RANJIT SINGH Vs. REGISTRAR CO OP SOC HARYANA

JUDGEMENT

(1.) Whether a member of the Managing Committee of a Central Co-operative Society ceases to be a member in the event of the Primary Co-operative Society, which he represents on the Managing Committee of the Central Society, becomes a defaulter and incurs a disqualification under Rule 26 of the Punjab Co-operative Societies Rules, 1963 (herein after referred to as 'the Rules'), framed under Section 85 of the Punjab Co-operative Societies Act, 1961 (hereinafter referred to as 'the Punjab Act'), is the short but interesting question raised in this bunch of three writ petitions (C. W. P. Nos. 5226, 5324 and 5692 of 1985).

(2.) To begin with the factual matrix : The petitioners in the three writ petitions are members of three different Primary Co-operative Societies, which are in turn members of the Karnal Central Co-operative Bank Ltd., Karnal (hereinafter called 'the Bank'), a Central Co-operative Society. Under the provisions of the Haryana Co-operative Societies Act, 1984 (for short 'the Haryana Act'), the Co-operative Societies in the State are categorised in three classes, namely Primary Societies, Central Societies and Apex Societies. Membership of the Primary Societies is confined to the individuals. The Central and Apex Societies have Primary Societies as members. The primary object of setting up the Apex Societies is the promotion of the objects of the Punjab and Haryana Acts by providing all facilities qua the operation of its member-Co-operative Societies and those of Central Societies, to facilitate the working of other Co-operative Societies, which are its members. In 1983, the three petitioners were elected representatives of their respective Societies to represent them in the Bank. They were thereafter elected members of the Bank by the general house. Under Section 20 of the Haryana Act, every member-Co-operative Society has one vote in the affairs of the Society, provided that member in default of any sum due from him to the Society shall not be eligible to exercise his right of vote. There is an explanation to this clause, which postulates that the expression 'member' in this clause does not include a Society. The result is that a Co-operative Society, which is a member of another Co-operative Society, is entitled to exercise its right of vote in the affairs of that Society notwithstanding its being in default for any sum due to that Society. However, individual members of a Primary Society, who are in default of any sum due to the Primary Society, are not eligible to exercise their right of vote. The Registrar, Co-operative Societies, Haryana, issued instructions on August 1, 1985, explaining the legal position. It was stated therein that under Rule 26 of the Rules, the Registrar is competent to remove a member of the Managing Committee of a Society when such a member ceases to be a member. Cessation is not automatic. The powers of the Registrar under Rule 26 stand conferred on all the Deputy Registrars, Co-operative Societies vide Haryana Government Notification No. S. O. 33/P. A. 25/61/S. 3/78 dated March 3, 1978. An individual or a Society (through its representative) will cease to be a member of the Managing Committee in the circumstances enumerated in Rule 26 ibid. It was advised that necessary action be taken against the members of the Managing Committees whose Societies had become defaulters. The Deputy Registrar, Co-operative Societies, Karnal, issued notices to some of the members of the Managing Committee of the Bank, including the three petitioners for showing cause as to why their membership from the Board of Directors of the Bank should not be ceased under Rule 26 (f) read with Rule 25 (a) of the Rules because the Primary Societies, which they were representing ia the Bank, were defaulters to the Bank. The petitioners sent their replies to the show cause notices explaining the position. The petitioners contended inter alia that the Deputy Registrar had no jurisdiction to take action against the petitioners. He was himself a Member of the Board of Directors along with the petitioners and was not competent to decide about the eligibility of other Directors to sit on the Board. His action tantamounts to be a Judge in his own cause. The petitioners themselves were not defaulters of any Co-operative Society. They had not incurred any personal disqualification. The Primary Societies were not members of the Managing Committee and their being defaulters would not disqualify their representative, i. e. the petitioners to serve on the Board of Directors. It was also averred that no rules had been framed under the Haryana Act disqualifying the members of the Committee. So the action was wholly without jurisdiction. The pleas of the petitioners did not find favour with the Deputy Registrar. He passed orders dated October 11,1985, ceasing the petitioners as Directors of the Bank. He held that the Punjab Co-operative Societies Rules, 1963, were applicable, and that the Primary Societies, which were represented by the petitioners, had incurred a disqualification under Rule 26 of the Rules. The petitioners impugn these orders.

(3.) It has been contended by the learned counsel for the petitioners that Section 2 (d) of the Haryana Act takes the Primary Societies out of the purview of Rule 26 (a). They have been made eligible to vote in the affairs of the Central Society inspite of there being any sums due from them to the Central Society. The representatives of such Societies are entitled to participate in the elections of the members of the Managing Committee of the Central Society by casting their vote or contesting election to the Managing Committee. The right to vote has a concomitant right to stand in the election, the default of a Primary Society does not visit its representative to the Central Society with any adverse consequences like cessation. Under Rule 26, only a person who is a member of the Committee and who continues to be in default in respect of any sum due from him to the Co-operative Society shall cease to hold his office as such. Since the Primary Society is not itself a Member of the Managing Committee of the Central Society being a juristic person and only natural persons can be members of the Managing Committee of the Central Society, provisions Of clause (a) of Rule 26 are not attracted. They are applicable to the members of the Managing Committees of the Primary Societies only. Bye-law 34 of the Bank also supports this contention. Only natural persons who are members of the Managing Committee can incur the disqualifications including cessation under these provisions ; Rule 26 runs counter to Section 20 (d) and is ultra vires thereof.