Hardyal Singh and Others vs The Registrar, Cooperative Societies and Others

A.K. Goel, J.—The Gurdaspur Co-operative Marketing-cum-Processing Society Limited was constituted under the provisions of the

Punjab Co-operative Societies Act, 1961 (for short, the Act). In view of the financial position of the society, an order of winding up was passed

on 11.9.1980 and vide order dated 31.3.1992, the society was revived. As per the By-laws of the society, only those members could participate

in the election, who had sold agricultural produce or done business of at least Rs.10,000/- through the society during the preceding year, Only six

such members being available, they proposed and seconded each other''s names and were elected as members of the Managing Committee and

they were elected in the elections held in the year 1994, Term of the said committee came to an end on 31.3.1999 and since no election was held,

an Administrator was appointed by the Registrar u/s 26(1D) of the Act. Certain residents approached the Registrar, Co-operative Societies,

Punjab and expressed desire to get themselves enrolled as members and also raised a grievance that they were not being enrolled as members,

which was noticed in letter dated 26.10.1999, Annexure R-l to the written statement filed on behalf of respondents No.5 and 6. It appears that the

term of the Administrator expired on 31.3.2000 and in his place, a Supervisory Officer was appointed, who passed resolution dated 28.6.2000

seeking approval of the registrar for enrollment of the new members. The said resolution is Annexure R-2 to the reply filed by respondents No.5

and 6. The Joint Registrar vide his order dated 1.8.2000 permitted enrollment of the new members (Annexure R-3 to the above written

statement). The petitioner filed petition before the Registrar u/s 27(3) of the Act challenging the enrollment of the new members. The Registrar,

Co-operative Societies. Punjab vide order dated 28.3.2001 (Annexure P-9) referred the matter to the Joint Registrar, who vide order dated

29.6.2001 (Annexure P-IO) held that the enrollment of members was in the interest of the society and the same was after approval of the

concerned officer.

This writ petition has been filed by the members of the previous Managing Committee challenging order of enrollment of members and order

rejecting objections of the petitioners, Annexures P-9 and P-10. This petition was filed on 4.8.2001 and notice was issued to the respondents, in

response to which written statement has been filed by respondents No. 1 to 4 and also a separate written statement has been field by respondents

No.5 and 6. It has been submitted that the enrollment of new members was justified to overcome the situation, where only six members were

eligible, who would have perpetually had the monopoly of being the office-bearers of the Managing Committee, which was against the co-

operative spirit and since the said six members (petitioners herein) did not permit any new member to join, the nominee of the Registrar, who was

looking after the affairs of the society, enrolled new members with the permission of the Registrar.

Counsel for the petitioners contended that the term of the Administrator had expired and thereafter a Supervisory Officer had been appointed,

which was not permitted under the law. Reliance was placed on Shri Naginder Singh and Ors. v. State of Punjab and Ors. 1973 P.L.J. 728; Brij

Kishore Arora Vs. The Administrator, U.T. Chandigarh and Others, and Balwant Singh and Ors. v. The Union Territory Administration and Ors.

1994 P.L.J. 64. It was also submitted that the Administrator could not enrol new members and he could only organise elections, for which reliance

was placed on K. Shantharaj and another Vs. M.L. Nagaraja and others, ; T. Ramegowda Vs. R. Krishnamurthy and others, ; Jt. Registrar of

Co-op. Societies Vs. T.A. Kuttappan and Others, and Amrik Singh and Anr. v. State of Punjab and Ors. 2001 127 P.L.R. 697.

Counsel for the respondents supported the impugned orders and submitted that enrolment of new members had become necessary to prevent

the situation, where only six members had the monopoly and are not willing to enrol any new member,

1 have heard learned counsel for the parties, perused the record of the case and the decisions cited. . Though I find force in the convention of

the counsel for the petitioners that the object of appointing an Administrator is only to work as a stop-gap arrangement and after the expiry of the

period for which the Administrator was appointed, there is no provision in the Act for appointing any Supervisory Officer, as has been done in the

present case and that such Supervisor Officer can only look after day to day work of the society and could not enrol new members. Inspite of this

being so, the monopoly created by six members contrary to the co-operative spirit and principles, for which the societies are incorporated, cannot

be allowed to continue. Such an impasse would be contrary to the very object of any co-operative society. The co-operative or the democratic

spirit, which underlies the functioning of a society, envisages collective and cooperative working of the members and in an exceptional situation of

the present nature, the Registrar who oversees the functioning of a society by inspecting and auditing a society and issuing directions from time to

time, under the scheme of the Act (Sections 48 to 50) and who also has the power to wind up the society and to appoint a liquidator to run a

society (Sections 57 and 58) cannot be denied power to pass an appropriate order in the interest of the functioning of the society. This power to

act in the larger interest of the society and the general public interest has to be conceded to the registrar in an exceptional case of the present

nature. This power cannot be exercised arbitrarily to usurp the management of an autonomous society, but has to be exercised fairly and

reasonably and whenever exercise of such a power is challenged, the same has to be justified. In the present case, the exercise of the power has

been justified. The petitioners have no answer to the difficulty posed by a situation where only six members are available, who have created

monopoly in their favour and are not willing to enrol new members. If enrollment of members in such a situation is quashed, the result will be un-

desirable. The petitioners will have total monopoly to control the affairs of the society making it a mockery of the statutory provisions of an elected

body. A writ cannot be issued to bring about such an un-desirable result, which would inevitably follow, if the enrolment of members is quashed.

For the above reasons, this writ petition is liable to be and is, accordingly, dismissed.