Reserve Bank of India Employees Cooperative Credit Society Limited v. State of Uttar Pradesh
1968-12-12
M.H.BEG
body1968
DigiLaw.ai
JUDGMENT M.H. Beg, J. - This writ petition is directed against an order said to have been passed by the State Government of Uttar Pradesh on 2-11-1964 on an appeal under Section 11-A (3) of the Cooperative Societies Act No. 11 of 1912 (hereinafter referred to as the Act) . Section 11-A is the result of an amendment of the Central Act for Uttar Pradesh. It reads as follows :- "Sec. 11-A: Powers of Registrar Cooperative Societies to compel Societies to change bye-laws- (1) Where the Registrar is of the Opinion whether on the representation of the society or any of its members or otherwise, that an amendment of the bye-laws of the society is necessary or desirable in the interest of the society or in public interest, he may, by order in writing to be issued to, the society by registered post, require the society to make the amendment within such time as he may specify in such order. (2) On the failure of the society to make any such amendment within such time specified, the Registrar may, after giving the society an opportunity of being heard, register such amendment and issue to the society by registered post a copy of the amendment so certified by him, which shall be conclusive evidence that the amendment has been duly made and registered. A bye-law so amended by the Registrar shall be bye-law of the society. (3) An appeal shall lie to the State Government from any order of the Registrar passed under sub-sec. (2) within two months from the date of the issue of such order. The Order of the State Government on appeal and subject to the result of an appeal, if any, the decision of the Registrar shall be final." 2. The petitioning society has its bye-laws giving the objects, such an encouragement of thrift, self-help, cooperation, grant of loans to members of the society on reasonable rate of interest, assistance to its members in obtaining the necessities of life at reasonable rates, and carrying on of the cooperative business approved by the General Meeting of the society and sanctioned by the Registrar. The area of operation of the society is given as the Reserve Bank of India, Kanpur. 3. Bye-law No. 5 of the society reads as follows :- "5. Scope : It shall be open.
The area of operation of the society is given as the Reserve Bank of India, Kanpur. 3. Bye-law No. 5 of the society reads as follows :- "5. Scope : It shall be open. to all the employees of the Reserve Bank of India, Kanpur, holding permanent appointments and members of the Reserve Bank of India, Employees' Association or Reserve Bank 'D' Class Employees' Union, subject to their being approved as members in the manner hereinafter described. The Officers in Class 1 and the staff Assistants would be exempted from membership of either of the above named Association or Union." 4. The allegation of the petitioning society is that the employees of the Reserve Bank of India had formed a trade union under the name and style of "Reserve Bank of India 'D' Class Union". In the year 1962, a rival trade Union was said to have been formed from amongst`D' Class employees and was known as the "Reserve Bank Karamchari Sangh". It is alleged that one Shri R. M. NIathur, the Manager of the Kanpur Branch of the Reserve Bank of India, in order to weaken the already existing Union, secured an amendment of bye-law No. 5 by writing to the Deputy Registrar, Cooperative Societies, U. P., who passed an order 24-10-1963 amending the bye-law which, in its amended form, reads as follows :- "It shall be open to all the employees of Reserve Bank of India, Kanpur, holding permanent appointments and members of the Reserve Bank of India Employees Association of Reserve Bank of India 'D' class employees Union, subject to their being approved as members in the manner hereinafter described." 5. The order of the Deputy Registrar (Annexure H) amending the bye-law shows that the Society was given ample opportunity to reply to the case for an amendment and was duly required, by an order dated 18-7-1963, to make the amendment itself within a month from the receipt of the order failing which the amendment was to be made by the Registrar. There was ample correspondence showing that the Society represented its case very fully against throwing open its membership to the members of the new Trade Union formed in 1962.
There was ample correspondence showing that the Society represented its case very fully against throwing open its membership to the members of the new Trade Union formed in 1962. The Society's objections were rejected by the Deputy Registrar on the ground that it is necessary and desirable in the interest of the Society itself that its membership should be open to all the employees of the Reserve Bank of India at Kanpur as no invidious distinctions could be made between different employees of the Bank simply because some of them belonged to one Union and some to another Union. So far as the objects of cooperation and of the Cooperative Society were concerned membership of a particular union was held to be an irrelevant consideration. 6. The petitioning society then appealed to the State Government and made detailed representations covering several pages stating all the facts and the grounds for setting aside the order of the Deputy Registrar. The appeal (Annexure I to the petition; dated 19-11-1963 ended with the prayer that a further chance of personal hearing may be given to the officers or representatives of the Society at the time of the disposal of the appeal. The appeal is said to have been rejected by the State Government by an order of which intimation was sent to the petitioning society by means of a communication dated 2-11.1964 headed office memorandum. This communication is merely information sent to the petitioning society that the Government had considered and rejected the petitioning society's appeal. A number of grounds taken by the petitioner in this court to assail the validity of the order of the State Government are dealt with below seriatim. 7. The first ground was that there was no power in the Deputy Registrar to amend the bye-laws in such a way as to determine who ought to be the members of the Co-operative Society. Reliance was sought to be placed for this proposition on N.P.S.S.S. Cooperative Credit Society v. R.D. Umalkar, A.I.R. 1967 Bom 319. This case had no bearing on the scope of the powers of the Deputy Registrar under Section 11-A of the Act which applies in Uttar Pradesh only. The decision attempted to be relied upon related to the provisions of Section 23 of the Maharashtra Cooperative Societies' Act (Maharashtra Act II of 1961).
This case had no bearing on the scope of the powers of the Deputy Registrar under Section 11-A of the Act which applies in Uttar Pradesh only. The decision attempted to be relied upon related to the provisions of Section 23 of the Maharashtra Cooperative Societies' Act (Maharashtra Act II of 1961). The question which arose under the provisions of the Maharashtra Act and decided by the Bombay High Court was whether a member could be excluded on certain grounds given there from the membership of a Cooperative Society. In that context, it was held by the Bombay High Court that the provision under consideration there did not invest the authorities under the Act with the power to determine who should be its members. That Act has nothing to do with the provisions of Section 11-A of the Act be- fore me. The contention that the Registrar cannot be said to possess any power under Section 11-A of the Act to amend bye-laws in such a way as to affect eligibility for membership is quite untenable in view of the wide powers conferred by Section 11-A. 8. The second contention was that the order of the Deputy Registrar violates the fundamental rights of the petitioning society under Article 19(1) (c) of the Constitution. This contention is also without sub-stance. Article 19 (I) (c) confers a right of Association upon citizens of India. The petitioning society is itself an association. In my opinion, no such right is injured when a bye-law is amended so as to widen the scope of membership of an association. In any case, the enlargement of scope of membership could not be said to be unreasonable. 9. The third ground was that the power of amendment conferred by Section 11-A of the Act constitutes an unreasonable restriction on fundamental rights conferred by Articles 14 and 19 of the Constitution as the power is too wide and unregulated. This power can only he exercised quasi-judicially and on reasonable grounds. The exercise of the power to amend the bye-laws is also subject to an appeal to the State Government. Section 11-A cannot, therefore, be struck down on the ground that it confers any power to act arbitrarily. 10. The fourth contention was that the actual order passed by the Deputy Registrar is not related to the objects for which an order amending a bye-law can be passed.
Section 11-A cannot, therefore, be struck down on the ground that it confers any power to act arbitrarily. 10. The fourth contention was that the actual order passed by the Deputy Registrar is not related to the objects for which an order amending a bye-law can be passed. This contention relates to the merits of the case which had to be considered by the State Government. As the question was raised, I may observe that the objects of a Cooperative Society and of cooperation are wider than those of a particular section of employees belonging to Union. This point is, however, left open for considera. don by the State Government which does not, for the reasons given below, appear to have passed any order actually rejecting the petitioning society's appeal. 11. The fifth point urged was that, in passing the order under Section 11-A, principles of natural justice were violated. The only ground taken in support of this objection was that no personal hearing was given to the petitioner. This is not required either by the Act or the Rules framed thereunder or by the rules of natural justice. The mode of hearing can be adopted to the requirements of a particular function. This principle is well established See: Local Government Board v. Arlidge, 1915 AC 120. 12. The sixth and last argument was that the order of the State Government, being a quasi-judicial order, must be a "speaking order". The order passed by the Deputy Registrar (Annexure H) is certainly a speaking order. The order passed by the State Government under Section 11-A (3) had also to be a speaking order. This ground was allowed to be added by means of an amendment application granted on 27-111968. To reply to this objection, the actual record of the proceedings was placed before me. I find from the record that there is a detailed report dated 29-9-1964 made by the Deputy Secretary which ends as follows : "In a cooperative society there should be no discrimination between the members who belong to a certain trade union or those. who belong to a different union of the employees of the same institution as well as those who may choose not to be members of any of the union. The Society should be purely of the employees.
who belong to a different union of the employees of the same institution as well as those who may choose not to be members of any of the union. The Society should be purely of the employees. No trade union of any group of employees can claim a right to restrict the cooperative society of the employees but only those who become members of that union. The Deputy Registrar has, therefore, rightly amended the said bye-law and the appeal may, therefore, be dismissed. 13. In this report there is another paragraph making a recommendation that similar action may be directed to be taken with regard to another Credit Society with which we are not concerned in this case. This matter was then sent to the Secretary of the Cooperative Department who made a short note on it on 1-10-1964 recording his opinion that there was no force in the appeal which may be rejected and also that the proposal relating to the other credit society, may be accepted. This was an opinion and recommendation only. After this, I find three signatures in one line. One of the signatures made on 13-10-1964 is said to be that of the Hon'ble Minister of the Department concerned. It is not known who made the other two signatures by the side of the signature of the Minister on two different dates subsequent to that on which the Minister signed. It does not appear what these bare signatures below the reports and recommendations really mean. They are not even preceded by any word or words such as "approved" or "appeal rejected". 14. Learned Standing Counsel for the pose it of State argued, on the basis of the above mentioned state of the record, that the appeal filed by the petitioning society must be held to have been rejected and that the reasons given in the report of the Deputy Secretary must be assumed to have been approved and adopted. This manner of by reconstructing an order of an authority, M. which is required to pass a "speaking order", has been held to be illegal by the on Supreme Court in Shahu Pragdas Umar Vaishava v. Union of India, Civil Appeal No. 657 of 1967 decided by the Supreme Court on 17.8.1967 (1967 M.P.W.R. 448).
This manner of by reconstructing an order of an authority, M. which is required to pass a "speaking order", has been held to be illegal by the on Supreme Court in Shahu Pragdas Umar Vaishava v. Union of India, Civil Appeal No. 657 of 1967 decided by the Supreme Court on 17.8.1967 (1967 M.P.W.R. 448). In very similar circumstances, I quashed a supposed order of the removal of the President of a Municipal Board in Parasnath Tiwari v. State of U.P., Civil Misc. Writ No. 5211/64 decided on 10.10.1968. Upon this state of the record, I am constrained to hold that there is no order at all rejecting the appeal which is now still pending before the State Government. Mere signature upon certain re-commendations sent to the Minister concerned does not amount to a speaking order. The speaking order itself cannot be presumed to have been passed on the assumption that the Hon. Minister adopted the reasons given in the Secretary's report. It is true that the provisions of the Act do not require that the reasons must be recorded as was the position in Parasnath Tiwares case. Nevertheless, if the order had to be a speaking order, the requirements of such an order, as laid down by a Full Bench of this Court in Hail Manzoor Ahmad v. State of U.P., 1968 ALJ 809, had to be complied with. In the case of a rejection of an appeal no detailed reasons are necessary. But a statement showing the reasoning adopted by the authority taking the decision is necessary. I find no such statement on record by the Minister concerned. Therefore, I hold that there was no order rejecting the appeal. Hence, the communication of the assumed order rejecting the appeal must be held to be ineffective. There being no legally operative order on the appeal there is nothing which need be quashed. I also declare that the communication sent to the petitioning Society on 2-11-1964 has no legal effect. The result is that the appeal before the State Government must be deemed to be pending. The Government is directed to decide and dispose it of in accordance with law. 15.
I also declare that the communication sent to the petitioning Society on 2-11-1964 has no legal effect. The result is that the appeal before the State Government must be deemed to be pending. The Government is directed to decide and dispose it of in accordance with law. 15. Learned counsel for the petitioner, having listened to this judgment dictated in open court, objects, at this stage, to any decision by this Court on any question resulting to the merits of the petitioner's appeal, including the question of constitutional validity of Sec- 11-A and the constitutional propriety of the order passed by the Deputy Registrar. The objection, that all these questions should be left open for decision by the State Government if the appeal has to be still decided by it, is misconceived. This Court has to decide all relevant questions raised by a petitioner except in so far as, in the exercise of its discretion, a question is left open for decision by an appropriate authority. The proper forum for decisions relating to constitutional validity of a statutory provision or of an order is this Court. The jurisdiction of the Registrar under Section 11-A (1) , and, therefore, of the State Government, deciding the matter in an appeal under Section 11-A (3) , is confined to an adjudication of the question whether it is "necessary or desirable in the interest of the Society or in public interest" to make an amendment. That question is, as already indicated, left open for decision by the State Government exclusively. 16. This writ petition is allowed, to the extent indicated above, with costs.