High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S.S. SUBRAMANI
Arignar Anna Weavers Co-Operative Society Limited - Appellant
Versus
State of Tamil Nadu and Others - Respondents
W.P. Nos. 13836, 13837, 13843, 13844 and 16880 to 16883 of 1998
Decided On : 27 January 1999
CO-OPERATIVE SOCIETIES - SUPERSESSION OF BOARD - PRINCIPLES OF NATURAL JUSTICE - INSPECTION REPORT - DISCLOSURE - FAIR HEARING - ADMINISTRATIVE ACTION - CIVIL CONSEQUENCES - OPPORTUNITY OF HEARING - IMPLIED DUTY.
Fact of the Case:
The petitioners, representing various co-operative societies, challenged the orders of supersession of their respective boards and the subsequent confirmation of those orders. The supersession was based on an inspection report, but the petitioners were not provided with a copy of the report despite their requests.
Finding of the Court:
The court held that the petitioners were entitled to a copy of the inspection report as a matter of natural justice and that the failure to provide them with a copy violated their right to a fair hearing. The court further held that the respondents had not complied with the statutory requirements under Section 82(5) of the Tamil Nadu Co-operative Societies Act before proceeding under Section 88 of the Act, which was a further violation of the principles of natural justice.
Issues: 1. Whether the petitioners were entitled to a copy of the inspection report as a matter of natural justice? 2. Whether the respondents had complied with the statutory requirements under Section 82(5) of the Tamil Nadu Co-operative Societies Act before proceeding under Section 88 of the Act?
Ratio Decidendi: 1. The court held that the petitioners were entitled to a copy of the inspection report as a matter of natural justice because: a) The inspection report was the sole basis for the supersession of the board under Section 88 of the Act. b) The principles of natural justice require that a person be given an opportunity to be heard before a decision is made that will adversely affect them. c) The petitioners had a legitimate interest in the inspection report as it affected their right to manage the society. 2. The court held that the respondents had not complied with the statutory requirements under Section 82(5) of the Tamil Nadu Co-operative Societies Act before proceeding under Section 88 of the Act because: a) Section 82(5) empowers the Registrar to direct the society to take remedial measures after disclosing the result of the inspection or investigation. b) The respondents had not issued any such direction to the petitioners before proceeding under Section 88 of the Act.
Final Decision: The court allowed the writ petitions and quashed the impugned orders of supersession and the notices issued under Section 81 of the Act.
The Order of the Court was as follows :
W.P. Nos. 13836, 13837, 13843 and 13844 of 1998 are filed by the respective Co-operative Society represented by the President seeking to quash the notice issued by the Enquiry Officer under Section 81(2)(1) of the Tamil Nadu Co-operative Societies Act. The Notice is dated 31-8-1998.
2. Even before the notice was issued, an order of supersession was passed against those Societies as per Order dated 13-6-1998 and confirmed in Appeal dated 20-10-1998. Orders of supersession are challenged in W.P. Nos. 16880 to 16883 of 1998.
3. I will first take into consideration the question whether the order of supersession is valid, for which I need narrate the facts in W.P. No. 16880 of 1998 since the facts are similar in all cases. That Writ Petition was filed by the members of the Board and the Society.
4. Petitioners therein assumed Office on 30-10-1996. A show cause notice was issued on 10-4-1998 under Section 88(1)(a) of the Tamil Nadu Co-operative Societies Act, asking them to explain why the Board shall not be superseded. In that proceeding, reference was made to an Inspection Report dated 23-3-1998 and it was further stated that it was in consequence of the same, they wanted supersession of the Board. Petitioners submitted their explanation on 30-4-1998. In that reply, petitioners wanted a copy of the Inspection Report, which is the only basis for issuing the show cause notice. It is the grievance of the petitioners that copy of the Inspection Report was not given in spite of demand. But at the same time, based only on that Report, second respondent passed an order superseding the Board. The matter was taken in appeal under Section 152 of the Co-operative Societies Act, without success. The same is challenged in these writ petitions, on various grounds.
5. Even though various grounds are taken in the writ petition challenging the orders of supersession and the subsequent confirmation, the only point that was urged by learned Senior Counsel for petitioners was that the impugned Orders cannot be sustained since they have been passed in violation of the principles of natural justice. The argument was that the only basis for passing the order of supersession of the Board is the Report of the Inspection Committee. But the details of the same have not been communicated to the petitioners and, therefore, they could not successfully defend themselves or submit their explanation effectively, to the second respondent. It is further said that the Inspection Report is neither a confidential document, nor a privileged document, and the petitioners are, as of right, entitled to a copy of the Report. It was further argued by the learned Senior Counsel for petitioners that even though the Act does not say that the Report has to be communicated, under the principles of natural justice, petitioners are entitled to have a copy of the same. It was further argued by learned Senior Counsel that without complying with the provisions of Section 82 of the Tamil Nadu Co-operative Societies Act, even show cause notice under Section 88 of the Act cannot be issued.
6. All the allegations in the writ petitions are disputed in the counter-affidavits filed by respondents. Learned Additional Government Pleader submitted that the show cause notice itself gives necessary information about the enquiry and the result of the same. It is further said that the Act also does not say that the petitioners are entitled to a copy of the Report. According to him, the principles of natural justice have been fully complied with, and the explanations submitted by petitioners were fully considered by respondent No. 2. Therefore, the respondents prayed for dismissal of the writ petitions.
7. The only point that requires consideration is, whether the principles of natural justice have been violated and whether the orders impugned in these writ petitions are bad in law.
8. Section 82 of the Tamil Nadu Co-operative Societies Act empowers the R
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