance of the petitioner with the sales person causing the disappearance of huge stock. On the other hand, the consideration has been that all the bills and the stocks had been held by the sales person and he had not accounted for the value of all the stocks in his custody. The bills and registers bear the signatures of the salesman and they do not appear to have been entered under the signatures of the petitioner on any of the bills or account books. The best can be said against the petitioner was that he had not exercised proper supervisory control against the sales person but that could only be a matter of an independent charge of a dereliction of duty and cannot be a finding of a debt or liability as was sought to be fastened through an arbitral award.";