Bakhshish Singh and others vs The Registrar, Co-operative Societies, Punjab, Chandigarh and others

M.M. Punchhi, J.

The detailed referring order has itself focussed the question involved herein, placed before us for resolving. Minimally, we may. notice that the Registrar, Co-operative Societies in the State of Punjab, to conduct their business in a particular manner, in the wake of change of price of fertilizer fixed by the Government of India under the Fertilizer Control Order 1957, (sic) and those directives being the subject matter of challenge, attracted one of the defences that the Registrar was authorized to issue such directives in exercise of his power under R. 45 of the Punjab Co-operative Societies Rules 1963, which reads as under:-

Directives by Registrar for the successful conduct of the business:-

The Registrar may, from time to time, issue such directives as he considers necessary for the successful conduct of the business of a co-operative society or class of co-operative societies.

It was maintained on behalf of the petitioners that R. 45 had been struck down in Gobind Ram and Others Vs. State of Punjab and Others, , by B. R. Tuli, J., and thus it could not be adopted as a measure of defence by the respondent-Registrar. It was maintained on the other hand, that the rule laid down in Gobind Ram''s case (supra) needed reconsideration. As is plain, the necessity of it was spelled out in the referring order.

In Gobind Ram''s case (supra), B. R. Tuli, J., had taken the view that the rule was not consistent with the power vested in the State Government under S. 85 of the Punjab Co-operative Societies Act, 1961 (hereinafter referred to as the Act) where under power to frame Rules had been conferred on the State Government. It seems that the provisions of sub-section(3) of S. 85 of the Act were not read before the Hon''ble Judge in the right perspective. These may well be reproduced here:

Every rule made under this section shall be laid as soon as may be after it is made before the State Legislature while it is in session for a total period of ten days which may be comprised in one session or in two successive sessions, and if before the expiry of the session in which it is laid or the session immediately following the Legislature agrees in making any modification in the rule or the Legislature agrees that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Undeniably; the rule in question was placed before the State Legislature. Rather, no data has been placed on the record to show that it was not so placed. It has thus to be assumed that it was so placed.

Mr. Khoji, Learned Counsel for the petitioners, on the strength of parliamentary practice, maintained that such rules are seldom placed before the Legislature and, possibly in the observance of that practice, the rule perhaps was not placed.On the Megha Singh and Co. and Others Vs. The State of Punjab and Others, , it was suggested that in any case "non-laying of the rule before the Legislature" would not have invalidated such delegated legislation. That apart, the concluding portion of sub-section (3) of S. 85 of the Act makes the intendment of the Legislature clear that the rule becomes effective on its promulgation, and for the interregnum till it is placed before the State Legislature, anything previously done under that rule shall be valid in the event of any modification thereto or annulment. So. in either event, even if a rule has not been placed before the House, or has been placed, within and for the statutory period, but not modified or annulled, the rule is valid. However, two different consequences follow. In the first event it remains delegated legislation and has to meet the test of being not inconsistent with the provisions of the Act. But, in the other event, it having received the tacit approval of the Legislature, becomes part and parcel of the Act and gets placed at a higher pedestal. In that case, even if it is inconsistent with some provision of the Act, the Court applies the rule of harmonious construction and finds a way to resolve the conflict. It finds out which out of the two is the leading provision, which the subordinate one and which must give way to the other. But, as said before, no data has been pleaded from which it could be deduced that the rule was not placed before the Legislature under S. 85 (3) of the Act.

It stands recognized that the modern Legislature seldom has enough time to deal with all matters or detail in legislation. It often is content to lay down the guidelines and leave the details to be worked out by expert executives. Such delegated legislation is by now well known. Sometimes, danger crops up when an indifferently made delegated legislation wrecks the plain legislation. That is true in the case of legislation in which the Legislature does not keep control but leaves it to the good sense of the Executive or the Court to find faults therewith. But, sometimes, a Legislature, as in the present case, controls the Executive and, in the Act itself, provides the device of "laying before the Legislature". If the act of "laying before the Legislature" has been accomplished, the delegated legislation then, in essence, ceases to be delegated legislation and becomes legislation itself.

In Express Newspapers (Private) Ltd. and Another Vs. The Union of India (UOI) and Others, , an argument raised by the petitioners challenging the constitution of the Wage Board and a decision made by it being beyond the Act and, therefore, ultra vires, was repelled by the Supreme Court in the following words:

The rule was framed by the Central Government by virtue of the authority vested in it under S. 20 of the Act and was a piece of delegated legislation which if the rules were laid before both the Houses of Parliament in accordance with S. 20 (3) of the Act acquired the force of law. After the publication of these rules, they became a part of the Act itself and any decision thereafter reached by the Wage Board by a majority as prescribed therein was, therefore, lawful and could not be impeached in the manner suggested.

Much case law has developed on that line, the latest being Delhi Cloth and General Mills Co. Ltd. and Others Vs. Union of India (UOI) and Others, ). Associated Cement Company Limited Vs. Commercial Tax Officer, Kota and Others, is also of the same kin. On the authority of all precedents on the subject, it stands crystallized that the requirement for placing rules before the Parliament is, in any case, sufficient safeguard against the abuse of excessive delegation. Thus, for all intents and purposes, R. 45 in the instant case was a part of the Act and the decision of Gobind Ram and Others Vs. State of Punjab and Others, treating it to be an incidence of mere delegated legislation or a draft rule, is an expression unwarranted by law, with utmost respect to the Hon''ble Judge.

Mr. Khoji also maintained that, after the rule was struck down, no effect was made either by the Legislature or the Executive to have it revived. He brought to our notice a report of the Committee on Subordinate Legislation for the year 1972-73, where in on R. 45 the Committee''s view was that, while it was necessary that some sort of power should be given to the Registrar, it was equally felt necessary that such powers should not be excessive or so vast so as to curb or retard the co-operative movement. It, therefore, recommended that this rule should be amended accordingly. However, the departmental representative, who appeared before the Committee, apprised it of the decision of the High Court (probably in Gobind Ram''s case, supra) wherein the rule had been struck down. The Committee then desired that a copy of the new rule, as framed in the light of the High Court judgment, should be supplied to the Committee, when a notification publishing it was issued. Mr. Khoji further brought to our notice that on 12th Jan. 1983, the Governor of Punjab, in exercise of the powers conferred by S. 85 of the Act, had substituted R. 45 of the Punjab Cooperative Societies Rules, 1963. The amended rule of the same number reads as follows:

Powers of the Registrar to give directions: (1) The Registrar may, from time to time, give directions consistent with the provisions of the Act as he considers necessary for the beneficial and efficient functioning of any co-operative society or class of co-operative societies. (2) If any question arises whether any directions given under sub-rule (1) are necessary for the beneficial and efficient functioning of the co-operative society or class of co-operative societies, as the case may be, the concerned co-operative society or class of co-operative societies may refer such question to the Government whose decision thereon shall be final.

Mr. Khoji contended that if the vires of the original rule is restored, it will be in conflict with the new rule. However, we find no such conflict emerging there from. The rule has not been added or renewed in the old terms but has been substituted, i.e., there is a new one for the old one. In any event, we are concerned with the R. 45 as it then existed at the time when the impugned directives were issued.

Mr. Khoji lastly contended that the powers conferred on the Registrar were very wide and, in any case, arbitrary and unguided even though the rule as such did not come in conflict with any provision of the Act. The wisdom of the Legislature to place such powers on the Registrar is not for the Court to suspect as was done by Gobind Ram and Others Vs. State of Punjab and Others, . Power conferred on a functionary of high office under the Act is presumed to be well guided and controlled by the provisions of the Act. The intention of the Legislature in that regard has to be gathered from a variety of factors, such as the scheme underlying the legislation, the preamble, the provisions and the object which it seeks to achieve. The placement of such power in the hands of the Registrar, Co-operative Societies to ensure successful conduct of business does need a guiding figure in that venture. Merely because, in the new rule, the right to presentation has been given against framing of a rule on which the Government''s decision is final, does not lead to the conclusion that the power of the Registrar under the original R. 45 was excessive or arbitrary. In Gobind Ram''s case (supra), the rule was held to be arbitrary merely because the Government, as a delegate for subordinate legislation, conferred it on another functionary and it was taken that the power thus given was arbitrary and unguided without further rules. Thus, for the view we have taken, no question of conferring arbitrary powers on the Registrar arises merely because he can issue directives as to the manner in which the Co-operative Societies shall conduct their business successfully.

For the foregoing reasons, we are of the considered view that Gobind Rani''s case (supra) was wrongly decided and is hereby overruled, holding that R. 45, as it then stood, was intra vires. The petitions shall now be disposed of on merits by the Bench hearing them.