Committee of Management of Meerut Wholesale Central Consumer's Co-operative Society Ltd. , Meerut v. Deputy Registrar, Cooperative Societies, Meerut
1971-02-09
G.C.MATHUR
body1971
DigiLaw.ai
JUDGMENT G.C. Mathur, J. - This petition has been filed by the Chairman and the Committee of Management of the Meerut whole-sale Central Consumer's Cooperative Stores Limited (herein after referred to as the Society). It is directed against an order dated August 8. 1970, passed by the Deputy Registrar, Cooperative Societies, U.P., Meerut, under Section 35(2) of the U.P. Cooperative Societies Act, 1965, placing the Chairman and the Committee of . Management under suspension and appointing respondent no. 2 Administrator in their place to manaze the affairs of the Society temporarily. 2. The order has been challenged on the following grounds : - (i) that it has been passed mala fides. (ii) that the Deputy Registrar had no jurisdiction to pass the impugned order under sub-section (2) of Section 35 as he had not first taken any action under sub section (1); (iii) that there was no power under Section 35 either to superside or to suspend the chairman ; and (iv) that no Administrator could be appointed under sub-section (2) of Section 35. 3. The charge of mala fides is directed against Shri R.P. Srivastava, Deputy Registrar, who passed the impugned order but he has not been impleaded by name. The allegations of mala fides are said to be contained in paragraphs 33, 34 and 35 of the writ petition. Paragraphs 33 and 34 do not allege anything against the Deputy -Registrar. In paragraph 35 the allegation is: "That the Deputy Registrar, Sri R. P. Srivastava, bears animosity and is against the petitioners." This is a very vague and general allegation and gives no reason or facts on which the alleged animosity is based on these allegations, it is not possible to accept the petitioner, contention that the order was passed malalide. 4. The second ground raised is that proceedings under sub-section (2) of Section 35 could be taken only after proceedings under sub section (I) had started and, since, in the present case, no proceedings under sub section (1) has started, the impugned order under sub section (2) was beyond the jurisdiction of the Deputy Registrar.
4. The second ground raised is that proceedings under sub-section (2) of Section 35 could be taken only after proceedings under sub section (I) had started and, since, in the present case, no proceedings under sub section (1) has started, the impugned order under sub section (2) was beyond the jurisdiction of the Deputy Registrar. Sub sections (;)and (2) of Section 35 are as follows "35(1) Where, in the opinion of the Registrar, the Committee of Management of any Co-operative Society persistently makes default or is negligent in `the performance of the duties imposed on it by this Act or the rules or the buy laws of the society or commits any act ' which is prejudicial to the interest of the society or its members, or is otherwise not functioning properly, the Registrar, after affording the Committee of Management a reasonable opportunity or being heard and obtaining the opinion of the general body of the society in a general meeting called for the purpose in the manner prescribed, may, by order in writing, supersede the Committee of Management: Provided that where, under prescribed circumstances, it is not feasible to convene a general meeting of the general body of the society, the Registrar may dispense with the requirement of obtaining the opinion of the general body of the society. (2) Where the Registrar, while proceeding to take action under subsection (1) is of opinion that suspension of the Committee of Management during the period of proceedings is necessary In the interest of the society, he may suspend the Committee of Management which shall thereupon cease to function, and make such arrangement as he thinks proper for the management of the affairs of the society till the proceedings are completed : Provided that if the Committee of Management so suspended is not superseded, it shall be reinstated and the period, during which it has remained suspended, shall count towards its term." Sub section (1) empowers the Registrar to supersede the Committee of Management of a Co-operative Society if he forms the necessary opinion and after giving the Committee of Management an opportunity of being heard and after containing the opinion of the general body. Sub-section (2) empowers the Registrar to suspend the Committee of Management "during the period" of the proceedings under sub section (1).
Sub-section (2) empowers the Registrar to suspend the Committee of Management "during the period" of the proceedings under sub section (1). Action under sub-section (2) can be taken only when the Registrar is "proceeding to take action under sub-section (1)". According to the petitioners, the Registrar can be said to be proceeding to take action under Sub-section (1) only when he has formed the requisite opinion and has served a charge-sheet or a show cause notice on the Committee of Management. It is urged that, since no charge-sheet or show cause notice was served on the petitioners, no action could be taken under `sub-section (2). This contention cannot be accepted in view of the decision of a Division Bench of this Court in Consumers Cooperative Stores Limited v. The Deputy Registrar, Co-operative Societies, U. P., Meerut, (Civil Miscellaneous Writ Petition No. 266 of 1970 decided on January 19, 1970) where it has beep held : "The words `while proceeding to take action under sub-section (1) in sub-section (2) of Section 35 of the U.P. Co-operative Societies Act, 1955, do not mean that action under sub-section (2) can be taken only after the show cause notice has been given to the Committee of Management or steps have been taken to obtain the opinion of the general body. What is contemplated is that if the Registrar is taking action for the supersession of the Committee of Management he can in emergent cases, proceed under sub- section (2), Section 35 of the Act." Then what is the earliest stage at which it can be said that the Registrar is proceeding to take action under sub section (1) ? In my opinion that stage is when the Registrar has tentatively formed the requisite opinion, has decided to take action under sub-sect ion (1) and has taken some steps in pursuance of that decision. That step may vary from case to case, The provision in sub- section (2) that the suspension can be only "during the proceedings" under sub-section (I) does not lead to any ether conclusion as the proceedings commence when this step is taken and conclude when the final order is passed The position in the present case may now be examined. Pan graphs I to 5 of the impugned order recite the formation of opinion regarding the matters mentioned in sub-section (1).
Pan graphs I to 5 of the impugned order recite the formation of opinion regarding the matters mentioned in sub-section (1). Paragraph 6 is in these words : - "6 And whereas, as a consequence of the above circumstances and facts, the under signed is proceeded to take action under sub- section (1) of Section 35 of the Act for supersession of the Committee of Management of the said store." At the bottom of the impugned order is an endorsement regarding forwarding of copies for information and necessary action. At No. 1 thereunder it is stated : "1. The Chairman, Meerut Wholesale Central Consumers Co operative Store Ltd. ; with the remark that the above order of suspension, which has been passed as an emergent measure, be brought to the notice of all the members of the Committee of Management. The show cause notice with detailed charges in pursuance of subsection (1) of Section 35 of the Act shall follow shortly." Paragraphs 1 to 5 of the impugned order show that the Deputy Registrar had tentatively formed the requisite opinion and paragraph 5 shows that the Deputy Registrar had decided to take action under sub-section (1) against the Committee of Management. The endorsement at the bottom of the impugned order shows that steps for the preparation of the charge-sheet were being taken and that the charge-sheet would be sent to the Committee of Management shortly. Thus so far as the impugned order is concerned, it clearly indicates that the Deputy Registrar was proceeding to take action under sub section (i) when he passed the impugned order. In paragraph 13 of the writ petition, it is stated that no specific charge or charges had been framed against the Committee of Management. In paragraph 14 and 17 it is stated that no proceedings had been initiated or taken under Section 33(1) and in paragraph 20 (B) also the same averment is made. Therefore, the complaint of the petitioners in the writ petition appears to be that no charges had been framed at the time when the impugned order was passed. It is also generally asserted that no action had been taken under sub-section (1) by that time. Two counter affidavit have been filed by respondent no. 2 in this case.
Therefore, the complaint of the petitioners in the writ petition appears to be that no charges had been framed at the time when the impugned order was passed. It is also generally asserted that no action had been taken under sub-section (1) by that time. Two counter affidavit have been filed by respondent no. 2 in this case. In paragraph 14 of the first counter-affidavit, it is stated that proceedings under Section 35 (1) have already been initiated and the work of preparing the charge-sheet is in progress. Similar statements are contained in paragraphs 17, 20(B) and 25 (B) of this affidavit. It thus appears that, after forming the requisite opinion and deciding to take action under sub-section (1), this Deputy Registrar had taken the further step of giving directions for the preparation of the charge-sheet. That being so, the contention of the petitioners that the Deputy Registrar was not proceeding to take action under sub section (1) at the time when he passed the impugned order must be rejected. 5. The third ground raised by the petitioners is that no action against the Chairman of the Society could be taken under Section 35 of the Act as that section contemplates action only against the Committee of Management. Sub-section (1) of Section 35 empowers the Registrar to supersede the Committee of Management and sub-section (2) empowers him to suspend the Committee of Management pending proceedings under sub-section (1). The other subsections of this section also refer to the Committee of Management. Therefore, Prima facie, it appears that the section deals .only with action against the Committee of Management. The argument of the Chief Standing Counsel is that the expression Committee of Management' in Section 35 includes the Chairman. "Committee of Management" has been defined in Section 2(e) to mean the Committee of a Co-operative Society, by whatever name called, to which the management of the affairs of the society is entrusted under Section 29. Section 29 (1) lays down that the management of every Co-operative Society shall vest in a Committee of Management constituted in accordance with the Act, the rules and the bye-laws and that it shall exercise such powers and perform such duties as may be conferred or imposed upon it by the Act, the rules and the bye-laws.
Section 29 (1) lays down that the management of every Co-operative Society shall vest in a Committee of Management constituted in accordance with the Act, the rules and the bye-laws and that it shall exercise such powers and perform such duties as may be conferred or imposed upon it by the Act, the rules and the bye-laws. No provision has been brought to my notice which says that the Committee of Management shall consist of the chairman and the elected members. The chairman is included in the definition of "officer of a Co-operative Society" in Section 2(o). Section 30 of the Act provides that every Co operative Society shall have a Chairman and a vice-Chairman elected in accordance with the. provisions contained in the rules and the bye-laws. Sub.section (2) of Section 30 provides that the chairman shall be responsible for the coctral, supervision and guidance of the affairs and business of the society and shall exercise such powers and perform such duties as may be conferred or imposed on him by this Act, the rules, the bye-laws and the resolutions of the Committee of Management. It is further provided that, when present, he shall preside over the meeting of the general body as well as that of the Committee of Management. These provisions do not at all indicate that the Committee of Management includes the chairman. The Chief Standing Counsel relies on rules 407 and 429 of the U. P. Co-operative Societies Rules, 1968, relating to the election of the chairman and of the Committee of Management. Rule 407 provides that the members of the Committee of Management shall be elected at the annual general meeting of the society. Rule 429 provides that the chairman and vice-chairman shall be elected by the Committee of Management from amongst the members of the Committee of Management. The argument is that, since the chairman is elected from the members of the Committee of Management, he is one of them and is included in the Committee of Management. In the first place, the rules, which are made by the Government, cannot be used to interpret the provisions of the Act made by the Legislature Rules may change but the interpretation of the provisions must remain the same.
In the first place, the rules, which are made by the Government, cannot be used to interpret the provisions of the Act made by the Legislature Rules may change but the interpretation of the provisions must remain the same. The rules may be altered and, in place of the present rule 429, another rule may be made, providing for the election of a chairman from amongst persons other than the members of the Committee of Management. In the second place. So for as the present case is concerned petitioner no. 2 was not elected Chairman of the Society under the U.P. Co operative Societies Rules 1968. He was elected catlier by the general body. Further Section 34 of the Act indicates that, in 4 certain circumstances, the chairman may not be a member of the Committee of Management at all. In the circumstances set out in the proviso to sub-section (1) of Section 34, the Government may nominate a Government servant ora non-official as chairman of the Committee of Management. It is to be noticed that so far as Section 35 is concerned, though it makes provision for the exercise of the functions of the committee of Management by some other person upon its Supersession, it makes no such provision in respects of the functions at the chairman If a chain an were also to be held to come within the scope of Section 35 and he is also removed when the Committee of Management is superseded, then there will be no one to exercise the functions of the chairman under Section 30, as no election of the chairman can be held at this stage. There is a specific provision in Section 38 of the Act for the removal of an officer of a Co-operative Society including its chairman Reading ail the provisions together, I am of opinion that the expression "Committee of Management" in Section 35 does not include the chairman of the Co operative Society and no action can be taken against the Chairman under this section. 6. In this connection, learned counsel for the .respondents relied on a decision of a Division Bench of this Court in Abdul Aziz v. State of Uttar Pradesh, (A.I.R. 1958 Allahabad, 109).
6. In this connection, learned counsel for the .respondents relied on a decision of a Division Bench of this Court in Abdul Aziz v. State of Uttar Pradesh, (A.I.R. 1958 Allahabad, 109). Where it was held that, when a Committee of a town area is superseded under Section 35 of the U. P. Town Areas Act, not only the elected members of the committee but the chairman has also to vacate his office. Section 5(8) of the U. P, Town Areas Act provides that the committee shall consist of the chairman and the elected members and therefore, if the committee is superseded, the chairman as well as the elected members must go. But that is not the position under the U.P. Co-operative Societies Act. There is no provision in the. Co-operative Societies Act like Section 5(2) of the Town Areas Act. The absence of any such poison in the Co operative Societies Act fortifies the conclusion that the Legislature while enacting the U. P. Co operative Societies Act, did not interim that the Chairman of the-Society should be included within the expression "Committee of Management." There is nothing in Section 35 itself to indicate that the expression "Committee of Management" used therein means something more than the meaning given to it in its definition in Section 2(e). It thus appears that the chairman is not included in the expression "Committee of Management" used in Section 35. 1 am, therefore, of opinion that no action could b taken against the Chairman under Section 35(1) or (2), The impugned order in go far as it suspends the Chairman, is illegal. 7. The last ground raised by learned counsel for the petitioners is that no Administrator can be appointed under sub section (2) of Section 35. This is correct. An administrator cannot be appointed under sub-section (2) but only under sub section (3) after the Committee of Management has been superseded. But it appears to me that, in the present case, the word "administrator" has been wrongly used for the Comines of the Deputy Registrar The use of a wrong nomenclature will not vitiate the order. Respondent no. 2, who has been appointed as Administrator, will only exercise such papers and functions as can legally be entrusted to him under sub-section (2) and exercise then ti 1 the final order under sub-section (1) is passed. 8.
Respondent no. 2, who has been appointed as Administrator, will only exercise such papers and functions as can legally be entrusted to him under sub-section (2) and exercise then ti 1 the final order under sub-section (1) is passed. 8. The writ petition is accordingly allowed to this extent that the impugned order of the Deputy Registrar dated August 8, 1970, in so far as it suspends the Chairman of the Society is declared to be illegal and ineffective. The respondents are restrained from interfering with the exercise of his powers under the Act by the Chairman. The writ petition is dismissed with respect to the other reliefs contained. Parties will bear their own costs of this petition.