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Judgment
S.K. Gangele, J.—Both these writ petitions have been filed against the disqualification of two Directors namely Mr. Sitaram Shivhare and Mr. Randhir Singh Thakur of Marketing Cooperative Society, Vidisha, M.P. Mr. Sitaram Shivhare was elected as representative of Marketing Cooperative Society, Vidisha from Primary Krishi Utpadan Krya Vikrya Sahakari Sanstha Maryadit, Vidisha and thereafter he was elected as Director of the Marketing Society Vidisha. Similarly, Mr. Randhir Singh Thakur was elected as representative of Marketing Society Vidisha from Primary Agriculture Credit Society Limited, Dabar, Vidisha. Thereafter, he was elected as Director of the Marketing Society Vidisha. The Primary Credit Cooperative Society Dabar was dissolved u/s 53(A) of the Madhya Pradesh Cooperative Societies Act, 1960 (hereinafter referred to as ''the Act of 1960'') vide order dated 29/11/2006. Similarly, Primary Krishi Utpadan Krya Vikrya Sahakari Sanstha Maryadit, Vidisha was also dissolved the Board of Directors vide order dated 17/11/2006. Consequently, the Deputy Registrar wrote a letter to the Marketing Society Vidisha that these two persons became ineligible as Directors of the Marketing Society Vidisha and they may be removed from the post of Board of Directors. In spite of the letter, the Society did not take any action. Then, the Deputy Director Marketing Cooperative Society Vidisha initiated action for disqualification of the aforesaid two persons u/s 48(AA) of the Act of 1960. A show cause notice was issued. Both the persons replied to the show cause notices, thereafter, the Joint Director vide order dated 29/7/2010 disqualified Mr. Sitaram Shivhare as Director from the Marketing Cooperative Society, Vidisha. Similarly, the Joint Director also disqualified Mr. Randhir Singh Thakur as Director of the Marketing Cooperative Society, Vidisha and the order was passed on the same day i.e. on 29/07/2010. Against the aforesaid orders, both these persons as well as Marketing Cooperative Society, Vidisha filed appeals before the M.P. State Cooperative Society Tribunal. Those appeals were registered as Appeal Nos. 124/2010 & 125/2010. The M.P. State Cooperative Tribunal vide order dated 21/3/2011 dismissed both the appeals, hence these two writ petitions.
The main contention of the learned counsel for the petitioner is that the order of disqualification is a malafide and arbitrary. There was a stay in regard to supersession of primary societies and subsequently both the persons were again elected as representatives of the Marketing Society, hence, they could not be disqualified from the post of Board of Directors. It is further contended that in accordance with Section 48(AA) of the Act of 1960, the petitioner has a right to disqualify the Board of Directors and the Registrar has no power and authority to initiate the proceedings, hence, the impugned orders are against the law.
Contrary to this, learned Deputy Advocate General has contended that the Society failed to perform its statutory duty, hence, the Registrar i.e. Joint Registrar, who was authorized to this effect passed the orders, which are in accordance with law. Learned Deputy Advocate General has contended that this Court has limited jurisdiction under Article 227 of the Constitution. In support of the aforesaid contentions, he relied on the judgments of the Hon''ble Supreme Court passed in the cases of Mohd. Yunus Vs. Mohd. Mustaqim and Others, and B.K. Muniraju Vs. State of Karnataka and Others, .
Admitted facts of the case are that both the persons namely Mr. Sitaram Shivhare and Mr. Randhir Singh Thakur were elected as representatives from their Primary Societies to the Marketing Cooperative Society, Vidisha and thereafter, they were elected as Board of Directors of the Marketing Cooperative Society, Vidisha. Board of Directors of both the Primary Societies were dissolved by the Official of the Cooperative Department i.e. by the Deputy Registrar. The petitioner in both the petitions pleaded that the intention of dissolving the Primary Societies is to disqualify these two Board of Directors so the quorum of the Marketing Cooperative Society could be reduced to less than maximum, so the committee could be dissolved. Earlier also, the Joint Director superseded the Board of Directors of the Society vide order dated 27/12/2003. It was quashed by this Court in W.P.No. 4494/2006. Thereafter, again the Marketing Society was superseded on the ground of lack of quorum. Primary Credit Cooperative Societies were issued notices for dissolving the Board of Directors. A writ petition was filed before the High Court against the aforesaid action, which was registered as W.P.No. 6402/2006. The Court granted stay vide order dated 13/12/2006. Thereafter, the Election Officer was appointed to conduct the election of the Marketing Society in pursuance to the order passed by this Court in W.P.No. 4494/2006, then the Joint Registrar removed the Chairman of the Society. The Chairman filed a Revision before the Madhya Pradesh State Cooperative Tribunal being Revision No. 109/2007 and it was allowed. In the meantime, W.P.No. 6402/2006 was dismissed with a liberty to file fresh proceedings and thereafter the Deputy Registrar vide an order dated 01/9/2007 superseded the Primary societies from which the two persons were elected as representatives of the Marketing Society. The order was challenged before the Joint Registrar and the Joint Registrar dismissed the appeal. Thereafter, a Second Appeal was filed before the Tribunal, it was also dismissed. Thereafter, a writ petition was filed, which was registered as W.P.No. 3797/2009. The Division Bench of this Court vide an order dated 02/09/2009 stayed the supersession of the Board of Directors. Thereafter, the Division Bench of this Court vide an order dated 10/11/2009 allowed the aforesaid writ petition and quashed the orders Annexures P/1, P/2 and P/3.
The Deputy Registrar directed the petitioner to take action in regard to disqualification of the Board of Directors. The petitioner society informed to the Deputy Registrar that no Board of Director of the society had incurred any disqualification and the Joint Registrar and Deputy Registrar are bent upon to dissolve the Board of Directors of the Marketing Cooperative Society. It is further mentioned by the Society in the reply that against the order of supersession of Primary Agriculture Credit Cooperative Society Maryadit, Dabar and Primary Krishi Utpadan Krya Vikrya Sahkari Sanstha Maryadit, Vidisha, a writ petition was filed before the High Court, which was registered as W.P.No. 6402/2006 and the High Court granted stay vide order dated 13/12/2006 and thereafter, the election of Primary Krishi Utpadan Krya Vikrya Sahkari Sanstha Maryadit, Vidisha was held on 20/12/2006. In the aforesaid election, Mr. Sitaram Shivhare was elected as representative of the Marketing Society Vidisha and the election of Primary Agriculture Credit Cooperative Society Maryadit, Dabar was held on 28/2/2007. In the aforesaid election, Mr. Randhir Singh Thakur was elected as representative of Marketing Cooperative Society Vidisha and in that capacity both these two persons were elected as Board of Directors of the Marketing Cooperative Society, Vidisha. In such circumstances, both these persons had not incurred any disqualification.
6 In spite of this reply, the Joint Registrar initiated proceedings u/s 48(AA) of the Act of 1960 on the ground that the society failed to take action in regard to disqualification of the aforesaid two persons and passed an order of disqualification. Section 48(AA) of the Act of 1960 prescribes disqualification for membership of Board of Directors and for representation. The relevant Section is as under:
48-AA. Disqualification for membership of Board of Directors and for representation-No person shall be eligible for election as a member of the Board of Directors of a society, and shall cease to hold his office as such, if he suffers from such disqualification as may be prescribed, and no society shall elect any member as its representative to the Board of Directors of any other society or to represent the society in other society, if he suffers from such disqualification as may be prescribed:
Provided that, if a member suffers from any of the disqualifications prescribed under this section,-
(i) it shall be lawful for the Board of Directors of the society to disqualify such member where he is elected as a Director, being a member of that society, after giving him a reasonable opportunity of being heard, within two months from the date of coming to the notice of the society, from holding the post.
(ii) if, the member incurs a disqualification in the higher level society, for his actions as a representative, such higher level society shall take action to disqualify him for holding the post in the higher level society, and if the society fails to take action, the Registrar shall disqualify such member from holding such post by an order in writing, after giving him reasonable opportunity of being heard.
Explanation: For the purpose of this section, the expression "disqualification" shall not include the disqualification specified in Section 50A for election as a member of the Board of Directors or a representative of a society.
From the aforesaid section, it is clear that if a person suffers from any of disqualification, the Board of Directors shall disqualify such person, if he is an elected as a Director after giving him reasonable opportunity. It is further mentioned that if the Society fails to take action, the Registrar shall disqualify such member from holding such post by an order in writing after giving him reasonable opportunity.
In the present case, the Deputy Registrar superseded the Board of Directors of Primary Societies from which two persons namely Mr. Sitaram Shivhare and Mr. Randhir Singh Thakur were elected as representatives of the Marketing Cooperative Society, Vidisha. The orders of supersession were challenged before this Court and an order of status quo was granted. As per the reply of the Marketing Cooperative Society, Vidisha, the elections of both the societies were held on different dates mentioned earlier in the order and thereafter both these two persons again elected as representative of the Marketing Cooperative Society. In such circumstances, they did not incur disqualification mentioned in Section 48(AA) of the Act of 1960. Hence, the order passed by the Joint Registrar is contrary to law and without power and authority. It appears that the Joint Registrar passed the order with an oblique and ulterior motive. The intention was to disqualify these two persons to continue as Board of Directors so the Board of Directors of Marketing Cooperative Society could be dissolved.
After going through the facts of the case, we have gathered an impression that the Joint Registrar and Deputy Registrar were bent upon to dissolve the Board of Directors of Marketing Society, Vidisha. It is misuse of powers. The Cooperative Society is backbone of democratic set up of our country. It has constitutional validity and if democracy has to develop in this country, it is obligatory that the authorities permit the cooperative societies to function in accordance with law. It appears from the facts of the case that the authorities were bent upon to dissolve the Marketing Cooperative Society, Vidisha. We do not know the intention, but the intention was malafide and with an oblique motive. Hence, in our opinion, an exemplary cost has to be imposed against the State. Consequently, both these petitions are allowed with a costs of Rs. 15,000/- (Rupees Fifteen Thousand Only). The impugned orders Annexures P/1 & 2 are hereby quashed. It is further observed that the two Board of Directors would also be entitled the benefit of sub-section 49(7-A) of the Act of 1960 in computing their period as Board of Directors of Marketing Cooperative Society.