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Allahabad High Court · body

2018 DIGILAW 728 (ALL)

CHANDRA MOHAN SINGH v. STATE OF U. P.

2018-03-28

SIDDHARTH

body2018
JUDGMENT Hon’ble Siddharth, J.—Heard learned counsel for the petitioners and learned Standing Counsel for the State-respondents. 2. The petitioners have filed this writ petition challenging the order dated 23.2.2016 passed by respondent No. 3/Assistant Commissioner and Assistant Registrar, Cooperative Societies, U.P. Firozabad, whereby the Committee of Management has been directed to furnish details regarding the resolutions of appointment of new employees in accordance with the circular dated 8.12.2014 issued by respondent No. 2/Commissioner and Registrar, Cooperative Societies, U.P., Lucknow. The aforesaid circular has also been challenged in the writ petition. Further prayer has been made for direction to respondent No. 4/Committee of Management, Sadhan Sahkari Samiti Limited to release the salary of the petitioners alongwith arrears. 3. The precise legal submission of the learned counsel for the petitioners is that by virtue of Section 121 of the U.P. Co-operative Societies Act, 1965 the Registrar has been vested with the powers of framing regulation to regulate the emoluments and other conditions of service including disciplinary control of employees in a co-operative society or a class of co-operative societies and any society to which such terms are applicable, shall comply with those regulations and with any order of the Registrar, issued to secure such compliance. 4. The aforesaid regulations are required to be published in the Gazette and take effect from the date of such publication. 5. The petitioners claim themselves to be employees of a Primary Agricultural Co-operative Credit Society and it has been argued that under Section 29-A (viii) of the U.P. Co-operative Societies Act, 1965 such Societies have the powers of appointing officers or other staff to conduct the business of the society and define inter alia their duties, service conditions, leave concessions and disciplinary matters subject to the provisions of this Act, the rules and the bye-laws. 6. The argument is that in view of Section 29-A(viii) of the U.P. Cooperative Societies Act, 1965, the Primary Agricultural Co-operative Credit Society have exclusive powers of appointment and regulation of service conditions of its employees and officers. The impugned circular dated 8.12.2014 issued by respondent No. 2 has been passed in mis-exercise of jurisdiction by respondent No. 2 and deserves to be quashed. The impugned circular dated 8.12.2014 issued by respondent No. 2 has been passed in mis-exercise of jurisdiction by respondent No. 2 and deserves to be quashed. It has further been argued that the Registrar is competent to frame regulations under Section 121 of the U.P. Cooperative Societies Act, 1965 and till regulations are framed, the Registrar cannot issue any circular to regulate the service conditions of the employees and officers of the Primary Agricultural Co-operative Credit Society, since such a power has not been vested in him by the statute. 7. Learned Standing Counsel appearing on behalf of respondent Nos. 1 to 3 has argued that under Section 121 the Registrar has the power to regulate the functioning and service conditions of its employees and officers in exercise of the power vested in him. He has rightly issued the circular dated 8.12.2014 and it is in conformity with the requirements of Section 29-A(viii) of the U.P. Cooperative Societies Act, 1965. It has been framed in the interest of the Primary Agricultural Co-operative Credit Society and it is not open for the petitioner to challenge the same. 8. Before considering the rival submissions, looking to the relevant provisions of Section 121 and Section 29-A of the U.P. Cooperative Societies Act, 1965, would be relevant, they are as under: 121. Power of Registrar to determine terms of employment of society.—(1) The Registrar may, from time to time, frame regulation to regulate the emoluments and other conditions of service including the disciplinary control of employees in a co-operative society or a class of co-operative societies and any society to which such terms are applicable, shall comply with those regulations and with any orders of the Registrar, issued to secure such compliance. (2) The regulations framed under sub-section (1) shall be published in the Gazette and take effect from the date of such publication. [29A. (2) The regulations framed under sub-section (1) shall be published in the Gazette and take effect from the date of such publication. [29A. Special provision for Primary Agricultural Co-operative Credit Societies, Central Co-operative Banks and Apex Bank.—Notwithstanding anything to the contrary in any other provision of this Act, rules and Bye-laws of the society, the Committee of Management of a Primary Agricultural Co-operative Credit Society or a Central Co-operative Bank or an apex bank shall exercise such powers and perform such duties as may be necessary and expedient for the purpose of carrying out its functions under this Act which shall include,- (a) the power to,- (i) admit members and dispose of applications for shares; (ii) interpret the organizational objectives and set specific goals to be achieved towards those objectives; (iii) prepare annual and supplementary budgets and get the approval of the General Body thereto; (iv) raise and invest funds in accordance with the bye-laws; (v) sanction all expenditure above the prescribed level, and the plan of capital development for the coming year or years; (vi) enforce any debt or demand of the society and institute, defend or compromise legal proceeding for or against the society; (vii) asses the existing man power resources and future requirements in the context of changes that might have taken to ensure availability of the required resources and consider and remove constraints in the process or progress of manpower planning at least once at the beginning of every year; (viii) appoint officers or other staff to conduct the business of the society and define inter alia their duties, service conditions, leave concessions and disciplinary matters subject to the provisions of this Act, the rules and the bye-laws; (ix) arrange for the education and training of members and employee and review the programmes and progress, relating thereto, at least once at the beginning of every year; (x) dispose of applications for loans, fix rate of interest subject to the directions of the Reserve Bank of India and the National Bank for Agriculture and Rural Development and determine securities to be taken for such loans; (xi) appoint Sub-Committees, as may be considered necessary; (xii) make periodical appraisal of its operation; (xiii) acquire, hold and dispose of the properties in the prescribed manner; (xiv) take loans from any financial institution regulated by the Reserve Bank of India and refinance from National Bank for Agriculture and Rural Development or any other refinancing agency directly or through any financial institution regulated by the Reserve Bank of India and not necessarily from only the federal tier to which it is affiliated, and similarly, placing its deposits with, or making investments in, any regulated financial institution and not necessarily with only the federal tier to which it is affiliated; (xv) decide issue relating to affiliation and disaffiliation with any federal structure including entry and exit at any level; (xvi) decide its area of operation according to the business requirement; [(xvi-a) decided its Internal Control Systems, appointment of auditors and compensation for the audit;] (xvii) take such other measures or do such other act as may be prescribed or required under this Act, the rules and the Bye-laws; and (b) the duty of,- (i) observing, in all affairs under the provisions of this Act, the rules and the bye-laws; (ii) causing- (A) proper receipt and disbursement of moneys of the society and maintenance of the account, assets and liabilities of the society; (B) preparation of Annual Report of the society for every year; (C) preparation of Annual Returns prescribed by the Registrar; (D) preparation of the statement of account required at audit and placement of the same before the auditors; (E) preparation of all other statement and returns and submission of the same to the Registrar; (F) maintenance of accounts of the society regularly in proper books; (G) maintenance of the register of members up-to-date; (iii) formulating recommendation in accordance with the guidelines of National Bank, if any, for appropriation of the net profits declared as distributable under the provisions of this Act and the rules and submitting the same to General Body; (iv) facilitating the inspections, inquiries and audits under this Act and considering the Audit, inspection and Inquiry Reports received from the concerned authority and furnishing compliance thereto in accordance with the provisions of this Act and the rules; (v) convening the meetings and special meetings of the General Body in time; (vi) watching that the loans and advances are utilized for the purposes for which they are meant and also that they are repaid punctually; (vii) examining and taking prompt action in cases of all arrears and defaults in repayment of loans and advances; (viii) liaisoning with the members in all matters of the society and ensuring the observance of the co-operative principles; (ix) making arrangements for holding elections in time; and (x) performing such other functions as may be entrusted to it by the General Body or required by or under this Act, the rule and the bye-laws. (3)(i) A member of the Committee of Management shall be disqualified for continuing in the Committee if he is representing a non-credit society on the board of a Central Co-operative Bank or apex bank and the society has committed a default for a period exceeding 90 days. (ii) A person who is a defaulting member or office-bearer of a defaulting Primary Agricultural Co-operative Credit Society shall not be eligible to be elected to the board of the society or the bank as the case may be, or continue on the Board for more than one year unless the default is cleared. (4) “A Primary Agricultural Co-operative Credit Society shall abide by all such directions regarding financial norms as may be prescribed by the Registrar in consultation with the National Bank.”] 9. A perusal of Section 121 of the Act clearly shows that the legislature has vested the power of framing regulations in the Registrar by virtue of Section 121 of the U.P. Cooperative Societies Act, 1965 and the respondents have not brought on record any such regulation framed in exercise of the powers vested in the Registrar under Section 121 of the U.P. Cooperative Societies Act, 1965. The impugned circular dated 8.12.2014 cannot be considered to be a regulation within the meaning of Section 121 of the U.P. Cooperative Societies Act, 1965. 10. Under Section 29-A of the U.P. Cooperative Societies Act, 1965 the Primary Agricultural Co-operative Credit Societies have been given powers to regulate the functioning, terms and conditions of the employees and the manner of business which cannot be curtailed by a circular, which is not in accordance with the powers vested in the statute. 11. In view of the above, the circular dated 8.12.2014 issued by respondent No. 2/Commissioner and Registrar, Cooperative Societies, U.P., Lucknow and the order dated 23.2.2016 passed by respondent No. 3/Assistant Commissioner and Assistant Registrar, Cooperative Societies, U.P. Firozabad are illegal and hereby quashed. 12. Since the petitioners have been appointed by the respondent No. 4 and the respondent No. 4 is not opposing their case, therefore, their salary shall be paid by respondent No. 4 in accordance to law. 13. However, it is open for the Registrar to frame regulation by exercising the powers under Section 121 of the U.P. Cooperative Societies Act, 1965 regarding the Primary Agricultural Co-operative Credit Societies. 14. Writ petition is allowed. No order as to costs.