DAMAN SINGH Vs. STATE OF PUNJAB

JUDGEMENT

(1.) The opinion of the High Courts appears to be unanimous on the question of the validity of the relevant provisions of the Co-operative Societies Acts in force in their respective States providing for the compulsory amalgamation of Co-operative Societies. The Full Benches of the High Courts of Andhra Pradesh, Karnataka, Punjab and Haryana. (DB ) and a Division Bench of the Patna High Court, AIR 1978 Andh Pra 121 (FB), AIR 1978 Kant 148 (FB), 1976 Pun LJ 302 (FB). There is also an excellent discussion by Vaidya, J. in ILR (1972) Andh Pra 1140) have upheld the validity of such provisions. But litigants, particularly those who are in a position to command funds are rarely deterred by such unanimity of judicial opinion. So, several Co-operative Societies of Punjab have chosen to prefer appeals to this Court questioning the vires of S. 13(8) of the Punjab Co-operative Societies Act which provides for the compulsory amalgamation of co-operative societies if it is necessary in the interests of the co-operative societies. The questions raised are simple and straight and are capable of but single, straightforward 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 forward the co-operative movement. We think it is needless to refer to the nature and history of the co-operative movement except to say that the promotion of the co-operative 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 obvious that the provisions relating to amalgamation of Co-operative Societies in different States, 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.

(2.) The Punjab Co-operative Societies Act, 1961 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:

(3.) 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 co-operative society is interferred 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. Art. 31A(1)(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. 14 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 31A(1)(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 44 of List-I and Entry 32 of List-II of the Seventh Schedule to the Constitution. He also read out to us the Statement of Objects and Reasons and the Joint Select, Committee's report relating to the Constitution (Fourth Amendment) Act, 1955 by which clause (c) of Art. 31A(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 Arts. 14 and 19. According to him the protection afforded by Art. 31A(1)(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.,