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1978 Supreme(Goa) 11
Goa High Court
TITO MENEZES, J.C.
Baban Naik - Appellant
Versus
Union of India, New Delhi - Respondents
Special Civil Appln. No. 77 of 1978
Decided On : 22 September 1978
M. Bruto da Costa, for Petitioners; J. Dias, Govt. Advocate (for Nos. 1, 2, 3, 4 and 9), R.D. Khalap (for No. 10,) and G.D. Kamat (for No. 5), for Respondents.
The Government cannot exempt the Registrar from complying with the provisions of the Act and Rules, and any such exemption is ultra vires and void.
Headnote:
CO-OPERATIVE SOCIETY - EXEMPTION FROM PROVISIONS OF ACT - NOTIFICATION - VALIDITY - ORDER OF SUPERSESSION - VALIDITY - MALA FIDE - JURISDICTION - CO-OPERATIVE TRIBUNAL - APPEAL.
Fact of the Case:
The petitioners, members of the Committee of the Goa, Daman and Diu Co-operative Fisheries Federation Ltd., challenged the Notification exempting the Society from a proviso to S.78(1) of the Maharashtra Co-operative Societies Act, 1966, and the Order removing the Committee and appointing an Administrator. The petitioners alleged mala fide and non-compliance with the provisions of the Act and Rules.
Finding of the Court:
The Court held that the Notification was ultra vires S.157 of the Act as it modified the provisions of S.78(1) in substance and affected the principle of natural justice. The Court also held that the Order was bad in law as it was passed without giving the Committee an opportunity to state its objections and without consulting the Federal Society, as required by S.78(1) and R.61(2) of the Co-operative Society Rules, 1962. The Court found that the allegations of mala fide were not totally misplaced.
Issues: 1. Whether the Notification exempting the Society from a proviso to S.78(1) of the Act was valid? 2. Whether the Order removing the Committee and appointing an Administrator was valid? 3. Whether the allegations of mala fide were substantiated?
Ratio Decidendi: 1. The Court held that the Notification was ultra vires S.157 of the Act as it modified the provisions of S.78(1) in substance and affected the principle of natural justice. The Court reasoned that S.157 empowers the Government to exempt a Society from any of the provisions of the Act, but not to exempt the Registrar from any provision of the Act. The Court also held that the Notification was passed without giving the Society an opportunity to represent its case, which was a requirement under S.157. 2. The Court held that the Order was bad in law as it was passed without giving the Committee an opportunity to state its objections and without consulting the Federal Society, as required by S.78(1) and R.61(2) of the Co-operative Society Rules, 1962. The Court reasoned that the Registrar had no jurisdiction to pass the Order without complying with these requirements. 3. The Court found that the allegations of mala fide were not totally misplaced, considering the reasons given by the Government for the issuance of the Notification and the Order, and the failure to give the Society an opportunity to represent its case.
Final Decision: The Court quashed and set aside the Notification and the Order. The Court directed the respondents to hold the elections of the members of the Committee as early as possible and to pay the costs of the petition to the petitioners.
ORDER :- The order contained in the notification dated May 18, 1978 and the order dated May 23, 1978 are challenged in this writ petition. By the impugned notification the State Government in exercise of the powers vested in it by S.157 of the Maharashtra Co-operative Societies Act, 1966 as applied to the Union Territory of Goa, Daman and Diu, (hereinafter referred to as "the Act") purports to exempt the Goa, Daman and Diu, Co-operative Fisheries Federation Ltd., Pamaji, a registered Society which shall hereinafter be referred to as the "Society", the respondent No. 10 herein form a part of the provisions of S.78(1) of "the Act". By the impugned order Government purported to remove the Board of Directors (hereinafter referred to as "the Committee") of the Society including the Chairman and the Vice-Chairman.
2. The case of the petitioners is as follows :-
The petitioners and the respondents Nos. 3 to 8 were nominated by the Government to constitute the Committee of the Society and were empowered to elect a Chairman and Vice-Chairman to act as such till elections were held in accordance with the established procedure. The Committee thus constituted, elected the first and second petitioners as the Chairman and Vice-Chairman respectively, in the meeting held on March 21, 1973. Under the management of the Committee, the Society worked properly and substantially fulfilled all the obligations indicated by the bye-laws. In the Audit Report for the years 1975-76 and 1976-77, the Auditors stated that the Society is working properly and has fulfilled the objectives to some extent and that its prospects were good. According to the Auditors, the functioning of the Society has also been good. Under the management of the Committee the Society made substantial profits.
In June 21, 1977, the Committee framed rules for election of the Committee and after placing them before a special general body meeting, submitted the rules for approval of the Registrar, the respondent No. 3 herein. The Registrar instead of approving the Rules, deliberately and with ulterior purposes kept the rules in abeyance without approving them, for over a period of 9 months. No technical difficulties existed to excuse the delay in approving the Rules. In the absence of rules the Committee had to continue to function and in fact continued to function even after Jan. 27, 1978. Such continuation after the expiry of 6 years term amounts to an implied extension by the Government of the term of "the Committee". The conduct of the Registrar (Respondent No. 3), in sending his representative to attend the general body meeting called on Feb. 14, 1978, and that of the Assistant Registrar in attending the special general body meeting held on April 30, 1978, and also the fact that the Registrar deemed it necessary to pass an order removing the Committee, confirm the fact that the Government had impliedly extended the term of "the Committee."
By the Notification dated May 18, 1978 (hereinafter referred to as "the Notification"), purported to have been passed under S.157 of the Act, the Government purported to exempt the Society from a proviso to Sub-S. (1) of S.78 of "the Act". The notification modified in substance the provisions of S.78 of the Act and is therefore ultra vires S.157 of the Act. Before the Notification was passed no opportunity was given to the Society to represent its case, though it contained an order to the prejudice of the Society. The notification is therefore illegal, null and void.
Subsequently, purporting to exercise powers under S.78(1)(b) of "the Act" read with cl.(b) of sub-r. (1) of R.6 of the Rules the Registrar of Co-operative Societies (hereinafter referred to as "the Registrar") by the order dated May 23, 1978 (for short "the Order") removed the Committee including the Chairman and Vice-Chairman and appointed Shri. K.C.D. Gangwani as Administrator of the Society with immediate effect to manage the affairs for a period of 6 months. The order could
