Dr. Hari Singh : Kuldeep Shrivastava : Rameshwar Lal v. State of Rajasthan
1990-11-29
D.L.MEHTA, G.S.SINGHVI
body1990
DigiLaw.ai
JUDGMENT 1. - In all these writ petitions the petitioners have challenged the vices of the Ordinance No. 2 of 1990 (31st August 1990). By this Ordinance, the Rajasthan State Cooperative Societies Act was amended and Section- 26(IB) [sic 36(IB)] was inserted. Section- 26 (1B) [sic 36 (1-B)J provides that "if before the expiry of the term of the Committee as specified in the bye-laws, a new Committee is not constituted, the Registrar may appoint a Government Servant as administrator to manage the affairs of the society for a period not exceeding one year or till a new committee is constituted, whichever is earlier". Petitioners have also challenged the vires of the notification No. F. 4 (15) Agr. Gr-IV/Coop/88, dated 31 August 1990. By this notification, the State Government has substituted sub-rule (2) in Rule -34. This amendment is consequential. State Government has also exercised the powers and dispensed with the previous publication of the proposed amendment. Vide Annexure-19, dated, 31st August, 1990, Registrar has directed that the elections of the Cooperative Societies be postponed till further orders. Thus, all these orders were passed on the same day, vide Annex. 20, in exercise of the powers conferred under the amended ordinance and the Rules. Collector and District Magistrate was appointed as the Administrator of the Central Cooperative Bank. Before passing any order Mr. M.I. Khan Addl. Advocate General, appeared and accepted the notice on behalf of the State and the State functionaries including the Chief Minister, in some of the writ petitions filed earlier, thereafter, he appeared in all the writ petitions. 2. During the course of arguments, Mr. B.P. Agrawal, Advocate General, appeared and submitted to the Court that he will like to address the court on some points of law. Learned Advocate General was also heard. 3. All the parties agreed that the writ petitions may be finally disposed of at this very stage. 4. Mr. Bajrang Lal Sharma and Mr. R.P. Tiwari appearing on behalf of the petitioners, challenged the vires of Ordinance No. 2 of 1990 on the following grounds: His excellency the Governor has not applied the mind in the matter of satisfaction that the circumstances exist which render it necessary for him to take immediate action.
4. Mr. Bajrang Lal Sharma and Mr. R.P. Tiwari appearing on behalf of the petitioners, challenged the vires of Ordinance No. 2 of 1990 on the following grounds: His excellency the Governor has not applied the mind in the matter of satisfaction that the circumstances exist which render it necessary for him to take immediate action. It was further argued that the Governor had no jurisdiction without instructions from the President to promulgate any such Ordinance like the Ordinance of 1990 and there is a clear violation as the previous sanction of the President has not been obtained and the assent of the President has also not been obtained. 5. On behalf of the petitioners attention was invited towards Chapter-IV of the Constitution and particularly, articles 38 and 39 of the Constitution. Article 38, provides that the State shall strive for the welfare of the people by securing and protecting as effectively as it may, the social order in which Justice-social, economic and political is available to all the institutions of the National life. Article 39 also provides among other things, that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. It was submitted that for the survival of the democracy the regular elections should be held and the system of appointing the Administrator should not be resorted and the Administrator should not be appointed. Our attention was also invited to Article 19 of the Constitution, particularly, relating to the provisions of clause (1) (g) of Article 19. Article -19 provides that, every person shall have the right to practise trade or business of his choice. Under cl. (6) of Article 19, reasonable restrictions can be imposed by the State and special law can be enacted, particularly in favour of the Corporations. On behalf of the petitioners it was also submitted that under the Banking Regulations Act, the Banks in the present case are the Scheduled Banks and they are under the control of the Reserve Bank of India and the amended ordinance is not consistent with the provisions of the Banking Regulations Act. 6. On behalf of the present petitioners the vires of the amended Rule 34(2) has been challenged on the ground that the process of elections has already started and the Government could not have interfered in the process of elections.
6. On behalf of the present petitioners the vires of the amended Rule 34(2) has been challenged on the ground that the process of elections has already started and the Government could not have interfered in the process of elections. Number of other points have also been raised by the learned counsel for the parties including the violation of Article 19. 7. Before dealing with the provisions of article 213 of the Constitution we will like to deal with the other arguments raised by the learned counsel for the parties. 8. Sub-Clause (c) of clause (1) of Article 19 provides that the citizens shall have the right to form the associations or unions. Mr. Sharma and the other counsel appearing on behalf of the petitioners submit that the appointment of the Administrator is the violation of the Fundamental Right of forming the association of the unions. Mr. Sharma has further invited our attention to sub-clause (g) of clause(1) of Article 19. Sub-clause (g) provides that everyone has a right to practise any profession or to carry on any trade or business. The contention of Mr. Sharma is that the Society/Bank is carrying on business and the members of the society are the owner of the property and appointment of the Administrator is the infringement of the guarantee granted under sub-clause (g) of clause (1) of Article 19. In support of his arguments Mr. Sharma has cited before us the case of Smt. Damayanti Naranga v. Union of India, AIR 1971 S.C. 966 . This is a case in which the Act was not only for the purpose of regulating the administration of the affairs of the original society, but the Act changed the composition of the society. Their Lordships held that the association itself clearly interferes with the right to continue to function as members of the association which was voluntarily formed by the original founders. Their Lordships further considered that the property and assets of the association namely, Hindi Sahitya Sammelan, were transferred to the- new Sammelan and, thus, there is a violation of Article 19 (f) clause (1). Thus, we are of the view that case does not apply in the facts and circumstances of the present case and it is not a case of taking over of the property.
Thus, we are of the view that case does not apply in the facts and circumstances of the present case and it is not a case of taking over of the property. it is a case in which the society still continues; only an Administrator has been appointed for a period not exceeding one year and, in case the elections are held earlier, then, the newly elected Board will have the right to take over the management of the society. Thus, there is no violation of sub- clause (c), (f) or (g) of Article 19 (1) of the constitution. The association so formed still continues. The property vests in the association or the society and only the management has been taken to regulate the society. Thus, we are of the view that the case cited by Mr. Sharma does not apply in the facts and circumstances of the case. 9. Mr. Sharma has also cited before us the case of Assam Rashtra Bhasha Prachar Samiti v. State of Assam, AIR 1989 S.C. 2126 . In the said case, the management of the body was taken under a temporary Act. however, it has not provided any time- table for the restoration of the management to the elected body. The Act was silent on the point. Their Lordships held that Clause (c) of Clause (1) of Article 19 has been violated. 10. We are of the view that the right to form association, in our opinion, may imply that the persons forming the association have also the right to continue to be associated with only those whom they voluntarily admit in the association. However, in an economic institution, like the cooperative Societies or the Cooperative Banks the reasonable restrictions can be imposed by the State Government and also by the Reserve Bank of India in the matter of functioning, loaning etc. We should not forget that the cooperative movement is the movement for the welfare of the down-trodden section of the society in principle. The State purchases the share and carries to some extent the recovery of the loan and also grants subsidy to the Banks. For the purpose of better management, the avoidance of mal-practice and development of the down-trodden, the Government may within the reasonable limits appoint the Administrator to perform the duties of the Committee.
The State purchases the share and carries to some extent the recovery of the loan and also grants subsidy to the Banks. For the purpose of better management, the avoidance of mal-practice and development of the down-trodden, the Government may within the reasonable limits appoint the Administrator to perform the duties of the Committee. In fact, under section 36 clause (1) the provision has been made for the same. We should not forget, in extra-ordinary cases, the word "regulate" can be extended to the stage of prohibition. However, if the Administrator is appointed under clause (1) of Section-36, to regulate the functioning of the Bank or the Society, for a temporary period of one year or in case the elections are held for a short period. We do not think that this will be a violation of the fundamental right of the petitioners. We are not considering the vires of clause (1) of Section -36. However, it has become necessary to do so as the petitioners have challenged the vires of Section- 36-B under which the Administrator has been appointed. Appointment of an Administrator for a short duration with a clear and defined motive to hold the election may fall within the purview of "regulating the functioning of the society". 11. For the reasons mentioned above, we are of the view that the case of Assam Rashtra Bhasha Prachar Samiti (supra), cited by Mr. Sharma also does not apply in the facts and circumstances of this case. 12. Mr. M.I. Khan, Addl. Advocate General and Mr. Agrawal appearing on behalf of the petitioners have cited before us number of cases to substantiate that it falls within the purview of reasonable restrictions. it is not necessary for us to refer them as we are of the view that the Administrator can be appointed by the Registrar of Cooperative Societies for a short duration under extra-ordinary circumstances or on the grounds mentioned in Clause (1) of Section -36. 13. The pre-amble of any enactment may now be regarded like the title as a part of Statute for the purpose of extending, restraining or even explaining the enacting words but not for the purpose of qualifying or limiting express provisions incorporated in clear and unambiguous terms. 14.
13. The pre-amble of any enactment may now be regarded like the title as a part of Statute for the purpose of extending, restraining or even explaining the enacting words but not for the purpose of qualifying or limiting express provisions incorporated in clear and unambiguous terms. 14. While explaining, restraining or extending the enacting words we may take the guide to ascertain what is the object of the Legislature in placing certain law on the Statute Book. It is our duty that the law should be interpreted to achieve the remedial objects for which the law has been enacted. Taking into consideration, now we will examine the various provisions of the Rajasthan Cooperative Societies Act. 15. Section- 29 of the Rajasthan Cooperative Societies Act provides that, the final authority in Cooperative Society shall subject to the provisions of this Act and the rules vest in the general body of the members. Section- 30 deals with the Annual General Meeting for the purpose of disposal of the business provided in the Act. Elections of the elected members other than nominated ones, are held in the annual general meeting. Clause (5) of Section-30, provides that if default is made in calling a general meeting within the period prescribed therefor under sub- section (1), or in complying with sub-sections (2), (3) or (4) and who without reasonable excuse failed to comply with any of the aforesaid sub-sections, dis- qualified for being elected of being an officer or a member of the Committee after following the principles of natural justice. State Government in exercise of the powers conferred under section 139, time to time issued various notifications to direct that with a view to successfully implement the drive for recovery of the dues. The elections may not be held under clause (b) of Section - 30 till the order of the Government. One of the notifications was issued on 31st December 1970 and subsequently also they were repeated. We are not concerned here with the legality of such notification issued. We are hereby only dealing that as a policy of the State Government. Section 31 of the Act only relates to the Special meetings. Section-32 of the Act deals with the power of Registrar to rescind certain resolution by the society.
We are not concerned here with the legality of such notification issued. We are hereby only dealing that as a policy of the State Government. Section 31 of the Act only relates to the Special meetings. Section-32 of the Act deals with the power of Registrar to rescind certain resolution by the society. Section-33 provides that the general body of the Cooperative Society shall constitute a Committee in accordance with the bye-laws and shall entrust the management of the affairs of the society to such committee. Rajasthan Cooperative Rules under Rule-8(1), the mode of holding meetings and issue of notices is generally provided in the bye-laws. Rule-30 provides that every society shall within a period of three months next after the date fixed for making up its accounts for the year under the rules for the time being in force, call a general meeting of its members. A general meeting of the society is generally convened under Clause (2) by the Secretary or any other officer authorised by it under intimation to the Registrar. It will not be out of place here to mention that the State Government vide notification dated, 19th September 1979, issued instructions as under : HINDI MATTER 365993 16. The election officer has been directed to conduct elections according to the rules and to see that the information is sent in time. Rule-31 provides that, notwithstanding anything contained in these rules or bye-law of society as to the mode of summoning a general meeting and the period of notice to be given for the said purpose, the Registrar or any person authorised by him may call the annual general meeting of the society, if the annual general meeting of the society is not called by the society. It will not be out of place here to mention that elections cannot be conducted unless the election officer is appointed by the Registrar. The committee has no jurisdiction to appoint the election officer. Rule- 32 provides that the election of the members of the Committee of every society belonging to the class of the petitioners shall be conducted in the manner specified in this rule by an election officer appointed by the Registrar. Thus, by implication, the power to conduct the election may be negatived by the Government or the Registrar by not appointing the election officer in time.
Thus, by implication, the power to conduct the election may be negatived by the Government or the Registrar by not appointing the election officer in time. The notice of the general meeting is also sent by the election officer, who is nominated by the Registrar. He intimates about the date of election and other allied matters. 17. Respondents have submitted the order dated 3rd September 1990 (Annex. R-3). In the said letter it has been mentioned specifically that the election process was stayed by the State Government and now is should be started from 3rd November 1990. The very Clause (5) of Annexure R/3, order dated, 3.9.90 reads as under:- (Contents missing)It further directs under clause (6) that election officers be appointed immediately. From the perusal of Annexure R/3, submitted by the non- petitioners it seems that the Registrar interfered in the process of election by issuing an order on 31st August 1990. 18. It will not be out of place here to mention that in fact, the election process started in April 1990 and number of instructions were issued from time to time. From the perusal of the annexures submitted with the writ petition (Annex. R/4), it seems that the directions were given for holding the elections of primary societies in five phases and all the elections were to be completed upto 21st June, 1990. On 26th April 1990 directions were issued by the Registrar of the Cooperative Societies that the Dy. Registrar and the Assistant Registrars or the officer authorised should appoint the election officer to conduct the election. in fact, the orders were issued by the Authorised Officer and he appointed the election officers of the primary societies. This is evident from Annexure-5, date 2.5.90, in writ Petition No.564/90 (Dr. Hari Singh v. State of Rajasthan ) . From the perusal of Annexure-8, it is clear that the Registrar directed on 4.5.90 that till further orders the election process of the societies should be stayed. There is a telegram (Annex.9) which was sent and Managing Director of the Bank was directed that the Annual General Meeting should not be called without the permission of the Registrar. The directions were also issued that in case the notices have been issued, the notices may be treated as cancelled and no annual meeting should be held.
There is a telegram (Annex.9) which was sent and Managing Director of the Bank was directed that the Annual General Meeting should not be called without the permission of the Registrar. The directions were also issued that in case the notices have been issued, the notices may be treated as cancelled and no annual meeting should be held. It seems that these orders were issued by the Registrar in exercise of the powers said to have been conferred under section-139 of the Rajasthan Cooperative Societies Act. 19. In a democratic country like India it is the duty of the State Government and the Registrar to act according to law and the Registrar is exercising powers from time to time under section 139 and generally directing for the postponement of the elections. Notification No. F.4/13/Coop/69, dated, 3rd May 1%9 published in the Rajasthan Gazette 4(g) Ext., dated 3rd May 1990, seems to be the first case of exercise of powers and the Registrar postponed the elections. It seems that this practise was continued in one way or the other and number of times the Government postponed the elections. From the perusal of Annexure-8, dated 4.5.90 (Annex. 9) , dated 18.5.90, it is clear that the Registrar directed that the elections should not be held and, if the notices have been issued they should be treated as cancelled. 20. It will not be out of place here to mention that in April and May generally, the agriculture class is not very much busy. Everyone knows about climate of Rajasthan and rains are expected in the second week of June of near about. We are not in a position to say why the elections were postponed. However, we are of the view that it is a case in which the Registrar might have not acted within the purview of law and might have postponed the elections for the extraneous circumstances. We are concerned with this part of the argument only for the limited purpose, i.e. where the fault lies in the matter of postponing the elections. 21. From the perusal of orders issued from time to time by the Registrar we are of the opinion that generally the spirit of the cooperative movement has been throttled by the Government for extraneous circumstances and the Registrar has played as a puppet.
21. From the perusal of orders issued from time to time by the Registrar we are of the opinion that generally the spirit of the cooperative movement has been throttled by the Government for extraneous circumstances and the Registrar has played as a puppet. This fact is evident that since 1969 most of the times Section 139 is invoked, elections are postponed and the administrators are appointed and the same has been followed in the year 1990 by the Registrar. 22. It is said that the State Government should act as a guide and should not interfere in the normal functioning of the genuine cooperative institution. Cooperative institution is a democratise institution organised for the development of the down trodden. We cannot forget also that in some cases the Cooperative Societies have become the game sanctuary of the money grabbers, particularly in the field of Housing Cooperative Societies. It is a well known fact that land grabbing, selling of land has become the routine of such Societies. We cannot pass any specific order in the instant case. We have to issue the broad guidelines that in future the elections should be held as far as practicable before the expiry of the term of the cooperative institutions. We further direct that the process of election should be allowed to be continued and the cooperative movement should not be throttled for extraneous considerations. If we take the Government version as is placed on record, then by now, the new elections might have taken place and there is no necessity of passing any order for the appointment of the Administrator. It is the Registrar who is responsible for all these contingencies and it seems that he was taken as a toy and he acted like a puppet without the application of the mind and passed the order for the postponement of the election and therefore, remained silent for a few months. 23. Indian Civil Services should be independent service, they are having the safeguards under the Constitution. They should implement the policy and execute the policy whenever the law directs and calls upon them to perform the duty as per law.
23. Indian Civil Services should be independent service, they are having the safeguards under the Constitution. They should implement the policy and execute the policy whenever the law directs and calls upon them to perform the duty as per law. The real spirit of the cooperative movement has been throttled and we hope that the Registrar will see that the elections are conducted at the earliest and the dying spirit of the movement is checked and flame of the movement is kept burning. 24. Now, we will deal with the provisions of Article 254 of the Constitution. The cooperative society is registered under the Rajasthan Cooperative Societies Act. The Central Cooperative Banks are also declared as Scheduled Banks and they fall within the purview of the Scheduled Banks and to some extent they are governed by the provisions of Banking Regulations Act and Reserve Bank of India Act. 25. Section- 5, clause (c) of the Banking Regulations Act, 1949, defines the Banking Company. Any Company which transacts the business of Banking in India has been declared as a Banking Company. Part-V of the Banking Laws (Application to Cooperative Societies Act) 1965, was inserted on 1.3.66. Section- 56 provides that the 'Banking Company' or 'the company', or such Company shall be construed as reference to a Cooperate Bank. Cooperative Banks are now Scheduled Banks and no Scheduled Cooperative Bank finds place in the Amending Act. There is a provision that no cooperative Bank shall hold any share in other Cooperative Society except to such extent and subject to such condition-as to the Reserve Bank may specify in that behalf. Section-56 further provides that every Cooperative Society and particularly, the Central Cooperative Banks, shall, before commencing Banking business in India, apply the Reserve Bank of India for license. 26. It will not be out of place here to mention that generally, the Cooperative Banks are doing Banking Business and they fall within the purview of banking Regulations Act. Section -2 of the Banking Regulations Act, provides that the provisions of this Act, i.e. the Banking Regulations Act, shall be, in addition to any other law for the time being in force. 27. Mr. M.I. Khan, Additional Advocate General, with all his vehemence at his command, submitted that there is no repugnancy in Banking Regulations Act, 1949 and the Rajasthan Cooperative Societies Act.
27. Mr. M.I. Khan, Additional Advocate General, with all his vehemence at his command, submitted that there is no repugnancy in Banking Regulations Act, 1949 and the Rajasthan Cooperative Societies Act. He submits that the doctrine of pith and substance should be applied and Cooperative law falls within List-Il of Seventh Schedule. He submits that Cooperative Societies fall within the purview of Item-32 of List-II of Seventh Schedule. He has further invited our attention to the provisions of C1. (zb) of Section -56 and submitted that Part-IIA, Part-IIC, Part-III, except sub-Sections (1), (2) and (3) of Section 45, and Part- IIIA, except Section 45 W, have been omitted. He has further invited our attention to the various provisions which have been omitted including (zc), (zd), (ze) and (zf), by which the provisions of Section, 46,47,48,49 have been substituted. 28. Mr. Khan has also cited before us the case of Sultan Singh v. Asstt. Registrar, Incharge Jhansi Division and others AIR 1972 Allahabad 159 . Their lordships held that ' in pith and substance, the U.P. Cooperative Societies Act, 1965 is a law relating to the incorporation, regulation and winding up of Cooperative Societies and is referable to Entry 32 in List 2 of Schedule 7. It is not a law which is essentially concerned with the activity of banking . " In the Banking Regulations Act there are various provisions and the Reserve Bank Of India has been empowered to prepare the scheme of amalgamating. Similarly, Reserve Bank of India is having a power under the Banking Regulations Act to appoint any person as a Chairman of a Bank and to nominate the members in place of the existing member for the reasons mentioned in the said Act. However, the powers which were there in the ordinary course in the Reserve Bank have been omitted by the Amendment Act No. 58 of 1968. Thus there is no repugnancy between the Central Act, namely, the Banking Regulations Act, 1949 and the Cooperative Societies Act. 29.
However, the powers which were there in the ordinary course in the Reserve Bank have been omitted by the Amendment Act No. 58 of 1968. Thus there is no repugnancy between the Central Act, namely, the Banking Regulations Act, 1949 and the Cooperative Societies Act. 29. Even under the Rajasthan Cooperative Societies Act, Clause (3) of Section-78A, provides that the Reserve Bank Of India in the public interest or for preventing the affairs of the Bank being conducted in a manner detrimental to the interests of the depositors for securing the proper management of the Bank, an order shall be made for the removal of the committee of management of other managing body. This power is co-extensive with the powers of the Registrar and the Reserve Bank has also the power to appoint the Administrator and the Administrator can continue beyond the period of five years in office until the day immediately preceding the date of the first meeting of the committee. 30. Now, we will deal with the provisions of Article 213 of the Constitution. 31. Mr. Bajrang Lal Sharma has cited before us the case of Dr. D.C. Wadhwa v. State of Bihar, AIR 1987 S.C. 579 . Their Lordships held that the "Rule of law constitutes the core of our Constitution and it is the essence of the rule of law that the exercise of the power by the State whether it be the Legislature or the Executive or any other authority should be within the constitutional limitations and if any practise is adopted by the Executive which is in flagrant and systematic violation of its constitutional limitations, petitioner as a member of the public would have sufficient interest to challenge such practise by filing a writ petition and it would be the constitutional duty of the Supreme Court to entertain the writ petition and adjudicate upon the validity of such practice." 32. Their Lordships of the Hon'ble Supreme Court were discussing the system of re-promulgation of Ordinances by the Governor from time to time without getting them replaced by the Act. The present cases do not stand on that footing. We will like to make it very clear that His Excellency the Governor on being satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such ordinance as the circumstances appear to him to require.
The present cases do not stand on that footing. We will like to make it very clear that His Excellency the Governor on being satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such ordinance as the circumstances appear to him to require. Now the law is well settled that satisfaction of His Excellency the Governor is not justiciable. We are not in agreement with Mr. Sharma. 33. Article 213 of the Constitution provides that the Governor shall not, without instructions from the President, promulgate any such ordinance, if, a Bill containing the same provisions would under the Constitution have required the previous sanction of the President for the introduction thereof into the Legislature, or he would have deemed it necessary to reserve a Bill containing the same provisions for the consideration of the President. 34. Clause (c) of Article 213 provides that, an Act of the Legislature of the State containing the same provisions would under this Constitution have been invalid unless, having been reserved for the consideration of the President, it had received the assent of the President. 35. Thus, it is necessary for us to consider whether under the Constitution there was a requirement of the previous sanction of the President for the introduction of such Bill into the Legislature or whether any assent of his Excellency President of India was necessary. 36. Mr. Sharma appearing on behalf of the petitioners has argued that under Article 31-A it is necessary under clause (b) of clause (1) to obtain the assent of his Excellency the President of India. He submits that clause (b), provides that 'notwithstanding contained in Article 13,no law for providing for the taking over of the management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property shall be valid unless such law having been reserved for consideration of the President, has received his assent. Where such law is made by the Legislature of the State the assent of the President is necessary. 37. Mr. Sharma further submits that the Cooperative Society is the property of the members. The assets and the liabilities of the society including their share capital reserves and other movable and immovable property form the property of the Society.
Where such law is made by the Legislature of the State the assent of the President is necessary. 37. Mr. Sharma further submits that the Cooperative Society is the property of the members. The assets and the liabilities of the society including their share capital reserves and other movable and immovable property form the property of the Society. he submits that for taking over management of the cooperative society assent of his Excellency the President is necessary and the Ordinance cannot be promulgated without the assent of his Excellency the President. 38. Mr. Sharma has relied upon the case of Daman Singh v. State of Punjab, AIR 1985 S.C. 973 . Their Lordships held in Para-l of the said judgment that, we are unable to find any justification for giving such a limited or narrow interpretation to the expression "corporations" occurring in Article 31 A (1) (c). Their Lordships further held that, 'On the other hand, we think that the very requirement of public interest or proper management of the Corporation mentioned in Article 31 A (1) (c) requires the expression to be given a broad interpretation since there can be no higher interest than the public interest. Thus, their Lordships held that Cooperative Society is a Corporation under Article 31A C1. (1) C1. (c). Clause (b) specifically provides that whenever a law is enacted for the purpose of taking over management of any property by the State for a limited period either in the public interest or in order to secure the proper management of the property, the assent of his Excellency the President is necessary. Vide Ordinance (Annex. 17), the 5 AIR 1985 S.C. 973 Ordinance No. 2 of 1990, dated 31.8.90, has been issued. It is an admitted case of the parties that the Ordinance has been issued without the assent of the President and it has not been referred for the consideration of the President in time. It is also an admitted position that earlier when the Act was enacted, it was submitted to his Excellency the President for his assent and the President accorded assent and it was considered by the State Government that the assent of his Excellency the President is necessary. 39. Even in subsequent amendments the assent of his Excellency the President was obtained.
39. Even in subsequent amendments the assent of his Excellency the President was obtained. We are of the view that for Ordinance to become an effective Ordinance and a valid ordinance it is necessary that the assent of the President should be obtained. Thus, there is a violation of the provisions of Article 213, as such, we hold that the Ordinance No.2 of 1990, issued on 31st August 1990, is not a valid ordinance and it is invalid and ineffective only for the reason that the proviso to Article 213 relating to the assent of His Excellency the President of India has not been followed and we declare that Section 36 (1)(b) is not a law or a valid amendment of the Act. As far as Annexure 18 is concerned, originally the law provided that the members of the Committee shall continue in the office for the term. Clause (2) further provided that, if the elections could not be held then the managing committee or the body shall continue in office upto the date of the constitution of the new body. The amendment which we have declared invalid shall introduce only for this purpose that if before the expiry of the term of the Committee as specified in the bye-laws, a new committee is not constituted the Registrar may appoint a Government servant as Administrator to manage the affairs of the society for the period not exceeding one year. This provision has been declared as invalid for want of the assent of the President under Article 213. Now, the new substituted rule creates a vacuum as there is no provision in the agreement for the appointment of the Administrator in case the elections could not be held in time. On the contrary, the provision is that the old committee shall continue till the new elections are held by the Registrar and new committee takes over the charge. Annexure-18, the amendment notification, is a consequence of the Ordinance (Annex. 17), which was issued on the same day. It will not be out of place here to mention that ordinarily, the rule making power provides that the draft rules shall be published and the objections shall be invited. However, in the instant case, the provision relating to the publication of the draft rules have been dispensed in exercise of the power said to have been conferred under section 148 of the Act.
However, in the instant case, the provision relating to the publication of the draft rules have been dispensed in exercise of the power said to have been conferred under section 148 of the Act. As we have declared the Ordinance as invalid, there will be a vacuum if the old society is not allowed to continue or to function. We are of the view that automatically, annexure-18, dated 31st August 1990 goes away, as rule cannot be allowed to create a vacuum. 40. In the result, we accept the writ petitions and declare Annexure-17, the Ordinance dated, 31st August 1990 as invalid and ineffective. We also declare the amended Rule Annexure-18, dated 31st August 1990 as invalid. The committees/ persons which existed prior to the issuance of the notification will be entitled to taken over the charge and the charge should be handed over to them. The process of election should be continued and the elections should be held and the Registrar should see that the elected body takes over the charge of the Committee at the earliest possible and as per the Schedule. 41. No order as to costs.Petition accepted. *******