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2019 Supreme(Del) 32
IN THE HIGH COURT OF DELHI AT NEW DELHI
VIPIN SANGHI, A.K. CHAWLA, JJ.
ISHWAR SINGH ANR ORS. - Petitioners
Versus
THE REGISTRAR OF CO-OPERATIVE SOCIETIES AND ORS. - Respondents
W.P.(C) 8300 of 2018 & CM APPL. 31887-31888 of 2018
Decided On : 17-01-2019
For the Petitioners: Mr. Jayant Mehta and Mr. Sachin Mittal and Ms. Drishti Harpalani, Advs.
For the Respondents: Mr. Pankaj Yadav and Mr. Priyaranjan Dubey, Advs.
The main legal point established is the strict construction of penal provisions, the obligation to forward the audit report to the Registrar, and the requirement for principles of natural justice in disqualification proceedings.
Headnote:
Election Disqualification - Co-operative Society - Delhi Co-operative Societies Act, 2003, Section 35(7)(d), Section 60(1), Section 60(5) - The court discussed the disqualification of members of the Managing Committee of a Co-operative Society under Section 35(7)(d) of the Delhi Co-operative Societies Act, 2003. It interpreted the obligations of the Managing Committee regarding the completion of statutory audit and forwarding of the audit report to the Registrar. The court emphasized the strict construction of penal provisions and the principles of natural justice in disqualification proceedings.
Fact of the Case:
The petitioners challenged the order of the Registrar of Co-operative Societies disqualifying members of the Managing Committee from contesting elections due to delay in completing the statutory audit. The Tribunal rejected the appeal on the ground of non-impleadment of the elected members of the Managing Committee. The petitioners then impleaded the elected members and filed a writ petition.
Finding of the Court:
The court found that the disqualification of the Managing Committee members was not justified as the audit was completed within the statutory period. It emphasized the obligation to forward the audit report to the Registrar and the need for principles of natural justice in disqualification proceedings.
Issues: The issues included the disqualification of Managing Committee members, non-impleadment of elected members in the appeal, and the obligation to forward the audit report to the Registrar.
Ratio Decidendi: The court held that penal provisions must be strictly construed and disqualification proceedings require adherence to principles of natural justice. It emphasized the obligation to forward the audit report to the Registrar and the need for notice and hearing before declaring disqualification.
Final Decision: The petition was dismissed with costs, and the court directed the petitioners to deposit the costs in the Prime Minister’s National Relief Fund.
VIPIN SANGHI, J.
1. The petitioners have preferred the present writ petition to assail the order dated 11.05.2018 passed by the Delhi Co-operative Tribunal (DCT) in Appeal No. 168/2016/DCT.
2. The said appeal had been preferred by the petitioners in the present petition alongwith two others to assail the order dated 09.08.2016 passed by the Registrar of Co-operative Societies (RCS) in respect of Arunodaya Co-operative Group Housing Ltd., as well as the elections results in respect of elections held on 28.08.2016 for electing the members of the Managing Committee of the said Society.
3. It appears that the Returning Officer was appointed by the Asstt. Registrar (Section-I) under Section 35 (1) of the Delhi Co-operative Societies Act, 2003 (the Act) on 19.10.2015 in respect of the said Co-operative Society to conduct the elections for electing members of its Managing Committee. On 05.05.2016, the Returning Officer sent a communication to the RCS, complaining about the delay caused by the erstwhile Managing Committee Members in submission of the documents desired by the Returning Officer to conduct the election. In the said communication dated 05.05.2016, he also observed that :
“further, the Auditor has conducted the audit of the Society for the financial year 2011-12 and 2012-13 on 24/12/2013 and Audit Reports have been submitted in the Audit Branch on 15/06/2015 and for the Financial Year 2013-2014 on 15/09/2015 and 2014-15 on 25/09/2015 and submitted in Audit Branch on 04/11/2015, belatedly and a statutory audit has thus not been completed within the statutory period prescribed in the DSC Act. Consequently, in terms of the statutory provisions of Section 35(7)(d) of the Act, the members of the erstwhile Managing Committee of the Society are required to be disqualified for election of office in the committee to be formed after election. The said provisions of Section 35(7)(d) is reproduced hereunder :
“35. Election and nomination of members of committee
………
(7) Notwithstandinig anything contained in this Act, a person shall be disqualified for election of office in a committee –
……….
(d) if he is an officer of a co-operative society which has not got its statutory audit completed within the statutory period prescribed in this Act; or
In view of the aforesaid facts, permission may kindly be granted in terms of the provisions of Section 35(7)(d) to disqualify the members of the erstwhile Managing Committee of the Society, expeditiously so that election process can be commenced and completed in a timely manner after the extension of tenure.
It is also brought to my notice that similar order of disqualification was passed with regard to the Society on failure to complete statutory audit within the statutory period before the last election of the Managing Committee of the Society. Consequently, members of the last to last Managing Committee were also disqualified from contesting the election. Copy of the Order dated 11th October, 2012 in this regard is attached herewith for ready perusal of your good office.”
4. Based on the said report sent by the Returning Officer, the Registrar of Co-operative Societies on 16.06.2016 granted approval to the Returning Officer to conduct the elections in terms of Section 35(7)(d) after disqualifying the members of the erstwhile Managing Committee due to their failure to complete the statutory audit within the statutory period before the last election. Consequently, the members of the erstwhile Managing Committee were disqualified by the RCS from contesting the elections.
5. However, the said disqualification was recalled by the RCS by communication dated 09.08.2016 addressed to the Returning Officer, which reads as follows :
“I am directed to convey that Sh. R.N. Bhardwaj, M.S. No. 276 and Sh. V.S. Soin, m.s. No. 279 of The Arunodaya CGHS LTD. May be allowed to participate and contest the forthc
