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1991 DIGILAW 363 (ORI)

SOMANATH PRUSTY v. DIRECTOR OF TEXTILES, ORISSA

1991-10-04

ARIJIT PASAYAT, S.K.MOHANTY

body1991
A. PASAYAT, J. ( 1 ) THE petitioner calls in question the legality of decisive view of the Deputy Director of Textiles, Orissa conveyed to the Assitant director of Textiles, Baripada (opposite party No. 3), that the petitioner was not eligible to continue as Member or President of Dihirakula Weavers' co-operative Society (opposite party No. 4) having incurred disability under the provisions of Section 28 of the Orissa Co-operative Societies Act, 1962 (in short 'the Act' ). ( 2 ) PETITIONER submits that pursuant to the direction by the Deputy director, his membership and consequentially the Presidentship of the Committee of the society is being withdrawn on deemed vacation of office. According to him, the background for the Deputy Director's decision is a decision under Section 70 of the Act in Dispute Case No. 3/89-90. Two points are raised to assail legality of the direction, viz. , (a) the decision which is one under Section 28 (5), was taken without due notice and/or opportunity, and (b) the Arbitrator-cum-Assistant Registrar of Co-operative Societies, who had passed the award in Dispute Case No. 3/89-90 was not authorised in law to render the same. ( 3 ) THE learned counsel for opposite party No. 2, i. e, the Orissa state Handloom Weavers' Co-operarive Societies Limited, represented by its Managing Director has submitted that Section 28 (5) comes into operation where a disqualification has been incurred under sub-sections (3), (3. a) (4)and (4-a) of the said Section, and therefore has no application to the facts of the case. The learned connsel for the State, however, submitted that even though action under Section 28 (5) was taken, in view of the fact that there was already an adjudication that there was defalcation of society's fund of a substantial amount, and the award has been communicated to the petitioner, there is no substance in the contention that there was violation of the principles of natural justice and/or that no due opportunity was granted to the petitioner. It was also submitted that the Arbitrator had jurisdiction to pass the award. ( 4 ) WE have not felt inclined to decide the question whether the Arbitrator had jurisdiction to deal with the dispute because we are satisfied that the petitioner is bound to succeed on the first challenge. Sub-section (5)of Section 28 reads follows :"28. It was also submitted that the Arbitrator had jurisdiction to pass the award. ( 4 ) WE have not felt inclined to decide the question whether the Arbitrator had jurisdiction to deal with the dispute because we are satisfied that the petitioner is bound to succeed on the first challenge. Sub-section (5)of Section 28 reads follows :"28. Society to have a Committee.- (1) to (4-d) xx xx xx (5) If in the opinion of the Registrar (a) a member or President of a Committee of a society has incurred any of the disqualifications mentioned in sub-sections (3), (3-a), (4) and (4-a); or (b) any officer of a society who having the power, by or under the bye-laws of the society, to remain in custody of any cash belong to the society, keeps in bis custody without reasonable cause, any such money in excess of the permissible limit beyond the period allowed under such bye-laws or in any other manner not permitted thereunder, the Registrar may, by order in writing, after giving such member, president or officer a reasonable opportunity of being heard, remove him from his office and thereupon he shall be deemed to have vacated the office with effect from the date of the said order. "there can be no manner of daubt that where in the opinion of the. Registrar a member or President of a Committee of a society has incurred any of the specific disqualifications, he may by order in writing remove him from his office and thereupon he shall be deemed to have vacated the office with effect from the date of the said order. But such order which is requir- ed to be in writing can be passted only after the concerned member, Pre- sident or officer is granted a reasonable opportunity of being heard. The grant of opportunity before any adverse action or order is taken/passed flows from the salutary requirement of principles of natural justice. It is an inseparable ingredient of fairnes and reasonableness. The principles must be read into unoccupied inrstices of the statute unless there is a clear mandate to the contrary. Non-observance of the principles of natural justice is itself prejudice and proof of prejudice independently of a proof of denial of natural justice is not necessay. It is an inseparable ingredient of fairnes and reasonableness. The principles must be read into unoccupied inrstices of the statute unless there is a clear mandate to the contrary. Non-observance of the principles of natural justice is itself prejudice and proof of prejudice independently of a proof of denial of natural justice is not necessay. Even if a statute is silent and there are no positive words in the Act or Rules polling out the need to hear the party whose rights and interests are likely to be affected, the requirement to follow : the fair procedure before taking a decision must be read into the statute, unless the slatute provides otherwise. In the instance case, statute prescribes it. Therefore, non-observance of the requirement has prejudicially affected the petitioner. ( 5 ) AS is apparent from the counters filed by the opposite parties, the foundation for the action against the petitioner was the award in Dispute case No. 3 of 1989-90, The opposite parties have submitted that the disqualification was automatic in view of sub-section (3), clauses (b) and (e)of Section 28. According to them, f';om the order of the Deputy Director, it is clear that the petitioner is a defaulter to the society as per law, and has been convicted for charges misappropriation and defalcation of funds, sub-section (3) of Section 28 makes it clear that a person is ineligible for continuing as a member or President of the society, if the enumerated circumstances exist. In view of clear prescription in sub-section (5) of Section 28 that the Registrar is to pass an order of removal from office after grant of an opportunity, it cannot be said (hat (he moment a person incurs disability of the kinds enumerated he is deemed to have vacated the office. Had that been the legislative intent, sub-section (5) obligating grant of opportunity, and passing of an order in writing would not have been engrafted to the statute. We, therefore, hold that the direction contained in Annexurc-3 7 cannot be sustained. However, (be petitioner has become aware of the allegations against him and we, therefore, direct him to file his show-cause, if he so chooses to do so, and 10 apppear before the concerned authority on 30-10-1991. If no show-cause in Tiling is filed on or before that date, the petitioner shall not be granted any further opportunity for the said purpose. If no show-cause in Tiling is filed on or before that date, the petitioner shall not be granted any further opportunity for the said purpose. The concerned authority shall hear the petitioner on 30th of october, 1991 or on any date to whice he may adjourn and dispose of the matter in accordance with law. We have not expressed any opinion about jurisdiction of opposite party No. 5 to pass the award in Dispute Case No. 3 of 1989-90. It shall be open (o the petitioner to raise all contentions which are available in law to be taken. We quash the direction of the deputy Director of Textiles, Orissa as contained in Annexure-3. The writ application is accordingly allowed in part. There shall be no order as to costs. S- K. Mohanty, J. I agree. Writ application allowed.