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Ganugala Veerabhadra Rao Vs. the Registrar of Co-operative Societies and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Appeal No. 208 of 1973
Judge
Reported inAIR1975AP213
ActsAndhra Pradesh Co-operative Societies Act, 1932 - Sections 31 and 31(4)
AppellantGanugala Veerabhadra Rao
RespondentThe Registrar of Co-operative Societies and ors.
Appellant AdvocateN. Bhaskar Rao, Adv.;Govt. Pleader
Respondent AdvocateC. Obulpathi Chowdary, Adv.
DispositionAppeal allowed
Excerpt:
.....- writ petition filed to quash provisions of bye-law no. 16 of gudivada co-operative marketing society - bye-laws empowering registrar to control seats in managing committee - contradictory to provisions of main act - held, entire bye-law struck down as invalid and repugnant to act. - - --it is now well established that the power of delegation is a constituent element of legislative power as a whole and in modern times, when the legislatures enact laws to meet the challenge of the complex socio-economic problems they often find it convenient and necessary to delegate subsidiary or ancillary powers to delegates of their choice, for carrying out the policy laid down by their acts. the extent to which such delegation is permissible is also now well settled. it is not bad because it..........from among themselves, and the representatives of individuals shall be elected by the full general body.'3. ry a reading of the above bye-law it would appear that the managing committee should not consist of more than nine members who have to be elected from the category of delegates of agricultural cooperative credit societies including large sized co-operative societies and rural banks affiliated to the societies and the category of individual members and the registrar or any subordinate of his authorised by him has to fix the number of members of the managing committee to be elected and divide the number between the two categories, one category being agricultural co-operative credit societies including large sized co-operative societies and rural bank affiliated to those.....
Judgment:

Raju, J.

1. The appellant who is an Individual member of the Gudivada Cooperative Marketing Society Ltd. hereinafter referred to as 'the Society', filed the writ petition to quash bye-law No. 16 of the Society and the election notification dated 8-9-1972 issued by the Election Officer to elect the Board of Directors (Managing Committee) of the Society as per the allocation of seats made by the Registrar of Co-operative Societies, Andhra Pradcsh (Respondent-No. 1), hereinafter referred to as 'the Registrar' between the Individual members and the delegates of the Agricultural Co-operative Credit Societies in pursuance of the power given to him under the impugned bye-law No, 16. Out of a total number of nine directors of the Managing Committee, the Registrar allotted five directors to be elected by the delegates of the Agricultural Co-Operative Credit Societies and four directors to be elected by the Individual Members. The contention in the writ petition is that bye-law No. 16 authorising the Registrar to make allotment of the seats in the Managing Committee is ultra vires the provisions contained in Sections 30 and 31 of the Andhra Pra-desh Co-operative Societies Act, 1964 hereinafter referred to as 'the Act'.

2. The impugned bye-law No. 16 may be conveniently extracted here which is as follows :--

'16. Management:

(1) Sublet to such resolutions as the Ceneral body may from time to time pass, the executive management of the affairs of the society shall vest in the Board of Directors/Management Committee. The Board of Directors/Managing Committee shall consist of not more than. . . .persons as follows:

(i) Not move than nine representatives elected from the category of delegates of Agricutural Co-op. Credit Societies including large sized Co-op. Credit Societies and rural banks affiliated to the societies and the category of individual members. The number of representatives for each category shall be such as may be fixed by the Registrar or any other subordinate authorised by him;

(ii) One nominee of the Government i. e. the Deputy Registrar of the circle having jurisdiction over the society or his nominee;

(iii) One representative of the Co-operative Central Bank to be nominated by the Registrar.

The seats allotted for agricultural co-op. credit societies including large sized co-op. societies and rural banks under item 1 shall be filled up by election by the delegates of such societies from among themselves, and the representatives of individuals shall be elected by the full General Body.'

3. Ry a reading of the above bye-law it would appear that the Managing Committee should not consist of more than nine members who have to be elected from the category of delegates of Agricultural Cooperative Credit Societies including large sized co-operative societies and Rural Banks affiliated to the societies and the category of Individual members and the Registrar or any subordinate of his authorised by him has to fix the number of members of the Managing Committee to be elected and divide the number between the two categories, one category being Agricultural Co-operative Credit Societies including large sized Co-operative Societies and rural bank affiliated to those societies and the other being individual members of the society to be elected separately. In pursuance of this power it appears that the Registrar fixed the number of members of the Managing Committee at nine and allotted five seats to be elected by the representatives of the Agricultural Cooperative Credit Societies etc. and four seats to be elected from among the Individual members by the full General Body. This power given to the Registrar to fix the number of members of the Managing Committee anr! allot scats for each category to be elected separately is assailed by the writ petitioner, who is an Individual member of the Society, on the ground that it is opposed to the provisions of the Act and therefore invalid Our learned brother, Obul Reddi, J. (as he then was) dismissed the writ petition. Hence this appeal by the petitioner.

4. Under Section 130 of the Act power is given to the Government to make rules for carrying out all or any of the purposes of the Act. In exercise of this power, Andhra Pradesh Co-operative Societies Rules 1964, hereinafter referred to as 'the Rules' were made. The societies formed under the Act are each governed by its own bye-laws. It is provided under Rule 4 of the Rules that the Registrar can frame model bye-laws for each class or classes of societies and to suggest modifications thereto from time to time and such model bye-laws shall be adopted by a society with such modifications, if any, as may be suggested by the society and agreed to by the Registrar. Rule 5 of the Rules says that the bye-laws of a society shall not be contrary to the provisions of the Act and the Rules and may deal with all or any of the matters specified thereunder and with such other matters incidental to the organisation of the society and the management of its business, as may be deemed necessary by the society. In the rale thirty matters ars enumerated in which the bye-laws may be framed. Matter No. 23 deals with the constitution of a Magaging Committee, its duties and powers and the manner of election of its members. Bye-law No. 16 in question of the Society was framed under this provision.

5. The question for consideration is whether bye-law No. 16 of the Society can be said to be contrary to the provisions of the Act as claimed by the appellant and therefore ultra vires. We are more concerned with Section 31 of the Act.

6. Section 31 so far as it is relevant for our purpose is as follows:--

'31. (1) The general body of a society shall constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee.....

(4) for the purpose of electing members to -a committee the general body--

(i) shall divide the number of members into constituencies and allot seats thereof, where the bye-laws so provide:

(ii) may, in the absence of such bye-laws, elect from among all the members of the society.'

7. Sub-section (4) of Section 31 was subsequently introduced by the Amendment Act 14 of 1966.

8. Sri N. Bhaskar Rao, learned counsel for the appellant, has argued that under Section 31 (4) it is only the General Body that is empowered to divide the number of members into constituencies for the purpose of electing members to the Managing Committee and allot seats thereof and bye-law No. 16 of the Society authorising the Registrar to fix the number of representatives for each constituency is contrary to that provision and therfore invalid. We see some force in this argument of the learned counsel.

9. In the bye-law provision is made for two constituencies out of the members of the General Body, one constituency consisting of the delegates of the Agricultural Cooperative Credit Societies including large sized societies and rural banks affiliated to the societies to elect from among its members and the other consisting of all the members of the General Body to elect from among its members and the other consisting of all the members of the General Body to elect from among the Individual members. The bye-law itself did not fix the number of members of the Managing Committee and allot seats to the two constituencies. That power of fixing the number and allotting the seats to the two constituencies was given by the bye-law to the Registrar or any subordinate authorised by him.

10. It is true that it is mentionedin Sub-section (1) of Section 31 that the General Body shall constitute a committee in accordance with the bye-laws. When it is said that the General Body shall constitute a Committee in accordance with the bye-laws and entrust the management or the affairs of the society to such committee, it only means that the General Body has to constitute a Committee if there is a provision in the bye-laws for constitution of such a committee for the management of the affairs of the society. If there is provision in the bye-laws for constitution of a Committee to manage the affairs of the society only the General Body can constitute it, otherwise not. In the bye-law, once there is a provision for constitution of a Committee to manage the affairs of the society, then the General Body has to take steps to constitute it by election by the members of the General Body. In what manner that election should take place is again provided under Sub-section (4) of Section 31. If the bye-laws provide to divide the number of members of the General Body into constituencies and allot seats thereof, the General Body shall do so. In the absence of any such provision to divide the number of members into constituencies in the bye-laws, all the members of the committee have to be elected by all the members of the General Body. Therefore, the bye-laws can make provision only for the constitution of a Committee for the management of the affairs of a society and whether election of the members of the Committee should be either from among the members of the General Body as a whole or by dividing the General Body into constituencies and allotting the number of seats to be elected by each of the constituencies. If the bye-laws make provision for election of the members of the Committee by dividing the General Body into constituencies, then it is the function of the General Body to divide the number of members of the General Body into constituencies and allot seats to each constituency out of the total number of seats of the committee to be elected. This is the power which is given to the General Body under Section 31 (4) of the Act, If that power is given to the General Body under the Act can it be by framing a bye-law that power can be transferred to some other authority? That is the question for consideration. The Supreme Court in Co-op. Central Bank Ltd. v. Addl. Industrial Tribunal Andhra Pradesh, Hyderabad, : (1969)IILLJ698SC in dealing with the bye-laws framed under the Andhra Pradesh Co-opeiative Societies Act, 1964, said that :--

'The bye-laws of a co-operative society framed in pursuance of the provisions of the Act cannot be held to be law or to have the force of law. It has no doubt been held that. if a statute gives power to a Government or other authority to make rules, the rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute. That principle, however, does not apply to bye-laws of the native that a Cooperative Society is empowered by the Act to make. The bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a Society.'

11. The Supreme Court in Vasanlal Maganbhai v. State of Bombay, AIR 1961 SG 4 held thus:--

'It is now well established that the power of delegation is a constituent element of legislative power as a whole and in modern times, when the legislatures enact laws to meet the challenge of the complex socio-economic problems they often find it convenient and necessary to delegate subsidiary or ancillary powers to delegates of their choice, for carrying out the policy laid down by their Acts.

The extent to which such delegation is permissible is also now well settled. The legislature cannot delegate its essential legislative function in any case. It must lay down the legislative policy and principle, and must afford guidance for carrying out the said policy before it delegates its subsidiary powers in that behalf.'

12. Craies on Statute Law, seventh edition at pages 324, 325, 327 and 329 said that: --

'The term 'bye-law' as now generally understood, applies to the local laws or regulations made by public bodies of a municipal kind, or concerned with local government, or by corporations or societies formed for commercial or other purposes..... ..... if a bye-law is validly made it has he force of law within the sphere of its legitimate operation. A bye-law may be treated by the Courts as ultra vires if it is not validly made..... There are five main grounds on which the bye-laws may be treated as ultra vires:

(a) that they are not made, sanctioned and published in the manner prescribed by the statute which authorises the making of them.

(b) that they are repugnant to the laws.

(c) That they are repugnant to the statute under which they are made.

(d) That they are uncertain.

(e) That they are unreasonable.

A by-law may be supplementary to the general law. It is not bad because it deals with something that is not dealt with by the general law, but it must not alter the general law by making that lawful which the general law makes unlawful, or that unlawful which the general law makes lawful ..... bylaws made in pursuance of a statutory power must not go beyond, nor be repugnant to the enactment under which they are made.'

13. Therefore, it is clear that a bye-law cannot validly be made to provide for something contrary to the one which is already provided by the statute under which the bye-lav is made. Also it is specifically provided under the rules that the bye-laws of a society shall not be contrary to the provisions of the Act and the Rules. No doubt as provided under matter No. 23 of that Rule, bye-laws can be made for the constitution of a Managing Committee, regarding its duties and powers and the manner of the election of its members. But those bye-laws can only be made subject to the provisions contained in the Act and the rules. Therefore, when provision is made under Sub-section (4) of ection 31 of the Act giving power to the General Body to divide the number of members into constituencies and allot seats thereof, if a bye-law is made giving the power of allotment of seats to some authority other than the General Body it would be contrary to the provisions of the Statute, It is true that it is provided in Section 31 (4) (i) that the General Body shall divide the number of members into constituencies and allot seats where the bye-laws so provide. It does not mean that the power given to the General Body is subject to the bye-laws. It only means that the General Body should divide the number of members into constituencies and allot seats thereof if there is a provision in the bye-laws for division of the General Body into constituencies, for the purpose of electing members to the Managing Committee. If the bye-laws do not provide for division of the General Body into constituencies for the purpose of electing members of the Managing Committee, of course the General Body is not given power to divide the number of members of the General Body into constituencies and allot seats. In clause (ii) of Section 31 (4) of the Act, as a matter of fact, it is provided that in the absence of such bye-laws the members of the Committee shall be elected by the General Body as a whole from among all its members. Similarly it is mentioned in Section 31 (1) that the General Body has to constitute the Committee in accordance with the bye-laws. The significance of saying 'in accordance with the bye-laws' has already been discussed above. In this connection it is apposite to refer to what was said by a Bench of this Court in Ramakrishna Reddy v. Registrar, Co-operative Societies (1966) 1 Andh LT 184. There, before the enactment of Sub-section (4) of Section 31, their Lordships were considering whether bye-law 12 of the Ramachandra-puram Co-operative Central Bank making a provision restricting the General Body as a whole to elect all the members of the Managing Committee was validly made. Their Lordships struck it down as being illegal and ultra vires on the ground that in the absence of any provision then for dividing the General Body into constituencies for the purpose of electing members to the Managing Committee, as per Section 31 (1) of the Act which alone then governed the matter without subsection (4) it is the General Body as a whole that has to elect all the members of the Managing Committee. While dealing with that matter their Lordships considered what is meant by 'in accordance with the bye; laws' when it is stated in Section 31 (1) that the General Body of a Society shall constitute a committee 'in accordance with the bye-laws'. Their Lordships observed thus:

'In fact, under Section 31 (1) it is the General Body of the society which shall constitute a committee and when that provision says that it can constitute a committee in accordance with the bye-laws, what it provides is that the procedure for constituting that committee by the General Body shall be in accordance with the bye-laws. This again does not and cannot imply that the bye-law itself can restrict the power of the General Body as such by empowering a smaller General Body representing Sectional interests to re-elect only that sectional interest.'

As already discussed above, a bye-law cannot override any provision made in the Act itself under which the bye-law is made. If that is so, we must hold that the provision made in bye-law No. 16 of the Society riving power to the Registrar to fix the number of seats in the Managing Committee and allot seats to each of the categories mentioned therein for the purpose of electing the members to the Managing Committee is contrary and repugnant to the provision contained in Section 31 (4) wherein that power is given to the General Body.

14. The next question for consideration would be whether the entire bye-law has to be struck down as repugnant. If a bye-law can be divided, the part which is bad may be rejected while the rest may be held to be good. But with regard to bye-law No. 16 with which are now concerned we do not think it is one which can be severed. What is provided in the by-law is that there should not be more than nine representatives to be elected from all the categories of the members of the General Body out of which the number of representatives for each category should be fixed by the Registrar. There is also provision for nominating two members to the Committees. If the power given to the Registrar for fixing the number of members of the Managing Committee and allot seats to be elected by each category of the members of the General Body is to be struck down, we do not think the remaining part of the bye-law is workable. In this view of the matter, we think the entire bye-law has to be struck down as invalid and repugnant to the provisions contained in Section 31 (4) of the Act.

15. Accordingly the writ appeal isallowed and allowing the writ petition, bye-law No. 16 of the Society is struck down asinvalid and accordingly the notification dated8-9-1972 issued by the Election Officer, respondent No. 2 is quashed, No costs. Advocate's fee Rs. 100/-.


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