1975 INSC 0241 The Hyderabad Co-Operative Commercial Corpn. Ltd. and Others, Vs Syed Mohiuddin Khadir (Dead) By L. Rs. and Others Civil Appeals Nos. 1152, 1153, 1268, 1708, 1733 and 2539 of 1969 (CJI A. N. Ray, K. K. Mathew, Syed Fazal Ali, V. R. Krishna Iyer JJ) 30.07.1975 JUDGMENT RAY, C.J. ­ These six appeals are by certificate from thejudgment dated January 23, 1968 of the High Court of Andhra Pradeshat Hyderabad in C.M.A. Nos. 210 and 374 of 1967 in that HighCourt.2. Two questions arise for decision in these appeals. First,whether in the circumstances of the case, there was any propertyof the Hyderabad Co-operative Commercial Corporation Ltd.hereinafter referred to as the co-operative society which could beattached by the decree holders, the appellants in Civil AppealNo. 1708 of 1969 and Civil Appeal No. 2539 of 1969 in the handsof the Director of Civil Supplies. Second, whether thedissolution of the Hyderabad Co-operative Commercial Corporation Ltd bythe Registrar of Co-operative Societies was competent.3. Syed Mohiuddin Khadir, hereinafter referred to as the decreeholder, obtained on August 24, 1959 a decree from the City CivilCourt, Hyderabad against the co-operative society for a sum ofRs. 6,91,293.11 p. with interest.4. On November 23, 1959, the decree holder filed an executionpetition before the City Civil Court against the co-operativesociety for attachment inter alia of a sum of Rs. 4,50,000belonging to the co- operative society and in the custody of theCommissioner of Civil Supplies and the Accountant General, Hyderabad.On November 27, 1959, the city civil court issued a prohibitoryorder to the Commissioner of Civil Supplies to Hold the said sumuntil further orders. Pursuant to the order, on December 2,1959, the Accountant General wrote to the Commissioner of CivilSupplies that in view of the order of the Court, no paymentrelating to the co-operative society would be made by his officewithout the concurrence of the Court. The decree holder contendsthat the attachment is valid. The State contends that there wasno debt due to the co-operative society and therefore, there wasno valid attachment.5. The facts and circumstances under which the city civil courtmade an order for attachment are these. The State budget for1959-60 provides for payment of Rs. 4,50,000 to the co- operativesociety. In the execution application, the decree holder stated thatthe sum of Rs. 4,50,000 mentioned in the budget was debt due tothe co-operative society. The decree holder further alleged thatthe sum of Rs. 4,50,000 belonging to the co-operative society wasin the custody and control of the Commissioner of Civil Suppliesand the Accountant General, Hyderabad, as evidenced by the budgetprovision and a letter dated June 12, 1959 issued by theCommissioner of Civil Supplies to the District Treasury Officers. Theletter dated June 12, 1959 written by the Assistant ChiefAccounts Officer and approved by the Commissioner and addressed toDistrict Treasury Officers stated thatthe following provisions for the Civil Supplies Department are madeunder the above major head (meaning thereby Trading Civil Supplies) inthe budget estimates for the year 1959-60; (1) payment to HyderabadCo-operative Commercial Corporation - Rs. 4,50,000 . . . . You arerequested to kindly make the payments under the above heads asper rules and intimate to this office the full particulars of theamounts and expenditure incurred in your district every fortnighton the 5th and 20th of the succeeding month to which they relatefor watching the expenditure as a whole against the above provision.6. The city civil court on these facts issued a prohibitory orderon November 27, 1959 directing the Commissioner of CivilSuppliers to hold be sum until further orders. The Accountant General,pursuant to the said prohibitory orders, wrote to the Court onDecember 2, 1959 that no payment relating to the co-operativesociety would be made by his office without the concurrence ofthe Court.7. The High Court held that the mere fact that the Commissionerof Civil Supplies directed the Treasury Officer to make paymentsto the co-operative society as and when occasion arose did notmean that the account as a whole became the property of theco-operative society in the hands of the disbursing officer namely,the Commissioner of Civil Supplies. The High Court held that theprovisions of Order 21. Rule 52 of the Code of Civil Proceduredid not apply and the attachment effected and the prohibitoryorder made by the city civil court and the directions to depositthe amount were not valid.8. It may be stated here that the State filed a suit C.S. No. 1of 1962 under Order 21, Rule 63 of the Code of Civil Procedurechallenging the order of attachment. The suit was withdrawn bythe Government. The High Court held that the withdrawal of thesuit did not preclude the Government from questioning the validity ofthe attachment.9. On behalf of the State, it was contended that the budgetappropriation of Rs. 4,50,000 for the financial year 1959-60 didnot make the sum the property of the co-operative society in thecustody of the public officer. It was also contended by theState that the said sum was not a debt due to the co-operativesociety. The State also contended that the rules require claimbeing made, bill being processed, scruting as to whether thereis sufficient fund credited to the appropriation for payment andin the present case, there was no order for actual payment.Another contention on behalf of the State was that even if theattachment was legal, it would cease to be so by the end of thefinancial year because the property was not brought into courtand the amount lapsed.10. The documents in the present case and in particular theletter dated June 12, 1959 and the letter dated December 2, 1959written by the Accountant General to the Court establish thatthere was a debt due to the co-operative society and theattachment was validly made. The letter dated June 12, 1959 providedfor payment and the payment was approved by the Commissioner.The officers disbursing the amount were to pay in accordance withthe rules and inform the department about the expenditureincurred in that behalf. There is intrinsic evidence in the letterdated June, 12, 1959 that the approval by the Commissioner is notonly sanction of the payment but also approval of the same.Payment in accordance with rules means that documents are to thevouched and there should be particulars of payment andidentification of the persons to whom payment is to be made.11. The letter dated December 2, 1959 written by the AccountantGeneral to the Court is tantamount to the money being notionallybrought to the Court. The Accountant General said that thepayment was not to be made except with the concurrence of theCourt. Thus it came into the control of and was held on behalf ofthe Court. The amount of Rs. 4,50,000 was not a mere budgetprovision but the documents show that the amount had ripened intoa debt and an order for payment to the co-operative Society. Thesum of Rs. 4,50,000 was impressed with the character of a debt dueto the co-operative society and it validly attached.12. The contention on behalf of the State that the amount was notbrought into Court and therefore, the provision lapsed is devoidof substance.13. The letter dated June 12, 1959 provided for payment of thesum of Rs. 4,50,000. The letter of the Accountant General datedDecember 2, 1959 indicated that the Accountant General pursuantto the order of the Court dated November 27, 1959 brought themoney to the Court.14. Attachment of debts is a process by means of which ajudgment-creditor is enabled to reach money due to the judgment-debtorwhich is in the hands of a third person. These aregarnishee proceedings. To be capable of attachment, there must bein existence at the date when the attachment becomes operativesomething which the law recognises as a debt. So long as thereis a debt in existence, it is not necessary that it should beimmediately payable. Where any existing debt is payable byfuture instalments, the garnishee order may be made to becomeoperative as and when each instalment becomes due. The debt mustbe one which the judgment-debtor could himself enforce for hisown benefit. A debt is a sum of money which is now payable orwill become payable in the future by reason of a presentobligation (see Webb v. Stenton ((1883) 11 QBD 518 : 52 LJ QB 584)).In the present case, the letter dated June 12, 1959 proves that there isan obligation to pay the specified sum of Rs. 4,50,000 to theco-operative society. The budget provision fastened on to the claimof the co-operative society against the State and it ripened intoa debt payable to the co-operative society. Therefore, in thecircumstances, the attachment levied by the city civil court wasperfected by bringing money to the Court.15. The second question which falls for determination is whetherthe dissolution of the co-operative society by the Registrar ofCo-operative Societies was competent. The State Registrar ofCo-operative Societies on September 6, 1960 cancelled theregistration of the co-operative society under Section 53 of theHyderabad Co-operative Societies Act, 1952 and appointed a liquidator.The decree holder filed writ petition No. 763 of 1960 on November2, 1960 before the High Court and impugned the validity of theorder of liquidation. The High Court on September 19, 1961dismissed the writ petition and upheld the order of liquidation.16. Though the High Court dismissed the writ petition, the HighCourt had to deal with the question of liquidation of the co-operativesociety in C.M.A. No. 210 of 1967 and C.M.A. No.374 of 1967. Those two appeals arise out of the order of the citycivil court dated July 11, 1967 in the decree holder's ExecutionPetition No. 95 of 1959. The city civil court held that thejudgment of the High Court upholding the validity of the order ofdissolution and appointment of the liquidator in Writ PetitionNo. 763 of 1960 did not prevent the decree holder from contending thatthe State Registrar had no jurisdiction to pass the order ofliquidation. The High Court in the appeals in C.M.A. No. 210of 1967 and C.M.A. No. 374 of 1967 held that though the HighCourt had decided in Writ Petition No. 763 of 1960 upholding thevalidity of the liquidation yet the order of liquidation couldnot be sustained because the delegation made under Section 5B ofthe Multiunit Co-operative Societies Act, 1942 was incompetent.17. The liquidator in Civil Appeal No. 1268 of 1969 and CivilAppeal No. 1733 of 1969 submitted that the liquidator wasinterested only in sustaining the validity of the order of liquidation.The liquidator is not interested in the dispute between theState and the decree holder in regard to the order of attachment.18. In order to appreciate the rival contentions of the decreeholder and the liquidator on the validity of the liquidation, itis necessary to refer to the provisions of Multiunit Co-operativeSocieties Act, 1942. The 1942 Act applies to co-operative societiesregistered before the commencement of the Act and also tosocieties which became registered after the commencement of theAct of 1942. The co- operative society was a society registeredbefore the Reorganisation of the States in 1956. As such thesociety is a multiunit society governed by the 1942 Act. Thedecree holder did not challenge this position. The Contention ofthe decree holder is that under Section 4 of the 1942 Act, theCentral Registrar of Co-operative Societies shall exercise inrespect of any co-operative society and to the exclusion of StateRegistrars, the powers and functions exercisable by the Registrarof Co-operative Societies of the State in which such society isregistered. Section 5B of the 1942 Act which speaks of delegationof any authority exercisable by Central Registrar to beexercisable by Registrar of Co- operative Societies of the State iscontended by the decree holder to exclude the State Registrarfrom acquiring any power by delegation. The decree contendedthat the power of delegation contemplated in Section 5B wasconfined only to matters mentioned in Section 5A of the 1942 Act.19. Under the 1942 Act multiunit co-operative societies whetherregistered before or after the coming into force of the Act weregoverned by the Co-operative Societies Act of the States in whichthey were registered. Under the 1942 Act and in particularSections 2 and 3 thereof, some powers like those of inspection,audit were given to Registrars of other States where suchsocieties had branches.20. Under Section 4(1) of the 1942 Act, the Central Governmentmay, if it thinks fit, appoint a Central Registrar of the Co-operativeSocieties. Section 4(2) of the 1942 Act provides thatthe Central Registrar of Co-operative Societies, if appointed,shall exercise in respect of any co-operative society to whichthe 1942 Act applies, to the exclusion of State Registrars, thepowers and functions exercisable by the Registrar of Co-operativeSocieties of a State in which such society is actuallyregistered. The powers which the Central Registrar is to exerciseunder the 1942 Act are powers under the Co-operative SocietiesAct of the State where a particular society is registered. Thepowers exercisable by the State Registrar under the Co-operativeSocieties Act are by reference under Section 4(2) of the 1942 Actincorporated into the 1942 Act and exercisable by the CentralRegistrar where the Central Registrar is appointed by the CentralGovernment.21. The State Registrar was admittedly competent to exercise inrespect of the co-operative society all powers under the HyderabadCo-operative Societies Act, 1952 referred to as the 1952State Act. Under the 1952 State Act, the State Registrar had thepower to dissolve the co-operative society and appoint a liquidator.22. The Central Government appointed a Central Registrar ofCo-operative Societies for the first time on December 29, 1956. Ifthe matters had rested there, the State Registrar would have beendivested of his powers over the society under the State Act asfrom that date. The matters, however, did not rest there.Section 5B of the 1942 Act manpowers the Central Government todelegate any power or authority exercisable by the CentralRegistrar under the Act to State Registrars and certain other officersby a notification published in the Official Gazette. Simultaneouslywith the appointment of the Central Registrar, the CentralGovernment published a notification on December 29, 1956delegating the powers or authority under the 1942 Act in relation tocertain matters including dissolution to the State Registrars andother officers mentioned in the notification in respect ofsocieties registered in their respective States. The Registrar ofSocieties, Andhra Pradesh was specifically mentioned in thenotification.23. The result of the notification was that the powers under theState Act of 1952 of which the State Registrar was divested bythe appointment of the Central Registrar were immediatelyrestored to him. It is in exercise of these powers under the StateAct of 1952 which were restored to the State Registrar that hepassed the order of dissolution of the society and appointed aliquidator on September 6, 1960.24. Section 5B of the 1942 Act empowers the Central Government todelegate "any power or authority exercisable by the CentralRegistrar of Co-operative Societies under this Act" (meaning therebythe 1942 Act) to the State Registrars and other officers.The language in Section 5B of the 1942 Act is plain. There are nowords of limitation or observation The Expression "any power orauthority exercisable by the Central Registrar of Co-operativeSocieties under this Act" takes in all powers under the 1942 Actincluding those under Section 4(2) which are the powers under theState Act embodied by reference in that section.25. The simultaneous introduction of Section 5A and Section 5Binto the 1942 Act in the year 1956 with effect from November 1,1956 point to the fact that Section 5B follows Section 5A butdoes not confine Section 5B only to matters mentioned in Section5A of the 1942 Act. The contention on behalf of the decreeholder that the expression "any power or authority exercisable bythe Central Registrar of Co-operative Societies under this Act"in Section 5B means only powers or authority under Section 5A ofthe Act is unsound. Section 5A of the 1942 Act is a transitionalprovision regarding certain co-operative societies affected bythe reorganisation of States. The provisions contained inSection 5B of the 1942 Act do not have any words of restriction intheir application only to Section 5A of the 1942 Act. On thecontrary, the provisions in Section 5B of the 1942 Act speak ofdelegation of power or authority exercisable by the CentralRegistrar under the 1942 Act. Whatever powers are exercisable bythe Central Registrar by reason of Section 4(2) of the 1942 Actare capable of being delegated by reason of provisions containedin Section 5B of the 1942 Act. The delegation by the CentralGovernment of the powers exercisable by the Central Registrar tobe exercised by the State Registrar is supported by theprovisions of the 1942 Act. The order of delegation being valid, theState Registrar was competent to dissolve the co-operativesociety by the order dated September 6, 1960.26. It is, therefore, not necessary to express any opinion as towhether the contention of the decree holder challenging thevalidity of the order of dissolution of the co- operative societyand appointment of liquidator is barred by reason of constructiveres judicata on account of the dismissal of the Writ PetitionNo. 763 of 1960 filed by the decree holder in the High Court.27. For these reasons, the judgment of the High Court is setaside. The attachment of the sum of Rs. 4,50,000 is upheld. Theorder of dissolution of the co-operative society and appointmentof the liquidator are held to be valid.28. The High Court stated that "it will be open to the decreeholder to take up execution against the Government for the amountdue to him from the co-operative society on the ground that theGovernment has taken over the entire assets and liabilities ofthe co-operative society". We affirm that finding of the HighCourt.29. Under the interim order of this Court, the liquidatordeposited an amount of Rs. 90,000 in the Court. That amount wasallowed to be withdrawn by the legal representatives of the decreeholder on furnishing bank guarantee. The liquidator asked forrefund of that amount to the liquidator to enable him todischarge his duties according to law.30. The decree holder will prefer the claim on account ofattachment of Rs. 4,50,000 before the liquidation. If in liquidation,it will appear that there are prior claims or that the decreeholder will be entitled to any rateable distribution out of Rs.4,50,000, the liquidator will make appropriate orders for paymentof appropriate amount to the decree holder.31. We make it clear that after payment by the liquidator to thedecree holder whatever amount will remain due to the decreeholder, it will be open to the decree holder to take up executionagainst the Government for the amount due by the co- operativesociety on the ground that the Government has taken over entireassets and liabilities of the co-operative society subject, ofcourse, to such contentions as the Government may have.32. The appeals filed by the State are dismissed.33. The decree holder will be entitled to costs in these appealsto be paid by the State. The liquidator will retain costs out ofthe assets in his hands. The amount of Rs. 90,000 which has beenwithdrawn by the decree holder will now be refunded to theliquidator. There will be one set of costs for the decree holders.There will be similarly one set of costs for the liquidator.