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1972 Supreme(P&H) 80
PUNJAB & HARYANA HIGH COURT
S.S.Sandhawalia and M.R.Sharma JJ.
Lakha Singh
Versus
Registrar, Co Operative Societies, Punjab, Chandigarh
Civil Writ No. 254 of 1972,
Decided On : MARCH 21, 1972
The power to remove a member of a co-operative society under Rule 26 of the Punjab Co-Operative Societies Rules, 1963, is vested solely in the Registrar, and a subordinate officer cannot exercise this power.
Headnote:
CO-OPERATIVE SOCIETY - DISQUALIFICATION OF MEMBER - MAXIMUM CREDIT LIMIT - DIRECTIVE BY REGISTRAR - INTERPRETATION - POWER OF REGISTRAR TO REMOVE MEMBER - RULE 26 OF PUNJAB CO-OPERATIVE SOCIETIES RULES, 1963.
Fact of the Case:
The petitioner, an elected member of the Managing Committee of the Mansa Co-Operative Marketing-cum-Processing Society Limited, was removed from his position by the Assistant Registrar, Co-Operative Societies, Bhatinda, on the ground that he had exceeded his maximum credit limit and was in default to the society. The petitioner challenged this order, arguing that he had not exceeded his credit limit and that the Assistant Registrar did not have the authority to remove him.
Finding of the Court:
The Court held that the petitioner had not exceeded his maximum credit limit, as the directive issued by the Registrar limiting loans to eight times the share capital of a member did not modify the petitioner's credit limit, which had been set at a higher amount by the Assistant Registrar. The Court also held that the Assistant Registrar did not have the authority to remove the petitioner from his position, as the power to remove members under Rule 26 of the Punjab Co-Operative Societies Rules, 1963, was vested solely in the Registrar.
Issues: 1. Whether the petitioner had exceeded his maximum credit limit and was in default to the society. 2. Whether the Assistant Registrar had the authority to remove the petitioner from his position.
Ratio Decidendi: 1. The Court interpreted Rule 25(a) of the Punjab Co-Operative Societies Rules, 1963, which provides for disqualification of members for being in default to a society or owing an amount exceeding their maximum credit limit, as containing two distinct provisions: (i) default to a society in respect of any sum due, and (ii) raising a loan beyond the maximum credit limit. The Court held that the petitioner had not committed a default of the type that would result in his automatic cessation of membership, as he had raised a loan that was below his maximum credit limit. 2. The Court interpreted Rule 26 of the Punjab Co-Operative Societies Rules, 1963, which provides for the cessation of membership of a member who incurs certain disqualifications, as requiring a competent authority to determine whether a member has ceased to be a member. The Court held that the Assistant Registrar, who was not invested with the powers of the Registrar under Section 27 of the Punjab Co-Operative Societies Act, 1961, was not competent to pass an order declaring that the petitioner had ceased to be a member.
Final Decision: The Court allowed the petitioner's petition and quashed the order of the Assistant Registrar removing him from his position as a member of the Managing Committee of the Mansa Co-Operative Marketing-cum-Processing Society Limited.
M.R.Sharma, J.
1. Common questions of law and fact arise out of Civil Writs Nos. 256 and 254 of 1972. These are being disposed of by this judgment.
2. Shri B. S. Khoji, learned Counsel for the Petitioner, has advanced the main arguments in C. W. No. 254 of 1972. Therefore, the facts giving rise to that petition may be stated.
3. The Petitioner is a member of the Bappiana Co-Operative Agricultural Service Society Limited, Bappiana (hereinafter called the Bappiana Society). This Society is, in turn, a member of the Mansa Co-Operative Marketing-cum-Processing Society Limited, Mansa (hereinafter called the Mansa Society). It was alleged that the Managing Committee of the Mansa Society was elected from individual shareholders as also from its constituent co-operative societies. The petitioner was an individual share holder of the Mansa Society and he was elected as a member of the Committee of the said society in his capacity as such. On November 4, 1971, the Assistant Registrar, Co-Operative Societies, Bhatinda, issued a show-cause notice to the Petitioner calling upon him to explain why it should be ordered that the petitioner ceased to be the member of the Committee of the Mansa Society. The allegations in the said notice were that the petitioner was a defaulter of the Bappiana Society inasmuch as he failed to pay Rs. 38/-to the said society in respect of the value of the shares allotted to him. This default is said to have continued from December 30, 1970 to June 29, 1971. The second allegation against the petitioner was that the Bappiana Agricultural Service Society Limited, of which the petitioner was alleged to be a representative, had made a default in payment of Rs. 38012/-on account of short term loan advanced to the said society by the Bhatinda Central Co-Operative Bank Limited, Bhatinda. A copy of this notice is annexed as Annexure A to the petition. It would be pertinent to note at this stage that in the show-cause notice the allegation regarding the realisation of loan beyond the maximum credit limit sanctioned in favour of the petitioner was not mentioned at all and the ultimate actions was taken on the basis of this ground only. The petitioner sent a reply to this notice on November 12, 1971, Annexure B. It was stated therein that the petitioner had been elected as a Director of the Mansa Society in his capacity as an individual share holder, and he could not be visited with evil consequences on account of the default committed by the Bappiana Society concerning non-payment of loan to the Bhatinda Central Co-operative Bank Limited, Bhatinda. The default in respect of the payment of Rs. 38/-towards the share-money was also denied. The Assistant Registrar, vide his order dated November, 25, 1971 came to the conclusion that Rs. 1360.10 were outstanding as loan against the petitioner as on December 22, 1970 when his share-money was only Rs. 100/-. He repaid Rs. 249.30 on December 30, 1970, leaving a balance of Rupees 1110.80. He also placed reliance on a directive said to have been issued by the Registrar, Co-Operative Societies, in exercise of powers conferred upon him under Rule 45 of the Rules framed under the Co-operative Societies Act (hereinafter referred to as the Act). Under this rule, a directive was issued in the following terms:-
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"* * * hereby direct that with effect from 1-2-1968 the loan outstanding of the Co-Operative Agricultural Service Societies against any member shall not, at any time, exceed 8 times the share capital paid by him."
The Assistant Registrar held that the capital of Shri Lakha Singh, the petitioner in the society on December 22, 1970, was only Rs. 100/-and he was entitled to have only Rs. 800/-as loan. In order to save himself from disqualification, either he should have taken loan only eight times of the share-capital or he should have contributed more of share-money commensurate with the loan procured. He had, therefore, made a default either in the payment of share-money or
