DEEPAK MISRA, J. ( 1 ) BY the Court. By this writ petition, preferred under Article 226 of the constitution of India the petitioner has assailed the order of supersession of the Committee/board of Directors of the Zila Sahakari Kendriya Bank maryadit, Jagdalpur contained in Annexure P-13 passed by the Joint Registrar of Co-operative Societies, Bastrar Division. ( 2 ) THE facts as have been uncurtained in the petition are that the petitioner is the President of Zila Sahakari Kendriya Bank Maryadit, Jagdalpur, a Co-operative Society governed by the provisions of M. P. Co-operative Societies act. 1960 (hereinafter referred to as 'the Act' ). The Registrar of the Co-operative society M. P. Bhopal directed as inquiry by order dated 27. 10. 1993 and the inquiry was to be conducted by the Joint Registrar, Co-operative Societies and the Branch Manager of M. P. State Co-operative Societies Branch, Raipur. The said two officers conducted an inquiry and on 30. 10. 1993 a show cause notice of supersession was issued along with the order of suspension. The said order of suspension was challenged in appeal before the Board of Revenue, M. P. , gwalior and the said appellate authority by order dated 12. 11. 1993 directed that proper opportunity of hearing should be given to the Board of Directors before taking action. After remand, on 23. 11. 1993 vide Annexure P-3 a show cause notice was served. A copy of this was also sent to the National agricultural Rural Development Bank (NABARD) and also to the Reserve Bank of India and M. P. State Co-operative Bank asking their views and opinion within 45 days. The petitioner, as alleged in the writ petition, filed an application vide Annexure P-2 dated 30. 11. 1993 for supply of documents as they were already seized by the Dy. Registrar and were not available with them and also prayed for three weeks' time to reply. Some of the members of the board of Directors filed their reply on 3. 12. 1993 and the petitioner also filed his reply on 13. 12. 1993. One of the members, namely, Prabha Shankar pandey, a Director, filed an appeal before the Board of Revenue wherein the appellate authority by order dated 15. 12. 1993 directed that inquiry would continue but no final order should be passed. Thereafter on 5. 7.
12. 1993 and the petitioner also filed his reply on 13. 12. 1993. One of the members, namely, Prabha Shankar pandey, a Director, filed an appeal before the Board of Revenue wherein the appellate authority by order dated 15. 12. 1993 directed that inquiry would continue but no final order should be passed. Thereafter on 5. 7. 1994 vide annexure P-8 an order was passed stating that as contemplated under second proviso to Section 53 (10) of the Act the order of suspension had already elapsed and the Board of Directors would be deemed to be reinstated but they would function under the supervision of the Collector, Jagdalpur. Thereafter the Joint Registrar issued a notice on 11. 7. 1994 (Annexure P-9) fixing the case to 27. 7. 1994 for reply but the case was adjourned. The petitioner submitted his reply under Annexure P-10 dated 4. 8. 1994 along with certain documents and specifically denied the charges. He also sought for final hearing. The case was adjourned from time to time. Eventually oral arguments were heard and written arguments were also submitted. However, ignoring all these aspects the Joint Registrar of the Co-operative Societies in flagrant violation of the mandatory provision passed an order vide Annexure P-13 superseding the board of Directors and appointing the Collector, Jagdalpur as specified officer. The said order is the subject-matter of challenge before this Court. It is averred in the writ petition that the said order is vitiated in the eye of law as the order has been passed without previous consultation with the Reserve bank of India though such consultation is mandatory. It is also averred that the consultation which has been stated to have taken place by the Joint registrar Co-operative Societies is unjustified inasmuch as the said authority had not supplied the necessary documents to the competent authority of Reserve bank of India, and hence there has been no affective consultation which vitiates the order of supersession. In addition to the aforesaid aspect there are averments also that the charge leveled against the Board of Directors did not warrant such drastic action and the whole proceeding is vitiated because of violation of principle of natural justice. It is also averred that the order is wreaked with bias and mala fide and requires to be lanceted is exercise of extra-ordinary jurisdiction of this Court.
It is also averred that the order is wreaked with bias and mala fide and requires to be lanceted is exercise of extra-ordinary jurisdiction of this Court. ( 3 ) A counter-affidavit has been filed by the respondent No. 1 to 3 contending, infer alia, that the Board of Revenue had allowed the appeal by its order dated 12. 11. 1993 and, thereafter, the respondent No. 3 registered a case under Section 53 of the Act and after conducting proper inquiry the final order of supersession was passed. There is reference to preliminary investigation into the allegations contained in the charge-sheet and the reply filed by the petitioner and the order-sheet maintained by the Joint Registrar to justify the order of supersession passed vide Annxure P-13. It has been put forth in paragraphs 8 and 9 to emphasize that there has been proper consultation with the Reserve Bank of India and there has been due compliance of the mandatory provision of the Act. ( 4 ) I have heard Mr. Unesh Trivedi learned Counsel for the petitioner and mr. R. P. Agrawal learned Counsel for the respondents No. 1, 2 and 3. Mr. A. S. Gaharwar learned Penal Lawyer and Mr. P. C. Poliwal learned Counsel for the respondents No. 6, 7, 9, 11, 12 and 13. Mr. Trivedi learned Counsel for the petitioner has raised a singular contention that there has been no consultation with the Reserve Bank of India as envisaged under Section 53 of the Act and is absence of effective consultation the order of supersession passed by the competent authority is indefensible. In support of his contention he has placed reliance on the decisions rendered in the cases of Radheyshyam Sharma v. Govt. of M. P. through C. K. Jaiswal and others, AIR 1972 MP 160 ; Board of directors of Shri Ganesh Sahkari Vipnan (Marketing) Sanstha Maryadit and another v. Dy. Registrar, Co-operative Societies, 1982 MPLJ 46 and Sitaram v. Registrar of Co-operative Societies, 1986 MPLJ 567. Mr. Agrawal learned Counsel for the respondents No. 1 to 3 has submitted that the term of the committee was for five years and the said period is over. Though he has submitted so he has also accepted that the controversy subsists because of sub-section 12 of section 53 of the Act. Mr.
Mr. Agrawal learned Counsel for the respondents No. 1 to 3 has submitted that the term of the committee was for five years and the said period is over. Though he has submitted so he has also accepted that the controversy subsists because of sub-section 12 of section 53 of the Act. Mr. Gaharwar learned Penal Lawyer for the State has supported the action of the Joint Registrar for the reasons indicated in the order. Mr. Poliwal who has appeared for the other respondents has supported the contentions advanced by the learned Counsel for the petitioner. ( 5 ) THE seminal question that arises for consideration is whether there has been effective consultation as mandated under Section 53 of the Act. To appreciate the rival contentions raised at the Bar, it is essential to refer to section 53 of the Act which deals with supersession of a committee. The said provision reads as under : "supersession of Committee. (1) If. in the opinion of the Registrar. the committee of any society, (a) (xxx) is negligent in the performance of the duties imposed on it by or under this Act or bye-laws of the society or by any lawful order passed by the Registrar or is unwilling to perform such duties ; or the registrar or is unwilling to perform such duties ; or (b) commits acts which are prejudicial to the interests of the society or its members ; or (c) violates the provisions of this Act or the rules made thereunder or bye-laws of the society or any order passed by the Registrar. The Registrar may, by order in writing, remove the committee and appoint a person or persons to manage the affairs of the society for specified period not exceeding two years in the first instalment; (provided that in case of a Co-operative Bank, the order of supersession shall not be passed without previous consultation with the Reserve Bank): provided further that if no communication containing the view of the Reserve Bank of India on action proposed is received within forty-five days of the receipt by that Bank of the request soliciting consultation, it shall be presumed that the Reserve Bank of India agrees with the proposed action and the Registrar shall be free to pass such order as may be deemed fit.
Provided also thatin case of a (***) Co-operative Bank, if so required by the Reserve Bank in the public interest or for preventing the affairs of the Co-operative Bank being conducted in a manner, detrimental to the interest of the depositors or for securing the proper management of a Co-operative Bank, the Registrar shall pass an order for the supersession of its committee or managing body by whatever named called and for appointment of an Administrator, therefore, for such period or periods not exceeding 5 years in the aggregate as may be from time to time be specified by the Reserve Bank and on such appointment, the provisions of sub-sections (4), (5), (6) and (8) shall apply as if orders were passed under sub-section (1) : provided that if a non-official is appointed in the committee of a primary society, he shall be from amongst the members of that society, entitled for such representation and in case of Central or Apex Society, he shall be a member of one of its affiliated societies entitled for such representation. (2) No order under sub-section (1) shall be made unless the committee has been given a reasonable opportunity of showing cause against the proposed order and representation, if any, made by it, is considered. (3) The period specified in the order under sub-section (1) may, at the discretion of the Registrar, be extended, from time to time; provided that no such order shall remain in force for more than 3 years in the aggregate; (4) The person or persons so appointed, shall subject to the control of the Registrar and to such instruments as he may, from time to time, given, have power to exercise all or any of the powers and to discharge all or any of the functions of the committee or of any officer of the society, and to take all such actions, as may be required in the interest of the society. (5) The Registrar may fix the remuneration payable to the person or persons so appointed. The amount of such remuneration and other costs, if any, incurred in the management of the society shall be payable from its funds. (6) The person or persons so appointed shall before expiry of the period of his or their appointment, arrange the constitution of a new committee in accordance with the bye-laws of the society.
The amount of such remuneration and other costs, if any, incurred in the management of the society shall be payable from its funds. (6) The person or persons so appointed shall before expiry of the period of his or their appointment, arrange the constitution of a new committee in accordance with the bye-laws of the society. (7) Before taking action under sub-section (1) in respect of a financing Bank or in respect of a society indebted to a financing bank, registrar shall consult, in the former case, The Madhya Pradesh State co-operative Bank Limited, and, in the latter case, the financing bank concerned, regarding such action (if the Madhya Pradesh State co-operative Bank Limited or the financing bank, as the case may be fails to communicate its view within forty five days of the receipt by such bank of the request soliciting consultation, or the financing concerned, as the case may be, agreed with the proposed action ). (8) Notwithstanding anything contained in Sections 48, 49, 50 if there is a difference of opinion between the general body of society and the person or persons appointed under sub-section (1) in respect of any matter, it shall be referred to the Registrar for decision and his decision thereon shall be final ; provided that if the Registrar fails to take any decision within three months of the general body meeting, the decision of the general body of the society shall prevail. (9) Nothing in this section shall be deemed to affect the power of the Registrar to direct the widding up of the society.
(9) Nothing in this section shall be deemed to affect the power of the Registrar to direct the widding up of the society. (10) During the period between the issuance of notice and the passing of an order removing the Committee, the Committee may be required by the Registrar to function under the supervision, and with the approval of such authority as the Registrar may specify inthis behalf and no order made or resolution passed or any other act performed by the committee, shall be effectual unless it is approved by such specified authority ; provided where the Registrar, while proceeding to take action under sub-section (2), is of the opinion that the supersession of the committee during the period of proceeding is necessary in the interest of the society he may suspend the committee, which shall thereupon cease to function and make such arrangement as he thinks fit, of the affairs of the society till the proceedings are completed and order issued under sub-section (1 ). Provided further that the period of suspension shall not exceed six months and on the expiry of said period the suspension of the committee shall stand revoked. Provided also that, if the committee so suspend, is not supersede after undergoing the proceeding mentioned above, it shall be reinstated and the period during which it has remained suspended shall not count towards its term. Provided also that no order of suspension shall be made unless the committee of the society has been given a reasonable opportunity of being heard. (11) Notwithstanding anything contained in this Act, the Registrar shall in case of Central Co-operative Banks, Urban Co-operative Banks and Primary Co-operative Land Development Banks, if the recovery continuously in three co-operative years is less than 65 per cent of the demand or if the overdues exceed 35 per cent, pass an order of removal of the committee or the Managing Committee by whatever name it is called of the Bank and for appointment of an administrator, therefore, for such period or periods not exceeding five years in the aggregate, as may be specified by the Registrar and on such appointment, the provision of sub-section (4), (5) and (6) shall apply thereto as if an order was passed under sub-section (1 ).
Provided that no such order shall be made unless the committee has been given a reasonable opportunity of showing cause against the proposed order and representation, if any, made by it is considered. (12) When a committee of a society has been superseded under sub-section (1) the members of the committee notwithstanding anything contained in this Act, rules made thereunder or bye-laws of the society, shall not be eligible for contesting the election as a member of the committee nor he shall be eligible for co-option or nomination in that society for a period of (seven) years. (13) Notwithstanding anything contained in this Act, or rules made thereunder or bye-laws of society, if the committee of society ceases to function due to order of any Court or otherwise, the Registrar (may appoint a person or- a committee of persons temporarily) till the Court order is vacated or new elections are held and the committee take charge. From the aforesaid provision it is luminously clear that the competent authority is entitled to supersede the committee of a Co-operative Society after consultation with the Reserve Bank of India. It is also provided under the proviso to Section 53 (l) (c) that if no communication containing the view of the reserve Bank of India on action proposed is received within 45 days from the date of communication by that Bank soliciting consultation it shall be presumed that the Reserve Bank of India agrees with the proposed action and in that event the Registrar of the Co-operative Societies shall be free to pass such an order as may be deemed fit. ( 6 ) BEFORE I advert to the relevant facts of the case at hand, whether there has been proper consultation or not; it is appropriate to refer to the decisions cited at the Bar, wherein this Court has dealt with the concept of effective consultation in the context of this provision. In the case of Radheshyam (supra) this Court has held as follows :"the very object of consultation is to obtain the view of theperson or body to be consulted in order to arrive at some conclusion in respect of the matter on which the advice is sought.
In the case of Radheshyam (supra) this Court has held as follows :"the very object of consultation is to obtain the view of theperson or body to be consulted in order to arrive at some conclusion in respect of the matter on which the advice is sought. No doubt the best way to consult would be to discuss the entire matter at a conference table so that there may be a full and fair exchange of views but that is neither possible nor feasible in many cases. In our view the requirement as to consultation would be duly fulfilled if the person to be consulted is supplied with all material available on the basis of which a particular conclusion has to be reached and his opinion is sought on the points in issue after indicating how the authority which seeks to consult views the matter. "in the case of Board of Directors of Shri Ganesh Sahkari Vipnan (Marketing) sanstha Maryadit (supra) this Court has laid down as under :". . . . THE position of law with regard to consultation as envisaged by section 53 (7) appears to be as under ; (i) that there should be effective and meaningful consultation. For this purpose, sufficient information, i. e. relevant material must he shown to have been placed to the Bank consulted to enable it to tender advice on the question on which the advice is sought in the light of the views of the authority seeking advice, and (ii) the sufficient opportunity must be given to the Bank to tender advice, i. e. the authority seeking advice must await communication of the views by the Bank consulted for a period of 45 days. If no views are communicated by the Bank within this period, the authority seeking advice will have right to act on the presumption that the Bank agrees with the proposed action. " ( 7 ) AGAIN in the case of Sitaram (supra) this Court has registered the views. Consultation with the Reserve Bank previous to an order of suspension as provided by Section 53 (1) of the M. P. Co-operative Societies act, contemplates an effective an meaningful consultation which is possible only when the entire relevant material of the case including the reply to the show cause notice what the committee should not be superseded is placed before the Reserve Bank.
The requirement of consultation would be reduced to an empty formality if more copy of the show cause notice is sent without any further material relevant for consideration. (Quoted from the placitum) from the aforesaid enunciation of law it is quite clear that there has to be effective consultation with the Reserve Bank of India and the necessary documents are to be supplied to the said Bank and the Reserve Bank of India has to act within 45 days, failing which it would be open to the Registrar to presume that the Reserve Bank of India agrees with the proposed action. On a perusal of the factual matrix it is apparent that the show cause notice along with necessary documents were sent to the Reserve Bank of India ; M. P. State co-operative Bank Bhopal and National Bank for Agricultural and Rural development (NABARD) on 30. 10. 1993 requesting them to send their opinion within 45 days. No reply was sent by the Reserve Bank of India within the 45 days. Submission of Mr. Agrawal is that as no reply was received it was open to the Registrar to draw presumption and pass such orders as may be deemed fit. However, as the factual matrix exposits, the respondents again sent the same papers on 23. 11. 1993 as per Annexure P-1 and along with it documents were sent with a request to send the opinion within 45 days. Annexure P-1 dearly indicates that the documents were annexed along with the letter of request. It is also apparent that the documents were also sent along with the first letter which is Annexure P-2 dated 30. 11. 1993. Reserve Bank of India did not send the final opinion within 45 days but sent a letter on 22. 7. 1994 asking for certain documents. It was mentioned in the said letter that the final opinion would only be given after receipt of the documents, namely, the enquiry report,; the explanation of thecommittee and other necessary documents. Emphasising on the aforesaid letter Mr. TRivedi submitted that the Reserve Bank of India was not satisfied as documents were not send and, therefore, the process was on, and hence the Registrar Co-operative Societies could not have passed the impugned order superseding the committee. It is also submitted by him that the Registrar should have waited for the opinion of the Reserve Bank of India. Mr.
TRivedi submitted that the Reserve Bank of India was not satisfied as documents were not send and, therefore, the process was on, and hence the Registrar Co-operative Societies could not have passed the impugned order superseding the committee. It is also submitted by him that the Registrar should have waited for the opinion of the Reserve Bank of India. Mr. Agarwal, per contra, has contended vide annexure P-1 dated 23. 11. 1993 all documents were sent which is manifest from the list of the attached documents. In the reminder under Annexure P-2, the same were sent. However, the Reserve Bank of India failed to react within 45 days. On a perusal of the order passed by the Registrar, I find that he has taken into consideration the fact that the "reserve Bank of India had not acted within 45 days. He has also taken note of the fact that the necessary documents were annexed with the letter dated 23. 11. 1993. Considering these aspects he has drawn presumption that the Reserve Bank of India agreed with the proposed action. In the cases which have been cited the factual matrix was quite different as documents were not sent to the Reserve Bank of India and, therefore, this Court reached the conclusion that there had been no effective consultation. In the case of Radheshyam (supra) a Division Bench of this Court ruled that the requirement as to consultation would be duly fulfilled if the person to be consulted is supplied with all materials available on the basis of which a particular conclusion has to be reached and his opinion is sought on the points in issue. In the case at hand, as already indicated, necessary documents including the inquiry report were sent to the Reserve bank of India but Reserve Bank of India did not submit its final opinion. In view of the peculiar factual matrix, I am of the considered opinion that there has been effective consultation as understood in law and the order passed by the Registrar, Co-operative Societies superseding the committee withstands close scrutiny and deserves the stamp of approval of this Court. ( 8 ) CONSEQUENTLY, the writ application, being devoid of merit, stands dismissed. However, there shall be no order as to costs. .