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ALLAHABAD HIGH COURT
Yatindra Singh and R.K. Rastogi, JJ.
Committee of Management District Co-operative Bank Limited
Versus
State of UP
Civil Misc Writ Petition 38022 of 2004
Decided On : 17 March 2005
Civil Misc Writ Petition 38022 Of 2004
interpretation - scope of section 29 (5) of the UP Co-operative Societies Act, 1965 - [section 29 (5)] - The main question involved in these writ petitions relates to the interpretation and scope of section 29 (5) of the UP Co-operative Societies Act, 1965 and deals with the considerations/factors governing discretion of the Registrar while appointing an Administrator or the Committee of Administrators under section 29 (5) (b) of the Act.
Fact of the Case:
The writ petitions challenge the appointments of private persons as Administrators and in the committee of Administrators under section 29 (5) (b) of the Act. The co-operative society had sent requisition for conducting elections in time, but the elections were delayed due to various reasons. The outgoing committee of management was superseded in some cases. The main points for determination were whether the outgoing committee of management is entitled to continue after expiry of its term, whether the petitioners have locus standi to file the present writ petitions, whether the State Government is entitled to issue government order regarding exercise of registrars discretion under section 29 (5) (b) of the Act, whether there is any justification for the delay in holding the elections, what are the considerations/factors for exercising power under section 29 (5) (b) of the Act, and whether the Registrar has reasonably exercised its power while appointing Administrators or the Committees of Administrators.
Finding of the Court:
The committee of management is not entitled to continue after expiry of its term. The petitioners have locus standi to file the present writ petitions. The State Government is entitled to issue general guidelines for exercise of power under section 29 (5) (b) of the Act. There was justification for the Registrar for not holding the elections earlier. The Registrar has not applied relevant considerations/factors in making the appointments. The appointments of private persons as Administrators or in the committee of Administrators were found to be illegal.
Issues: The main issues involved in the case were whether the outgoing committee of management is entitled to continue after expiry of its term, whether the petitioners have locus standi to file the present writ petitions, whether the State Government is entitled to issue government order regarding exercise of registrars discretion under section 29 (5) (b) of the Act, whether there is any justification for the delay in holding the elections, what are the considerations/factors for exercising power under section 29 (5) (b) of the Act, and whether the Registrar has reasonably exercised its power while appointing Administrators or the Committees of Administrators.
Ratio Decidendi: The committee of management is not entitled to continue after expiry of its term. The petitioners have locus standi to file the present writ petitions. The State Government is entitled to issue general guidelines for exercise of power under section 29 (5) (b) of the Act. There was justification for the Registrar for not holding the elections earlier. The Registrar has not applied relevant considerations/factors in making the appointments. The appointments of private persons as Administrators or in the committee of Administrators were found to be illegal.
Final Decision: The writ petitions are allowed with the aforesaid observations and directions. The appointments of private persons as Administrators or in the committee of Administrators were quashed. The government servants who were initially appointed as Administrators will manage the co-operative societies till the Registrar reconsiders the appointments in the light of the observations made by the court. The Registrar shall reconsider the appointments within three months and change them if necessary. The Chief Secretary will appoint a committee within three months to consider the points mentioned under the heading some SUGGESTIONS. And the follow up action will be taken.
( 1 ) THE main question involved in these writ petitions relates to the interpretation and scope of section 29 (5) of the UP Co-operative Societies Act, 1965 (the Act) and deals with the considerations/factors governing discretion of the Registrar while appointing an Administrator or the Committee of Administrators under section 29 (5) (b) of the Act. These points arises as the appointments of private persons as Administrators and in the committee of Administrators under section 29 (5) (b) of the Act are challenged in these writ petitions. THE FACTS
( 2 ) A co-operative society {section 2 (f) of the Act} means a co-operative society registered under the Act. Chapter III of the Act deals with members OF CO-OPERATIVE SOCIETIES AND their RIGHTS AND LIABILITIES. Section 17 of this Chapter explains who can be members of a co-operative society. It shows that not only an individual (natural person) can be member of a co-operative society but State government, or Central Government, or firms, or other incorporated bodies (including cooperative bodies), or even un-incorporated bodies (if approved by the Registrar) can be member of a co-operative society.
( 3 ) MEMBERS for promotion of their economic interest may form a co-operative society (section 4 of the Act) in accordance with co-operative principles. Co-operative societies are broadly divided into three tiers.
(i) Primary society (ii) Central society or central co-operative society. (iii) Apex Society, or Apex level society, or state level co-operative society.
( 4 ) GENERALLY, the primary society is at the Nyaya Panchayat level and has individuals as its members. The central society is at the district level and has primary co-operative societies as its members. The apex society is at the State level and has central or primary societies as its members.
( 5 ) APEX Society or Apex level society or state level co-operative societies are defined in section 2 (a-4) of the Act. Banking is one of the ways to promote economic interest and a co-operative society for banking may be formed. The Apex society in the banking sector is UP co-operative Bank Ltd. Lucknow (UP Co-operative Bank ).
( 6 ) CENTRAL Society is defined in section 2 (d-1) of the Act. It is a society that is not a primary society and has other co-operative societies as its members. The Central Societies in cooperative banking are known as District Co-operative Banks (DCBs) of that district. All District co- operative Banks in the State are members of the apex co-operative society namely UP co-operative Bank.
( 7 ) THE word primary society is defined in section 2 (q-1) of the Act. Its ordinary membership is not open to any other co-operative society. Generally it has individuals or natural persons as its members. There are different kinds of primary societies facilitating lending, crediting and banking. In rural area they are at Nyaya Panchayat level and there could be more than one primary society in a Nyaya Panchayat or one primary co-operative society may serve more than one Nyaya Panchayat. Most of the primary co-operative societies are members of Central banking society namely the District Co- operative Bank (DCB) of that district.
( 8 ) BANKING in the co-operative sector is not confined to the rural areas. It has operation in urban areas also. Different districts have urban co-operative banks UCBs) in addition to DCB. There can be more than one UCB in a district. UCBs are generally primary co-operative societies and are defined under Rule 2 (qq) of the UP Co-operative Societies Rules 1968 (the Rules ). Non-agriculturist individuals can be members of the UCBs. UCBs may also be members of the up Co-operative Bank.
( 9 ) CHAPTER VII of the Rules is titled as CONSTITUTION OF GENERAL BODY OF co-OPERATIVE SOCIETIES. Rules 84-A deals with the general body of a co-operative society. In case the co-operative society is having individuals (natural persons) as its members, it consists of the individuals. In case
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