In CWP-1867-2023-PUNJ HC- P&H HC stays sale/transaction pertaining to assets of Rawalpindi Self Supporting Cooperative Cinema Society in light of allegations pertaining to fraudulent activities and abuse of position by individuals managing Society Justice Jaishree Thakur [31-01-2023]

Read Order: MANINDER DEEP SINGH MAHANT AND ANOTHER VS STATE OF PUNJAB AND OTHERS 

Mansimran Kaur

Chandigarh, March 6, 2023: While dealing with a petition instituted by the petitioners on account of mismanagement of the Rawalpindi Self- supporting Cooperative Cinema Society Ltd., Ludhiana, the Punjab and Haryana High Court has passed an order of interim stay on any further sale or transaction of the assets of the Society. 

A Single-Judge Bench of Justice Jaishree Thakur disposed of the instant petition by granting an interim stay in the present petition by restraining any further sale/ transfer in relation to the assets of the third respondent. 

The Petitioner was the legal heir of  Late Mahant Joginder Singh who was a member of Rawalpindi Self Supporting Cooperative Cinema Society Ltd. Late Mahant Joginder Singh executed Will dated November 8, 2011  by virtue of which the first petitioner  was  entitled to 1/5th  of  the share of Late Mahant Joginder Singh. 

Petitioners were basically aggrieved by the inaction of Respondents(State Govt & Registrar of Co-operative Societies in Ludhiana) in looking into the capricious and unscrupulous activities of individuals who were running the third respondent-Society and constituted an Executive Committee of the third Respondent. The Executive Committee illegally converted the asset property to gain for themselves and caused wrongful loss to the members of the third respondent. 

Subsequently, proceedings were initiated before the second respondent against the third respondent, however , the same were dismissed on the ground that the third respondent had re - registered itself under the Punjab Self- Supporting Co-operatives Society Act,  2006. 

Thereafter, through order dated July 16, 2021,in civil suit, application for production of documents moved on behalf of the first petitioner was allowed. However, due to non- compliance with the said order, bailable warrants were issued against the President of the third respondent. 

In pursuance of the same, revision petition was filed by the third respondent along with Smt Shabnam Chadha and Mr Rajinder Kaura. The said revision was disposed of.

Thereafter, on March 23, 2022, petitioner filed a criminal complaint against M/S Periwal Enterprises Pvt. Ltd. The third respondent was compelled to produce the documents before the Court of Civil Judge. 

In the backdrop of these events, the petitioner was compelled to institute a petition under Article 226 and 227 of the Indian Constitution. 

It was the case of the petitioner that Smt Shabnam Chadha & her husband Shri Harpreet Singh Chadha, who were members of executive committee of the third Respondent, never disclosed to members of the third respondent about their relationship with M/s Periwal Enterprises Pvt Ltd and thus violated the fiduciary trust placed in them in contravention of Section 43 of the Punjab Self Supporting Cooperative Societies Act, 2006.  

It was further contended that the Sale Deed dated June 12, 2020 was executed by the third Respondent-a Self Supporting Society to a private juristic entity Ms Periwal Enterprises Pvt Ltd, which is in violation of section 10 of Punjab Self Supporting Cooperative Societies Act,2006. It was further submitted that there was a discrepancy of Rs 12 crores which were not reflected in any account of the Society, which itself would raise an issue of mismanagement. 

It was argued that the property belonging to the respondent Society, which is a Self-Supporting Cooperative Society, is being sold to a Company which is not permissible. 

After considering the submissions, the Court passed an order of interim stay on any further sale/transaction pertaining to the assets of the third respondent. Also time was granted to the respondents(State Govt & Registrar) to file their reply.