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1972 DIGILAW 470 (ALL)

Ram Swarup Dube v. District Assistant Registrar Coop-Societies, Jalaun at Orai

1972-11-02

H.N.SETH

body1972
JUDGMENT H.N. Seth, J. - This is a petition under Art. 226 of the Constitution. Petitioner No. 2 Kaithari Kshetriya Sahkari Samiti Ltd., which is a primary Co-operative Society, is a member of Jalaun District Co-operative Bank Ltd. Jalaun (a central society). The primary society was registered under Co-operative Societies Act 1912 and had framed its own bye-laws in accordance with the provisions of the Co-operative Societies Act, 1912 and the Rules framed thereunder. It also elected a committee of management which was managing its affairs when the Co-operative Societies Act, 1965 (hereinafter referred to as the Act) came into force with effect from 26th of January 1968. The Act required all the Co-operative Societies, which were in existence before it came into force, to amend their bye-laws and to constitute is committee of management so as to being them in accordance with the Act and the Rules framed thereunder. 2. Petitioner No. 1, Sri Ram Swarup Dubey, was a delegate to the District Co-operative Bank Ltd., Jalaun (Central Society) as representing Kaithari Kshetriya Sahkari Samiti Ltd., and Sedan Sahkari Samit. In the year 1971 he was elected as Chairman of the Central Society. Due to certain reasons, details of which have been mentioned in the petition, Sri Daya Shanker Singh, District Assistant Registrar Co-operative Society, Jalaun became annoyed with petitioner No. 1 and wanted to oust him from the Chairmanship of the Central Society. With that end in view, he passed an order on 14th August 1972, purporting to exercise his power under Sec. 29(5) of the Act, and nominated a committee of management consisting of respondents 5 to 13, for managing the affairs of Kaithari Kshetriya Sahkari Sdmiti Ltd. After nominating the new committee, respondent No. 1 addressed a letter dated 18-8-1972 to the Secretary, Jalaun District Co-operative Bank Ltd. (Central Society) stating that the members of the Kaithari Kshetriya Sahkari Samiti Ltd. had passed a resolution on 14th of August, 1972 withdrawing its representation through petitioner No. 1, Ram Swarup Dubey. As a result of this, Sri Dubey had ceased to be a member of the Bank and immediate actions in accordance with law be taken immediately. 3. The petitioners contend that the action taken by respondent No. 1, in nominating a Committee of management under Sec. 29(5) of the Act, is wholly without jurisdiction. As a result of this, Sri Dubey had ceased to be a member of the Bank and immediate actions in accordance with law be taken immediately. 3. The petitioners contend that the action taken by respondent No. 1, in nominating a Committee of management under Sec. 29(5) of the Act, is wholly without jurisdiction. Consequently the resolution said to have been passed by the Committee of management, as nominated by respondent No. 1, on 14th of August 1972, withdrawing the right of petitioner No. 1 to represent the Society before the Jalaun District Co-operative Bank is also completely without jurisdiction. As a result of the communication made by respondent No. 1, Secretary of the Jalaut; District Co-operative Bank Ltd. convened a meeting of the Board of Directors for 13th of September, 1972 Tor considering the effect of the resolution withdrawing the right of the petitioner to represent Kaithari Kshetriya Sahkari Samiti. 4. With the same end in view, respondent No. 1, illegally appointed respondent No. 2 as an arbitrator to look into certain disputes relating to the affairs of the Sadan Sahkari Samiti, Dakore. By an order dated 28th August, 1972, the arbitrator, at the instance of respondent No. 1, appointed respondent No. 3 as Administrator, of the Sadan Sahkari Samiti so that petitioner's right to represent this society may be brought to an end and may not be able to continue to function as the Chairman of the Jalaun District Co-operative Bank, `even in his capacity as a delegate of that Society. The petitioner accordingly filed this petition claiming that the order dated 11th of August, 1972 passed-by respondent No. 1 appointing, a committee of Management for Kaithari Kshetriya Sahkari Samiti, under Sec. 29(5) of the Act, be quashed. They also pray that the notice issued by the Bank for convening the meeting for considering the effect of withdrawal of representation of Sri Ram Swarup Dube's delegation and various proceedings in connection with and consequent on the appointment of respondent No. 2 as Arbitrator to resolve a dispute in relation to the Sadan Sahkari Samiti, Dakore be quashed. Since the proceedings relating to the affairs of the Sadan Sahkari Samiti are the subject-matter of dispute of another writ petition, it is not necessary to consider the facts relating to the affairs of that Society. 5. Since the proceedings relating to the affairs of the Sadan Sahkari Samiti are the subject-matter of dispute of another writ petition, it is not necessary to consider the facts relating to the affairs of that Society. 5. Respondent No. 1 Daya Shanker Singh as also respondent No. 5 claiming to be looking, after this case on behalf of respondent Nos. 4 and 6 to 13, have filed counter affidavits for contesting this writ petition. Respondent Nos. 6, 7, 9 and 13 have also put in appearance through Dr. R. N. Dwivedi, Advocate. 6. Main controversy in this petition is about the validity of the order dated 11th of August, 1972, passed by respondent No. 1 appointing a committee of Management under Sec. 29(5) of the Act. Undisputed facts concerning this controversy are that a Committee of Management had been ejected for running the affairs of the Kaithari Kshetriya Sahkari Samiti before the U. P. Co-operative Societies Act, 1965 came into force on 26th of January, 1968. In December 1971, the bye-laws of that Kaithari Kshetriya Sahkari Samiti were brought in line with the provisions of the Act under the order of the Registrar, Co-operative Societies. Although the Managing Committee for Kaithari Kshetriya Sahkari Samiti had been elected for a period of three years before the coming into force of the Act, no new election for constituting a new Managing Committee in accordance with the provisions of the Act and the rules framed thereunder, had taken place. Accordingly, the Managing Committee as already elected, continued to function till the impugned order dated this of August was passed. According to the petitioner, apart from the fact that in the circumstances no action under Sec. 29(5) of the Act could at all be taken, respondent No. 1 also did not comply with the procedure laid down by that section of the Act before nominating a committee of management. The respondents do not accept this position. According to them the action taken by respondent No. 1 was within his jurisdiction and the procedure provided in Sec. 29(5) of the Act had been fully complied with. It was only when the petitioners did not hold an election within three months, as directed in the notice issued on 7th April 1972, that the respondent No. 1 exercised his power under Section 29 (5) of the Act and nominated a committee of management. 7. It was only when the petitioners did not hold an election within three months, as directed in the notice issued on 7th April 1972, that the respondent No. 1 exercised his power under Section 29 (5) of the Act and nominated a committee of management. 7. The Uttar Pradesh Co-operative Societies Act, 1965 which replaced the Co-operative Societies Act, 1912, made substantial changes in the law relating to Constitution and function of the Managing Committee of Co-operative Societies. At the time when the Act came into force, there were already in existence a number of Co-operative Societies which were functioning in accordance with the., bye-laws and Rules framed by them. The bye-laws framed by various Co-operative Societies and the Constitution of the Managing Committee were not fully consistent with the provisions of the 1965 Act. Accordingly, the Legislature made a provision for meeting such a contingency in Section 131 of the Act, which reads as follows? "(1) Any Co-operative Society existing on the date of coming into force of this Act and registered under the Co-operative, Credit Societies Act (Act X of 1904), or the Co-operative Societies Act, 1912 (Act II of 1912), or under any other law relating to Co-operative Societies in force in the State of Uttar Pradesh, shall be deemed to be registered under this Act, and its bye-laws shall so far as the same are not inconsistent with the express previsions of this Act, continue in force until altered or rescinded according to the provisions of this Act. (2) Any Co-operative Society to which sub-Sec. (1) applies and which conforms to the requiring of Section 77 shall be deemed to be a Co-operative farming society for the purposes of Chapter XI. (3) Every Co-operative society covered by sub-Sec. (1) shall, within a period of one year from the date of coming into force of this Act, delete or amend such bye-laws as are inconsistent with the provisions of this Act and the rules and shall make such further bye laws as may be necessary having regard to the provisions of this Act and the rules. (4) In default of action on the part of any Co-operative society as required by sub-Sec. (3), the Registrar may make necessary amendment including deletions and additions in the bye-laws of the Society. (4) In default of action on the part of any Co-operative society as required by sub-Sec. (3), the Registrar may make necessary amendment including deletions and additions in the bye-laws of the Society. (5) Every Co-operative society shall within a period of one year from the date of coming into force of this Act or such further period as the Registrar may, for reasons to be recorded in wilting allow for any Co-operative society, adjust its membership according to the classification of members under this Act : Provided that any existing member who cannot be adjusted into one or the other kinds of memberships shall be deemed on the expiry of the period of one year or the extended period, if any, to have withdrawn from the membership of the society with the same rights and liabilities attached as if he had withdrawn from membership before the coming into force of this Act. (6) Where a Co-operative society fails to adjust memberships as specified in Sub-sec. (5), the Registrar may make the adjustment and direct as to who, if any, of the existing members shall be deemed to have withdrawn their membership under the provisions of Sub-sec. (5). (7) Every Co-operative society shall within one year of the coming into force of this Act constitute its committee of management in accordance with the provisions of this Act and the rules and in default thereof the Registrar shall in the manner prescribed constitute the committee of management. (8) Notwithstanding, anything in this Act, no act or proceedings of a Co-operative society or its committee of management shall be invalid or questioned in court merely on the ground that up to the time of adjustment of membership or reconstitution of the committee of management in accordance, with the previsions of this section the membership of the society or the constitution of its committee of management was inconsistent with the provisions of this Act or the rules." 8. According to this section, every Co-operative Society existing on the date of which the Act came into force, required to amend its bye-laws, reclassify its members and constitute is Committee of Management in accordance with the provisions of the Act and the Rules made therein, within a period of one year failing which the Registrar is given adequate power to alter the bye-laws, reclassify the membership and nominating a Committee of Management. Rule 392 lays down that where a Co-operative Society fails to reconstitute its committee of management under Sub-sec. (7) of Section 131, the Registrar shall, after affording an opportunity to the society to reconstitute its committee of management within the time specified by him, constitute by nomination a committee of management of the society from amongst such persons as under the bye laws of the society and the rules qualified for the membership of the committee of management. It is, therefore, clear that if the petitioner failed to reconstitute its managing committee within a period of one year of the coming into force of the Act so as to bring it in accordance with the provisions of the Act and the rules the registrar could take action under Section 131 of the Act read with rule 392. However, it is admitted by the parties that such an action under Section 131 could be taken only by the Registrar, Deputy Registrar, or an Assistant Registrar Incharge of the Division, as the power to deal such matters had been delegated to these authorities alone, and not to Sri Daya Shanker Singh, District Assistant Registrar, Co-operative Societies, Jalaun. 9. The respondents, however, justify their action under Section 29 of the Act, and contend that the power of the Registrar under this section has been delegated to the District Assistant Registrar, Co-operative Societies, who is fully competent to exercise the same. Sec. 29 reads thus : - "Committee of management: (1) The management of every Co-operative Society shall vest in a committee of management constituted in accordance with this Act, the rules and the bye-laws which shall exercise such powers and perform such duties as may be conferred or imposed by this Act, the rules and the bye-laws. (2) The term of the elected members of the committee of management shall be such as may be provided m the rules of the bye-laws of the society: Provided that they shall after the expiry of their terms continue as members of the committee of management till fresh elections are held by the society under Sub-sec. (3) or Sub-sec. (4) or nominations are made by the Registrar under Sub-sec. (5). (3) After the expiry of the term mentioned in Sub-sec. (2) the Co-operative society shall in its ensuing annual general meeting elect members for the committee of management as provided in clause (i) of Sub-sec. (3) or Sub-sec. (4) or nominations are made by the Registrar under Sub-sec. (5). (3) After the expiry of the term mentioned in Sub-sec. (2) the Co-operative society shall in its ensuing annual general meeting elect members for the committee of management as provided in clause (i) of Sub-sec. (1) of Section 32, and thereupon the members so elected shall replace the members whose term expired under Sub-Sec. (2). (4) If the society fails to elect members for the committee of management as required under Sub-sec. (3), the Registrar shall call upon the Society by order in writing to elect such members within three months from the date of communication of the order. (5) If the society still fails to elect the members for the committee of management, the Registrar may himself nominate such persons as under the rules and the bye-laws are qualified for being elected as members of the committee of management and the members self-nominated shall forthwith replace the elected members of the committee of management whose term had expired under Sub-sec. (2). (6) Within six months from the date of nomination made by the Registrar under Sub-sec. (5) the Registrar" shall call a general meeting of the general body of the society for electing the members for the committee of management. When the general meeting} has elected members for the committee of management, the persons nominated by the Registrar under Sub-sec. (5) shall forthwith vacate their office and the members so elected shall continue for the remainder of the term." 10. This section clearly provides that the management of every Co-operative Society is to vest in a Committee of Management constituted in accordance with the Act, the Rules and the bye-laws. Sub-Sec. (3) provides that the term of its elected members shall be such as may be provided in the Rules or the bye-laws of the Society. According to Sub-sec. (3), after the expiry of the term mentioned in Sub-sec. (2), the Co-operative Society is to elect members for the committee of management in its ensuing annual genera meeting and when such election takes place the new Committee of Management takes over from the outgoing committee of management. The provisions contained in Sub-secs. (2) and (3) obviously refer to the committee of management referred to in Sub-sec. (1) that is to a committee of management constituted in accordance with that Act. Sub-secs. The provisions contained in Sub-secs. (2) and (3) obviously refer to the committee of management referred to in Sub-sec. (1) that is to a committee of management constituted in accordance with that Act. Sub-secs. (4) and (5) then provide for a contingency where the term of committee of management constituted in accordance with the Act, as referred to in Sub-sec. (1) has expired but steps have not been taken for holding fresh election. In such contingency, the Registrar or his delegate has been given a power to nominate a committee of management and then to hold fresh election within a period of six weeks. Sec. 29(5) therefore comes into operation only when there is a committee of management constituted in accordance with the Act and its term has expired. 11. So far as Co-operative Societies existing on the date when the Co-operative Societies Act, 1965 came into force are concerned, the scheme of the Act seems to be clear. First of all its bye-laws, membership and constitution of its committee of management has to be brought in line with and in accordance with the provisions of the Act. If the Society fails to do so, Registrar has been empowered to take necessary action under Section 131 of the Act. Once the constitution of the committee of management has been brought in line with and in accordance with the provisions of the Act, the position of such a society becomes just like that of a Co-operative Society constituted in accordance with the provisions of the Act. In such cases if elections are not held the Registrar can take necessary action under Section 29 of the Act. The two sections, therefore, operate in absolutely two different fields and so long as the committee of management of an existing Society has not under Section 131 of the Act, been brought in accordance with the provisions of the Act and the Rules, the power for its reconstitution cannot be exercised under Section 29 of the Act. 12. Learned counsel for the respondents contended that according to Section 131 of the Act, every Co-operative Society existing on the date on which it came into force, shall be deemed tote registered under the Act. Accordingly, it should be deemed that the Managing Committee which was existing at that time was also constituted under the Act. 12. Learned counsel for the respondents contended that according to Section 131 of the Act, every Co-operative Society existing on the date on which it came into force, shall be deemed tote registered under the Act. Accordingly, it should be deemed that the Managing Committee which was existing at that time was also constituted under the Act. Such a committee was therefore, constituted in accordance with the provisions of the Act and therefore if the Society did not take steps to hold fresh elections after the term of its committee of management expired there can be no objection in taking action under Section 29 of the Act. I am unable to accept this submission. Sec. 131 of the Act merely provides that any Co-operative Society existing on the date of coming into force of the Act and registered under the Co-operative Societies Act 1912 shall be deemed to be registered under the Act and the bye-laws shall so far as the same are not inconsistent with the express provisions of the Act, shall continue in force unless altered or rescinded according to the provisions of the Act. This section merely creates a fiction of law that a Co-operative Society registered under the 1912 Act will be deemed to be registered under the Co-operative Societies Act 1965. This fiction cannot possibly be extended further so as to create another fiction that the committee of management constituted under the old Act, though it is not in accordance with the provisions of the new Act, shall also be deemed to have been constituted in accordance with the provisions of the new Act. As a matter of fact, specific provisions have been made in the Act so as to enable the Registrar to see that the constitution of the Society and its managing committee are brought in line with and in accordance with the provisions of the Act. So long as that power has not been exercised and the constitution of the Managing committee has not been brought in line with the present Act, it cannot be deemed that the same has been constituted in accordance with the provisions of the Act. 13. So long as that power has not been exercised and the constitution of the Managing committee has not been brought in line with the present Act, it cannot be deemed that the same has been constituted in accordance with the provisions of the Act. 13. In this case, the affidavits filed by the parties make it clear that the constitution of the Managing Committee of Kaithari Kshetriya Sahkari Samiti, which had been registered under the 1912 Act, had not so far been brought in line and in accordance with the provisions of the 1966 Act. In the circumstances, , the power under Sec 29 of the Act could not be exercised. As the Kaithari Kshetriya Samiti had failed to constitute its committee of management in accordance with the provisions of 1965 Act and the rules framed thereafter, the Registrar should have taken steps for its reconstitution as provided in See. 131(7) which step is over done in this case. As stated earlier action under Section 131 of the Co-operative Societies Act could not be taken by Sri Daya Shanker Singh who was the District Assistant Registrar, Co-operative Societies. It could be taken only by the Registrar, Deputy Registrar oi Assistant Registrar Incharge of a division. The order dated 11th August, 1972 passed by Sri Daya Shanker, therefore, is without jurisdiction and so long as the constitution of the committee of management not altered m accordance with the provisions of Section 131 of the Co-operative Societies Act 1965, the old committee of management continues. Action taken by the committee of management illegally constituted by respondent No. 1, does not in any way affect the various rights oi the existing committee of management, and its representation to the Central Society. Sri Dwivedi, learned counsel for some of the respondents contended that the affidavits filed by his clients clearly show that the petitioner Sri Ram Swarup, had not been validity elected as a member and delegate not Kshetriya Sahkari Samiti Ltd., and as such he has no right to maintain the present writ petition and to claim any relief against the respondents. Sri Ram Swarup has been acting as a member and delegate of Kaithari Co-operative Society ever since the year 1967. Sri Ram Swarup has been acting as a member and delegate of Kaithari Co-operative Society ever since the year 1967. If any body was aggrieved by his membership of the Kaithari Sahkari Samiti he should have taken appropriate action under rule 115 of the rules framed under the U.P. Co-operative Societies Act 1912. Accordingly, I am not inclined to entertain this plea at the instance of the respondents at this stage. 14. In the result the writ petition succeeds and is allowed. The order passed by respondent No. 1, dated August, 11, 1972 appointing a committee oi management under Sec. 29(5) of the Co-operative Societies Act 1965 is quashed. Consequently, the resolution of the committee constituted under the order of respondent No. 1, dated August 14, 1972 as communicated to Girl trad Society is also quashed. The re pendents shall abide by the consequences following the quashing of aforementioned order and resolutions, and, as such, it is not necessary to grant any further relief to the petitioner.