Dulichand Dube and Others vs Krishak Sewa Sahakari Samiti Maryadit, Chorai and Others

R.K. Tankha, J.

By this petition under Article 226 of the Constitution of India the petitioners who are members of the Krishak Seva Sahakari Samiti Maryadit, Chorai, have prayed for the issue of a writ of certiorari for purposes of quashing the order dated 3-2-1977 (Annexure-H) passed by State Government, the respondent No. 3 and also the communication in relation to the said order dated 14-2-1977 (Annexure-G) by the Registrar, Co-operative Societies, Madhya Pradesh the respondent No. 4.

Facts in brief leading to the present petition are that the petitioners are the members of the Krishak Seva Sahakari Samiti Maryadit, Chorai in district Chhindwara (respondent No. 1). This society was constituted on 7-1-1974 and was registered under the M.P. Co-operative Societies Act, 1960 (hereinafter referred to as the Act.)

The first Board of Directors were nominated by the Registrar of the Co-operative Societies Madhya Pradesh (respondent No. 4) for a period of three years from 19-2-1974 to 18-2-1977. Therefore, as the time for the expiry of the period of the tenure of the first Board of Directors approached nearer, the Board of Directors vide their resolution dated 28-12-1976 (Annexure-B) resolved to convene an annual general meeting for electing Board of Directors on 17-2-1977. S.P. Bhagat (respondent No. 2) was appointed as a returning officer by the Deputy Registrar (respondent No. 5) vide his order dated 14-12-1976. The Returning Officer published the election programme as required by Rule 41 (2) of the M.P. Co-operative Societies Rules, 1962 (herein-decided on. after referred to ''as the Rules''). In accordance with this programme 9 directors were to be elected (out of which four were reserved and five were general). The last date for filing nomination was 22-1-1977. On the basis of the scrutiny held on 25-1-1977 the five nominations submitted on behalf of the petitioners were found valid and there being no contest, the Returning Officer, respondent No. 2, declared all the five petitioners elected as having been unopposed vide declaration dated 31-1-1977 (Annexure E). In the general body meeting of the Society dated 17-2-1977 the declarations made by the Returning Officer were read out in accordance with Rule 41 (12) of the Rules which is clear from the copy of the proceedings (Annexure F). The remaining co-options and elections were scheduled to be held on 19-2-1977 but on that date meeting was adjourned to 25-2-1977 on account of the death of the President of India. In the meanwhile a copy of the telegram (Annexure G) received by the Deputy Registrar (respondent No. 5) containing the order of the State Government dated 3-2-1977 (Annexure H) communicated to him by the Registrar (respondent No. 4) was sent to the President of the Society, staying the election. By that order the State Government (respondent No. 3) exempted the societies from the operation of sections 48 and 49 of the Act till 31-5-1977 and in consequence thereof the Society (respondent No. 1) was directed to stay the elections. This power was alleged to have been exercised by the State Government u/s 91 of the Act. But on 25-2-1977 the petitioners the ex-officio directors and the nominated directors held their meeting and co-opted the directors whose seats were vacant and thereafter also elected petitioner No. 1 as the President of the Society. The petitioners who were elected unopposed as mentioned earlier have filed the present petition challenging the order dated 3-2-1977 (Annexure H) of the State Government (respondent No. 3) respectively referred to above, as having been passed without jurisdiction.

The respondent No. 1 in his separate return and the respondents 3 to 5 in their joint return claimed dismissal of the petition on various grounds. It has been contended that on account of the impugned order the term of the Society was extended upto 31-5-1977 and by subsequent order dated 7-1-1977 the society was further exempted from the operation of section 49 of the Act for a further period ending on 31-12-1977. That being so it is contended that the elections could not be said to have been fallen due and the election already held is of no consequence. The exercise of the power u/s 91 of the Act by the State Government (respondent No. 3) in exempting the societies from the operation of section 49 of the Act by extending the term upto 31-5-1977 and later upto 31-12-1977 was within authority. Therefore, all these respondents contended that the present petition is misconceived and liable to be dismissed.

Having heard learned counsel of the parties, we are of opinion that there is merit in this petition and it must be allowed. It was not disputed before us by the learned counsel for the contesting respondents that but for the order dated 3-2-1977 (Annexure-H) of the State Government (respondent; No. 3), the elections were due and rightly held. Therefore, the point in controversy is whether the State Government (respondent No. 3) could by the exercise of the powers u/s 91 of the Act postpone the election of the society which it wanted to hold or held according to the mandatory provisions of section 49 and the bye-laws of the said society. Before we proceed further it would be better to reproduce hereunder the relevant provisions of section 49 (1), (5) and (8) of the Act and also that of section 91 as amended by the M.P. Co-operative Societies (Amendment) Act, 1976 (Act No. 14 of 1976):

Annual General Meeting.--(1) Every society shall within a period of twelve months from the date of last annual general meeting call a general meeting of its members for the purpose of--

(a) approval of the programme of the activities of the society prepared by the committee for the ensuing year;

(b) election, if fallen due in the prescribed manner of the members of the committee;

(5) If default is made in calling general meeting within the period prescribed there for under sub-section (1) or in complying with the requirement of sub-section (1), the Registrar may, by order, declare any officer whose duty it was to call such meeting or comply with the provisions of sub-section (1) and who without reasonable excuse failed to comply with any of the provisions of aforesaid sub-section, to be disqualified for being elected or being in office for such period not exceeding three years, as he may specify in such order and if the officer is an employee of the society impose a penalty on him of any amount not exceeding five hundred rupees:

Provided that no order shall be made under this Sub-section unless the person concerned is given a reasonable opportunity of being heard.

(8) It shall be obligatory on the outgoing committee of a society to hold elections of the incoming committee prior to the period prescribed in its bye-laws. If the committee fails to conduct elections and has not handed over charge on the date prescribed in the bye-laws, all the member of the committee shall be deemed to have vacated their seats and the Registrar shall assume charge till the next elections are held and the new committee takes over charge.

Power to exempt co-operative societies from provisions of this Act.--Notwithstanding anything contained in this Act, the State Government may, on its own motion or on the application of committee of the society, or of the society to which the society is affiliated by general or special order, in each case and subject to such conditions, if any, as it may impose, exempt any society or class of societies from any of the provisions of this Act.

The State Government (respondent No. 3) in pursuance of the powers conferred on them u/s 91 of the Act passed the following order:

A bare reading of the aforementioned order makes it clear that it pertains to give exemption to the members of the committee from incurring any disqualification by not holding the elections within the due date as provided by sub-sections (5) and (8) of section 49 of the Act. This is clear from the operative part of the order which reads as under:

In case if the committee would have failed to hold elections within the due date, the members would have incurred disqualification as provided by sub-section (8) of section 49 of the Act. To save the members from the said disqualification the State Government (respondent No. 3) in its discretion exercised the power u/s 91 of the Act. But the matter does not rest there as in the return filed on behalf of the State (respondent No. 3) and all other contesting respondents, the aforementioned order (Annexure-H) is not being interpreted in that way as we have understood. On the other hand, their stand had been that by virtue of that order of the society is debarred from holding or continuing the process of election which may be due till 31-5-1977 and since the elections, according to them, of the Krishak Sewa Sahakari Samiti Maryadit, Chorai were in process they were restrained by the communication dated 14-2-1977 issued by the Registrar (respondent No. 4). That being so, inspite of our understanding the order passed by the State Government, it is necessary in the present case to clear any doubt that may remain in the matter of the consequences of that order. Section 49 of the Act only relates to holding of election if fallen due in the prescribed manner of the members of the committee. The manner is prescribed under the bye-laws of the society, which fact was not disputed before us. It was also not disputed that the term of the outgoing committee was to expire on 18-2-1977. Thus, the elections of the committee were clearly due in accordance with the provisions of section 49 of the Act and the bye-laws of the society and they were accordingly held. Even the names of the petitioners were announced in the general body meeting of the society held on 17-2-1977 as they having been elected unopposed. We need not enter into further details of the proceedings as we are here concerned only with the powers of the State Government (respondent No. 3) u/s 91 of the Act. Earlier in two cases a Division Bench of this Court has taken the view that u/s 91 of the Act the State Government has no power to postpone the election of the society. The power that can only be exercised is to exempt the society from certain provisions of the Act. That does not mean that the State possesses the power for postponing the elections which became due or are being held by the society, [see: The Dewas Central Co-operative Bank Ltd. v. State of M.P. and five others M. P. No. 85 of 1970, decided on 12-10-1970 and Kalvansingh v. State of M.P. and two others M. P. No. 95 of 1970, decided on 19-10-1970]. The relevant passage in the case of Dewas Central Co-operative Bank Ltd. v. State of M. P. (supra) reads as under:

Section 91 of the Act, in our opinion, does not empower the State Government to postpone election of the society which is wanted to convene according to the mandatory requirement of section 49. The impugned order dated 4-6-1970 and the orders of the opposite parties No. 3, 5 and 6 which were made pursuant to it are violative of the rights of the petitioner and its share-holders u/s 49. We take the view that the order of the State Government dated 4-6-1970 was made completely without the authority of law and the error committed in making that order is apparent on the face of the record.

Similarly the relevant passage in the case of Kalvansigh v. State of M.P. and Ors. (supra) reads as under:

Thus, if the election when fallen due is not held, serious consequences follow and the defaulter''s act is made punishable in the manner provided by sub-section (5). When the bank was proceeding to hold elections according to the requirement of section 49, we are firmly of the view that the performance of the mandatory duty of the bank could not be prevented under the authority of law either by respondent No. 1 or by respondent No. 2.

We, therefore, see no reason for taking a different view of the matter and also hold that section 91 of the Act does not empower the State Government (respondent No. 3) to prevent the society from the performance of the mandatory duty cast on it u/s 49 of the Act to hold elections. Thus, the elections which were held in which the petitioners were declared elected unopposed could not set at naught by the order of the State Government (Annexure-H) followed by the communication of respondent No. 4 (Annexure-G). We are really surprised how the respondent No. 4 added the words on his own to the order while communicating the same (Annexure-H) to his subordinates, who on their part communicated the same to the society. The words leading to the confusion, which were added, are:

Which ultimately led to all confusion." In this view of the matter, the question of quashing the order of the State Government dated 3-2-1977 (Annexure-H) does not arise. But the communication of the same (Annexure-G) dated 14-2-1977 sent by the Registrar (respondent No. 4) has to be quashed.

Before concluding we may also mention that our attention was invited to a subsequent order dated 7-4-1977 (Annexure R/2) similar to Annexure-H was passed by State Government (respondent No. 3) extending the exemption facility upto 31-12-1977. Since we have already interpreted the earlier order (Annexure-H), the same would apply to the order as well.

For the reasons stated above, this petition succeeds and is allowed. The order dated 14-2-1977 (Annexure-G) passed by respondent No. 4 is hereby quashed and it is declared that the State Government (respondent No. 3) had no jurisdiction while exercising the power u/s 91 of the Act to postpone the election of the Krishak Sewa Sahakari Samiti, Chorai, which were held in accordance with section 49 and the bye-laws. In consequence, the elections of the petitioners could not be postponed or interfered with as has been tried to be done by the respondents. In the circumstances of the case, we direct the parties to bear their own costs. The outstanding security amount shall be refunded to the petitioners.