- (1.) THIS appeal has been preferred against the order of the Deputy Registrar Co-operative Societies, Jodhpur dated 26. 10. 1961 by which he has ordered the dissolution of the Managing Committee of Beda Vrahat Bahu Uddeshya Sahkari Samiti Ltd. , Beda with immediate effect and appointed the Vikas Adhikari, Panchayat Samiti Bali, the Inspector Co-operative Societies Pali, the Sarpanch Gram Panchayat Bora, and the Manager, Pali Central Co-operative Bank Ltd. , Pali as Administrators to manage the affairs of the Society for a period of six months.
(2.) A preliminary objection has been raised against the maintenance of this appeal on the ground that the appeal had been preferred by the Vice-President of the Managing Committee Anant Ram without any authority. Shri Anant Ram who has preferred this appeal on behalf of the Managing Committee of the Society has submitted a copy of the resolution of 30th November' 61 passed by the Members of the Managing Committee authorising him to file this appeal against the impugned order. It has been further contested by the learned Government Advocate appearing on behalf of the Co-operative Department that the resolution could not be called to be a validly passed resolution in the absence of the meeting having been presided over by the President of the Society, who was the B. D. O. of the area as ex-officio or establishing in the alternative that the President was informed of the meeting going to be held on 30. 11. 61 and he did not present himself despite notice. In reply, it has been contended on behalf of the appellant that the President has never been attending the meetings for more than a year or so, and that the Managing Committee was being presided over all along the period by the Vice-President Shri Anantram himself and the affairs of the Society were being managed without the President. He has produced in support of his contention two Registers of the Society: (1) for the calling of the meeting in which the notice issued to the Members of the Managing Committee were recorded and the signatures of the Members in lieu of their having received the notice are recorded. This register dates from 7. 9. 60 and has got all notices recorded upto 26. 11. 61. Nowhere in this book is it recorded that the notices have ever been issued to the President. It means, during all this period the affairs of the Committee have continued to be managed by the Managing Committee and the Vice-President himself without ever caring to inform the President at all ; (2) This is the register of the resolution and proceedings passed in the various sittings of the Managing Committee, This dates from 16. 8. 61 to 30. 11. 61. From the proceedings of all sittings of the Managing Committee recorded in this register also, it appears that all the meetings have been presided over by this Vice-President and the President has never attended them. An opportunity was asked for by the learned Government Advocate to consult the B. D. O. ex-officio President, in this behalf and report the true state of affairs. The case was therefore adjourned. On the adjourned date i. e. 15th January, 1962, the learned Govt. Advocate informed that the ex-officio President (B. D. O.) has not turned up; but that he has sent in his place the Inspector Co-operative Societies who has informed him that it was a fact that during the past 12 months or so the President had not attended any of the meetings of the Managing Committee of the Society. It has been also confirmed by the Inspector Co-operative Societies present before us, that the registers presented before us on behalf of the appellant were the genuine registers and there did not exist any other register of the proceedings or the notices for the meetings. The above statement on behalf of the respondent goes to show that the affairs of this Society have been continuing to be managed for more than a year atleast by the Vice-President and other Members of the Managing Committee themselves without the President ever joining the meeting. Under the circumstances it cannot be said that the resolution of 30. 11. 61 passed by the Managing Committee [authorising the Vice-President to prefer this appeal had not been validly passed. The Managing Committee had met that day and passed resolution entirely in accordance with the practice being in vogue in this Society for such a long period. It may also be observed here that it is rather strange that the ex-officio President of the Managing Committee (B. D. O.) has never ever cared to enquire all through this long period of 12 months or more as to how the affairs of the Society were being managed and how the Managing Committee had been functioning. Had he ever cared to find it out, as he should have done, as ex-officio President of the Society, this state of affairs would not have continued and it would have immediately come to the notice of the B. D. O. that the Managing Committee had been meeting without even sending him a notice of the meetings. The preliminary objection is, therefore, hereby over-ruled. The order of the learned Deputy Registrar has been assailed on behalf of the appellant on the ground that the! inquiry had been held by the Department not in accordance with the provisions of law in this behalf; but on the-complaint of one Lal Singh who had nothing to do with the Society land who had got annoyed with the Managing Committee because of some private reasons. Our attention has been drawn to the provisions of section 49 of the Rajasthan Co-operative Societies Act 1953, finding place in Chapter VII of that Act in which section 51 under which the Managing Committee of the Society has been superseded, also falls. Sec. 46 (1) of the Act authorises the Registrar to hold an enquiry of his own motion by himself or through a person duly authorised by him in writing in this behalf, into the constitution, working and financial condition of a society. Sub-section (2) of section 46 of the Acs further makes it binding on the Registrar to hold such an enquiry as contemplated by sub-section (1), on the requisition of the society duly authorised by rules made in this behalf to make such requisition in respect of one of its Members, such member being itself a Member, of the Society; (b) on the application of the majority of the committee of the society or (c) on the application of not less than one third of the Members of the Society. It has been contended that no enquiry could, therefore, have been held on the application of the said Shri Lal Singh. It has been further contended that the perusal of file No. F. 19 (31) Soc/ins. A/drj/59 and F. 22 (15) Soc/dnc/drj/61 of Deputy Registrar Co-operative Societies (both combined into one) dealing with the inspection of affairs under section 46 of the Act, supersession of the Managing Committee under sec. 51 of the Act (both combined into one) starts with the application of Shri Lal Singh itself dated 8. 7. 59, and that it is in compliance of an order passed thereon dated 9. 7. 59, that the Assistant Registrar Co-operative Societies Pali was appointed to enquire into the constitution, working and financial condition of this society under sec. 46 of the Act. From the "persual of the record it appears that Shri Lalsingh continued to submit further applications dated 17. 9. 59 and in an application he also submitted that he did not think it proper to begin or join the enquiry Officer. After a number of reminders,the Asstt. Registrar Cooperative Societies,pali submitted his report of enquiry on 19. 11. 59. In this report the learned Assistant Deputy Registrar has submitted that he sent for Shri Lalsingh, the complainant, and that he did present himself in the office of the Society but that he refused to help in the enquiry or give his own statement. He has also submitted a copy of the letter given by Shri Lalsingh to the learned Assistant Registrar in this behalf. The learned Assistant Registrar has begun his report with the statement that Shri Lalsingh had made an application for the grant of loan in his own name and another in the name of his wife which was refused by the Managing Committee of the Society because of the applicant's not being the member of the Society. He has further submitted that it appears that it was because of this that Shri Lalsingh got annoyed and started making complaints against the Society. He has then proceeded to state how Shri Lalsingh was indebted to various societies and private individuals to the extent of huge amount which he had not repaid, and that it was on this ground that this Society had not thought it proper to admit him as a Member. He has further given the result of his enquiry into the constitution of the Managing Committee of the Society. He has submitted that the Members of the Managing Committee should have been re-elected in accordance with the rules; but that they had not been done till then. As regards the working, the report was made that certain amounts of loans had been advanced without the required sanction over and above the maximum limit fixed and that seven Members of the Managing Committee itself had been advanced loans in this irregular manner. It was also observed that this loan was advanced by Members of the Managing Committee of their own will. He has also given a report about the over-due and non-over-due payments of the loans from the Central Co-operative Bank. Further, he has stated that looking at the profits accrued, it can be said that the working of the Society has been quite good. He also found that the Treasurer had been keeping too heavy an amount with him. He also complained against the non-production of certain receip:s. He also referred to the certain amount of distribution of seeds and stated that certain quantity of grains were still due to be recovered from about six Members. About the sale of the controlled wheat, it has been stated that the accounts were not complete. In the end, he reported that although no sufficient efforts were made in the preceding year to recover the loans, full efforts were being made that year. On the receipt of this report a notice was issued to the Secretary to explain the various irregularities and remove them within certain fixed time. A copy of this letter No. 11784 of 29. 12. 59 was also endorsed to the Assistant Registrar Cooperative Societies Pali to have the defects removed. There is another letter at page 77 of the file from the Assistant Registrar Co-operative Societies addressed to the Deputy Registrar giving details how the Managing Committee has removed the defects pointed out in his inspection report and how a new election of the Managing Committee had been got done on 31. 7. 60. We have been referred to another letter on page 128 of this file, through which the learned Deputy Registrar Co-operative Societies has forwarded to the Assistant Registrar Co-operative Societies Pali, vide No. 12993 of 5. 10. 61, a copy of the reply received by the Secretary of the Society dated 25. 9. 61 for inviting his views in that behalf. It has been further contended that although the Society has explained in its letter of 25. 9. 61, the various allegations made in the inspection report against the Society and that the Assistant Registrar Co-operative Society also had in his letter dated 25. 8. 60 referred to above submitted that the defects pointed out in the inspection report had been removed; and the view of the Assistant Registrar Co-operative Society had been further sent for vide letter No. 12993 of 5. 10. 61, the reply of the learned Assistant Registrar was not awaited in that behalf and all of a sudden on 25. 12. 61, on receipt of a letter from the Asstt. Registrar recommending the names of the Inspector Co-operative Societies and Sarpanch Gram Panchayat Beda and the Vikas Adhikari ex-officio Chairman for acting as Administrator, the supersession order appealed against was passed on 26. 10. 61 (as at page 132 of that file ). It has been contended that this appears to have happened because previously at some date the Assistant Registrar had been asked to serve a show-cause notice on the Managing Committee and also submitted the panel of names for being appointed as Administrator, and as that panel was received, without caring to wait for opinion of the Asstt. Registrar on the explanation offered by the Managing Committee referred to above, the order of supersession was passed. On this basis it has been contended that thus the supersession has been ordered without letting the Managing Committee have a full chance of representing their case and was, therefore, bad in law. As against it, the learned Government Advocate has referred us to the provisions of sec. 46 (1) and sec. 47 of the Act, which empower the Registrar Co-operative Societies or any of his nominees and the Deputy Registrar Co-operative Societies also who exercises the power of the Registrar under the Act, to hold an enquiry and inspect the working of the Society of his own accord and that, therefore, even if the enquiry was started on the complaint of Shri Lalsingh, it could not be called to have been vitiated. It has been also contended that the committee was given a notice and it was only thereafter that the action of superseding the Managing Committee was taken, It has therefore been contended that no illegality has been committed by the Department and the order of supersession was quite alright. Further it has been contended by the learned Government Advocate that the Managing Committee itself was not found to have been lawfully constituted in as much as certain members including the Vice-President himself were not elected in accordance with law to be on the Managing Committee; and that alone could have been sufficient reason to supersede the Managing Committee. There is notice at page 113 of the file referred to above requiring the Secretary to show cause and state objections within a period of a fortnight of the receipt thereof, as to why the Managing Committee be not dissolved under sec. 51 of the Act. This notice was accompanied by the statement of allegations against the Managing Committee and was issued on 14. 8. 1961, vide No. 10882-85. The reply of the Secretary of the Society was received vide No. 108 dated 25. 9. 61 and vide receipt No. 12338 of 29. 9. 61 of the Deputy Registrar Co-operative Societies as at pages 125, to 127 of the "file. Upon this the learned Deputy Registrar deemed it fit to refer the matter again to the Assistant Registrar Cooperative Societies Pali vide his letter No. 12993 dated 5. 10. 61 as at page 128 of the file as referred to above. It means uptil 5. 10. 61 learned Deputy Registrar was not contemplating taking any action against the Society and was considering the explanations and objections offered by the Secretary of the Society as referred to above. The file does not contain anywhere the receipt of the view of the Assistant Registrar Co-operative Societies sent for through the letter at page 128 referred to above. Without further waiting for the receipt of reply of this letter from the learned Assistant Registrar, it is evident from the perusal of the file, the learned Deputy Registrar has proceeded to supersede the Society through the impugned order. He has done so without giving any reasons whatsoever. Neither his file nor the order contains any reasons for passing the impugned order without waiting for the receipt of the view from the learned Assistant Registrar on the reply and objections submitted by the Secretary of the Society in response to show-cause notice given to him under sec. 51 of the Act. Sec. 51 of the Act lays down that an order dissolving the Managing Committee of a Society and appointing suitable persons to manage the affairs thereof can be passed, if in the opinion of the Registrar, the Committee of any Society is found to be not functioning properly; only after giving an opportunity to the Committee to state its objection if any. Such an order is also required to be passed in writing. It means the objections raised by the Committee of the Society should be considered by the learned Registrar or the Deputy Registrar acting as the Registrar and he should record his order in writing about those objections and then proceed to dissolve the Committee and appoint other persons to manage the affairs of the Society. In this particular case when the objections stated by the Managing Committee of the Society were under consideration of the learned Deputy Registrar acting as Registrar in this case, as) is evident by his inviting the views of the Asstt. Registrar then he should have waited for the disposing of them finally before proceeding to take the action that he has elected to take through the impugned order. The learned Government Advocate has very vehemently contended at this stage that as formation of the Managing Committee of the Society itself was not in accordance with rules, there was nothing to be considered and the order superseding the Managing Committee could have been passed at any stage without waiting for any formalities. It could have been done so. But we do not find anywhere that the Managing Committee has been ordered to be dissolved for this reason. This is not even an allegation supplied to the Society along with the notice dated 14. 8. 1961 (as at page 113 and 114 of the file) as would be quite evident from the statement of allegations enclosed with that notice. It cannot, therefore, be held that the Managing Committee has been dissolved in the present case on account of its misconstitution. From what has been discussed above it would appear that the dissolution of the Managing Committee has been ordered by the learned Deputy Registrar in this case although after giving an opportunity to the Committee to state its objections, yet without deciding them one way or the other. The object of the provisions of law to let the committee have an oppotunity of stating its objections means that those objections should be considered and should be upheld or rejected. The learned Deputy Registrar also proceeded in the beginning along these very lines and he even forwarded a copy thereof to the learned Assistant Registrar for inviting his views. But it is not known why he did not wait thereafter for the receipt of the views of the learned Assistant Registrar or he did not himself apply his mind to them and decide them one way or the other.
(3.) AS this has not been done we feel that order of supersession of the Managing Committee of this Society has not been passed entirely in accordance with the spirit of the provisions of sec. 51 of the Act. In view of what we have held above, there does not remain any necessity of expressing any opinion as to whether an enquiry could have been started on the application of Shri Lalsingh or not, as has been done in the present case. But as the learned counsel for the appellant has placed a great reliance on this objection, and argued it at a great length, we feel that an expression of opinion on this point also would be necessary in this case. We have already referred to the provisions of sec. 46 (1) of the Act in the very beginning of this judgment and so have referred to the provisions of sec. 47 of the Act. They give very wide powers to the Registrar or Deputy Registrar acting as the Registrar to proceed to hold an enquiry into the constitution working and financial conditions of a Society at any time by himself or by a person duly authorised by him in writing in this behalf. Sub-sec. (2) of sec. 46 of the Act, on which the learned counsel for the appellant has cared to rely and placed great stress, does not bar the learned Registrar or the Deputy Registrar acting as Registrar from exercising the powers vested in him under sub-sec. (1) of S. 46 of the Act. This sub-sec. (2) only makes it mandatory for the Deputy Registrar acting as a Registrar under this Act to hold an enquiry into the constitution working and financial condition of a Society on receipt of a requisition or the application stated in clause (a) (b) and (c) of that sub-section. This obligatory duty imposed upon an officer acting as Registrar under this Act, is quite independent of his powers under sub-sec. (1) of this section under which he can order an enquiry any time and on any information, he likes. To conclude, we accept this appeal, set aside the order of the learned Deputy Registrar dated 26. 10. 61 and remand the case to him to first consider the objections stated by the Secretary of the Society in response to his notice and proceed afresh to take action in accordance with law after taking into consideration and deciding the same. .;