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1990 Supreme(Raj) 564

RAJASTHAN HIGH COURT AT JAIPUR BENCH
M.B.Sharma, J.
Kuldeep Srivastava & Ors. - Appellants
Versus
State of Raj. & ors. - Respondents
S.B. Civil Writ Petition No. 2186, 2354, 2359 of 1990.
Decided On : 26-07-1990

The principles of natural justice are enshrined in the Constitution and cannot be taken away by executive orders. A statutory authority is required to exercise its discretion independently and its discretion cannot be interfered with by the Government.

Headnote:

CO-OPERATIVE SOCIETIES - REMOVAL OF COMMITTEE - PRINCIPLES OF NATURAL JUSTICE - EXEMPTION - VALIDITY - RAJASTHAN CO-OPERATIVE SOCIETIES ACT, 1965 (RAJASTHAN ACT 19 OF 1965), SEC. 139, SEC. 36(1), RULE 110 - RAJASTHAN CO-OPERATIVE SOCIETIES RULES, 1966 (RAJASTHAN RULES 19 OF 1966), RULE 34(2).

Fact of the Case:

The petitioners, members of various co-operative societies, challenged the orders issued by the State Government under Section 139 of the Rajasthan Co-operative Societies Act, 1965 (the Act) read with rule 110 of the Rajasthan Co-operative Societies Rules, 1966 (the Rules) and the order issued by the Registrar, Co-operative Societies under Section 36 (1) of the Act removing the Board of Directors/Committee of the Society and appointing Administrator to manage the affairs of the society. The petitioners contended that under Section 139 of the Act read with rule 110 of the Rules no power is vested in the State Govt. to exempt the applicability of the principles of natural justice and despite the aforesaid order the principles of natural justice enshrined in rule 36 (6) shall apply. Even if we assume that such a power is vested or could be vested the same could only be exercised in case if any class of the societies involved in the present batch of writ petitions, fell under sub-section (I) of Section 36 of the Act and the case did not so fall. Secondly, the Registrar was required to take independent action under sub-section (I) of Section 36 of the Act and the State Government could not colour or interfere with the discretion of the Registrar, statutory authority, because the Registrar has acted under the order of the State Government and has not exercised his independent discretion, the order removing the Board of Directors/Committee and appointing the Administrator, therefore, cannot be sustained.

Finding of the Court:

The Court held that the State Government did not have the power to exempt the applicability of the principles of natural justice contained in sub-section (1) of Section 36 of the Act in respect of procedure for removal/supersession of the committee. The Court further held that the Registrar was required to exercise his own discretion independently and that the order of removal/supersession of the committee was not in accordance with law.

Issues: 1. Whether the State Government had the power to exempt the applicability of the principles of natural justice contained in sub-section (1) of Section 36 of the Act in respect of procedure for removal/supersession of the committee? 2. Whether the Registrar was required to exercise his own discretion independently?

Ratio Decidendi: 1. The Court held that the State Government did not have the power to exempt the applicability of the principles of natural justice contained in sub-section (1) of Section 36 of the Act in respect of procedure for removal/supersession of the committee. The Court relied on the fact that the principles of natural justice are enshrined in the Constitution and cannot be taken away by executive orders. 2. The Court held that the Registrar was required to exercise his own discretion independently and that the order of removal/supersession of the committee was not in accordance with law. The Court relied on the fact that the Registrar is a statutory authority and that his discretion cannot be interfered with by the State Government.

Final Decision: The Court allowed the writ petitions and quashed the orders issued by the State Government and the Registrar. The Court also set aside the removal/supersession of the committees of the respondents Banks/society and the appointment of the administrator.

JUDGMENT

1. - This order will deal with the above numbered writ petitions in which a common question is involved. Though, the societies in all the cases are not of same class, but the question which has to be decided is in respect of the validity of the orders issued by the State Government under Section 139 of the Rajasthan Co-operative Societies Act, 1950 (Sic 1965) (for short, the Act) read with rule 110 of the Rajasthan Co-operative Societies Rules, 1966 (for short, the Rules) arid the order issued by the Registrar, Co-operative Societies under Section 36 (1) of the Act removing the Board of Directors/Committee of the Society and appointing Administrator to manage the affairs of the society.

2. For the disposal of the present batch of writ petitions, I intend to give the facts of S.B. Civil writ Petition No. 2186/1990. Kuldeep Srivastave v. State of Rajasthan and others as the facts of the cases are not going to make any difference to the ultimate decision of the case.

3. Before I give the facts as aforesaid, I will at the very outset like to clearly specify the points on which action/order of the Registrar of the Co-operative Societies made under Section 36 (1) of the Act has been challenged. A two-fold contention has been raised by the learned counsel for the petitioners that under Section 139 of the Act read with rule 110 of the Rules no power is vested in the State Govt. to exempt the applicability of the principles of natural justice and despite the aforesaid order the principles of natural justice enshrined in rule 36 (6) shall apply. Even if we assume that such a power is vested or could be vested the same could only be exercised in case if any class of the societies involved in the present batch of writ petitions, fell under sub-section (I) of Section 36 of the Act and the case did not so fall. Secondly, the Registrar was required to take independent action under sub-section (I) of Section 36 of the Act and the State Government could not colour or interfere with the discretion of the Registrar, statutory authority, because the Registrar has acted under the order of the State Government and has not exercised his independent discretion, the order removing the Board of Directors/Committee and appointing the Administrator, therefore, cannot be sustained.

4. It may be stated at the very out-set that in all of the writ petitions with which we are concerned, three years period for which the election of the Board of Directors/Committee has been held has expired and it was only after the expiry of the period for which the Board of Directors/Committee was constituted that they are continuing. In other words no part of the period for which the Board of Directors/Committee was constituted as a result of election remains.

5. Kuldeep Srivastava is a member of Kota Sahkari Bhumi Vikas Bank Ltd. Kota and was elected as one of the members of the Board of Directors of that Bank on February 13, 1987 alongwith 8 other members, the total number of elected directors being 9. He was further elected as Chairman of that Bank on February 14, 1987. Thus, the period of three years expired on February 14, 1990. There are bye-laws of the respondent Bank and the relevant bye-law is 26(1) and (2). The period of elected Board of Directors is three years, by it under bye-law 26(2) every member of the Board of Directors even after the expiry of period of three years till fresh Board of Directors is duly elected, shall continue to work. It may be stated that apart from the aforesaid bye-law 26(1) and (2), there is rule 34(a) of the Rules which also provides that the members of the Committee shall continue in office for such period as may be specified by bye-laws or until another committee is constituted. The bye-law (1) and (2) is in respect of Land Development Bank and so far as Central Co-operative Bank/Banks are concerned, the only provision in the relevant bye-law is that the period of elected member of the Board of Directors shall be three years a

















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