Tara Prasad Patnaik and Others vs State of Orissa and Others

Pradipta Ray, J.—The petitioner No. 1 is the elected Chairman and the petitioner Nos. 2 to 11 are the members of the elected Committee of Management of the Capital Urban House Building Cooperative Society Limited (In short the ''Society''), a. primary society within the meaning of the Orissa Cooperative Societies Act, 1962 (hereinafter referred to as ''the Act''). The said Committee of Management (in short the ''Committee'') assumed office on September 2, 1997 for a period of 4 years. By an order dated July 30, 1999 the Deputy Registrar of Cooperative Society, Puri Division in exercise of his power u/s 32 (7) of the Act placed the Committee of the Society under suspension. The petitioners have filed this writ application challenging the said order of suspension.

The petitioners have challenged the legality of the impugned order of suspension contending inter alia, that the Deputy Registrar had no authority or jurisdiction to exercise power u/s 32 (7) of the Act; that the impugned order was passed mala fide, without independent application of mind for extraneous reasons in order to disable the petitioner No. 1 to continue as the Chair-person of the Orissa Cooperative Housing Corporation Ltd., an Apex Society of which the petitioner No. 1 is an Ex-Offico member by virtue of being Chairman of the said Primary Society.

Initially on August 3, 1999 an interim order was granted staying operation of the impugned order of suspension. Subsequently, by order dated November 18, 1999 the said interim order of stay was vacated on the ground that the concerned Officer appointed by the Deputy Registrar had assumed the charge of the management of the Society on July 31. 1999. A Division Bench passed another interim order on August 31, 1999 that - "no final order would be passed by the Registrar pursuant to notice issued u/s 32 (1) of the Act."

The learned Addl. Govt. Advocate has produced the original records relating to impugned order of suspension and the proceeding u/s 32 (1) of the Act. The opp. parties have also filed counter to the writ petition disclosing the reasons for placing the committee under suspension and dealing with the allegations made in the writ application.

Records and materials placed before this Court reveal that on July 29, 1999 a Sub-Assistant Registrar of Cooperative Societies submitted an inspection report pointing out certain lapses on the part of the Committee of the Society. On the same day the Assistant Registrar of Cooperative Societies, Bhubaneswar Circle had some telephonic discussions with the Deputy Registrar, Cooperative Societies, Puri Division (O. P. No. 3) and on the same day the Assistant Registrar by his Memo No. 2604 dated July 29. 1999 sent a report to the Deputy Registrar mentioning the lapses of the Committee as contained in the report of the Sub- Assistant Registrar and suggesting necessary action to stream- line the management of the Society. The said report was received by the Deputy Registrar on July 30, 1999. On the same day a note was put up before the Deputy Registrar and on the basis of the said note the Deputy Registrar (O. P. No. 3) directed to place the committee under suspension pending drawing up of charges u/s 32 (1) of the Act.

As already stated. Mr. Acharya, learned Advocate for the petitioner has raised a jurisdictional question regarding the authority and competence of the Deputy Registrar of Cooperative societies, Puri Division to place the committee of management of the Society under suspension at the relevant point of time. To meet the said contention of the petitioner the opp. party No. 8 initially annexed an order dated February 5, 1992 issued by the State Government in exercise of power under Sub-section (2) of Section 3 of the Act. By the said order the State Government conferred on the officers specified in Column 2 of the Schedule to the said order the powers of the Registrar exercisable under different Sections of the Act. It appears that by the said order the Deputy Registrar of Cooperative Societies in charge of Puri Division was authorised to exercise the powers of the Registrar under different provisions including Section 32 of the Act. The opp. party No. 3 initially disclosed another order dated June 5, 1992 issued by the Registrar prescribing the local limits within which a particular officer would exercise his power as authorised by the notification dated February 5, 1992. By the said order dated June 5, 1992 the Deputy Registrar, Puri Division was given authority to exercise the powers of Registrar as conferred on him within the territorial jurisdiction of the Puri Revenue district. The present Cooperative Society is situated within the Khurda Revenue District. To ascertain the exact position this case was placed for further hearing on the question whether the Deputy Registrar, Puri Division had any jurisdiction within the Revenue District of Khurda. At the time of further hearing the State Govt. disclosed a notification dated April 6, 1993 issued by the State Government re-allocating the territorial jurisdiction of different officers. By the said order the Deputy Registrar, Puri Division has been conferred authority and jurisdiction to exercise the powers of Registrar within territorial limits of the Revenue Districts of Puri, Khurda and Nayagarh. Thus it appears that the Deputy Registrar, Puri had the territorial jurisdiction over the Khurda Revenue District on the relevant date.

After disclosure of the said notification dated April 6, 1993 Mr. Acharya, learned Advocate in his written submission raised another interesting question by pointing out that on the date of notification (February 5, 1992) conferring power exercisable by the Registrar under different Sections of the Act, Sub-section (7) of Section 32 of the Act was already deleted and it did not form part of Section 32 of the Act. It has been pointed out. that Section 32 (7) of the Act was deleted from the Orissa Cooperative Societies Act on December 31, 1991 and the same was reinserted in the said Act by Orissa Ordinance No. 1 of 1996. Mr Acharya has submitted that provisions of Sub-section (7) of Section 32 of the Act not being in the Act on January 5, 1992, the notification dated February 5, 1992 could not and did not confer any power under the said Sub-section (7) of Section 32 on the Deputy Registrar of Co- operative Societies. In view of the said new question raised, this case was again placed for further hearing.

In support of the said submission Mr. Acharya has placed a Government order dated September 21, 1999 whereby the State Government has issued a fresh order conferring the powers exercisable by the Registrar under different Sections of the Act in supersession of the earlier orders including the order dated February 5, 1992. By referring to the said new Govt. order Mr. Acharya has submitted that the said new order has been issued upon realisation that by the earlier orders of conferment of power, the concerned delegates did not a acquire those powers of the Registrar which were introduced in the Act by subsequent amendments. In order words, the earlier notifications could not confer those powers which were not in the statute on the dates of such notifications/orders.

There is no dispute about the fact that on February 5, 1992 Sub-section (7) of Section 32 of the Act was not there in the Statute and that no fresh order/notification conferring power u/s 32 (7) of the Act was issued after re-insertion of Sub-section (7) of Section 32 and before the date of the impugned suspension of the committee of management of the Society. Mr. Acharya, learned Advocate has relied upon a decision of the Supreme Court in The Godavari Sugar Mills Ltd. v. S. B. Kamble and Ors. reported in AIR 1975 SCI 193 to support his submission that an order/notification could not confer any power which was not in the statute on the date of such order or notification. In Godavari Sugar Mills (supra) the Supreme Court was considering whether inclusion of any Act or Regulation in the 9th Schedule of the Constitution would also give Constitutional protection to the new provisions subsequently inserted in the Act by amendments on the ground that it was ancillary or incidental to the provisions contained in the statute on the date of inclusion. Relying upon its several previous decisions the Supreme Court held :

"The protection of Art. 31B can also not be extended to a new provision inserted as a result of amendment on the ground that it is ancillary or incidental to the provisions to which protection has already been afforded by including them in the Ninth Schedule. The entitlement to protection being confined only to the Acts. Regulations and provisions mentioned in the Ninth Schedule, it cannot be extended to provisions which were not included in that Schedule. This principle would hold good irrespective of the fact whether the provision to which entitlement to protection is sought to be extended deals with new substantive matters or whether it deals with matters which are incidental or ancillary to those already protected-"

Mr. Nanda, learned Addl. Govt. Advocate has referred to a decision of Bombay High Court in The Telangkhedi Co-operative Dairy Society Ltd. and Others Vs. The Deputy Registrar, Co-operative Societies, Nagpur and Others, and a decision of Calcutta High Court in Hind Associated Corporation Private Ltd. Vs. State of West Bengal and Others, In the case of Telangkhedi Cooperative Dairy Society a similar question was considered whether a notification conferring power under the main Section would include the powers conferred by new sub-sections of the said main Section which were introduced by amendment subsequent to the date of notification conferring power. The Bombay High Court upheld the contention of the State that the power conferred by the Government notification would extend to the power exercisable under sub-sections inserted subsequently by amendment of the Statute.

No precise reason has been given. But it appears that the Bombay High Court probably adopted the reasoning that the powers underthe Sub-sections inserted subsequently were ancillary and/or consequential to the main Section. In its decision the Calcutta High Court took the view that where there is general delegation of power under a particular section it is not necessary that every time the amendment has been made and there must be fresh delegation.

Both the said decisions of Bombay High Court and Calcutta High Court were rendered long before the decision of the Supreme Court in Godavari Sugar Mills'' case. The logic and/ or reason adopted in the aforesaid two decisions run contrary to the decisions of the Supreme Court in Godavari Sugar Mills'' case. If inclusion of the main Act in the Ninth Schedule cannot cover the amendments introduced subsequently even on the ground that such amendments are ancillary or consequential the delegation of power exercisable under a particular section cannot extend to a power which was subsequently included. After the decision of the Supreme Court in Godavari Sugar Mills'' case, the aforesaid decisions of Bombay High Court and Calcutta High Court have lost their legal force.

Accordingly, it is held that the notification dated February 5, 1992 could not and did not confer the power of suspension exercisable by the Registrar under Sub-section (7) of Section 32 of. the Act on the Deputy Registrar of Cooperative Societies. On the date when the Deputy Registrar, Puri suspended the committee of Management he had no competence and authority to exercise powers u/s 32 (7) of the Act.

However, Sub-section (32 of Section 32 of the Act was re- inserted in the Act in 1996. When a fresh notification conferring power of the Registrar under different sections of the Act including Section 32 of the Act was issued on September 21, 1999, the Deputy Registrar got the power of the Registrar to suspend a Committee of Management under Sub-section (7) of Section 32 of the Act.

In Padmalochan Panda and Others Vs. State of Orissa and Others, a Division Bench of this Court has explained the duties and obligations of the Registrar before exercising the extra-ordinary power of suspension of an elected Committee. In paragraph 10 of the judgment it has been observed:

"In the matter of formation of opinion for the purpose of Sec 32 (7) of the Act, the Registrar cannot act mechanically without any verification of the allegations unless the allegations are so grave that immediate action is called for. In the present case the Registrar did not at all apply his independent mind and mechanically acted upon the allegations received without any verification whatsoever."

As pointed out hereinabove, the Deputy Registrar proceeded in such hot-haste that he had no occasion to consider and verify the report of the Assistant Registrar for the purpose of formation of the required independent opinion. The lapses pointed out by the Assistant Registrar were not so grave requiring immediate suspension without any kind of verification. Facts of this case are almost similar to those in the case of Padmalochan. Panda (supra) and the impugned order of suspension attracts similar vice.

Thus the impugned order of suspension of the Committee of management is found to be without jurisdiction and beyond competence of the Deputy Registrar of the Cooperative Societies, Puri Division. The said order has also has been passed mechanically without application of independent mind and without any attempt to verify facts even prima facie. The impugned order of suspension is accordingly liable to be set aside. However, in view of the fact that from July 31, 1999 an officer of the Cooperative Department has been running the management of the Society and that the final order in the proceeding u/s 32 (1) of the Act is going to be delivered as soon as prohibition imposed by this Court is lifted, this Court does not want to disturb the present arrangement regarding the management of the Society till final order is passed in the proceeding u/s 32 (1) of the Act.

Hearing of the main supersession proceeding u/s 32 (1) of the Act has been concluded on February 26. 2000. In fact the Deputy Registrar has already written major part of the judgment in the order-sheet. He has not recorded the final conclusion and operative part in view of the interim order passed by this Court. It has been expressly recorded in the order-sheet on February 26, 2000 that the Deputy Registrar was unable to deliver final order because of the interim order of this Court.

Mr. Acharya, learned Advocate for the petitioner has raised another controversy alleging that Deputy Registrar in fact recorded his final conclusion in the order-sheet, but subsequently changed the last page deleting the concluding portion. By an affidavit the petitioners have disclosed a xerox copy of the order- sheet in the said proceeding u/s 32 (1) of the Act to show that final conclusion has also been recorded.

Original records of the proceeding u/s 32 (1) of the Act have been produced and handed over to this Court Upon a scrutiny of the records it appears that the xerox copy disclosed by the petitioner is almost an exact copy of the last order in the order-sheet excepting that in the original order- sheet concluding paragraph is not recorded and last 4 lines in the 4th page of the order have been scored out. The last page of the order-sheet clearly looks different from other pages and it definitely gives rise to a reasonable suspicion that the last page was changed to delete the concluding portion and last 4 lines were scored out subsequently. However, the said dispute is not very material inasmuch as the Deputy Registrar has practically recorded his findings and concluding portion is to be recorded on the basis of the findings already recorded therein.

For the foregoing reasons the impugned order of suspension is set aside and quashed. However, under the present order of this Court, the officer, who is at present in charge of management of the Society, will continue to run the management of the Society till a final order is passed in the proceeding u/s 32 (1) of the Act. Opp. Party No. 3 is directed to pass his final order in the proceeding u/s 32 (1) of the Act by May 31, 2001.

The writ petition is disposed of.