Hariram Yadav vs The State Of Madhya Pradesh - 2021 Supreme(Online)(MP) 2687

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2021 Supreme(Online)(MP) 2687

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THE HIGH COURT OF JUDICATURE FOR MADHYA PRADESH AT JABALPUR
(Full Bench)
Writ Petition No.4021/2019 Bhopal Cooperative Central Bank Maryadit Bhopal and others Vs.
State of Madhya Pradesh and others Writ Petition No.4057/2019 Board of Director (Superseded) Bhopal Cooperative Central Bank, Bhopal Vs.
State of Madhya Pradesh and others Writ Petition No.4339/2019 Board of Director Distt. Cooperative Central Bank, Raisen Vs.
State of Madhya Pradesh and others Writ Petition No.4915/2019 Ramchandra Lowanshi Vs.
State of Madhya Pradesh and others Writ Petition No.4919/2019 Malak Singh Patel Vs.
State of Madhya Pradesh and others Writ Petition No.5124/2019 Kunwar Singh & another Vs.
State of Madhya Pradesh and others Writ Petition No.5535/2019 Virendra Fouzdar Vs.
State of Madhya Pradesh and others
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Writ Petition No.6038/2019 Hariram Yadav & others Vs.
State of Madhya Pradesh and others Writ Petition No.6607/2019 Shivaji Patel & others Vs.
State of Madhya Pradesh and others Writ Petition No.7065/2019 Bharat Singh Vs.
State of Madhya Pradesh and others Writ Petition No.7518/2019 Rajendra Kumar Jaroliya Vs.
State of Madhya Pradesh and others Present:
Hon’ble Shri Justice Mohammad Rafiq, Chief Justice Hon’ble Shri Justice Rajeev Kumar Dubey, Judge Hon’ble Shri Justice Vijay Kumar Shukla, Judge Appearance Smt. Shobha Menon, Senior Advocate with Shri Rahul Choubey, Advocate for the petitioners in W.P.No.4021/2019.
Shri Sanjay Ram Tamrakar, Advocate for the petitioners in WP Nos.4915/2019 and 4919/2019.
Shri Rahul Deshmukh, Advocate for the petitioners in W.P.Nos.4057/2019, 4339/2019, 5124/2019 and 6607/2019.
Shri Anil Lala, Advocate for the petitioners in W.P.Nos. 6038/2019 and 7518/2019 Shri Naveen Dubey, Advocate for the petitioner in W.P.No.7065/2019.
Shri Rajendra Kumar Shrivastava, Advocate for the petitioner in W.P.No.5535/2019.
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Shri R.K.Verma, Additional Advocate General for the respondents/State.
Shri Ankit Saxena, Advocate for the respondent No.6-Kewal Singh
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Whether approved for reporting- Yes.
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Law laid down:
Before Full Bench, the questions of law referred by the Single Bench on the assumption of conflict, are:-
(1) Whether the order passed by the Division Bench in Writ Petition No.6913/2917-Brij Kumar Chanpuriya Vs. State of M.P. & others decided on 15.5.2017 lays down the correct law in regard to Section 48-AA and Section 50-A of the Madhya Pradesh Cooperative Societies Act, 1960 or in Writ Appeal No.551/2019-Anter Singh & others Vs. State of M.P. & others decided on 17.5.2019)
affirming the order passed by the Single Bench of this Court in WP No.5033/2019 ?;
(2) Whether the provisions of Section 48-AA and Section 50-A of the Act of 1960 operate in a different sphere i.e. pre and post election of the Director? and
(3) Whether Section 50-A of the Act of 1960 is a deeming provision for holding a Director of a society as disqualified or an opportunity of hearing is still required to be given as held by this Court in WP No.6913 of 2017?
As regard to question No.1-Held: Analysis of the two Division Bench judgments [i.e., one in Brij Kumar Chanpuriya (supra) and another in Anter Singh and other (supra)] which formed the basis of reference thus clearly shows that there was actually no conflict of opinion between these judgments.
As regard to question No.2-Held: The aim of principles of natural justice is not only to secure justice but also to prevent miscarriage of justice. The observance of such principles of natural justice checks arbitrary exercise of power by the State and its functionaries. Unless a statutory provision, either specifically or by necessary implication, excludes the application of principles of natural justice, the requirement of providing reasonable opportunity of hearing before an order having civil consequence is passed against someone, has to be read into the provisions of a statute, be it an administrative or quasi-judicial order. Law is well settled that if a statute is silent and statutory provision does not specifically provide giving opportunity of hearing, there could be nothing wrong in spelling out therein the need to hear the parties whose interest is likely to be affected by the order that may be passed, and making it a requirement to follow a fair procedure before taking a decision, unless the statute provides otherwise. Even if, therefore, unlike Section 48-AA, Section 50-A of the Act of 1960 does not specifically envisage for giving reasonable opportunity of being heard to the person, who is sought to be disqualified, to continue as member of the Board of Directors, adherence to principles of natural justice must be read into the statue as there is no clear mandate to the contrary. Analytical examination of both Section 48-AA and Section 50-A of the Act of 1960 would thus show that these two provisions operate in different spheres and stage of their applicability would depend upon fact situation of a given case. It is trite
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that silence of the statutory provision with regard to the principles of natural justice is also taken in support of its compliance, if the person is likely to be adversely affected by an order passed under such provision.
Provisions of Section 48-AA of the Act of 1960 is to be treated in both situations i.e. at the time of election (i.e. pre-election stage) or if any person is disqualified after election (i.e. post-election stage). The proviso contained in sub-section (2) of Section 50-A would apply to post-election stage wherein a person holding office of the Director of the Cooperative Bank on account of the default of his parent Society for a period exceeding 12 months, is sought to be unseated. Proviso to sub- section (2) of Section 50-A stipulates that an elected person shall cease to hold the office, if such Society commits default for any loan or advance, for a period exceeding twelve months. The proviso to sub-section (2) of Section 50-A would thus apply to post-election stage. Sub-section (3) of Section 50-A which envisages a situation where representative/delegate of the Society is debarred from voting, if he is in default for a period exceeding 12 months to the Society or any other Society for any loan or advance taken by him, is however applicable to pre-election stage.
As regard to question No.3-Held; there cannot be an automatic removal/disqualification of a Director or member of Board of Directors. Since, Section 50-A of the Act of 1960 cannot be held to be a deemed provision, there cannot be deemed vacation of his seat in the office of the Board of Directors. The competent authority after due application of mind would in any case be required to give opportunity of hearing to the member of the Board of Directors, apply its mind and then pass a specific order for removing/unseating him from such office.
Referred to:
Sections 48-AA, 48-B and 50-A of the Madhya Pradesh Cooperative Societies Act, 1960 and Rule 45 of the Madhya Pradesh Cooperative Societies Act, 1962, Sahara India (Firm), Lucknow Vs. Commissioner of Income Tax and anr. (2008) 14 SCC 151 Rajesh Kumar and others Vs. Dy. CIT and others (2007) 2 SCC 181 Canara Bank Vs. V.K.Awasthy (2005) 6 SCC 321 C.B.Gautam Vs. Union of India (1993) 1 SCC 78 Olga Tellis Vs. Bombay Municipal Corporation (1985) 3 SCC 545 Swadeshi Cotton Mills Vs. Union of India (1981) 1 SCC 664 Mohinder Singh Gill & Anr. Vs. The Chief Election Commissioner, New Delhi & others (1978) 1 SCC 405 A.K.Kraipak and others Vs. Union of India and others (1969) 2 SCC 262 State of Orissa Vs. Dr. (Miss Binapani Dei and others AIR 1967 SC 1269

Significant paragraph Nos. 10 to 32
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Heard on: 18/03/2021
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Advocates:
Anil Lala,Advocate General

J U D G M E N T

(Pronounced on 22/04/2021) Per: Mohammad Rafiq, C.J.

All these matters have been laid before the Full Bench upon a reference from a learned Single Bench of this Court vide order dated 25.4.2019, assuming conflict between the ratio of two judgments rendered by Division Benches of this Court, one in Writ Petition No.6913/2917-Brij Kumar Chanpuriya Vs. State of M.P. & others decided on 15.5.2017 and another in Writ Appeal No.551/2019-Anter Singh & others Vs. State of M.P. & others decided on 17.5.2019, for answering the following three questions of law:-

“1. Whether the order passed by the Division Bench of this Court in WP No.6913/2017 on 15.05.2017 lays down the correct law in regard to Section 48-AA and Section 50-A of the Act of 1960 or the order passed in Writ Appeal No.551/2019 affirming the order passed by the Single Bench of this Court in WP No.5033/2019?

2. Whether the provisions of Section 48-AA and Section 50-A of the Act of 1960 operates in a different sphere i.e. pre and post election of the Director?

3. Whether Section 50-A of the Act of 1960 is a deeming provision for holding a Director of a society as disqualified or an opportunity of hearing is still required to be given as held by this Court in WP No.6913 of 2017?”

2. The petitioners in all these writ petitions were the Directors of the various Cooperative Central Banks, who assailed their removal as such Directors, on the ground of breach of principles of natural justice as well as non-service of notice prior to their removal in terms of Section 48-AA of the Madhya Pradesh Cooperative Societies Act, 1960 (for short ‘the Act of 1960”). All the petitioners in their capacity as representatives of the parent

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Cooperative Societies were elected as Directors of the District Cooperative Central Banks and were removed/disqualified to continue as such Directors, because the Societies, of which they were representatives, were in default for exceeding 12 months.

3. We have heard learned counsel appearing for the petitioners and learned Additional Advocate General for the respondent/State. The arguments on behalf of the petitioners have been led by Smt. Shobha Menon, learned Senior Advocate and other advocates appearing for the petitioners in respective petitions have also made the submissions, who have substantially adopted her arguments.

4. Learned counsel appearing on behalf of the petitioners argued that the petitioners were elected representatives from different Cooperative Societies and in that capacity, they were further elected as Directors of the another Cooperative Society, which is in each case is a separate Central Cooperative Bank in terms of Rule 49-C of the Madhya Pradesh Cooperative Societies Rules, 1962 (for short “the Rules of 1962), as per the procedure contained in Rule 49-E of the Rules of 1962. The Registrar/Joint Registrar illegally removed them from the office of the Directors without following the provisions of Section 48-AA of the Act of 1960 which mandates for providing an opportunity of hearing to any such Directors/representatives before their removal/disqualification. Section 50-A of the Act of 1960, especially proviso to sub-section (2) thereof, would not be applicable to the case of removal of any Director/representative as it operates in entirely different sphere and applies to only pre-election stage of a candidate or voter, for election to Board

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of Directors, as representative or delegate of the Society. Once the petitioners were elected as Directors/Members of the Board of Directors in terms of Section 48-B of the Act of 1960, they were entitled to continue in that capacity till next election of the members of the Board of Directors in terms of Section 48-B of the Act of 1960. Besides this, Section 49(7-A)(d) of the Act of 1960 also ordains that the term of the representatives elected by the Board of Directors to other societies shall be co-terminus with the term of Board of Directors of the Society. It is argued that Rule 45(

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