Kawal Dhari Singh vs Union of India and Others

Heard Sri Raghuvendra Singh, Sri Rakesh Kumar, Sri Rakesh Srivastava, Sri Sri Ram Raj, Sri J.N. Mathur assisted by Sri Akhilesh Kalra, Sri Rakesh Chaudhary, and Standing Counsel appearing for the parties.

Sri Ram Raj, Advocate has filed the writ petition No.5579 (MB) of 2009 on behalf of a delegate of Shag Sabji Evam Fal Utpadan Kraya Vikraya Sahkari Samiti Ltd. Lakshi Raypur, Azamgarh, which is a Society registered under the provisions of U.P. Cooperative Societies Act, 1965 and is aggrieved by the order dated 2.6.2009 passed by the Chief Director (Cooperation), Ministry of Agriculture, Krishi Bhawan, New Delhi directing therein that the Board of Directors of U.P. Cooperative Processing and Cold Storages Federation Limited (in short referred to as the ''PACSFED'') elected on 2.9.2002 will continue till elections of a fresh Board of Directors takes place. The aforesaid order has been assailed inter alia on the grounds that there existed no Board on the date of passing of the impugned order, and therefore, the provision of Section 45(5) of the Multi State Cooperative Societies Act, 2002 is not applicable; by the impugned order the elections held on 2.9.2002 are now being enforced. The petitioner has sought a direction for holding of election of the Committee of Management under the supervision and control of Administrative Committee, which is presently managing the affairs of the PACSFED.

Writ Petition No.5676 (MB) of 2009 has been filed by the Board of Directors of PACSFED through its Chairman Naresh Shanker Srivastava assailing the order No.28 dated 3.6.2009 passed by Sri V.K. Chaudhari, Managing Director of U.P. Cooperative Processing and Cold Storages Federation Limited, Lucknow, refusing to accept the assumption of charge by the Board of Directors and has also assailed the order No.703 dated 8.6.2009 issued by the Registrar, Cooperative Societies, Uttar Pradesh, Lucknow, directing the petitioner No.1 not to interfere in the affairs of the PACSFED till the Central Registrar issues appropriate direction.

Writ Petition No.5985 (MB) of 2009 has been filed by the Board of Directors of PACSFED through its Chairman Naresh Shanker Srivastava inter alia praying for quashing the proceedings of the meetings of the Committee of Administrators held on 10.6.2009 and 19.6.2009 as also the notice dated 19.6.2009 for convening the General Body Meeting of the PACSFED.

In short, the facts of the case are that U.P. Cooperative Processing and Cold Storages Federation Limited (PACSFED) was registered under the provisions of U.P. Cooperative Societies Act, 1965 on 25.11.1974. The area of operation of the PACSFED was the whole State of Uttar Pradesh. Prior to July, 1994 the term of the Committee of Management of a Cooperative Society was three years as defined under subsection 2(a) of Section 29 of the U.P. Cooperative Societies Act, 1965. On 15.7.1994, the State Government vide its amendment enhanced the term of Committee of Management from 3 years to 5 years and accordingly amended the provisions of Section 29 of the Act. On 19.7.1998, the State Government by way of amendment in Section 29 of the Act, reduced the term of the Committee of Management from 5 years to 3 years. In the year 2000, the U.P. State Reorganisation Act was enacted which came into force on 9.11.2000. By the operation of the said Act, the boundaries of State of Uttar Pradesh reorganized by carving out certain territories and a new State of Uttaranchal (now known as ''Uttarakhand'') came into existence.

Thereafter, the Central Registrar/opposite party No.2 granted the certificate of registration dated 14.2.2001 to the PACSFED under the MultiState Cooperative Societies Act, 1984 and the election process of the PACSFED started under the said Act of 1984. A Writ Petition No.5171 (MB) of 2002 was filed challenging the process of election initiated under the MultiState Cooperative Societies Act on the ground that the PACSFED is not a MultiState Cooperative Society and, therefore, the election of its Board of Directors cannot be held under the provisions of MultiState Cooperative Societies Act. The State of U.P. and the PACSFED also challenged the registration certificate dated 14.2.2001 granted by the Central Registrar by filing Writ Petition No.602 (MS) of 2002 and Writ Petition No.1710 (MS) of 2002. In Writ Petition No.5171 (MB) of 2002, an interim order dated 29.8.2002 was passed directing that the election may be held, but the result of the election shall not be implemented. This interim order continued till the final decision of the writ petition.

In the election held on 2.9.2002, Naresh Shankar Srivastava was declared elected as Chairman of the PACSFED, but the election result was not given effect to.

The Writ Petition No. 5171 (MB) of 2002 was finally decided on 2.12.2002, wherein it was held that the PACSFED is not a MultiState Cooperative Society and therefore, the election of the Board of Directors of the PACSFED held under the MultiState Cooperative Societies Act was set aside. The said judgment and order dated 2.12.2002 was assailed before the Apex Court and the Apex Court vide interim order dated 8.1.2003 provided that the body elected under the MultiState Cooperative Societies Act, as per the direction given by the High Court would function till further orders, but subsequently, the Apex Court by the judgment and order dated 8.4.2003 remitted the matter to the High Court after appointing Sri Subhash Chandra Chaturvedi, Retd. I.A.S. as an Administrator.

The aforesaid Writ Petition Nos.5171 (MB) of 2002, 1710 (MS) of 2002 and 602 (MS) of 2002 alongwith other connected writ petitions were heard together and decided by a common judgment. The main question for consideration before the High Court was whether after reorganization of the State of Uttar Pradesh and carving out the State of Uttaranchal under the U.P. State Reorganization Act, 2000 whether the PACSFED shall continue to be governed by the U.P. Cooperative Societies Act, 1965 or by the MultiState Cooperative Societies Act, 1984.

A Division Bench of this Court in its judgment and order dated 10.1.2004 held that the PACSFED is not a MultiState Cooperative Society and hence, the provisions of MultiState Cooperative Societies Act, 1984 will have no application to it and the Apex Society will continue to remain to be governed by the U.P. Cooperative Societies Act, 1965 and the Rules made thereunder.

Aggrieved by the judgment and order dated 10.11.2004, Naresh Shanker Srivastava filed Special Leave Petition which was converted into a Civil Appeal No.292294 of 2004. Another appeal was registered as Civil Appeal No.1722 of 2005. The Apex Court by judgment and order dated 6.5.2009 set aside the order dated 10.11.2004 passed by the High Court and held that the PACSFED is a MultiState Cooperative Society. The relevant portion of the said judgment reads as under:

�24. It has been contended by the respondents that in view of Section 129 of the Uttaranchal Act which came into force in 2003, 14 member Societies of PACSFED in Uttaranchal would automatically become registered under the Uttaranchal Act. However, the said contention is legally untenable. Once the State of U.P. was bifurcated by the Reorganization Act which came into force on 9.11.2000, Section 95 automatically got attracted. By virtue of Section 95 of the MultiState Societies Act, PACSFED becomes a MultiState Society. On 14.2.2001, when the Central Registrar of the MultiState Cooperative Societies issued the Registration Certificate granting registration of the PACSFED under the MultiState Act, admittedly, the Uttaranchal Act of 2003 was not in existence. Even otherwise, a State legislation viz. Uttaranchal Act which has been enacted subsequently cannot have an overriding effect over a Central law viz., the MultiState Act. The Uttaranchal Act can govern and regulate the Cooperative Societies whose objects extend to and apply within the State of Uttaranchal. So, the finding of the High Court that with the enforcement of the Uttaranchal Cooperative Societies Act, 2003, with effect from 21.5.2003, the MultiState Act shall not be applicable is erroneous. The area of operation of the PACSFED as laid down in its byelaws is still the same as it was on the date of the reorganization of the State of U.P. Therefore, it would be legally impermissible to say that now the area of operation of the PACSFED is confined to the State of U.P. alone and that it has ceased to be a multiState Cooperative Society. As far as withdrawal of memberCooperative Societies of the PACSFED operating in the State of Uttaranchal is concerned, the deemed conversion of a Cooperative Society into a MultiState Cooperative Society by virtue of Section 95 of the MultiState Act is an irreversible process and the membership of a MultiState Cooperative Society in a particular State at a given point of time is only a fortuitous circumstance on the basis of which a MultiState Cooperative Society cannot automatically revert to assume the character of a State Cooperative Society. Further, there is no provision in the MultiState Act which permits such automatic conversion of a MultiState Cooperative Society into a State Cooperative Society by operation of law. The only relevant consideration for continuance of a MultiState Cooperative Society as a MultiState Cooperative Society is that it should have its objects not confined to one State and since the objects of the PACSFED still remain the same as it was immediately before the reorganization of the State of Uttar Pradesh, it shall be deemed to be a MultiState Cooperative Society by virtue of deeming provision of Section 95 of the MultiState Act.

In view of the foregoing discussions, the PACSFED is a deemed MultiState Cooperative Society registered under the corresponding provision of the MultiState Act, 1984 as and from the date of the reorganization of the State of Uttar Pradesh and therefore, the impugned judgment and order dated 10.11.2004 is liable to be set aside, which we hereby do.�

The grievance of the petitioner in Writ Petition No.5579 (MB) of 2009 is that the impugned order dated 2.4.2009 as far as it directs that the Board of Directors of PACSFED elected on 2.9.2002 to continue till election of fresh Board of Directors is wholly arbitrary and illegal as there did not exist any Board. Even assuming that the election was held in 2002, under the provisions of MultiState Cooperative Societies Act, 1984, then too, the term of the Board stood expired. Therefore, there is no question of allowing opposite party No.6Naresh Shanker Srivastava as Chairman and the Board of Directors to control the affairs of the PACSFED.

Elaborating his argument, he submitted that even under the provisions of the MultiState Cooperative Societies Act, 1984, the term of the office of the elected Board is five years. Therefore, the impugned order is contrary to the provisions of Section 45 of the MultiState Cooperative Societies Act, 1984.

On behalf of opposite party No.6, it has been submitted that the Board of the Directors elected on 2.9.2002 under the MultiState Cooperative Societies Act, 1984 remained in office from 8.1.2003 to 8.4.2003, i.e. for three months. On account of long drawn litigation, which ultimately culminated in pronouncement of the judgment dated 6.5.2009 by the Apex Court and only thereafter, the elected body assumed charge of office on 2.6.2009. The intimation of the assumption of charge by the Board of Directors of the PACSFED was also given to the Central Registrar and the Managing Director of the PACSFED by means of letter dated 2.6.2009 provided that the Board of Directors elected on 2.9.2002 to remain in office for the residuary term in the office.

He further submitted that under the provisions of Section 45 of the MultiState Cooperative Societies Act, responsibility has been caste upon the existing Board of Directors to conduct the election of the Board of Directors before the term came to an end. Section 45(5) of the Act clearly provides that the elected Members shall continue to hold office till their successors are elected or nominated under the provisions of the Act or the Rules or byelaws and assume charge of their office.

It has also been argued that the election during the intervening period under the U.P. Cooperative Societies Act, 1965 is ipso facto void as PACSFED had automatically become a deemed MultiState Cooperative Society with effect from 9.11.2000. The administrator appointed by the Registrar, U.P. Cooperative Societies cannot have any authority to continue after the pronouncement of the judgment by the Apex Court declaring the PACSFED as MultiState Cooperative Society. Lastly, it has been argued that the petition is not maintainable as the delegate has no authority to file the writ petition.

In Writ Petition No.5676 (MB) of 2009, it has been argued that after the declaration of the PACSFED as MultiState Cooperative Society, it is the Central Registrar, who has all the powers to issue appropriate directions/orders to regulate the affairs to the PACSFED. The Registrar, Cooperative Societies, U.P. or the Managing Director has no authority to interfere in the functioning of the Board of Directors as also in the affairs of the PACSFED, but both the authorities are acting in flagrant violation of the directions contained in the letter dated 2.6.2009. In the impugned order dated 8.6.2009, the Registrar, U.P. Cooperative Societies has mentioned that the order dated 2.6.2009 has been issued by the Chief Director without affording any opportunity of hearing to them or the PACSFED. The entire facts have been brought to the notice of the Central Registrar with a request to review its order dated 2.6.2009 and therefore, the petitionerNaresh Kumar Srivastava was asked not to interfere in the affairs of the PACSFED.

It has been vehemently argued that the impugned order dfated 8.6.2009 shows the illegal interference of the Registrar in the functioning of the Board of Directors, overlooking the fact that the PACSFED has been declared as MultiState Cooperative Society and in view of the directions dated 2.6.2009, fresh election for constituting fresh Board of Directors is to be held within four months.

On behalf of Committee of Administrators of the U.P. Cooperative Processing and Cold Storages Federation Limited, Lucknow, it has urged that while holding the PACSFED to be a MultiState Cooperative Society, the Apex Court did not give any further directions. The Central Registrar, MultiState Cooperative Society/Chief Director (Cooperation), New Delhi, even though opined that the term of the Board of Directors of the MultiState Cooperative Society cannot exceed five years in view of Section 45(5) of the MultiState Cooperative Societies Act, allowed it to continue till fresh elections are held, though it term had expired way back in September, 2007.

It was further submitted that the petitioner No.1 Naresh Shanker Srivastava was elected as Chairman of the Board of Directors in the year 1999 in view of the U.P. Cooperative Societies Act for a term of five years. However, he was removed from his office in December, 2000 but was successful in getting an interim order in his favour. All of a sudden, he managed another election in September, 2002 and if five years is calculated from that date, it came to an end of September, 2007.

It has also been pointed out that in June 2005 another election was held under the provisions of U.P. Cooperative Societies Act, 1965 in which one Mahesh Kumar Gupta was elected as Chairman for a period of five years. The term of Committee of Management elected in June, 2005 was reduced from five years to two years, consequently, the State Government took a decision to appoint Administrator of the Society. Later on, the Administrator was changed and vide order dated 30th July, 2008, one R.L. Upadhyaya was appointed as Administrator of the PACSFED. Subsequently, an Administrative Committee was appointed under the Chairmanship of Shri R.L. Upadhyaya.

It is also informed that the PACSFED is no more in existence as the assets and liabilities of the PACSFED alongwith its employees have been transferred to an Apex Body known as the U.P. Processing & Construction Cooperative Federation Limited, a Society registered under the U.P. Cooperative Societies Act, 1965 pursuant to the resolution dated 28th June, 2009 of the Special General Body meeting. Therefore, in terms of the provisions of the MultiState Cooperative Society Act, the PACSFED has since gone into liquidation and shall stand liquidated on the expiry of the statutory period in view of the Section 21 of the MultiState Cooperative Society Act, 2002. it has been urged by the Counsel that the PACSFED as on date is a shell Society with no assets and liabilities as on the acceptance of the resolution by the PACSFED and its acceptance by the U.P. Processing & Construction Cooperative Federation Limited all the bank accounts stand transferred and all the offices have since become offices of the new Apex Body. Furthermore, the State Government has also granted approval to U.P. Processing and Construction Cooperative Federation Limited vide order dated 8.7.2009 and declared it a construction agency.

It is in this background, it was submitted that Writ Petition No.5985 (MB) of 2009 and Writ Petition No.5676 (MB) of 2009 have become infructuous.

Before proceeding further, it would be relevant to point out that during the pendency of the Writ Petition No.5676 (MB) of 2009 and Writ Petition No.5579 (MB) of 2009, Mr. Naresh Shankar Srivastava filed another Writ Petition No.5985 (MB) of 2009. During the course of arguments, Sri Raghvendra Kumar Singh submitted that the writ petition may be dismissed as not pressed and he may be granted liberty to file fresh writ petition assailing the resolutions passed by the Administrative Committee.

Accordingly, the Writ Petition No.5985 (MB) of 2009 was dismissed as withdrawn with liberty to file fresh writ petition.

At the outset, it may be mentioned that Section 45(5) of the MultiState Cooperative Societies Act, 1984 provides that the term of office of the elected members of the Board shall not exceed five years from the date of elections. It is not in dispute that term of the Committee of Management of which election was held on 2nd September, 2002 has come to end. There is no provision in the Act which provides that an elected body would get of any additional term in the event its term is curtailed by any order of the Court or by any other authority. The Apex Court while holding that the PACSFED as a MultiState Cooperative Society in its final judgment gave no direction either for holding fresh elections or for reinstating any erstwhile Committee.

It is to be noted that it is well within the knowledge of the Apex Court that the election of the Committee of Management has been held in 2.9.2002 but it did not allow the said Committee to run the affairs of the Society. On the contrary, the Apex Court in order to run the smooth functioning of the Society without adversely affecting the rights of the members of the Society appointed Sri Subhas Chandra Chaturvedi, IAS as an Administrator by an order dated 8th April, 2003.

It is also relevant to mention that in the impugned order dated 2.6.2009 the Central Registrar himself has admitted that in terms of the provisions of the Section 45(5) of the MultiState Cooperative Societies Act, 1984, the term of the Board of Directors of a MultiState Cooperative Society cannot exceed five years from the date of election and has rejected the request for continuation of the Board. But at the same time, it allowed the Board of Directors of the Federation elected on 2.9.2002 to continue till the fresh election takes place. This cannot be done in view of the fact that the Apex Court by the order dated 8.4.2003, as averred above, appointed the Administrator and did not allow the Board of Directors elected on 2.9.2002 to continue when even the term of five years has not expired and now when, admittedly, the term has expired there was no occasion to allow the Board of Directors to continue till the elections of fresh Board of Directors.

The assertions of Sri J.N. Mathur that the PACSFED is no more in existence as the assets and liabilities including the employees have been transferred to U.P. Processing & Construction Cooperative Federation Limited cannot be accepted at this stage as only the assets and the liabilities have been transferred, but the Society is still in existence. Whether the transfer of assets and liabilities to U.P. Processing & Construction Cooperative Federation Limited pursuant to the resolution of the Special General Body Meeting held on 28.6.2009 is valid or not, is not the subject matter of the present writ petition.

In view of the above, it would be in the fitness of the things that the elections of the Board of Directors of the Federation be conducted under the supervision of a neutral authority. The name of Hon''ble Mr. Justice D.K. Trivedi (Retd.) was suggested by the Court to which all the parties agreed and therefore, the Hon''ble Mr. Justice D.K. Trivedi, Former Judge, High Court (Hari Kripa, 6/169, Vineet Khand, Gomti Nagar, Lucknow,Telephone No.05222302591) is requested to conduct the election of the Federation under his supervision. His Lordship may be free to take assistance of any other person for the conduct of free and fair election. His Lordship shall be paid Rs.51,000/ as supervisory charges.

The Central Registrar shall notify the date for election after informing Hon''ble Mr. Justice D.K. Trivedi, Former Judge.

The Writ Petition Nos.5676 (MB) of 2009 and 5579 (MB) of 2009 are disposed of accordingly.

(Ordered accordingly)