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2022 Supreme(MP) 1269

IN THE HIGH COURT OF MADHYA PRADESH BENCH AT GWALIOR
Gurpal Singh Ahluwalia, J.
Shivdayal Shandilya – Appellant
Versus
State of Madhya Pradesh & Ors. – Respondents
Writ Petition No. 16853 of 2022
Decided On : 17-10-2022

Advocates Appeared:
Shri Sanjay Bahirani - Advocate, for the Appellant; Shri Sanjay Kumar Sharma - Government Advocate For State And Shri Vivek Khedkar - Advocate For Respondent No.6), for the Respondent

Headnote:(A) Constitution of India - Article 226 - Cooperative Societies Act, 1960 - Petition challenging supersession of society board - Supersession found valid as it followed legal principles; lack of quorum due to ineligible directors leading to decision - The order was not quashed on the grounds of no opportunity given for hearing due to established disqualifications of directors involved. (Paras 4, 10, 12, 15, 20)

(B) Natural Justice - Violation of natural justice does not alone render an order vulnerable without showing of prejudice - Petitioner’s claim to challenge supersession dismissed as non-disqualification of directors was not contested. (Paras 16, 19)

Facts of the case:
The petitioner, President of a cooperative society, challenged the supersession of the board of directors by the Deputy Registrar on grounds that the decision was made without jurisdiction due to the officer's transfer and without a hearing. The court noted the election irregularities and disqualifications that validated the supersession.

Findings of Court:
The impugned order was upheld, with the court finding no merit in claims of jurisdiction and violation of natural justice absent proof of prejudice.

Issues: The primary issues were the jurisdiction of the Deputy Registrar to issue the order and whether the lack of a hearing invalidated the action taken.

Ratio Decidendi: The court determined that the Deputy Registrar retained authority until officially relieved, and that established disqualifications justified supersession without necessitating a hearing for all directors involved.

Result: Petition dismissed and interim stay vacated.

Table of Content
1. application for vacating stay fixed for consideration. (Para 1 , 2)
2. petition filed under article 226 for various reliefs. (Para 3 , 4)
3. challenging the competence and process of supersession. (Para 5 , 15 , 19)
4. opposition to the petition regarding justification of disqualifications. (Para 6 , 16)
5. court considers legality of the supersession decision. (Para 7 , 8 , 9 , 10 , 18)
6. law governing supersession of the board under m.p. cooperative societies act. (Para 12 , 17)
7. petition dismissed; interim order vacated. (Para 20 , 21)

JUDGMENT

1. Today the case is fixed for consideration of I.A.No.5580/2022, an application for vacating stay.

2. The respondent No.6 has filed its return. However, the State and its functionaries have not filed their return. For adjudicating I.A.No.5580/2022, this Court is required to hear the matter on merits, therefore, instead of deciding the application, the matter is heard finally on merits.

3. This petition under Article 226 of the Constitution of India has been filed seeking following reliefs :

    a. That, in view of the fact narrated above, order issued at Annexure P/1 may kindly be quashed in the interest of justice.

    b. That, due to taking illegal action by respondent no.5 the coercive step may kindly be taken against him and huge cost may kindly be imposed.

    c. That any other suitable relief which this Hon'ble court deem fit in the fact of the circumstances of the case. The cost of the present petition also may kindly be awarded.

4. It is submitted by the counsel for the petitioner that the petitioner is the President of Vipdan Sahkari Sanstha Maryadit, Sabalgarh, District Morena. The election of Board of Directors of the said society was held in the year 2020 and Directors of the Society were elected amongst the members of the parents societies. The first meeting of the Board of Directors was called on 7.9.2020. By the impugned order dated 5.7.2022, the society has been superseded under Section 53 of M.P. Cooperative Societies Act on the ground that on 2.9.2020 elections were held for the Board of Directors and only seven Directors were elected against 10 posts. On 2.9.2020 i.e., the date on which the elections were conducted, out of seven Directors, the term of two Directors namely Anant Kumar and Makhanlal had already come to an end in their parent society and the members of Bhutpurwa Sainik Prathmik Upbhokta Bhandar Maryadit, Sabalgarh and Rajeev Gandhi Prathmik Upbhokta Sahkari Bhandar Maryadit, Sabalgarh had incurred disqualification as they were the defaulters in their parent society for more than 12 months and thus they were disqualified for being elected as Directors. Out of seven elected Directors, only three Directors were validly elected and, therefore, there was a lack of Quorum and, accordingly, the society has been superseded by the Deputy Registrar, Cooperative Societies Morena by order dated 5.7.2022 and Shri N.S. Bareliya has been appointed as the Administrator.

5. Challenging the order passed by the Deputy Registrar Cooperative Societies, the following submissions have been made by the counsel for the petitioner:

    (i) The Deputy Registrar Shri C.P.S. Bhadoriya was not competent to pass an order because on 30.6.2022 he was already transferred.

    (ii) No opportunity of hearing was given to the Society before passing the order in question.

6. Per contra, the petition is vehemently opposed by the counsel for the respondent No.6 i.e. the Marketing Society, Sabalgarh, District Morena. It is submitted that it is clear from the impugned order dated 5.7.2022 that the term of membership of two Directors in their parent society had already come to an end and two Directors had incurred disqualification being the defaulter in their parent society for a period of more than 12 months therefore, they were not eligible to be elected as Directors and, therefore, only three Directors were left which has resulted in lack of quorum and, accordingly, the Deputy Registrar has rightly supe

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