Holding

Sections 13(8)‑13(11) of the Punjab Cooperative Societies Act, 1961 are constitutionally valid and are protected by Article 31A(1)(c).

Summary

The Supreme Court examined the constitutional validity of sections 13(8) to 13(11) of the Punjab Cooperative Societies Act, 1961, which empower the Registrar to compulsorily amalgamate cooperative societies. Petitioners argued that the provisions violated the right to form associations under Article 19(1)(c) and were not protected by Article 31A(1)(c) because cooperative societies were not "corporations". The Court held that cooperative societies are corporations within the meaning of Article 31A, and that the legislation is saved by the protection afforded to laws dealing with amalgamation of corporations in the public interest or for proper management. It further ruled that notice to the societies, not to individual members, satisfies natural‑justice requirements, and that the provisions do not offend the basic structure of the Constitution. Consequently, the appeals were dismissed with costs.

Issues considered

The provisions of the Punjab Cooperative Societies Act, 1961 (ss.13(8)‑13(11)) violate Article 19(1)(c) of the Constitution.
Whether cooperative societies fall within the definition of "corporations" under Article 31A(1)(c).
Whether the legislation is protected by Article 31A(1)(c) as being in the public interest or for proper management.
Whether the lack of individual notice breaches principles of natural justice.
Whether the provisions offend the basic structure or dignity of the human being.

Legislation cited

Constitution (Fourth Amendment) Act, 1955
Constitution of Indias. Article 19(1)(c), s. Article 31A(1)(c), s. Article 43
Punjab Cooperative Societies Act, 1961s. 13(10), s. 13(11), s. 13(8), s. 13(9), s. 30

Subjects

cooperative societiescompulsory amalgamationArticle 19Article 31Acorporationnatural justicebasic structure doctrineconstitutional validity

Judgment

A

DAMAN SINGH & ORS.

B v.

STATE OF PUNJAB & ORS.

April 4, 1985

c (Y.V. CHANDRACHUD, C.J., D.A. DESAI, 0. CHINNAPPA REDDY,
E.S. VENKATARAMIAH AND RANGANATH MISRA, J J.] l
Constitution of India, Article 144-Affidavits of underlings of the Executive
usefulness for deciding the vires of legislation-Compulsory a1na/gan;ation of
co-operative societies, constitutional validity of-Punjab Co-operative Societies
Act, 196!, sub-sections8, 9, 10 and If of section 13-Whether the provisio11s
D
thereof interfere wrth the Right to fonn or to be a nw1nber of a society and
therefore, contrav!!ne 4rticle 19(I)(c) of the Constitution and also violate the
principles of natural justice-Words and phrases-"Corporations" 111eani11g and
what it comprehends in the scheme of the Constitution of India-Constitution of
India; 1950 Article 31-A(l)(c), Entries 43 and 44 of [)st I and Entry 32 of Lisr
II of the Seventh schedule and 4rticle 43-Superior Courts cannot go into
E the question whether a certain ground to which no reference is found in the
judg111ent of the subordinate court was argued before that court or not-Proper
procedure in such case explained-Professional Ethics-Counsel appearing in rhe.
Supre1ne Court-Duty to court explained.

Pursuant to a policy decision arrived at an All -India Conference on Co·
operative Societies, various State Legislatures, roughly at about the san1e time
F introduced enactments providing for amalgamation of co-operative societies.
The vires of the provisions, contained in sub-sections 8 to 1i of section 13 of
the Punjab Co·operative Societies Act, 1961, providing for co1npulsory amal~
gamation of cooperative soci~ties if it is rn.::ccssary iu the interests cooperative
i \
societies, i~ challenged in these appeals by special-kave and other special Je"'ve
petitions.
G
Dismissing the appeals and petitions, the Court,

HELD 1. The vices of legislation is not to be decided_ on the basis of
affidavits of underlings of the e,11;ecutive who can hardly be described as
authorised to 'speak for the legislature. As usual in these and such cases,
H
DAMAN SINGH v. PUNJ,\B 58!
the Counter-affidavits. where they have been filed, leave n1uch to be desired and
are least helpful to the Court. [584F-G 585A] A

2.1 The law providing for amalgamation of co-operative societies, "in
view of the constitutional bar contained in Article 31-A (1) (c) cannot be
struck down as violative of the provisions of Article 19 (1) (c) of tbc Constitu-
tion. The dght of a citiz.!n to form a society or to be a member ofa certain
cooperative society is not interfered wi1h if the society of which he has become B
a momber is amalgamateci with another society consisting of members with
whom he may not be willing to be associated. [588D-G]

In the cases here, the cooperative societies are governed by statute from
their inception. They arc created by statute, they are controlled by statute
and so there can be no objection to statutory interference with their composi·
c
tion on the ground of contravciition of the indiVidual right of freedom of
association. [594C-~J

Damya1lli Naranga v. Unio:1 of J11dia, if971] 3 S.C.R. 840, explained and
distinguished.
D
2.2 The exprcssiun "Corporations" occurring in Article 31-A (1) (c) of
the Constitution cannot be given such a limited or narrow interpretation, so as
not to comprehend cooper.--. tive societies in its expanse. On the other hand
the very requirement of the Corporation mentioned io Article 31-A (I) (c) '
require!:> the expression to b~ given a broad interpretation since there can been
higher intcr.:st than the public interest.[S89C-DJ

2.3 Section 30 of the Punjab Cooperative Societies ..<\ct, 1961 confers E
every rcgist·~red co-operative ~ociety the status of a body corporate having
perpetual succession and a common seal, with power to holdproperty enter
into contracts, institute and defond suits and other legal proceedings and to do
• all things necessary the purposes for which it is constituted. Therefore, co~
operative society i~ a corporation as commonly understood. [5910-H, 592A],
F
Board of Trustees, Ayurvedic, and Unani Tibia College, Delhi v. The
State of Delhi, [196~] Suppl. I SCR 156 applied.

2.4 1he scheme of the Constitution as enjoin:d in Entries 43 and 44 of
List I of the s~venth Schedul~ an Entry 32 of List II does not make any
difference either. The mention of co-operative societies both in Entry 43 of
List I and Entry 32 of List H along with other corporations give an indication G
that the Constitution makers were of the view that co-operative societies weer
of the same genus as other corporations , and all ·were corporations. In fact
the very express exclusion ; of co·operative societies from Entry 43 of List I is
indicative of the view that btlt for such exclusion, co-operat ive societies would
be comprehended within the expression "corporations".[592A, 592F-G]

2.5 The statement of Objects and Reasons of the Constitution (4th
H
SUPREME COURT REPORTS (I 985] 3s.c.R.
amendment) Act and the report of the Joint Select Committee relating thereto,
A
do now show that initially it was proposed to give protection to legislation pcr-
taJning to amalgamation of companies only but later it was thought fit to extend
the~protection to statutory corporations also and therefore, the expression "cor-
porations" was substituted in the Act in the place of the expres~ion "Compa-
nies'' which had been m~ntioned in the Bill. It was obviously thought by the
Parliament that the protection should not be confined to companies only but
should extend to all corporations which would naturally include Statutory
B Corporations. The more generic expression "corpora1ion" was used so that
all companies statutory corporations and the like may be brought in. There
is no indication that notwithstanding the use of the generic expression "corpora-
tions", the expression was in~ended to exclude corporations other than com-
panies and statutory corporations. Parliament apparently chose the broader
expression not with a view to limit th~ prote;;ti0n oft he legislation relating to
c amalgamltion to any cla<>s of corporationj but with a view to prot.!ct legisla-
tion pertaining to amalgam1tion of all cb.sses of corpJratio:is. [592H, 5930-G]
·---pI

2.6 The very philosophy and concept of the cooperative movement is
irnpregnated with the public interest and the am1l5a1nation of co-operative
societies when such an1algamation is in the intere<>t of the co-operative societies
is certainly in the public inter.:st or can only be to secure the proper raanage-
D ment of the societies. Therefor~, it cannot be said that the protection of Art.
31-A(l) (c) was not available to section 13 (8) of the Punjab Co-operative
Societies Act, as the interest of a co-operative society may not necessarily be in
the public interest or for the proper management of the society. [5940-G]

2.7 Notice to individual members of a co-operative society. is opposed
to the very status of a cooperative society as a body corporate and is, there-
E fore, unnecessary. Once a person becomes a member of a co-operative society
he loses his individuality qua the society and he has no independent rights
except those given to hin1 by the statute and the bye-laws. He must act and
speak through the society or rather, the society alone can act and speak for
qua rights or duties of the society as a body. So if the statute which autho-
rises compulsory amalgamation of cooperative societies pruvides for notice to
the societies concerned, the requirement of natural justice is fully satisfied. The
F notice to the society will be deemed as notice to all its members. That is why ~·
,
section 13 (9) (a) provides for the issue of notice to the societies and not to !
individual members. Section 13 (9) (b), however, provides the members
also with an opportunity to be heard if they desire to be heard Further a
member who objects to the proposed amalgamation within the prescribed time
is given, by section 31 (11) the option, to walk·out, as it were, by withdrawing
G his share, deposits or loans as the case may be. [595A, C-A]

2,g A fresh notification would not be necessary Where the Assistant
Registrar even initially was authorised generally to perform all the funclions of
a Registrar. A fresh notification would probably be necessary where the
Assistant Registrar was authorised to perform certain specified functions only
of the Registrar. That is not claimed to be the situation here. [596A-B]
H
BA MAN SINGH V· PUNJAB (Chinnappa Reddy, J.) S83
2.9 It cannot be said that the dignity of a human being is even remot.':dly A
affected by the an1algamation of a co-operative society of which an individual is
mcn1bcr with another cooperative society. Therefore the contenti~n that both
Article 31-A(l)(c) of the Constitution and section 13(8) of the Puojab Co-
operative Societies Act~ offended the basic structure of the Constitution and
therefore were void is misplaced.

OBSERVATION: B

[The Counsel app~a-i1 ,g in the Supreme Court, particularly,· when they
appear before the Constitution Bench mu3t avoid advancing totally unsustain-
able propositions. The tin1e of the Supreme Court is public tin1e and as the
mountainous arrears show that tiq1e is becoming increasingly dear .ind pre~
cious. The counsel must carefully ex.amine with a greater sense of responsibility
the submissions which they propose to make before actually advancing them in c
the Court). [596G·H 593A·B]

3. It is not unusual for parties and counsel to raise innumerable
grounds in the peti1ions and memoranda of appeal etc. but, later, confine
themselves, in the course of argumeht to a few only of those grounds, obviously
because the rest of the grounds arc considered even by them to be untenable,
No party or counsel is thereafter entitled to m1ke a grievance that the D
grounds not argued were not considered. If indeed @.llY ground which was
argu;:d w .F> not consiJ;:red it should be open to the party aggrieved to draw
the attention of the Court making the order to it by filing a proper application
for review or clarification. The time of the superior Courts is not to be wasted
in enquiring into the question whether a certain ground to Which no reference
is found in the judgctt~nt of the subordinate court was argued before that court
or noti596D-E] E

CIVIL APPELLHB J URISDIC rio:-i : Civil Nos. 20 6,
Appeal
2861, 250, 320, 1607, 3548, 379, 769 1280 of 1979 and 1476-1483 Of
1985.
F
From the Judgments and Orders dated 10.1.79, 28.9.79,
16.1.79, 26.4.79, 27.9.79, 15.1.79, 8.1.79. 19.4.79, of the Punjab and
Haryana High Court in C.W.P .. N·Js. 4327/78, 3430/79, 4713/78,
4937/78, 1345/79, 3217/79, 5121/78, 24/78, 5195/78, 4340/78,
4613/78, 4793/78, 4753/78, 4386/78, 4545/78, 4585/78 and
1257/79.
G
M.K. Rananwrthi, R.C. Pathak, Arvind Kumar, Mrs. Laxmi
Arvind, M;ss K.V. La/itha, Arun Madan, Sarwa Mitter, Manoj
Swarup and Miss La/ita Kohli, for the appearing Appellants.
M.S. Gujral, S.K. Bagga, Swaraj Kaushal, R.S. Sodhi and
M.P. Jha, for the appearing Respondents. H
584 SUPREME COURf REPORTS (1985) 3 S.C.R.

A The Judgment of the Court was delivered by

CHINNAPPA REDDY, J. The opinion of the High Courts appears
to be unanimous on the question of the validity of the relevant
provisions of the Cooperative Societies Acts in force in their res-
B pective States providing for the compulsory amalgamation of Co-
operative Societies. The Full Benches of the High Courts of Andhra
Pradesh, Karnataka, Punjab and Haryana and a Division Bench of
the Patna High Court ('J have upheld the validity of such provisions.
But litigants, particularly those who are in a position to command
funds are rarely deterred by suca unanimity of judicial opinion.
c So, several Co-operative Societies of Punjab have chosen to prefer
appeals to this Court questioning the vires of sec. 13 (8) of the
Punj1b Cooperative Societies Act which provides for the com-
pulsory amalgamation of cooperative societies if it is necessary in .
the interests of the cooperative societies. The questions raised
are simple and straight and are capable of but single, straight
forward answers. Unfortunately a large number of appeals have
D
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 cooperative movement. We think it is
I~ needless to refer to t11e nature and history of tl1e cooperative
movement except to say that the promotion of the cooperative
movement is one of the Directive principles of State Policy (sec
Art.43 of the Constitution). As usual in these and such cases,
the eounter-aflidavits, where they have been filed, leave much to be

F
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
i\
described as authorised to speak for the legislature. But even
from the meagre m1terial available to us from the record, it is

G
(1). AIR 1978 AP.J21 (FB)
AIR !978 KARNATAKA 148 (FB)
1976 Punjab Law Journal 302 (FB)
AIR 1968 PATNA 211
There is also aQ excellent discussion by Vaidya, J. in ILR 1972 AP 1140.

H
DAMAN SINGHv. PUNJAB (Chinnappa Reddy, I.) 585
obvious that the provisions relating to amalgamation of A
Cooperative Societies in different State, enactments were introduced
pursuant to a policv decision arrived at an Alt India Conference.
This is evident from the circumstance that these provisions were
enacted by the variom State legislatures roughly at about the same
time .. A reference to the p)Jicy decision at an All India
Conference may be found in the Full Bench Judgments ·of the B
Andhra Pradesh and K1rnatah High Courts. It is unnecessary to
say more on this aspect of the case.

_The Punjab Co-operative Societies Act, 1961 which replaced
the earlier Act was en1cted, so it is stated in the Statement of
,...-·· Objects and Reasons, "In pursuance of the policy of the C
Government of India to simplify co-operative law and procedure in
order to remove all bottleneck• in the way of development of
co-operative movement in the country." It is further stated in the
Statement of Objects and Reasons.

D
"The important provisions, such as relating to change
of liability, amalgaination of .rnc;eties, splitting up of
societies, settlement of disputes and winding up of societies,
etc. were found to be of .a dilatory and complicated
nature, and, therefore, creating problems in the day to day
working of the co-operative societies. Special care has, E
therefore, been taken to cut out all unnecessary delays
particularly in registration of societies and the provisions
to this effect have been simplified. Another approach
influencing a change is to make the Cooperative Law
comprehensive. Moreover consistent with our national
policy to promote the organisatipn and growth of the F
co-operative Societies in the various fields of economic
activity, more difficult and complicated forms of co-
operative societies are to spring up as compared to
Co-operative Credit Societies ............ ".

Section 2(c) defines "co-operativ,e society" as meaning "a
G
Society registered or deemed to be registered under this Act."·
Chapter II (secs. 3 to 14) deals with registration of co-operative
societies. In particuiar sec. 8 pr;scribes the conditions pre-requisite
to registration and authorises the Registrar to register a society
and its Bye laws if he is.saitsfied that the conditions are fulfilled,
H
Section 13 provides for the amalgamation, transfer of assets and
•

586 SUPREME COURT REPORTS ( 198 5] 3 S.C.R.

A · liabilities and division fo co-operative societies. While sec. 13(2)
provides for voluntary amalgamation, Sec. 13 (8) provides for
. compulsory amalgamation if the Registrar is satisfied that it is
necenary in the interests of the co-operative societies. Sec. 13(9)
(a) requires the Registrar to send a copy of the proposed order to
the societies concerned and the creditors and sec. 13 (9) (b) requires
IL the Registrar to consider the objections received from the societies
•
concerned or from any member or creditor of such societies.·
Section 13 (l l) gives to the mem·ier or credita< who has objected
to the proposed order under sub·sec. 9 the option of .withdrawing
his share; deposits or loans as the case m1y be <>n an application
to be made to the society to which his share, deposits or· '
Joans stand allocated by virtue of the order under sub-sec. 8 •
within a period of 3() days from the ·date of such order. It is the·
,vires of these provisions, that is in question in these appeals and.it
will be useful to extract at this juncture, sub-sections 8, 9, 10 and 11
of sec 13. of the Punjab Co-operative Societies Act. T.hey are as
follows:...!... ·

"13.(1) ...........................
(2) •••..•..••••••••••••••••.••

(3) ••••••..••.••.•..••.•..•.••

(4) •.••.•.••••••...•.••••....•

(5) ••••••.•••.••.••••..• ; •••.• .A
•
.(6) ..•..•.••..••.••••.••..•..• •
·~. (7) •.••••.•.•.••.•••..••••••••

(8) Where the Registrar is satisfied that it is necessary
in the interest of the co-operative society or co-operative
societies that-

(i) any co-operative society be divided to form two -y
or more co-operative societies ; or

(ii) one or more co-operative societies be amal-
n ~amated with any other co-operative society; or

'-
DAMAN SINGH v. PUNJAB ( Chinnappa Reddy, J.) 537

(iii) two or more co-operative societies be amal- A
gamated to form a new co-operative society, then,
notwithstanding anything hereinbefore contained,
· the Registrar may, after consulting the financing
institution, if any, provide for-

(a) the division of that co-operative society into two or II
more co-operative societies : or

(b) the amalgamation of the society or societies-

(i) With any other co-operative society, or

(ii) to form a new co-operative society, with such
constitution' including representation on the com-
mittee, property rights, interests; liabilities, duties
and obligations, as may be specified in the order.

(9) No order shall be made under sub-section (8), a
unless-

(a) a copy of the proposed order has been sent under
certificate of posting to the society•• or societies con-
cerned and the creditors ;

(b) the Registrar has considered the objections received
from the society or societies concerned or from any
member ·or creditor of such society or societies within
such period, being not less than fifteen days from
the date of posting of the proposed order, as may be
specified by the Registrar in this behalf in the pro-
posed order.

(10) the Registrar may, after considering the objections
referred to in sub-section (9), make such modification
in the proposed order as he may deem fit and the
order ·may contain such incidental, consequential and
supplemental provisions as the Registrar may deem
necessary to give effect to the same.

(II) A member or creditor who had objected to the pro-
posed order under sub-section (9) shall have the option H
588 SUPREME COURT REPORTS [1985] 3 s,c.R.

of withdrawing his share, deposits or Joans as the case
A
may be, on an application which shall be made to the
society to which his share, deposit or loan stands
allocated by virtue of the order under sub-section(8) ,
within a period of thirty days of the date of such
order.
B
(12) ..•........................... "

Chapter V of the Act deals with privileges of Cooperative
Societies and in particular sec. 30 states,

c "The registration of a co· operative society shall render
it a body corporate by the name under which it is regis-
tered having perpetual succession and a common seal, and
with power to hold property, enter into contract, institute
and defend suits and other legal proceedings and to do all
things necessary for the purposes for which it is con-
D stituted."

The foremost submission of Shri M.K. Ramamurthi, learned
counsel for the petitioners was that any Jaw providing for the
•
amalgamation of co-operative societies directly contravenes Art. 19
(1) (c) which guarantees to all citizens the right to form associations
E
or unions. According to Shri Ramamurthi, the right of a citiz:n
to form a society or to be a member of a certain cooperative
society is interfered with if the society of which he has becom" a
member is amalgamated with another society consisting of members
with whom he may not be assosiatcd. Article 31(A) (1) (c) furnishes
F 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 Art14 or Art. 19. Shri Ramamurthi attempted to
G cross the stile by arguing that co-operative societies were not
corporations within the meaning of that expression in Art. 31-(A)
(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 subm'1ssion, he
invited our attention to Entries 43 and 44 of List-I and Entry 32 of
II List-H of tlJc SeveJ]th S9hedule to the Constituti<;>n. Ile also rea<;I
DAMAN SINGH v. PUNJAB (Chinnappa Reddy, J.) 589

out to us the Statement of Objects and Reasons and the Joint A
Select Committee's report relating to the Constitution (Fourth
Amendment) Act, 1955 by which clause (c) of Art .31-A(l) was
introduced. His submission was that the legislative intent was
merely to render legislation providing for amalgamation of com-
panies and statutory corporations alone immune to challenge on the
ground of conflict with the fundamental rights guaranteed by B
Articles 14 and 19. According to him the protection afforded by
Art. 31-A(l)(c) was not available and was never intended to be
niade available to co-operative societies, since the expression
'corporations' did not comprehend co-operative societies in its
expanse; ·
·~·
c
We are·unable to find any justification for giving such a limi-
ted or narrow interpretation to the expression 'corporations' occur-
ring in Art. 31-A(ll (c). On the other hand, we think that the very
requirement of public interest or proper management of the corpo-
ration mentioned in Art. 31-A(l) \cl requires the expression to be
given a broad interpretation since there can be no higher interest D
than the public interest. We do not however desire to quibble with·
rules of construction since we propose to examine what a 'corpora-
tion' means and comprehends ordinarily and in the scheme of the
Constitution.

E
What is a corporation ? In Halsbury's Laws of England, 4th
Edition, Volume 9, Paragraph 1201, it is said,

"A corporation may be defined as a body of persons (in the
case of a corporation aggregate) or in office (in the case of
a corporation sole) which is recognised by the law as F
having a personality which is distinct from the separate
personalities of the members of the body or the personality
of the individual holder for the time being of the office in
question."
G
A corporation aggregate has been defined in paragraph 1204 as,
"A corporation of individuals united into one body under
a special domination having perpetual succession under an
artificial form, and vested by the policy of law with the
capacity of acting in several respects as an individual, par-
ticularly of takin$ and grantin$ property, of contracting ff
590 SUPREME COURT REPORTS [198 5] 3 S.C.R.

obligations and of suing and being sued, of enjoying privi-
A
leges and immunities in common and of exercising a varie·
ty of political rights, more or less extensive, according to
the design of its institution, or the powers conferred upon
it, either at the time of its creation or at any subsequent
period of its existence."
B
This court in the Board of Trustees, Ayurl'edic and Unani Tibia
College, Delhiv. the State of Delhi(') was!required to answer the ques-
tion whether the Board of trustees which was originally registered
under the Societies Registration Act, 1860 and a new Board of
trustees which was incorporated by an Act of the legislature called
c the Tibbia College Act, 1952 by which the old Board was dissolved
and a new Board constituted were corporations. The court held
that the old Board was not but the new Board was. Posing the
question what is a corporation, the court answered it with the state-
ments contained in Halsbury's Laws of England already extracted
D by us and added,

"A corporation aggregate has therefore only one capa-
city,namely, its corporate capacity. A corporation aggregate
may be a trading corporation or a non-trading corporation.
The usual examples of a trading corporation' are (I) char·
E ter companies, (2) companies incorporated by special acts
of Parliament, (3) companies registered under the Com-
panies Act, etc. Non-trading corporations are illustrated
by (1) municipal corporations, (2) district boards, (3)
benevolent institutions, (4) universities etc. An essential
element in the legal conception of a corporation is that its
F identity is continuous, that is, that the original member or
members and his or their successors are one. In law tlie
individual corporators, or members, of which it is com-
posed are something wholly different from the corporation
itself; for a corporation is a legal person just as much as
G
an individual. Thus, it has been held that a name is essen·
tial to a corporation ; that a corporation aggregate can, as
a general rule, only act or express its will by deed under
its common seal; that at the present day in England· a cor-
poration is created by one or other of two methods,

H (I) [1962] SUPPL. 1, SCR)56
DAMAN SINGH v. PUNJAB (Chinnappa Reddy, I.) 59lc

namely, by Royal Charter of incorporation from the A
Crown or by the authority of Parliament that is to say, by
or by virtue of statute. There is authority of long stand-
ing for saying that the essence of a co~poration consists in

(I) lawful authority of incorporation,

(2) the persons to be incorporated, ,
'
(3) a name by which the persons are incorporated,

(4) a place and
C'
(5) words sufficient in law to show incorporation. No
particular words are necessary for the creation of a cor-
poration : any expression showing an intention to incorpo-
rate will be sufficient."

The court then noticed the various provisions of the Societies D
Registration Act, 1860 which according to them contained no suffi-
cient words to indicate an intention to incorporate but on the•con-
trary contained provisions showing that. ther.e was an. absence of
such intention. Therefore, they observed, "We have, therefore,
come to the conclusion that the provisions aforesaid do not estab-
lish the main . essential characteristic of a corporation aggregate, E
namely, that of au intention to incorporate the society." Consider-
ing next the question whether the new Board was a corporation, the
court had no difficulty in answering the question with reference to
sub-section 2 of section 3 which stated · that the Board shall be a
~ j)Ody corporate having perpetual succession and common seal and
F
f'Sball by the said name sue and be sued; The court observed, '.'Sub·
'·section 2 of sec. 3 says in express terms that the new Board consti-
tuted under the impugned Act is given a corporate status; in other
words, the new Board is a corporation in the full sense of the
- term."
G
We have already extracted sec. 30 of the Punjab Act which
confers on every registered co-operative society the status of a body
., corporate having perpetual succession and a common seal, with
power to hold property, enter into· contracts, institute and defend
suits and other legal proceedings and to do all things necessary for
!he purpose for which, it is constituted, There cannot, therefore, be
592 SUPREME COURT REPORTS [\985} 3 S.C.R.
A the slightest doubt that a co-operative society is a corporation as
commonly understood. Does the scheme of the Constitution make
any difference 7 We apprehend not.

Entry 43 of List I of the Seventh Schedule is as follows ;

B "43. Incorporation, regulation and winding up of trad-
ing corporations, including banking, insurance and finandal
corporations but not including co-operative societies."

Entry 44 of the same list is as follows : ·

c "44. Incorporation, regulation and winding up of cor-
porations, whether trading or not, with objects not confined
. ·-r
to one State, but not including universities."

Entry 32 of List II is as follows :

D "32. Incorporation, regulation and winding up of cor-
porations, other than those specified in List I and universi-
tiesincorporated trading, literature, scientific, religious and
other societies and associations ; co-operative societies," ·

According to Mr. Ramamurthi the express exclusion of co-
E operative societies in Entry 43 of List I and the express inclusion of
co-operative societies in Entry 32 of List II separately and apart
from but along with corporations other than those specified in list
I and universities, clearly indicated that the constitutional scheme
was designed to treat co-operative societies as institutions distinct
from corporations. On the other hand one would think that th~---.;,
F very mention of co-operative societies both in Entry 43 of List I and 'f
Entry 32 of List II along with other corporations give an indication
that the Constitution makers were of the view that co-operative
societies were of the same genus as other corporations and all were
corporations. In fact the very express exclusion of co-operative
societies from Entry 43 of List I is indicative of the view that but
G for such exclusion, co-operative societies would be comprehended
within the meaning of expression "corporations".

The statement of Objects and Reasons of the Constitution
(4th amendment) Act and the report of the Joint Select Committee
relating thereto do not carri;Mr. Ramamurthi's argument any
H
DAMAN SHIGH v. PUNJAB ( Chinnappa Reddy, J.) 593
further. The statement of Objects and Reasons says, in relation to A
Art. 31 ·A (1) (c),

"The reforms in company law now under contempla-
tion like the progressive elimination of the managing agency
system, provision for the compulsory amalgamation of two
or more companies in the national interest, the transfer of B
an undertaking from one company to another, etc., require
to be placed above challenge."

The report of the Joint Select Committee, is so far ·as it is '·
relevant, says,
c
"In sub·clauses (c) and (d), the word "corp.orations" has
been substituted for the word "companies" in order to
cover statutory corporations as well as companies."

, According to Mr. Ramamurthi, the statement of Objects .and D
Reasons and the report of the Joint Select Committee show that ini-
tially it was proposed to give protection to legislation pertaining to
amalgamation of companies only but later it was thought fit to
extend the protection to statutory corp<;>rations also and therefore
the expression "corporations" was substituted in the Act in the
place of the expression "companies" which. liad been· mentioned in E
the Bill. There is no substance in this submission. It was .obvi·
ously thought by the Parliament that the protection should not be
confirmed to companies only but should extend to all corpora-
tions which would naturally include Statutory Corporations. The
more generic expression "corporations" was used so that all com-
panies, statutory corporations and the like may. be bropght in. ' F
There is no indication that notwithstanding the use of the generic
expression "corporations'', the expression was intended to ex-
clude corporations other than companies and statutory corporations
Parliament apparently chose the broader expression not with a view
to limit the protection of the legislation relating to amalgamation G
to any class of corporations but with a view to protect legislation
pertaining to amalgamation of all classes of corporations·. ~

The answer to the principal question raised by Shri Rama·
murthi appears to us to be so plain as to merit, no further discus- 1 H
594 SUPREME COURT REPORTS (198 SJ 3 s.c.tt
A ·sion. We must however notice here Damyanti Naranga v. Union of
India on which reliance was placed by the learned counsel on the
basis that Art. 31-A (1) (c) did not afford any protection to s. 13(8),
(9) etc. That case has ·no application whatever to the situation
before us. It was a case where an unregistered society was by sta-
tute converted ·into a registered society which bore no resemblance
B whatever 1to the original society. New members could be admitted
in large numbers so as to reduce the original members to an insigni-
ficant minority. The composition of the society itself was transfor-
med by the Act and the voluntary nature of the association of the
members who formed' -the original society was totally destroyed.
The Act was, therefore, struck-down by the court as contravening
C the fundamental right guaranteed by Art. 19(1)(f). In the cases
before us we are.concerned with co-operative. societies which from
the inception are governed by statute. They are created by statute,
there are controlled by statute and so, there can be no objection to
statutory interference with their composition on the ground of con-
D .traventi0n of the individual right of freedom of association.

The second submission of the learned counsel was that s.
13(8) .of the Punjab Co-operative Societies Act provided for
amalgamation of ·Co-operative Societies if . the Registrar was
satisfied that it was necessary to do so in the interest of the Co-
E operative Societies ·whereas the Constitutional protection was
:available ,only if the legislation was in the public interest or in
order .to secure the ,proper management of any of the corpora-
tions. According to the learned counsel the protection of Art.
31·A (!) (c) was, therefore, not available to s. 13 (8) of the
.P,unjab Cooperative Societies Act as the interest of a Cooperative
F Society may not necessarily be in the public interest or for the
.pr~.er .management of the society. This submission is no more
than a play with words. The very philosophy and concept of
the .Cooperative movement is impregnated with the public in-
terest and the amalgamation of Co-operative Societies when such
amalgamation is in the interest of the Co-operative Societies is
G · certainly in the public interest or can only be to secure the pro-
per management of the societies. The argument of the learned
counsel is an attempt at .hair-splitting and is rejected.

H (I) [1971] 3. S.C.R. 840.
DAMAN SiNGH v. PUNJAB (Chinnappa Reddy, '·' 595
The next submission of-the learned counsel was__ that s. 13 A
(8), (9) and (JO) did not make express provision for the issue of
notice to the members of the concerned Co-operative Societies and
were, therefore, violative· of the principles of natural justice. He
argued that in the absence of any provision, the rules of natural
justice may be read into the provisions and notice to the members
of the affected societies was imperative. Otherwise, he argued, B
members of one society would be formed against .their will and
without being heard to associate themselves with members of
another society. We have no hesitation in rejecting this sub-
mission also. Once a person becomes a member of a co-opera-
tive society, he loses his individuality qua the society and he has'
no -independent rights except those given to him by the statute
c
and the by-laws. He must act and speak through the &ociety·or
rather, the society alone can act and speak for him qua rights
or duties of the society as a -body, So if the statute which autho-
rises compulsory amalgamation of cooperative societies provides
for notice to the societies concerned, the requirement of natural D
justice is fully satisfied. The notice to the society will be deemed
as notice to all its member. That is why s. 13 (9) (a) Provides for
the issue of notice to the societies and not to individual members.
Section 13(9)(b), however, provides the members also with an
opportunity to be heard if they desire to be heard. _Notice to
individual members of a cooperative society, in our opinion, is
opposed to the very status of a cooperative society as a body
corporate and is, therefore, unnecessary. We do not consider
it necessary to further elaborate the matter except to point out
that a member who objects to the proposed amalgamation within
the prescribed time is given, bys. 31(11), the option to walk-out,
as it were, by withdrawing his share, deposits or loans as the case -F
may be.

Another submission of the learned counsel was that the
notification authorising the Assistant Registrar of Co-operative
Societies to exercise all the powers of Registrar under the Act G
could enable ~the Assistant Registrar to perform only such func-
tions as the Registrar was authorised to perform under the Act
as on the date of the notification. The Assistant Registrar would
not be entitled to exercise the powers entrusted to the Registrar
I
H
5~6 SUPREME COURT RllJ'ORtS [1985) 3 s.c.t>..

A by amendment of the Act subsequent to the date of the notifi-
cation unless a fresh notification was issued. We do not think that
a fresh notification would be necessary where the Assistaut Regis·
trar even ·initially was authorised generally to perform all the
functions of a Registrar. A fresh notification would probably be
necessary where the Assistant Registrar was authorised to perform
B
certain specified functions only of the Registrar. That is not
claimed to be the situation here.

The final submission of Shri Ramamurthi was that several
other questions were raised in the writ petition before the High ,_
c . Court but they were not considered. We attach no significance
to this submission. It is not unusual for parties and counsel to
~
.I
raise innumerable grounds in the petitions and memoranda of
appeal etc., but, later, confine themselves, in the course of argu·
ment to a few only of those grounds, obviously because the rest
D of the grounds are considered even by them to be untenable.
No party or counsel is thereafter entitled to make a grievance that
the grounds not argued were not considered. If indeed any ground
which was argued was not considered it should be open to the
party aggrieved to draw the attention of the court making the
order to it by filing a proper application for review or clarification.
E The time of the superior courts is not to be wasted in enquiring
into the question whether a certain ground to which no reference
is found in the judgment of the subordinate court was argued
before that court or not ?

Shri Arvind Kumar, learned counsel for one of the appel·
F !ants very airily made a submission that Art. 31-A (1) (c) intro·
duced by the Constitution (64th amendment) Act and s. 13(8) of
the Punjab Co-operative Societies Act offended the Basic Struc-
ture of the Constitution as they affected the dignity of the human
being and were therefore void. We find overselves unable to
appreciate how the dignity of a human being can even remotely
G
be said to be affected by the amalgamation of a cooperative
society of which an individual is a member with another coopera-
tive society. We expect counsel appearing in this court, particu-
larly when they appear before the Constitution Bench, to avoid
. H advancing such totally un~ustainable propositions, The time of
bAMAN SINGH v. PUNJAB ( Chinnappa Reddy, J.) 591

this court is public time and as the mountainous arrears show the A
time is becoming increasingly dear and precious. We can only
appeal to counsel to carefully examine with a greater sense of
responsibilty the submission which they propose to make before
actually advancing them in court. All the appeals are dismissed
with costs which we quantify each Rs. 2,500 in each appeal.
\ B

S.R. Appeals & Petitions dismissed.
c

!,