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1994 Supreme(P&H) 327

PUNJAB & HARYANA HIGH COURT
A.L.Bahri and Ashok Bhan JJ.
S.R.Goyal
Versus
Mehtab Singh, Deputy Registrar, Cooperative Societies
Civil Writ Petition No. 10872 of 1993,
Decided On : MARCH 25, 1994

Suspension of the Managing Committee of a cooperative society under Section 34(2) of the Haryana Co-operative Societies Act, 1984 is illegal if there are no proceedings pending under Section 34(1) of the Act for removal of the Committee.

Headnote:

COOPERATIVE SOCIETY - SUSPENSION OF MANAGING COMMITTEE - SECTION 34(2) OF THE HARYANA CO-OPERATIVE SOCIETIES ACT, 1984 - PENDENCY OF PROCEEDINGS UNDER SECTION 34(1) IS A CONDITION PRECEDENT - SUSPENSION OF MANAGING COMMITTEE WITHOUT PENDING PROCEEDINGS IS ILLEGAL.

Fact of the Case:

The Managing Committee of the Bankmen Cooperative Urban (Salary Earners) Non Agriculture Thrift and Credit Society, Rohtak was suspended by the Deputy Registrar exercising the powers of Registrar Cooperative Societies, Haryana, under Section 34(2) of the Haryana Co-operative Societies Act, 1984. The petitioners, members of the Managing Committee, challenged the suspension order, arguing that it was illegal as no proceedings were pending under Section 34(1) of the Act, which is a condition precedent for invoking the powers under Section 34(2).

Finding of the Court:

The court held that the suspension of the Managing Committee was illegal as there were no proceedings pending under Section 34(1) of the Act for removal of the Committee. The court found that pendency of proceedings under Section 34(1) is a condition precedent for invoking the powers to suspend the committee under Section 34(2).

Issues: Whether the suspension of the Managing Committee was legal when no proceedings were pending under Section 34(1) of the Act.

Ratio Decidendi: The court interpreted Section 34(2) of the Act and held that the powers to suspend the Managing Committee under Section 34(2) can only be exercised during the pendency of proceedings under Section 34(1) of the Act. The court reasoned that the suspension of the committee can be operative only during the period of proceedings and in the absence of pendency of any proceeding, the question of suspension of the committee cannot arise.

Final Decision: The court allowed the writ petition, set aside the impugned order of suspension, restored the Managing Committee of the Society, and directed the Administrators appointed for running the society to hand over the society to the members of the Managing Committee forthwith.

Judgment

Ashok Bhan, J.

1. Petitioners are the Managing Committee Members, President, Treasurer and Vice President of the Bankmen Cooperative Urban (Salary Earners) Non Agriculture Thrift and Credit Society, Rohtak (hereinafter referred to as the society) the society was registered on 25.3.1989. It was established with a view to encourage thrift and saving among its members by accepting deposits by offering other suitable facilities. Election of the office bearers of the society was held on 17.2.1992. Elected members hold the office for a period of three years.

2. Vide order dated 3.9.1993 Annexure P-1 with the writ petition, Managing Committee of the Society was ordered to be suspended under the orders of Deputy Registrar exercising the powers of Registrar Cooperative Societies, Haryana. Raj Kumar and Rajinder Nath two Inspectors from the department of cooperative societies were appointed as Administrators for the purpose of running the society. This writ petition has been filed under Articles 226/227 of the Constitution of India, for issuance of a writ in the nature of certiorari quashing the order dated 3.9.1993 (Annexure P/1) suspending the Managing Committee primarily on the ground that action taken by respondent No.1 for suspending Managing Committee of the Society was in violation of the provisions of the Haryana Co-operative Societies Act, 1984 (hereinafter referred to as the Act); Managing Committee of the Society has been ordered to be suspended Under Section 34 (2) of the Act while no proceedings were pending under Sub-section (1) of Section 34 of the Act that pendency of proceedings under Sub-section (1) of section 34 was a condition precdent for invoking the powers under Sub-section (2) of Section 34 of the Act for suspending the Managing Committee of the Society. For facility of reference Section 34 is reproduced below:-

"34. Removal of Committee (1) if in the opinion of the Registrar, a committee persistently makes default or is negligent in the performance of duties imposed on it by this Act or the rules or by bye laws or commits any act which is prejudicial to the interest of the society or its members, the Registrar may after giving the committee an opportunity to state its objections, if any, by order in writing, remove the committee and order fresh election of the committee or appoint administrators in accordance with the provisions of Section 33. Provided that the appointment of administrators shall be for a period of one year which may be extended, from time to time, up to three years.

(2) Where the Registrar, while proceedings to take action Sub-section (1), is of the opinion that suspension of the committee during the period of proceeding is necessary in the interest of the Cooperative Society, he may suspend the committee and make such arrangement as he thinks proper for the management of the affairs of the society till the proceedings are completed. Provided that if the committee so suspended is not removed it shall be reinstated and the period of suspension shall count towards it tenure; Provided farther that the period of suspension shall not exceed

(3) The administrators appointed under Sub-section (1) shall arrange, for the eletion of a committee in accordance with the bye taws of the society failing which the Registrar shall arrange to hold the election.

(4) Before taking any action under Sub section (1) in respect of a Cooperative Society the Registrar shall consult the financing institution in which it is indebted."

3. Notice of motion was issued. In the written statement Filed, a preliminary objection has been taken to the effect that against the impugned order, an appeal was competent Under Section 114 of the Act and as such the petitioners be not permitted to invoke the extraordinary writ jurisdiction of this Court under Article 226 of the Constitution of India; assertion of the petitioners that the Managing Committee of the society was suspended in exercise of powers Under Section 34(2) of t






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