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1998 Supreme(All) 698

IN THE HIGH COURT OF ALLAHABAD
BINOD KUMAR ROY, R. K. MAHAJAN
DAL SINGH YADAV - Appellant
Versus
STATE GOVERNMENT - Respondents
C. M. W. P. 22405 Of 1998
Decided On : 07/16/1998

Advocates Appeared:
R.C.DWIVEDI

The Legislature has the competence to legislate on all aspects of Co-operative Societies, including the management thereof, and the reduction of the term of the Committee of Management from five years to three years was a valid exercise of that power.

Headnote:

CO-OPERATIVE SOCIETIES - UTTAR PRADESH CO-OPERATIVE SOCIETIES ACT, 1965 - SECTION 29(2) - AMENDMENT - REDUCTION OF TERM OF COMMITTEE OF MANAGEMENT FROM FIVE YEARS TO THREE YEARS - VALIDITY - CHALLENGE - GROUNDS - VESTED RIGHT - MALA FIDE - SPIRIT OF CO-OPERATIVE MOVEMENT - COURT'S ANALYSIS AND CONCLUSION.

Fact of the Case:

The petitioner, a Director/member of the Board of Directors of the Committee of Management of the District Co-operative Bank Ltd., Shahjahanpur, challenged the validity of the Uttar Pradesh Co-operative Societies (Second Amendment) Act, 1998 (U.P. Act 19 of 1998), which amended Section 29(2) of the Uttar Pradesh Co-operative Societies Act, 1965, reducing the term of the Committee of Management from five years to three years. The petitioner contended that the amendment was ultra vires, violated his fundamental rights, and was against the spirit of the co-operative movement.

Finding of the Court:

The Court held that the amendment to Section 29(2) of the Act was not ultra vires, did not violate any fundamental rights, and was not against the spirit of the co-operative movement. The Court found that the Legislature had the competence to legislate on all aspects of Co-operative Societies, including the management thereof, and that the reduction of the term from five years to three years was a valid exercise of that power.

Issues: 1. Whether the amendment to Section 29(2) of the Act was ultra vires the Constitution? 2. Whether the amendment violated any fundamental rights of the petitioner? 3. Whether the amendment was against the spirit of the co-operative movement?

Ratio Decidendi: 1. The Court held that the Legislature had the competence to legislate on all aspects of Co-operative Societies, including the management thereof, and that the reduction of the term from five years to three years was a valid exercise of that power. 2. The Court held that the petitioner had no fundamental right to continue as a member of the Committee of Management for a period of five years, and that the amendment did not violate any of his fundamental rights. 3. The Court held that the amendment was not against the spirit of the co-operative movement, as it was aimed at ensuring better management and accountability of Co-operative Societies.

Final Decision: The Court dismissed the writ petition, holding that the amendment to Section 29(2) of the Act was valid and did not suffer from any constitutional infirmity.

( 1 ) THE petitioner has come up with following prayers :- (i) to issue a writ, order or direction in the nature of mandamus commanding the respondents not to enforce U. P. Act No. 19 of 1998; (ii) to declare the said Act to be ultra vires as it contravenes the fundamental right of the petitioner and is against the spirit of the co-operative movement; and (iii) to call for the records and direct the respondents to produce order dated 10/11-71998 passed by the Registrar, Co-operative Societies, U. P. , Lucknow appointing the District Magistrate, Shahjahanpur as Administrator of the District Co-operative Bank Limited, Shahjahanpur.

( 2 ) THE petitioner is Director/member, Board of Directors of the Committee of the Management of the District Co-operative Bank Ltd. , Shahjahanpur whose term is going to expire on 10/05/1999. He asserts that when the B. J. P. found that their party members have not succeed in the election of the Co-operative Societies, it being in power amended Section 29 reducing the period of 5 years to 3 years thus depriving his vested right to continue till 10/05/1999. Respondent No. 2 has illegally passed a consequential order appointing the District Magistrate, Shahjahanpur as Administrator.

( 3 ) ACCORDING to Sri R. C. Dwivedi, learned counsel for the petitioner Section 29 (2) of the Uttar Pradesh Co-operative Societies Act, 1965, as it stands after the U. P. Act 19 of 1998 (Second Amendment) Act, "is ultra vires, illegal and be declared as unconstitutional" on the following grounds :-" (a) That the act contravenes the fundamental right for the committee of management which was to last uptil10th of May, 1999. (b) That the petitioner has a vested right to continue and work as a member/directors of the Board of Directors/committee of Management of District Co-operative Bank Ltd. , Shahjahanpur till 10th of May 1999, but by amending Act the term has arbitrarily been curtailed which contravenes the fundamental right of the petitioner. (c) That the amendment brought in by U. P. Act No. 19 of 1998, is a mala fide and colourable exercise of power hence is liable to be set aside as the same has been made on account of political considerations. (d) That the amendment brought in by U. P. Act No. 19 of 1998, curtailing the term of the Committee of Management is against the fundamental principles of co-operative movement and negates the principle of co-operation and thus, be declared as ultra vires. " (Vide Paragraph 13 of the writ petition)3. 1 To a question put to Sri as to which particulars Art. of Part II of the Constitution of India has been allegedly violated, he failed to give any answer. He, however, contended that once term of the Committee of Management was fixed for five years by the Legislature it could not be reduced to three years and in doing so the right vested in the Committee of Managemenk has been deprived. 3. 2 Sri Dwivedi further conended that the Legislature has acted mala fide in enacting it. 3. 3 Sri Dwivedi lastly contended that we must call for a counter from the State and cannot dismiss this writ petition in limine in view of the ratio decidandi laid down by the Apex Court in N. K. Singh v. Union of India, (1994) 6 SCC 98 : (AIR 1995 SC 423.

( 4 ) SRI R. P. Goyal, the learned Advocate General, on the other hand contended as follows :- (i) Thus submissions made by Sri Dwivedi have got prima facie no substance so as to call fora counter from the respondents. The decision in N. K. Singh is not in relation to an Act of Legislature. (ii) Entry No. 32 of the State List of Seventh Schedule of the Constitution of India expressly confers exclusive jurisdiction in the State Legislature to make enactment in regard to Co-operative Societies of the State. Full Bench decision dated 16-5-1973 of our High Court in C. M. W. P. No. 7632 of 1971, and of the Patna High Court in sheetal Prasad Gupta v. State of Bihar, AIR 1990 SC 65, which follows our Full Bench, give a complete answer regarding the arguments of Sr








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