UDAI BHAN SINGH Vs. REGISTRAR CO OPERATIVE SOCIETIES

JUDGEMENT

(1.) MECHANICAL Department Primary Co-operative Bank, North Eastern Railway, Gorakhpur, is a registered Society under the U. P. Co-operative Societies Act, 1965. In 1966 the Society resolved to appoint Senior clerks from amongst the clerks already in the employment of the Society on the basis of seniority cum suitability. The Managing Committee of the Society test for selecting suitable candidates, it held the test in January, 1973. Clerks who were already in the employment of the Society were eligible for promotion to the post of Senior Clerk. On the recommendation of the Committee the petitioners were promo- ted to the post of Senior Clerks by the order dated 6th January, 1974. On an application of the unsuccessful candidates the District Assistant Registrar of the Co-operative Societies, Gorakhpur referred the matter to Arbitrator under Section 70 of the Co-operative Societies Act, 1965 (hereinafter referred to as the Act). On 30th March, 1970, the Arbitrator dismissed the Arbitration application of the unsuccessful candidates on the ground that no dispute could be raised or adjudicated in arbitration proceedings under Section 70 read with rule 229 of the Rules framed under the Act. The unsuccessful candidates thereafter filed a civil suit No. 300 of 1970 in the Court of the Additional Munsif, Gorakhpur, claiming relief for the declaration that the petitioner's promotion and appointment to the post of Senior Clerks was invalid, but the suit was withdrawn on 3rd March, 1972. Meanwhile the petitioners were confirmed on the post of Senior Clerks.

(2.) THE Committee of Management of the Society was suspended under section 35 (1) of the Act and an Administrator was appointed under the order of the Registrar dated 20th July, 1971, to run the affairs and administration of the Society. Some members of the suspended Managing Committee of the Society filed application before the Registrar under section 70 of the Act read with rule 229 of the Co-operative Societies Rules challenging the petitioners promotion on the post of Senior Clerks. THE District Assistant Registrar, Co-operative Societies, respondent No 2, appointed Z. Rahman, a Cooperative Officer, as the Sole Arbitrator. He gave his award on 19th February, 1972, cancelling the petitioners promotion to the post of Senior Clerk. THEreupon, the Administrator of the Society issued orders on 24th February, 1972, reverting the petitioners to the lower post of clerks. Aggrieved, the petitioners filed writ petition No. 1364 of 1972 challenging the validity of the award mainly on the ground that their promotion was set aside by the Arbitrator without giving them any notice of the proceedings or opportunity of hearing. THE Writ Petition was contested by the District Assistant Registrar and others. THE petition came up for hearing before Hari Swarup, J. on 17th December, 1973. Sri B. L. Yadav, counsel for the petitioners as well as the learned Standing Counsel appearing for the respondents including the District Assistant Registrar, Co-operative Societies, Gorakhpur, made a statement before the learned Judge that the award had become infructuous and ineffective as the petitioners had not been reverted in pursuance of the award but in pursuance of the order of the District Assistant Registrar, Co-operative Societies, Gorakhpur, dated 22nd February, 1972, by which the resolution of the Managing Committee of the Society as well as the order promoting the petitioners to the post of Senior Clerks were annulled and cancelled under section 128 of the Act. THE petitioners thereupon did not press the petition, instead they withdrew the same with premission to file a fresh petition. THE petitioners thereupon filed this petition challenging validity of the order of the District Assistant Registrar, Co-operative Societies, Gorakhpur, dated 22nd December, 1972, and also the order of their reversion.

(3.) LEARNED counsel further urged that the Impugned order was void inasmuch as no opportunity of hearing was afforded to the petitioners. I find force in the contention. Section 128 does not expressly provide for giving opportunity of hearing to any party but the nature of the power conferred on the Registrar and the serious consequences which may entail upon the Society, its members or its servants, indicate that the power is exercisable on objective standards. Any order passed by the Registrar cancelling the resolution of a Society or setting aside any appointment made by it is bound to affect the affairs of the Society and many a time Registrar may not have complete information about facts. In such a situation, the Registrar, while exercising his powers under section 128 of the Act, must act in accordance with the principles of natural justice. In the instant case the petitioners were confirmed on the post of Senior Clerks and they have been working on that post since January, 1974. Their right to hold the post was adversely affected by the order of respondent No. 2. The petitioners were, therefore, entitled to opportunity of hearing. The impugned order of respondent No. 2 is liable to be quashed on this ground also.