JUDGMENT Hari Swarup, J. -This petition challenges the order of the State Government nominating respondent No. 3 as the Chairman in exercise of the powers under the first proviso to subsection (1) of Section 34 of the U. P. Co-operative Societies Act. The petitioner was an elected Chairman and on the passing of this order of nomination, has by virtue of sub-section (5) of Section 34 of the Act ceased to be the Chairman. 2. Learned counsel contended that Section 34 was ultra vires and void on the ground that it violates Article 14 of the Constitution, has been made in colourable exercise of legislative powers, is violative of Art. 19 (1) (f) and (g) and is void on other grounds also. All these grounds raised by the learned counsel were considered by a Division Bench of this Court in Jalaun Producers Co-operative Union v. State (1979 All LJ 244), and it was held that Section 34 is not void. We see no reason to differ from the view taken therein. 3. It is urged that Section 34 of the Act gives no guidelines and confers on the State Government power to act arbitrarily. The relevant portion of Section 34 runs as under: (1) Where the State Government has - (a) subscribed directly to the share capital of a co-operative society under Chapter VI; or (b) assisted indirectly in the formation or augmentation of the share capital of a co-operative society as provided in Chapter VI; or (c) given loans or made advances to a co-operative society or guaranteed the repayment of principal and payment of interest on debentures issued by a cooperative society or guaranteed the repayment of principal and payment of interest on loans or advances to cooperative society.- The State Government shall have the right to nominate on the Committee of Management of such society not more than two persons one of whom shall be a Government servant, so, however, that the Government servant shall not vote at an election of an office-bearer of the society: Provided that where the share capital subscribed to by the State Government is not less than fifteen lakhs of rupees the State Government shall also have the right to nominate the Chairman of the Committee of Management from amongst the members of the Committee; " 4.
The various clauses of sub-section (1) of Section 34 show that the purpose of the power given to the State Government to nominate members of the Managing Committee and the Chairman thereof is for the protection of the interest of the State. Whenever the State makes a contribution financially it has been given the power to make nomination on the Committee of Management. The guideline is therefore available in the form of the conditions precedent for the exercise of the power. 5. The learned counsel contended that the power has been exercised arbitrarily. No facts other than the fact that there has been a change in the Government, have been alleged. It has not been shown that the action of the Government was capricious or malicious. The State Government has not appointed any political person but the Registrar of the Co-operative Society itself who is a Government official. No political bias can therefore be inferred from the passing of the order. 6. The next contention of the learned counsel is that two persons who are Government servants cannot be the members of the committee of Management on the nomination of the State Government under Section 34 of the Act. He relies on the following words in Section 34 : "One of whom shall be a Government servant". This does not mean that the other shall not be Government servant. The proviso gives the power to appoint anyone out of the nominees as the Chairman of the Committee of Management. We see no force in this contention also. 7. The learned counsel then contended on the basis of Section 30 of the Act that the petitioner was a Chairman of the Society while the nominee under Section 34 is only a Chairman of the Committee of Management. The law does not contemplate two Chairmen. It contemplates only one Chairman either elected by the Committee of Management or nominated to be such by the State Government under Section 34 of the Act. The nomenclature makes no difference. The Act contemplates only one Chairman for the society run through its Committee of Management. In any case this cannot be ground for quashing the order. 8.
It contemplates only one Chairman either elected by the Committee of Management or nominated to be such by the State Government under Section 34 of the Act. The nomenclature makes no difference. The Act contemplates only one Chairman for the society run through its Committee of Management. In any case this cannot be ground for quashing the order. 8. The last contention raised by the learned counsel was that the Government not being a member of the society in the sense that it never applied for membership and got itself enrolled as a member, could not take advantage of Section 34 of the Act. We find no merit in this contention because Section 34 becomes operative on conditions laid therein being fulfilled. Chapter VI of the Act deals with the State aid to co-operative societies, Sub-s. (2) of Section 44 provides. "(2) Without prejudice to the generality of the provisions contained in subsection (1) the State Government may, (a) With a view to aid the growth of co-operative societies in general or any class of co-operative societies, subscribe directly to the share capital of a co-operative society with limited liability with its consent: (b) subject to any rules made in this behalf provide money to a State-level co-operative society for the purchase of shares in other co-operative societies with limited liability". If the State Government under this provision makes the necessary subscription to the share capital of a cooperative society, Section 34 comes into operation, and the State Government gets the power and authority to make nominations. It is not dependent on the States acquiring membership in the manner suggested by the learned counsel. 9. In the result, we find no force in this petition which is accordingly dismissed. 10. Learned counsel for the petitioner has prayed for a certificate under ; Article 134-A for filing an appeal in the Supreme Court. Learned counsel has stated that against the judgment in Jalaun Producers Co-operative Union v. State (1979 All LJ 244) (supra) the Supreme Court has granted a certificate for special leave to appeal under Article 136 of the Constitution. In view of the leave granted by the Supreme Court, we come to the conclusion that the case involves a substantial question of law which needs to be decided by the Supreme Court. The certificate prayed for is granted