Judgment

RAY, J. :- The Civil Appeal is by special leave from the judgment dated 8 December, 1970 of the High Court at Allahabad dismissing the petition of the appellants. The appellants in the Allahabad High Court impeached the first order dated 19 September, 1970 passed under Section 34 of the Uttar Pradesh Co-operative Societies Act, 1965 referred to as the Act nominating two thirds of the total number of members of the committee of management of the Uttar Pradesh Co-operative Federation. The appellants are the Uttar Pradesh Co-operative Federation Ltd., Lucknow referred to as the Federation and Veerpal Singh who are both also the petitioners in the writ petition.

2. This writ petition is directed against the second order of the Uttar Pradesh State Government dated 26 June, 1971 passed under Section 34 of the Act nominating two thirds of the total number of members of the committee of management of the Federation.

3. The question which falls for determination in the writ petition and the civil appeal is whether the State Government under Section 34 of the Act could nominate two thirds of the total number of members of the committee of management of the Federation.

4. The annual general meeting of the Federation was held on 30 March 1970. The committee of management of the Federation was elected at the annual general meeting. The appellant petitioner Veerpal Singh on 8 April 1970 was unanimously elected as Chairman of the Federation.

5. On 19 September, 1970 the State Government passed an order under Section 34 of the Act and nominated two thirds of the members of the committee of management of the Federation. It may be stated here that under Section 34 of the Act where the share capital subscribed to by the State Government is 60 per cent or more of the total share capital of the co-operative society the State Government shall have the right to nominate up to two thirds of that the total numbers of members of the committee of management. The State Government passed the order on that basis that it had share capital of more than 60 per cent in the Federation.

6. The Federation moved the Allahabad High Court against the said order of the State Government. The High Court stayed the operation of the said order nominating two thirds of the members of the committee of management. The High Court dismissed the petition of the Federation on 8 December, 1970. On 18 December, 1970 the State Government cancelled the order dated 19 September, 1970.

7. The Additional Registrar, Co-operative Societies, Uttar Pradesh submitted an inspection report to the effect that the State Government had been misinformed about the share capital of the State Government in the Federation. The report stated that in fact the share capital of the State Government in the Federation was never 60 per cent. The report further stated that the matter should be thoroughly investigated and guilty persons should be punished.

8. The appellant petitioner Veerpal Singh wrote a letter on 12 June, 1971 to the Chief Minister of Uttar Pradesh and asked for immediate action pursuant to the report of the Additional Registrar of Co-operative Societies. In that letter Veerpal Singh stated that Om Prakash Tyagi, Deputy Registrar, Co-operative Societies had been working as Secretary of the Federation since 1970. Veerpal Singh also stated in the letter that on being elected Chairman he examined the accounts and found that Om Prakash Tyagi had been responsible for mal-practices.

9. On 26 June, 1971 the State Government passed the second order under Section 34 of the Act and nominated two thirds of the total number of members of the committee of management of the Federation. After the State Government had passed the said order nominating two thirds of the total number of members of the committee of management the elected members of the committee under R. 38 (b) of the bye-laws of the Federation were removed by draw of lots to accommodate the nominated members. The appellant petitioner Veerpal