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2014 DIGILAW 1053 (MP)

Ram Naresh v. Joint Registrar, Cooperative Societies, Jabalpur

2014-08-25

ALOK VERMA, RAJENDRA MENON

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ORDER 1. Challenging the order dated 17.6.2014 (Annexure P-8) passed by the Madhya Pradesh State Co-operative Tribunal, Bhopal in Review Petition No.2/2014 exercising its powers of review and recalling an earlier order passed on 25.2.2014, this writ petition has been filed under Articles 226 and 227 of the Constitution of India. 2. Facts in brief which are necessary for decision of the writ petition goes to show that the petitioners are the members of the Co-operative Societies which are in turn members of the District Co-operative Central Bank Limited, Jabalpur, Central Society. The petitioners were elected to the post of Directors and formed the Board of Management of the District Central Co-operative Bank, Jabalpur. By order dated 3.7.2010 the Board of Directors of District Co-operative Central Bank, Jabalpur was superseded under section 53(1) of the M.P. Co-operative Societies Act, 1960 and, therefore, a dispute was raised and the matter went before the M.P. State Co-operative Tribunal, Bhopal in F.A. No.82/2010. This first appeal was decided by the Cooperative Tribunal and vide order Annexure P-1 dated 25.2.2014 the Tribunal found that the action of the Joint Registrar in superseding the Board of Directors is absolutely illegal and is contrary to the provisions of the Act. It is further observed that the Board of Directors are also entitled to the benefits of the provisions of section 49(7-A)(i) of the Act. The Tribunal while doing so, took note of provisions of section 49(7-A) of the Act of 1960 and permitted the Board of Directors to function and discharge the duties for the remaining period of their term which has been spent by them under super-session. 3. It seems that after such an order was passed in Annexure P-1, the Joint Registrar filed a review application seeking review of the earlier order dated 25.2.2014 and brought to the notice that the petitioners are not entitled to the benefit of section 49(7-A) and they cannot be permitted to reoccupy the post of Directors. It was alleged that most of the Members of the erstwhile Board are representatives of Co-operation Societies who have already been declared as defaulters and such members of the Co-operatives Societies are disqualified to hold the post of Directors. The proceedings against them are pending under section 50-A(2) of the Co-operative Societies Act and pending decision on the same the Board of Directors cannot function under section 49(7-A). The proceedings against them are pending under section 50-A(2) of the Co-operative Societies Act and pending decision on the same the Board of Directors cannot function under section 49(7-A). Allowing this application the impugned order has been passed on 17.6.2014 and, therefore, petitioners challenge the same in these proceedings. 4. Shri Siddharth Gulatee, learned counsel for the petitioners invited our attention to the documents and material available on record to demonstrate that the proceedings under section 50-A(2) of the Cooperative Societies Act against all the primary societies is pending for adjudication. The matter is still subjudice before the Joint Registrar and the inquiry is to be completed. It is the contention of the petitioners before us that until and unless final orders are not passed and the primary societies are not declared defaulters, the reason given in the impugned order passed in the review application is unsustainable. Shri Siddharth Gulatee also invites our attention to the assertion made by respondents in para 12 of their return to say that the issue is still pending. 5. Per contra, learned counsel appearing for the respondents have tried to justify their action but on going through the material available on record particularly the assertion made by them in para 12 of the return, it is clear that in the matter of default committed by primary societies the proceedings are pending under section 50-A(2). 6. Having heard learned counsel for the parties it is clear that until and unless a final decision is not taken and finding is recorded to the effect that the primary societies are defaulters, they are not entitled to continue the benefits under section 49(7-A), cannot be denied to the present petitioners. It is only when the primary societies are found to be defaulters in the matter of complying with the statutory requirement, that action can be taken. Since the issue is still pending before the appropriate authority, the learned Tribunal has committed an apparent error in allowing the review application. That being so, we are of the considered view that in reviewing its earlier order a jurisdictional error and illegality has been committed by the M.P. State Cooperative Tribunal which has been interfered with these proceedings. 7. Now the law is well settled with reference to benefit available to the cooperative society under section 49(7-A) as clearly laid down by the apex Court. 7. Now the law is well settled with reference to benefit available to the cooperative society under section 49(7-A) as clearly laid down by the apex Court. The Supreme Court in the case of State of Madhya Pradesh and others v. Sanjay Nagayach and others 2013 RN 283 (SC) = (2013)7 SCC 25 and a Bench of this Court in cases like W.P. No.13717/2013 (Raj Kumar Arya v. Joint Registrar Cooperative Society) decided the issue and have consistently held that if in an illegal manner a society is superseded under the provisions of section 53 of the Cooperative Societies Act normally the supersession is set aside. It has been held that once the order of supersession is set aside and the superseded body is reinstated in office then for the period when body is prevented from functioning due to order of supersession the elected body which is superseded is entitled to discharge its duties for remaining period for which it was prevented from functioning. Once it is found that the action is illegal the petitioners are entitled to function for the period in accordance with law by virtue of section 49 (7-A) of the Act and this benefit can be denied only if any irregularity is available. The so called irregularity by the Primary Society is still to be determined and decided in the pending proceedings. 8. Under such circumstances, we allow this writ petition. The impugned order dated 17.6.2014 (Annexure P-8) is quashed. The respondent is at liberty to proceed in the matter in accordance with the law after the matter pending in inquiry against the primary society is decided. Till such a decision is not taken in those proceedings, the petitioners be permitted to discharge their duties and functions in accordance with law after the charge is given to them forthwith. 9. With the aforesaid this writ petition stands allowed and disposed of. .................