ELECTED COMMITTEE OF MANAGEMENT OF DISTRICT CO-OPERATIVE BANK LTD. , JAUNPUR v. STATE OF UTTAR PRADESH
2008-03-31
ANJANI KUMAR, RAKESH SHARMA
body2008
DigiLaw.ai
JUDGMENT By the Court.—Amendment Application filed by the petitioners has been allowed. With the consent of the parties the matter is heard finally. 2. The petitioner, who is elected Committee of Management of District Co-operative Bank Ltd., Jaunpur (hereinafter referred to as the Bank) superseded, is a Co-operative Society registered under the provision of U.P. Co-operative Societies Act, 1965 (hereinafter referred to as ‘the Act’). The Committee has now been substituted by its Chairman and others who have filed this writ petition for quashing the impugned order superseding the Committee of Management of the Bank dated 13th December, 2007 whereby the petitioner-Committee of Management has been superseded by the Joint Registrar, Co-operative Societies, U.P., Varanasi Region, Varanasi exercising powers of the Registrar Co-operative Societies under Section 35 (1) of the Act and further in exercise of powers under sub-section (3) of Section 35 of the Act appointed the District Magistrate, Jaunpur to be the Administrator in place of superseded Committee of Management. 3. The brief facts leading to filing of the present writ petition are that the petitioner-Committee of Management of District Co-operative Bank Ltd., Jaunpur is a Central Bank (District Level Co-operative Society) and is registered under the provisions of U.P. Co-operative Societies Act, 1965. The present Committee of Management was elected on 23/24th August, 2006 and the meeting of the Committee of Management was held on 24th August, 2006. It is asserted by the petitioner that the members of the Committee of Management including the Chairman of the Committee of Management since belong to Samajvadi Party who is now in opposition and the new Government is formed by the Bahujan Samaj Party, as such there was a political rivalry between the members and Chairman of the Committee of Management with the present political set up in power. The provisions of Section 35 of the Act are quoted below : “35.
The provisions of Section 35 of the Act are quoted below : “35. Supersession or suspension of Committee of Management.—(1) Where, in the opinion of the Registrar, the Committee of Management of any Co-operative Society persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the Rules or the bye-laws of the society or commits any act which is prejudicial to the interest of the society or its members, or is otherwise not functioning property, the Registrar after affording the Committee of Management a reasonable opportunity of being heard and obtaining the opinion of the general body of the society in a general meeting called for the purpose in the manner prescribed may, by order in writing, supersede the Committee of Management : [Provided that where under the prescribed circumstances it is not feasible to convene a general meeting of the general body of the society, the Registrar may dispense with the requirement of obtaining the opinion of the general body of the society]. (2) Where the Registrar, while proceeding to take action under sub-section (1) is of opinion that suspension of the Committee of Management during the period of proceeding is necessary in the interest of the society, he may suspend the Committee of Management which shall thereupon cease to function, and make such arrangement as he thinks proper for the management of the affairs of the Society till the proceedings are completed : Provided that if the Committee of Management so suspended is not superseded it shall be reinstated and the period during which it has remained suspended shall count towards its term. (3) Where the Registrar has superseded the Committee of Management under sub-section (1), he may appoint in its place, [for a period not exceeding one year] to be specified in the order of supersession,— (a) a new committee consisting of one or more members of the society, or (b) an administrator or administrators who need not necessarily be members of the society : [Provided that the Registrar may, with the previous approval of the State Government, extend from time to time the period of supersession, so however, that any single extension does not exceed six months and the total extension does not exceed one year].” 4.
The provision of Section 35 of the Act has undergone a change when it was amended by the amended Act No. 47 of 2007, namely, U.P. Co-operative Societies (Third Amendment) Act, 2007. The aforesaid provision, inter alia, purports to amend several provisions of U.P. Cooperative Societies Act. So far as the controversy involved in the present writ petition is concerned which relates to exercise of power by the Registrar under Section 35 of the Act is concerned, this U.P. Act No. 47 of 2007 purports to amend the aforesaid provision of Section 35 as under : “Provided further that in the case of a Central Cooperative Bank or the Uttar Pradesh Co-operative Bank, the suspension or supersession of the Committee of Management shall not be made by the Registrar unless the Reserve Bank of India has been consulted.” 5. Learned Counsel for the petitioner has raised number of grounds on merits including the exercise of power on the part of the respondents superseding the petitioner’s Committee of Management is in fact mala fide and colourable exercise of power by respondent. A detail counter affidavit has been filed on behalf of the Administrator appointed in place of superseded Committee of Management denying all those allegations made in the writ petition. For the purposes of present controversy it would not be necessary to enter into all the arguments which have been advanced by the petitioners on merits, i.e. mala fide, arbitrary exercise of power etc. in view of argument advanced on behalf of the petitioners. It is submitted by the learned Counsel for the petitioner that in view of amendment of Section 35 of the Act by U.P. Act No. 47 of 2007, prior approval of the Reserve Bank of India is necessary for superseding the elected Committee of Management. In other way learned Counsel for the petitioners has submitted that prior approval of the Reserve Bank of India which is a condition precedent for exercise of power under Section 35 by the Registrar before superseding a Committee of Management. This amending Act has been published in the official Gazette dated 10th December, 2007 and has been assented by the Governor on 9th December, 2007.
This amending Act has been published in the official Gazette dated 10th December, 2007 and has been assented by the Governor on 9th December, 2007. Learned Counsel submitted that on the date when order under Section 35 (1) of the Act was passed against the present Committee of Management, the amending Act No. 47 of 2007 was enforced and, therefore, it was incumbent on the part of respondents to have gone for prior approval of the Reserve Bank of India before passing of the order superseding the petitioners’ Committee of Management. This fact has been asserted on affidavit on behalf of the petitioners by filing a supplementary affidavit which has not been controverted on affidavit filed on behalf of contesting respondent. There is no material on record that any prior consultation, as is required under the amended provision of Section 35, amended by Act No. 47 of 2007, has been done by the respondents from the Reserve Bank of India. In this view of the matter as submitted by learned Counsel for the petitioners that if the statute prescribes a thing to be done in a particular manner it should be done in that manner alone and since necessary mandatory consultation has not been done by the respondents before superseding Committee of Management, the order deserves to be quashed and the petitioner’s Committee of Management deserves to be reinstated. 6. Sri Mandhyan, Senior Counsel for the contesting respondent, has submitted that this Court should not exercise power under Article 226 of the Constitution of India because the petitioners have a remedy by way of filing appeal under Section 98 of U.P. Co-operative Societies Act and further on enquiry since the charges have been proved which included the charges of misappropriation of money and misuse of power etc., the power under Article 226 of the Constitution of India should not be exercised by this Court in favour of the petitioners. However, to the arguments advanced on behalf of the petitioners, as referred to above, Sri Mandhyan submitted that the Reserve Bank of India was informed of the supersession of Committee of Management, therefore, respondents have complied with the provisions of Section 35 as amended by amending Act No. 47 of 2007. 7.
However, to the arguments advanced on behalf of the petitioners, as referred to above, Sri Mandhyan submitted that the Reserve Bank of India was informed of the supersession of Committee of Management, therefore, respondents have complied with the provisions of Section 35 as amended by amending Act No. 47 of 2007. 7. We have given our considered thought to the arguments advanced on behalf of both the sides and we are of the opinion that after amendment of Section 35 by Act No. 47 of 2007 a duty is cast upon the respondents to enter into prior consultation before superseding the Committee of Management under Section 35 of the Act and that having not been done by the respondents, to us it appears that the order, since has been passed in contravention of the mandatory provision of the Act, deserves to be quashed and is hereby quashed. 8. The order dated 13th December, 2007 superseding the Committee of Management is hereby quashed, the Committee is herewith reinstated and the Administrator appointed under the impugned order is hereby removed. However it will be open to respondent to pass a fresh order in accordance with law. 9. The writ petition is allowed with costs. ————