ARJUN LAL PATEL Vs. STATE OF M P

JUDGEMENT

(1.) The petitioner, the Director of Zila Sahakari Kendriya Bank Maryadit Board .of Directors. Hoshangabad having been elected as such from Harda Vikas Khand and is a representative of the Sewa Sahakari Samiti Maryadit, Nimgaon. The respondent No. 4, namely, District Co-operative Central Bank Limited, is registered under Section 9 of the Madhya Pradesh Co-operative Societies Act, 1960, (hereinafter referred to as 'the Act'}. The aforesaid Act was enacted with an object to organise and develope co-operative as democratic instruments and peoples' institutions based on self help and mutual aid and for curbing exploitation and ensuring socio-economic development of people with particular emphasis on weaker sections of the society. According to the writ petitioner, the Registrar is executive head of the co-operative movement and the respondent No. 5 is the Chairman of the bank. Under Section 53-B of the Act, the Registrar is empowered to remove an officer of a Society in certain circumstances under Section 58 of the Act, the Registrar can cause .audit, enquiry, inspection and supervision over the Societies/ Co-operative Societies. Section 56 of the Act empowers the Registrar to enforce performance of certain obligation by the society. Section 59 of the Act confers powers on the Registrar to conduct an enquiry.

(2.) The election in respect of the respondent-bank took place in 1996 in which the respondent No. 5 was elected as the Chairman of the Board of Directors of the Bank and the petitioner and others were elected as Directors of the Board of Directors. On some complaint being received in respect of the irregularities committed in the functioning of the bank by the Chairman and his associate Directors, when no action was taken the petitioner filed a writ petition before, this Court and the same was disposed of with a direction to the authorities to take action in accordance with law in respect of the complaints pertaining to irregularities and illegalities. The Joint Registrar, thereafter issued a show cause notice on 26.11.1998 to the respondent No. 5 and Lakhanlal Deora and Shiv Kumar Choudhary, the Directors directing the respondent bank to take action against the aforesaid three Director. As the petitioner and other Directors have brought the aforesaid irregularities and illegalities to the notice of the authorities leading to issue of notice dated 26.11.1998 against the three persons including the Chairman of the bank, the respondent No, 5 and his associate Directors in collusion with the authorities of the department saw to it that show cause notices were issued against the petitioner on the ground that the Society to which he represents in the Board of Directors was in default for a period exceeding twelve months in respect of loan taken by it from the respondent-Bank/Apex Society. It is averred in the writ petition that the show cause notice was issued to the petitioner was based on no enquiry and without affording an opportunity of being heard to the petitioner. The petitioner filed a revision before, the Board of Revenue against the said show cause notice. The Board of Revenue passed an interim order staying further action. After establishment of the Madhya Pradesh Co-operative Tribunal the case was transferred by the Board of Revenue to the Tribunal for adjudication. It was submitted before, the Tribunal that the whole proceeding initiated against the petitioner was mala fide, and as no opportunity was given to the petitioner the enquiry conducted against him was absolutely vitiated being violative of principles of natural justice. It was put forth before the Tribunal that Section 19-AA of the Act speaks of disqualification for membership of the Committee and for representation. The proviso to the aforesaid Section lays down 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 of being heard but the Deputy Registrar, Co-operative Societies without hearing the petitioner or the Society of the petitioner has reported that the petitioner suffers from the disqualification as provided in Rule 45(3) of the Rules of 1962.

(3.) Appreciating the contentions raised by the petitioner, the Tribunal by its order dated 2.11.1999 disposed of the revision directing that the Society of the petitioner be also noticed along with a copy of the report of the enquiry made by the Deputy Registrar. The Tribunal also held that the provisions of Section 59, do not speak of giving opportunity of hearing to the affected person. Therefore, the petitioner was not entitled to an opportunity of being heard at that stage.