Section 27(6) of the Punjab Co-operative Societies Act, 1961, requiring consultation with the financing bank before taking action against a Co-operative Society, is directory and not mandatory.

S.S.SANDHAWALIA, J.

1. Whether the provisions of sub-sec.(6) of S.27 of the Punjab Co-operative Societies Act, 1961 , are mandatory or directory in nature is the spinal issue which has necessitated the admission of this writ petition for a hearing by the Division Bench.

2. The facts are not in dispute and lie in a narrow compass. The petitioners were elected members of the Managing Committee of the Thatha Co-operative Agricultural Service Society (hereinafter referred to as the Society) in the year 1979 and by virtue of S.26(1)(b) of the Punjab Co-operative Societies Act (hereinafter called the Act) their term of office was to be for a period of three years. It is averred on behalf of the petitioners that they were functioning satisfactorily when they were shocked to receive a show cause notice issued by respondent No.3 under S.27 of the Act. Certain allegations of bias have been made against respondent No.2, the Assistant Registrar, Co-operative Societies, Tarn Taran, to which detailed reference is not necessary and it suffices to mention that ultimately the matter was transferred to the Assistant Registrar, Co-operative Societies, Amritsar. It is then alleged that the Assistant Registrar without having served a notice on the Managing Committee or its members passed the impugned order of removal under Sec.27(1) vide Annexure-P.1 dated the 27th of April, 1981. Aggrieved by the same the petitioners preferred an appeal before the Deputy Registrar who finally heard and dismissed the same on the 21st of Aug. 1981 vide order Annexure-P.3. The petitioners then preferred the present writ petition wherein the particular grievance made is that there had been no consultation by the Registrar with the financing Bank in accordance with S.27(6) and therefore, the action of the authorities under the Act stood vitiated. Ancillary grounds of lack of notice and bias etc., were also raised.

3. In the return filed by respondent No.2 Shri Ravinder Kumar, Assistant Registrar, it was highlighted that the petitioners were taking contradictory stands themselves with regard to the show cause notice served upon them. It was pointed out that in para 2 of the petition it had been averred that the petitioners were shocked to receive the show cause notice whilst in the later paragraphs it was sought to be alleged that no show cause notice was served on them. It has been repeatedly reiterated with reference to the despatch numbers of the communications addressed to the petitioners that a show cause notice with reminders was duly served on the petitioners but no reply thereto was sent. The allegations of bias were categorically denied as wrong and false and deliberately concocted. With regard to the consultation with the financing Bank, namely, the Amritsar Co-operative Bank Ltd, Amritsar, it is the stand of the respondents that the allegations in the show cause notice were communicated to the said Bank but since no reply at all was sent by the said financing institution it was presumed that the Bank had no objection to the removal of the Managing Committee, and, as such due compliance of S.27(6) had also been made.

4. As at the motion stage, so before us, the main contention projected on behalf of the petitioners is the non-compliance with what is alleged to be the mandatory provision of S.27(6). Particular reliance for this stand is placed on the single Bench decision of this Court in Ajit Singh V/s. State of Punjab, 1964 Cur LJ 157 which has been later followed in Jagir Singh V/s. Deputy Registrar; Co-operative Societies, Amritsar, 1977 Cur LJ (Civ) 249.

5. Inevitably the mode of, or the effect of the non-compliance with the provisions of sub-sec.(6) of S.27 would revolve around the language of the provisions and it is, therefore, apt to read S.27 of the Act at the very outset-

"S.27. (1) If, in the opinion of the Registrar, a committee or any member of a committee persistently makes default or is negligent in the performance of the duties imposed