HUBLI MANEKATTUVA SAHAKARI SANGHA LIMITED, HUBLI v. DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, DHARWAD
1994-04-22
V.P.MOHAN KUMAR
body1994
DigiLaw.ai
( 1 ) ISSUE rule. ( 2 ) THE petitioner herein is a co-operative society, represented by its president. The, society went into liquidation and as per proceedings dated 27-7-1972, the society was ordered to be. Wound up. A liquidator, who is a departmental officer, was appointed to administer the affairs of the society. It is seen from the exhibits produced that the 2nd respondent after conducting due and detailed enquiry issued Annexure-C order dated 24-4-1989 to rescind the order of liquidation and revived the society. The liquidator, the 2nd respondent herein, was allowed to be in office in-charge of the society. In view of the fact that the order of liquidation stood revoked, the 2nd respondent thereafter represented the committee of management of the society and was administering the affairs of the society. Annexure-C order was issued under Section 72 (3) of the Co-Operative Societies Act. ( 3 ) THEREAFTER, between 1-6-1989 and 4-6-1989, the liquidator enrolled new members and on 5-6-1989, convened a general body of the members where and a group of persons were selected as directors. These directors met and elected a president. On coming to know of the same, the 1st respondent issued show cause notice on 24-8-1989 to the directors of the society to show cause why annexure-c order revoking the revival order be rescinded. On 19-9-1989, the said show-cause notice was replied. After hearing, by Annexure-B order dated 25-10-1989, Annexure c order dated 24-4-1989 was rescinded. An appeal filed by the petitioner before the 3rd respondent was unsuccessful. The said order Annexure-A and the order revoking the revival, an-nexure-b, are impugned in these proceedings. ( 4 ) I have heard the government Advocate as well. The counsel for the petitioner contended that unless there is express conferment of power to review, the 2nd respondent could not have rescinded the order dated 24-4-1989. He relied on the decision of the Supreme Court in patel narshi thakershi and others v pradyumansinghji arjunsinghji. But in this case, the stand taken by the respondents is that the power exercised by the authorities is riot the power of review but only power of rectification. According to them, there were no grounds to revoke the liquidation order and that therefore, the authority was merely setting right the error committed resulting in the restoration of position ante to 24-4-1989.
According to them, there were no grounds to revoke the liquidation order and that therefore, the authority was merely setting right the error committed resulting in the restoration of position ante to 24-4-1989. According to the contesting respondent, the power exercised is under Section 72 (3) of the act and the authority exercising the said power has inherent power to set right the error. It has to be noted that it is fundamental that every authority has inherent power vested in it to correct any error which vitiates the Order, after due notice to the affected party. Such reserve power is located in every authority exercising jurisdiction. Hence, it is not necessary that there should be an express conferment of power on the 2nd respondent to rescind the order dated 24-4-1989. The position has been succinctly stated by Justice t. l. vishwanatha iyer of the Kerala high court in sasidharan v reserve bank of india, as follows:"7. The power is inherent in any administrative authority to correct accidental mistakes committed by it, in ignorance of, or overlooking the facts. Indeed such power should be exercised, where rights of third parties have been affected by the mistaken proceedings, without their knowledge, and without their being heard, resulting in miscarriage of justice. If the power to correct inadvertent mistakes is not recognised and accepted, it may lead to perpetuation of injustice and to undesirable consequences. A person whose rights are so affected by an illegal order passed behind his back need not be compelled to rush to court to get it set aside, on pain of its being held binding otherwise. The authority concerned can itself remedy the mischief, on its being apprised of its mistake and the injustice flowing therefrom. (see in this connection karunakaran nambiar v director of public instruction ). Such an order does not affect any rights of the party benefitting by the mistake, as no rights legally inhered in him by virtue of the mistaken order. Wade in his administrative law (fifth edition, page 226) points out that even where such powers are not (expressly) conferred, statutory tribunals would have power, to correct accidental mistakes, and to review a decision when facts subsequently discovered have revealed a miscarriage of justice. The same rules must apply to non-statutory action by administrative authorities as well. "the principle noticed therein can be applied to the facts of the above case.
The same rules must apply to non-statutory action by administrative authorities as well. "the principle noticed therein can be applied to the facts of the above case. Each authority is conferred with such inherent powers as will enable it to correct its own error, review its own order or to do Justice to an adversely affected party when once it is satisfied that the order resulted from any such error or mistake. No one can be said to have acquired any right to claim the benefit of an order which arose out of an erroneous premises. Therefore, the contention of the petitioner that the 2nd respondent has no power to rescind the order dated 24-4-1989 has to be negatived. ( 5 ) THEN it takes us to the question whether annexures-a andb orders impugned are in any way illegal. The learned government Advocate Smt. Nimmy swamy urged that the power exercised by the 2nd respondent comes within the ambit of Section 72 of the Co-Operative Societies Act. The said Section reads as follows:"72. Winding up of co-operative societies. (1) if the registrar after an inquiry has been held under Section 64 or an inspection has been made under Section 65 or on receipt of an application made by not less than three- fourths of the members of a co-operative society, is of opinion that the society ought to be wound up, he may issue an order directing it to be wound up. (2) the registrar may, of his own motion, make an order directing the winding up of a co-operative society (a) where it is a condition of the registration of the society that the society shall consist of at least ten members and the number of members has been reduced to less than ten; or (b) where the co-operative society has not commenced working or has ceased to work; or (c) where the co-operative society has ceased to comply with the conditions imposed by or under this act regarding registration and management. (3) the registrar may cancel an order for the winding up of a co-operative society, at any time, in any case where in his opinion, the society should continue to exist. (4) notwithstanding anything contained in this Section, no co-operative bank shall be wound up or an order for winding up shall be cancelled except with the previous sanction in writing of the reserve bank.
(4) notwithstanding anything contained in this Section, no co-operative bank shall be wound up or an order for winding up shall be cancelled except with the previous sanction in writing of the reserve bank. "a reading of the Section discloses that none of the grounds made mention in the Section exists to invoke the power. The reason stated in Annexure-B order for revoking Annexure-C order is the illegality in the election held. This is not a ground mentioned in Section 72. Hence, the Section does not clothe the 2nd respondent power to issue the impugned order. Therefore, it has straightaway to be stated that a reading of the impugned order does not disclose that the grounds mentioned in Section 72 existed before placing the society in the pre 24-4-1989 stage. There are no grounds made mention of in the impugned orders to attract the power under Section 72 or to sustain the impugned action under that section. ( 6 ) BUT it may be noted that the liquidator who has to administer the affairs of the society has committed a patent illegality. He has enrolled certain members from 1-6-1989 to 4-6-1989. Being the person representing the society who exercises powers under Section 30 of the Act, he may perhaps be empowered to admit new members. Nevertheless the question here would be the rights of such a member vis-a-vis the election to the committee of management. Rule 8 of the Co-Operative Societies Rules states that no person enrolled within 30 days of the date of general body meeting being convened to elect the office bearers of the society is entitled to participate and contest in the election. It is stated by the respondent that the general body meeting convened to be held on 5-6-1989 with the newly enrolled members as voters and some of the office bearers elected on 5-6-1989 were those who were admitted as members of the society between 1-6-1989 and 4-6-1989. There has thus been a clear violation of the rule. If qualified, a person can be admitted as a member of a society at any time. But Rule 8 abridges the right of a member of a co-operative society to cast his vote or participate at an election held within 30 days of his enrolment.
There has thus been a clear violation of the rule. If qualified, a person can be admitted as a member of a society at any time. But Rule 8 abridges the right of a member of a co-operative society to cast his vote or participate at an election held within 30 days of his enrolment. Impliedly it means, a member of society becomes a full-fledged member entitled to the voting rights conferred on him under Section 20 of the act on the expiry of 30 days. It means the casting of vote within the said period of "incubation", is an exercise of a non-existent right. The corollary therefore is that the whole election process was vitiated by allowing ineligible members who were enrolled between 1-6-1989 and 4-6-1989 who could not have cast their vote at the meeting held on 5-6-1989. ( 7 ) IT is an admitted fact that the present president of the society, representing the petitioner herein was admitted between 1-6-1989 and 4-6-1989. He could not have therefore been a candidate for election on 5-6-1989 and he could not have been elected as well. If that be so, he cannot enforce his personal right. ( 8 ) THE petitioner before this court is the society. The societyis represented by the president. Therefore, the petitioner-society can certainly seek relief. But here though the incumbent of the office of the president is ineligible to hold the said office, he is nevertheless a member of the society who can espouse the cause of the society. In such circumstances this writ petition at the instance of such a person is maintainable. Since the general body which consisted of eligible and ineligible members of the society conferred on him, the status of the president, his action of filing the writ petition and prosecuting the same on behalf of the society can be validated as well extending the doctrine of de facto. Hence, taking into account all these circumstances and in view of the changed circumstances this court is entitled to mould the relief that can be granted. In the instant case, the order of revival, Annexure c, is seen passed after detailed deliberation, consultation and enquiry. The 2nd respondent ought not to have interfered with the same by issuing Annexure-B order on the basis of non-existent grounds.
In the instant case, the order of revival, Annexure c, is seen passed after detailed deliberation, consultation and enquiry. The 2nd respondent ought not to have interfered with the same by issuing Annexure-B order on the basis of non-existent grounds. Therefore, the status ante of the society as on the date of revocation has to be restored. A general body of the society with the members existing as on 24-4-1989 i. e. the date of Annexure c Order, should be convened and the authorities should take appropriate steps to constitute a committee of management so as to give effect to the order dated 24-4-1989. ( 9 ) THE impugned orders cannot be sustained. the writ petition is disposed off with the following direction. (i) annexures-a and b orders are quashed; (ii) there will be a direction to the 1st respondent to convene the general body of the society with the members as it existed prior to 24-4-1989 and take appropriate steps to hold the election with them as the voters to the committee of management of the society. (iii) Rule made absolute. --- *** --- .