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Uttarakhand High Court · body

2016 DIGILAW 770 (UTT)

Kehar Singh v. Ranveer Singh

2016-10-26

K.M.JOSEPH, U.C.DHYANI

body2016
JUDGMENT : K.M. Joseph, J. Appellant is respondent no. 4. The writ petition was filed by the Chairman of the Cooperative Society. Election to the Committee of Management was held on 07.11.2013. It had the term of five years. There were six members in the Management Committee. The writ petitioner, one Ravindra, Smt. Munesh and Smt. Rekha Devi were elected; two persons, namely, Subhash Kumar and Smt. Bala Devi were co-opted as members in the Management Committee. It appears that two members, namely, Smt. Rekha Devi and Smt. Bala Devi tendered their resignations to the Registrar, Dairy Development Department, Uttarakhand On 19.5.2016, the first impugned order was passed. The Registrar, Dairy Development Department, Uttarakhand purported to hold that there were six members in the society and since two members, out of six members, have already resigned, four remain. Out of four members, he found that Sri Subhash Kumar, who was one of the members of the Society, had not supplied the minimum quantity of milk required. Consequently, Subhash Kumar was found disqualified. Therefore, there remained only three members. Therefore, the respondent, who was the Registrar, held that there remained no society as it was a three member society. He consequently appointed the Assistant Director of Dairy Development Department as an Administrator on 19.05.2016. The next impugned order was passed on 20.05.2016 and by the said order, the Administrator was replaced by an Administrative Committee of five members; one out of them was the person, who tendered resignation and one another, who was the son of one of the members, who resigned. Out of these, Sri Kehar Singh was appointed as the Chairman. In this regard, petitioner relied on the letter dated 20.05.2016 written by the Cabinet Minister, who was in-charge of the Cooperative Society, and which was sent to the Director Dairy Development, Dehradun. The learned Single Judge took note of Section 35 of the Uttaranchal Co-operative Societies Act, 2003 (hereinafter referred to as the Act), which reads as follows: “35. Supersession or suspension of the Committee of Management. The learned Single Judge took note of Section 35 of the Uttaranchal Co-operative Societies Act, 2003 (hereinafter referred to as the Act), which reads as follows: “35. Supersession or suspension of the 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 properly, 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. (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 proceedings 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 not 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 six months), 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 the period of supersession, so however, that any single extension does not exceed six months and the total extension does not exceed one year : Provided further that the committee or an administrator or administrators appointed (before the commencement of Uttaranchal Co-operative Societies Act, 2003) shall be deemed to have been duly appointed and no action taken or power exercised or functions performed by it or him, as the case may be, shall be deemed to be invalid or shall be called in question in any court on the ground of any defect in its or his appointment as such or on the ground that the Committee of Management was not reconstituted within time or the period of supersession or the term of its or his office was not duly extended. (4) The Registrar shall have the power to change the committee or any members thereof or the administrator or administrators appointed under clause (a) or (b) of sub-section (3) at his discretion during the period specified under that sub-section. (5) The committee, administrator or administrators appointed under sub-sections (3) and (4) shall, subject to any directions which the Registrar may from time to time give, have the power to exercise all or any of the functions of the Committee of Management or of any officer of the society and shall be deemed for all purposes under this Act, the rules and the bye-laws of the society to be the Committee of Management. (6) Before the expiry of the period specified under sub-section (3), the committee, administrator or administrators, appointed under sub-sections (3) and (4) shall arrange for the reconstitution of the Committee of Management in accordance with this Act, the rules and the bye-laws of the society to takeover the management of the co-operative society on the expiry of the said period. (6) Before the expiry of the period specified under sub-section (3), the committee, administrator or administrators, appointed under sub-sections (3) and (4) shall arrange for the reconstitution of the Committee of Management in accordance with this Act, the rules and the bye-laws of the society to takeover the management of the co-operative society on the expiry of the said period. (7) The provisions of Section 29 shall apply in respect of reconstitution of the Committee of Management under this section. 2. He noted that before passing the order, under Section 35(1) of the Uttaranchal Co-operative Societies Act, 2003, it was absolutely necessary for the Registrar to have given an opportunity of hearing to the Management Committee and should have also obtained the opinion from the general body of the Society. Both these requirements were observed in the breach. The learned Single Judge further took note of Bye-law No. 35, which contemplated filling up of any casual vacancy amongst elected members of the Committee by way of co-option. In regard to the disqualification of Sri Subhash Kumar, it is found that it was contrary to the procedure provided in Rules 474 to 477. Noting the argument of the learned counsel for the appellant that there was no occasion for providing an opportunity to the Committee of Management, as there was no Committee, it was found that the argument was without any basis. Further reliance is placed on Bye-law No. 35, which we have noticed, as per which, remaining members of the Committee were empowered to co-opt the members from the general body. It is found that the Registrar did not make any attempt to comply with the requirement of Section 35 of the Act, namely, to call a meeting of the General Body. There is a tearing haste, which was not required, is another finding. The Minister’s directions to appoint certain persons were noticed. It is found that there is mala fide and arbitrariness running through the entire gamut of events. The contention based on the alternative remedy was rejected. Consequently, the impugned orders were quashed. After quashing, the learned Single Judge proceeds to order as follows: “17. The Minister’s directions to appoint certain persons were noticed. It is found that there is mala fide and arbitrariness running through the entire gamut of events. The contention based on the alternative remedy was rejected. Consequently, the impugned orders were quashed. After quashing, the learned Single Judge proceeds to order as follows: “17. It is, however, made clear that in order to meet a quorum, the remaining members i.e., other than the two who had resigned on 18.05.2016 shall meet immediately within a period of three weeks from the date of production of certified copy of this order after calling for a general body meeting and co-opt member in accordance with law for smooth functioning of the Committee.” 3. We heard Sri Ajay Veer Pundir, learned counsel for the appellant, Sri Shobhit Saharia, learned counsel on behalf of the writ petitioner, Sri Paresh Tripathi, Chief Standing Counsel for the State of Uttarakhand and Sri Yogesh Pandey, learned counsel for the 4th respondent. 4. Sri Ajay Veer Pundir, learned counsel for the appellant would reiterate that there is no Committee, to which notice could have been issued under Section 35 of the Act. He would further submit that this is a case, where the Committee has lost its quorum. He would refer us to the Rules and also the Co-operative Societies Rules (Rule 123) and contend that there is no quorum. He would further draw our attention to Article 243 ZJ, which reads as under: “Article 243 ZJ. Number and term of members of board and its office bearers.— (1) The board shall consist of such number of directors as may be provided by the Legislature of a State, by law: Provided that the maximum number of directors of a co-operative society shall not exceed twenty-one: Provided further that the Legislature of a State shall, by law, provide for the reservation of one seat for the Scheduled Castes or the Scheduled Tribes and two seats for women on board of every co-operative society consisting of individuals as members and having members from such class or category of persons. (2) The term of office of elected members of the board and its office bearers shall be five years from the date of election and the term of office bearers shall be conterminous with the term of the board: Provided that the board may fill a casual vacancy on the board by nomination out of the same class of members in respect of which the casual vacancy has arisen, if the term of office of the board is less than half of its original term. (3) The Legislature of a State shall, by law, make provisions for co-option of persons to be members of the board having experience in the field of banking, management, finance or specialization in any other field relating to the objects and activities undertaken by the co-operative society, as members of the board of such society: Provided that the number of such co-opted members shall not exceed two in addition to twenty-one directors specified in the first proviso to clause (1): Provided further that such co-opted members shall not have the right to vote in any election of the co-operative society in their capacity as such member or to be eligible to be elected as office bearers of the board: Provided also that the functional directors of a co-operative society shall also be the members of the board and such members shall be excluded for the purpose of counting the total number of directors specified in the first proviso to clause (1).” 5. He would contend that actually under the proviso to Sub Article (2) of Article 243 ZJ, having regard to the date of the election, namely, 07.11.2013, and the term of the election, there is no power to the Board to fill any vacancy. He would further submit that the learned Single Judge was not justified in giving direction in Paragraph 17. He would also contend that even proceeding on the basis of the judgment, a situation has arisen now, where there is no quorum and this Court may direct that the election be held within a particular period, namely, six months. 6. Per contra, learned Chief Standing Counsel would also submit that the provisions contained in proviso to Sub Article (2) of Article 243 ZJ will not enable filling of the casual vacancy by the Board by nomination. 6. Per contra, learned Chief Standing Counsel would also submit that the provisions contained in proviso to Sub Article (2) of Article 243 ZJ will not enable filling of the casual vacancy by the Board by nomination. He would also contend that there is no Committee of Management, to which an opportunity of hearing could have been extended under Section 35 of the Act. He would contend that there were only three members, who remained. He would also submit that the Committee of Management has not come before this Court. He would further submit that the persons, whose resignations were the subject matter of the controversy, were not made parties. The Committee of Management has also not been made party either as a petitioner or as a respondent and the petitioner has no locus to challenge the order. Even the persons, who were disqualified, have not approached this Court. 7. Sri Shobhit Saharia, on behalf of the writ petitioner, would submit that under the Bye-laws, the maximum number of members is fixed as 15. Out of the same, maximum nine members may be elected members. There are provisions for nomination. There is also one member, who is the Manager, who is an ex officio Secretary. 8. He would submit that there is mala fide and violation of the provisions of Section 35 of the Act. According to him, having regard to the order dated 19.05.2016 being set aside, even the members, who resigned, will continue to be the members. He would also contend that in an adjourned meeting, the quorum will be four. This is as per Bye-law-38. 9. He would further contend that even taking the number as nine, there are five members and as Rule 123 of the Uttaranchal Co-operative Societies Rules, 2004 provides that there should be more than one half of the number of members of the Committee, the requirement related to the quorum already exists. This, he arrives at in the following manner: There are three members, who have neither resigned nor are found to be disqualified. Apart from them, there is a member, namely, Subhash Kumar, whose disqualification has been found to be wrong as the same is contained in the order dated 19.05.2016 and the same stands quashed. This, he arrives at in the following manner: There are three members, who have neither resigned nor are found to be disqualified. Apart from them, there is a member, namely, Subhash Kumar, whose disqualification has been found to be wrong as the same is contained in the order dated 19.05.2016 and the same stands quashed. Apart from these four members, there is also the Manager, who is an ex officio Secretary, who keeps the minutes and who certainly will be entitled to be counted for the purpose of reckoning the quorum. This is apart from his argument that there will be quorum on the basis that the members, who resigned, will continue to be the members in view of the order passed by the learned Single Judge. 10. Sri Shobhit Saharia, learned counsel for the writ petitioner has contended that power under proviso to Sub Article (2) of Article 243LJ permits them to nominate. 11. Learned counsel for the appellant Sri Ajay Veer Pundir would, in fact, point out that two members have been co-opted in 2014 and 2015 within two and a half year. 12. Learned Chief Standing Counsel would also argue that having regard to Article 243 ZJ, there is no need to give notice. 13. There is no dispute that the action was taken to supersede the elected Committee of Management of the Co-operative Society. The law relating to supersession, as far as legislature of the State is concerned, is contained in Section 35 of the Act, which is of the year 2003. Part IXB (containing Article 243ZH to 243ZT) was inserted as by the Constitution (Ninety-Seventh Amendment) Act, 2011 with effect from 15.02.2012. It is thereunder, that Article 243ZJ figures and we have already extracted the same. The argument of the learned Chief Standing Counsel is based on Article 243 ZL, which provides for supersession and suspension of Board and interim management, does not commend itself to us as appealing. It is thereunder, that Article 243ZJ figures and we have already extracted the same. The argument of the learned Chief Standing Counsel is based on Article 243 ZL, which provides for supersession and suspension of Board and interim management, does not commend itself to us as appealing. Undoubtedly, it provides that the Board may be superseded or kept under suspension, inter alia in case, there is a stalemate in the Constitution or functions of the Board, but it does not provide for any procedure for hearing, but we are of the view that Article 243ZL can be reconciled with Section 35 of the Act and it is not open to the Court or to the Authorities to ignore the law made by a competent legislature, namely, the Co-operative Societies Act, 2003 and there is no inconsistency in regard to the requirement to be followed in Section 35 of the Act with the provision in Article 243ZL. Undoubtedly, there is power of supersession, but we cannot hold that the law, which provides for complying with certain procedures, is rendered ineffective and unnecessary. The requirement of the law contained in Section 35 of the Act is intended to prevent arbitrary supersession. Arbitrariness is best avoided in circumstances, where natural justice is complied with; where rights of the parties are affected. Taking into account the views of the general body meeting of the Co-operative Society is a legislative effort in consonance with the democratic principles, as a co-operative society is also a democratic institution and it is meant to be governed as a democratic institution. Therefore, we would think that the argument of Sri Paresh Tripathi is only to be repelled. 14. As far as the impugned orders are concerned, it is clear that there is a breach of Section 35 of the Act. Even assuming and proceeding on the basis of the argument of Sri Ajay Veer Pundir and the learned Chief Standing Counsel that there is no Committee and there is no need to issue notice, it is undisputed that Section 35 of the Act stands breached insofar as the general body of the society was not convened. Therefore, this dimension of Section 35 of the Act cannot be in the region of dispute. In such circumstances, the order dated 19.05.2016 is rightly interfered with by the learned Single Judge. Therefore, this dimension of Section 35 of the Act cannot be in the region of dispute. In such circumstances, the order dated 19.05.2016 is rightly interfered with by the learned Single Judge. The subsequent order dated 20.5.2016 is a consequential order and we also note that the letter of the Minister dated 20.05.2016 was also taken into consideration by the learned Single Judge. 15. We notice that none of the official respondents in the writ petition have challenged the order of the learned Single Judge and they have, therefore, accepted the judgment of the learned Single Judge. 16. As regards the contention raised on locus standi of the writ petitioner, where he sought to maintain the challenge against a portion of the order dated 19.05.2016, by which the disqualification of Subhash Kumar has been done, we would think that we cannot say that there was absolutely lack of locus standi for the petitioner, for the petitioner was sought to be impacted adversely on the basis of the said disqualification. The petitioner has actually pointed out the legal provisions contained in the Rules, which contemplated a procedure for disqualifying a person. It is obvious that the said procedure has not been followed, before conclusion of such disqualification was arrived at. There is no dispute before us also that the disqualification was not affected of the said person as per the said Rules. Therefore, we see no reason to interfere with the order dated 19.05.2016. Regarding the contention of the learned Chief Standing Counsel that the persons, who resigned, have not impugned the order and they were not made parties also, we would think that we need only sustain the judgment of the learned Single Judge quashing the order dated 19.05.2016 on the ground that there is violation of Section 35 of the Act and, also, on the basis that the disqualification of Sri Subhash Kumar was found to be contrary to the Rules. Therefore, we need not be treated as having pronounced on the issue relating to the resignation of the members, and the judgment of the learned Single Judge is sustained on a different basis, but the result is that the order dated 19.05.2016, without our rendering a finding on the issue of resignation, will stand quashed. 17. There remains the direction in Paragraph 17. 17. There remains the direction in Paragraph 17. On the one hand, there is a case for the appellant, as also, the learned Chief Standing Counsel, that there is no quorum; this is refuted by the petitioner, who submits that there is a quorum. 18. We would think that the learned Single Judge was not justified in issuing the directions and, that too, to meet the quorum, that the remaining members, other than those, who had resigned, shall meet within a period of three weeks from the date of production of certified copy of the order after calling for a general body meeting and co-opt member in accordance with law for smooth functioning of the Committee. After having quashed the orders dated 19.05.2016 and 20.5.2016, the matter should have been left there. Further direction itself generated much controversy before us particularly related to the power to co-opt members. Whether there is a quorum with the Board are all matters, which need not be gone into by this Court as we are affirming the quashing of the order passed under Section 35 of the Act read with the constitutional provisions enabling supersession on the basis, which we have indicated. We need not go into the question as to whether there is a quorum for the Committee and whether there is power to co-opt and this question is left open. We are also not pronouncing on the question relating to the power available to the Authorities to proceed afresh in the matter. The Appeal is partly allowed accordingly and the direction contained in Paragraph 17 of the judgment will stand set aside, and also, we have modified the quashing of the order dated 19.05.2016 as indicated aforesaid.