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1996 DIGILAW 321 (CAL)

Pubali Co-operative Housing Society Ltd. v. Registrar of Co-op. Societies, W. B.

1996-08-12

Tarun Chatterjee

body1996
Judgment Tarun Chatterjee, J. 1. The Secretary of Pubali Co-operative Housing Society Ltd. having its registered office at Sector IIA, Bidhannagar, Durgapur (hereinafter referred to as the 'Co-operative Society') is representing the co-operative society in this writ petition. The object of the Co-operative Society is to provide its members with land for construction of dwelling-houses. The private respondents Nos. 2 to 5 were admittedly the members of the Co-operative Society and they were allotted plots of land for construction of their respective houses. By the Board of Directors of the Co-operative Society on 1st July, 1990, the private respondents Nos. 2 to 5 had been expelled from the membership of the Cooperative Society. Rule 137 of the West Bengal Co-operative Societies Rules, 1987 (hereinafter referred to as 'the rules') confers power on the Co-operative Society to expel its members on the ground of default in payment of their dues towards the costs of land or house or apartment allotted to them by the society for more than six months without a break by the vote of 2/3rd of the members of the board present after giving opportunity of explaining their conduct. However, in order to understand intention of the legislature to frame Rule 137 of Rules, it is necessary to re-produce the same herein below : "Expulsion of members-(l) Any member who continues to default in payment of his dues towards cost of land or house or apartment allotted to him by the society for more than six months without a break may be expelled from the society by the vote of two-thirds of the members of the board present and voting at a meeting after he has been given an opportunity of explaining his conduct and no resolution of the board shall be effective unless it is submitted to the Registrar for approval and approved by him: Provided that the order of expulsion shall take effect only from the date of communication of the decision of the Board to the concerned member after the approval of the Registrar, as aforesaid, has been duly obtained: Provided further that the approval or disapproval of the Registrar shall be communicated to the society within a period of six weeks and in the absence of such communication, the resolution of the Board shall be effective. Explanation-The power of approval offered hereinabove shall vest in the Registrar exclusively and shall not be capable of being delegated to any other officer. (2) A member may be expelled in the same manner as laid down in sub-rule (1) if, in the opinion of the Board, he has done any act prejudicial to the interest of the society or has violated a lawful decision of the Board despite warning. (3) The member so expelled shall have a right to appeal to the State Government for which purpose he shall submit a written representation to the State Government within a fortnight from the date of communication of the order of expulsion". 2. From a perusal of Rule 137 as quoted herin above, it is evident that the following conditions must be satisfied before a member can be expelled from the Co-operative Society. (1) A member must be a defaulter in payment of his dues towards the cost of land or house or apartment allotted to him by the society for more than six months without a break. (2) Such expulsion shall be made by the vote of two-thirds of the members of the Board present and voting at a meeting after the member is given an opportunity of explaining his conduct. (3) No resolution of the Board shall be effective unless it is submitted to the Registrar for approval and approved by him. Proviso to this Rule says that the order of expulsion shall take effect only from the date of communication of the decision of the Board to the concerned member after the approval of the Registrar, as aforesaid, has been duly obtained. Second proviso to Rule 137 of the said Rules also says that the approval or disapproval of the Registrar shall be communicated to the society within a period of six weeks and in the absence of such communication, the resolution of the Board shall be effective. The Explanation to Rule 137 says that the power of approval conferred hereinabove shall vest in the Registrar exclusively and shall not be capable of being delegated to any other officers. If the aforesaid ingredients under the above Rule are satisfied then the expulsion of a member of a Co-operative Society can be said to have been rightly done. The Explanation to Rule 137 says that the power of approval conferred hereinabove shall vest in the Registrar exclusively and shall not be capable of being delegated to any other officers. If the aforesaid ingredients under the above Rule are satisfied then the expulsion of a member of a Co-operative Society can be said to have been rightly done. So far as the facts of this case are concerned, I find that the resolution for expulsion of the private respondents Nos. 2 to 5 was taken by the erstwhile board on 1st July, 1990 which was communicated to the Registrar on 11th July, 1990. The order disapproving the expulsion of the private respondent Nos. 2 to 5 from the membership of the Co-operative Society was taken by the Registrar on 11th November, 1991 which is now under challenge in this writ petition. 3. Before me, Mr. Choudhury, learned advocate for the writ petitioner makes only two fold submissions. First submission is that since the enquiry regarding expulsion of the private respondents Nos. 2 to 5 from membership of the said Co-operative Society was held by the Assistant and/or Additional Registrar and not by the Registrar himself, therefore, the order passed by the Registrar disapproving such expulsion cannot be sustained in law. This submission has been made by Mr. Choudhury relying on the explanation in Rule 137 of the said Rules. As already noted above, explanation to Rule 137 says that the power of approval conferred on the Registrar shall vest in the Registrar exclusively and shall not be capable of being delegated to any other officer. Mr. Choudhury relying on this explanation and particularly the words used in the explanation to Rule 137 that the power of approval conferred hereinabove shall vest in the Registrar exclusively and shall not be capable of being delegated in any other officer, submits that since the enquiry was held not by the Registrar himself, the order passed by him disapproving the expulsion of the private respondents Nos. 2 to 5 from the membership of the Co-operative Society is liable to be set aside. This argument on the face of it looks very attractive. 2 to 5 from the membership of the Co-operative Society is liable to be set aside. This argument on the face of it looks very attractive. But considering the explanation to Rule 137 read with proviso to Rule 137, I am of the firm opinion that the said explanation to Rule 137 has been incorporated by the legislature to confer power on the registrar only to approve or disapprove any action in the matter of expulsion of a member of a Co-operative Society. There is no dispute that in this case, disapproval of the resolution of the Board expelling the private respondents was taken by the Registrar himself and not by any other officer working under him. From a perusal of Rule 137 of the said rules it cannot be said that the Registrar is not conferred with any power to direct the Assistant or Deputy Registrar of the Cooperative Society to hold an enquiry in respect of the resolution taken by the Co-operative Society in the matter of expulsion of its members. A restriction has only been made in Rule 137 to the extent that the power of approval or disapproval is vested in the Registrar exclusively and such power of the Registrar shall not be capable of being delegated to any other officer. Therefore, I can not be in agreement with the learned counsel for the writ petitioner that since the enquiry was held by the officer other than the Registrar himself, the order of disapproval is liable to be set aside. It is an admitted position that the order of disapproval which is under challenge in this writ application was passed by the Registrar himself in accordance with Rule 137 of the said Rules and such power was not delegated to any other officer. For the reasons aforesaid, I do not find any substance in the argument of Mr. Choudhury on this question and accordingly it is rejected. 4. Mr. For the reasons aforesaid, I do not find any substance in the argument of Mr. Choudhury on this question and accordingly it is rejected. 4. Mr. Choudhury thereafter contends, relying on the second proviso to Rule 137 of the said Rules, that as the order disapproving the resolution of the Board was made long after six weeks from the date of submitting the resolution before the Registrar by the Board, the resolution of the Board in terms of second proviso to Rule 137 of the Rules shall be effective on the expiry of six weeks in view of' the fact that Registrar becomes functus officio and therefore, the order of disapproval passed by the Registrar must be set aside. In support of this contention Mr. Choudhury relies on a decision of the Supreme Court in the case of Balasynor Nagrik Co-operative Bank Ltd. vs. Babubhai Sankarlal and others, 1987(1) SCC 606 . In my view, though this argument at the first glance looks very attractive but after considering the Rule 137 of the Rules in its entirety including the second proviso to Rule 137 I am unable to agree with the argument of Mr. Choudhury. As noted hereinbefore, expulsion of members of a Co-operative Society can be done in exercise of the power conferred on the Co-operative Society if a member continues to make default in payment of his dues towards cost of land or house or apartment allotted to him by the co-operative society for more than six months without a break by vote of 2/3rd of the members of the Board present and voting at a meeting after he is given an opportunity of explaining his conduct. Therefore, in view of Rule 137 of the said Rules the power has been conferred on the Co-operative Society to expel a member of the Co-operative Society, but this power is subject to the following conditions: (1) No resolution of the Board of the Co-operative Society shall be effected unless it is submitted to the Registrar for approval and approved by him. (2) The order of expulsion shall take effect only from the date of communication of the decision of the Board to the concerned member after the approval of the Registrar as aforesaid has been duly obtained. (2) The order of expulsion shall take effect only from the date of communication of the decision of the Board to the concerned member after the approval of the Registrar as aforesaid has been duly obtained. (3) The approval or disapproval of the Registrar shall be communicated to the society within a period of six weeks and in the absence of such communication the resolution of the Board shall be effective. 5. From the aforesaid, it is therefore, clear that the resolution in the matter of expulsion passed against a member of the Co-operative Society by its Board shall only take effect from the date of communication of the decision of the concerned Board after the approval of the Registrar is obtained by the Board. From this, it is also clear that the resolution expelling a member of the co-operative society shall not take effect until the approval is obtained from the Registrar by the Board of the Co-operative Society in question and it is the duty of the Registrar, in view of second proviso to Rule 137, to communicate the order of approval or disapproval to the society within a period of six weeks from the date of passing the order of approval or disapproval by the Registrar and if there is no communication within a period of six weeks from the date of approval or disapproval by the Registrar, the resolution expelling the member of the Board shall be effective. From the above, it is therefore, clear that second proviso to Rule 137 has nowhere said that the order of approval or disapproval to be passed by the Registrar sha1l be so passed within a period of six weeks from the date of submission of the resolution by the Board of the Co-operative Society to the Registrar. For the reasons aforesaid, I am not in agreement with the learned advocate for the writ petitioner, that since the order of disapproval which is under challenge in this writ application has not been passed within six weeks from the date of submitting the resolution, the order of disapproval which is under challenge in this writ application is bad, illegal and inoperative in law. So far as the decision in the case of Balasynor Nagrik Co-operative Bank Ltd. vs. Babubhai Shankarlal 1987(1) SCC 606 is concerned, I am of the view, that the said decision is clearly distinguishable as the provisions made in Rule 137 of the Rules and the provisions in s. 36(1) of the Gujarat Co-operative Societies Act, 1961 are clearly different. In that decision, the Supreme Court, while dealing with s. 36(1) of the Gujarat Co-operative Societies Act, 1961 held that if a Board of the Co-operative Society communicates its resolution expelling a member for acts detrimental to the working of the society passed in the manner required by sub-so (1) of S. 36 to the Registrar for his approval, under the first proviso there is a duty caste on the Registrar to exercise his power of according approval or disapproval within a period of three months from the date of such submission as provided by the second proviso to S. 36(1) of the Gujarat Co-operative Societies Act, 1961. In that background the Supreme Court held that the section puts a limitation on the power of the Registrar and on the expiry of the period, the Registrar becomes functus officio and accordingly the Supreme Court held in that case the Registrar had no jurisdiction to set aside the resolution after the expiry of the period fixed by S. 36(1) of the Gujarat Co-operative Societies Act, 1961 from the date of submission of the resolution by the Co-operative Society to the Registrar. It is difficult to appreciate how the aforesaid decision of the Supreme Court can be applied in this case, as, in my view, the Supreme Court decision dealt; with the second proviso to s. 36(1) of the Gujarat Co-operative Societies Act, 1a61 which is quite different from Rule 137 of the Co-operative Societies Rules, with which we are concerned. In this connection it is necessary to refer to paragraph 4 of the said judgment of the Supreme Court which reads as follows: "The decision of the appeal must turn on a construction of sub-so (1) of S. 36 of the Act read with the two provisions thereto, which is in these terms : 36. Expulsion of members. In this connection it is necessary to refer to paragraph 4 of the said judgment of the Supreme Court which reads as follows: "The decision of the appeal must turn on a construction of sub-so (1) of S. 36 of the Act read with the two provisions thereto, which is in these terms : 36. Expulsion of members. (1) A society may, by resolution passed by three-fourths majority of all the members present and voting at a general meeting of members held for the purpose, expel a member for acts which are detrimental to the proper working of the society: Provided that, no resolution shall be valid, unless the member concerned is given an opportunity of representing his case to the general body, and no resolution shall be effective unless it is submitted to the Registrar for his approval and approved by him: Provided further, that the approval or disapproval of the Registrar shall be communicated to the society within a period of three months from the date of such submission, and in the absence of such communication the resolution, shall be effective." (Emphasis is mine) 6. From the aforesaid quotation of s. 36 of the Gujarat Co-operative Societies Act, 1961 as made by the Supreme Court it is clear that second proviso to s. 36(1) of the Act clearly provides that the approval or disapproval of the Registrar shall be communicated to the society within a period of three months from the date of submission of the resolution of the Board and in the absence of such communication such resolution shall be effective. Therefore, a limitation has been prescribed in respect of the order of the Registrar which is to be communicated to the Society within a period of three months from the date of submission of the resolution of the Board of the Co-operative Society expelling a member of the same. It is also clear from such perusal that the second proviso to s. 36(1) of the Gujarat Cooperative Societies Act, 1961 clearly prescribes limitation on the Registrar from passing an order of approval or disapproval of the resolution of the Co-operative Society if such order of approval or disapproval is not passed by him within a period of three months from the date of submission of the resolution by the Board of the Co-operative Society. Whereas the second proviso to Rule 137 of Rules clearly provides that the order of approval or disapproval of the Registrar shall be communicated to the society within a period of six weeks that is to say that if the order of approval or disapproval of the Registrar is not communicated to a society within a period of six weeks from the date of passing such order of approval or disapproval by the Registrar, the resolution of the Board of the Co-operative Society then only shall be effective. Therefore, from a comparative reading of the aforesaid two provisions of two different acts, I am therefore, of the view, that the Supreme Court in that decision laid down the principle on an interpretation of second proviso to s. 36(1) of the Gujarat Co-operative Societies Act, 1961 by holding that the order of the Registrar approving or disapproving the resolution of the Board must be passed and communicated to the society within three months from the date of submitting the resolution by the Co-operative Society. So far as this case is concerned, it is not disputed before me that the order of disapproval expelling private respondents from membership of the co-operative society was communicated to the society within six weeks from the date of disapproval of the resolution of the Co-operative Society by the Registrar. 7. That being the position and in view of my discussions made hereinabove the Supreme Court decision which was dealing with a different provision under a different Act, cannot be applied to the case in hand. In this case, admittedly the resolution expelling the membership of the private respondents was communicated on 11th July, 1990 to the Registrar. The order of disapproval was passed on 19th November, 1991. From the discussions made hereinabove, if the second proviso to s. 36(1) of the Gujarat Co-operative Societies Act, 1961 was made applicable to the West Bengal then certainly the argument of the learned counsel for the writ petitioner ought to have been accepted by me. The order of disapproval was passed on 19th November, 1991. From the discussions made hereinabove, if the second proviso to s. 36(1) of the Gujarat Co-operative Societies Act, 1961 was made applicable to the West Bengal then certainly the argument of the learned counsel for the writ petitioner ought to have been accepted by me. But in view of the different provision as incorporated in Rule 137 of the said rule I am not able to hold that since the disapproval of the Registrar was not communicated to the society within a period of six weeks from the date of submission of such resolution, the order of disapproval of the Registrar which is challenged in this writ application can be held to be null and void. 8. For the reasons aforesaid, this writ application has no merit and is therefore dismissed. 9. Interim order, if there be any, stands vacated. 10. There will be no order as to costs. 11. Let the certified xerox copy of this order be given to the parties immediately if it is applied for obtaining the same. Application rejected.