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WP-4021-2019 & connected WPs

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Board of Director (Superseded) Bhopal Cooperative Central Bank,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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WP-4021-2019 & connected WPs

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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WP-4021-2019 & connected WPs

Shri

R.K.Verma,

Additional

Advocate

General

for

the

respondents/State.

Shri Ankit Saxena, Advocate for the respondent No.6-Kewal Singh

______________________________________________________________

Whether approved for reporting- Yes.

_____________________________________________________________________________

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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WP-4021-2019 & connected WPs

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

__________________________________________________________

Heard on: 18/03/2021

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WP-4021-2019 & connected WPs