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The Telangkhedi Co-operative Dairy Society Ltd. and ors. Vs. the Deputy Registrar, Co-operative Societies, Nagpur and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtMumbai High Court
Decided On
Case NumberSpl. Civil Appln. No. 171 of 1957
Judge
Reported inAIR1958Bom330; (1958)60BOMLR757; ILR1958Bom1047
ActsCo-operative Societies Act, 1912 - Sections 3, 11(1), 11(2), 11(3), 11(4), 11(5), 11(6), 11(7), 11(8) and 11(9); Central Provinces and Berar Co-operative Societies (Amendment) Act, 1949; Constitution of India - Articles 226 and 227
AppellantThe Telangkhedi Co-operative Dairy Society Ltd. and ors.
RespondentThe Deputy Registrar, Co-operative Societies, Nagpur and ors.
Appellant AdvocateM.N. Phadke, Adv.
Respondent AdvocateN.L. Abhyankar, Adv.
Excerpt:
.....11--refusal of society to incorporate amendments mentioned in order made under section 11(4)--deputy registrar acting under section 11(5) without giving opportunity to society of being heard--validity of order made under section 11(5).;the deputy registrar is properly clothed with authority to make orders under sub-sections (4) and (5) of section 11 of the central provinces and berar co-operative societies act, 1912.;what is contemplated under section 11(5) of the act, when it refers to 'giving the society an opportunity of being heard', is a hearing after the refusal of the society to incorporate the amendments within the time mentioned in the order made under section 11(4) of the act. where no such hearing is given, an order passed under section 11(5) is invalid in law and can be..........in the year 1956, and the third petitioner is the secretary of the said society.2. on 18-9-56 the deputy registrar, co-operative societies, madhya pradesh, made an order under sub-section (4) of section 11 of the act, requiring the society to make certain amendmentsto its bye-laws in accordance with the proposals enclosed along with the order. it appears that on receipt of this notice the secretary of the society wrote a letter to the deputy registrar, co-operative societies seeking an interview. this letter was replied to by the deputy registrar by the letter dated 29th september 1956 whereby he informed the society that the persons seeking interview may see him in his office during office hours. it appears that some of the members of the society did see the deputy registrar,.....
Judgment:

Y.S. Tambe, J.

1. This is a petition under Articles 226 and 227 of the Constitution of India. The first petitioner, the Telangkhedi Co-operative Dairy Society, Nagpur, is a society registered under the Co-operative Societies Act. 1912 (II of 1912) hereinafter called the Act. The second petitioner is the President of the said Society, elected in the year 1956, and the third petitioner is the Secretary of the said Society.

2. On 18-9-56 the Deputy Registrar, Co-operative Societies, Madhya Pradesh, made an order under Sub-section (4) of Section 11 of the Act, requiring the Society to make certain amendmentsto its bye-laws in accordance with the proposals enclosed along with the order. It appears that on receipt of this notice the Secretary of the Society wrote a letter to the Deputy Registrar, Co-operative Societies seeking an interview. This letter was replied to by the Deputy Registrar by the letter dated 29th September 1956 whereby he informed the Society that the persons seeking interview may see him in his office during office hours. It appears that some of the members of the Society did see the Deputy Registrar, Thereafter a meeting of the general body of the Society was held on 14-10-56 and in that meeting proposals made by the Deputy Registrar for amending the bye-laws were considered in that meeting. Some amendments were accepted and certain others were rejected. For the purposes of this petition the attack rests on the amendment of bye-law No. 6 and the amendment of bye-law No. 34, though there is a general attack on the validity of the introduction of these bye-laws. The result of the meeting was duly communicated to the Deputy Registrar. Thereafter on 30-10-56 the Deputy Registrar in exercising the powers under Sub-section (5) of Section 11, made an order, the material part of which is as follows:

'I therefore order that the amendments as detailed in the annexure are the registered amendments to the bye-laws of the Telangkheri Co-operative Dairy Society, Ltd., Nagpur, under the Provisions of Sub-section (5) of Section 11 of the Co-operative Societies Act IT of 1912 with effect from the date of this order.'

3. The Society, feeling aggrieved by this order, took an appeal to the State Government under Sub-section (6) of Section 11 of the Act. This appeal was rejected by the state Government on' 19-3-57. The petitioners are now seeking to get quashed the aforesaid order of the Deputy Registrar, of date 31-10-1958, made Under sub-section (5) of Section 11, and the order of the State Government dated 19-3-1957 made in appeal against that order.

4. Shri M. N. Phadke who appears for the petitioners contends that the said order of 31-10-56 is invalid in law. His first ground of attack la that it was made by the Deputy Registrar and the Deputy Registrar had no power to make that order. The second ground of attack is that no opportunity of being heard was given to the Society by the Deputy Registrar after he was communicated the refusal of the Society to effect the amendments as proposed by the Deputy Registrar. Thirdly, he contends that the amended bye-laws are unreasonable.

5. As regards the first contention, he argues that under Section 3 of the Act the State Government no doubt had powers to confer on the persons appointed to assist the Registrar all or any of the powers of the Registrar, but in the instant case there had been no valid conferral of power on the Deputy Registrar to make orders under Sub-sections (4) and (5) of Section 11. What he contends really is that the notification which was issued on 19th October 19-19 was issued prior to the date Sub-sections (4) to (9) were introduced in the section. The notice therefore has not the effect of empowering the Deputy Registrar to exercise the powers which were not in existence on the date of the notification. In our opinion, this contention is not well founded. When this notification is read as a whole, It Is clear that the state Government had conferred on the Deputy Registrar the entire powers which could be exercised by the Registrar under Section 11 of the Act. No doubt, on 19th October 1949, the date of this notification, Sub-sections (4) to (9) did not find place in the Section . They were introduced by Central Provinces and Berar Co-operative Societies (Amendment) Act, 1949, which came into force from 18-11-1949.

6. Now, Section 11 in general deals with the topic of amendment of the bye-laws of a society. Sub-sections (1) to (3) deal with amendments to the bye-laws effected at the instance of the Society. Sub-sections (4) and (5) deal with amendments to the bye-laws effected at the instance of the Registrar. Sub-sections (6), (7) and (8) deal with the right of appeal conferred on the society as against the order of the Registrar in respect of the amendment of the bye-laws. Sub-section (S) deals with the effect of the decision in the appeal. Thus, it will be seen that Section 11 deals only with one topic and the topic is amendment of the bye-laws. By the notification of 1949 what the State Government has done is to confer on the Deputy Registrar all the powers of the Registrar which the Registrar was competent to exercise under Section 11 relating to the topic of amendment of the bye-laws. We therefore hold that the order dated 18-9-1956 issued by the Deputy Registrar under Sub-section (4) of Section 11, and the order made by him on 31-10-1956 under Sub-section (5) of Section 11, are valid in law, the Deputy Registrar being properly clothed with authority to exercise those powers.

7. As regards the second contention, in our view it is well founded. Sub-sections (4) and (5) of Section 11 read as follows;

'(4) Notwithstanding anything contained in this Act or the rule or bye-laws made thereunder, if the Registrar considers that an amendment of the bye-laws of a registered society is necessary or desirable in the interests of such society, he may, by an order in writing to be served on the society by registered post, require the society to make the amendment within such time as may be specified in such order.

'(5) If the society fails to make any such amendment within the time specified by the Registrar in his order under Sub-section (4), the Registrar may, after giving the society an opportunity of being heard, register such amendment and issue a certified copy thereof to such society.'

Now, the scheme as it appears to us of these two sub-sections is that if the Deputy Registrar considers that in the interest of the particular society it is necessary or desirable to have certain bye-laws amended then he must serve an order on, the society calling upon it to make the amendment within a certain time which he may specify in that order, the idea being that on the Registrar informing the Society that it is desirable in the interest of that particular society to have those bye-laws amended, the Society should have an opportunity to consider the proposals along with reasons therefor, take a decision thereon, and to act accordingly. Sub-section (5) deals with the procedure to be followed subsequent to the refusal of the society, and it is specifically provided in the Sub-section that even if the society fails to make such amendments within the time specified by the Registrar in the order made under Sub-section (4), before making an order under Sub-section (5) the Registrar should hear the society as to its reasons for failing to carry out the order made under Sub-section (4). The idea is that the Society should have an opportunity to explain to the Registrar its point of view.

8. As already stated, the topic dealt with by the orders in question was amendment of the byelaws of the Society, which affects the running of the society. The Registrar may take one view. It is possible that the Society may take another. What is contemplated under the Act is that after the failure Of the society to carry out the orders of the Registrar there should be an exchange of views between the Registrar and the Society before a final action is taken under Sub-section (5). This in the instant case has not been done. Shri Abhyankar who appears for the respondents contends that though provisions of Sub-section (5) have not been literally complied with, there has been a substantial compliance with these provisions and that is sufficient to satisfy the requirements of law what he contends is that in the reply of 26-9-1956 the Society informed the Deputy Registrar that it was not going to amend the bye-laws on account of its previous resolution passed on 25-10-1953 and 12-8-1956. Further he contends that there had been an interview of some of the members of the Society with the Deputy Registrar and therefore the Society had reasonable opportunity to place before the Deputy Registrar its point of view prior to the making of the order dated 31-10-1956. It is not possible for us to accept this contention. What is contemplated, in our view is a hearing after the refusal of the Society to incorporate the amendments within the time mentioned in the order made under Sub-section 4 of Section 11.

9. Coming to the facts: The resolutions passed in meeting dated 25-10-53 and 12-8-56 could have no bearing on or relevance to the question at issue. The first order under Sub-section (5) of Section 11 was made on 18-9-1956. The resolutions are obviously prior to that date. Further, it appears from the letter of the Secretary, dated 26-9-56, that the Society did not take any definite stand as such, by that letter. The following portion, of this letter is very significant:

'Further to request you that it will facilitate-the general body of the society to further reconsider its original decisions in the respect if the reasons for the necessity and usefulness of the proposed amendments in the interest of the society are intimated to us. It is therefore requested that you will foe kind enough to send the same to enable the society to take correct and proper decisions.'

From this letter it appears that merely on reading the order of 18-9-56 the Society was not in a position to understand the reasons of the Deputy Registrar in proposing the amendments to the Society and the Secretary was keen on knowing the reasons so that he could place those reasons before the Society when the meeting was duly convened for the purpose; and in the same strain a request was further made therein that an interview be granted to some of the members of the Society. Therefore, it will be reasonable to infer that the interview that was granted by the Deputy Registrar was not an opportunity to the Society for being heard but was an Interview for the purpose of explaining to those members of the Society the reasons which prompted the Deputy Registrar in taking action under Sub-section (4) of Section 11. From the minutes of the meeting which was held subsequent to this interview, i.e., on 14-10-56, it appears that the Society had not wholly rejected the amendments proposed. Some of the amendments were accepted and some of them were rejected. This indicates that the Society was not acting capriciously. The refusal of the Society to carry out the order of the Deputy Registrar made under Sub-section (4) of Section 11 was on 14-10-56. No opportunity was given to the Society to be heard as to its reasons for rejecting certain amendments though Sub-section (5) provides that the Deputy Registrar should afford such an opportunity to the Society. In our view, the failure of the Deputy Registrar to comply with the provisions of Sub-section (5) has resulted in vitiating his order made on 31-10-56.

10. As regards the order made toy the State Government in appeal, no reasons are given therein for rejecting the appeal. Therefore, it is not possible to know on what ground the appeal was rejected.

11. As regards the third ground, in our view, It would not be advisable in the instant case to express ourselves on that question as the case is to go back to the Deputy Registrar to deal with it in accordance with the provisions of sub-section (5) of Section 11 of the Act, and the petitioners will have an opportunity of having their say before the Deputy Registrar.

12. In the result, therefore, this petition is allowed. The order of the Deputy Registrar, dated 31-10-1956,' is quashed. So also the order of the State Government made in appeal, of date 19-3-3957, is quashed.' The costs of this petition shall be paid by the respondents.

13. Petition allowed.


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