2021 (1) KLT 631 (F.B.) – Is the Issue Solved:

Does the F.B. Decision Give an Answer to this Vexed Question of Law

(By P.B. Menon, Advocate, Palakkad)

It is a well settled position in law that C.P.C. deals not only with procedural matters but also substantial rights of parties, See 1983 KLT 717 at page 720. Thus certain rights and liabilities follow from the provisions contained therein cannot be ruled out.

Section 47 C.P.C. is a well drafted substantial provision contained in C.P.C. which deals with execution, discharge and satisfaction of a decree. It is a complete code by itself. It specifically provides that nothing relating to these matters can be considered in a separate suit. Further it provides as to who all will come under its purview. So nothing is left for consideration by a separate suit by the parties concerned relating to such matters affecting the decree. If one so analyse S.47 C.P.C., it will be seen that the court auction purchaser acts as a representative of the decree holder. In the auction in execution of a decree, the auction purchaser bid or purchase the property in question of the judgment debtor in one sense on behalf of the decree holder and the auction money goes to the decree holder and auction purchaser gets the property. Really the decree holder and execution proceeding work as a medium, in such transfer of property. Is it not that what actually takes place in a court auction sale. Having thus become an auction purchaser necessarily he has to get delivery of the property from the judgment debtor so that his title is perfected. Application for delivery has to be made within one year from the date of the sale becoming absolute. If not so taken delivery, the remedy in execution is lost in the light of Article 134, Limitation Act.

Now let us see Article 65(C) of the Limitation Act where the suit is by a purchaser at a sale in execution of the decree when the judgment debtor is out of possession at the date of sale, as it is outstanding with a third party, the Court auction purchaser acts as the representative of the judgment debtor who prays for recovery of possession from such third party in possession and gets relief unless the defendant has not perfected his title by adverse possession and limitation as against the plaintiff. Thus a court auction purchaser has a remedy under Article 65(C) of the Limitation Act, provided the judgment debtor is out of possession in the form of a suit for recovery of possession and here he acts as the representative of the J.D.

Thus the essential difference which one notices on reading Section 47 C.P.C. with Order 21 Rule 95 C.P.C. & Article 134 Limitation Act is that judgment debtor is assumed to be in possession when the auction purchaser applies for delivery of the property in execution whereas in a case where the judgment debtor is out of possession and a third party is in possession, the auction purchaser is obliged to file a suit for recovery of possession under Article 65(C).

Hence the question referred to the Full Bench by the Division Bench as noticed therein and set forth for decision is “Whether an auction purchaser in a court sale is entitled to file a separate suit for declaration of title and recovery of possession of the auctioned property based on sale certificate issued by the Execution court, after the period of limitation of one year from the date when the sale becomes absolute, as provided under Article 134 of Limitation Act.

After an exhaustive consideration of case law on various aspects relating to such matters, the answer rendered is:

“In the light of the above the reference is answered holding that the failure of the auction purchaser to apply for delivery as provided under Order XXI Rule 95 C.P.C., his right to file a fresh suit for enforcing delivery in execution is barred. However suits which do not offend S.47 C.P.C. and suits for possession on the strength of title deed including purchase certificate that fell in the frame work of Article 65 of Limitation act would be maintainable”.

But can there be one without offending the provision of Section 47; so also there can be no case covering Article 65(C) of Limitation Act, as the same is over ridden by Order 21 Rule 101 C.P.C.

In referring the question by the Hon’ble reference Bench nor the answer given by the Hon’ble F.B., the essential distinction as to whether J.D. is in possession or out of possession was evidently not in the mind of the court is what one feels in reading the judgment The Full Bench in such circumstances gave the answer with reference to Article 134 and Article 65(C) Limitation Act.

If one analyse the provisions in C.P.C., it will be seen, as to whether the J.D. is in possession or not and a third party is in possession, the same is dealt with in detail under Order 21 Rule 95 to Rule 103 C.P.C.. So execution court alone in whatever circumstances holds the field and gives a remedy and no suit as such is contemplated under law.

In every case, what happens is that a court auction purchaser applies for delivery against the judgment debtor assuming that he is in possession and if he is in possession delivery follows with or without police aid depending upon the circumstances. But when Amin goes to the property with the delivery warrant to effect delivery from J.D., in some cases third parties offer resistance, when an application for removal of resistance by the decree holder is filed (in the present day it is seldom seen filed, probably because being not aware of such a correct procedure) or a claim petition comes from such third party. In either case the execution court conducts an enquiry and an order is passed. Such orders are treated as deemed decrees under the provisions of C.P.C. and the right to file a suit challenging such orders is taken away by the amended C.P.C. Order 21 Rule 101 C.P.C. further deals with the overriding effect over other laws contrary thereto. The result is Article 65(C) is held ineffective. Thus as regards execution, delivery etc., by a court auction purchaser, whether the J.D. is in possession or a third party is in possession, provisions in CPC alone applies and suits even provided for under Article 65(C) are barred by virtue of the provision contained in Order 21 Rule 101 C.P.C.

Thus the relevant question is as to, whether the J.D. is in possession or not and a third party is in possession, what is the law or common law right if any available to a court auction purchaser who holds a sale certificate issued by a court of law in his favour and who failed to apply in time for delivery.

Has he a fight to file a suit for necessary relief after the period provided for under the Limitation Act or not.

I feel the court has to find a solution just to render justice to this unhappy helpless litigant, who of course, slept over his rights, unintentionally or otherwise, as the codified laws of the country do not provide a remedy.

Since long, after independence, Apex Court is indulging and entering into legislative functions as well and pronounce orders, whatever be the provisions of law as contained in the various enactments in the interest of justice and by virtue of the constitutional rights conferred upon it. One sees such progressive views expressed in tune with the modern times. Under Article 141 what the Hon’ble Apex Court pronounce is the law of the land. Then why not extend the arm of justice in favour of such helpless honest litigants who have parted with money with no desired result, by holding that under the common law right, such litigants can file a suit for recovery of possession on the strength of their title under the sale certificate and get relief.

Any other enlightened view or solution will be appreciated as it will inspire me to acquire more knowledge in civil law as an eternal student-at-law.

Benny v. Mini – Taming the Law of Justice

(By R.V. Sreejith, Advocate, High Court of Kerala)

Judge made law is a reality. It is a basic principle of interpretation of law that when the words are unambiguous, there is no room left to the Judge than to adhere to the words spelt out in the legislation. It is also a fact that legislator cannot forsee all the eventuality during the legislation. If the lacuna in the legislation is filled by a binding precedent, the labour of the Judge is less. He need only follow, the ratio of the binding precedent. A labour of the Judge starts when the colour of the case does not matches with the colour of the cards in his armoury.[1]

The Division Bench of the Kerala High Court had to face such a situation, while deciding Benny v. Mini[2]. In this case parties to a marriage had entered into settlement, where they have decided to part and also to settle the disputes including the monetary one. After all the formalities, and the wife receiving the custody of children and compensation, the Court had posted the case for judgment. At this juncture, the wife withdrew the consent, considering the welfare and future of the children. The concerned Family Court allowed the applications and dismissed the Original Petitions. This created a challenging situation. The wife had received all the monetary benefits promised during the settlement. After that she had unilaterally withdrew her consent. This is the situation probably not forseen by the framers of the Divorce Act. Even though Divorce Act Section 10(a) permits a mutual consent divorce, it makes a condition that a divorce by mutual consent will be decreed only if the petition is not withdrawn by both the parties before 18 months from the date of presentation.[3]

The Division Bench was confronted with the decision in Hithesh Bhatnagar’s case[4]. The Apex Court in that case held that the mutual consent should continue till the passing of the decree, in a proceedings by a mutual consent. There was a decision of a coequal bench of the same Court in Rajesh R. Nair v. Meera Babu[5], wherein it is declared that right to withdraw consent is a qualified right and the Court cannot probe into the bona fides of withdrawal.

A Judge’s labour really starts at this point, there were decisions which could be termed as precedents. But if they are followed, the intention of the legislation will be defeated. A Judge will be in cross roads in such a situation. He can mechanically follow the precedent, and can cause violence to the legislation. The other option before the Judge is to take the law to the justice. This is an uphill task for any Judge. The Division Bench took the second way. They brought in the ratio of Prakash Alumal Kaldhari[6], which is having a persuasive authority, to drive the point that once one of the party to compromise fulfils the terms of the compromise, the other party cannot unilaterally withdraw consent in view of Order XXIII of the Code of Civil Procedure.

After making a legal basis on this judgment, the Division Bench then turned to the facts of the case and found that the colour of the card in hand matches with the colour of the card in the index.[7] It also swiftly brought in the aid of Indian Contract Act, to drive to the point. It observed that reciprocal promises fall under Section 51 of Contract Act and the parties are obliged to perform their part. Then again the ratio in Gopakumar v. Sunitha Kumar[8] was also employed to hold that parties cannot fail to perform their obligations when the terms are self working.

After settling the law, the Court took a pragmatic step. It gave an opportunity to the wife to return the benefits which she received as part of the agreement. It was after the wife negating that offer, the Division Bench held that the respondent is precluded from withdrawing her consent, by bring in the aid of promissory estoppel.

If the judicial power is to be exercised for the purpose of giving effect to the will of the legislature, or the will of the people, as observed by J. Marshal[9] the judgment in Benny’s case is a classic attempt to give the effect of the legislation and is one taming the law to justice.

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Foot Note:-

1. Benjamin Cardozo, The Nature of the Judicial Process- P.21 (1921).

2. 2021 (2) KLT 2.

3. Section 10A(2), The Divorce Act, 1869.

4. 2011 (2) KLT SN 56 (C.No.74) SC.

5. 2014 (1) KLT 217.

6. 2011 (2) KLT Online 1116 (Bom.).

7. Ibid No. 1.

8. 2020 (2) KLT OnLine 1050.

9. Osborne v. Bank of US, 22 US. (9 Wheat.) 738 (1824).

Colonial Protocol Salutions In Indian Courts

(By S.K. Premraj Menon, Advocate, High Court of Kerala)

a. The ghost of colonial legacy still haunts Indian judiciary, particularly, the Supreme Court and the High Courts, where the Judges are still addressed as ‘My Lord’ or ‘Your Lordship’. Indiscriminate usage of these colonial salutations and bowing before the Judges are all those which we borrowed from the antiquated British system which existed in India during the late 1700 and which gradually crystallized into a symbol of prestige and honor, despite the constitutional motto of right to equality. The internationally renowned jurist and Senior Advocate Fali.S.Nariman said that the reason to call Judges with elective honorifics is simply because they simply love it and that Judges are humans. An interesting anecdote is seen narrated in his autobiography, Before Memory Fades.

b. ‘My Lord’ or ‘Your Lordship’ are distinct expressions while making submissions or formally addressing Judges of superior Courts in India. When you address someone as ‘My Lord’ or ‘Your Lordship’, you are acknowledging that they are your master, that they have dominion over you and that you owe them service and obedience. A Judge who delivers a verdict in a case may have a measure of power, but certainly, he is neither your master, nor do you owe him any service, is my most humble take on this point.

c. Colloquial application of titles as in United Kingdom which we see in their manners and rules of aristocracy, materially differs from the protocol salutations which we now witness in the superior Courts in India. The English peerage - Marquess, Earl, Viscount and Baron are addressed as ‘My Lord’ or ‘Your Lordship’, except by their upper class. The Marchioness, Countess, Viscountess and Baroness are addressed as ‘My Lady’ or ‘Your Ladyship’, except by their upper class. Sons of the Duke and Marquess as well as the eldest son of Earl are also addressed as ‘My Lord’ or ‘Your Lordship’, except by their upper class. The daughters and daughters-in-law of the Duke and Marquess as well as the eldest daughters-in-law of Earl are addressed as ‘My Lady’ or ‘Your Ladyship’, except by their upper class. In England and Wales, they use the medieval sounding ‘My Lord’ and ‘My Lady’ for High Court and Court of Appeals Judges. Magistrates can be called ‘Your Worship’ or ‘Sir/Madam’ and circuit Court Judges are addressed as ‘Your Honour’. In Italy, you address a Judge as ‘signor presidente della corte’ or ‘Mr President of the Court.’ In Spain Judges are addressed as ‘su señoría,’ which translates to ‘Your Honour.’ Male Judges in Germany are addressed as ‘Herr Vorsitzender’ and female Judges are referred to as ‘Frau Vorsitzende’, which translates as ‘Mister Chairman’ or ‘Madam Chairperson’. When addressing a Judge in South Korea, it is proper to use the gender neutral ‘pansa-nim’ which means Honourable Judge. In Brazil, Judges can be called ‘juiz’ or ‘juiza’ - the male and female versions of Judge. In the United States of America, Judges are addressed as Justice/Madam Justice or Judge followed by their names. In the United States Supreme Court website, a document titled ‘Guide for Counsel in Cases To Be Argued Before The Supreme Court of The United States’ it is seen stated that under the present practice, ‘Mr.’ is only used in addressing the Chief Justice whereas others are referred to as ‘Justice’ or ‘Your Honour’. If you are in doubt about the name of a Justice whom you are addressing, it is better to use ‘Your Honour’ rather than mistakenly address the Justice by another Justice’s name. The Singapore Supreme Court website also says that the Judge/Registrar can be addressed as ‘Your Honour’. In Australia, in the High Court and the Federal Court, Judges are addressed as ‘Your Honour’. In this context, it will not be out of place to mention that the younger sons of Earls and the children of Viscounts and Barons bear the courtesy title ‘Honourable’, except when being addressed by their upper class. This title is what see affixed in front of the names of the Judges of the Supreme Court and the High Courts in India.

d. The letter No.124-CJ1/73 dt. 19th April, 1973 from the then Acting Chief Justice of India J.M.Shelat, addressed to the Chief Justices of all the High Courts vis-a-vis the mode of addressing the Courts would state that after having received replies on this issue from almost all the Chief Justices of the High Courts, a meeting of the Full Court of the Judges of the Supreme Court of India was held on 12th March, 1973, wherein it was resolved that the Judges and the Chief Justice of the Supreme Court may be addressed by the members of the Bar as ‘Mr. Justice’ and ‘Mr. Chief Justice’ respectively, and when addressing the Court the form of address would be ‘This Honourable Court’. If in the course of arguments, if it becomes difficult to address a Judge as ‘Mr. Justice’ he may be addressed as ‘Sir’. Vide this letter, it was decided, in consultation with the Supreme Court Bar Association, to introduce the new mode of address on and from 1st May, 1973. A uniform mode of address in the Supreme Court and in the High Courts was inter alia suggested to be proper. Vide his letter dt. 22nd June, 1973 from the then Acting Chief Justice of the Kerala High Court to the Advocate General and the President of the Kerala High Court Advocatess’ Association, stated that w.e.f. 1st July, 1973, the Judges of the Kerala High Court may be addressed by the members of the Bar as ‘Mr. Justice’ and the Chief Justice as ‘Mr. Chief Justice’ and that if it becomes difficult to address a Judge as ‘Mr. Justice’ in the course of the arguments, he may be addressed as ‘Sir’. The form of addressing the Court was ‘This Honourable Court’ A suggestion for introducing similar methods of address in the subordinate judiciary was also made, pursuant to which, the High Court of Kerala had issued Circular No. 9/1973 dt. 26th July, 1973 introducing the mode of address in subordinate Courts, whereby the Presiding Officer of a Court including Munsiffs and Magistrates may be addressed by the members of the Bar as ‘Mr. Judge’ and if in the course of arguments, it becomes difficult to address the officer as ‘Mr. Judge’, he may be addressed as ‘Sir’. The Court was to be addressed as ‘This Honourable Court’. In consultation with the Bar Associations of the concerned districts, all the District Judges, District Magistrates and the State Transport Appellate Tribunal were requested to introduce this new mode of address with immediate effect.

e. Debates of Court etiquettes in India has always been an interesting topic. This was triggered again a few days back, i.e., on 23rd February, 2021 when the Supreme Court Bench headed by Chief Justice of India S.A.Bobde objected to a petitioner addressing the Judges as ‘Your Honour’. Chief Justice Bobde told the petitioner – a law student, “When you call us Your Honour, you either have the Supreme Court of United States or the Magistrate in mind. We are neither”, following which, the petitioner apologized and said that he would henceforth use ‘My Lords’, to which the Chief Justice replied, “Whatever. We are not particular what you call us. But don’t use incorrect terms”. Is the mode of addressing as ‘Your Honour’ less dignified? I feel, not. One needs to remember that even the general public are made to address the Judges of the Supreme Court and the High Court as ‘My Lord’ or ‘Your Lordship’ despite the fact that neither would the Bar Council of India Rules bind them nor would the fore-referred letter of the then Acting Chief Justice of India J.M.Shelat.

f. In this context, it is pertinent to advert to the fact that the Bar Council of India Rules, which regulate legal practice, do not mandate the usage of ‘My Lord’ and ‘Your Lordship’ when it comes to addressing the Bench. There have been efforts to purge the Courtroom protocol salutations ‘My Lord’ and ‘Your Lordship’ – the practice we inherited from British rule.

The Advocates Act of 1961, under Section 49(1)(c) empowers the Bar Council of India to make rules on professional and etiquette standards to be observed by advocates. To address this issue, a Resolution by the Bar Council of India in 2006 added Chapter III-A to Part VI of the Bar Council of India Rules. The provision and its explanation read as follows :

CHAPTER III-A : To address the Court

Consistent with the obligation of the Bar to show a respectful attitude towards the Court and bearing in mind the dignity of judicial office, the form of address to be adopted whether in the Supreme Court, High Courts or subordinate Courts should be as follows : ‘Your Honour’ or ‘Honourable Court’ in Supreme Court and High Courts and in the subordinate Courts and Tribunals it is open to the lawyers to address the Court as ‘Sir’ or the equivalent word in respective regional languages.

Explanation - As the words ‘My Lord’ and ‘Your Lordship’ are relics of a colonial past, it is proposed to incorporate the above rule showing respectful attitude to the Court.

This rule categorically acknowledges and points out that the words ‘My Lord’ and ‘Your Lordship’ are relics of the colonial past and discourages the use of ‘My Lord’ and ‘Your Lordship’, prescribing ‘Your Honour’ or ‘Honourable Court’ as an acceptable way for addressing the Supreme Court and High Courts, and ‘Sir’ in the subordinate Courts and Tribunals. Reportedly, after the recent imbroglio, the Bar Council of India has issued a statement stating that there was some other resolution, which despite my research, I could not trace any further amendments to Chapter III-A.

g. One needs to recall that in 2009, Justice K.Chandru of the Madras High Court banned lawyers from addressing him as ‘My Lord’ or ‘Your Lordship’. Justice Muralidhar of the Delhi High Court followed the practice as prescribed by the Bar Council of India and urged lawyers to address his bench as ‘Sir’. The Registry was directed to show the direction as part of his cause list every day. In 2014, the then Chief Justice of India H.L.Dattu had clarified that it was not mandatory to address Judges as ‘My Lord’ or ‘Your Lordship’ and that lawyers could address them in any dignified manner, respectfully. The resolution of the Full Court of the Rajasthan High Court in 2019 is a welcome step that should serve as an example for other Courts in the country. Last year, Chief Justice Thottathil Radhakrishnan of the Calcutta High Court asked the subordinate judiciary to address him as ‘Sir’ instead of ‘My Lord’ or ‘Your Lordship’.

h. There are corridor whispers that some Judges are pompous enough to take umbrage if you do not address them as ‘My Lord’ or ‘Your Lordship’. It is high time to depart from this age-old colonial convention, realizing that lawyers are not slaves of Judges and am sure, none of the Judges would have even a tiny twinge of annoyance, if lawyers don’t address them as ‘My Lord’ or ‘Your Lordship’. If I could also add in a lighter sense, lawyers would never feel insulted or annoyed even if Judges do not address them as learned counsel. As we have seen, the COVID-19 pandemic has even introduced virtual hearings and we see the Judges wishing lawyers ‘Good Morning’ and lawyers reciprocating the wish, just prior to the roll calls, though Judges are meant to hear the submissions instead of a weather report. Let us hope that we would soon end the colonial shadow which has befallen the Indian judiciary, though I realize that it is too difficult for many lawyers to give up this colonial practice. I would only say, let history give us only the Court system and not the bizarre system of honorifics.

Operating Heart And Soul !

(By Advocate Biju Antony, Asst. Prof. Bharata Mata School of Legal Studies, Aluva, Research Scholar of JJT University, Rajasthan)

INTRODUCTION

The Father of the Indian Constitution, Dr.B.R. Ambedkar had once said, “If I was asked to name any particular article in this Constitution as the most important - an article without which this Constitution would be a nullity - I could not refer to any other article except this one. It is the very soul of the Constitution and the very heart of it”[1]. The Article 32 Part III

of the Indian Constitution permits all the Indian citizens to go to the Supreme Court of India in case of violation of Fundamental Rights. These rights are the rights of each and every citizen of a democratic state where the state cannot make a law which takes away or curtails any of the rights of the citizen guaranteed. The Article 32[2] is so important and integral part of the very basic structure of the Indian Constitution for it is meant to ensure observance of rule of law.

The learned Chief Justice of India, Hon’ble Justice Sharad Aravind Bobde recently made a remark that we are “trying to discourage”[3] individual from filing petitions under Article 32 of the Indian Constitution while considering Kerala journalist Siddique Kappan’s bail who had been arrested for moving to Harthras to report news where U P police forcefully cremated the body of Dalit woman allegedly gang raped and murdered by four men. Chief Justice had reiterated the words again in the following day too. Pratap Bhanu Mehta, eminent academician and former Vice Chancellor of Ashoka University very sarcastically said “unwittingly let the cat out of the bag” in a very scathing article ‘Their Lordships & Masters’ concerning the comment of CJI on Article 32.[4] The very words of CJI is some or other way demoting the Article 32 which is the watch dog of the fundamental right of each and every citizen of India. Article 32 being the very soul which shields the fundamental rights of citizen if tampered by such dispiriting expressions involves episodic suspension of it and which eventually lead to a document of barbarism in democracy through judicial barbarism. The application of the law if depended on the whims of each Judge by judicial barbarism, the spirit of the Constitution will be alienated. It is also good to peep into the words of former Chief Justice of the Supreme Court of India Ranjan Gogoi, Judiciary is “ramshackled” …if you go to the court, you would be washing dirty linen in the court. You will not get a verdict”[5]

ARTICLE 32 MAKES THE CONSTITUTION PEOPLE’S CONSTITUTION

The Constitution of India becomes ‘people’s constitution’ by the very existence of the Article 32. It is also known as the people’s Constitution because it is the ‘Protecting Article’ of the very fundamental rights of each and every citizen of India. Fundamental rights are the very basic human rights preserved in the Constitution of India which are guaranteed to all citizens. Article 12 to 35 of the Indian Constitution deals with the fundamental Rights enshrined in the Indian Constitution. They are Right to Equality, Right to Freedom, Right against Exploitation, Right to Freedom of Religion, Cultural and Educational Rights and Right to Constitutional Remedies. These rights are considered to be most sacred rights bestowed upon the citizens of India.

The declaration of the fundamental right is meaningless without appropriate and effective machinery for the enforcement of the rights. The fundamental rights are safeguarded with Article 32 which is the appropriate remedy enshrined in the constitution. The Constitution drafting committee members had a towering dream while incorporating a long list of fundamental rights and so endowed with an effective remedy for the enforcement of these rights under Article 32 of the Constitution[6] which is also kept as a fundamental right of the citizen of India.

ARTICLE MAKES SUPREME COURT PEOPLE’S COURT

The very existence of the fundamental right to Constitutional Remedies in the Constitution of India makes it a ‘people’s Constitution’ and elevates Supreme Court of India as ‘people’s Court’. It is because the way the fundamental rights are treated and enforced is varied from ordinary legal rights by the Article 32. If a legal right of a person is violated, the aggrieved person cannot directly move to the Supreme Court bypassing the lower courts. Article 32(1) guarantees the right to move to the Supreme Court by “appropriate proceedings” for the enforcement of the fundamental rights enshrined in Part III of the Constitution. The aggrieved citizen of India obtains an appropriate direction from the Supreme Court of India under Article 32 clause (2) with appropriate writs in the nature of habeas corpus, mandamus, prohibition, quo-warranto and certiorari for the enforcement of any of the rights discussed in Part III of the Constitution[7]. This sanctifies the Constitution as ‘people’s constitution and elevates the Apex Court to ‘people’s Court’. Every act to curb Article 32 takes away the spirit of the Indian Constitution which is for all Indians without any sort of distinction of creed, cast or religion.

ARTICLE PROTECTING FUNDAMENTAL RIGHTS

Article 32 is the ‘Protecting Article’ for there is no limitation in regard to the kind of proceeding visualized in Article 32. So each and every citizen can directly move to the Supreme Court to protect their fundamental rights. It does not mean that the Article may litter the precious time of the Apex Court for it says, “appropriate proceedings”. The word “appropriate proceedings” means each and every case is to undergo and would be evaluated of in the light of the purpose for which the proceeding is to be taken, namely the infringement of the fundamental rights. In Bandhu Mukti Morcha v. Union of India[8] case the court observed that “here limitation in regard to the kind of proceedings envisaged in clause (1) of Article 32 except that the proceedings must be ‘appropriate’ and this requirement of appropriateness must be judged in the light of the purpose for which the proceeding is to be taken, namely, enforcement of a fundamental right[9]. It means that if the purpose of the writ under Article 32 is to protect the fundamental rights, the proceedings of the Writ are “appropriate”. The court need not also follow the adversary system that is used in the Common Law countries in the case of Article 32. The draft makers of the Constitution knew that any unbending pattern or strait-jacket modus operandi would not work in India where there is much of poverty, ignorance, illiteracy, derivation and exploitation[10]. So it is the most solemn and sacred duty of the Supreme Court of India to be the protector and guarantor of fundamental rights and it is also by the Article 32 bestows the court with the responsibility to entertain proceedings seeking protection against any violation of such rights[11]. Once a citizen has exposed of infringement of his fundamental right the court cannot turn down to entertain petitions seeking enforcement of fundamental rights enshrined.[12]

AN ARTICLE FOR POOR AND MARGINALIZED

Article 32 is an article of the poor and marginalized. The court is not bound to follow the adversary procedure visualized in the CPC and Evidence Act. Such a shift of the court is to avail most suitable enforcement of any violation of fundamental rights in our social reality where a vast majority of people are unable to fight for their rights due to poverty, ignorance, illiteracy etc. It is for that cause that the court has started “the practice of appointing commissions for the purpose of gathering facts and data in regard to a complaint of breach of a fundamental right made on behalf of the weaker sections of the society”.[13] It is to be noted that the wide power of the court to devise its own procedure under Article 32 cannot be constrained or abridged by any statute or even by the Supreme Court Rulings.[14] The Supreme Court can act to protect any infringement even at a letter or telegram of a citizen and in Mohanlal Sharma v. State of U.P.[15] the telegram send alleging that the petitioners son was murdered by the police in the police lock-up was treated as a Writ Petition and the Court directed the CBI to conduct a detailed and thorough investigation. The extended and sacred hands of the poor for enforcement of their fundamental rights would be chopped off if any sort of “trying to discourage” takes place from the part of the Supreme Court.

The Supreme Court of India has grown to the reach of the poor by the very survival of the Article 32. It is an Article which upholds, defends and protects its citizen from any kind of infringement of fundamental rights due to any doubt of unfair investigation owing to various kinds of influences. The Court under Article 32 and High Courts under Article 226 can direct the Central Bureau of Investigation (CBI) to conduct an investigation which the Court finds “appropriate” even without the consent of the State concerned though the CBI Act requires that the Center cannot order investigation in a State matter without the consent of the concerned State.[16] To clarify it the Apex Court has said, “no Act of Parliament can exclude or curtail power of the constitutional courts with regard to the enforcement of fundamental rights”.[17] The Supreme Court of India can intervene and act against any sort of infringement of fundamental rights at anytime and anywhere in India.

The verdict of Bhagwati, J., in Bandhu Mukti Morcha[18] which is a landmark judgment which has opened the doors of the highest court of India to the poor and oppressed says, “Art.32 does not merely confer power on the Court to issue a direction, order or writ for the enforcement of the fundamental rights but it also lays a constitutional obligation on this Court to protect the fundamental rights of the people and for that purpose this Court has all incidental and ancillary powers including to forge new remedies and fashion new strategies designed to enforce fundamental rights. It is in realisation of this constitutional obligation that this Court has innovated new methods and strategies particularly for enforcing the fundamental rights of the poor and disadvantaged who are denied their human rights and to whom freedom and liberty have no meaning”. The milestone judgment has unbolted the doors of Supreme Court to the poor by permitting its citizens to seek enforcement of fundamental rights from the Supreme Court by writing a letter to any Judge of the Court even without the support of an affidavit.

ARTILCE 32: VIGILENT REQUISITE

For the administration of justice the Article 32 of the Indian Constitution is with those who are vigilant over their fundamental rights and not with those who sleep on their rights. The court will not entertain its jurisdiction in favour of the party who approach the court after a substantial delay and is guilty of laches. The remedy should be sought in a reasonable time though there is no prescribed time of 90 days as it is in Limitation Act and still the court is not with the indolent but the vigilant. If the party present due and convincing explanation for the delay the court would consider the plea of infringement of fundamental rights i.e. a writ would not be dismissed for the sole reason of delay.[19] In Trilokchand Motichand v. H.B. Munshi[20] case Justice Hedge took the view that there should not be any prearranged period of limitation of entertaining petitions under Art.32 and so if acceptable explanation of delay is prayed the Court should not refuse to entertain a petition merely on the ground of delay and the provisions of the Limitation Act.

MOST FLEXIBLE ARTICLE TO SAFE GUARD FUNDAMENTAL RIGHTS

The Article 32 is said to be most elastic article to uphold the fundamental rights preserved in the Constitution of India. It is said to be flexible because the wording of Article 32 is so expandable that it allows all necessary adaptation without legislative sanction from time to time so as to make possible effective enforcement of the fundamental rights. Even if the aggrieved fail to put up a proper writ and has not prayed for the appropriate remedy in proper way still if there is an infringement of fundamental rights the application cannot be thrown out for the Article 32 permits large prudence to the Supreme Court to grant appropriate relief by molding the exigencies of a particular case demand.[21]

CONCLUSION

The words “trying to discourage” Article 32 is very much embarrassing for the Article constitutes the basic structure of the Constitution which cannot be changed even by an amendment under Article 368. The right bestowed in Article 32 cannot be abrogated, abridged or taken away even by an Act of the legislature. Thus anything retarding the serenity to violate fundamental rights would be unconstitutional. It is the very reason why the Apex Court in Prem Chand Garg case even stepped down to rectify its own decision in which court had asked the petitioner to deposit an amount as a condition precedent to the hearing of a petition. Moreover it is the responsibility of the Apex Court to create new remedies and fashion new strategies well designed to enforce fundamental rights according to the time and tide of the nation. “Justice delayed is Justice denied” is a legal maxim. As per the statics that came out in February 1st 2020 there are 3.65 crore total pending cases in India. It is very high time to unbolt the operation of constitutional remedies under Articles 32 and 226 even to the District and Session courts of the country to promote fair justice to its citizens. The protection of the Constitution and its procedure should not be a hand-maiden of justice in its way of access to fairness of justice.

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Foot Note:-

1. Constitution Assembly Debates Vol. VII at 953

2. Article 32:

(1) The right to move the Supreme Court by appropriate proceedings for the enforcement of the rights conferred by this Part is guaranteed.

(2) The Supreme Court shall have power to issue directions or orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, whichever may be appropriate, for the enforcement of any of the rights conferred by this Part.

(3) Without prejudice to the powers conferred on the Supreme Court by clauses (1) and (2), Parliament may by law empower any other court to exercise within the local limits of its jurisdiction all or any of the powers exercisable by the Supreme Court under clause (2).

(4) The right guaranteed by this article shall not be suspended except as otherwise provided for by this Constitution.

3. https://www.livelaw.in/top-stories/supreme-court-issues-notice-to-up-govton-plea-for-release-of-iournalist-siddique-kappan-165915 on 16th November 2020

4. PB Mehta in Article : SC was never perfect, but the signs are that it is slipping into judicial barbarism; In Indian Express, Saturday December 19, 2020

5. The New Indian Express, Kochi, on 14th February 2021

6. Dr.J.N. Pandey, ‘Constitutional Law of India’, Central Law Agency – Allahabad (2019) , 56th Edition. P 446.

7. Ibid.

8. Bandhu Mukti Morcha v. Union of India, 1984 KLT OnLine 1212 (SC) = (1984) 3 SCC 161 : AIR 1984 SC 802

9. Bandhu Mukti Morcha v. Union of India, 1984 KLT OnLine 1212 (SC) = (1984) 3 SCC 161 : AIR 1984 SC 802, 813-814.

10. S.P.Gupta & Ors. v. President of India & Ors., 1982 KLT OnLine 1002 (SC) = AIR 1982 SC149

11. Romesh Thappar v. State of Madras, 1950 KLT OnLine 805 (SC) = AIR 1950 SC 124, 126 : 1950 SCR 594, 597

12. Ibid.

13. Bandhu Mukti Morcha v. Union of India, 1984 KLT OnLine 1212 (SC) = (1984) 3 SCC 161, (AIR) 816, Para 14

14. Bandhu Mukti Morcha v. Union of India, 1984 KLT OnLine 1212 (SC) = (1984) 3 SCC 161, 190-91

15. Mohanlal Sharma v. State of U.P. (1988 (2) KLT OnLine 1131 (SC) = (1989) 2 SCC 600.

16. State of W.B. v. Committee for Protection of Democratic Rights, 2010 (1) KLT 723 (SC) = (2010) 3 SCC 571: AIR 2010 SC 1476

17. Ibid, (SCC) 600

18. 1984 KLT OnLine 1212 (SC) = AIR 1984 SC 802

19. State of U.P. v Bahadur Singh, 1983 KLT OnLine 1254 (SC) = (1983) 3 SCC 73.

20. 1969 KLT OnLine 1067 (SC) = AIR 1970 SC 898; R.S. Deodhar v. State of Maharashtra, 1973 KLT OnLine 1155 (SC) = AIR 1974 SC 259; Har Swarup v. G.M., Central Rly., 1974 KLT OnLine 963 (SC) = AIR 1975 SC 902.

21. Chiranjit Lal Chaudhari v Union of India, 1951 KLT OnLine 808 (SC) = AIR 1951 SC 41.

Deduction under Section 80P of the I.T. Act to PACS --
Supreme Court Settles the Issue

(By R.Muralidharan, Puducherry Civil Service Officer (Retd.),
Director, Catalyst (The Training People))

At the end of the tunnel, there is always light. Curtains are down to the long journey of battle between the co-operative societies and authorities under the Income Tax Department. Various High Courts are interpreting the provisions of exemption applicable to co-operative societies, especially Section 80P of the Income Tax Act, 1961 based on the judgments of the Apex Court. Reading and analysing these judgments often tend to think that time and again the Courts miss woods for trees and leaving the soul for skin. Putting an end to such differing and divergent views, the Supreme Court found the true intent of Section 80P and held in unequivocal terms that it is a benevolent provision enacted by Parliament to encourage and promote the credit of the co-operative sector in general and hence it must be read liberally and reasonably, and if there is ambiguity, it is in favour of the assessee. The Court has held that co-operative societies registered as primary agricultural credit societies are entitled to deductions under Section 80P(2)(a)(i) of the Income Tax Act, even when they may also be giving loans to their members which are not related to agriculture. It observed that the giving of loans by a primary agricultural credit society to non-members is not illegal and held that the only effect of it is that profits attributable to such loans cannot be deducted under Section 80P. The judgment of the Apex Court in the Mavilayi Service Co-operative Bank Ltd., & Ors. v. Commissioner of Income Tax (Civil Appeal Nos.7343-7350 of 2019 with Civil Appeal No.8315 of 2019 dated 12.1.2021 (2021 (1) KLT 485 (SC) = 2021 (1) KLT OnLine 1001 (SC) is illuminating and path-breaking in more than one respect as it interprets Section 80P beyond any pale of doubt and justice is done to co-operativesector. A proper reading of the judgment leaves little scope for interpretation that defeats the purpose, intent and object of the benevolent provision.

These appeals have been filed by Co-operative Societies who have been registered as ‘primary agricultural credit societies’, together with one ‘multi-State co-operative society’, and raise important questions as to deductions that can be claimed under Section 80P(2)(a) (i) of the Income Tax Act, 1961 (‘IT Act’); and in particular, whether these assessees are entitled to such deductions after the introduction of Section 80P(4) of the IT Act by Section 19 of the Finance Act, 2006 with effect from 1.4.2007. It may be stated at the outset that all these assessees, who are stated to be providing credit facilities to their members for agricultural and allied purposes, have been classified as primary agricultural credit societies by the Registrar of Co-operative Societies under the Kerala Co-operative Societies Act, 1969 (‘Kerala Act’), and were claiming a deduction under Section 80P(2)(a)(i) of the IT Act, which had been granted to them up to Assessment Year 2007-08.

Divergent Decisions by the Division Benches

The assessing officer denied their claims for deduction, relying upon Section 80P(4) of the IT Act, holding that as per the audited Receipt and Disbursal statement furnished by the assessees in these cases, agricultural credits that were given by the assessee-societies to its members were found to be negligible – the credits given to such members being for purposes other than agricultural credit. The decisions of the assessing officers were challenged before the Kerala High Court. Before the High Court, the assessees relied upon a decision of a Division Bench of the Kerala High Court in Chirakkal Service Co-operative Bank Ltd. v. C.I.T. (2016 (2) KLT 535). The Division Bench held that once a Co-operative Society is classified by the Registrar of Co-operative Societies under the Kerala Act as being a primary agricultural credit society, the authorities under the IT Act cannot probe into whether agricultural credits were in fact being given by such societies to its members, thereby going behind the certificate so granted. Since all the assessees were registered as primary agricultural credit societies, they would be entitled to the deductions under Section 80P(2)(a)(i) read with Section 80P(4) of the IT Act.

However, the Department contended that the judgment in Chirakkal(supra) was rendered per incuriam by not having noticed the earlier decision of another Division Bench of the Kerala High Court in Perinthalmanna Service Co-operative Bank Ltd. v. I.T.O. & Anr.(2014 (1) KLT Online 1117) where, in an appeal challenging orders under Section 263 of the I.T. Act, it was held that the revisional authority was justified in saying that an inquiry has to be conducted into the factual situation as to whether a Co-operative Bank is in fact conducting business as a Co-operative Bank and not as a primary agricultural credit society, and depending upon whether this was so for the relevant assessment year, the assessing officer would then allow or disallow deductions claimed under Section 80P of the I.T. Act, notwithstanding that mere nomenclature or registration certificates issued under the Kerala Act would show that the assessees are primary agricultural credit societies. These divergent decisions led to a Full Bench of the Kerala High Court in The Mavilayi Service Co-operative Bank v. Commissioner of Income Tax, reported in 2019 (2) KLT 597.

Finding of the Full Bench

The Full Bench of the Kerala High Court, by the impugned judgment  referred to Section 80P of the I.T.Act, various provisions of the Banking Regulation Act and the Kerala Act and held that the main object of a primary agricultural credit society which exists at the time of its registration, must continue at all times including for the assessment year in question. Notwithstanding the fact that the primary agricultural credit society is registered as such under the Kerala Act, yet, the assessing officer must be satisfied that in the particular assessment year its main object is, in fact, being carried out. If it is found that as a matter of fact agricultural credits amount to a negligible amount, then it would be open for the assessing officer, applying the provisions of Section 80P(4) of the I.T. Act, to state that as the co-operative society in question – though registered as a primary agricultural credit society – is not, in fact, functioning as such, the deduction claimed under Section 80P(2)(a)(i) of the IT Act must be refused. This conclusion was reached after referring to several judgments, but relying heavily upon the judgment in Citizen Co-operative Society Ltd. v. Asst. C.I.T., Hyderabad  (2017 (4) KLT Online 2013).

The essence of the judgment of the Full Bench is that in Chirakkal Service Co-operative Bank (supra)the Division Bench expressed a divergent opinion without noticing the law laid down in Antony Pattukulangara v. E.N.Appukuttan Nair & Ors. (2012 (3) KLT SN 123 (C.No.129)and Perinthalmanna Service Co-operative Bank (supra). Hence the said judgment in Chirakkal Service Co-operative Bank is not good law, in view of the law down by the Apex Court in The Citizen Co-operative Society (supra). The judgment of the Division Bench in Perinthalmanna Service Co-operative Bank has to be affirmed. Since each assessment year is a separate unit, the intention of the legislature is in no manner defeated by not allowing deduction under Section 80P of the I.T. Act, by reason of sub-section (4) thereof, if the assessee society ceased to be in the specified class of societies for which the deduction is provided, even if it was eligible in the initial years. Inveighing and impugning the judgment of the Full Bench, the appellants have approached the Supreme Court in these appeals.

Assertion by the Appellant

The gravamen of the grievance of the appellant, based upon the language of Section 80P(1) and (2), is that Section 80P is a beneficial provision which is meant to further the co-operative movement in India. For this purpose, certain income of a co-operative society, once it is registered under a State Act, becomes deductible from its gross total income. The moment a co-operative society that is registered as such is engaged in providing credit facilities to its members, the inquiry of assessing officer stops there. The Full Bench was wholly incorrect in adding credit facilities related to agriculture, as no such thing is contained in Section 80P(2)(a)(i), as contrasted with Sections 80P(2)(a)(iii) to (v) of the I.T. Act. A distinction must be drawn, therefore, between eligibilityfor deduction, and whether the whole of the amounts of profits and gains of business attributable to any one or more such activities under the sub-section is to be given. Placing reliance upon the speech of the Finance Minister dated 28.2.2006 moving the amendment to Section 80P by introducing sub-section (4) thereof, that the object of the amendment was to remove co-operative banks from Section 80P(1) and (2) as such banks, like any other commercial bank, are lending amounts to members of the general public and that, therefore, merely by being co-operative banks, should not be entitled to avail of the deductions given under Section 80P. Since none of the assessees are co-operative banks licenced by the Reserve Bank of India to carry on banking business, Section 80P(4) has no application. Any inquiry into whether the assessee is a primary agricultural credit society so as to be outside Section 80P(4) should not, in any manner, cut down the beneficial provision contained in Section 80P(1) and (2), as Section 80P(4) is in the nature of a proviso which cannot cut down the main enacting part. In any case, once a registration certificate stating that the assessee is a primary agricultural credit society is given by the Registrar under the Kerala Act, then short of such certificate being cancelled under the Kerala Act and rules thereunder, the assessing officer, who is an authority for purposes of collection of revenue, cannot possibly go into whether, in substance, the society continues to be a primary agricultural credit society.

The next limb of contention was that the Full Bench of the Kerala High Court completely misread this Court’s judgment in Citizen Co-operative Society Ltd.(supra). If the judgment is seen closely, all the assessees’ contentions in law were answered in their favour. However, on facts, it was held that since the Co-operative Society in that case carried on business illegally i.e., by giving loans to nominal members who had no place under the statute under which it was registered, and was also giving loans to the members of the general public, it could not be said to be a Co-operative Society at all, as a result of which the findings of fact of all the authorities below were not interfered with by the Supreme Court. There was no argument, neither was there any finding by the Court in that case that the assessing officer is entitled to go behind a certificate given under a particular statute. Indeed, he pointed out that both under the Banking Regulation Act, 1949 and the Kerala Act, if any dispute arose as to classification of a society as being a primary agricultural credit society versus being a co-operative bank, it is the RBI alone who is to decide such dispute under the Banking Regulation Act, 1949, and the Registrar of Co-operative Societies, who is to decide on classification under Rule 15 of the Kerala Co-operative Societies Rules, 1969. Thus, the judgment in Citizen Co-operative Society Ltd.is directly in their favour on the applicability of Section 80P(4), which has been completely missed by the Full Bench.

Refute by the Respondent

In oppugnation, the respondent would contend that The Full Bench was wholly correct in stating that a mere certificate of registration as a primary agricultural credit society would not avail. For the assessment year in question, the assessing officer has to be satisfied that the assessee is ‘engaged in’ activities as a primary agricultural credit society i.e. in giving loans for agricultural and allied purposes to its members. The fact is that loans given for agricultural purposes by the aforesaid societies were negligible, the main business being that of banking, as such loans were given for purposes other than agricultural credit. The whole object of Section 80P would be defeated if the Division Bench in Chirakkal (supra) was held to be correct in law, as then, despite being engaged in activities other than agricultural credit, a society undeserving of any deduction would still get such deduction contrary to what was sought to be achieved by Section 80P(4) of the I.T. Act. The Supreme Court judgment in Citizen Co-operative Society Ltd.was correctly read by the Full Bench, as permitting an assessing officer to get to the real facts of a case in order to conclude as to whether activities of a primary agricultural credit society were, in fact, being carried out in the assessment year in question.

Analysis, Approach and Adjudication

The Supreme Court has made extensive reference to the relevant provisions of the I.T. Act, Banking Regulation Act, Kerala Co-operative Societies Act and the bye-laws of the appellant societies. It is important to note that though the main object of the primary agricultural society in question is to provide financial assistance in the form of loans to its members for agricultural and related purposes, yet, some of the objects go well beyond, and include performing of banking operations as per rules prevailing from time to time, opening of medical stores, running of showrooms and providing loans to members for purposes other than agriculture.

The Court observed that Section 80P is a benevolent provision enacted by Parliament to encourage and promote the credit of the Co-operative sector in general and hence it must be read liberally and reasonably, and if there is ambiguity, in favour of the assessee. The judgment in Citizen Co-operative Society Ltd.,does not hold that the assessing officer can go behind the registration of a society and arrive at a conclusion that the society in question is carrying on illegal activities. It is settled law that it is only the ratio decidendi of a judgment that is binding as a precedent.

Interpreting Section 80P, the Court noted as follows:

(i) The marginal note to Section 80P which reads ‘Deduction in respect of income of co-operative societies’ is important, in that it indicates the general ‘drift’ of the provision.

(ii) For purposes of eligibility for deduction, the assessee must be a ‘Co-operative Society’. This, therefore, refers only to the factum of a co-operative society being registered under the 1912 Act or under the State law. For purposes of eligibility, it is unnecessary to probe any further as to whether the co-operative society is classified as X or Y.

(iii) The gross total income must include income that is referred to in sub-section (2).

(iv) Sub-clause (2)(a)(i) speaks of a Co-operative Society being ‘engaged in’ carrying on the business of banking or providing credit facilities to its members. What is important qua sub-clause (2)(a)(i) is the fact that the Co-operative Society must be ‘engaged in’ the providing credit facilities to its members. The statutory provision involved does not require the appellants to be primary agricultural credit societies to claim a deduction under Section 80P(2)(a)(i) in the first place.

(v) The burden is on the assessee to show, by adducing facts, that it is entitled to claim the deduction under Section 80P. Therefore, the assessing officer under the I.T. Act cannot be said to be going behind any registration certificate when he engages in a fact-finding enquiry as to whether the co-operative society concerned is in fact providing credit facilities to its members. Once this task is fulfilled by the assessee, by placing reliance on such facts as would show that it is engaged in providing credit facilities to its members, the assessing officer must then scrutinize the same, and arrive at a conclusion as to whether this is, in fact, so.

(vi) What is important to note is that the expression ‘providing credit facilities to its members’ does not necessarily mean agricultural credit alone. Section 80P being a beneficial provision must be construed with the object of furthering the co-operative movement generally, and Section 80P(2)(a)(i) must be contrasted with Section 80P(2)(a)(iii) to (v), which expressly speaks of agriculture. Once it is clear that the co-operative society in question is providing credit facilities to its members, the fact that it is providing credit facilities to non-members do not disentitle the society in question from availing of the deduction. The distinction between eligibility for deduction and attributability of amount of profits and gains to an activity is a real one. Since profits and gains from credit facilities given to non-members cannot be said to be attributable to the activity of providing credit facilities to its members, such amount cannot be deducted.

(vii) Section 80P(1)(c) also makes it clear that Section 80P is concerned with the co-operative movement generally and, therefore, the moment a Co-operative Society is registered under the 1912 Act, or a State Act, and is engaged in activities which may be termed as residuary activities i.e., activities not covered by sub-clauses (a) and (b), either independently of or in addition to those activities, then profits and gains attributable to such activity are also liable to be deducted, but subject to the cap specified in sub-clause (c). This puts an end to any argument that in order to avail of a benefit under Section 80P, a Co-operative Society once classified as a particular type of society, must continue to fulfil those objects alone. If such objects are only partially carried out, and the society conducts any other legitimate type of activity, such Co-operative Society would only be entitled to a maximum deduction of ` 50,000 under sub-clause (c).

(viii) Sub-clause (d) also points in the same direction, in that interest or dividend income derived by a co-operative society from investments with other Co-operative Societies, are also entitled to deduct the whole of such income, the object of the provision being furtherance of the co-operative movement as a whole.

The limited object of Section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks i.e., which lend money to members of the public. The ratio decidendi of Citizen Co-operative Society Ltd.,must be given effect to. Section 80P of the I.T. Act, being a benevolent provision enacted by Parliament to encourage and promote the credit of the Co-operative sector in general must be read liberally and reasonably, and if there is ambiguity, in favour of the assessee. A deduction that is given without any reference to any restriction or limitation cannot be restricted or limited by implication, by adding the word ‘agriculture’ into Section 80P(2)(a)(i) when it is not there. Further, Section 80P(4) is to be read as a proviso, which proviso now specifically excludes co-operative banks which are Co-operative Societies engaged in banking business i.e., engaged in lending money to members of the public, which have a licence in this behalf from the RBI. Judged by this touchstone, it is clear that the impugned Full Bench judgment is wholly incorrect in its reading of Citizen Co-operative Society Ltd.Clearly, therefore, once Section 80P(4) is out of harm’s way, all the assessees in the present case are entitled to the benefit of the deduction contained in Section 80P(2)(a)(i), notwithstanding that they may also be giving loans to their members which are not related to agriculture. Also, in case it is found that there are instances of loans being given to non-members; profits attributable to such loans obviously cannot be deducted.

It must also be mentioned here that unlike the Andhra Act that Citizen Co-operative Society Ltd.,considered, ‘nominal members’ are ‘members’ as defined under the Kerala Act. Considering the definition of ‘member’ under the Kerala Act, loans given to such nominal members would qualify for the purpose of deduction under Section 80P(2)(a)(i).

Further, unlike the facts in Citizen Co-operative Society Ltd., the Kerala Act expressly permits loans to non-members under Section 59(2) and (3). Thus, the giving of loans by a primary agricultural credit society to non-members is not illegal. Resultantly, the impugned Full Bench judgment is set aside.

It is as clear as crystal that the Apex Court has applied the statutory fabric on the specific facts of the issue keeping in mind the purpose for which the exemption is given for promotion of co-operative movement. In view of the emphatic enunciation and the legal proposition as above, one can be of the unhesitant opinion that this judgment will end all the ongoing litigation in various forum and give a much needed relief to the co-operative societies and also a quietus to the matter once for all.