HARAKH BHAGAT Vs. ASSISTANT REGISTRAR CO OPERATIVE SOCIETIES

JUDGEMENT

(1.) This is an application under Articles 226 and 227 of the Constitution by a member of the Working Committee of Raipura Multipurpose Cooperative Society Limited (Petitioner No. 1) and also by the said Society (Petitioner No. 2) for quashing an order dated the 28th June, 1966, (Annexure D) passed by Shri S. K. Sahai, Assistant Registrar, Co-operative Societies, compulsorily amalgamating the said Co-operative Society with Budhuchak Multipurpose Co-operative Society, in purported exercise of the powers conferred by rule 39 of the Bihar Co-operative Societies Rules, 1959.

(2.) As is well known, the Co-operative movement in Bihar is regulated and guided by the Bihar and Orissa Co-operative Societies Act, 1935, (hereinafter referred to as the Act), whose preamble is worth quoting: "Whereas it is expedient to facilitate the formation, working and consolidation of Cooperative Societies for the promotion of thrift, self-help and mutual aid among agriculturists and other persons with common needs and for that purpose to consolidate and amend the law relating to Cooperative Societies -------" The Registrar of Co-operative Societies and his subordinate officials have been conferred extensive powers by the Act to superwise the working of the Societies and to take appropriate action even to the extent of superseding the managing committees of the Societies (Section 41) for liquidating or dissolving the Societies (Section 44) in extreme cases. The Societies, after incorporation, are conferred duties and privileges which are set out in Chapter III of the Act. The rights and liabilities of the members of the registered Societies also are dealt with in Chapter IV. Section 66 of the Act confers power on the State Government to make rules "to carry out all or any of the purposes of the Act". Clause (ix) of Sub-rule (2) of that section specifies the following matters as being included in the rule-making power, namely, "prescribe the procedure to be followed when societies change the form or extent of their liability, and provide for the amalgamation and division of societies and prescribes the conditions of such amalgamation and division".

(3.) The Bihar Co-operative Societies Rules, 1959, (hereinafter referred to as the Rules), were made in exercise of this rule-making power. Rule 37 deals with division of Co-operative Societies. The provisions of this rule seem to indicate that a division of a registered Society can be made only if the members of the Society resolve to divide themselves into two or more registered Societies. Rule 38 deals with voluntary amalgamation of Societies. This rule also envisages such amalgamation only when two or more registered Societies resolve to amalgamate themselves into a new Society. Rule 39, however, confers power on the Registrar to compulsorily amalgamate registered Societies, As the validity of this rule is under challenge, I shall quote it in full:--