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2005 Supreme(Bom) 715
IN THE HIGH COURT OF BOMBAY
SHETKARI SAHAKARI GINNING AND OIL MILL society LTD
Versus
STATE OF MAHARASHTRA
Decided on 10.6.2005
Headnote:Maharashtra Co-operative Societies Rules, 1961 - Rule 74 - Validity of Rule 74 of Rules, 1961. - Rule 74 of MCS Rules 1961 not suffers from vice of excessive delegation. - By virtue of the powers conferred by Section 165(2)(xlvii) of the Maharashtra Co-operative Societies Act the State Government was empowered to make rules in the matter of audit. Rule 74 of the Rules provides for levying of audit charges by the Registrar. Rule itself provides that Registrar who have been authorized to levy the audit charges can only fix the rates with the previous approval of the State Government. In other words the delegate has a control over the sub-delegate in the matter of fixing of charges. It is now settled preposition of law and the issue is no longer res integra, that when the Act provides for laying the rules in the house, then the challenge to the rule on the ground that it suffers from the vice of excessive delegation is negatived. AIR 1982 SC 1126 and 1995 (1) Scale 147 - Relied.
Maharashtra Co-operative Societies Rules, 1961 - Rule 74 - Maharashtra Co-operative Societies Act, 1961, Section 81 - Scope of Rule 74. - Rule 74 of MCS Rules, 1961 provides for levying of audit charges by Registrar. - A conjoint reading of Section 85 and Section 165 of the Maharashtra Co-operative Societies Act, would clearly show that the Registrar has to maintain a panel of auditors or direct a Chartered Accountant to carry on audit of a co-operative society. Section 165(2)(xlvi) clearly provides the procedure for appointment of auditor under Section 81. The procedure for appointment of auditor necessarily would contemplate the power to fix the fees or the remuneration of the auditors. Section 165(2) uses the expression in particular and without prejudice to the generality of the foregoing power, in other words even if something is not specifically set out in sub-section (2), it will be still open for the Government to make rules for the purpose of conduct or regulation of business of society, class of society. Rule 74 therefore, as made was within the rule making power of the State.
Maharashtra Co-operative Societies Rules, 1961 - Rule 74 - Maharashtra Co-operative Societies Act, 1961, Sections 90 and 165 - Effect of Rule 74. - Rule 74 providing for levying of audit charges by Registrar not ultra vires Section 90 of MCS Act, 1961. - By virtue of Section 90(2) of the Maharashtra Co-operative Societies Act it was open to the State Government to make a rule for charging supervision fees. Therefore, the challenge that Rule 74 is ultra vires Section 90 of the Act, must be negated as there was power under Section 90(2) read with Section 165(2), to make a rule for levying and it fees.
F. I. REBELLO, J.
( 1 ) PETITIONER No. 1 is a co-operative society operating in Katol Tahsil. Registrar of Co-operative Societies has the right to audit the accounts of the petitioner society every year. Petitioners are bound by provisions of the Maharashtra Co-operative Societies Act, 1960 and Rules framed thereunder (which hereinafter shall be referred to as the Act and the rules ). Section 90 of the Act provides for constitution of federal authority to supervise the working of the society and the State Government can direct the societies to pay such sum every year as would be fixed by the Registrar, towards the recoupment of expenditure of supervision. Under section 155 of the Act some of the dues from societies are recoverable as arrears of Land Revenue. The petitioners by this petition are challenging the action of the respondents in levying and collecting Audit Fee and Supervision Fee from petitioner No. 1 - society.
( 2 ) IT is the case of the petitioners that respondent No. 2 is levying fees towards Audit Charges under Rule 74 of the Rules framed under the Act. Section 165 of the Act confers power on the State Government to make Rules. It is set out that a perusal of the provisions of the Act would indicate, that no power has been conferred under any Rule in respect of Audit Charges. Reference is then made to section 165 which is the Rule making power, to frame rules in respect of various matters including under section 81 of the Act. Powers have been conferred on the Government to prescribe rate of contribution, more specifically under section 69-A of the Act. It is therefore, set out that Rule 74 insofar as it provides for levying of Audit Charges is ultra vires the powers of State government. There is no provision, it is contended under section 81 for payment of any Audit Fee and as such demand made by respondents for Audit Charges is illegal and arbitrary. Rule 74 it is submitted itself suffers from the vice of excessive delegation as no guidelines are laid down for the Registrar in fixing Audit Charges. The delegation therefore, is uncontrolled and arbitrary. It violates Article 14 of the constitution of India and as such Rule 74 be quashed and set aside, even otherwise under section 165, Rules framed by State Government are required to be placed before both the Houses and are further subject to condition of previous publication.
( 3 ) THE next contention is that the demand for Supervision Fee is arbitrary and unsupported by the provisions of the Co-operative Societies Act. Reference is then made to section 90 of the Act. It is contended that section 90 of the Act and Rule 74 has been utilised by the respondents to levy Supervision Charges. Referring to section 90 it is set out that Sub-section (3) provides for payment of supervision Charges. It is pointed out that the Registrar can register certain Co-operative societies as Supervision Co-operative Societies. No societies, however, at the time the petition was filed were constituted or recognized under section 90 of the Act. As there is no society recognized as Co-operative Federal Authority for supervision of a 'a Class Society', no Supervision Charges can be levied or collected from the petitioner No. 1. Rule 74 it is then pointed does not prescribe fee and leaves it to the registrar. Under section 90 (3) the fee is to be prescribed by the Rules and as such Rule 74 is ultra vires section 90 of the Act. It is submitted therefore that no supervision Fees can be collected from the petitioner No. 1 - Society. Section 89-A it is averred has been inserted by Maharashtra Act no. 20/1986. It prescribes for inspection of record of society by Registrar. Sub-section (3) permits State Government to levy Supervision Fee and rate thereof is to be fixed by the State Government. Registrar, it is pointed out, has not inspected any record of petitioner No. 1 Society and as such there is no question of levying any fee under section 80-A. The Supervision Fee being levied a
