Skip to content


Govind Arya Vs. State of Madhya Pradesh and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtMadhya Pradesh High Court
Decided On
Case NumberM.P. No. 302 of 1982
Judge
Reported inAIR1985MP34
ActsMadhya Pradesh Co-operative Societies Act, 1961 - Sections 19C and 53(4)
AppellantGovind Arya
RespondentState of Madhya Pradesh and anr.
Appellant AdvocateG.M. Chaphekar and ;V.S. Kokje, Advs.
Respondent AdvocateS.R. Joshi, Govt. Adv. and ;S.D. Sanghi, Adv.
DispositionPetition allowed
Cases Referred(Brij Gopal Denga v. State of
Excerpt:
- - 124 of 78 in which the respondents were party where in the membership of the 867 members, including that of the petitioner was challenged, the respondents had taken a contrary stand by supporting the resolution by which those persons were admitted to the membership of the society, whereas in the present case in the returns filed they have taken a somersault on the ground that the returns filed in that petition could at best be said to be the opinion of those respondents. the kurukshetra university). he, therefore, submitted that at best the averments made in the returns regarding the admission of membership of 867 persons, including the petitioner, can be said to be the opinion of those respondents who had filed the returns but that does not in any way help the case of the.....p.d. mulye, j. 1. the petitioner, who is an agriculturist and resident of gawali palasia, tahsii mhow, has filed this petition under article 226 of the constitution of india to quash the show cause notice dated 21-4-1982 (annexure-a) given by respondent no. 3 and direct him not to disturb or deviate from resolution no. 10 dated 28-3-1978 of respondent no. 4 society, namely ambika aloo utpadak vipanan avam prakriya sahakari samiti maryadit, gawali palasia, granting membership to the petitioner and others and not to remove any member from the register of members. 2. the relevant facts giving rise to this petition, may be stated, thus : respondent no. 4, which is a co-operative society is registered under the m.p. co-operative societies act, 1960. the petitioner became a member of the said.....
Judgment:

P.D. Mulye, J.

1. The petitioner, who is an agriculturist and resident of Gawali Palasia, Tahsii Mhow, has filed this petition under Article 226 of the Constitution of India to quash the show cause notice dated 21-4-1982 (Annexure-A) given by respondent No. 3 and direct him not to disturb or deviate from Resolution No. 10 dated 28-3-1978 of respondent No. 4 Society, namely Ambika Aloo Utpadak Vipanan Avam Prakriya Sahakari Samiti Maryadit, Gawali Palasia, granting membership to the petitioner and others and not to remove any member from the register of members.

2. The relevant facts giving rise to this petition, may be stated, thus : Respondent No. 4, which is a Co-operative Society is registered under the M.P. Co-operative Societies Act, 1960. The petitioner became a Member of the said Society on 28-3-1978, vide Resolution Annexure-R-3, when the Managing Committee of the Society was superseded. On 14-5-1979 the petitioner was also elected as a Director of the Society which functioned till 14-1-1982 when the Society was again superseded and respondent No. 3 was appointed as the Officer-in-charge of the said Society by the Registrar. The said supersession is under challenge before the Joint Registrar of Cooperative Societies, Madhya Pradesh.

3. On 10-5-1982 the petitioner received a show cause notice dated 21-4-1982 (Annexure-A) from respondent No. 3, the Officer-in-charge of respondent No. 4 Society, asking him to him cause why the petitioner's name be not removed from the register of members of the said society. In this notice it is also stated that the Resolution dated 28-3-1972 (28-3-1978?) granting membership of the Society to the petitioner was invalid and it is proposed to be cancelled. Further it is alleged in the said notice that the petitioner was noteligible for the membership of the Society and that he has obtained membership by misrepresentation. Further it is also stated therein that membership was granted to the petitioner even though no shares were available for allotment, the entire share capital having been fully subscribed. Further according to the petitioner similar notices have been served on 867 member of respondent No. 4 Society out of the total membership of 1318. Thus a majority of members of the Society are threatened with expulsion which, if allowed, will change the total complexion of the Society beyond recognition.

4. The petitioner by this petition has, therefore, prayed that the action of respondent No. 3 is illegal, arbitrary and mala fide as he has no authority to expel members and has no jurisdiction to give the show cause notice as according to him a member can be expelled according to the provisions of Section 19-C of the M.P. Cooperative Societies Act, 1960 on the only grounds mentioned therein. The petitioner has, therefore, submitted that as he does not fall in any one of the categories mentioned in the said section, the power given to the Committee in this section cannot be exercised by the Officer-in-charge alone because a resolution has to be passed by three fourth majority and this has to be done at a meeting specially held for that purpose. Thus the officer-in-charge could not have acted under this section at all.

5. Further according to the petitioner the said Officer-in-charge is appointed under Section 53 of the said Act as a temporary stop-gap arrangement and not as a full-fledged substitute for the Board of Directors or the Committee. The person ' so appointed to manage the affairs of the Society cannot over-step his function and start throwing a large body of members of the society out enblock. The petitioner has, therefore, prayed that the show cause notice being ultra vires the Act, having been issued without application of mind, motivated by mala fides, being vague and general and incapable of specific answer having been issued illegally, arbitrarily, mala fide and with capricious exercise of power, infringing the freedom of association granted by Article 19 of theConstitution of India, coupled with the fact that respondent No. 3 has no authority whatsoever to cancel, revise or review the resolution passed by the earlier Board of Directors or Committees and the decision of respondent No. 3 that the resolution dated 28-3-1978 passed by the Society was ineffective is without jurisdiction, deserves to be quashed.

6. The respondents Nos. 1 and 2, namely the State of M.P. and the Registrar, Co-operative Societies M.P. in their returns have submitted that the respondent No. 3 has issued the show . cause notice under the provisions of the bye-laws of the Society, a copy which has been annexed by respondents Nos. 3 and 4 along with their returns as Annexure. R-l; that the petitioner has not availed of the alternative remedy available to him under Section 64 of the M.P. Co-operative Societies Act; that the said action has been taken under Sub-clause (4) of Section 53 of the said Co-operative Societies Act; that the action of the said respondent No. 3 is not final and any member, if aggrieved by his action or decision can file a dispute under Section 64 of , the Co-operative Societies Act. Thus, they have denied the case of the petitioner.

7. The respondents Nos. 3 and 4 by their returns have denied that the petitioner is a member of the Society as defined in Section 2(r) of the M.P. Co-operative Societies Act, 1960; that bye law No. 5 of the registered bye-laws of the Society divides membership of the Society into four classes, out of which petitioner is a person falling in class 2. that is, Varg-Kha; that by-law No. 10 prescribes the share capital which was fully subscribed and paid up by 5-12-1977; that thereafter no amendment in the registered by-laws of the society was made for increasing the share capital; that despite the fact that not a single share for allotment to any person desiring to become member was left after 5-12-1977 it was impossible to admit any new member on account of the bar created by Rule 14 and by-law No. 5, the petitioner and 866 other persons were admitted enblock to the membership of the Society in Varg-Kha by resolution No. 10 dated 28-3-1978, which was passed by the then Prabhari Adhikari of the Society appointed by the Deputy Registrar, Co-operative Societies Indore Division, under Section 49(7-B) of the Act.

8. Further according to respondents Nos. 3 and 4 this action of the Prabhari Adhikari was patently ultra vires, illegal and without jurisdiction being taken in open defiance of clear and mandatory provisions of Rule 14 and bye-law No. 5 with the result that it was void and of no effect. As the said resolution had no existence in the eye of. law it could be ignored and discarded on that short ground alone. Thus neither the petitioner nor any of the remaining 866 other persons ever acquired the status of member as defined in Section 2(r). Thus, as they were not eligible to become members, their de facto existence as members being void, illegal and ultra vires has necessarily to be ignored and treated as non est. Further according to these respondents the Prabhari Adhikari acted not only in open defiance of the Rules and bye-laws but also unlawfully disregarded and contravened a previous decision taken by the Board of Directors by Resolution No. 2 dated 23-11-1977 whereby it was resolved that no allotment of shares be made to any persons other than persons whose monies were lying in deposit as 'amanat' with the Society. Further according to them the Prabhari Adhikari also acted in defiance of a directive which was issued by the Deputy Registrar, Cooperative Societies, Indore Division of 14-2-1978 whereby he had directed that no new member should be enrolled without obtaining prior permission of the Assistant Registrar. In pursuance of this directive the then Prabhari Adhikari of the Society passed Resolution No. 1 dated 23-2-1978 directing that further enrolment of members shall stand stopped and all applications for membership shall be kept pending until orders were received from the Assistant Registrar. However, that resolution was disregarded by the other Prabhari Adhikari when he passed resolution No. 10 dated 23-3-1978.

9. Further according to respondents Nos. 3 and 4 though it was not necessary to issue such a show cause notice before taking any further steps against the petitioners and other 866 members, respondent No. 3 thought it proper to give an opportunity to the petitioner and othersalike him to show cause against the proposed action. In short their contention has been that the Resolution No. 10 dated 28-3-1978 and so also the de facto membership of the petitioner and 866 persons who were admitted to membership along with him is ultra vires, void and has no existence in the eye of law and the respondents are fully entitled to take notice of and disregard the same and, therefore, question of depriving them of their membership by expulsion does not arise as they never had the status of a member. Further according to them it is also necessary to protect the interest of 457 persons who lawfully became members of the Society up to 5-12-1977. Besides, according to Section 53(4) of the said Act, respondent ,No. 3 is entitled to take appropriate action in the interest of the Society and thus he has acted within the scope of his power and authority. Therefore, as the petitioner and the other 866 members are not members of the Society in the true sense of the term, question of their expulsion as provided by Section 19-C of the Act does not arise; that some of these members did not file the application for membership in accordance with the Rules and the bye-laws. They have, therefore, contested and challenged the right of the petitioner to claim the relief sought for by him, as according to them the petitioner having already given his reply to the show cause notice, the petition at this stage is not maintainable.

10. The learned counsel for the petitioner submitted (sic) of the Society on 28-3-1978, he was elected as a Director of the Society on 14-5-1979 on which post he worked till 14-1-1982 when the Society was superseded and respondent No. 3 was put in charge and it is thereafter only that the impugned show cause notice Annexure-A dated 10-5-1982 was issued to the petitioner and such other 866 members of the Society. He, therefore, submitted that the petitioner having been a member of the Society for about a period of five years till 14-1-1982, during which period he was also elected as a Director of the Society on which post he worked without any blemish, merely because the Society was subsequently superseded by the Registrar on 14-1-1982 the respondent No. 3 who was appointed as Prabhari Adhikari had noauthority or jurisdiction even to issue such a show cause notice which is just a farce as in fact from the wordings of the notice itself it is clear that he has prima facie already taken a decision that the petitioner and such other persons who have also been served with similar notices are not 'members' of the Society as defined under Section 2(r) of the said Act, they having been admitted to the membership illegally and against the provisions of the bye-laws. However, he submitted that once a person has been made a Member as provided under Section 19 of the said Act, he could be disqualified as a member under Section 19-A of the said Act, the effect of which is provided in Section 19-B which provides that-

'If any person having been admitted as a member of a society subsequently becomes subject to any of the disqualifications as specified in Section 19-A, such person shall cease to be a member of the society and the Registrar shall declare his seat to be vacant'

He further submitted that according to the provisions of Section 19-C of the said Act, which is reproduced below, a member could be expelled as provided therein :

'19-C. Expulsion of members: (1) The Committee may, by a resolution passed by three fourth majority of the members present and voting at a meeting held for the purposes, expel a member if he-

(a) intentionally does any act likely to injure the credit of the society or bring it to disrepute; or

(b) wilfully deceives the society by false statement; or

(c) carries on any business which comes or likely to come into conflict with the business carried on by the society; or

(d) persistently makes default in payment of his dues or fails to comply with any provisions of the bye-laws.

Provided that no such resolution shall be valid unless the member concerned has been given seven days' notice, either personally or by registered post, of the proposal to expel him and has been given an opportunity to represent his case to the committee.

(2) Notwithstanding anything contained in the Act or rules or byelaws, madethereunder where it appears to the Registrar to be necessary or desirable in the interest of the society to expel a member from the society, he may call upon such member and the society, to explain within a period to be specified by him why such member should not be expelled from the society. If the member or society fails to furnish his or its explanation within the time specified or after considering the explanation, if received, the Registrar may pass an order expelling a member from the society.

(3) No member of a society, who has been expelled under Sub-section (1) or subsection (2) shall be eligible for re-admission as a member of the society up to a maximum period of five years from the date of such expulsion.'

11. The learned counsel for the petitioner further relied on the provisions of Section 49-B relating to amendment of proceedings of society by successor committee, which provides that notwithstanding anything contained in this Act, made thereunder rules and bye-laws of a society, any resolution passed by a committee shall not be modified or annulled by the successor committee without the previous sanction in writing of the Registrar. He, therefore, submitted that merely because the Society was superseded on more than one occasion as in the present case, the Prabhari Adhikari who acts in place of the Committee of the Society has no authority or jurisdiction to issue such a show cause notice as according to Section 48 of the said Act the final authority in a society vests in a general body of members. The learned counsel also submitted that Section 53 of the said Act provide for supersession of Committee. Sub-section (4) of this section provides that the person or persons 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 functions of the committee or of any officer of the Society and to take all such actions as may be required in the interest of the society. Therefore, independently he has no such power or authority to challenge the membership of a person of the society on the alleged ground that he was illegallyadmitted to the Membership of the Society. He, 'therefore, submitted that if the Prabhari Adhikari i.e. Respondent No. 3 had any doubt about the validity of the membership of the petitioner suo motu he could not issue such a notice but he ought to have before issuing any such notice obtained the necessary instructions from the Registrar or that he should have referred the said dispute regarding the membership of the petitioner to the Registrar. He therefore, submitted that the word 'control' does not comprehend within itself the adjudication of a claim by a co-operative society against its member. Control is exercised by a superior authority in exercise of its supervisory power. Adjudication of disputes is a judicial or quasi-judicial function. There is a clear distinction between jurisdiction to decide a dispute which is a judicial power and the exercise of control which is an administrative power and it will be wrong to treat the two as identical or equate one with another as has been held in the decision reported in AIR 1972 SC 1248 (Shamrao Vithal Co-operative Bank Ltd, v. Kasargode Panduranga Mallya). Therefore, the said show cause notice issued to the petitioner cannot be said to have been issued on the administrative side.

12. The learned counsel for the petitioner also submitted that as the Society after its supersession is being controlled and managed through the Registrar, that is the agency of the Government, it is an authority within the meaning of Article 12 of the Constitution and hence subject to the basis obligation to obey the fundamental rights as the Government for which he placed reliance, on the decision reported in AIR 1981 SC 487 (Ajay Hasia v. Khalid Mujib) and, therefore, he submitted that as his fundamental right is now being tried to be violated by issuance of such a show cause notice, the petitioner is entitled to challenge the impugned notice in exercise of the writ jurisdiction of this Court.

13. In support of his submission the learned counsel for the petitioner further relied on the decision reported in 1978 MP LJ 207 : (AIR 1978 Madh Pra 191) Chhotelal Pannalal Nagar v. DistrictMagistrate, Indore) in which the High Court in exercise of its writ jurisdiction had interfered in the case of the Director of a Co-operative Society who on account of his detention in MISA could not attend the board meeting thereby resulting in his disqualification as a Director. He also urged that just as there is a provision in the Companies Act regarding the share capital of a company, it is not a legal requirement under the provisions of the Co-operative Societies Act though in the present case the bye laws of the Society no doubt have mentioned about the share capital of the Society, but he also submitted that the same has been increased by the Society about which admittedly there is no dispute. He, therefore, submitted that when the petitioner and other 866 shareholders have already been made members of the Society long back and have also purchased shares of the Society, even if the building for the cold storge is to be expanded, which is one of the main objects of the Society for which it is formed, still that by itself is not a valid, sufficient and legal ground to presume that the petitioner and those 866 members could not be made members of the Society even though earlier there was a directive from the Deputy Registrar to that effect.

14. He also submitted that in an earlier writ petition No. 124 of 78 in which the respondents were party where in the membership of the 867 members, including that of the petitioner was challenged, the respondents had taken a contrary stand by supporting the resolution by which those persons were admitted to the membership of the Society, whereas in the present case in the returns filed they have taken a somersault on the ground that the returns filed in that petition could at best be said to be the opinion of those respondents. The learned counsel, therefore, submitted that it is. not open to the various Prabhari Adhikarfs to play with the members in this manner according to their own ideas, contrary to the provisions of the Act and the Rules framed thereunder.

15. The learned counsel for the respondent-State has virtually supported the stand taken by the respondents Nos. 3 and 4. The learned counsel forrespondents Nos. 3 and 4 by his forceful submission referred to the various annexures filed by them and submitted that as the petitioner, had, vide Annexure-R7, given reply to the show cause notice issued to him, the matter is yet to be decided and there being no final decision taken by the Prabhari Adhikari on the basis of the Prima facie opinion formed by him regarding the legality and validity of the membership of the petitioner and the other 866 members, no interference at this stage in exercise of the writ jurisdiction is called for. He emphasised that in the eye of law contrary to the provisions of the bye-laws, the membership of the petitioner has to be treated as non-est even though he may have deposited the money or may have been allotted the share purchased. He also submitted that in fact all these members have not complied with the provisions of Rule 14, which provides for conditions to be complied with for admission to membership coupled with the provisions of the bye-laws Annexure. R-1.

16. Bye-law No. 3 provides the object of the Society for which it is formed, which is reproduced below :

mn~ns'k %&

bl lfefr ds fuEufyf[kr mn~ns'; gksaxs %&

- lnL;ksa dks vkyw] Qy o lkx lCth mit dh j{kk; fo; vFkok forj.k dh ,slh O;oLFkk djuk ftlls fd mUgsa loksZRre ykHk fey ldsvkSj bl ms'; ls

d laxzg ds igys vFkok ckn esa mit dh NVuhdjuk] mldk Js.khdj.k djuk rFkk mls Bhd ls Hkjdj j[kuk] rFkk

[k ifjfLFkfr vuqlkj mit ds ifjogu dk izca/kdjuk]

2- jkT; 'kklu] dsanzh; lgdkjh vf/kdks'kftlls lfefr lEc) gSA LVsV cSad vkQ bafM;k vFkok mldh lgk;d cSad rFkk iath;d }kjkfufnZ'V dksbZ vU; vf/kdks'k ;k laLFkk ls tekursa] lgk;rk] vuqnku] nkuvkfn Lohdkj djuk rFkk _.k m/kkj ysukA

- lnL;ksa dks mudh dPph vFkok izf;k dh gqbZmit ds rkj.k ij _.k nsukA

- xksnke o izf;k ds fy;s vgkrs 'khrx`gvius Lo;a ds cukuk ;k mUgsa fdjk;s ij ysuk&nsuk; ftlls mit dk laxzg djus]izf;k djus rFkk O;kikj djus esa lqfo/kk gks]

'- ;k rks Lo;a dh vksj ls ;k 'kklu ;k jkT;lgdkjh foi.ku lfefr ;k vU; dksbZ f'k mit lgdkjh

lfefr ds ,tsaV ds :i esa jklk;fud [kkn]dhVk.kquk'kd nokbZ;ksa] vU; [kkn cht] f'k ;a= ,oa e'khujh] i'kqvksa dsfy;s pkjk rFkk vU; ?kjsyw vko';drk dh oLrqvksa dk fo; vFkok iznk; djukA

' lacaf/kr izkFkfed lk[k lfefr;ksa }kjk mudslnL;ksa dks vkyw] cht] lkx lCth ds fy;s fn;s x;s _.k dh olwyh mudh mit ds fo;}kjk djus ds fy;s lfefr;ksa ds ,tsUV dh gSfl;r ls dk;Z djukA

' vius lnL;ksa esa ferO;f;rk] Lokoyacu ,oalgdkfjrk dh Hkkouk c<+kukA

'- dksbZ fu;fer eaMh ds fu;a=.k] izca/k vFkoki;Zos{k.k dk dk;Z gkFk esa ysuk vFkok ;fn vko';d gks rks ,slh eaMh dh izca/kdkfj.khlfefr esa lfEefyr gksuk] vkSj

.- os lc vU; dk;Z djuk tks ij crk;s gq;s ls . rd ds ms';ksa dks iwjk djus ds fy;s vko';d gksA

By-law No. 5, which is reproduced below deals with the persons who can be admitted as members of the said society :

'& lnL;rk %

- lfefr esa fuEu izdkj ds lnL; gksaxs %&

v d oxZ ds lnL;] ftlesa lgdkjh lfefr;kagksxhA

c [k oxZ ds lnL;] ftlesa O;fDrxr 'kdgksaxs tks vkyw] lkx lCth dk mRiknu djrs gSaA

l x oxZ ds lnL;ksa] ftuesa O;kikjh] vk<+fr;snqkdunkj vkfn ,sls O;fDr gksaxs tks lfefr ls O;kikfjd laca/k j[krs gksa vFkokj[kus tk jgs gksaA

uksV % x oxZ ds lnL; uke ek= ds lnL; gksaxsvkSj mudks er nsus vFkok lfefr ds izca/k esa Hkkx ysus dk dksbZ vf/kdkj ughagksxk rFkk u gh os lfefr ds ykHk vFkok gkfu esa Hkkxhnkj gksaxsA

n jkT; 'kklu

2- fdlh Hkh O;fDr dks ^[k* oxZ dk lnL; ughacuk;k tkosxk tc rd fd%&

d mldh vk;q ' o'kZ dh u gks pqdhgks rFkk og vuqca/k djus ds ;ksX; u gksA

[k og lfefr ds dk;Z{ks= esa jgus okyk'kd u gksA

x mlus lfefr dk de ls de ,d va'k [kjhn fy;kgksA

?k mlus lfefr esa ,d :i;k izos'k 'kqYd u nsfn;k gksA

p mlus vius lnL;rk ds vkosnu i= ds lkFkviuh vkyw] lkx lCth mit ;ksX; Hkwfe;ksa dk fooj.k i=d u ns fn;k gksA

- fdlh Hkh O;fDr dks ^x* oxZ dk lnL; ughacuk;k tk;sxk tc rd fd%&

d mldh vk;q ' o'kZ dh u gks pqdhgks rFkk og vuqca/k djus ds ;ksX; u gksA

[k mlus lfefr dk ,d uke ek= dk va'k u [kjhnfy;k gksA

x mlus lfefr esa ,d :i;k izos'k 'kqYd u nsfn;k gksA

?k mldh lnL;rk ds fy;s fyf[kr vkosnu i=lapkyd e.My }kjk Lohr u dj fy;k x;k gksA

Bye-law No. 6 deals how a person can become Member of the Society.

17. The learned counsel for respondents Nos. 3 and 4, therefore, vehemently contended that if the membership right from the inception is null and void the same can be ignored and in support of his submission he placed reliance on the decisions reported in (1972-73) 8 Co-op. LJ 271 (Postal Co-operative House Construction Society Ltd. v. The Registrar) 1966 Jab LJ 543 (SC). AIR 1938 Nag 335 (FB) (Asaram v. Ludheshwar), AIR 1956 SC 87 (Merla Ramanna v. Nallaparaju), AIR 1954 SC 340 (Kiran Singh v. Chaman Paswan), AIR 1954 SC 349 Manilal Mohanlal Shah v. Sardar Sayed Ahmed), AIR 1957 Madh Pra 71 (FB) (Govinddas v. Parmeshwaridas) and AIR 1968 SC 702 (Munshi Ram v. Delhi Administration).

18. As regards the doctrine of indoor management about which the learned counsel for the petitioner had laid sufficient stress, the learned counsel for these respondents submitted that it does not apply to the case of a society, though the learned counsel for the petitioner had contended that the petitioner and other 866 members having been admitted to the membership of the Society, it is an internal affair of the Society in what circumstances they were made members of the Society.

19. So far as the returns filed in the earlier writ petition is concerned, though the averments made in the returns are not disputed, the learned counsel submitted that it does not have the effect of estoppel or res judicata as has been held in AIR 1955 SC 62 (Kalidas Dhanjibhai v. State of Bombay) and AIR 1976 SC 376 (Shri Krishan v. The Kurukshetra University). He, therefore, submitted that at best the averments made in the returns regarding the admission of membership of 867 persons, including the petitioner, can be said to be the opinion of those respondents who had filed the returns but that does not in any way help the case of the petitioner.

20. After hearing the learned counsel and after going through the case law cited on behalf of the parties, as also through the provisions of the Act, Rules and the Bye-laws, we are of opinion that this petition deserves to be allowed as the authorities cited on behalf of the respondents are distinguishable on material facts. In the decision reported in (1972-73)8 Co-op. LJ 271 (supra) a case relating to Postal Co-operative House Construction Soaiety Ltd., the Board had decided who could be the members of the Society, which they had divided into three categories. Category-A dealt with Post Office employees working in the District of Patna such applicants are requested to pay Rs. 2500/- in one instalment. In that case the person who was admitted to membership was admittedly was not a postal employee and consequently was not a Postal Employee of the low income group for whom the society was formed and it is in these circumstances that it was found that though he had deposited the amount which was kept in suspense account, he could not be treated to be a member validly made, which is not the case here, as in the present case the petitioner was allotted membership as also the other 866 members in 1978 itself, whereafter the petitioner was also elected as a Director of the Society in which capacity he worked till the Society was superseded in 1982.

21. In the decision reported in AIR 1977 SC 1900 (Raj Rani v. Delhi Administration) the Court had ordered to convene a meeting in which the Chairman was authorised to find out if a person had been wrongly declared to be a defaulter and it is in these circumstances that the said decision has considered that point. Similarly the other authorities cited on behalf of the respondents on this point donot cover a case of the present type though the proposition of law enunciated therein cannot be disputed.

22. Relying on the Supreme Court decision reported in AIR 1970 SC 245 (Cooperative Centra) Bank Ltd. v. Addl. Industrial Tribunal, AP) a Full Bench of this Court in the decision reported in 1983 MP LJ, 645 : (1983 Lab IC 1565) Sevaram Totaram Parigir v. Board of Revenue, MP) has held that it is well settled that where a statute authorises either the Government or any other authority to frame rules and the rules are so framed, the rules will have the force of statute. They will be deemed to have been incorporated as part of the statute. But they cannot be equated with the kind of bye-laws framed only for the internal management and working of the Society and thus not having the force of law. Therefore, even if the bye-laws of the Society in the present case have mentioned what shall be the share capital of the Society, still there is no bar that the same could not be increased according to the progress made by the Society in trying to achieve its objects and consequently the mere fact that the Society does not have sufficient accommodation in the Cold storage in which all the members could keep their potato crop and will find it difficult* to keep their product, is not sufficient to dislodge them as members of the Society except in accordance with the provisions of the Act which also provide for expulsion of a member or the circumstances in which a member ceases to be a member when he incurs certain disqualification.

23. Section 53(4) of the Act, which deals with the supersession of Committee, the learned counsel for the respondents placed reliance on the words 'and to take all such actions as may be required in the interest or desirable in the interest of the Society' are also found in Section 19-C(2) which enables the Registrar to expel a member. These words have been incorporated in the decision reported in AIR 1979 Madh Pra 173 (Brij Gopal Denga v. State of MP) wherein it has been held that Co-operation is a method of doing business. The members of an association or a society formed for business purposes can only claim the right to carry on the business likeall other citizens subject to restrictions imposed under Clause (6) of Article 19. The impugned provisions of the Act which enable the Registrar to expel a member if it is desirable or necessary in the interest of the Society, are intended to protect the business of the society and the interest of the members. The expression means nothing more than 'in public interests' and a legislation intended to protect the interest of the limited class of persons may well be 'in the interests of the general public'. The Registrar is required to give notice to the member concerned to explain why he should not be expelled. The power conferred is quasi judicial in nature. In the present case the respondents, except the orders of the Deputy Registrar, have not placed any material on record to indicate that the other existing members could not keep their potato product in the cold Storage because of the shortage of accommodation in it, though admittedly for expansion of the same the Society had obtained money from the State Government with which the Cold Storage was expanded, but we do not know what is the capacity there of. Therefore, on that ground the petitioner and 866 members could not be treated to have been admitted as members illegally against the directions of the Registrar.

24. As stated above the Prabhari Adhikari, namely respondent No. 3 acts under the control of the Registrar and in such matters like the present one, in our opinion, he is not competent to issue such a notice because the question whether a particular member has been validly made as a member of the Society is not to be reopened by him because he has to exercise all or any of the functions of the Committee or of any officer of the Society. Therefore, the present action of the respondent No. 3 cannot be said to be such which he was required to take in the interest of the Society.

25. Normally, as argued by the learned counsel for respondents Nos. 3, and 4, we would have left the matter to the respondent No. 3 on the basis of the reply filed to the show cause notice, but as the matter was argued at length on all points involved, we thought it proper to decide the petition on merits about which, inthese circumstances, there is no bar. It is not the case of the respondents that the petitioner cannot be included in the category of 'Kha' members. From the trend of the notice as also the returns filed and the averments made it is apparent that the respondents have virtually made up their mind and, therefore, no useful purpose will be served in calling upon respondent No. 3 to decide the objections raised by the petitioner to the show cause notice.

26. In the result this petition is allowed with no order as to costs: The impugned show cause notice dated 21-4-1982 (Annexure-A) is quashed. The amount of security, after verification, be returned to the petitioner in person.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //