The Ordinance was promulgated in view of the recommendations of the Committee on Co-operative Laws set up by the Govt. of India and the decision taken in the All India Co-operative Ministers Conference that the State of Bihar should also fall in line with the recommendations of the Committee, as other States in the country have.

Headnote:
CONSTITUTIONAL LAW - ORDINANCE - Vires - Bihar Co-operative Societies (Second Amendment) Ordinance, 1975 (Bihar Ordinance No. 35 of 1975) - Challenge - Mala fide exercise of power - Promulgation of Ordinance to bypass Legislature - Unreasonable restriction on freedom of association - Violation of Article 19 (1) (c) of the Constitution - Discrimination between office bearers and other members of managing committee - Violation of Article 14 of the Constitution - Unbridled power conferred on Registrar of Co-operative Societies - Supersession of managing committee - Interpretation of Section 41 of the Act - Stay of operation of Ordinance - Dismissal of writ petitions.
Fact of the Case:

The petitioners, office-bearers of various cooperative societies, challenged the vires of the Bihar Co-operative Societies (Second Amendment) Ordinance, 1975 (Bihar Ordinance No. 35 of 1975) on various grounds, including mala fide exercise of power, promulgation of Ordinance to bypass Legislature, unreasonable restriction on freedom of association, violation of Article 19 (1) (c) of the Constitution, discrimination between office bearers and other members of managing committee, violation of Article 14 of the Constitution, and unbridled power conferred on Registrar of Co-operative Societies.
Finding of the Court:

The Court held that there was no mala fide exercise of power in promulgation of the Ordinance, that the Ordinance was not promulgated to bypass the Legislature, that the Ordinance did not impose unreasonable restriction on freedom of association, that there was no discrimination between office bearers and other members of managing committee, that the Ordinance did not confer unbridled power on Registrar of Co-operative Societies, and that the supersession of managing committee was in accordance with Section 41 of the Act.
Issues: 1. Whether the Ordinance was promulgated in mala fide exercise of power? 2. Whether the Ordinance was promulgated to bypass the Legislature? 3. Whether the Ordinance imposed unreasonable restriction on freedom of association? 4. Whether there was discrimination between office bearers and other members of managing committee? 5. Whether the Ordinance conferred unbridled power on Registrar of Co-operative Societies? 6. Whether the supersession of managing committee was in accordance with Section 41 of the Act?
Ratio Decidendi: 1. The Court held that there was no mala fide exercise of power in promulgation of the Ordinance, as the Ordinance was promulgated in view of the recommendations of the Committee on Co-operative Laws set up by the Govt. of India and the decision taken in the All India Co-operative Ministers Conference that the State of Bihar should also fall in line with the recommendations of the Committee, as other States in the country have. 2. The Court held that the Ordinance was not promulgated to bypass the Legislature, as the Ordinance was given the same force and effect as an Act of Legislature within the limits as provided by Article 213, and it was for the Legislature of the State to disapprove of it, if the State was sought to be ruled by successive Ordinances, as and when it meets, or for the electorate to disapprove of the conduct of its accredited representatives for having ruled the State by means of Ordinances and reject them at the next poll. 3. The Court held that the Ordinance did not impose unreasonable restriction on freedom of association, as the suspension of Article 19 during emergency relates to States action and not to a Governors Ordinance. 4. The Court held that there was no discrimination between office bearers and other members of managing committee, as the Ordinance made a distinction between the office-bearers and other members of the managing committee for its treatment regarding the terms of office, although the parent Act or the rules framed thereunder do not make any such distinction between them in matters of management of the societies and vesting of powers in them, and the Ordinance confers arbitrary powers on the Registrar of the Co-operative Societies to curtail the rights of the democratically elected executive without any rational basis and sensible object. 5. The Court held that the Ordinance did not confer unbridled power on Registrar of Co-operative Societies, as the Registrar was expected to carry out the mandate of law celling for special general meeting for holding election of office-bearers within 90 days in case of multi-purpose societies and within 180 days in case of primary societies from promulgation of the Ordinance, and the Registrar will always be amenable to the writ jurisdiction of this Court besides remedy by way of suits in Civil Court for being compelled to discharge his statutory functions within a specified time and can be pulled up for his inaction in the matter. 6. The Court held that the supersession of managing committee was in accordance with Section 41 of the Act, as the Ordinance provided that, in case election is not held, the entire managing committee will be deemed to have been superseded under Sec. 41 of the Act, and the Registrar of the Co-operative Societies is expected to carry out the mandate of law celling for special general meeting for holding election of office-bearers within 90 days in case of multi-purpose societies and within 180 days in case of primary societies from promulgation of the Ordinance.
Final Decision: The Court dismissed all the writ petitions, but made no order as to costs.

Judgment

K.B.N.SINGH, J.

1. In this batch of 28 writ applications the vires of the Bihar Co-operative Societies (Second Amendment) Ordinance, 1975 (Bihar Ordinance No. 35 of 1975), which replaces the Bihar Co-operative Societies (First Amendment) Ordinance, 1974 (Bihar Ordinance No. 173, of 1974) is under challenge. As common questions of law arise in these writ applications, they have been heard together and this judgment will govern all of them.

2. These writ applications were filed in or about October, 1974, and what was challenged was the Bihar Ordinance No. 173 of 1974. When these applications came to be heard, a petition for amendment was filed in C. W. J. C. No. 1605 of 1974, stating that the Ordinance (Bihar Ordinance No. 173 of 1974) had lapsed, and it was apprehended that a fresh Ordinance on the same lines was likely to be promulgated by the Governor of Bihar. It was common ground before us that a fresh Ordinance, being Bihar Cooperative Societies (Second Amendment) Ordinance, 1975 (Bihar Ordinance No. 35 of 1975), was promulgated. It was signed by the Governor of Bihar on the 11th January, 1975, and was published in the Bihar Gazette on the 15th January, 1975. We accordingly allowed the amendment prayed for challenging the vires of the new Ordinance which will be hereinafter referred to as the Third Ordinance, being Ordinance No. 35 of 1975. The parties to the writ applications agreed that this amendment made in C. W. J. C. No. 1605 of 1974 will hold good in all the writ applications. Allegations of mala fide on the part of Shri Umesh Prasad Verma, Minister of Cooperation, Government of Bihar; have been made in the writ applications in getting the Ordinance promulgated, which will be discussed at the appropriate place in course of the judgment.

3. The arguments of Mr. Jagdish Swaroop, learned Counsel appearing on behalf of the petitioner in C. W. J. C. No. 1605 of 1974, have been adopted by learned counsel appearing in the other 23 writ applications, immediately following, namely, C. W. J. C. Nos. 1604, 1640, 1667, 1668, 1671, 1672, 1673, 1676, 1678, 1692 to 1702, 1704, 1705 and 1715 of 1974, which may be referred to as the first batch of writ applications for sake of convenience.

4. Arguments of Mr. B. C. Ghose, learned Counsel appearing on behalf of the petitioners in one of the second batch of applications, namely, C. W. J. C. No. 1643 of 1974, have been adopted on behalf of the petitioners in C. W. J. C. Nos. 1674, 1713 and 1714 of 1974. In view of the submissions made before us, it will suffice to mention the facts of C. W. J. C. No. 1605 of 1974, while dealing with the arguments of Mr. Jagdish Swaroop, and of C. W. J. C. No. 1643 of 1974, while dealing with the arguments of Mr. B. C. Ghose, in so far as they may be necessary.

5. In Sections 14 and 27 of the Bihar and Orissa Co-operative Societies Act, 1935, hereinafter referred to as the Act, some amendments were sought to be made by the Bihar Ordinance No. 111 of 1974, promulgated by the Governor of Bihar on the 18th of May, 1974, and it is common ground before us that it lapsed on the 27th of July, 1974, on account of the Legislature having met in the meantime. This Ordinance may be referred to as the first Ordinance. The case of petitioner No. 1, Shri Mathura Prasad, in C. W. J. C. No. 1605 of 1974 is that, after lapse of that Ordinance, on the 6th of August, 1974, he was validly elected as the Chairman of the Bihar State Co-operative Bank Limited for a term of three years, which would continue up to the next election to be held in August, 1977, under the existing law. by defeating Shri K. N. Sahay, an individual member of the Bank, Respondent No. 2, Shri Umesh Prasad Verma, Minister of Co-operation, who is a close, relation of Shri Sahay, with mala fide motive influenced the Council of Ministers to approve a Second Ordinance to be passed by the Governor of Bihar Amending Sections 2, 14 and 27 of the Act, on almost the same terms as contained in the first O

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1975 Supreme(Pat) 105

Cases Referred (10)