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Madhya Pradesh High Court · body

2014 DIGILAW 1435 (MP)

Barelal v. State of M. P.

2014-11-07

SUJOY PAUL

body2014
ORDER 1. Parties are heard on admission. 2. Admit. 3. Issue notices to respondents No.1 to 3 and 6 on payment of process fees within seven days, failing which the petition shall stand dismissed automatically without reference to the Court. 4. Parties are also heard on the question of interim relief. 5. This matter has a chequered history. Earlier, by order dated 2.12.2011 the petitioner-society was superseded. This was put to test before this Court by filing a writ petition. The writ petition was not entertained on the ground that the petitioners may avail the statutory alternative remedy. However, in Writ Appeal No.98/2012, = 2013 RN 352 the order of supersession was set aside and it was found that a mandatory provision was not followed and, therefore, relegating the petitioners to avail alternative remedy is not necessary. Thereafter, second show cause notice dated 25.10.2013 (Annexure P/6) was issued. This notice was subsequently dropped on 7.12.2013 (Annexure P/7). Thereafter, a fresh notice under section 53 (2) of M.P. Cooperative Societies Act, 1960 (for brevity, the “Act”) was issued on 18.7.2014 (Annexure P-9). Thereafter, the petitioners submitted an application dated 25.7.2014 (Annexure P/10). The resolution of the society dated 28.12.2013 was also brought to the notice of the respondents. 6. Admitted position between the parties is that section 53 (2) proceedings are still pending and no final order is passed. This is also not in dispute that the term of the petitioners is till January, 2015. 7. The petitioners are aggrieved by the order dated 16.10.2014, whereby invoking section 53(9) of the Act the petitioner-society is placed under suspension. 8. Shri K.N.Gupta, learned senior counsel submits that as per fourth proviso of sub-section (9) of section 53 of the Act, the petitioners should have been given a reasonable opportunity of being heard. Before issuing the suspension order, no opportunity of any nature was given to the petitioners. He submits that since principles of natural justice and mandatory provision of fourth proviso aforesaid are buried in graveyard, alternative remedy is not a bar. Before issuing the suspension order, no opportunity of any nature was given to the petitioners. He submits that since principles of natural justice and mandatory provision of fourth proviso aforesaid are buried in graveyard, alternative remedy is not a bar. He placed reliance on AIR 1998 SC 2410 (Myurdhwaj Cooperative Group Housing Society Ltd. v. Presiding Officer, Delhi Cooperative Tribunal); 2003 (I) MPJR 12 (Manohar Singh Marwaha v. State of MP); (1998) 8 SCC 1 (Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai) and 2013 RN 283 (SC) = (2013) 7 SCC 25 (State of MP v. Sanjay Nagayach) to bolster the aforesaid submissions. 9. Shri M.P.S.Raghuvanshi, learned Additional Advocate General supported the impugned order. He submits that the notices under section 53(2) of the Act were issued to the petitioners. The petitioners have not chosen to file reply till date. Therefore, as per the first proviso to sub-section (9) aforesaid, the Registrar is empowered to suspend the society during the period of proceedings of section 53(2) of the Act. He submits that once notices under section 53(2) are issued and petitioners have not chosen to file any reply, no further opportunity is required. By placing reliance on 1981 RN 468 (Champalal v. Board of Revenue), it is submitted that there exists an alternative remedy and, therefore, this petition be not entertained. He relied on (2014) 1 SCC 603 (Commissioner of Income Tax v. Chhabil Dass Agarwal) to submit that in view of alternative remedy, this petition is not entertainable. By placing reliance on (2003) 4 SCC 104 (Public Service Tribunal Bar Association v. State of UP), it is submitted that termination and suspension orders cannot be stayed. Lastly, he relied on AIR 1973 SC 1249 (Veerpal Singh v. The Registrar, Cooperative Societies UP)) and (1999) 8 SCC 16 (Maharaja Chintamani Saran Nath Shahdeo v. State of Bihar) to submit that the petitioner has no case and petition is liable to be dismissed. 10. Shri Prashant Sharma, learned counsel for the respondent No.5 submits that the petitioners have not filed reply to the notices issued under section 53(2) of the Act. Even if notices would have been issued under fourth proviso to sub-section (9) of section 53 of the Act, the said notices would have contained the same allegations. 10. Shri Prashant Sharma, learned counsel for the respondent No.5 submits that the petitioners have not filed reply to the notices issued under section 53(2) of the Act. Even if notices would have been issued under fourth proviso to sub-section (9) of section 53 of the Act, the said notices would have contained the same allegations. Since petitioners have failed to file reply of notices under section 53(2), the doctrine of useless formality may be applied and it may be presumed that even if such notices would have been issued containing the same reasons, which were mentioned in section 53(2) proceedings, the petitioners would have no reply at all. 11. I have heard learned counsel for the parties on the question of interim relief. 12. The first proviso of section 53(9) of the Act enables the Registrar to suspend the society if it is necessary in the interest of the society. The fourth proviso reads as under :- “Provided also that no order of suspension shall be made unless the Board of Directors of the society has been given a reasonable opportunity of being heard.” 13. Pausing here for a moment, it is apt to see that proviso to section 53(2) of the Act in no uncertain terms makes it clear that for the purpose of section 53(2) proceedings, a reasonable opportunity and show cause needs to be given to the society. In addition, under section 53(9) of the Act, before passing suspension order, the legislature has chosen to provide another opportunity to the society of being heard. In other words, the legislature in its wisdom has thought it proper to provide reasonable opportunity of hearing at two different stages. For the purpose of section 53(2), a reasonable opportunity is required to be given. In addition, in the event of suspension it was made clear in the said proviso that reasonable opportunity of being heard is required to be given. As per the test and context in which said proviso is used, it is crystal clear that it is a mandatory provision and principles of natural justice, equity and fair play is codified in the sape of aforesaid proviso. I am not impressed with the submission of other side that merely because petitioners have not filed reply to the notice issued under section 53(2), issuance of second notice would amount to an useless formality. I am not impressed with the submission of other side that merely because petitioners have not filed reply to the notice issued under section 53(2), issuance of second notice would amount to an useless formality. At this stage, it cannot be presumed that as to what defence will be taken by the petitioners if notice would be issued as per the mandate of aforesaid proviso (reproduced in page 5). The reason for placing the society under suspension is that the society has not filed reply to the notice. This reason is different than the reasons mentioned in the sow cause notice issued under section 53(2) of the Act. Thus, the doctrine of useless formality has no application in the facts and circumstances of the present case. 14. Shri Prashant Sharma although relied on section 53-A(iii) of the Act, I do not see any merit in the contention based on the said provision. section 53-A(iii) does not give any licence to the respondents to suspend the society without following mandatory proviso aforesaid. In the prima facie opinion of this Court, the respondents have violated the mandatory provision and principles of natural justice. Thus, prima facie the appointment of administrator by Annexure P-1 is bad in law. 15. So far as the question of alternative remedy is concerned, after the judgment in Champalal (supra) much water has flown in the rivers. In the matter of Sanjay Nagayach (supra) arising out of M. P. Cooperative Societies Act, the apex Court upheld the order passed in writ Appeal No.1065/2011 ( 2012 RN 252 ). In para 25 of the said judgment in writ appeal, it was made clear that entertaining a writ petition despite availability of alternative remedy is a matter of discretion and not of a compulsion. When the facts are not in dispute and mandatory legal provision is violated, relegating the person to avail alternative remedy is not proper. The said view is affirmed by the Supreme Court in Sanjay Nagayach (supra). So far the judgment in Public Service Tribunal Bar Association (supra) is concerned, it is arising out a different statute, which was applicable to State of UP. The relevant statute applicable in State of UP debars the Tribunal to pass any kind of interim orders. There is no such bar in any of the statutes here. So far the judgment in Public Service Tribunal Bar Association (supra) is concerned, it is arising out a different statute, which was applicable to State of UP. The relevant statute applicable in State of UP debars the Tribunal to pass any kind of interim orders. There is no such bar in any of the statutes here. The said judgment has no application in the facts and circumstances of the present case. 16. In view of aforesaid analysis, I find a strong prima facie case in favour of the petitioner, whereby the respondents without following the aforesaid proviso of section 53(9) passed the impugned order. 17. Resultant, the effect and operation of the impugned order, Annexure P/1 dated 16.10.2014, is stayed. 18. The respondents are free to file parawise reply expeditiously. They are given liberty to mention for final hearing of this matter at an early date after filing of their reply.