R.P. Dube vs LT. Governor and Others

H.L. Anand, J.

(1) By this petition under Article 226 of the Constitution of India, the petitioner, who claims to be the Secretary or the Delhi Consumers Cooperative Wholesale Store Ltd., a Society, registered under the Bombay Cooperative Society Act, 1925, as extended to the Union Territory of Delhi, hereinafter to be referred as "the Society", seeks to quash certain orders made by the Registrar, Cooperative Societies ,respondent No. 2, and to restrain the respondents, who include the Lt. Governor of Delhi, certain individuals who claim to be its office bearers, and the Commissioner, Food & Supplies, from interfering in the working and management of the Society. An order is also sought to restrain the Registrar, Cooperative Societies, Delhi, hereinafter to be referred as "the Registrar", from taking any action u/s 55 of the Delhi Cooperative Societies Act, 1972 hereinafter to be referred as "the Act".

(2) The Society was registered in December 1962 with the object of organising, assisting and aiding consumer cooperatives and do wholesale and retail business in consumer goods. In October 1969, the Managing Committee of the Society was superseded following certain charges against it and the management of the affairs of the Society was entrusted to a nominated committee. In March 1975, the Society elected Smt. Mukul Bannerjee, a member of Parliament and PrithviSingh Gaur, respondent No. 3, as its President and Vice President respectively. The petitioner and B. L. Chabra, respondent No. 4, J. N. Sahney, respondent No. 5, were elected as the members of the managing committee. The managing committee elected the petitioner as its Secretary. It further appears that, either on account of charges of misappropriation of the funds of the Society and mismanagement of its affairs, made against the petitioner, or as a result of a tussle for leadership of the Society, the managing Committee was split up into two hostile groups, one led by the petitioner and the other by respondents 3, 4 and 5. The petitioner was apparently able to enlist the support of the President of the Society. As a sequel to the dissensions attempts were made by one group to oust the other from the various offices and the Managing Committee. Rival claims were made as to the validity of proceedings of various meetings, election of office bearers and even eligibility to be the members of the Managing Committee. The faction opposed to the petitioner apparently sought the intervention of the Registrar and persuaded him to make four orders and directions. By an order of 19/09/1975 (Annexure 12) in purported exercise of power under Rule 77 of The Delhi Cooperative Societies Rules, 1973, hereinafter to be called "the Rules", the Registrar directed that the status quo be maintained pending consideration of. the dispute by the Managing Committee and convened its meetings. By an order of 8/10/1975 (Annexure 31), also in purported exercise of power under Rule 77 of the Rules, the Registrar directed that a meeting called by the petitioner shall not be held. By the third order of 15/10/1975 (Annexure 36), for which also Rule 77 of the Rules was invoked, the Registrar declared as illegal certain meetings, the co-option of members, the election of the petitioner and cancelled a meeting of the General Body called by the Managing Committee. Bythe fourth order of 8/10/1975 (Annexure 10), in purported exercise of power u/s 55 of the Act, the Registrar directed an inquiry into the charges leveled against the petitioner. By this petition, the petitioner assails these four orders.

(3) The petitioner contends that the various actions taken and orders issued by the Registrar from time to time culminating in his order of 15/10/1975, were mala fide, illegal, void and bad in law and were, Therefore, liable to be quashed. The petitioner contends that from the chronology of events, it is obvious that the Registrar has been in collusion with respondents 3 to 5 and has been acting in a manner, which was contrary to the interest of the Society. It is further contended that the various orders and directions issued by the Registrar from time to time in purported exercise of power vested by Rule 77 of the Rules were in excess of powers inasmuch as Rule 77 did not empower the Registrar to make any of the orders or the directions in question. It is further contended that if Rule 77 is construed as being wide enough to empower the Registrar to make any order or give any direction in relation to the business, affairs and administration of the Society Rule 77is bad, being ultra virus of. the'' Act, as also being beyond the rule-making power conferred by the Act. It is urged that under Rule 77 it was not open to the Registrar to set at naught the decisions taken bythe duly constituted Committee of the Society in the conduct of its business and such a power would be excluded by implication because of specific provision in the Act which empowers a Registrar to interfere in the management and the affairs of the Society, after following the procedure laid down in the Act and the Rules. It is, Therefore, urged that the various orders passed by the Registrar, particularly the orders dated 19/09/1975, Annexure 12/10/1975. Annexure31, order dated 8/10/1975, Annexure 10, and order dated 15/10/1975, Annexure 36, must be quashed as being mala fide, in excess of powers and, void. It is further urged that the order dated 19/09/1975, Annexure 12, was both mala fide and in excess of powers and that the Registrar had no power to call a meeting of the managing Committee and could have, at best, directed the Committee to convene the meeting or to take action, if the directions had not been carried out. It is further alleged that the action of the Registrar in calling meetings, even though being aware that neither the President nor the Secretary of the Society would be available, was mala fide. the petitioner, Therefore, prays that the impugned orders and actions be quashed and that the Registrar and the other respondents be restrained from interfering in the management and conduct of business of the Society and the Registrar be also restrained from taking any action u/s 55 of the Act in relation to the affairs of the Society.

(4) The petition is opposed by the respondents and affidavits in return to the Rule have been filed on behalf of respondents 1, 2 and 4to 6. By the affidavit of R. S. Rai, Registrar, by way of return to the Rule, on his behalf and on behalf of the Lt. Governor, respondent No. 1,and the Commissioner, Food & Civil Supplies, respondent No. 6 it is alleged that the petitioner had not been duly elected as Secretary of the Society. It is further alleged that on receipt of complaint of serious irregularities in the conduct of the management of the Society and its business, a statutory inquiry u/s 43 of the Bombay Cooperative Societies Act, as extended to Delhi, which was then in force in the Union Territory of Delhi, was ordered as a result of which liability of individual Directors, including the petitioner, was fixed leading to the supersession of the Managing Committee and the appointment of a nominated committee to look after the affairs of the Society. It is alleged that in the course of the inquiry observations were made by the Inquiry Officer against the conduct of the petitioner. It is claimed that serious allegations had been made against the petitioner and it was considered proper to institute an inquiry u/s 55 of the Act and Shri Y. P. Puri was appointed as Inquiry Officer to hold an inquiry into the working of the Society by an order dated 19/10/1975. The various requisitions for cancellation of the meetings, the various orders made and directions issued from time to time under Rule77 of the Rules, were said to be justified and the allegations of in mala fide and collusion made against respondent No. 2 were denied. It is further stated that the petitioner had already been removed from Secretaryship of the Society and an enquiry had already been ordered into the affairs of the Society, in which the petitioner would be given full opportunity in accordance with the law. In a further affidavit dated 8/03/1976, the Registrar has made out that serious allegations of misappropriation of funds, mismanagement of the affairs of the Society and irregularities were made against the petitioner. By a separate affidavit, respondent No. 5 alleged that the petitioner had not come to this Court with clean hands and had suppressed the material facts which rendered the petition liable to be dismissed. The dismissal of the petition is also sought to be justified on the ground of non-joinder of Smt. Mukul Banerjee and because the petition involves disputed questions of fact. It is further claimed that the petitioner had an effective alternative remedy u/s 60 of the Act and THE petition, was, Therefore, not maintainable. The various orders and directions made by the Registrar from time to time were defended as being valid and in accordance with the Act, Rules and the bye-laws. The allegations of collusion and mala fide were denied. By a separate affidavit, B. L. Chhabra, respondent No. 4, has, by and large, reiterated the various averments made by Sawhney in his affidavit.

(5) In his rejoinders to the three affidavits, the petitioner has. by and large, reiterated the allegations made in the petition. In a rejoinder to the additional affidavit of the Registrar, the allegations of misappropriation, mismanagement etc. were denied.

(6) The first question that requires consideration is whether the orders and directions issued by the Registrar cancelling meetings, declaring the proceedings of the meetings as illegal and convening fresh meetings. Annexures 12, 31 and 36, in exercise of powers claimed under Rule 77 of the Rules were in excess of powers.

(7) The impugned order of 19/09/1975, Annexure 12,made by the Registrar in purported exercise of power under Rule 77of the Rules runs thus :"Whereas Shri R. P. Dube, Secretary of the Delhi Wholesale Consumer Cooperative Store Ltd., vide his office order dated 3-9-1975 has informed S/Shri J. N. Sahney and B. L. Chabra that their membership stands automatically ceased with immediate effect under the provision of Section 60(f) of Delhi Cooperative Societies Rules, 1973:And whereas S/Shri P. S. Gaur, Vice President, B. L. Chabra and J. N. Sahney in their Memorandum dated 4-9-75 have informed that Shri R. P. Dube, has ceased to be a member of the Managing Committee and Secretary of Delhi Consumers Cooperative wholesale Store Ltd., having incurred disqualification being a defaulter of Saket Cooperative Thrift & Credit Society; And whereas after giving adequate opportunity to S/Shri P. S. Gaur, J. N. Sahney, B. L. Chabra and R. P. Dube, I am satisfied that action of both the parties in declaring each other as having ceased to be Member of the Managing Committee of the aforesaid store is not accordance with the provisions of Law and also not in the interest of the aforesaid store itself. Now, Therefore, I, R. S. Rai, Registrar Cooperative Societies, in exercise of the powers vested in me under Rule 77 of the Delhi Cooperative Societies Rules, 1973, hereby direct that slatllS-quo shall be maintained pending consideration of the dispute by the Managing Committee for which another meeting shall be called in accordance with the provision of the Law. I further direct that the meeting scheduled to take place on the 20/09/1975, at3.00 P.M. at Co-ops. shall stand cancelled. sd/-R. S. Rai, Registrar, Cooperative Societies"

(8) The impugned order made by the Registrar on 8/10/1975, Annexure 31, and also made in purported exercise of powers under Rule 77 of the Rules is in the following terms :

"WHEREAS/Shri P. S. Gaur, Vice-President, J. N. Sawhney, Member, Managing Committee, B. L. Chhabra, Member, Managing Committee and S. S. Saini, General Manager/Secretary in their letter dated 7-10-75 have represented to the undersigned that the Chairman and Ex-Secretary (Shri R. P. Dube) of the Delhi Consumers Cooperative wholesale Store Ltd. have summoned a meeting of the Managing Committee for 8-10-75 at 3.00 P.M. at Coops, Connaught Place, New Delhi and that the Managing Committee had, in its meeting held on 6-10-75 cancelled this proposed meeting; And whereas unauthorised persons are stated to have been invited in the aforesaid meeting; And whereas no members can be cooped on the Managing Committee by the Chairman except in accordance withlaw; And whereas the undersigned is satisfied that no members can be co opted on the Managing Committee except as provided by the Act/Rules/By laws and that if such a meeting is allowed to be held, it will create complications, besides being illegal; Now ,Therefore, 1. R. S. Rai, Registrar, Cooperative Societies in exercise of the powers vested in me u/s 77 of the Delhi Cooperative Societies Rules, 1973, hereby direct that the scheduled meeting shall not be held."

(9) The impugned order made by the Registrar on 15/10/1975(Annexure 36) invoking the said powers reads thus :

" WHEREAS in a meeting held on 6/10/1975, the Managing Committee of the Delhi Consumers'' Cooperative Whole-sale Store Ltd., and two nominated members removed Shri R. P. Dubey, from the Secretaryship of the aforesaid store and empowered Shri S. S. Sainy, General Manager, of the store to act as Secretary in addition to his duties till further decision; And whereas the President of the said store held meeting on 8/10/1975 which was attended to only by one member viz. Shri R. P. Dubey and some outsiders in violation of the statutory directive issued by Registrar Cooperative Societies, under Rule 77 of the Delhi Cooperative Societies Rules, 1973 on 7/10/1975 ;And whereas three elected Directors and General Manager/Secretary of the Store have represented that the meeting held on 8/10/1975 was illegal and was in contravention of the Act, Rules and Bye-laws of the store. Now Therefore, I, R. S. Rai, Registrar of the Cooperative Societies, Delhi Administration in exercise of the powers conferred upon me under Rule 77 of the Delhi Cooperative Societies Rules, 1973, hereby direct :-(i) that the meeting held on 8/10/1975 in violation of statutory directive and without quorum is hereby treated as illegal;(ii) that any co-option of the outsiders as members of the Managing Committee of the said store over and above the strength of 5 as fixed at the time of the election of the store in March 1975 by the President and alleged to have been ratified in the illegal meeting of the Managing Committee held on 8/10/1975 is hereby declared as illegal;(iii) that the decision of the President or any other illegal members to continue Shri R. P. Dubey as Secretary of the Store, or to remove Shri B. L. Chhabra from the membership of the said store or to revert the GeneralManager of the Store to Delhi Admn., or to make any arrangement for the operation of the accounts of the said store is hereby declared as illegal and the entire minutes of the meeting held on 8/10/1975shall be treated as cancelled; and(iv) that the meeting of the General Body called for 1 6/10/1975 by the illegal Managing Committee is hereby cancelled as majority of the Primary Consumer Co-operative Store affiliated to the Wholesale Store have in writing demanded the cancellation of the afore-said meeting. I ,further direct that action of the President and Shri R. P. Dubey in holding the illegal meeting of the Managing Committee on 8/10/1975 and that of the General Body meeting on 16/10/1975 is contrary to the statutory provisions and they shall beheld responsible for any loss to the store under clause 24of the bye-laws of the said store. sd/- R. S. Rai,15-10-75Registrar, Cooperative Societies"

(10) Even a cursory look at the three orders and the examination of the form in which they are drawn, as indeed their substance, hardly leaves any possible manner of doubt that these were made as a sequel to disputes raised between rival groups in the Society with regard to the validity or otherwise of the proceedings of meetings, convened bythe Society, from time to time, and as to the decisions arrived at by the Society ,either in the matter of election of office bearers or with regard to the validity of the proceedings of the earlier meetings of the Society or with respect to the declaration by the Society with regard to the validity of the membership of certain persons of the Committee and/or are based on decisions arrived at by the Registrar with regard to the validity or otherwise of the various actions which were challenged before him, after giving an opportunity to the parties concerned of being heard. That being the substance of the three orders and directions the question would be whether, having regard to the scheme of the Act and the Rules framed there under, such orders and directions were within Rule 77 of the Rules or even otherwise valid.

(11) For a proper appreciation of this question it is necessary to examine the scheme of the Act and the Rules with regard to the settlement of disputes affecting the constitution, management and the business of the Society and as to the functions and powers of the different authorities in that behalf.

(12) Section 9 of the Act provides for registration of a cooperative Society .Sub-section (2) of this Section, inter alia, empowers the Registrar to refuse registration, but obliges him to "communicate the order of refusal, together with the reasons Therefore, to such of the applicants as may be prescribed". Section 11, inter alia, empowers the Registrar to refuse to register the amendment of the bye-laws but obliges him to "communicate to the order of refusal together with the reasons Therefore, to the society in the manner prescribed". Section 16 confers on the Registrar the power to direct amalgamation, division and re-organisation of cooperative societies. Section 32 empowers the Registrar to remove the committee of any society, order fresh elections of the committee, appoint one or more administrators to manage its affairs and matters connected there with, Chapter Iv of the Act, according to its title, deals with "management of co-operative societies" and makes provision regarding annual general meeting, special general meeting elections, supersession of committees etc. Section 55 empowers the Registrar to hold an enquiry into the constitution, working and financial condition of a society or to cause such an enquiry to be held and confers power to require the officers of the society to call a general meeting, and if they refuse or fail to do it, to call it himself. Section 56 empowers the Registrar to inspect the books of the Society or cause the same to be inspected. Section 57 empowers the Registrar to apportion the costs of any enquiry u/s 55 or an inspection under; Section 56 of the Act. Section 59 empowers the Registrar to enquire into the conduct of any person who is found to have mismanaged its affairs and to require such a person after appropriate proceedings to restore the property or the money as he may consider ''just and equitable. Chapter Viii deals with settlement of dispute. Section 60, which occurs in this Chapter, provides that "any dispute touching the constitution, management or the business of a co-operative society", other than a dispute regarding disciplinary action against any employee of the Society, may be referred to the Registrar for decision. Section 61 provides that the Registrar may on a reference u/s 60 decide the dispute himself or transfer it to a nominee or refer it for disposal to an arbitrator. Sub-section (3) of this Section provides that" the Registrar or any other person to whom a dispute is referred for decision under this section may, pending the decision of the dispute, make such interlocutory orders as he may deem necessary in the interest of justice". Chapter X deals with the execution of awards, decrees, orders and decisions. Section 71, which occurs in this Chapter, provides that every decision, award or order duly passed by the Registrar or arbitrator or Tribunal under Sections 29, 30, 59, 61, 70, 76, 78 and 79 shall be executed in the manner laid down in the Section. Section 73 provides for attachment before the award. Chapter Xi provides for appeal and revision. Section 76 confers the right of appeal against the orders of the Registrar made under sub-section (2) of Section 9 refusing to register a society ; sub-section (4) of Section 11 refusing to register an amendment ; sub-section (1) of Section 16; any decision or award made u/s 61 and certain other orders. Section 78 provides for the constitution of a Tribunal to hear the appeals. Section 79 confers the power of review by the Tribunal while Section 80 confers the power of revision on the Lt. Governor. Section 81 confers on the various appellate and revisional authorities the power to "make such inter-locutory order, including an order of stay, pending the decision of the appeal or revision as such authority or the Tribunal or Lieutenant-Governor may deem fit". Section 97 empowers the Lt. Governor to make rules to carry out the purposes of the Act.

(13) Chapter Iv of the Rules deals with "management" of cooperative societies and makes provision with regard to maintenance of accounts, holding of meeting, elections, voting etc. Chapter V sets out the privileges of co-operative society and deals with borrowings bythe Society. Rule 77 in this chapter empowers the Registrar to "issue such directions as he considers necessary for the successful conduct of the business of a cooperative society or class of cooperative societies". Chapter Xii of the Rules contain miscellaneous provisions and includes Rule 154 which is described as a special rule and confers special powers on the Registrar in relation to societies in which either share has been subscribed by the Government or liability byway of guarantee for borrowing exceeding fifty per cent of the working capital of the society has been undertaken by the Government. The powers include the power to declare the proceedings of the general meeting as invalid, or certain conditions being satisfied. Sub-rule(3) of this Rule further provides that "in a society in which shares have been subscribed by the Government, the Registrar may, after such inquiry as he may deem fit and after giving the person concerned a reasonable opportunity of showing cause, remove any member of the committee who has been guilty of any act or omission resulting in financial loss to the society".

(14) On a reference to the scheme of the Act and the Rules and the provisions with regard to the settlement of disputes affecting the constitution , management and business of the society it appears obvious that the expressions "management" and "business" of the society are not inter-changeable and, consistently with the ordinary meanings of these expressions, the former connotes and encompasses within its scope the constituent bodies of the Society, the election to such bodies, meetings etc., the maintenance of books of accounts etc., while the latter connotes the actual business which the society carries on, whether of trade, commerce, industry, etc. It is also apparent that except in certain types of societies a certain amount of corporate democracy is ensured in the management of the societies. It is also apparent that, by and large, orders which the Registrar is empowered to make affecting the interest of the societies or the individual concerned are made appealable as well as subject to review and revision. Special provision is made for reference of disputes touching the constitution, management or business of the society between the members and the decisions that may be arrived at on these references, as indeed the award that may be made, are enforceable as also subject to appeal, review and revision. Having regard to these provisions, it is difficult to accept the contention that when Rule 77 empowers the Registrar to issue directions for "successful conduct of the business of a cooperative society or class of cooperative societies", it empowers the Registrar to decide disputes between the members of the societies with regard to the management of the society, such as the validity of the elections to various offices, validity of meetings of various constituent bodies or empowers him to cancel meetings or to direct fresh meeting being held or to otherwise supersede the decisions of the various constituent bodies of the societies or its individual officers or to adjudicate on the validity of the proceedings of the meetings, decisions with regard to the status of members or to declare that certain members have become disqualified or have ceased to be the members of the society. In view of the specific provision made under Sections 60 and 61 with regard to the adjudication of these matters, any general power to issue directions would exclude from its ambit matters for which there is a specific provision. Even otherwise, the expression "the successful conduct of the business of a cooperative society or class of cooperative societies" in Rule 77 is not wide enough to include any directions with regard to the management of the society otherwise the expression "successful conduct of business" would be given a meaning which will be wholly unjustified on the language of the Rule. To hold to the contrary would amount to making the Registrar a repository of wide powers to entertain and decide all types of disputes with regard to the constitution, management and business of the Society and interfere in the management of the society without any such decision, orders or directions being made subject to any appeal, revision or review because the directions that may be made under Rule 77 are not made justiciable either by the Act or by the Rules. To concede such powers to the Registrar would amount to elevating him to the position of a despot with absolute and unregulated power to make drastic orders that may affect the vital interests of the societies and their members and would not be justified either with reference to the scheme of the Act or the language of the Rules. It must, Therefore, be held that Rule 77 merely empower the Registrar to issue directions for the successful conduct of the business of the society and such directions would not include matters which fall within the provisions of Section 60 and 61 of the Act.

(15) Shri B. N. Lokur, who appeared for the Administration, did not seriously challenge the contention that the impugned orders were beyond the scope of Rule 77 of the Rules but nevertheless sought to defend the validity of impugned orders with reference to the power of the Registrar under Rule 154. Rule 154 runs thus :"154. Special rule.

(1)Notwithstanding anything contained in these rules the procedure laid down in this rule shall apply to a society in which either shares have been subscribed by the Government or liability by way of guarantee for borrowing exceeding fifty per cent of the working capital of the society has been undertaken by the Government: Provide that it shall not be incumbent upon such a society to follow the procedure laid down in clauses (i) and (ii), if its working capital does not exceed Rs. 1,00,000 or it does not have another co-operativesociety as its member :

(2)(i) Notice of all general body meetings shall be given to the Registrar. The Registrar may, of his own motion or on a reference made to him, declare the proceedings of the general meetings as invalid, if he is satisfied that the meeting was held without proper notice or without all the members not having received the notice turn the meeting or if the meeting was not conducted at the appropriate place andtime. (ii) No matter shall, except with the permission or direction or directions of the Registrar be considered either in a meeting of a general body or committee or in a meeting of any smaller body set up if the agenda of which is not circulated to all members atleast fifteen clear days or seven days in advance, respectively.(iii) Should a difference of opinion in respect of any matter arise between a nominated member of the committee and other members thereof the opinion of the nominated member shall be recorded in the minutes of the proceedings of the meeting in The words of the nominated member and the proceedings shall also be got signed from the nominated member. The Chairman, shall, as soon as possible, make a reference to the Lt. Governor and if no reference is made within seven days of the date of the meeting, the Registrar may on receipt of a report from a nominated member make a reference to the Lt.Governor for getting his decision which shall be final on the issue on which difference of opinion was so recorded.

(3)In a society in which shares have been subscribed by the Government , the Registrar may, after such enquiry as he may deem fit and after giving the person concerned a reasonable opportunity of showing cause, remove any member of the committee who has been guilty of any actor omission resulting in financial loss to the society-"

It was not disputed on behalf of the petitioner that, having regard to the capital structure of the Society, Rule 154 of the Rules, incorporating the special procedure, would be attracted and the orders and directions, which the Registrar is empowered to make under the said Rule, could be legitimately made, if the other conditions for the exercise of such power were satisfied and that, if the impugned orders and directions fell within the terms of the aforesaid Rule , subject to the question of mala fides, no exception could betaken to these. Shri B. N. Kirpal, learned counsel for the petitioner, however ,contends that the impugned orders cannot be justified with reference to the aforesaid Rule either because they are beyond the scope of he said Rule. This contention of the petitioners appears to meto be well-founded. By virtue of sub-rule (2) of Rule 154 the Registrar is empowered to declare the proceedings of the general meeting as invalid on certain conditions being satisfied. By virtue of sub-rule (3)of Rule 154 the Registrar is also empowered to remove any member of the committee who has been found guilty of an act or omission resulting in financial loss to the Society after such inquiry as the Registrar may deem fit and after giving the person concerned a reasonable opportunity of showing cause. That is the totality of the special powers conferred by the special Rule. Unfortunately, for the respondents, none of the impugned orders could be said to fall either in the first category or the second in that none of the three impugned orders involve the declaration of the proceedings of any general meeting as invalid or removal of any member of the committee. The impugned order of 19/09/1975, (Annexure 12) directs that status quos hall be maintained pending consideration of the dispute by the Managing Committee and contains a direction cancelling its meeting. The impugned order of 8/10/1975 (Annexure 31) similarly restrains the holding of a meeting, While the impugned order of 15/10/1975 (Annexure 36) declares the meeting of the Managing Committee, co-option, to the committee, the election of the petitioner as secretary, the requisition for a general body meeting and certain decisions of the Managing Committee to be illegal. None of these orders could, Therefore, be said to be within the terms of the Rule 154 and could not, Therefore, be justified with reference to it. The impugned orders being thus without the authority of law are liable to be quashed.

(16) In the way I have looked at the validity of the three impugned orders referred to above, it would have been unnecessary to consider the further contention of the petitioner that the said orders are invalid because of mala fides and bias attributed to the Registrar but these allegations would have to be considered in view of the fact that the fourth impugned order made on 8/10/1975 (Annexure 10)under Section 55 of the Act would still survive the decision of the first question.

(17) Whether the impugned orders including the aforesaid order u/s 55 are invalid on account of mala fides or bias on the part of the Registrar is next question that must be considered.

(18) According to the petitioner, the allegations of mala fide on the part of the Registrar have their genesis in the bias and prejudice that the Registrar throughout carried against the petitioner because of the involvement of the petitioner in a criminal case on false charges of misappropriation and the wild allegations of misappropriation of funds. mismanagement of the affairs of the society and various other acts of commission and omission in the conduct of the business of the Society made by certain hostile elements in the Society against the petitioner. IT is urged that the conduct of the Registrar in relation to the management of the Society and the disputes raised before him by the dissident elements, the manner in which he rushed through the matter, annulled the proceedings of the meeting: cancelled the meetings convened bythe petitioner, himself convened meetings on dates which did not suit the petitioner or the President of the Society, made the four impugned orders and even declined the innocuous requests of the petitioner and the President to change the dates of meetings, even while aware that the said dates did not suit the petitioner and the President of the Society .irresistibly point to a deep rooted prejudice and bias against the petitioner on the part of the Registrar and a complete identification and collusion with the elements in the Society hostile to the petitioner. It is urged that because of this prejudice and bias the Registrar had rendered himself unfit to act in a just and fair manner, which, as a statutory authority, he was bound to do and that the impugned orders were, Therefore, vitiated on that account. It was further urged that the very fact that at least three impugned orders could not have been made under Rule 77 of the Rules and the matters raised in it could have been dealt with only under Sections 60 or 61 of the Act by itself indicates that these orders were made in an unholy haste with a view to humiliate the petitioner without the due process of law, and in such a manner as to circumvent the statutory requirements and deny the petitioner the right to challenge them in appeal, review or revision.

(19) On behalf of the authorities the allegations of mala fide, prejudice or bias are denied and the impugned orders dealing with the conduct of the affairs of the Society and the treatment of the various matters in relation to it, brought before the Registrar, are sought to be justified on the ground that they were dealt with by the Registrar in the ordinary routine in discharge of his official functions on the basis of the material placed before him uninfluenced by any bias or prejudice, even though conscious of the fact that grave allegations of misappropriation of funds, mismanagement of the affairs of the Society and other acts of omission or commission had been made against the petitioner from time to time.

(20) After hearing learned counsel for the parties it appears to me that ,while the Registrar was not at all justified either in involving Rule77 of the Rules in making the three impugned orders, which were made in purported exercise of the said Rule, and in declining brief postponements of the various meetings convened by him, even when the request for such postponement was made not only by the petitioner on the ground that he would not be available, inter aha, because of a commitment in a court of law, but also by the President of the Society ,a well known public figure and Member of Parliament, who admittedly, though siding with the petitioner, could not be said to be guilty of an attempt to delay the meetings and had requested postponement because she was going either out of India or out of station, and the manner in which the Registrar dealt with these matters may, Therefore, appear to be both unreasonable and unfortunate. It is not possible to hold that the impugned orders were tainted with any mala fide, prejudice or bias so as to vitiate them for that reason. It is true that it is a paramount requirement that State must act in a just and proper manner and that, Therefore, every State functionary, whether a statutory authority or otherwise, must act in a just and fair manner in the discharge of his public duties. It is implicit that in the discharge of such duties the ordering servant would have an open mind and would act on an objective assessment of the material and circumstances that may be available without being influenced in any manner by what may be described as any personal bias or prejudice for or against the person and without any preconceived notions with regard to men and matters which may impair his capacity at impartial considieration. Even so no exception could be taken to an executive act ,whether of a statutory authority or otherwise, merely because in the process of consideration of the matter by the authority the authority was influenced by certain adverse circumstances appearing on the record against the person sought to be affected by the order, or if the authority acts on the basis of a reasonable suspicion as to the conduct of the person for which there is some warrant. This is so because there is a clear distinction between bias or prejudice, which is based on some adverse material or circumstances or a reasonable suspicion as to the existence of certain facts and bias or prejudice which is purely subjective having no foundation in any objective conditions. It is not every bias or prejudice that vitiates an action. It is only such bias or prejudice which, without having any objective basis, is so deep sealed or deep rooted in the mind of the subject that it impairs his capacity to act in just and fair manner and blurrs his ordinary vision as to the true state of affairs. The representation by parties before courts, tribunals, as indeed before executive authorities, are intended, in a sense, to cause prejudice in the mind of the court, tribunal or the authority in favor of a certain point of view or against the contrary point of view and are, to that extent, Therefore, intended to cause a justifiable prejudice in favor or against. The attempt to cause such a state of the mind is, Therefore, implicit in any process of consideration and could not vitiate the process unless such bias or prejudice blinds the faculty of the subject to act in an impartial manner and prevents a just, fair and detached examination of the matter. The Registrar admittedly had before him the fact and the circumstance that the conduct of the petitioner had been adversely commented upon in an earlier statutory inquiry ,he has since been arrayed in a court on a criminal charge of misappropriation etc., as indeed, grave allegations of misappropriation of funds of the Society, mismanagement of its affairs and of the commission of various acts, Constituting irregularities, had been made against him. If the Registrar, Therefore, acted in the manner he did and to which an exception is taken, it could not be said to be thg result of any personal bias or prejudice independent of the material and circumstances which could reasonably have influenced his mind that by seeking postponement of the meetings the petitioner was probably merely trying to put off the evil day. He may have also misconstrusdthe support that the petitioner had of a prominent public figure when he brushed aside even her request for adjournment. No bias or prejudice can be necessarily inferred merely from the fact that some of the impugned orders were clearly beyond the authority of law. That may make the orders illegal of improper .and may, on some rekoning lose the Registrar to the criticism of being rough, and perhaps rash. but would not necessarily lead to the conclusion that they were tainted by any bias or prejudice,

(21) In considering the validity of the order by which an inquiry u/s 55 has been ordered it cannot be ignored that the inquiry has been ordered on the basis of grave allegations of misappropriation, mismanagement and irregularities and that in the course of the inquiry the petitioner would have adequate opportunity of being heard and, what is more, be entitled to assail the findings of the inquiry. if adverse to him, in appeal, revision or review. Where serious allegations of misappropriation of funds of a Society, mismanagement of its affairs have been made against an officer or past officer of the Society, it is but proper that the Registrar should take seiz in of the complaints and, unless he is satisfied that they are frivolous, direct a proper and fair inquiry so that ends of justice are met, either by the person responsible being punished or, if he is innocent, his honour is suitably vindicated. No exception could, Therefore, be taken to the order by which an inquiry has been directed u/s 55 of the Act.

(22) As a result of the aforesaid discussion the impugned orders of 19/09/1975 (Annexure 12/10/1975 (Annexure31) and 15/10/1975 (Annexure 36) must be quashed, while THE petition must be dismissed in so far as it seeks to assail the fourth order of 8/10/1975 (Annexure 10).

(23) In the result, the petition succeeds in part and the impugned orders of 19/09/1975 (Annexure 12/10/1975 (Annexure 31) and 15/10/1975 (Annexure 36), are quashed. THE petition in so far as it assails the fourth order of 8/10/1975(Annexure 10) is dismissed.

(24) The appropriate authorities would, however, be free to initiate any valid proceedings or take any valid action in relation to the matters which were dealt with in purported exercise of power under Rule 77 either on the existing material or any other material that may be brought on the record with a view to ensure that the public interest and the interests of the Society are fully protected and the affairs of the Society are conducted in accordance with law.

(25) The petitioner would also have his costs. Counsel fee is assessed at Rs. 500.00.