2004 Supreme(MP) 672

Madhya Pradesh High Court
K. K. LAHOTI
Deepak Saxena - Appellant
Versus
State of M.P. - Respondent
Decided On : 08/31/2004

The State Government's nomination of the Collector as Chairman of the District Central Cooperative Bank was invalid because it was not made in accordance with the provisions of Section 52(1) of the Act, the State Government could not nominate the Collector as Chairman without first removing the elected Chairman from office, and the State Government's failure to provide the elected Chairman with a show cause notice or an opportunity to be heard before issuing the impugned order violated the principles of natural justice.

Headnote:

The High Court held that the State Government's nomination of the Collector as Chairman of the District Central Cooperative Bank was invalid because it was not made in accordance with the provisions of Section 52(1) of the Madhya Pradesh Cooperative Societies Act, 1960 (the Act). The Court also held that the State Government could not nominate the Collector as Chairman without first removing the elected Chairman from office, and that the State Government's failure to provide the elected Chairman with a show cause notice or an opportunity to be heard before issuing the impugned order violated the principles of natural justice.

Fact of the Case:

The petitioners were elected chairmen of various District Central Cooperative Banks and District Land Development Banks in Madhya Pradesh. In 2004, the State Government issued orders under Section 52(4) of the Act, nominating the Collector of each district as the Chairman of the respective bank. The petitioners challenged these orders, arguing that they were invalid because they were not made in accordance with the provisions of Section 52(1) of the Act, that the State Government could not nominate the Collector as Chairman without first removing the elected Chairman from office, and that the State Government's failure to provide the elected Chairman with a show cause notice or an opportunity to be heard before issuing the impugned order violated the principles of natural justice.

Finding of the Court:

The High Court held that the State Government's nomination of the Collector as Chairman of the District Central Cooperative Bank was invalid because it was not made in accordance with the provisions of Section 52(1) of the Act. The Court also held that the State Government could not nominate the Collector as Chairman without first removing the elected Chairman from office, and that the State Government's failure to provide the elected Chairman with a show cause notice or an opportunity to be heard before issuing the impugned order violated the principles of natural justice.

Issues: 1. Whether the State Government's nomination of the Collector as Chairman of the District Central Cooperative Bank was made in accordance with the provisions of Section 52(1) of the Act? 2. Whether the State Government could nominate the Collector as Chairman without first removing the elected Chairman from office? 3. Whether the State Government's failure to provide the elected Chairman with a show cause notice or an opportunity to be heard before issuing the impugned order violated the principles of natural justice?

Ratio Decidendi: 1. The Court held that the State Government's nomination of the Collector as Chairman of the District Central Cooperative Bank was not made in accordance with the provisions of Section 52(1) of the Act because the Collector was not a person nominated by the State Government under Section 52(1). The Court held that the nomination of the Collector under the bye-laws was not a nomination under Section 52(1) because the bye-laws did not provide that the Collector would be nominated under Section 52(1). 2. The Court held that the State Government could not nominate the Collector as Chairman without first removing the elected Chairman from office because Section 52(4) of the Act only allows the State Government to nominate a Chairman when there is a vacancy in the office of Chairman. The Court held that there was no vacancy in the office of Chairman because the petitioners were still holding office. 3. The Court held that the State Government's failure to provide the elected Chairman with a show cause notice or an opportunity to be heard before issuing the impugned order violated the principles of natural justice. The Court held that the petitioners had a right to be heard before being removed from office and that the State Government's failure to provide them with an opportunity to be heard was a denial of natural justice.

Final Decision: The High Court allowed the petitions and quashed the impugned orders. The Court also awarded costs to the petitioners in the amount of Rs. 1,000/- each.