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2006 Supreme(Chh) 599
S. R. NAYAK, C. J., VIJAY KUMAR SHRIVASTAVA AND DILIP RAOSAHEB DESHMUKH, JJ.
Mohd. Akbar etc. etc.
Versus
State of Chhattisgarh and Anr. etc.
Writ Petn. Nos. 2881 of 2005 and 4377 of 2004 etc. etc.
Decided on : 19-12-2006.
Kanak Tiwari,Sr. Counsel with Prateek Sharma, Counsel for Petitioners in W.Ps. No. 3580/2004, 1662/2005, 2881 and 4340/2005 and 3269/2004; Manindra Shrivastava, Sr. Counsel with Amrito Das, for Petitioner in W.P. No. 4377/2004; Rahul Jha, for Petitioner in W.P. No. 318/2005. S. N. Nande, for Petitioner in W.P. No. 4953/2005; Sanjay K. Agrawal, for Petitioner in W.P. No. 5479/2005; Smt. Renu Kochar, for Petitioner in W.P. No. 6135/2005, R.S. Shrivastava, for Petitioner in W.P. No. 626/2006; Ravish Chandra Agrawal, Advocate General and Prashant Mishra, Addl. Advocate General with Utkarsh Verma, Dy. Govt. Advocate for State of Chhattisgarh; Rajeev Shrivastava, for Zila Sahakari Krishi Aur Gramin Vikas Bank Maryadit, Raigarh.
Headnote:
The High Court of Chhattisgarh, in a Full Bench decision, struck down the impugned amendment to Section 49 of the Chhattisgarh Co-operative Societies Act, 1960, holding it to be ultra vires, arbitrary, and subversive of the democratic structure of cooperatives. The Court held that the amendment, which gave unbridled power to the Registrar to take over the management of cooperative societies for an indefinite period, violated Article 14 of the Constitution of India. The Court also held that the amendment could not be considered a validating legislation as it did not remove the defects pointed out by the Court in an earlier judgment and reproduced verbatim the same amendment. The Court directed the Registrar of Co-operative Societies to hold elections to the concerned cooperative societies within six months.
Fact of the Case:
The petitioners, elected officers and members of the managing committees of primary and central cooperative societies registered under the Chhattisgarh Co-operative Societies Act, 1960, challenged the constitutional validity of an amendment to Section 49 of the Act, which gave the Registrar of Co-operative Societies unbridled power to take over the management of cooperative societies for an indefinite period.
Finding of the Court:
The Court held that the impugned amendment was ultra vires, arbitrary, and subversive of the democratic structure of cooperatives. The Court also held that the amendment could not be considered a validating legislation as it did not remove the defects pointed out by the Court in an earlier judgment and reproduced verbatim the same amendment.
Issues: 1. Whether the impugned amendment to Section 49 of the Chhattisgarh Co-operative Societies Act, 1960, was ultra vires, arbitrary, and subversive of the democratic structure of cooperatives? 2. Whether the impugned amendment could be considered a validating legislation?
Ratio Decidendi: 1. The Court held that the impugned amendment was ultra vires, arbitrary, and subversive of the democratic structure of cooperatives because it gave unbridled power to the Registrar to take over the management of cooperative societies for an indefinite period, thereby violating Article 14 of the Constitution of India. 2. The Court held that the impugned amendment could not be considered a validating legislation because it did not remove the defects pointed out by the Court in an earlier judgment and reproduced verbatim the same amendment.
Final Decision: The Court struck down the impugned amendment to Section 49 of the Chhattisgarh Co-operative Societies Act, 1960, and directed the Registrar of Co-operative Societies to hold elections to the concerned cooperative societies within six months.
1-A.S. R. NAYAK, C. J. :- I have had the opportunity of reading the draft judgments prepared by Vijay Kumar Shrivastava, J. and Dilip Raosaheb Deshmukh, J. in these writ petitions. The conclusions reached by Dilip Raosaheb Deshmukh, J. with respect, are not acceptable to me. I agree with Vijay Kumar Shrivastava, J.
2. In the result, I dismiss all the writ petitions with no order as to costs. The registrar of Co-operative Societies, State of Chhattisgarh, Raipur is directed to hold elections to the Co-operative Societies concerned within a period of six months from today as directed by Vijay Kumar Shrivastava, J. in his order.
3. VIJAY KUMAR SHRIVASTAVA, J. :- I have had an opportunity to read the draft order prepared by my learned Brother Dilip Raosaheb Deshmukh, J. Having perused the same with due consideration, I regret my inability to agree with the opinion of Deshmukh, J. Hence, this separate opinion of mine.
4. Constitutional validity of the Chhattisgarh Co-operative Societies (Amendment) Act, 2004 (No. 22 of 2004) has been assailed in all these petitions. For brevity the amendment provided therein is reproduced below :
"Amendment of Section 49.- In Section 49 of the Chhattisgarh Co-operative Societies Act, 1960 (No. 17 of 1961) (hereinafter referred to as the Principal Act) :-
(1) Sub-section (7AA) and (7AAA) shall be omitted.
(2) Sub-section (8) (i) and (ii) the following shall be substituted.
"(8) If the elections are not held before the expiry of the term specified in sub-section (7A) or the extended term under deleted herein before sub-section (7AA), all the members of the committee shall be deemed to have vacated their seats and the powers of the committee shall be deemed to have been vested in the Registrar and the Registrar shall hold elections as early as possible :
Provided that the Registrar may authorize any officer to exercise the powers of the committee vested in him under this sub-section and the officer so authorized shall exercise such powers from the date of such authorization."
History :-
5. The M.P. Co-operative Societies Act, 1960 (henceforth "the Act, 1960") has come into force on 15th day of May, 1962 and the law has been enacted with the following objects and reasons :
"At present different laws on Co-operatives are in force in the constituent units of the new State of Madhya Pradesh. In order to have one uniform law for the whole State and with a view to strengthening and developing the Co-operative Movement and to extend the assistance by the State including State partnership, wherever necessary, it has been felt that a new law on Co-operation may be enacted."
6. Further, vide amendment Act No. 12 of 1994, the objects of the Act, 1960 was substituted as below :
"An Act to organize and develop co-operatives as democratic instruments and people's institutions based on self help, and mutual aid and for curbing exploitation and ensuring socio-economic development of people with particular emphasis on weaker sections of society."
7. The Act, 1960 was amended from time to time, but the purpose of the Act, 1960 remains to organize and develop co-operative as an effective democratic instrument for curtailing exploitation and ensuring socio-economic justice to people's with particular emphasis on weaker sections.
8. Section 49 has a pivotal role in the Act, 1960. Section 49 of the original Act is reproduced as below :
"49. Annual General Meeting.- (1) A general meeting of a society shall be held at least once in a year for the purpose of-
(a) approval of the programme of the activities of the society prepared by the committee for the ensuing year;
(b) election, if any, in the prescribed manner of the members of the committee;
(c) consideration of the audit report and the annual report;
(d) disposal of the net profits; and
(e) consideration of any other matter which may be brought forward in accordance with the bye-laws.
(2) Notice of such meeting shall be sent to the Assistant Registrar of the District in which the so
