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Madhya Pradesh High Court · body

2003 DIGILAW 915 (MP)

SATISH KUMAR UPADHYAYA v. STATE OF MADHYA PRADESH

2003-07-29

AJIT SINGH, DIPAK MISRA

body2003
Judgment ( 1. ) INVOKING the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India, the petitioner has prayed for declaring Section 53-B of the M. P. Co-operative Societies Act, 1960 (for brevity the Act) as ultra vires the Constitution of India. ( 2. ) THE facts which are essential to be adumbrated for the purpose of disposal of this writ petition are that the petitioner claims to be the elected president of the M. P. Rajya Hathkargha Bunkar Sangh Maryadit having its head office at Jabalpur. The said Society is registered under Section 9 of the act. It is putforth that the State Government having been conferred powers under Section 3 of the Act has been authorised to appoint a person to be the registrar of Cooperative Societies for the State and may appoint one or more officers to assist him as Additional Registrar, Joint Registrar, Deputy Registrar, Assistant Registrar etc. Under Section 53-B of the Act, the Registrar of cooperative Societies has been empowered to remove an officer of a society in certain circumstances. It is putforth in the petition that Section 53-B of the act confers unbridled and unrestricted powers on the Registrar to remove an. officer of a Society in certain circumstances without consulting the Society. It is averred that the petitioner was working as the President of the Society who was functioning as per law. At that juncture all of a sudden the Registrar of the Cooperative Societies issued a letter dated 19-2-1999 stating that various complaints were received against him with regard to commission of irregularities in day to day working of the Society in violation of the orders passed by the Department under the provisions of the Act, the rules framed thereunder and the bye-laws of the Society. It was put to him by the Department and eventually the Registrar had found the same to have been prima facie proved. Pursuant to the order of the Department dated 19-2-1999, the Managing director of the Society issued a memo dated 24-2-1999 to the petitioner stating therein that the allegations have been found prima facie proved against him and why an action should not be taken against the petitioner for removing him from the Society and to disqualify him as per Section 53-B (1) of the Act after affording opportunity of hearing. The said letter dated 19-2-1999 has been brought on record as Annexure P-l. On the same day a Notification was issued by the Managing Director of the Society informing all the members of the board regarding meeting to be held on 12-3-1999 at 12 noon at the Head office, Jabalpur. Various other facts have been asserted to show how the petitioner was eventually removed by virtue of the order passed by the Additional Registrar. It is also set forth that the petitioner assailed the legality and validity of the order dated 16-4-1999 in Writ Petition No. 1897/99. The learned single Judge dismissed the writ petition against which a Letters Patent Appeal was preferred and the Division Bench passed an interim order in the Letters patent Appeal. We may clearly state that we are not concerned with it but we have referred to the same for the sake of completeness. What is in controversy before us is the Constitutional validity of Section 53-B of the Act. ( 3. ) ACCORDING to the writ petitioner Section 53-B of the Act is unconstitutional inasmuch as there is no procedure prescribed to be followed by the Registrar to enable him to form an opinion which has to be objective in nature and not subjective. The principles of natural justice and fair play require that before forming an opinion by the Registrar, an opportunity should be given either to the Society or to the officer directed to be removed and in the absence of the same there is conferment of unbridled and unrestricted powers on the Registrar which is defiant of Article 14 of the Constitution. It is urged in the petition, the rules which have been framed under the Act are totally silent with regard to the procedure for the purpose of calling a meeting under the direction of the Registrar issued under Section 53-B of the Act and, therefore, there is no procedural safeguard in arriving at such a conclusion. Section 53-B (2) of the Act has been criticised on the ground that if the society does not take action, the Registrar has to take action and shall afford an opportunity to the affected person and, therefore, in the absence of any provision relating to grant of adequate opportunity to the affected person the provision becomes arbitrary and thereby unconstitutional. Section 53-B (2) of the Act has been criticised on the ground that if the society does not take action, the Registrar has to take action and shall afford an opportunity to the affected person and, therefore, in the absence of any provision relating to grant of adequate opportunity to the affected person the provision becomes arbitrary and thereby unconstitutional. It is also urged that absolute powers have been vested in the Registrar without any kind of restriction or reasonableness, to direct the society to take action for removal and disqualify the officer, therefore, the provisions of Section 53-B of the Act are violative of Article 14 of the Constitution of India. It is also contended that the society which has come into being for the purpose of developing the cooperative movement in the State has no role in the matter but has to be guided by the mandate of the Registrar. By following the decision of the registrar, the whole scheme of the Act is nullified and, therefore, the provisions are contrary to the scheme of the Act. It is pleaded that grant of opportunity before a bigger body for forming an opinion is one thing and grant of opportunity before removal is another. Such an action can not be justified on the basis of majority. Various other averments have been putforth which need not be referred to inasmuch as they are the repetition of the same. In this factual backdrop the prayer has been made to declare the provision as ultra vires. ( 4. ) AS the matter involved interpretation of Section 53-B of the Act in the backdrop of Part III of the Constitution which required scanning and scrutiny of the various provisions of the Act, the learned Advocate General for the State agreed to argue the matter without filing a formal reply inasmuch as it was expressed by him that the provisions required to be interpreted and nothing beyond that. ( 5. ) WE appreciate the aforesaid stand taken by the learned Advocate General. We may state here that we have initially heard the learned advocate General but later on we have heard Mr. Hemant Shrivastava, learned Govt. Advocate. As we have already indicated earlier we are not going to enter into any kind of debate with regard to justifiability and sustainability of the order of removal as far as the petitioner is concerned. We may state here that we have initially heard the learned advocate General but later on we have heard Mr. Hemant Shrivastava, learned Govt. Advocate. As we have already indicated earlier we are not going to enter into any kind of debate with regard to justifiability and sustainability of the order of removal as far as the petitioner is concerned. We shall only singularly confine ourselves to the validity of Section 53-B of the Act. Section 53-B of the Act reads as under :- "53-B. Power of the Registrar to remove an officer of a society in certain circumstances.- (1) If in the opinion of the Registrar, any officer of the cooperative society has been grossly negligent in the discharge of his duties imposed on him by or under this Act the rule made thereunder of bye-laws or has, by a fraudulent act, caused financial loss to the society the Registrar may without prejudice to any other action that may or can be taken against him, call upon the society to remove within a specified period such officer from the office held by him and where necessary also to disqualify him from holding any office under that society for a period not exceeding three years, whereupon the society shall, after affording opportunity to the officer concerned of being heard, pass such orders as it deems fit. (2) On the failure of the society to take action under sub-section (1), the Registrar may after affording opportunity to the officer of being heard and for reasons to be recorded, any communicated to the officer, and the society concerned, remove or remove and disqualify for a period not exceeding three years, the officer from holding any office under that society for the period specified in the orders. (3) An officer removed under the sub-section (1) or sub-section (2) shall with effect from the date of communication of the order, cease to hold that office and if disqualified shall not be eligible to hold any office under that society for the period specified in the order. " ( 6. ) THE submission of Mr. N. S. Kale, learned Senior Counsel and mr. " ( 6. ) THE submission of Mr. N. S. Kale, learned Senior Counsel and mr. R. K. Gupta, learned Counsel for the petitioner is that if the aforesaid provision is read in stricto sensu it becomes graphically clear that the Society is at the mercy of the Registrar and is bound to obey every mandate given having no option. The learned Counsel for the petitioner have given immense emphasis on the term "such orders" by stating that such orders would mean to pass order of removal within a specified period in respect of such officer from the office held by him and where necessary also to disqualify him from holding any office under that society for a period not exceeding three years. It is contended by them that if the words "such orders" are given such a meaning then nothing is left with a society except to pass an order of removal with a further disqualification. It is urged by them that this is a mandate by the registrar and the Society is bound by it and the provision of affording an opportunity of hearing to the officer concerned is an exercise in futility inasmuch as there is pre- determination of the action taken or to be taken by the society. It is putforth by them that if such a power is conferred on the registrar or anybody delegated by him to take such action the whole concept of cooperative movement would become a Sisyphean endeavour for progress and it will be ruled in toto by the high ranking officers. It is also canvassed by them that if the society does not take any action as per sub-section (2), the registrar may after affording an opportunity to the officer of being heard and for reasons to be recorded, and communicated to the officer and the society concerned, remove or remove and disqualify for a period not exceeding three years, the officer from holding any office under that society for the period specified in the order. The Registrar shall pass one of those orders only after hearing the person but not the society which has taken the decision. It is argued by them that such power with the Registrar normally indicates that the society is bound to take a decision as directed by the Registrar and no option is left with it. ( 7. ) MR. The Registrar shall pass one of those orders only after hearing the person but not the society which has taken the decision. It is argued by them that such power with the Registrar normally indicates that the society is bound to take a decision as directed by the Registrar and no option is left with it. ( 7. ) MR. V. K. Tankha, learned Advocate General and Mr. Hemant shrivastava, learned Govt. Advocate in their turn have contended that the provisions have been misconstrued by the learned Counsel for the petitioner. Though the Registrar is entitled to form an opinion that opinion has to be formed in an objective manner. It is urged by them that the Society can pass any other order than the two orders which have been specified therein. It is submitted by them that to take action necessarily does not mean that the petitioner has to be visited with the aforesaid order but appropriate order can be passed, if circumstances so warrant. It is contended by the learned Advocate general that sub-sections (1) and (2) are to be read to make it a purposive and the provisions are to be read down so that the proper meaning and substance are evident and perversity of interpretation is avoided and the Constitutional validity of the provision is upheld. 7-A. To appreciate the respective submissions of the learned Counsel for the parties, it is appropriate to vice-rate the basic provisions of the Act. Section 9 deals with registration of Societies and that power is vested with the registrar. Section 11 deals with amendment of bye-laws of society. Sub-section (2) envisages that if the Registrar is satisfied that the proposed amendment is not contrary to the Act or the Rules and is not against the aims and objects of the Society or any of its existing bye-laws he may register the amendment. Section 12 confers power on the Registrar to direct amendment of bye-laws. Section 18 empowers the Registrar to cancel the registration on certain grounds. Section 19-A deals with disqualification of membership of committee and for representation. It is apposite to state here that the learned Counsel for the petitioner has laid immense emphasis on Section 48 occurring in chapter V. The said provision stipulates that the final authority rests in a society which shall vest in the general body of members. Section 19-A deals with disqualification of membership of committee and for representation. It is apposite to state here that the learned Counsel for the petitioner has laid immense emphasis on Section 48 occurring in chapter V. The said provision stipulates that the final authority rests in a society which shall vest in the general body of members. Learned Counsel has also drawn our attention to Section 48-C which we think appropriate to reproduce. It reads as under :-"48-C. Powers of Committee.- The Board of the Committee of a society shall in accordance with the bye-laws have power to- (a) admit and terminate membership; (b) elect the Chairman and other office bearers; (c) remove from office the Chairman and office bearers (d) fix staff strength with the approval of the Registrar; (e) frame policies concerning- (i) organisation and provisions for services to members; (ii) qualifications, recruitment, service conditions of the staff and other matter relating to staff with the approval of the Registrar; (iii) mode of custody and investment of funds; (iv) manner of keeping accounts; (v) mobilisation, utilisation and investment of funds; (vi) monitoring and management of information system including statutory returns to be filed; (f) place the- annual report, annual financial statements; plan and budget for the approval of the general body; (g) consider audit and compliance reports and place the same before the general body; and (h) undertake such other functions as specified in the bye-laws. " ( 8. ) WE may also state here that our attention has been drawn to section 48-D of the Act which deals to make regulation. Section 50 of the Act provides for Special General Body meeting. Section 54 (b) of the Act has been placed emphasis by the learned Advocate General. The said Section deals with supersession of Committee. The said power rests with the Registrar. In this backdrop the Section 53-B of the Act has to be scrutinised. ( 9. ) THE learned Counsel for the petitioner have vehementally submitted that the role of the society is totally paralysed by virtue of this power vested in the Registrar and the whole scheme of the cooperative movement has become a myth. It is contended by them that the Registrar enjoys the authority to direct the society to take action and the society has the only discretion either to remove the officer or remove him with a further disqualification. It is contended by them that the Registrar enjoys the authority to direct the society to take action and the society has the only discretion either to remove the officer or remove him with a further disqualification. The question that arises for consideration is whether the words "such orders" mean that the Society can not pass any other orders. On perusal of other material produced by the delinquent officer or blindly and mechanically obey the mandate of the Registrar. The principles of natural justice have been engrafted into the provision. On a first flush it may appear that the society may hear the officer concerned only to adjudge to take a decision between one of the two options namely; either removal or removal with disqualification for a period not exceeding three years. In a sense whether the doctrine of noscitur a sociis is applicable in toto to a case of this nature, is the acid test. In this context we may profitably refer to a decision rendered in the case of Rohit Pulp and Paper Mills Vs. Collector, Central Excise, AIR 1991 SC 754 , wherein Their lordships held thus :- "the principle of statutory interpretation by which a generic word receives a limited interpretation by reason of its context is well established. In the context with which we are concerned, we can legitimately draw upon the "noscitur a sociis " principle. This expression simply means that "the meaning of a word is to be judged by the company it keeps". ( 10. ) IN this context we may usefully refer to the decision rendered in the case of State Vs. Hospital Mazdoor Sabha, AIR 1960 SC 610 , wherein gajendragadkar, J. (as His Lordship then was) has expressed the view of the court as under :- "this rule, according to Maxwell, means that, when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that if, the more general is restricted to a sense analogous to a less general. They take as it were their colour from each other, that if, the more general is restricted to a sense analogous to a less general. The same rule is thus interpreted in "words and phrases" "associated words take their meaning from one another under the doctrine of noscitur a sociis, the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it; such doctrine is broader than the maxim Ejusdem Generis. In fact the latter maxim "is only as illustration or specific application of the broader maxim noscitur a sociis". The argument is that certain essential features of attributes are invariably associated with the words "business and trade" as understood in the popular and conventional sense, and it is this colour of these attributes which is taken by the other words used in the definition though their normal import may be much wider. We are not impressed by this argument. It must be borne in mind that noscitur a sociis is merely a rule of construction and it can not prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. It is only where the intention of the legislature in associating wider words with words of narrower significance is doubtful, or otherwise not clear the present rule of construction can be usefully applied, it can also be applied where the meaning of the words of wider import is doubtful; but, where the object of the Legislature using wider words is clear and free of ambiguity, the rule of construction in question can not be pressed into service. " ( 11. ) IN this context, we may profitably refer to the decision rendered in the case of K. Bharirathi, G. Shenoy Vs. K. P. Ballakuraya, AIR 1999 SC2143, wherein in Paragraph 6 the Apex Court while dealing with the provisions of kerala Land Reforms Act, 1963 and interpreting the provisions enshrined under Section 3 (1) (ii) which used the word "only" held as under :- "6. Shri T. L. Vishwanatha Iyer, learned Senior Counsel who argued for the respondent laid emphasis on the monosyllable "only" in order to bolster up his contention that the legislative intent was to limit the exemption to leases of buildings. Shri T. L. Vishwanatha Iyer, learned Senior Counsel who argued for the respondent laid emphasis on the monosyllable "only" in order to bolster up his contention that the legislative intent was to limit the exemption to leases of buildings. It is not a sound principle in interpretation of statutes to law emphasis on one word disjuncted from its preceding and succeeding words. A word in a statutory provision is to be read in collocation with its companion words. The pristine principle based on the maxim "noscitur a sociis" (meaning of a word should be known from its accompanying or associating words) has much relevance in understanding the import of words in a statutory provision. " ( 12. ) IN the present context, we do not think it appropriate to give a restricted meaning to the word such. It is submitted by the learned Counsel for the petitioner that if the society exonerates the officer, action is taken and, therefore, no further action is permissible. We are not at all impressed by the aforesaid submission. We are of the considered view that the provision has to be read down to mean that the doctrine of noscitur a sociis will not apply in the narrowest sense to the words used in the provision. To elaborate: the term such orders gives a latitude to the society to pass appropriate orders. It does not really refer to the commands given by the Registrar. The word such is not to be construed in absolute terms that it has to be obeyed or followed in letter and spirit. Simultaneously it is also un-pragmatic and unworkable to hold that once the society exonerates the officer, the Registrar is without any power to take steps. We have referred to various provisions of the Act to show what powers are enjoyed by the Registrar. In this context, we may also refer to section 57 of the Act which confers powers on the Registrar to seize records etc. where he is satisfied that the records, registers or the books of accounts of a society are likely to be tampered with or destroyed and the funds and property of a society are likely to be misappropriated or misapplied. where he is satisfied that the records, registers or the books of accounts of a society are likely to be tampered with or destroyed and the funds and property of a society are likely to be misappropriated or misapplied. Thus the collective good of the society is the sine qua non running through the basic marrow of the scheme of the Act and the Registrar being a responsible officer has been conferred the power. While we can not interpret the word "such" in the narrowest term only to make it so that the society has no power simultaneously we can not accede to the argument that once the society has exonerated the delinquent officer, sub-section (2) would not come into play inasmuch as action has been taken. Emphasis has been laid on the term to take action. In our considered view, as submitted by Mr. Tankha, learned Advocate General, Section 53-B (1) and (2) are to be read conjointly purposively and in an effective manner and in a way, read down to convey that if the society does not agree with the opinion of the Registrar and passes a different kind of order that will be treated to be a failure on the part of the Society enabling the registrar to take action and then the Registrar has to follow the procedure and take appropriate action under sub-section (2 ). At this juncture we may clearly state that on a reading of the said provision it transpires that there is provision of affording an opportunity of being heard to the officer but there is no provision to hear the Society but if we appreciate the same in proper perspective it lays down that the order has to be communicated to the officer of the society. There is a warrant for reasons to be recorded. Hence, there is no embargo to hear the society as the society passes the order in favour of the officer. Sub-section (2) only comes into play when an order of different nature than the order called upon by the Registrar is passed. In our view the concept of natural justice has not been ostracised and, therefore, the society should be heard to justify its order. If the aforesaid interpretation is given to Section 53-B (2) we are of the considered opinion the provisions can not be regarded as ultra vires. In our view the concept of natural justice has not been ostracised and, therefore, the society should be heard to justify its order. If the aforesaid interpretation is given to Section 53-B (2) we are of the considered opinion the provisions can not be regarded as ultra vires. We interpret the same in the aforesaid manner to treat it as intra vires. We lay down the same as suggested by the learned Advocate General to treat it as intra vires. Resultantly, we express our conclusions in seriatim : (a) The Registrar shall form an opinion under Section 53-B (1) of the Act on the basis of proper material of the case. (b) The Registrar thereafter may call upon the society to take action as enumerated under the said provision. (c) After getting the order from the Registrar the Society shall afford an opportunity of hearing to the officer concerned and take such decision and such decision does not necessarily mean to follow the mandate of the Registrar. To elaborate : the society is not bound to remove the officer and remove and disqualify him. It does not mean that opportunity of hearing is given only to pass either of the aforesaid orders. The society is at liberty to pass any other kind of order or to exonerate the officer. (d) If any other kind of order is passed and the officer is exonerated sub-section (2) comes into play. (e) To take action does not mean that to pass a resolution exonerating the delinquent officer as that would not amount to taking action as contemplated in Section 53-B (1) of the Act. (f) If the Registrar feels that proper action has not been taken he may take recourse to sub-section (2) and follow the procedure by giving opportunity of hearing to the officer concerned. Further as principles of natural justice have not been expressly or impliedly ostracised to hear the society, we are of the opinion the society which has passed the order should be heard before any final order is passed under Section 53-B (2) of the Act. ( 13. ) CONSEQUENTLY, the writ petition, being sans merit, stands dismissed without any order as to costs. Writ Petition dismissed.