Praveen Kumar Chandrakar (Died) Through Lrs. v. State of Chhattisgarh Through The Secretary, Co-operative Department
2023-11-29
DEEPAK KUMAR TIWARI, GOUTAM BHADURI
body2023
DigiLaw.ai
JUDGMENT : . Goutam Bhaduri, J Heard. 1. All the petitions are being heard together as in few of the cases, the vires of the amendment made in certain sections by the State, which has been notified on 13th of October, 2020 in the Chhattisgarh Co-operative Societies Act, 1960 (hereinafter referred to as 'the Act, 1960') is under challenge. 2. Except the writ petitions Nos. WPC No.3131/2020 (Praveen Kumar Chandrakar (died) Through Lrs Versus State Of Chhattisgarh), 367/2020 (Kamta Prasad Patel & another Versus State of Chhattisgarh & others) and WPC No.814/2021 (Amit Kumar Khatri & others Versus State of Chhattisgarh & others), the other petitions touch upon the direction issued on the basis of the amendment carried out in the Act, 1960 and Reorganization of the Societies Act. In the other petitions, the tenure of the Society Members/Directors were under challenge would show that they were elected in the year 2017 and the period lasted up till 2022 and now being 2023, by efflux of period of time, except the above referred petitions, all the petitions have become infructuous. 3. With respect to the petitions referred hereinabove vires have been challenged on five grounds which are as under:- The first challenge is the omission of clause (d) and (e) of sub-section (1) of Section 19-A of the Act, 1960 by the notification dated 14th of October, 2020 (Chhattisgarh Co-operative Societies (Amendment) Act, 2020 i.e. No.18 of 2020). Prior to omission clause (d) stood as:- (d) if he is disqualified under Section 48-A of the Act; Whereas prior to omission clause (e) stood as:- (e) if he is a person who has been dismissed from the service of any co-operative institution of Government service. The submission of the learned counsel for the petitioners is that the disqualification which has a reference of M.P. Amendment Act No.12 of 1994, would curtail the right. Likewise, the omission of clause (d) which also takes into sweep the person who has been dismissed from service of any cooperative institution or Government service, would also curtail the right of the general public at large. 4. The Second challenge is the addition of proviso clause to sub-section (8) of Section 49 of the Act, 1960, which was substituted by the amendment Act 18 of 2020. Sub-section (8) of Section 49 reads as under:- “49.
4. The Second challenge is the addition of proviso clause to sub-section (8) of Section 49 of the Act, 1960, which was substituted by the amendment Act 18 of 2020. Sub-section (8) of Section 49 reads as under:- “49. Annural General Meeting.- xxx xxx xxx xxx xxx xxx (8) Notwithstanding anything contained in this Act or Rules made thereunder the election of a board shall be conducted before the expiry of the term of the board. If the elections are not held before the expiry of the term, or board of society ceases to function due to the order of any court or otherwise all the members of the board shall be deemed to have vacated their seats and the powers of the board shall be deemed to have been vested in the Registrar and the [State Co-operative Election Commission] shall hold elections within six months, or twelve months in case of the Co-operative Banks:” Proviso to sub-section (8) of Section 49 of the Act, 1960 reads as under:- “Provided that the registrar may authorize any officer or a person or a committee of persons to exercise the powers of the board vested in him/Committee under this sub-section; and the officer or the person or the Committee of persons so authorized shall exercise such power from the date of such authorization for a period specified by the registrar or till the elections are held by the state Cooperative Election Commission, whichever is earlier: Provided further that in case of committee of persons, the registrar may nominate one person as a chairman and one person as vice chairman, and that such person(s) may be nominated from among the members of committee itself. Provided further also that in case of any non-official person or persons, their qualifications shall be such as may be prescribed” It is submitted by the petitioner that such addition of right conferring power to the Registrar to further delegate it to any officer would be ultravires to sub-section (8) of Section 49 of the Act, 1960 as it gives enumerate inflated right with no time limit, therefore, would be ultravires. 5.
5. The third challenge is the addition of sub-section (2-A) to Section 58-B. Sub-section (2-A) of Section 58-B reads as under :- “(2-A) Any officer or officer bearer under this Section held liable for causing loss to the society shall not be eligible to contest election as member of the board or representative of any society for the period of next six years from the date of communication of such order to him and cease to hold his office as such. In case of any salaried officer held liable for causing loss to the society then without prejudice to the other action that may be taken against him, an action against such officer shall also be taken under the provisions of service rules applicable to such officer.” Submission of the petitioners are that such curtailment of the right would be against the fundamental right of its individual citizen to contest for a member in the society and to elevate to the board and such amendment of curtailment could not have been incorporated by a penal action. 6. The last challenge (Fourth and Fifth) is about the deletion of sub-section (14) of Section 77 of the Act, 1960 and addition of Section 77-AA of the Act, 1960. sub-section (14) of Section 77 before was omitted by the Act, 2020 reads as under:- “(14) The Tribunal may suo motu or on the application of the party, call for and examine the records of any proceedings in which no appeal lies to it, for the purpose of satisfying itself as to the legality or propriety of any decision or order passed. If in any case, it appears to the Tribunal that any such decisions or orders should be modified, annulled or reversed, the Tribunal may pass such order thereon as it may deem just.” The new Section 77-AA about the revision which was added, reads as under:- 77-AA. Revision.- (1) The tribunal may at any time on its/his motion or on the application made by any party for the purpose of satisfying itself/himself as to the legality of propriety of the order passed by the Registrar under sub-section (2) of Section 55 or 64 of this Act, may pass such order as it think fit.
Revision.- (1) The tribunal may at any time on its/his motion or on the application made by any party for the purpose of satisfying itself/himself as to the legality of propriety of the order passed by the Registrar under sub-section (2) of Section 55 or 64 of this Act, may pass such order as it think fit. (2) The Registrar may at any time on its/his motion or on the application made by any party for the purpose of satisfying itself/himself as to the legality or propriety of the order passed by any officer subordinate to him under sub-section (2) of Section 55 or 64 of this Act, may pass such order as he think fit: Provided that powers conferred on the Registrar under this section shall not be delegated to any officer below the rank of Additional Registrar. (3) Under sub-section (1) and (2) no order shall be varied or reversed in revision unless notice has been served on the parties interested and reasonable opportunity given to them of being heard. (4) No such application shall be entertained by the Tribunal or Registrar unless presented within thirty days from the date of order and in computing the period aforesaid time requisite for obtaining a copy of the said order shall be excluded. Learned counsel for the petitioners would submit that in such Section, the Tribunal and the Registrar has been put at par, therefore, virtually the right of the Tribunal has been curtailed giving power to the Registrar, therefore, all the sections be declared ultravires. 7. Learned State counsel would submit that the primary challenge of the petition is based on the fact that the power has ripened in favour of the members and the Co-operative Society by virtue of 97th amendment of 2011 of the constitution and the entirety they have sailed on that ground. He would further submit that 97th amendment of 2011 itself has been struck down by the Gujarat High Court in the case of Rajendra N. Shah Vs. Union of India {WP (PIL) No.166/2012, decided on 22/04/2013, 2013 SCC OnLine Gujarat 2242} and the said judgment having been challenged before the Supreme Court, the same has been upheld by the Supreme Court in the matter of Union of India Vs. Rajendra N. Shah {2021 SCC OnLine SC 474} except to the extent that in respect of Multi-State Cooperative Societies, which operates within various states.
Rajendra N. Shah {2021 SCC OnLine SC 474} except to the extent that in respect of Multi-State Cooperative Societies, which operates within various states. Therefore, the cause of action itself has come to an end, on which the petitioners were agitating. He would further submit that nothing has been brought on record before this Court as to how the amendment of statute is ultravires to Constitution or to any other statute or right of individual, therefore, the petitions have no merit. He would further submit that except the petitions referred above, wherein vires has been challenged, the other petitions have become infructuous with the efflux of time as prescribed tenure for which the petitioners were elected from 2017-2022 has come to an end, therefore, the petitions have no merit and are liable to be dismissed. 8. We have heard learned counsel for the parties and perused the documents. 9. The perusal of the pleading would show that the entire challenge was based in view of the amendment brought in the constitutional amendment of 97th amendment of 2011 brought in part IXB which is of Article 243ZH to 243ZT. This issue was brought to an end eventually by the judicial dictum of the Supreme Court in the matter of Union of India Vs. Rajendra N. Shah {2021 SCC OnLine SC 474}, wherein at para 81 the Supreme Court held as under:- 81. The judgment of the High Court is upheld except to the extent that it strikes down the entirety of Part IXB of the Constitution of India is operative only insofar as it concerns multi-State Cooperative Societies both within the various states and in the Union Territories of India. The Appeals are accordingly disposed of. Therefore, the primary challenge which made the basis of the petitions appears to be lacking as of now. 10. Now coming to the other aspect with respect to the omission of clause (d) and (e) of sub-section (1) of Section 19-A of the Act, 1960. Prior to omission clause (d) stood as:- (d) if he is disqualified under Section 48-A of the Act; Whereas prior to omission clause (e) stood as:- (e) if he is a person who has been dismissed from the service of any co-operative institution of Government service. 11.
Prior to omission clause (d) stood as:- (d) if he is disqualified under Section 48-A of the Act; Whereas prior to omission clause (e) stood as:- (e) if he is a person who has been dismissed from the service of any co-operative institution of Government service. 11. Reading of omitted clause (d) would show that it has a necessary reference in Section 48-A of the Act, 1960, which speaks about disqualification for holding specified office. Section 48-A of the Act, 1960 reads as under:- 48-A. Disqualifications for holding specified office- (1) No person shall be at the same time hold the specified office of more than one Apex Society, one Central Society and one Primary Society: Provided that the provisions of this sub-section shall be applicable in case of societies of the same classification. (2) If any person who is holding a specified office in one Apex Society, one Central Society and one Primary Society is elected or appointed to a specified office in any other Apex or Central or Primary society, he may, by a letter in writing signed by him and addressed to the registrar, within a period of one month from the date of his election or appointment to such specified office resign from the specified office in all except on Apex Society and or one Central Society and or one Primary Society as the case may be. (3) If any person required to resign under sub-section (2), fails to resign within the period specified therein, then at the expiration of such period he shall be deemed to have resigned from the specified office in all except one Apex Society and one Central Society and one Primary Society, as the case may be, in which he was already holding the specified office prior to such subsequent election or appointment to specified office in other Apex or Central or Primary Society. 12. Reading of Section 48-A of the Act, 1960 would further show that certain rights and restrictions have been created by Section 48-A of the Act, 1960 to hold an office. At the same time, if the State in its wisdom and in its legislative competence have exercised and thought it proper to omit, the Courts by transgressing into legislative turf should not hold it to be ultravires.
At the same time, if the State in its wisdom and in its legislative competence have exercised and thought it proper to omit, the Courts by transgressing into legislative turf should not hold it to be ultravires. It would be necessary for petitioners to slate the said omission and highlight that in what way would restrict the right of any individual, whether constitutional or otherwise, so as to declare it ultravires. 13. Omitted clause (e) of sub-section (1) of Section 19-A of the Act, 1960 also removes the bar that a person who is dismissed from a service of the cooperative institution or Government service will not come as a rider or as a stigma as a disqualification. It is obvious that a dismissal from the service may be for various reasons. The holding of an office of an individual is for his survival and avocation and the individual right to have a contest and cast vote falls in a different category. Therefore, if an omnibus disqualification clause when has been omitted by the State that the disqualification will not work as a stigma or a barrier, it cannot be amalgamated to the issue to create a bar to contest an election or hold any post. Further, nothing has been placed before us why such omission would be ultravires and whether it is ultravires to constitution or any other law of the Country. 14.There exist a very strong presumption in favour of Constitutionality and Courts have to take very reluctant approach while holding any legislation unconstitutional and burden of proof is on the petitioner to demonstrate that legislation is unconstitutional. The Supreme Court in the matter of Dharmendra Kirthal Versus State of Uttar Pradesh and Another { (2013) 8 SCC 368 } has observed as under:- “23. At this juncture, we may profitably recapitulate that it is the duty of the Court to uphold the constitutional validity of a statute and that there is always the presumption in favour of the constitutionality of an enactment. In this context, we may fruitfully refer to the decision in Charanjit Lal Chowdhury v. Union of India { AIR 1951 SC 41 } wherein it has been ruled thus: “10....
In this context, we may fruitfully refer to the decision in Charanjit Lal Chowdhury v. Union of India { AIR 1951 SC 41 } wherein it has been ruled thus: “10.... it is the accepted doctrine of the American courts, which I consider to be well founded on principle, that the presumption is always in favour of the constitutionality of an enactment, and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles.” 24. In Ram Krishna Dalmia v. Justice S.R. Tendolkar { AIR 1958 SC 538 }, this Court had ruled that there is always a presumption in favour of the constitutionality of an enactment and the burden is on him who challenges the same to show that there has been a clear transgression of the constitutional principles and it is the duty of the Court to sustain that there is a presumption of constitutionality and in doing so, the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of the legislation.” 15. The Supreme Court has further observed in Burrakur Coal Co. Ltd. v. Union of India { AIR 1961 SC 954 }, Mudholkar, J., speaking for the Constitution Bench, observed: 25..... Where the validity of a law made by a competent legislature is challenged in a court of law, that court is bound to presume in favour of its validity. Further, while considering the validity of the law the court will not consider itself restricted to the pleadings of the State and would be free to satisfy itself whether under any provision of the Constitution the law can be sustained. 16. We are aware of the limitations and boundaries of legislative affairs and the judicial intervention, therefore, by the judgment, the Court cannot transgress upon into the turf of legislation.
16. We are aware of the limitations and boundaries of legislative affairs and the judicial intervention, therefore, by the judgment, the Court cannot transgress upon into the turf of legislation. Further, the proviso clause has been added to sub-section (8) of Section 49 of the Act, 1960 Proviso of sub-section (8) of Section 49 of the Act, 1960 reads as under:- “Provided that the registrar may authorize any officer or a person or a committee of persons to exercise the powers of the board vested in him/Committee under this sub-section; and the officer or the person or the Committee of persons so authorized shall exercise such power from the date of such authorization for a period specified by the registrar or till the elections are held by the state Cooperative Election Commission, whichever is earlier: Provided further that in case of committee of persons, the registrar may nominate one person as a chairman and one person as vice chairman, and that such person(s) may be nominated from among the members of committee itself. Provided further also that in case of any non-official person or persons, their qualifications shall be such as may be prescribed” 17. The reading of first clause, the submission has been made by the petitioner that the proviso clause gives an unfettered right to the Registrar who may authorize any officer or a person or a committee of persons to exercise the powers of the board vested in him/Committee under this sub-section, whereby it is ultravires to sub-section (8). 18. Reading of sub-section (8) of Section 49 of the Act, 1960, which is about holding annual general meeting, which shows that sub-section (8) contemplates that the election of board shall be conducted before the expiry of term of board and further it speaks that if the elections are not held before the expiry of the term or board of society ceases to function due to the order of any Court or otherwise, there will be deeming fiction that it would be presumed that they have vacated their seats and the powers of the Board shall be deemed to have been vested with the Registrar. The Section further contemplates that in such conditions the State Co-operative Election Commission “shall hold elections within six months, or twelve months in case of the Banks”.
The Section further contemplates that in such conditions the State Co-operative Election Commission “shall hold elections within six months, or twelve months in case of the Banks”. Therefore, the necessary interpretation of sub-section (8) would show that the outer limit of holding the election has been fixed for six months in case of ordinary society and in case of bank it is 12 months. The question looms large as to what would happen to the on going functions of the Board when sub-section (8) is read with proviso clause it shows that in such period, the Registrar would authorize any officer or a person or a committee to exercise the powers of the board vested in him which is under sub-section (8) and they would also exercise the power from date of such authorization. 19. This addition of proviso clause also appears to be logical in nature that if the cooperative society or bank are functioning at certain specified field, the Registrar may not be technically or professionally competent to continue such transaction or business in such case the Registrar would be in its discretion is allowed to run the function of the society through a competent person in a smooth functional manner which may eventually take care of the interest of the members of the society. Therefore, in our view that such provision pushes the narrative of cooperative society or bank to perform it its field with more objectively as any mint fresh idea without any experience may proved to be a fatal and in a given case the members have to bear the brunt. Consequently, it also cannot be held to be ultravires. Nothing has been placed or has been shown before us to hold that the addition of proviso to sub-section (8) of Section 49 of the Act, 1960 would be ultravires to any act or any fundamental right except presumption. 20. Further, the challenge is to the addition of sub-section (2-A) to Section 58-B of the Act, 1960, wherein certain restrictions have been incorporated by the legislation in case loss is caused to the society by the member and procedure has been laid down for making good the loses caused to the society. Sub-section (2-A) has been added to Section 58-B of the Act, 1960.
Sub-section (2-A) has been added to Section 58-B of the Act, 1960. Reading of Section 58-B of the Act, 1960 shows that the primary legislative intent is that when the State Government has contributed to its share capital or has given the financial assistance or has guaranteed the repayment of loans, debentures etc. and if it is found that any person who is or was entrusted with organisation or management of society including the Chairman, Secretary etc. and the said employee by misconduct has misappropriated or fraudulently retained any property which belong to the society the government after enquiry pass the necessary orders. Sub-section (2-A) only adds on when such person is held liable for causing loss to the society shall not be eligible to contest the election as a member of the board or representative of any society for a period of next six years from the date of communication. The addition of sub-section is to regulate the function of the society that the person entrusted do not attach their personal gain, against the interest of the society. If it is done so, they would further be not eligible to come again to occupy the chair. This reform lies at the root. The said addition also appears to be logical for the reason that if any member or a Chairman or Secretary willfully allow to reap the incentive to his near and dear or friends, he shall not be able to come back again to occupy the chair, if he is held liable for the loss caused to the society. The addition of such Section appears to be more in general public interest, whereby the personal gain has been given a back seat. Consequently, the said Section also appears to be reasonable and do not contravene any law or ultravires to any act. 21. Lastly the submission is made that the power of revision under Section 77-AA puts the Registrar at par with the Tribunal as Chapter X Section 77 is about the constitution of Tribunal. Reading of the said Section 77-AA would show that it is an independent Section irrespective of the constitution of Co-operative Tribunal which is under Section 77 of the Act, 1960. Section 77-AA of the Act, 1960 is about revision. Sub-section (1) gives the power of tribunal the power of revision.
Reading of the said Section 77-AA would show that it is an independent Section irrespective of the constitution of Co-operative Tribunal which is under Section 77 of the Act, 1960. Section 77-AA of the Act, 1960 is about revision. Sub-section (1) gives the power of tribunal the power of revision. Likewise, sub-section (2) also gives a power of revision that the Registrar may at any time of its own motion or on the application made by any party sub-ordinate to him under sub-section (2) of Section 55 or 64, may pass such order as he think fit. Reading of sub-section 1 & 2 together shows that the Registrar can exercise the revisional power only in respect of orders passed by his sub-ordinate whereas such restriction is not confined to the Tribunal. Consequently the submission of the petitioners that the Registrar and the Cooperative Tribunal has been put at par is completely misconceived and plain reading of the Section shows that both of them operate in the different fields. The State within its legislative competence thought it proper to confer the Registrar with such power and nothing has been placed before us to show the incompetence of the State to do so or such act is ultravires to any other law. 22. In view of the aforesaid discussions, all the petitions are dismissed. Before we part with, we make it clear that we have only commented upon the vires of the sections which were under challenge in these petitions irrespective of the individual right which may accrue to the individual in a different set of litigation.