WP/31974/2012 of J. Srinivas Prabhu Vs The Andhra Pradesh Co-operative Tribunal, on 31 December 2014

* THE HON’BLE SRI JUSTICE RAMESH RANGANATHANANDTHE HON’BLE SRI JUSTICE M. SATYANARAYANA MURTHY

+WRIT PETITION NOs.31138 AND 31974 OF 2012

WRIT PETITION NO.31138 of 2012:

% Dated 31-12-2014

The Prudential Cooperative Bank Ltd.

…. Petitioner

Vs.

$ The A.P. Cooperative Tribunal at MJ Market, Nampally, Hyderabad andothers.

…. Respondents

! Counsel for the petitioner:Sri Anand Kumar Kapoor ^ Counsel for respondents:Learned Advocate General and the Learned Additional Advocate General for the State of Telangana; Sri R.N.Hemendranath Reddy. Learned Additional Advocate General for the State of Telangana; Sri R.N.Hemendranath Reddy.

<GIST:

HEAD NOTE:

? Citations:

1)2003 (6) ALD 5162)(2002 (4) ALD 7003)AIR 1988 SC 1531 = (1988) 2 SCC 6024)(1972) 2 SCC 4275)(1969) 2 AC 1476)AIR 1965 SC 14497)(1995) 2 SCC 3268)[1969] 2 SCC 7939) (1864) 10 HLC 704 (HL)10)(2003) 4 SCC 20011)(1983) 2 SCC 8212)(2011) 3 SCC 113)(1886) 31 Ch D 60714)191 App. Div. 850, 112 N.Y.S 249, 25115)(2013) 5 SCC 47016)(2004) 4 SCC 11317)AIR 1998 SC 133418)AIR 2000 SC 177119)(2004) 5 SCC 120)1932 AIR(PC) 165

21)1899 (22) ILR (Mad) 6822)(1969) 2 SCC 7423)AIR 1983 SC 127224)1952 SCR 28 : AIR 1952 SC 1225)AIR 2003 SC 267626)AIR 1999 SC 145527)(1885) Vol.X AC 36428)(1989) 3 SCC 70929)(1971) 1 SCC 8530)(1997) 8 SCC 8931)(1988) 1 SCC 44032)(2003) 4 ALL ER 20933)(2004) 2 SCC, 65734)(2010) 4 SCC 30135)AIR 1981 SC 71136)(1988) 2 SCC 35137)(1974) 1 SCC 60838)(1961) 2 SCR 67939)(2003) 10 SCC 42140)AIR 1996 SC 1356

THE HON’BLE SRI JUSTICE RAMESH RANGANATHANANDTHE HON’BLE SRI JUSTICE M.SATYANARAYANA MURTHYWRIT PETITION NOs.31138 AND 31974 OF 2012

ORDER:(per Hon’ble Sri Justice Ramesh Ranganathan)

By his order dated 29.10.2012 the Learned Single Judge, beforewhom W.P.Nos.31138 of 2012 and 31974 of 2012 were listed, observedthat the earlier judgment, in S. Varalakshmi v. District Co-operativeOffice, Hyderabad[[1]], required reconsideration by a Division Bench forrendering an authoritative pronouncement on the aspect whether Section36 of the A.P. Mutually Aided Co-operative Societies Act, 1995 (for shortthe “1995 Act”) intended to extend the application of the provision of anappeal, under Section 76 of the A.P. Co-operative Societies Act, 1964 (forshort the “1964 Act”), to an order passed in execution proceedings underSection 36 of the 1995 Act. The Learned Single Judge was also of theopinion that the issue, whether Rule 52 of the Andhra PradeshCooperative Societies Rules, 1964 (for short ‘the 1964 Rules’), which wasmade in the exercise of the powers of delegated legislation conferred onthe State Government under Section 130 of the 1964 Act and was notincorporated by reference by any of the provisions of the 1995 Act, couldbe invoked for execution of the awards passed under the 1995 Act, alsorequired consideration by the Division bench.

Elaborate submissions were put forth by Sri Anand Kumar Kapoor,Learned Counsel for the petitioner-Bank; the Learned Advocate Generaland the Learned Additional Advocate General for the State of Telanganaand Sri R.N.Hemendranath Reddy, Learned Counsel for the petitioner inW.P.No.31794 of 2012.

Facts, to the limited extent necessary to answer the reference, arethat the Prudential Co-operative Bank Limited, (the petitioner in W.P.

Facts

No.31138 of 2012 and a Co-operative Society registered under the 1995Act), advanced loans to the 5[th] respondent therein for which respondentNos.2, 6 and 7 stood as guarantors. As the 5[th] respondent defaulted inrepayment of the loan amount, proceedings in O.P. No.408 of 2001 wereinstituted before the Andhra Pradesh Co-operative Tribunal (for short “theTribunal”) by the petitioner bank under Section 37 of the 1995 Act. Anaward was passed by the Tribunal on 06.01.2011 for Rs.48,62,201.99 Pswith future interest at 22% per annum on the principal amount ofRs.39,25,000/-. The petitioner-bank filed E.P. No.64 of 2011, before theTribunal, on 05.09.2011 to execute the award. The Tribunal transmittedthe execution proceedings to the Divisional Co-operative Officer,Secunderabad who, in turn, delegated his powers to the Sales Officer,Prudential Co-operative Bank, Secunderabad (the 3[rd] respondent).

The 3[rd] respondent brought the immovable properties to sale and,pursuant thereto, they were put to sale on 31.08.2012. However, beforethe sale was confirmed, one of the guarantors preferred an appeal, in CTANo.72 of 2012, before the Tribunal questioning the validity of the saleproceedings. Thereafter the appellant in CTA No.72 of 2012 filed I.A.No.188 of 2012 seeking stay of all further proceedings. By its order dated28.09.2012, the Tribunal granted interim stay subject to the appellantdepositing Rs.50 lakhs by 19.10.2012. Aggrieved thereby both thepetitioner bank, and the appellant in CTA No.72 of 2012, filed W.P.Nos.31138 and 31974 of 2012 respectively. Before the Learned SingleJudge it was contended, on behalf of the petitioner-bank, that no appeallay, much less to the Tribunal, against orders passed in executionproceedings instituted pursuant to an order passed under Section 37 of the1995 Act. On the other hand it was contended, on behalf of the petitionerin W.P. No.31974 of 2012, that, if this contention was accepted, it wouldmean that the 1964 Rules (more particularly Rule 52 thereof), which weremade under Section 130 and did not form part of Chapter X of the 1964Act, would also not apply to execution of an award passed under the 1995Act.

I n A. Vemanaidu v. Erracheruvupalle Primary Coop. Society, Chittoor District[[2]],the petitioner had obtained agricultural loans from therespondent, a society registered under the A.P. Cooperative Societies Act,1964. A public auction notice was issued proposing to bring theimmovable properties of the petitioner to sale in a public auction inexecution of the recovery certificate issued by the competent authorityunder Section 71(1) of the A.P. Cooperative Societies Act, 1964. Aggrieved thereby, the petitioner invoked the jurisdiction of this Court. It isin this context, that this Court held:-

……..A reading of Sub-section (2) of Section 70 as well as Rule 52 of the Rules, itbecomes clear that the amount covered by a certificate for recovery of the debt granted bythe Registrar of Co-operative Societies under Section 71(1) of the Act can be executed inaccordance with Sub-section (2) of Section 70 of the Act duly following the procedureunder Rule 52 of the Rules. The Act is a self-contained Code.

It provides for constitution of Cooperative Tribunal and Section 76 of the Actprovides that any person aggrieved by any decision passed or order made under variousprovisions of the Act, inter alia, may file appeal to the Tribunal. An order for execution ofa certificate of recovery under Section 71 of the Act and auction notice consequentthereto can only be under Section 70(2) of the Act read with Sub-rule (11) of Rule 52of the Rules. Therefore, the impugned action is clearly appealable under Section 76of the Act….

“……..The learned Counsel for the petitioners, however, lastly submits that auctionin one case is scheduled to be held on 22-6-2002 and in another case on 24-6-2002.Pending the appeal before the Co-operative Tribunal that may be filed by the petitioners theCourt may stay the auction. Having regard to the provisions of Section 76(6) of the Actread with Rule 11 of the Co-operative Tribunal Appeal Provision Rules, 1994 the request ofthe petitioners cannot be accepted. There are adequate powers conferred. It is well-settled that when an enactment creates a Statutory Tribunal and entrusts certainmatters to be agitated by way of appeal at the first instance and also confersadequate incidental and supplemental powers to stay and suspend the orders, it isnot for this Court to interdict the process of the law, in accordance to which, theproperties of the petitioners are brought to sale….” (emphasis supplied)

Relying on A. Vema Naidu[2], wherein it was held that an order forexecution of a certificate of recovery under Section 71 of the A.P.Cooperative Societies Act, 1964, and the auction notice issuedconsequent thereto, could only have been made under Section 70(2) readwith sub-rule (11) of Rule 52 and, therefore, the impugned action wasclearly appealable under Section 76 of the Act, the Learned Single Judge,i n S. Varalakshmi[1],held that, in view of the above decision, it must beheld that the petitioner has an effective alternative remedy and the twoissues raised in the Writ Petition could not be gone into at this stage by theCourt. Having so held, the Learned Single Judge further observed:- “……….The submission of the learned Counsel for the petitioner that the procedure contemplated under Section 37 of the AP MAC Act is altogether different and,therefore, the procedure for execution of awards/recovery certificates passed underthe 1964 Act under Section 71 and Rule 52 of the Rules cannot be followed is withoutany basis. The learned Counsel submitted that though the provisions of the 1964 Acthave been made part of the AP MAC Act by incorporation, when an award is passedunder Section 37 by the Tribunal, the same cannot be executed under the 1964 Act.This submission is devoid of any merit…”.

……..A plain reading of the above provisions would show that the provisions of the1964 Act shall mutatis mutandis apply to the mutually aided Co-operative Societiesas well, with regard to execution of decisions, decress and orders. It is a case oflegislation by reference and, therefore, all the provisions of the A.P.Co-operativeSocieties Act before dealing with execution will apply mutatis mutandis in executionof awards/orders passed under the AP MAC Act…..

……... Whether the relevant rules dealing with execution of awards/recoverycertificates/decisions/orders as contained in the A.P. Co-operative Societies Rules,1964 made under Section 130 of the 1964 Act are also applicable for execution oforders/decrees under Section 36 of the AP MAC Act. It is well settled principle of lawthat when in exercise of powers conferred on them to make delegated legislation, theGovernment makes statutory rules, they form part of the main statute. Those ruleshave to be read along with the provisions in the main statute.

Therefore, though Section 36 of the AP MAC Act does not specifically refer tothe A.P. Co-operative Societies Rules, by reason of settled principles of law, as thesaid Rules become part of the 1964 Act, those Rules also are applicable to theproceedings taken up for execution of decisions/orders passed by the Tribunalunder the AP MAC Act.

The procedure for execution of decree in the 1964 Act is laid down in Section 70.The said provision empowers the Registrar or any person authorized by him to recover anyamount due under a decision or order of the Registrar. The method of recovery underSection 70 of the 1964 Act is "without prejudice to any other mode of recovery provided byor under the 1964 Act". Sub-section (2) of Section 70 specifically provides that if an orderor decision made either under Section 60 or Section 71 or Sections 76, 77 or 78 may berecovery by execution by the Civil Court, by the Collector, or by the Registrar in themanner provided under Section 71. Section 130 empowers the Government to makeRules for carrying out of purpose under the 1964 Act. In furtherance thereof, 1964Rules were made. Rule 52 is a self contained code in itself for execution of decrees,decisions or orders. Necessarily, when the Registrar undertakes to execute adecision or decree under the 1964 Act, he has to follow the procedure under Rule 52.Rule 52 is intended to avoid arbitrary or high-handed execution. This procedure isapplicable even to execution of decisions or decrees passed by the Tribunal underSection 37 of the AP MAC Act. Therefore, it must be held that the first respondenthas ample power and jurisdiction to execute the decrees/decisions and orderspassed by the Tribunal under Section 37 of the AP MAC Act in accordance withSection 71(1) or 71(2)(c) of the A.P. Co-operative Societies Act, 1964 read with Rule52 of the A.P. Co-operative Societies Rules, 1964……...”

(emphasis supplied)

Section 36 of the 1995 Act relates to execution of decisions,decrees and orders. It stipulates that, in regard to execution of decisions,decrees and orders, all the provisions of Chapter X of the A.P. Co-operative Societies Act, 1964 shall, mutatis mutandis, apply to Co-operative Societies registered under the 1995 Act such, however, that allreferences to the Registrar in the 1964 Act shall be construed to be areference to the Co-operative Tribunal in their application to Co-operative

Societies registered under the 1995 Act. Chapter X of the 1964 Act relatesto execution of decisions, decrees and orders. Sections 70 to 74 fall underChapter X. Section 70 confers power on the Registrar to recover certainamounts by attachment and sale of property, and execution of orders. Section 70-A relates to execution of non-monetary orders. Section 71relates to recovery of debts, and Section 72 provides that the Registrar, orthe person authorised by him, shall be a Civil Court for certain purposes. Section 73 relates to attachment of property before decision or order, andSection 74 relates to recovery of amounts due to the Government. ChapterXI of the 1964 Act relates to appeal, revision and review. Section 75,thereunder, relates to the constitution of a Co-operative Tribunal. Section76, which also forms part of Chapter XI of the 1964 Act, relates to appealsand, under sub-section (1) thereof, any person or society aggrieved by anydecision passed or order made under Sections 6, 9A, 9B, 9C, 12A, 13, 16,17, 19, 21, 21A, 21AA, 23, 32(3), 34, 34A, 60, 62, 64, 66, 70, 71, 73 and117 of the 1964 Act may appeal to the Tribunal. While Section 76 doesnot fall under Chapter X of the 1964 Act, an appeal is provided thereunderagainst an order passed under Sections 70, 71 and 73 of the 1964 Act allof which fall under Chapter X thereof.

The 1995 Act does not explicitly provide for an appeal against thedecision of the Tribunal on a dispute referred to it under Section 37 of thesaid Act. The power to create or enlarge jurisdiction is legislative incharacter, so also the power to confer a right of appeal or to take away aright of appeal. (A.R. Antulay v. R.S. Nayak[[3]];M.L. Sethi v. R.P.Kapur[[4]];Anisminic Ltd. v. Foreign Compensation Commission[[5]];Halsbury’s Laws of England, 4th Edn., Vol. 10, page 327 at para 720;Amnon Rubinstein —- Jurisdiction and Illegality (1965 Edn., pages 16-

50) ;Raja Soap Factory v. S.P. Shantharaj[[6]]). A right of appeal isalways statutory. The Court cannot confer or infer it. What is legislativelynot permitted cannot be read by implication, in any event not in respect of aright of appeal as it 'is a creature of Statute. A right of appeal is conferredby statute or equivalent legislative authority. It is not a mere matter ofpractice or procedure. (U.P. Awas Evam Vikas Parishad v. Gyan Devi (dead) by LRs[[7]]; Shankar Kerba Jadhav v. The State ofMaharashtra[[8]];Halsbury's Laws of England Vol. 37 Para 677). Thecreation of a right to an appeal is an act which requires legislativeauthority, neither an inferior court nor the superior court nor both combinedcan create such a right or take away such a right, it being one of limitationand extension of jurisdiction. (Attorney General v. Herman JamesSillem[[9]];A.R.Antulay[3]). While the absence of a specific provision in the1995 Act, conferring a right of appeal against the decision of the Tribunalon the dispute referred to it under Section 37 thereof, would mean thatthere is no statutory remedy of an appeal against such decisions or orders,the Learned Single Judge, in S. Varalakshmi[1], read into Section 36 of the1995 Act, such a remedy. By the order under reference, another LearnedSingle Judge has doubted the correctness of the Judgement in S.Varalakshmi[1]. It is necessary for us, therefore, to examine the scope ofSection 36 of the 1995 Act.

Section 36 of the 1995 Act provides that all the provisions ofChapter X of the 1964 Act shall, mutatis mutandis, apply to co-operativesocieties registered under the 1995 Act. It is a well established legislativepractice to borrow the provisions of an earlier Act on a particular subject bymaking a broad reference to the earlier Act or some or most of itsprovisions therein so as to make them applicable to the relevant subjectmatter dealt with by the later statute. This is done, primarily, as a matter ofconvenience in order to avoid verbatim repetition of the provisions of theearlier Act. When such a legislative device is adopted, the relevantprovisions of the earlier Act will apply mutatis mutandis to mattersgoverned by the later Act. (Maharashtra SRTC v. State ofMaharashtra[[10]]). When an earlier Act, or certain of its provisions, areincorporated by reference into a later Act, the provisions so incorporatedbecome part and parcel of the later Act as if they had been bodilytransposed into it. (M/s.Ashok Service Centre v. State of Orissa[[11]]).The legal incidents of legislation by incorporation is that it becomes part of the existing law which implies bodily lifting provisions of one enactmentand making them part of another. (Girnar Traders v. State ofMaharashtra[[12]]). If a subsequent Act brings into itself by reference someof the clauses of a former Act, the legal effect of that, as has often beenheld, is to write those sections into the new Act as if they had been actuallywritten in it with the pen, or printed in it. (Wood's Estate, Ex parte, Worksand Buildings Commrs.. Re.[[13]]). Consequently all the provisions ofChapter X of the 1964 Act, i.e., Sections 70 to 74 thereof, must be read aspart and parcel of Section 36 of the 1995 Act.

The next question which necessitates examination is what do thewords “mutatis mutandis” in Section 36 of the 1995 Act mean? EarlJowitt's 'The Dictionary of English Law (1959)'defines 'mutatismutandis' as 'with the necessary changes in points of detail'. In Bouvier'sLaw Dictionary (3rd Revision, Vol. II), and in Black's Law Dictionary(Revised 4th Edn. 1968)'mutatis mutandis' is defined to mean 'with thenecessary changes in point of detail, meaning that matters or things aregenerally the same, but to be altered when necessary. (Houseman v.

Waterhouse[[14]]).The phrase “mutatis mutandis” implies that a provisioncontained in another part of the statute or other statutes would haveapplication as it is, with certain changes in points of detail. (RajasthanState Industrial Development & Investment Corpn. v. Diamond & GemDevelopment Corpn.[[15]];Prahlad Sharma v. State of U.P.[[16]];Mariyappa v. State of Karnataka[[17]];Janba (dead) v. Gopikabai(Smt.)[[18]]; M/s.Ashok Service Centre[11]). Extension of an 'earlier Act,mutatis mutandis, to a later Act brings in the idea of adaptation, but so faronly as it is necessary for the purpose, making a change without alteringthe essential nature of the thing changed, subject of course to expressprovisions made in the later Act. (M/s.Ashok Service Centre[11]).ChapterX of the1964 Act has been made applicable mutatis mutandis to co-operative societies registered under the 1995 Act with the limited changethat wherever there is a reference to the Registrar in Chapter X of the 1964

Act, such provisions shall be construed as referring to the Tribunal in theapplication of such provisions to co-operative societies registered underthe 1995 Act. In effect the word “Registrar”, as used in the differentprovisions of Chapter X of the 1964 Act, must be substituted with the word“co-operative Tribunal”, when the provisions of Chapter X of the 1964 Actare applied to co-operative societies registered under the 1995 Act.

In S. Varalakshmi[1], the Leaned Single Judge failed to notice that itis only Chapter X of the 1964 Act which has been made applicable,mutatis mutandis, to co-operative societies registered under the 1995 Act,and not Chapter XI of the 1964 Act or Section 76 thereof. As it is only theprovisions of Chapter X of the 1964 Act which have, mutatis mutandis,been made applicable to co-operative Societies registered under the 1995Act, the remedy of an appeal under Section 76 of the 1964 Act, which is inChapter XI thereof, has not been incorporated by reference in Section 36of the 1995 Act. Consequently no statutory remedy of appeal is availableto co-operative societies registered under the 1995 Act, against thedecision or order passed by the Tribunal in the exercise of its jurisdictionunder Section 37 of the 1995 Act.

This question can be examined from yet another angle. The appealprovided to the co-operative Tribunal under Section 76 of the 1964 Act is,among others, against orders passed by the Registrar under Chapter X ofthe 1964 Act which include Sections 70, 71 and 73 thereof. As Chapter Xof the 1964 Act has been made applicable to co-operative Societiesregistered under the 1995 Act, with the limited change that the “Registrar”,in Chapter X of the 1964 Act, stands substituted by the “co-operativeTribunal” in its application to co-operative societies registered under the1995 Act, extending the remedy of an appeal under Section 76 of the 1964Act, to orders passed under Section 37 of the 1995 Act, would mean that aremedy of an appeal is provided to the Co-operative Tribunal against itsown orders. An appeal is an application by a party to an appellate courtasking it to set aside or revise a decision of a subordinate court. (Tirupati Balaji Developers (P) Ltd. v. State of Bihar[[19]];and Nagendra Nath Dey. v. Suresh Chandra Dey[[20]]). Appeal implies, in its natural andordinary meaning, the removal of a cause from any inferior court or tribunalto a superior judge or court for re-examination or review, more so for thepurpose of testing the soundness of the decision and proceedings of theinferior court or tribunal. (Tirupati Balaji Developers (P) Ltd.[19]; Chappan

v. Moldin Kutti[[21]]). The removal of a cause is for the purpose of testingthe soundness of the decision of the inferior court. The words “appellatejurisdiction” mean “the power of a superior court to review the decision ofan inferior court”. (Tirupati Balaji Developers (P) Ltd.[19]; Wharton’s LawLexicon).

An appeal gives the right of entering the superior court and invokingits aid and interposition to redress the error of the court below. There aretwo important postulates of constituting the appellate jurisdiction: (i) theexistence of the relationship of a superior and an inferior court; and (ii) thepower in the former to review decisions of the latter. An appeal removes acause, entirely subjecting the facts as well as the law, to a review and aretrial. Its purpose is to test the soundness of the decision and proceedingsof the inferior court or tribunal. The essential criterion of the appellatejurisdiction is that it revises and corrects the proceedings in a causealready instituted, and does not create that cause. In reference to judicialtribunals, an appellate jurisdiction necessarily implies that the subject-matter has already been instituted and acted upon, by some othercourt/tribunal, whose judgment or proceedings are sought to be revised.The superior forum has the jurisdiction to reverse, confirm, annul or modifythe order of the forum appealed against and, in the event of a remand, thelower forum is required to rehear the matter and comply with suchdirections as may accompany the order of remand. The appellatejurisdiction inherently carries with it a power to issue corrective directionsbinding on the forum below. (Tirupati Balaji Developers (P) Ltd.[19]; Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat[[22]]). As an appeal lies from an inferior body or an authority or Tribunal to asuperior forum or Court or Tribunal, an appeal lay, under Section 76 of the 1964 Act, to the Co-operative Tribunal against the order of the Registrar. As the “Co-operative Tribunal” stands substituted for the “Registrar”, inthe application of Chapter X of the 1964 Act to co-operative societiesregistered under the 1995 Act, there cannot be an appeal from the order ofthe Tribunal to itself. The judgment in S. Varalakshmi[1], to the extent itheld to the contrary, cannot be treated as laying down the correct law.

It is well settled that interim relief is granted during the pendency ofproceeding so that, while granting final relief, the court is not faced with asituation that the relief becomes infructuous or that, during the pendency ofthe proceeding, an unfair advantage is not taken by the party in default oragainst whom interim relief is sought. The object behind granting interimrelief is to maintain status quo so that the final relief can be appropriatelymoulded without the party's position being altered during the pendency ofthe proceedings. (Cotton Corporation of India v. United Industrial Bank Ltd.[[23]]).An interim relief can be granted only in aid of, and as ancillaryto, the main relief which may be available to the party on finaldetermination of his rights in a proceedings. If this be the purpose toachieve which power to grant temporary relief is conferred, it isinconceivable that where the final relief cannot be granted in the termssought for, because the statute bars the granting of such a relief, ipso factothe temporary relief of the same nature can be granted. (State of Orissa v.

Madan Gopal Rungta[[24]];Cotton Corporation of India[23]). As noappeal lies to the Tribunal against its own orders, the necessary corollarythereto is that the Tribunal can neither entertain an appeal against its owndecision, decree or order passed under Section 37 of the 1995 Act, norcan it pass any interim orders in such an appeal filed before it. Sri R.N.Hemendranath Reddy, Learned Counsel, would submit that the order nowpassed by us, holding that there is no right of appeal against the orderspassed by the Tribunal in execution proceedings, would open thefloodgates, result in dismissal of several hundreds of appeals now pendingbefore the Tribunal, and all the appellants therein being forced to invokethe extra-ordinary jurisdiction of this Court under Article 226 of theConstitution of India. As the remedy of an appeal can only be statutorily prescribed, the problem, as presented by Sri R.N.Hemendranath Reddy,can only be addressed by the Legislature. Suffice it to record thesubmission of the Learned Advocate General for the State of Telanganathat he would request the Government to take steps to resolve this issue.

The second question referred for our opinion is whether the 1964Rules, more particularly Rule 52 thereof, can be invoked for execution ofawards passed under the 1995 Act. The 1995 Act does not confer any rulemaking power on the Government. However, Section 130 of the 1964 Actrelates to the power to make rules and, under sub-section (1) thereof, theGovernment may, by notification published in the Andhra Pradesh Gazette,make rules for carrying out all or any of the purposes of the 1964 Act for thewhole or any part of the State, and for any class of societies. In theexercise of the powers conferred by Section 130, the Government of A.P.made the 1964 Rules which were published in the A.P. Gazette on30.07.1964.

Rule 52 of the 1964 Rules prescribes the procedure in execution ofdecrees, decisions or orders. Rule 52(14)(v) thereof provides that, afterconfirmation of the sale, the Registrar shall grant a certificate of sale,bearing his seal and signature, to the purchaser; such certificate shall statethe property sold and the name of the purchaser; it shall be conclusiveevidence of the fact of purchase, in all courts and tribunals where it may benecessary to prove it; and no proof of the seal or signature of the Registrarof the district shall be necessary unless the authority, before whom it isproduced, shall have reason to doubt its genuineness. Rule 52(14)(vi),which was inserted by G.O.Ms. No.37 dated 28.01.2002, provides that anyorder made under clause (v) of Rule 52(14) shall, subject to an appealunder Section 76 of the A.P. Co-operative Societies Act within ninety daysfrom the date of the order, be final and shall not be liable to be questionedin any suit or other legal proceedings.

As noted hereinabove, Section 76 of the 1964 Act provides theremedy of an appeal only against orders passed under the provisionsspecifically referred to therein. Rule 52(14)(vi) merely provides that,unless and until set aside in an appeal filed within 90 days, the orderpassed under Rule 52(14)(v) is final. Like Rule 52(14)(vi) of the 1964

Rules, Section 153 of the Patna Municipal Corporation Act, 1951 providedthat "every valuation made by the Chief Executive Officer -- -- shall,subject to the provisions of Sections 151 and 152, be final". In RaiVimal Krishna v. State of Bihar[[25]], the Supreme Court held that thephrase 'subject to' in Section 153 meant that, until and unless theassessment list was revised or amended under Section 151 or 152, theassessment list would continue to be final. Rule 52(14)(vi) merely givesfinality to the order passed under Rule 52(14)(v) subject to an appealunder Section 76 of 1964 Act, and cannot be understood as conferring aright of appeal.

It is no doubt true that the Rule making power of the Government inSection 130 of the 1964 Act is in Chapter XIV thereof, and not in Chapter Xwhich alone is incorporated in Section 36 of the 1995 Act. The 1995 Actdoes not also confer any power on the Government to make rules. Doesthat mean that the statutory provisions in Chapter X of the 1964, relating toexecution of decisions, decree or orders, cannot be enforced in theabsence of Rules? In understanding the scope and purport of Chapter Xof the 1964 Act, which has been incorporated by reference in Section 36 ofthe 1995 Act, it is permissible to refer to the other provisions of the 1964Act. Even though only particular sections of an earlier Act are incorporatedinto the latter Act, in construing the incorporated sections it may, at times,be necessary and permissible to refer to other parts of the earlier statutewhich are not incorporated. (M/s. Surana Steels Pvt. Ltd. v. Dy.Commissioner of Income-tax[[26]]).Where a single Section/Chapter of anAct is introduced into another Act, it must be read in the sense which itbore in the original Act from which it is taken, and, consequently, it isperfectly legitimate to refer to all the rest of that Act in order to ascertainwhat the section/chapter meant, though those other sections are notincorporated in the new Act. (The Mayor, Aldermen, And Burgesses ofthe Borough of Portsmouth (acting as the Urban Sanitary Authority ofthe said Borough v. Charles Bovill Smith, James Goldsmith, (the Younger) and John Baker Goldsmith)[[27]]).

A reference to the other provisions of the 1964 Act, and the Rules made thereunder, is necessary to give a meaning to the machineryprovisions in Chapter X of the 1964 Act, and to interpret them in such amanner as to ensure that such provisions are not rendered futile. A courtof construction dealing with the language of a statute, in order to ascertainfrom and accord to the statute the meaning and purpose which thelegislature intended for it, strongly leans against any construction whichtends to reduce a statute to futility. The provisions of a statute must be soconstrued as to make it effective and operative, on the principle " ut resmagis valent quam pereat". (Tinsukhia Electric Supply Co. Ltd. Vs.

State of Assam[[28]]; Madhav Rao Jivaji Rao Scindia v. Union ofIndia[[29]], Union of India v. B.S. Agarwal[[30]];Paradise Printers v.Union Territory of Chandigarh[[31]]). The court will presume that theLegislature did not intend a statute to have consequences which areobjectionable or undesirable, or absurd or unworkable, or impracticable orinconvenient, or anomalous or illogical, or futile or pointless. (R. v. CentralValuation Officer[[32]]).

The provisions of Chapter X of the 1964 Act, which are machineryprovisions, must be construed in such a manner as to make it workablehaving regard to the doctrine " ut res magis valeat quam pereat". (Andhra

Bank v. B. Satyanarayana[[33]]; (H.S. Vankani v. State of Gujarat[[34]]).They must be construed so as to give them a sensible meaning. Thelegislature expects the court to observe the maxim ut res magis valeatquam pereat (it is better for a thing to have effect than to be made void). Ifthe obvious intention of the statute gives rise to obstacles inimplementation, the court must do its best to find ways of overcoming thoseobstacles, so as to avoid absurd results. The Rule making authority alsoexpects the rule framed by it to be made workable and never visualisesabsurd results. (H.S. Vankani[34]). It would not be improper for this Court torefer to the scope of the Rule making power under Section 130 of the Actand the Rules made thereunder i.e., the 1964 Rules, more particularly toRule 52 thereof which prescribes the procedure in execution of decrees,decisions or orders, in understanding the scope of Chapter X of the 1964

Act which has been incorporated by reference in Section 36 of the 1995Act.

For the purpose of interpreting Chapter X of the 1964 Act, it ispermissible to read Rule 52 of the 1964 Rules as if it was in Chapter X ofthe 1964 Act. The complex demands on modern legislation necessitatesthe plenary legislating body to discharge its legislative function by layingdown broad guidelines and standards, to lead and guide as it were,leaving it to the subordinate legislating body to fill up the details by makingnecessary rules and to amended the rules from time to time to meetunforeseen and unpredictable situations, and within the framework of thepower entrusted to it by the plenary legislating body. (State of T.N. v. M/s.Hind Stone etc.[[35]]). Rules framed, under the provisions of a statute,form part of the statute. But before a rule can have the effect of a statutoryprovision, two conditions must be fulfilled, namely, (1) it must conform tothe provisions of the statute under which it is framed; and (2) it must alsocome within the scope and purview of the rule making power of theauthority framing the rule. (General Officer Commanding-in-Chief v.Subhash Chandra Yadav[[36]]).

The rule making power conferred on the Government, for carryingout all or any of the purposes of the Act, must be confined to such of thepurposes as are indicated in any of the provisions of the Act. (A.P. Coop.

Bank v. Chittoor Primary Coop. Bank[[37]]). A statutory rule, while eversubordinate to the parent statute, is, otherwise, to be treated as a part ofthe statute, and as effective. "Rules made under the Statute must betreated for all purposes of construction or obligation exactly as if they werein the Act and are to be of the same effect as if contained in the Act and areto be judicially noticed for all purposes of construction or obligation. (State of U.P. v. Babu Ram Upadhya[[38]];Maxwell; Interpretation of Statutes,11th Edn. pp. 49-50; M/s.Hind Stone etc.[35]).

As Rule 52 of the 1964 Rules prescribes the procedure forexecution of decisions, decrees or orders as stipulated in Chapter X of the1964 Act, it is not impermissible to read Rule 52 of the 1964 Rules as a

part of Chapter X of the 1964 Act, in which event the procedure prescribedin Rule 52 of the 1964 Rules, along with Chpater X of the 1964 Act, can betreated as having been incorporated by reference in Section 36 of the 1995Act. The 1995 Act was notified on 27.05.1995 and came into force on01.06.1995. Both the 1964 Act and the 1964 Rules were in existencewhen the 1995 Act was made. As the State Legislature cannot be said tobe unaware of the 1964 Act and the 1964 Rules when it incorporatedChapter X of the 1964 Act by reference in Section 36 of the 1995 Act, andas the Rules made under the 1964 Act must be construed as part of the Actitself, the legislature can be presumed to have intended to incorporate the1964 Rules, to the extent they relate to Chapter X of the 1964 Act (i.e.,Rule 52 of the 1964 Rules), also in Section 36 of the 1995 Act. On such aconstruction, it is permissible for the Tribunal to invoke Rule 52 of the 1964Rules in the execution of the awards passed under the 1995 Act.

Even, in the absence of Rules prescribing the procedure forexecuting decrees, decisions or orders, the provisions of Chapter X of the1964 Act, which have been incorporated by reference in Section 36 of the1995 Act, must be given effect to. The whole working and functioning ofChapter X of the 1964 Act, as incorporated in Section 36 of the 1995 Act,cannot be withheld and rendered nugatory only for the reason of absenceof the rules prescribing the procedure. Absence of Rules will not render theAct inoperative, and would not curtail the power conferred under the Act.The power vested under the Act would still be exercisable as providedunder the provision. (Orissa State (Prevention & Control of Pollution)

Board v. Orient Paper Mills[[39]]). While the power conferred by the Actcan be exercised even in the absence of rules, such power should beexercised on well settled principles and norms which would satisfy the testof Article 14 of the Constitution. (Delhi Science Forum v. Union of India[[40]]). It is not even urged before us that the procedure prescribed forexecution of decisions, decrees and orders in Rule 52 of the 1964 Rules isin violation of Article 14 of the Constitution of India.

Even in the absence of Rules, the Tribunal, while executing awardsunder Section 36 of the 1995 Act, can follow any reasonable procedure.

Conclusion

As Rule 52 of the 1964 Rules is also a reasonable procedure for executionof awards, it is not impermissible for the Tribunal to follow the procedureprescribed therein. It must be borne in mind that the onus, to demonstratethat a decision of the Tribunal is vitiated for adopting a procedure notsanctioned by the 1995 Act, is on the person who questions the validitythereof. This onus is discharged only by satisfying the court that theauthority has adopted a procedure which does not satisfy the test of Article14 of the Constitution or which is against the provisions of the statute inquestion. (Delhi Science Forum[40]). It has not even contended before usthat the procedure, prescribed under Rule 52 of the 1964 Rules, does notsatisfy the test of Article 14 of the Constitution or is against the provisionsof the 1964 Act. The Tribunal is, therefore, not disabled from following theprocedure prescribed in Rule 52 of the 1964 Rules in executing awardsunder the 1995 Act.

In the result, we answer the reference holding that a personaggrieved by a decision of the Tribunal under Section 37 of the 1995 Act,has no statutory remedy of an appeal thereagainst, much less to theTribunal itself, and the judgment in S. Varalakshmi[1], to the extent it heldthat an appeal lies to the Tribunal, does not lay down the correct law. TheTribunal is also entitled to invoke Rule 52 of the 1964 Rules, and to followthe procedure prescribed therein, in executing awards under the 1995 Act.

In the normal course, we would have directed placing the matterbefore the Learned Single Judge but, as the result of both the WritPetitions, are solely based on the questions referred to us, W.P.No.31138of 2012 is allowed. As C.T.A.No.72 of 2012, filed before the Tribunal bythe petitioner in W.P.No.31974 of 2012, is itself not maintainable, bothW.P.No.31974 of 2012 filed before this Court, and C.T.A.No.72 of 2012filed before the Tribunal, are dismissed. As C.T.A.No.72 of 2012 isdismissed as not maintainable, I.A.No.188 of 2012 filed in C.T.A.No.72 of2012 shall also stand dismissed. The proceedings in E.P.No.64 of 2011shall continue, and the Tribunal shall adjudicate the same in accordancewith law. The Miscellaneous Petitions pending, if any, in both the WritPetitions shall stand disposed of. No costs.

_____________________________RAMESH RANGANATHAN, J

Date: 31-12-2014.

___________________________________M. SATYANARAYANA MURTHY, J

Note: L.R. copy to be marked. B/o MRKR/CS

[1]2003 (6) ALD 516[2](2002 (4) ALD 700[3]AIR 1988 SC 1531 = (1988) 2 SCC 602[4](1972) 2 SCC 427[5](1969) 2 AC 147[6]AIR 1965 SC 1449[7](1995) 2 SCC 326[8][1969] 2 SCC 793[9](1864) 10 HLC 704 (HL)[10](2003) 4 SCC 200[11](1983) 2 SCC 82[12](2011) 3 SCC 1[13](1886) 31 Ch D 607[14]191 App. Div. 850, 112 N.Y.S 249, 251[15](2013) 5 SCC 470[16](2004) 4 SCC 113[17]AIR 1998 SC 1334[18]AIR 2000 SC 1771[19](2004) 5 SCC 1[20]1932 AIR(PC) 165[21]1899 (22) ILR (Mad) 68

[22](1969) 2 SCC 74[23]AIR 1983 SC 1272[24]1952 SCR 28 : AIR 1952 SC 12[25]AIR 2003 SC 2676[26]AIR 1999 SC 1455[27](1885) Vol.X AC 364[28](1989) 3 SCC 709[29](1971) 1 SCC 85[30](1997) 8 SCC 89[31](1988) 1 SCC 440[32](2003) 4 ALL ER 209[33](2004) 2 SCC, 657[34](2010) 4 SCC 301[35]AIR 1981 SC 711[36](1988) 2 SCC 351[37](1974) 1 SCC 608[38](1961) 2 SCR 679[39](2003) 10 SCC 421[40]AIR 1996 SC 1356