UTKAL CO-OPERATIVE BANKING SOCIETY LIMITED v. STATE OF ORISSA
1999-07-08
PRADIPTA RAY, R.K.PATRA
body1999
DigiLaw.ai
R. K. PATRA, J. ( 1 ) THE Utkal Co-operative Banking Society Limited represented through its Secretary has filed this writ petition challenging the validity of the Order No. 188 (Conf.)/ BK. 5 dated 30-12-1998 (Annexure-6) of the Registrar, Co-operative Societies, Orissa, passed under sub-section (7) of Section 32 of the Orissa Co-operative Societies Act, 1962 (hereinafter to be referred as 'the Act') placing its Managing Committee under suspension and appointing opposite Party No. 3 to manage its affairs until further orders. The petitioner incidentally challenges the propriety of letter No. 23395/er-5 dated 30-11-1998 (Annexure-4) by which the Registrar reports about non-compliance of defects by the petitioner as pointed out in the inspection report of the Reserve Bank of India. ( 2 ) IT may be noted that the petitioner in this petitions initially challenged the issuance of the letter at Annexure-4. A Bench of this Court on 22-12-1995 issued rule nisi and by way of interim measure order-4 that no coercive action should be taken pursuant to the aforesaid letter (Annexure-4 ). During pendency of the writ petition, the Registrar passed the impugned order of suspension at Annexure-6. The petitioner by way of amendment has incorporated the aforesaid order of suspension at Annexure-6 as per the Court's order dated 5-1-1999. ( 3 ) THE sole point urged by Shri Naidu is that before issue of "show-cause notice" under sub-section (1) of Section 32 of the Act, the Registrar cannot suspend the Managing Committee of the petitioner-Society in purported exercise of power under sub-section (7) of Section 32 of the Act. In support of the said submission he placed reliance on the judgment dated 5-11-1993 of this Court rendered in O. J. C. No. 1639 of 1991 (Khurda Control Co-operative Bank Limited v. State of Orissa ). ( 4 ) THE Registrar has filed his counter affidavit. With regard to the letter dated 20-11-1998 (Annexure-4), it has been stated in the counter affidavit that in the inspection report of the Reserve Bank of India unwarranted interference by the President and other Directors in the day-to-day functioning of the Society was pointed out besides other irregularities like sanctioning fresh loans before ensuring repayment of the outstanding dues etc.
With regard to the letter dated 20-11-1998 (Annexure-4), it has been stated in the counter affidavit that in the inspection report of the Reserve Bank of India unwarranted interference by the President and other Directors in the day-to-day functioning of the Society was pointed out besides other irregularities like sanctioning fresh loans before ensuring repayment of the outstanding dues etc. The Registrar, as a statutory authority under the Act, accordingly required the Secretary of the petitioner-Society to submit necessary proposal for amendment of the relevant provisions of the bye-law to enable the Society to act in accordance with the guidelines issued by the Reserve Bank of India. With regard to the order of suspension the Registrar in his counter affidavit has averred that the impugned order of suspension was made because of the fact that the managing committee of the petitioner-society was acting in a manner prejudicial to the interest of the Society and persistently defaulting in performance of its duty. Notice dated 16-2-1999 (Annexure-A/2) under sub-section (1) of Section 32 of the Act has already been issued calling upon all the members including the President of the managing committee of the petitioner-society to show cause as to why the committee shall not be removed from the office. A set of charges was enclosed to the said notice. Pursuant to the notice and the charges, all the fifteen members of the managing committee have duly filed their cause. The Registrar gave them opportunity of hearing on 18-3-1999 and no final order has been passed in view of pendency of the writ petition. ( 5 ) SUB-SECTION (7) of Section 32 of the Act reads as follows:"notwithstanding anything contained in this section, if, in the opinion of the Registrar, the Committee of any Society is acting in a manner prejudicial to the interest of the Society or its members, or has committed such serious irregularities or illegality that further continuance of the Committee would be detrimental to the interest of the Society, the Registrar may at any time before or, as the case may be, after issue of a notice under sub-section (1), suspend the Committee, and make such arrangement as he thinks proper for the management of the affairs of the society during the period of suspension of the Committee: Provided that if the Committee so suspended is reinstated the period of suspension shall count towards its term.
" (Emphasis supplied)A bare reading of the aforesaid provision would indicate that the Registrar would be competent to suspend the committee of any Society on the grounds stated therein. In the present case, we are not concerned whether there existed grounds for suspension. In the case at hand, the point involved for determination is as to when the Registrar can suspend the committee of management, i. e. prior to issuance of notice under sub-section (1) of Section 32 or after issuance of such notice. It's answer is obvious and is found in the provision itself which clearly states that the Registrar can suspend the committee at any time before or after issue of notice under sub-section (1) of Section 32 of the Act. It may be noted that sub-section (1) of Section 32 deals with removal of the committee of the society. Under the said provision, the Registrar is empowered to remove the committee on the grounds stated therein after giving it a reasonable opportunity of being heard. So far as the exercise of powers under sub-section (7) to suspend a committee is concerned, the Registrar can do so after issue of notice to show cause for removal of the committee under sub-section (1) or before issuance of such notice. The provision does not admit of any ambiguity. This being the position of law, we have no hesitation to hold that the Registrar is within his jurisdiction in passing the order of suspension as per the impugned order (Annexure-6) before issuance of notice to show-cause for removal of the committee as contemplated under sub-section (1) of Section 32. For the reasons aforesaid, the order of suspension (Annexure-6) cannot be held to be illegal or without jurisdiction. ( 6 ) LET us examine at this stage if the judgment of this Court in O. J. C. No. 1839 of 1991 (Khurda Central Co-operative Bank Limited v. State disposed of on 5-11-1993) relied upon by Shri Naidu is of any assistance to the petitioner. In that case, this Court quashed the order dated 11-9-1990 suspending the committee of management of Khurda Central Co-operative Bank on the ground that no order of suspension could be passed prior to issue of notice to show cause for removal as envisaged under sub-section (1) of Section 32. For that purpose the Bench relied on an earlier common judgment rendered in O. J. C. Nos.
For that purpose the Bench relied on an earlier common judgment rendered in O. J. C. Nos. 3488 and 3760 of 1990 (Uma Charan Bisei v. State and Mohan Pradhan v. State disposed of on 24-7-1991 ). On careful perusal of the common judgment in the case of Uma Charan and Mohan Pradhan (supra) it transpires that in both the cases the Registrar's order dated 10-9-1990 suspending the committee of Aska Central Co-operative Bank Limited as well as the notice dated 26-11-1990 issued by the Registrar under sub-section (1) of Section 32 had been challenged. The Court did not interfere with the notice under sub-section (1) of Section 32 of the Act. It quashed the order of suspension of the committee of the Bank being of the view that the Registrar's power to suspend is an "extreme power" to be exercised with great caution and check only if continuance of the committee is detrimental to the society and not for minor irregularities. The Court found that the committee had been in the office only for eight months and there was nothing on record to show that it had done any such act which could be said to be detrimental and prejudicial to the interest of the society. In that case the meaning, purport and import of the expression "at any time before or, as the case may be, after issue of notice under sub-section (1) suspend the committee" (at that time the relevant provision was also similarly worded as "at any time before or after giving opportunity to such committee to State objection as required under sub-section (7) of Section 32) did not arise for consideration. In fact the Bench did not address itself on that issue. It is well settled that a judgment is not a precedent on proposition which it did not decide. In the subsequent case of Khurda Central Co-operative Bank (supra) this Court merely relying on the common judgment in Uma Charan and Mohan Pradhan (supra) quashed the order of suspension. For the aforesaid reasons, neither the case of Uma Charan Bisel and Mohan Pradhan nor the case of Khurda Central Co-operative Bank (supra) is of any help to the petitioner. ( 7 ) IT may be stated that Annexure-4 is not a notice under sub-section (1) of Section 32 of the Act.
For the aforesaid reasons, neither the case of Uma Charan Bisel and Mohan Pradhan nor the case of Khurda Central Co-operative Bank (supra) is of any help to the petitioner. ( 7 ) IT may be stated that Annexure-4 is not a notice under sub-section (1) of Section 32 of the Act. It is a letter asking the Secretary of the petitioner-society to submit proposal for amendment of the relevant bye-laws so that the defects pointed out in the inspection report of the Reserve Bank of India can be remedied. No exception can, therefore, be taken to issue of the letter at Annexure-4. ( 8 ) IN the result, there is no merit in this writ petition which is dismissed. With the dismissal of the writ petition, all orders passed in the case stand vacated. ( 9 ) THERE would be no order as to costs. ( 10 ) PRADIPTA RAY, J. , I agree. Petition dismissed.