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C/M, MANAGEMENT, D.C.BANK LTD. THRU' ITS CHAIRMAN & OTHERS. versus STATE OF U.P THRU' SECRETARY(COOPERATIVE) & OTHERS.

High Court of Judicature at Allahabad

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C/m, Management, D.C.BANK Ltd. Thru' Its Chairman & Others. v. State Of U.P Thru' Secretary(cooperative) & Others. - WRIT - C No. 23736 of 2004 [2004] RD-AH 344 (22 July 2004)

 

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HIGH COURT OF JUDICATURE OF ALLAHABAD

- U.P.Cooperative Societies Act

- Right to hold post after expiry of term - no

A.F.R.

COURT NO.34

"RESERVED"

CIVIL MISC. WRIT PETITION NO. 23736 OF 2004

Committee of Management, District Cooperative

Bank Ltd., Moradabad & anr.  ......... Petitioners

Versus

State of U.P. & ors. ......... Respondents

---------

Hon. Dr. B.S. Chauhan, J.

Hon. Krishna Murari, J.

(By Hon. Dr. B.S. Chauhan, J.)

This writ petition has been filed for issuing a direction to the respondents to allow the petitioners to continue as the Committee of Management of the District Cooperative Bank Limited, Moradabad till the new Committee of Management is constituted by holding elections.

The facts and circumstances giving rise to this case are that the District Cooperative Bank Limited, Moradabad is a Central Cooperative Society duly registered and governed by the provisions of the U.P. Cooperative Societies Act, 1965, hereinafter called "the Act" and the U.P. Cooperative Societies Rules, 1968, hereinafter called "the Rules". The last election of the Committee of Management of the said Bank was held on 6th July, 1999 and the tenure at that time of the Committee so elected had been three years. However, prior to the expiry of the said tenure, the provisions of the Act were amended and the tenure of the Committee so elected was made for five years in stead of three years and in pursuance thereof, the Committee of Management-present petitioners had a tenure upto 5th July, 2004. The Committee of Management passed a resolution in its meeting held on 11.11.2003 requesting the Registrar, Cooperative Societies, U.P. Lucknow, respondent no.2 to hold the election of the new Committee of Management.  Again, such a resolution was passed on 14.12.2003 as the tenure of the Committee was expiring on 5th July, 2004. The Respondent no. 2 vide order dated 23.06.2004 fixed the date of elections of Committees of Management of different Cooperative Societies and the District Cooperative Banks including the petitioners, in 3rd week of December, 2004. Hence, this petition.

Shri H.R. Mishra, learned counsel for the petitioners has submitted that undoubtedly, the tenure of the Committee of Management is over but as respondent-authorities failed to hold the fresh election of Committee of Management and in other similarly situated Societies particularly that of the Milk Cooperative Societies, the Authority concerned vide order dated 26.06.2004 appointed the same Committee of Management as the administrative Committees, thus petitioners are being given hostile treatment not to give the similar treatment to them. Provisions of Section 29 of the Act provides for reconstitution of the Committee of Management of a Cooperative Society before 15 days of the expiry of the term of the Committee of Management. Clause (4) thereof cast the duty upon the Secretary of the Society to send requisition to the Registrar for conducting the election of the Cooperative Society four months before of the expiry of the term of the Committee of Management. As the resolution had already been sent much in advance and the respondents failed to conduct the election, petitioners have a right to continue till the election is held. Shri Mishra further placed reliance upon the Division Bench decision of this Court (Lucknow Bench) passed in Writ Petition No. 2390 (M/B) of 2004, Gangol Sahakari Dugdh Utpadak Sangh, Partapur, Meerut & anr. Vs. State of U.P. & ors., dated 21.05.2004 wherein a direction had been issued to the Registrar to ensure that the election process comes to an end before 15 days of the expiry of the term of the existing Committee of Management of a Cooperative Society and in view thereof, it is submitted that as the respondents failed to hold the election in time, the petitioners should be permitted to continue in office.

On the contrary, Shri Sudhir Agrawal, learned Additional Advocate General has submitted that undoubtedly, there is obligation on the part of the statutory authorities to hold election before the expiry of the term but there had been extraordinary situation because of the general election of the Parliament and as the entire administration was busy in holding the election of the Parliament, the elections could not be held in time. Under the provision of Section 29 of the Act itself, the State Government has a power to extend the period fixed by the Registrar for holding the election. It is not a case of mala fide or ill will on the part of the statutory authorities or the Government that election could not be held. The provisions of the Act and Rules are crystal clear that a Committee duly elected cannot be permitted to continue in office after expiry of its tenure as sub-section (5)(a) of Section 29 of the Act which had been brought into force by amendment with effect from 16.06.1997 clearly provides that an elected Member ceases to exist to be a Member on expiry of his term. The petitioners cannot be permitted to maintain the writ petition and seek a relief contrary to law and it is the prerogative of the Registrar to appoint the Administrator in the fact situation, like this, and the petition is liable to be dismissed.

We have considered the rival submissions made by the learned counsel for the parties and perused the record. .

Undoubtedly, earlier, the tenure of the Committee so appointed had been three years. However, by amendment vide U.P. Act No.12 of 2002, it had been extended to five years and the term of the petitioners came to an end on 5th July, 2004. Rule 85-A of the Rules provides for different kind of delegates in a Society. The Committee of Management of the Society can be constituted only after having the election wherein the delegates of various Societies have to participate. Provisions of relevant part of the said Rule reads as under:-

""85-A. The following societies may have delegates as follows:-

(a) The District/Central Co-operative Bank may have delegates in general body from each member as follows:-

(i) Primary Agricultural Credit Society     ......  Six

(ii) Block Union ...... .....   Four

(iii) Marketing Society ...... .....   Four

(iv) District Co-operative Federation .....   Two

(v)  District Wholesale Consumer Store   .....  Two

(vi) Any other society ...... .....   Two"

Undoubtedly, it is a 3-tier system of the Cooperative Societies prevalent in the State; first level is Primary Cooperative Society; second level Society is District Co-operative Bank etc. like the petitioner; and the 3rd level Society is apex level Society. Rules 439 and 444 provide the procedure of election of the Cooperative Societies. The Rule 440 (4) provides that for purpose of election of members of Committee of Management of a Cooperative Society, or as the case may be, of delegates to general body of a Cooperative Society, the Registrar shall, notwithstanding anything contained in the bye-laws of the Society, before the issue of notice under sub-rule (2) of Rule 441 for election of a Cooperative Society or, as the case may be, of a class of Cooperative Societies determine provisionally -

(a) the number of constituencies in which the area of operation of the society shall be divided;

(b) the extent of area of each constituency;

(c) the total number of seats allotted to each constituency;

(d) the number of seats reserved for weaker section.

Thus, it is evident that at every stage, there must be some gap of time for holding the election, as fresh list of voters are required to be prepared. Provisional list of constituencies are also required to be published. Thus, in a case like instant, it is not practically possible that election can be held within a short span of time.

In State of U.P. & anr. Vs. C.O.D. Chheoki Employees Cooperative Society Ltd. & ors., AIR 1997 SC 1413, the Hon'ble Apex Court held that there is no fundamental right to a Member of the Cooperative Society to contest the election or hold a post as the Act merely provides for a statutory right. The Member of a Society had no independent right qua the Society and he cannot assail even the constitutionality  of the Act, Rules and bye-laws. Only if a person fulfils qualification prescribed to become a Member or for being a Member of the Society, he becomes subject to the operation of the Act, Rules and bye-laws applicable from time to time. However, he does not have any independent right qua the Society and it is the Society that is entitled to represent as a corporate aggregate.  The stream cannot rise higher than the source.

Thus, in view of the above, we are of the opinion that the Committee of Management is to be governed by the statutory provisions and no person can seek a relief contrary to the said statutory provisions.

In case the term of a Society is over and election of the new Committee of Management is not held for certain compelling reasons, the vacuum cannot be permitted to come into existence and during that period, the management of the Cooperative Society has to vest in the administration and in that situation, an Administrator can be appointed to perform all the duties and obligations which a Committee of Management is require to perform under the Act. (Narvada Bux Singh Vs. State of U.P. & ors., Writ Petition No.3083 of 1981 decided on 29.09.1981). In that case, this Court held that sub-section (4) of Section 29 of the Act does not run counter to the cooperative movement and there is no bar for appointing the Administrator in case the election could not be held in time. The tenure of the duly elected Committee comes to an end automatically on expiry of its term. Similar view has been reiterated by Lucknow Bench of this Court in the case of Kendriya Upbhokta Sahakari Bhandar & ors. Vs. State of U.P. & ors., Writ Petition No. 2053 (M/B) of 1998, decided on 10.11.1998.

Second proviso to sub- section (3) of Section 29 of the Act reads as under:

"Provided further that where the State Government is satisfied that circumstances exist which render it difficult to hold the election on the date fixed by the Registrar, it may direct the Registrar to postpone the election, and thereupon the Registrar shall postpone the election, and all proceedings which reference to the election shall be commenced afresh in all respects".

This proviso has been added by amendment which came into force on 24.12.1998. In the counter affidavit it has been stated that the elections of the Cooperative Societies could not be held in time because of the parliamentary elections and it is the State Government, and though the State Government has a power in a given case on being satisfied that circumstances exist which renders  difficulty to hold the elections, it may direct the Registrar to postpone the elections, but in the instant case no order by which the Registrar had earlier fixed the election has been produced by the respondents nor there is any order passed by the State Government, on the basis of which the Registrar has postponed the elections. What has been submitted by the respondents is that the Registrar, Cooperative Societies had issued a Notification dated 30th June, 2004 notifying the schedule of election for the Cooperative Societies. However, keeping in view of the special drive for recovery of the loans as well as for distribution of Kharif crop loan, the State Government took a decision on 8th June, 2004 to postpone the election of the Cooperative Societies, and in view of the directions issued by the State Government on 8th June, 2004, the election programme has been re-scheduled. In the counter affidavit it has not been stated that the State Government has postponed the election because of the parliamentary elections. The term of the petitioner Society expired on 5th July, 2004. The Notification as issued by the Registrar for holding the election, itself, provided for holding the election of the Committee of Management of the District Cooperative Societies on 22nd December, 2004. There is nothing  on record to show as under what circumstances the election could not be held prior to the expiry of the term, i.e., 5th July, 2004. The Registrar, Cooperative Societies never issued a Notification for holding the election earlier, and thus, there was no occasion for the State Government to postpone the same for considering that that was not possible for the reason of the parliamentary elections.

In the absence of such pleadings, in the counter affidavit it cannot be presumed that the Registrar of the Society i.e. respondent no.2 had acted bona fidely and wanted to hold the elections in time. It is a clear cut case of non performance of the statutory duties on the part of the respondent no.2, and in absence of the proper pleadings and documents in support thereof, the submission made by Mr. Sudhir Agarwal, learned Additional Advocate General cannot be accepted in this respect.

A Division Bench of this Court has considered a similar issue in Shivpal Singh Yadav Vs. State of U.P. & ors, (1993) 2 UPLBEC 1138, and held that where an Administrator was appointed who could not continue and a specific period was allowed to remain in office and the elections for the new Committee of Management was not held for an unreasonable period, the Administrator has to be removed. The Registrar becomes responsible and liable to be prosecuted under Section 166 I.P.C. being a public servant, for disobeying the direction of the law as the legislature could have intended a vacuum to be created in the case  notified  in the Cooperative Societies upon the term of its Committee of Management expiring.

While enacting the Statute, the legislature could not imagine that the authorities under the Statute, would act unreasonably, which will defeat the very purpose of the Act, and that the Committee of Management shall not be elected so that the Administrators can be appointed at the whims of the statutory authorities. In the said judgment, the Division Bench directed for removal of the Administrator and handing over the charge to the earlier duly elected Committee, with a further direction to hold the elections afresh. The Court observed as under:

"In the present case, we find that the Registrar has failed to hold the elections for reconstituting the committee of management of the bank which was his statutory obligation, and has allowed the Administrator to continue illegally beyond the period specified under sub-section (6) of Section 29 of the Act. The conduct of the Registrar appears to be not only negligent but also, as it appears, he has wilfully disobeyed the mandate of the Legislature as well as the directions of this Court as have been mentioned above.

Undoubtedly the Registrar is a public servant, who, for disobeying the directions of the law could be liable to prosecute under Section 166, I.P.C. For the present, except a little caution to him, we do not issue any direction in this regard.

We, on the facts and circumstances of the case, find that it is a fit case where the Administrator appointed under sub-section (4) of Section 29 of the Act in the Bank be restrained and the committee of management constituted on 13-9-1988 as has been mentioned above, be resusclated by bringing it back to power."  

Be that as it may, the aforesaid judgment was delivered more than a decade above. The rigour of the said judgment and the provisions of Section 29 (3) of the Act seems to have been mellowed down by the legislature enacting the provisions of sub-section (5) (a) by amendment (U.P. Act No. 1 of 1997) w.e.f. 16.04.1997, which reads as under:-

"(5) (a) Where, for any reason whatsoever, the election of the elected members of the Committee of Management has not taken place or could not take place before the expiry of the term of elected members, the Committee of Management shall, notwithstanding anything to the contrary in this Act or the rules, or the bye-laws of the society, cease to exist on the expiry of such term."

The Statute clearly provides that whatever may be the circumstances for not holding the election, and the reason for not holding the election may be in contravention of the Act or the Rules, the members of the Committee of Management do not have a right to hold the office on expiry of their tenure. In such a situation, only Administrator can be appointed. However, as any person may be appointed as Administrator and there is no bar, and that the Committee of Management running the affairs of a Society may also be appointed as an Administrator, it is for the Registrar to consider as to who should be appointed as an Administrator on expiry of the term of a duly elected Committee of Management.

The order passed by the Registrar, Cooperative Societies dated 16th July, 2004 appointing the Members of the Committee of Management as Members of the Administrative Committee, has also been produced by Shri Sudhir Agrawal, the learned Additional Advocate General, which makes it clear that upon expiry of the tenure of the duly elected Committee of Management, though it ceased to remain in the office, but most of the members of the elected Committee of Management have been appointed in the Administrative Committee.

Thus, it is for the Registrar, and not for the Court, to consider as to who should be appointed as an Administrator. Court cannot encroach upon the powers of the statutory authority and perform the duty assigned to the authority concerned under the Act.

So far as the issue of continuation of the Committee of Management in office after expiry of his tenure on 5th July, 2004 is concerned, it is not permissible in view of the provisions of Section 29 (5) (a) of the Act.

There are no allegations of mala fide in the petition. Election of the Committee of Management could not held as the State machinery had been involved in the Parliamentary election and the schedule of the election had already been announced. Election is to be held in accordance with the same. In such a fact situation, an Administrator is to be appointed in view of the statutory provisions of Section 29 (5)(b) and the petitioners cannot seek the relief claimed herein as it would be contrary to the statutory provisions.

The Court has no competence to issue a direction contrary to law. (Vide Union of India & another Vs. Kirloskar Pneumatic Co. Ltd. (1996) 4 SCC 453; State of U.P. & ors. Vs. Harish Chandra & ors., (1996) 9 SCC 309; and Vice Chancellor, University of Allahabad & ors. Vs. Dr. Anand Prakash Mishra & ors., (1997) 10 SCC 264).

In State of Punjab & ors. Vs. Renuka Singla & ors., (1994) 1 SCC 175, dealing with a similar situation, the Hon'ble Apex Court observed as under:-

"We fail to appreciate as to how the High Court or this Court can be generous or liberal in issuing such directions which in substance amount to directing the authorities concerned to violate their own statutory rules and regulations."

Similarly, in Karnataka State Road Transport Corporation Vs. Ashrafulla Khan & ors., JT2002 (2) SC 113, the Hon'ble Apex Court has held as under:-

"The High Court under Article 226 of the Constitution is required to enforce rule of law and not pass order or direction which is contrary to what has been injected by law."

In view of the above, the Court lacks competence to issue a direction contrary to law. The statutory provisions do not permit continuation of the duly elected Management Committee to hold the office after expiry of its tenure even if the Registrar fails to hold the election in time.

In view of the above, we find no force in the petition. It is dismissed accordingly. However, it is open for the Registrar, Cooperative Societies to consider as to whether the Committee of Management, the present petitioner, may be appointed as an Administrator, and for that purpose the Registrar is to take an independent decision without being influenced by the order of this Court. No costs.

July 22, 2004

AHA/AKSI


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Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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