JUDGMENT 1. Today the case is fixed for consideration of I.A.No.5580/2022, an application for vacating stay. 2. The respondent No.6 has filed its return. However, the State and its functionaries have not filed their return. For adjudicating I.A.No.5580/2022, this Court is required to hear the matter on merits, therefore, instead of deciding the application, the matter is heard finally on merits. 3. This petition under Article 226 of the Constitution of India has been filed seeking following reliefs : a. That, in view of the fact narrated above, order issued at Annexure P/1 may kindly be quashed in the interest of justice. b. That, due to taking illegal action by respondent no.5 the coercive step may kindly be taken against him and huge cost may kindly be imposed. c. That any other suitable relief which this Hon'ble court deem fit in the fact of the circumstances of the case. The cost of the present petition also may kindly be awarded. 4. It is submitted by the counsel for the petitioner that the petitioner is the President of Vipdan Sahkari Sanstha Maryadit, Sabalgarh, District Morena. The election of Board of Directors of the said society was held in the year 2020 and Directors of the Society were elected amongst the members of the parents societies. The first meeting of the Board of Directors was called on 7.9.2020. By the impugned order dated 5.7.2022, the society has been superseded under Section 53 of M.P. Cooperative Societies Act on the ground that on 2.9.2020 elections were held for the Board of Directors and only seven Directors were elected against 10 posts. On 2.9.2020 i.e., the date on which the elections were conducted, out of seven Directors, the term of two Directors namely Anant Kumar and Makhanlal had already come to an end in their parent society and the members of Bhutpurwa Sainik Prathmik Upbhokta Bhandar Maryadit, Sabalgarh and Rajeev Gandhi Prathmik Upbhokta Sahkari Bhandar Maryadit, Sabalgarh had incurred disqualification as they were the defaulters in their parent society for more than 12 months and thus they were disqualified for being elected as Directors. Out of seven elected Directors, only three Directors were validly elected and, therefore, there was a lack of Quorum and, accordingly, the society has been superseded by the Deputy Registrar, Cooperative Societies Morena by order dated 5.7.2022 and Shri N.S. Bareliya has been appointed as the Administrator. 5.
Out of seven elected Directors, only three Directors were validly elected and, therefore, there was a lack of Quorum and, accordingly, the society has been superseded by the Deputy Registrar, Cooperative Societies Morena by order dated 5.7.2022 and Shri N.S. Bareliya has been appointed as the Administrator. 5. Challenging the order passed by the Deputy Registrar Cooperative Societies, the following submissions have been made by the counsel for the petitioner: (i) The Deputy Registrar Shri C.P.S. Bhadoriya was not competent to pass an order because on 30.6.2022 he was already transferred. (ii) No opportunity of hearing was given to the Society before passing the order in question. 6. Per contra, the petition is vehemently opposed by the counsel for the respondent No.6 i.e. the Marketing Society, Sabalgarh, District Morena. It is submitted that it is clear from the impugned order dated 5.7.2022 that the term of membership of two Directors in their parent society had already come to an end and two Directors had incurred disqualification being the defaulter in their parent society for a period of more than 12 months therefore, they were not eligible to be elected as Directors and, therefore, only three Directors were left which has resulted in lack of quorum and, accordingly, the Deputy Registrar has rightly superseded the society. 7. Heard the learned counsel for the parties. (i) Whether the Deputy Registrar was competent to pass the impugned order or not? 8. By referring to the transfer order dated 30.6.2022 issued by Cooperative Department, it is submitted by the counsel for the petitioner that Shri Chandra Pratap Singh Bhadoriya, who has passed the impugned order dated 5.7.2022, was transferred to District Shahdol and thus, after 30.6.2022 Shri C.P.S. Bhadoriya was not competent to hold the post of Deputy Registrar and, therefore, the order passed by him is without jurisdiction. 9. However the counsel for the petitioner could not point out as to whether Shri C.P.S. Bhadoriya was relieved on or prior to 5.7.2022. On the contrary it is submitted by Shri Bahirani that even if Shri Bhadoriya was holding the post of Deputy Registrar on 5.7.2022 but in the light of his transfer order 30.6.2022, he was stripped off his all powers and, therefore, he was not competent to pass the order in question. 10. Mere transfer of an employee would not take away his powers attached to the post which he was holding.
10. Mere transfer of an employee would not take away his powers attached to the post which he was holding. Unless and until an officer is relieved from his post, he cannot be expected to sit idle in the office and not to exercise the powers. Even otherwise, the counsel for the petitioner could not point out any provision of law which provides that immediately after issuance of transfer order, the officer would lose all his powers attached to the post which he was holding. Thus, in absence of any averments to the effect that Shri C.P.S. Bhadoriya was already relieved prior to passing of the order dated 5.7.2022, it is difficult for this Court to hold that merely because the order of transfer was passed, he had ceased to hold the post of Deputy Registrar or was not competent to exercise the powers attached to the said post. 11. Accordingly, this question is answered against the petitioner. (ii) Whether the supersession of the Board of Directors is in accordance with law or not? 12. Section 53 of M.P. Cooperative Societies Act reads as under: '53.
11. Accordingly, this question is answered against the petitioner. (ii) Whether the supersession of the Board of Directors is in accordance with law or not? 12. Section 53 of M.P. Cooperative Societies Act reads as under: '53. Supersession of Board of Directors.-(1) If in the opinion of the Registrar, the Board of Directors of any society.- (a) is in persistent default; or (b) is negligent in the performance of the duties imposed on it by or under this Act or bye-laws of the society or by any lawful order passed by the Registrar or is unwilling to perform such duties; or (c) commits acts which are prejudicial to the interests of the society or its members; or (d) violates the provisions of this Act or the rules made thereunder or byelaws of the society, or (e) there is stalemate in the constitution or functions of the Board of Directors of a Society: (f) [x x x] [Provided that in special circumstances, the State Government may, for reasons to be recorded in writing, extend the term of office of the Administrator for a period not exceeding one year in total: Provided further that the Board of Directors of any such co-operative society shall not be superseded or kept under suspension where there is no Government share holding or loan or financial assistance or any guarantee by the Government or the society does Government sponsored business or undertakes an activity as a representative or agent of the Central or State Government and turnover of the above two businesses, together or separately, constitutes 50 percent or more of its total business: Provided further that in case of a co-operative bank, the order of supersession shall not be passed without previous consultation with the Reserve Bank: Provided further that the advice of the Reserve Bank shall be limited to the provision of the Banking Regulations Act, 1949 (No.10 of 1949).
Provided further that if no communication containing the views of Reserve Bank, on action proposed is received within thirty days of the receipt by that bank of the request soliciting consultation, it shall be presumed that the Reserve Bank agrees with the proposed action and the Registrar shall be free to pass such order as may be deemed fit: Provided also that in case the Registrar is not in agreement with the opinion of the Reserve Bank, he may pass an order, recording the reasons thereof in writing.] (2) No order under sub-section (1) shall be passed unless a list of allegations, documents and witnesses in support of charges leveled against it, has been provided and the Board of Directors has been given a reasonable opportunity of showing cause against the proposed order and representation, if any, made by it, is considered. (3) The administrator so appointed, shall subject to the control of the Registrar and to such instructions as he may, from time to time, give, have power to exercise all or any of the powers and to discharge all or any of the functions of the Board of Directors or of any officer of the society and to take all such action as may be required in the interest of the society. (4) The Registrar may fix the remuneration payable to the administrator so appointed. The amount of such remuneration and other costs, if any, incurred in the management of the society shall be payable from its funds. (5) The Administrator so appointed shall manage the affairs of the society under the controland guidance of the Registrar and shall arrange the conduct of election under the direction of the Authority. (6) Before taking action under-section (1) in respect of a financing bank or in respect of a society indebted to a financing Bank, the Registrar shall consult, in the former case, the Madhya Pradesh State Co- operative Bank Limited and in the later case, the financing bank concerned, regarding such action. If the Madhya Pradesh State Co-operative Bank Limited or the financing bank, as the case may be, fails to communicate its views within thirty days of the receipt by such bank of the request soliciting consultation, it shall be presumed that the Madhya Pradesh State Co-operative Bank limited or the financing bank concerned, as the case may be, agreed with the proposed action.
(7) Notwithstanding anything contained in Section 48, 49 and 50, if there is a difference of opinion between the general body of society [and the Administrator appointed under sub-section (1)] in respect of any matter, it shall be referred to the Registrar for decision and his decision thereon shall be final: Provided that if the Registrar fails to take any decision within three months of the general body meeting, the decision of the general body of the society shall prevail. (8) Nothing in this section shall be deemed to affect the power of the Registrar to direct the winding up of the society. (9) During the period between the issuance of notice and the passing of an order removing the Board of Directors, the Board of Directors may be required by the Registrar to function under the supervision, and with the approval of such authority as the Registrar may specify in this behalf and no order made or resolution passed or any other act performed by the Board of Directors shall be effectual unless it is approved by such specified authority: Provided where the Registrar, while proceeding to take action under sub-section (2), is of the opinion that the supersession of the Board of Directors during the period of proceeding is necessary in the interest of the society he may suspend the Board of Directors, which shall thereupon cease to function and make such arrangement as he thinks fit, of the affairs of the society till the proceedings are completed and order issued under sub-section (1): Provided further that the period of suspension shall not exceed six months and on the expiry of said period the suspension of the Board of Directors shall stand revoked: Provided further that, if the Board of Directors so suspended, is not superseded after undergoing the proceeding mentioned above, It shall be re-instated and the period during which it has remained suspended shall not count towards its term: 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.
(10) Notwithstanding anything contained in this Act, the Registrar shall, in case of Central Co-operative Banks, Urban Co-operative Banks, Urban Credit Co- operative Societies and Primary Co-operative Land Development Banks, If the recovery continuously in three co operative years is less than 60 percent of the demand or if the overdues exceed 40 percent, pass an order for removal of the Board of Directors or the Managing Board of Directors by whatever name it is called and for appointment of an administrator therefor for such period or periods not exceeding one year and in case of an Urban Credit Co-operative society six months in aggregate, as may be specified by the Registrar and on such appointment, the provisions of sub-sections (3), (4) and (5) shall apply thereto as if an order was passed under sub-section (1): Provided that in case of a co-operative bank, the order of removal shall not be passed without previous consultation with the Reserve Bank: Provided further that the advice of the Reserve Bank shall be limited to the provisions of the Banking Regulations Act, 1949 (No. 10 of 1949):] Provided further that if no communication containing the views of the Reserve Bank, on action proposed is received within thirty days of the receipt by that Bank of the request soliciting consultation, it shall be presumed that the Reserve Bank agrees with the proposed action and the Registrar shall be free to pass such order as may be deemed fit: [Provided further that in case the Registrar is not in agreement with the opinion of the Reserve Bank, he may pass an order recording the reasons thereof in writing] Provided also that no such order shall be made unless the Board of Directors has been given a reasonable opportunity of showing cause against the proposed order and representation, if any, made by it is considered.
(11) When a Board of Directors of a society has been superseded under sub-section (1) any member of the Board of Directors, not withstanding anything contained in this Act or rules made thereunder or byelaws of the society, shall not be eligible for contesting the election as a member of the Board of Directors nor shall he be eligible for cooption or nomination in any society for a period of seven years: Provided that nothing in this sub-section shall apply to a member of the Board of Directors of a society who was not a party of such a decision of the Board of Directors which led to the supersession of it.
(12) Notwithstanding anything contained in this Act or rules made thereunder or byelaws of society, if the Board of Directors of society ceases to function due to order of any court or in the absence of prescribed quorum, the Registrar may appoint an Administrator temporarily in place of Board of Directors till the court order is vacated or the new elections are held and the Board of Directors take charge: Provided that if the society ceases to function due to absence of quorum as prescribed, the Administrator so appointed by the Registrar, shall conduct election within a period of six months and in the case of co-operative Bank within a period of one year from the date of appointment of such Administrator and ensure that the Board of Directors take charge: Provided further that in special circumstances, the State Government may, for reasons to be recorded in writing, extend the election of a society for not exceeding one year in total: Provided also that in case of a co-operative Bank the information of appointment of Administrator shall be sent to the Reserve Bank by the Registrar.] (13)(a) Notwithstanding anything contained in this Act, in the case of any Co-operative Bank, if so required by the Reserve Bank, in the public interest or for preventing the affairs of the co-operative banks being conducted in a manner detrimental to the interest of the depositors or for securing the proper management of the co-operative bank, an order shall be made by the Registrar for the removal of the Board of Directors or managing body (by whatever name it is called) and for the appointment of an administrator, to manage the affairs of the co-operative Bank, for such period or periods, not exceeding one year in the aggregate, as may from time to time be specified by the Reserve Bank, and the administrator so appointed shall continue to remain in office even after the expiry of his term of office till the date immediately proceeding the day of holding the first meeting of the new committee. (b) On such appointment of an administrator, the provision of sub-section (3) shall also be applicable on him.
(b) On such appointment of an administrator, the provision of sub-section (3) shall also be applicable on him. (c) No appeal, revision or review shall lie or be permissible against an order as is referred to in clause (a) made on the requisition of the Reserve Bank and such order shall not be liable to be called in question by any manner.] 13. Rule 44 of Cooperative Societies Rules, 1962 reads as under:- 44. Disqualification for membership of committee.-(1) [No person shall be eligible for election, co-operation or nomination] as a member of the committee of a society and shall cease to hold his office as such, if he (a) is an applicant to be adjudicated or is an undischarged insolvent; or (b) is sentenced for an offence not involving moral turpitude and a period of five years has not elapsed from the date of expiry of the sentence; or (c) is or becomes of unsound mind; or (d) holds or accepts any office of profit in the society; or (e) carries on business of the kind carried on by the society; or (xxx) (f) has been disqualified under Section 49, 50 or 53 for the period mentioned in the order; or (g) has, at the time of nomination of his/her candidature, or subsequent to his/her election, his/her wife/husband/father/ mother/brother/ sister/son/daughter as a paid employee of the society; or (h) is or gets in default to the society or to any other society for a period exceeding twelve months in respect of any loan or loans taken by him; or (i) has been a member of a society for less than (four months) immediately preceding the date of election; or (j) has been removed from the service of Central Government or a State Government or any Public Undertaking institution or any local self institution or any co-operative society] [xxx] 14.
Bylaws 30 and 32 of Vipdan Sahkari Sanstha Maryadit, Sabalgarh, District Morena reads as under: 30- izfrfuf/kRo ds fy;s v;ksX;rk;sa%& ¼1½ dksbZ Hkh lEcf/kr lfefr ,sls lnL; dks tks mi&fof/k 29 esa n'kkZbZ xbZ ;ksX;rkvksa esa ls dksbZ v;ksX;rk j[krk gks] lfefr esa izfrfuf/kRo djus ds fy;s] vius izfrfuf/k ds :i esa ugha pqusxhA 2½ lfefr esa vFkok lfefr ds lapkyd eaMy esa] laEcf}r lfefr dk izfrfuf/kRo djus okyk dksbZ Hkh izfrfuf/k] vius in ij u jgsxk& ¼1½ ;fn og mi&fof/k esa 29 esa of.kZr v;ksX;rkvksa esa ls dksbZ Hkh v;ksX;rk j[krk gks] vFkok 2½ ;fn og lEcf}r lfefr dk lnL; u jgk gks] vFkok ¼3½ ;fn lEcf}r lfefr mls okfil ys ysrh gS vFkok mlds LFkku ij dksbZ nwljk izfrfuf/k pqurh gS] vFkok 4½ ;fn lEcf}r lfefr dh izcU/kdkfj.kh lfefr] ftlus mls pquk gks] vf/kfu;e dh /kkjk 53 dh mi/kkjk ¼1½ ds vUrxZr gVk nh xbZ gks] ,slh fLFkfr esa mDr mi/kkjk ds vUrXkZr ,sls fjDr LFkku dks Hkjus ds fy;s tks O;fDr vFkok O;fDrx.k fu;qDr fd;k x;k@fd;s x;s gks] mls Lo;a dks] vFkok vius esa ls fdlh ,d dks] tSlh Hkh fLFkfr gks] ukekafdr djus dk vf/kdkj gksxkA 5½ ;fn og vf/kfu;e dh /kkjk 53 dh mi/kkjk ¼1½ ds vUrxZr cU/k&dkfj.kh lfefr ds gVk;s tkus ds ckn vlEcaf}r lfefr ds dk;Z dh ns[k&js[k ds fy;s fd;s x;s fu;qDr O;fDr vFkok O;fDr;ksa }kjk ukekafdr fd;k x;k gks] tc fd /kkjk 53 dhs mi/kkjk ¼6½ ds vUrxZr uohu izcU/k dkfj.kh lfefr xfBr dh pk pqdh gS] vFkok 6½ ;fn lacf/kr lfefr ds ifjlekiu esa ykus ds vkns'k ns fn;s gksaA 31- -------- 32- lapkyd eaMy ds pqus gq;s lnL;ksa esa ls izR;sd dk dk;Zdky& ¼1½ ;fn bu mi&fof/k;ksa esa vU; :i esa fuf'pr ugha gksrk rks izR;sd lnL; dk dk;Zdky rhu o"kZ vFkok ml vf/kd le; rd jgsxk tc rd fd lacaf/kr pquko {ks= dk pquk gqvk uohu lnL; vFkok in xzg.k ugha dj ysrkA ijUrq ukekafdr lnL; dh inkof/k] mudks ukekafdr djus okys izkf/kdkjh dh bPNk ij fuHkZj gksxhA ¼2½ vke lHkk fdlh Hkh lnu rFkk mlds }kjk pqus gq;s eaMy ds fdlh Hkh lapkyd dks gVkus ,oa mlds LFkku ij fdlh nwljs dks pquus ds fy;s l{ke gksxhA 15.
Although the petitioner has challenged the supersession of the Society on the ground that it has been passed without issuing any show cause notice but none of the Directors who have been declared disqualified or ineligible has challenged the impugned order dated 5.7.2022. Even the petitioner has not disputed that the terms of Anant Kumar and Makhan Lal (according to the counsel for respondent No.6 the name of Shri Makhan Lal has been wrongly mentioned in the impugned order dated 5.7.2022 but in fact he is Shri Sarvan Lal) had come to an end from their parent society. There is not a single whisper in the writ petition to the effect that the members of Bhutpurwa Sainik Prathmik Upbhokta Bhandar Maryadit, Sabalgarh and Rajeev Gandhi Prathmik Upbhokta Sahkari Bhandar Maryadit, Sabalgarh were not disqualified as they were not the defaulters for a period of 12 months in their parent society. 16. The only contention of the counsel for the petitioner is that no show cause notice was issued. It is well established principle of law that mere violation of principle of natural justice would not automatically make the order vulnerable unless and until the petitioner succeeds in pointing out any prejudice which was caused to him. The petitioner has not disputed that the term of Anant Kumar and Sarvan Lal (mentioned as Makhan Lal in the impugned order) had already come to an end in their parent society. The petitioner has not disputed that the members of Bhutpurwa Sainik Prathmik Upbhokta Bhandar Maryadit, Sabalgarh and Rajeev Gandhi Prathmik Upbhokta Sahkari Bhandar Maryadit, Sabalgarh were the defaulters exceeding 12 months in their own parent society. Thus, in absence of any challenge to the reasons for superseding the society, this Court is of the considered opinion that non grant of any opportunity to explain will not make the order vulnerable as held in the order passed by the Supreme Court in the cases of Natwar Singh vs. Director of Enforcement reported in (2010) 13 SCC 255 , Indu Bhushan Dwivedi vs. State of Jharkhand reported in (2010) 11 SCC 278 , Dharampal Satyapal Ltd. vs. CCE reported in (2015) 8 SCC 519 and Haryana Financial Corporation vs. Kailash Chandra Ahuja reported in (2008) 9 SCC 31 . 17.
17. Thus, the order dated 5.7.2022 cannot be quashed merely on the ground that no show cause notice was issued to the Vipdan Sahkari Sanstha Maryadit, Sabalgarh, District Morena before issuance of order dated 5.7.2022. (iii) Whether the petitioner has an any locus to challenge the order dated 5.7.2022 or not? 18. By the impugned order dated 5.7.2022 the Board has been superseded. The petitioner has filed this petition being the President of Board of Directors. The respondent No.6 Vipdan Sahkari Sanstha Maryadit, Sabalgarh, District Morena is opposing the contention of the petitioner. 19. This petition has not been filed by the Society or by any of the member who has been declared to be in-eligible to hold the post of Directors. Merely because with supersession of the society, the petitioner would also lose his post of President would not clothe him with any right to challenge the supersession unless and until he succeeds in establishing that the supersession was contrary to law. As already held, the petitioner has not challenged the findings given by the Deputy Registrar with respect of disqualification/ineligibility of four Directors. As already held that mere non-compliance of principle of natural justice would not make any order vulnerable unless and until the petitioner succeeds in pointing out that had he been granted any opportunity, he would have explained the situation which may not have resulted in passing of the impugned order. This Court is of the considered opinion that under the given facts and circumstances of the case, the order dated 5.7.2022 cannot be quashed even on the writ petition filed by the petitioner. 20. Since nothing could be pointed out by the counsel for the petitioner for interfering in the order, the petition fails and is hereby dismissed. 21. The interim order dated 22.7.2022 is hereby vacated.