Sathi Joint Farming Coop. Society Ltd. , Through Its Secretary, Ashok kumar Rajgaria v. Registrar, Co Operative Societies
1990-11-13
NAGENDRA PRASAD SINGH, SACHCHIDANAND JHA
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Judgment Sachchidanand Jha, J. 1. This writ application has been filed for quashing the order dated 9.7.1990, as contained in Annexure 1, in so far as it relates to the suspension of the Managing Committee of the Sathi Joint Farming Co-operative Society Ltd. (hereinafter referred to as the Society). By the aforesaid order, the Registrar, Co-operative societies, while issuing notice to the office bearers of the said Society to show cause as to why, on the ground of mismanagement of the affairs of the Society, as detailed in the notice, it be not dissolved under Sub-section (1) of Sec. 41 of the Bihar Co-operative Societies Act, 1935 (hereinafter referred to as the Act), has also passed an order suspending the Managing Committee in exercise of power under Sub-sec. (2) of Sec. 41 of the Act. 2. Learned Counsel appearing on behalf of the petitioners has contended that although the power of the Registrar to take steps for the dissolution or supersession of the Managing Committee of a registered Society under Section 41(1) of the Act is not in dispute, the Registrar has no power to make a composite order simultaneously suspending the Managing Committee of the Society. According to the learned counsel, the order of suspension can be passed only after an inquiry has commenced in the matter of dissolution under Sec. 41(1) of the Act. Learned Counsel in support of his contention placed reliance on a decision the Supreme Court in the case of Veerpal Singh V/s. The Registrar, Co-operative Societies, U.P. and Ors. -- in which the Supreme Court in paragraph 15 of the judgment held that the proceeding can commence only when the necessary step to commence it is taken. On the facts of the case, it was held that as no proceedings had been set in motion in accordance with the provisions of the Statute, interim suspension of the Committee of Management was bad. 3. I am afraid, the aforesaid decision, far from lending support to the petitioners contention, in fact, negatives it. It appears that Sec. 15 of the U.P. Act corresponds to Sec. 41 of the Bihar Act. The substance of Sub-section (1) of Sec. 35 has been mentioned in the second paragraph 12, while Sub-sec. (2) has been quoted in the first paragraph 12 of the judgment at page 1250.
It appears that Sec. 15 of the U.P. Act corresponds to Sec. 41 of the Bihar Act. The substance of Sub-section (1) of Sec. 35 has been mentioned in the second paragraph 12, while Sub-sec. (2) has been quoted in the first paragraph 12 of the judgment at page 1250. It would appear there from that the provisions in the two Acts are pari materia the same. While dealing with the provisions of Sub-sec. (1), the Supreme Court held that the Registrar has power under Sec. 35(1) of the Act to supersede the Committee of Management after affording the Committee a reasonable opportunity of being heard and obtaining the opinion of the General Body of the Society in a general meeting called for the purpose. Sub-sec. (2) of Sec. 35 of the U.P. Act which is the relevant provision reads thus : Where the Registrar, while proceeding to take action under Sub-sec. (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 the thinks proper for the management of the affairs of the society till the proceedings are completed: Provided that if the Committee of the 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 (2) of Sec. 41 of the Bihar Act, which is in the same terms, may also be quoted in order to show the similarity between the two provisions so that the ratio of the aforesaid decision can be applied to the present case. Sub-section (2) reads as follows: Where the Registrar while proceeding to take action under Sub-sec. (1) is of opinion that suspension of the Managing Committee is necessary in the interest of the registered society, he may suspend the Managing Committee which shall thereupon cease to function, and make such arrangement as he thinks proper for the management of the affairs of the registered society till the proceedings under Sub-sec. (1) are completed: Provided that if the Managing Committee so suspended is not dissolved it shall be reinstated and the period during which it has remained suspended shall count towards its term. 4.
(1) are completed: Provided that if the Managing Committee so suspended is not dissolved it shall be reinstated and the period during which it has remained suspended shall count towards its term. 4. While dealing with the power of the Registrar to pass an order of suspension under Sec. 35(2) of the U.P. Act, the Supreme Court, held that the aforesaid provision confers power on the Registrar to suspend the Committee of the Management during the period of proceedings for supersession. The power to suspend the committee during the period of the proceedings is exercisable when proceedings for supersession have commenced. The question as to when the proceeding shall be deemed to have commenced, has been answered in paragraph 13 of the judgment in the following words: The provision in the Act indicate that some definite steps like the issue of a notice must be taken under the provisions of Sec. 35(1) of the Act with a view to show that of proceedings for...of the Committee are set in motion. (Emphasis added) 5. It would appear that in the aforesaid case no notice in terms of Sub-sec. (1) of Sec. 35 of the Act had been issued bet ore the order of suspension was passed under Sub-sec. (2) and therefore, it was held in paragraph 15, on the facts of that case, that the proceedings for supersession of the Committee of Management had not commenced and that as no proceedings had been set in motion in accordance with the provisions of the Statute, the interim suspension of the Committee of Management was bad. Since, in the present case the notice in terms of Sub-sec. (1) of Sec. 41 of the Act has admittedly been issued, it has to be held, following the Supreme Court decision that the necessary steps for the commencement of the proceeding having been taken, the proceeding has been set in motion and commenced and therefore, the Registrar, Co-operative Societies was competent to pass an order of interim suspension. 6. Learned Counsel in support of his contention referred to the provisions relating to inquiry under Sec. 107 of the Code of Criminal Procedure, 1973. It was submitted that although the Magistrate is competent to direct the execution of interim bond during the pendency of the proceeding, it can be done only after the inquiry has commenced.
6. Learned Counsel in support of his contention referred to the provisions relating to inquiry under Sec. 107 of the Code of Criminal Procedure, 1973. It was submitted that although the Magistrate is competent to direct the execution of interim bond during the pendency of the proceeding, it can be done only after the inquiry has commenced. In other words, just as an order for execution of interim bond cannot be passed before commencing the inquiry, in the manner stated in Sec. 116 of the Cr.P.C. Similarly, the Registrar, Cooperative Societies, cannot pass any interim order of suspension without commencing the inquiry and considering the materials/evidence on record. I am afraid, the analogy to the provisions relating to inquiry under Sections 107/116, Cr.P.C. is entirely misplaced. Sub-sec. (1) of Sec. 116 provides for the mode of inquiry into the truth of the information upon which action under Sec. 107, has been taken. Sub-sec. (3), which provides for a direction for execution of interim bond, reads as follows: After the commencement, and before the completion of the inquiry under Sub-sec. (1), the Magistrate, if he considers, that immediate measures are necessary...may, for reasons to be recorded in writing, direct the person in respect of whom the order under Sec. 111 has been made to execute a bond,.... It would, thus, appear that in terms of the express provision of the statute itself, a direction to execute interim bond during the pendency of the inquiry can be passed only "after the commencement" of the main inquiry under Sub-section (1). The relevant provisions, as contained under Sub-sec. (2) of Sec. 41 of the Act, are entirely different. While, as noticed above, in a proceeding under Sec. 107, Cr.P.C. a direction to execute interim bond can be made only after the inquiry has commenced in the manner stated in Sub-sec. (1) of Sec. 116, in the proceeding initiated under Sec. 41 of the Act it is open to the Registrar to make an interim order of suspension while proceeding to take action under Sec. 41(1). 7 The words while proceeding to take action under Sub-sec. (1) occurring in Sub-sec. (2) of Sec. 41 of the Act are significant and suggest that an order in terms of Sub-sec.
7 The words while proceeding to take action under Sub-sec. (1) occurring in Sub-sec. (2) of Sec. 41 of the Act are significant and suggest that an order in terms of Sub-sec. (2) can be passed contemporaneously, provided the necessary definite steps like the issue of a notice under Sec. 41(1) has been taken and the proceeding for supersession has been set in motion The order of interim suspension will be deemed to be separate and independent order, although contemporaneous, and cannot be said to be a composite order as contended by learned Counsel for the petitioners. 8. Learned Counsel next contended that the order of suspension of the Managing Committee of the Society is bad as being violative of the principles of natural justice, since no opportunity of showing cause has been given to the petitioners. According to the learned counsel, the order visits the petitioners with a civil consequence and as such they were entitled to show cause notice in the matter of suspension also. 9. As noticed above, Sub-sec. (1) of Sec. 41 confers power on the Registrar to make an order of supersession after giving the Managing Committee an opportunity to state its objections, if any. The order of supersession can, thus, only be passed after giving a show-cause notice. Sub-sec. (2), however, contemplates interim suspension if, in the opinion of the Registrar, it is so necessary in the interest of the society, in which case the Registrar has to make necessary arrangements for the management of the affairs of the Society till proceedings under Sub-sec. (1) are completed, it would, thus, appear that the order of suspension is intended to be interim in nature. The Supreme Court and this Court, in a number of decisions relating to service cases, has held that an order of interim suspension pending disciplinary proceedings is not penal in nature. So far as the suspension of the Managing Committees of Co-operative Societies is concerned, in my opinion, this power is to be exercised only in appropriate cases where the Registrar after considering the complaints regarding mismanagement of the affairs of the Society etc. comes to the conclusion that, ^having regard to the facts and circumstances of the case, it is necessary in the interest of Society itself to make an order of suspension pending final decision in the matter of supersession under Sub-sec. (1).
comes to the conclusion that, ^having regard to the facts and circumstances of the case, it is necessary in the interest of Society itself to make an order of suspension pending final decision in the matter of supersession under Sub-sec. (1). Besides, the provisions in question do not contemplate two parallel show-cause notices and proceedings, one in the matter of supersession and the other in the matter of suspension, in respect of the same complaints or allegations. For the reasons as briefly indicated above, lam of the opinion that neither on the principles of natural justice nor in terms of the provisions themselves, the petitioners were entitled to any show-cause notice before the order of suspension was passed. 10. Learned Counsel next attempted to contend that no case has been made out to justify even prima facie issuance of a show cause notice under Sec. 41(1) of the Act. I am afraid, I cannot go into this aspect of the matter at this stage, since that is the subject-matter of the inquiry pending with the Registrar who has to take a final decision after considering the show cause/objections as may be filed by the officer bearers of the Society. Besides, as indicated above, the relief sought in the writ petition is only with regard to quashing of the order dated 9.7.1990 in so far as it relates to the suspension of the Managing Committee. The petitioners have not challenged the issuance of show-cause notice itself in the writ petition and therefore, learned Counsel cannot be permitted to advert to that aspect. 11. Learned Counsel lastly contended that in view of the provisions contained in the proviso to Sub-sec. (2), the period during which the Managing Committee has remained under suspension shall be counted towards its statutory term which under Sec. 14(9) of the Act is three co-operative years, and, therefore, the order of suspension will cause prejudice and the petitioners cannot be compensated there for. As stated above the order of suspension is only interim in nature and is to be limited to the period of inquiry before a decision in the matter of supersession is taken under Sec. 41(1).
As stated above the order of suspension is only interim in nature and is to be limited to the period of inquiry before a decision in the matter of supersession is taken under Sec. 41(1). In a given case where after issuance of show-cause notice under Sec. 41(1) and passing an order of suspension under Sec. 41(2), no final decision in the matter of supersession is taken by the Registrar within a reasonable time, it can be said that the continued suspension will cause prejudice to the office bearers of the Society. Although, for the reasons mentioned above, it may not be possible for this Court to interfere with the orders of interim suspension pending inquiry under Section 41(1) where the Registrar, on the facts and circumstances of the case, is so satisfied; however, the interest of the petitioners has also to be protected. Having considered the matter in all its aspects, I am of the opinion that the ends of justice will be met if a time-limit is fixed for completion of the inquiry under Sec. 41(1) of the Act. I, accordingly, direct the Registrar, Co-operative Societies, Bihar, Patna to take all steps to complete the inquiry in the matter of supersession of the Managing Committee of the petitioners Society under Sec. 41(1) of the Act and to take a final decision in the matter within a period of three months from the date of filing of the show cause by the petitioners i e, the office bearers of the Society in question. 12. With the observations and directions mentioned above, this writ petition is dismissed at the admission stage itself. 13. H.P. Singh, J. I agree.