- (1.) The petitioner is the Managing Director of the Haryana State Co-operative Labour and Construction Federation Limited, and has come to this Court challenging the order of his removal form the post of Managing Director on account of appointment of Shri M.M. Seth, Superintending Engineer, PWD (B and R) as Managing Director by the Haryana Government vide order dated 9.4.1990 Annexure P. 9 and also against the order appointing him as Officer on Special Duty on 23.4.1990 (Annexure P. 10) and also against the order of suspension dated 23.4.1990 (Annexure 11). Admittedly, the petitioner was confirmed by the Board of the society vide its order dated 16.10.1981 Annexure P. 1. The order of confirmation reads as follows :- "PROCEEDINGS Agenda No. 8 : To confirm the officers/officials Sh. M.S. Pattar is confirmed as C.E. in the scale of Executive Engineer. He may order the confirmation of the officers/officials who are eligible for confirmation and their work has been satisfactory." Later on, by amendment of the bye-laws, the nomenclature of the post of Chief Executive was changed to that of Managing Director. In this way, the petitioner has been holding the post of Managing Director of the Society. The State Government considering that the share capital of the State in the said Society is over 10 lacs, acting under Section 31 of the Haryana Co-operative Societies Act, 1984 (hereinafter referred to as the Act) appointed Shri M.M. Seth, Superintending Engineer, PWD (B & R) as Managing Director. However, no specific order was passed removing the petitioner from the post of Managing Director. Thereafter, the Board appointed the petitioner as Officer on Special Duty on 23.4.1990 (Annexure P-10) and placed the petitioner under suspension on the same date vide orders Annexure P-11. The petitioner has challenged the impugned orders on the ground that these are without jurisdiction and are mala fide on the part of the respondents.
(2.) The State has filed written statement and has disputed the stand taken by the petitioner. Mr. S.C. Mohunta, Advocate General, Haryana, vehemently contended that once the share capital in a Co-operative Society exceeds rupees ten lacs the Haryana Government is empowered to appoint a Managing Director under Section 31 of the Act and on appointment to the post of Managing Director by the Government, the existing Managing Director will stand automatically removed from the post. Mr. V.K. Bali, Senior Advocate for the petitioner, submitted that no power under Section 31 of the Act has been given to the State Government to remove the existing Managing Director. In order to determine the controversy between the parties, it is necessary to read the provisions of Section 31 of the Act. The aforesaid provisions read as follows :- "31(1) Appointment Power, Functions of Managing Director :- Where the Government has subscribed to the share capital of a Co-operative Society to the extent of ten lakh rupees or more, the Government may notwithstanding anything contained in the bye-laws of the society, nominate another member in addition to those nominated under Section 29 and appoint him as Managing Director : Provided that no person shall be appointed as Managing Director of a Co-operative Society unless he is a member of the Indian Administrative Service or Haryana Civil Service (Executive Branch) or Class I or II Officer of the Co-operative Department, Haryana, except in the case of the Haryana State Co-operative Labour and Construction Federation Limited, the Haryana Housing Apex Finance Society Limited and the Haryana Co-operative Dairy Development Federation Limited where technical person may be appointed as Managing Directors. (2) The Managing Director appointed under sub-section (1) shall exercise such powers as are assigned to him under the bye-laws or delegated to him by the committee. He shall also discharge all such functions, consistent with the bye-laws as are assigned to him by the Government or the Registrar. He shall work under the superintendence and control of the committee. (3) The Managing Director of a Co-operative society shall be its principal executive officer. All employees of the society shall function and perform the duties under his superintendence and control."
(3.) A plain reading of Section 31 of the Act makes it clear that power under Section 31 is discretionary and it is not obligatory on the part of the State to appoint in every case its own Managing Director when the share capital exceeds 10 lacs of rupees. Section 31 does not confer any power on the State Government to remove the existing Managing Director. Admittedly, the petitioner was holding the post of Managing Director in confirmed capacity. Provision of Section 31 does not confer any power on the State Government to remove the existing Managing Director in order to create a vacancy to appoint its own nominee. The power has to be expressly conferred which cannot be assumed. There is nothing in the language of Section 31 from which it can be interpreted that the power to remove the existing Managing Director is conferred on the State Government and thereby create a vacancy to appoint its own nominee. The provisions of Section 31, if they are interpreted in a manner in which it is suggested by the learned Advocate General, it would make the provisions very arbitrary, unreasonable, capricious and would render them violative of Article 14 of the Constitution.;