Kular Coop. Agri. Service Society Ltd. vs Registrar, Coop. Societies, Punjab

R.L. Anand, J.

The Kular Cooperative Agricultural Society Ltd., Kular Post Office Chaikiman, Tehsil Jagraon, District Ludhiana (hereinafter called Society) through its Vice President Shri Jagga Singh has filed the present Civil Writ Petition under Articles 226/227 of the Constitution of India against the Registrar, Cooperative Societies, Punjab, Chandigarh, Assistant Registrar, Cooperative Societies, Jagraon and Shri Chamkaur Singh son of Tehal Singh, respondents No. 1 to 3 respectively for the issuance of an appropriate writ, order or direction for setting aside the order dated 28.1.1980 passed by the Assistant Registrar, Cooperative Societies, Jagraon, Annexure P3 and it has been pleaded by the Society that it is registered under the provisions of the Punjab Cooperative Societies, Act, 1961 and is carrying on business and has its office in Village Kular, Tehsil Jagraon, District Ludhiana. Vide resolution dated 21.2.1980, the Society has authorised its Vice President Shri Jagga Singh to file the present writ petition in the High Court.

It is alleged that respondent No. 3 Chamkaur Singh was appointed by the Managing Committee of the Society on 24.10.1978 as Cashier of the Society and vide resolution dated 26.6.1979 the services of respondent No. 3 were terminated by the Society as per resolution Annexure P1 dated 26.6.1979. Against the said orders, respondent No. 3 filed an appeal on 28.6.1979 before the Assistant Registrar, Cooperative Societies, Jagraon vide Annexure P2 and the appeal was accepted vide orders dated 28.1.1980 by the Assistant Registrar, Cooperative Societies and respondent No. 3 was reinstated into service. The impugned order is Annexure P3. The petitioner Society has challenged the impugned order Annexure P3 on the ground that it was passed by the Assistant Registrar, Cooperative Societies without jurisdiction as he had no authority to pass such orders either under the provisions of Punjab Cooperative Societies Act or under the Punjab Cooperative Societies Rules or under the Service Rules framed by the Registrar, Cooperative Societies, Punjab known as Punjab State Cooperative Agricultural Service Societies Service Rules, 1979. It is also averred that the services of respondent No. 3 were terminated on 26.6.1979. Thereafter on 29.8.1979 Model ByeLaws for the petitioner Society were registered by the Assistant Registrar, Cooperative Societies and in the Model Byelaws there is a provision being Byelaw No. 38 which provides that the Managing Committee shall exercise all the powers and discharge all the duties of the Society except those reserved for General Body subject to any regulations or restrictions duly laid down by the Society in General Meeting or in the Byelaws. In particular the Managing Committee shall have the powers to appoint, suspend, dismiss or punish employees subject to any conditions laid down by the Registrar from time to time against whom an order of dismissal is passed and such employee may file an appeal before the concerned Assistant Registrar within 30 days of the order of such dismissal and the order of the Assistant Registrar shall be final. This Byelaw does not confer any power on the Assistant Registrar, Cooperative Societies to decide the appeal as it is ultra vires and against the provisions of the Punjab Cooperative Societies Act and Rules framed thereunder. The Byelaws of a Society can be made only regarding the business, constitution and management of the Society and so far as a dispute between the dismissed employee and the Society is concerned, that is outside the scope of business, constitution or the management of the Society and as such by registering the said Byelaw the Assistant Registrar has done indirectly what he has been prohibited from doing directly. In short the Society has challenged the jurisdiction of the Assistant Registrar, Cooperative Societies in deciding the appeal of Shri Chamkaur Singh vide Annexure P3 and has prayed for the quashment of the same.

Notice of the writ petition was given to the respondents. Respondents 1 and 2 filed a separate written statement and it was pleaded that Assistant Registrar was competent to hear the appeal against the termination of the employees of the Cooperative Agricultural Service Society under ByeLaw No. XXXVIII(a) of the Model ByeLaws and the aforesaid Byelaw had been adopted by the petitioner Society. The appeal of Shri Chamkaur Singh had been decided on merits. Moreover, the President of the Society admitted before the Assistant Registrar and gave some concession which is mentioned in the orders itself.

Separate written statement was also filed by respondent No. 3 Chamkaur Singh who pleaded that point of jurisdiction was not raised before the Tribunal. The petitioner Society had tried to remain on fence and submitted to the jurisdiction and now aggrieved by the order Annexure P3, cannot avail the remedy of the writ. In the alternative it was pleaded that Assistant Registrar had the right and the jurisdiction to hear the appeal. It was also pleaded that the order Annexure P3 was based on consent and it cannot be challenged in the writ jurisdiction. The petitioner Society is aggrieved by the reinstatement of respondent No. 3. It was also pleaded that Model ByeLaws in principle would apply to a situation which may occur in the Society prior to its registration. It was also pleaded by respondent No. 3 that the petitioner has the remedy of filing the revision petition under Section 69 of the Punjab Cooperative Societies Act. After denying the material averments of the writ petition, the respondents have also prayed for the dismissal of the writ petition.

I have heard Sh. B.S. Khoji, Advocate, on behalf of the petitioner, Sh. P.S. Chhina, Sr. DAG (Punjab) on behalf of respondents No. 1 and 2 and Shri B.S. Shant, Advocate, on behalf of respondent No. 3 and with their assistance have gone through the record of this case.

Before I decide the points for determination arising from this writ petition, I would like to make a brief reference with regard to Annexure P3. It would show that Shri Chamkaur Singh filed an appeal against the Society and the appeal of the Society was argued on merits and the Assistant Registrar, came to the following conclusion after hearing the arguments :

"If both the resolutions are kept in view, it is observed that the Committee of the Society wanted to appoint their own and near person, and the services of Chamkaur Singh were terminated on the alleged plea of absence from duty and nonfurnishing of surety/security. Besides, the Managing Committee of the Society did not give any warning for his absence nor one month''s notice, as per Rules, for terminating his services, has been given. Therefore, the charge of absence from duty was just an excuse for terminating the services of Chamkaur Singh, but, in fact they wanted to appoint their own man which they did by removing Chamkaur Singh."

Thus it would show that this order was not passed on consent as alleged by respondent No. 3. Rather the findings were given by the Assistant Registrar on merits when it further held that Managing Committee of the Society while terminating the services of respondent No. 3 was at wrong and the resolution passed by the Society was set aside and Chamkaur Singh was reinstated by accepting his appeal.

The first point for determination in this case would be whether the Assistant Registrar, Cooperative Societies had the jurisdiction to hear the appeal of Shri Chamakar Singh. Learned counsel for the petitioner submitted that the order Annexure P3 has been passed without jurisdiction because under the Punjab Cooperative Societies Act, 1961 or under the Rules no power has been conferred to hear any appeal against the order of termination of an employee who in the given circumstances had only the right to refer the matter for adjudication before the Labour Court. There is force in the submission raised by the learned counsel for the petitioner as the Assistant Registrar, Cooperative Societies had derived the power on the basis of the Byelaw No. XXXVIII(a).

Now the question arises if any Byelaw of the Society has the force of law because the right of appeal is conferred by a statute and the Byelaw of a Society framed in pursuance of the Punjab Cooperative Societies Act cannot be held to have the force of law. It has been held in Cooperative Central Bank v. The Additional Industrial Tribunal, AIR 1970 SC 245, that the Byelaws of a Cooperative Society framed in pursuance of the provisions of the Act cannot be held to be a law or to have the force of law. It has no doubt been held that if a statute gives power to a Government or other Authority to make Rules, the Rules so framed have the force of statute and are deemed to be incorporated as part of the statute. That principle, however, does not apply to Byelaws of the nature that a Cooperative Society is empowered by the Act to make. The Byelaws rather contemplated by the Act can be merely those which govern internal management, business or the administration of a Society. They are the Articles of Association of a Company incorporated under the Companies Act. They may be binding between the persons affected by them but they do not have the force of a statute. In Joginder Singh v. Registrar Cooperative Societies Punjab and others, 1984 RRR 326 (P&H) : 1977 PLJ 310, it was held that Byelaw of a Cooperative Society cannot be held to be a law nor such Byelaw does have the force of law. The Hon''ble Division Bench held as follows at page No. 312. :

"We are unable to accept the submission that the Byelaws of a Cooperative Society framed in pursuance of the provisions of the Act can be held to be law or to have the force of law. It has no doubt been held that, if the statute gives power to a Government or other authority to make Rules, the Rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute. That principle, however, does not apply to Byelaws of the nature that a Cooperative Society is empowered by the Act to make. The Byelaws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a Society. They may be binding, between the persons affected by them, but they do not have the force of a statute... ... The Byelaws that can be framed by a Society under the Act are similar in nature to the Articles of Association of a Company incorporated under the Companies Act and such Articles of Association have never been held to have the force of law."

In this situation, if any order has been passed in violation of the above said principle, it would amount to the exercise of jurisdiction in illegal manner, as held in 1978 PLJ 276. Faced with this situation, the counsel appearing on behalf of respondent No. 3 invited my attention to Model Byelaw No. XXXVIII which was adopted by the Society, in which there is a specific provision that an appeal is maintainable against the order of dismissal and such appeal can be heard by Assistant Registrar, Cooperative Societies. It was submitted that once the Model Byelaw has been adopted by the Society, it is not open for it to say that Assistant Registrar, Cooperative Societies had no jurisdiction to hear the appeal. The first submission raised by the learned counsel for respondent No. 3 is of no avail as I have said in the earlier portion of this judgment that the right of appeal is a right conferred under a statute or under the statutory Rules framed under the Act. A study of the provisions of Cooperative Societies Act and its Rules would show that no remedy of appeal has been provided. The matter in dispute was with regard to the termination of the services of Shri Chamkaur Singh and it could be referred to the appropriate Government for making a reference to the Labour Court.

The second submission which was raised by learned counsel for respondent No. 3 in order to defeat the argument of Shri Khoji was that the Society had acquiesced and submitted to the jurisdiction of the Assistant Registrar Cooperative Societies and now it is not open for it to challenge the jurisdiction in the writ petition. This argument is also devoid of any merit. No amount of acquiescence or consent can validate any action of a public authority which had no inherent jurisdiction to deal with a matter. The Assistant Registrar was not competent under the Byelaws to decide an appeal and by participation on the part of the Society it cannot be held that the Assistant Registrar Cooperative Societies got the jurisdiction which was never conferred upon him either by the statute or under the Rules having the force of the statute.

In view of the above I have no hesitation in allowing the writ petition by setting aside the orders contained in Annexure P3. There shall be no order as to costs.