Himachal Pradesh High Court
Nangal Jarialan vs State Of H.P. & Ors on 6 December, 2016
Bench: Mansoor Ahmad Mir, Tarlok Singh Chauhan
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No. 2080 of 2016 Judgment reserved on: 15.11.201 Date of decision: 06.12.2016 .
Nangal Jarialan, Cooperative Agriculture Service Society Ltd. & Anr.
...Petitioners.
Versus
State of H.P. & Ors. ...Respondents
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Coram:
The Hon'ble Mr. Justice Mansoor Ahmad Mir, Chief Justice The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge Whether approved for reporting? Yes.
rt For the petitioners : Ms. Archna Dutt, Advocate.
For the respondents: Mr. Shrawan Dogra, Advocate General, with Mr. Anup Rattan, Mr. Varun Chandel, Additional Advocate Generals and Mr. Kush Sharma, Deputy Advocate General, for respondents No. 1 and 2.
Mr. Ajay Sharma, Advocate, for respondent No. 3.
________________________________________________________________________________ Tarlok Singh Chauhan, Judge The instant case is a glaring example where the Managing Committee of a Cooperative Society has shown undue interest in protecting the service of its Secretary and while doing so have thrown all the laws to the wind.
2. At the outset, it may be observed that initially the writ was filed by the Society wherein its Secretary was arrayed as respondent No. 4 and had prayed for the following reliefs:-
"i) That the impugned orders dated 19.5.2016 and 29.7.2016 may very kindly be quashed and set aside ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 2 and petitioner's society may kindly be allowed to continue the respondent No. 4 in service till the age of 62 years with all consequential benefits, in the interest of justice and fair play.
ii) That respondents may be directed to produce the .
record of payment made on bill basis to the persons serving with the respondent department."
3. However, subsequently an application being CMP No. 6826 of 2016 was filed for transposition of respondent No. 4 as petitioner No. 2 and the same was allowed vide order dated of 22.8.2016.
4. The brief facts as set out in the petition are that the rt petitioner No. 2 was initially appointed as a Salesman-cum-
Assistant Secretary in the year 1979 and subsequently in the year 1986 he was appointed as Secretary in the petitioner No. 1 -
Society.
5. The petitioner No. 2 in terms of Service Rules of the Society was to retire on the attainment of the age of 60 years on 31.5.2015, however, vide resolution No. 6, dated 17.3.2015, the Managing Committee of the petitioner No. 1-Society decided to grant him an extension for one year.
6. It is averred that the Society thereafter called its General House for rectification of the aforesaid resolution, however, for want of quorum the resolution could not be rectified.
The meeting of the House was initially called on 31.3.2015 and thereafter on 22.4.2015 and on both the dates quorum was not complete. It is then averred that due to unnecessary interference ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 3 by the observer of respondent No. 2, the business could not be conducted and the House was again called on 3.5.2015, wherein, once again the observer raised unwanted and unwarranted .
objections and the meeting was adjourned. Thereafter the department issued various notices for the General Meeting but the same could not be convened for one reason or the other.
7. The respondent No. 2 thereafter passed an order on of 19.5.2016, whereby petitioner No. 2 was ordered to be superannuated as the resolution of the General Meeting of the rt Society had not been rectified by the General House.
8. Aggrieved by the order, petitioner No. 2 preferred a review petition, which was dismissed on 29.7.2016.
9. Both the aforesaid decisions have been assailed in this petition on the ground that the State Government itself has carried out amendment in the Service Rules whereby the retirement age of the Secretaries has now been enhanced to 62 years and therefore, the petitioner No. 2 has every right to continue till the attainment of the age of superannuation i.e. 62 years.
10. The official respondents No. 1 and 2 have filed joint reply, wherein, it is stated that petitioner No. 2 was superannuated on 31.5.2015 on completion of 60 years of age, however, he filed CWP No. 2733 of 2015 before this Court wherein a direction was sought against the Assistant Registrar, Cooperative Societies, Una to grant approval of 2 years in service in view of the decision taken ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 4 by the Managing Committee in its meeting held on 17.3.2015. The petition was disposed of by this Court on 27.10.2015 as having not been pressed.
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11. The Assistant Registrar Cooperative Societies, as a follow up action, on 3.12.2015 wrote a letter to the President of the petitioner No. 1 - Society, to immediately retire petitioner No. 2 from service, which letter was assailed by petitioner No. 2 by filing of revision petition under Section 94 of the Cooperative Societies Act, 1968. The respondent No. 2 disposed of the revision petition vide its rt order dated 19.5.2016 and held that the extension in service of petitioner No. 2 for the period of 2 years granted by the Managing Committee of the petitioner No. 1 - society was bad in law and directed the petitioner to immediately dispense with the services of petitioner No. 2.
12. Aggrieved by this order, petitioner No. 2 thereafter filed a review petition which too was dismissed.
13. As regards the contention with respect to the enhancement of the age of superannuation by virtue of an amendment carried in Rule 12 of the Service Rules, it is averred that the benefit of this amendment was available only to those employees who were in regular service on the date of the amendment i.e. 24.6.2015 and this benefit could not be extended to petitioner No. 2 since he had already retired on 31.5.2015 after ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 5 attaining the age of 60 years as per Service Rules in vogue at that time.
14. Respondent No. 3, who is a candidate next in line for .
consideration to the post of Secretary, has filed a separate reply, which is quite similar to that of the reply filed on behalf of respondents No. 1 and 2.
We have heard learned counsel for the parties and of gone through the record of the case.
15. At the outset, it may be observed that the very rt philosophy and the concept of the cooperative movement is impregnable with public interest. A cooperative society is a substitute for self-interest of an individual or a group of individuals for the benefit of the whole community. Therefore, even the general body of the members cannot take any steps which may be derogatory to the promotion of the interests of any one of its member(s) or its employee(s) and the same is necessarily be in accordance with the cooperative principles. Conversely, the general body of the members cannot act in a manner so as to confer undue benefit or advantage in favour of anyone of its member(s) or employee(s). Above all, the society unlike a private individual cannot act as it pleases and the decision taken by the general body has to be in accordance with the H.P. Cooperative Societies Act, 1968 (for short 'Act'), H.P. Cooperative Societies Rules, 1971 (for short 'Rules') and the bye-laws of the society.
::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 616. A cooperative society is registered on cooperative principles of democracy, equity, equality and solidarity.
Democratic accountability, mutual trust, fairness, impartiality, unity .
and agreement amongst its members are some of the cardinal dimensions of the cooperative principles. Therefore, the decision taken by the executive body of the society should enjoy the confidence and must have the backing of majority of its members.
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17. Moreover, the cooperative societies are corporations within the meaning of Article 31-A(1)(c) as held by the Hon'ble rt Supreme Court in Daman Singh and Ors. vs. State of Punjab and Ors. 1985 (2) SCC 670. The very philosophy and concept of the cooperative movement is impregnable with public interest. Once a person becomes the member of the cooperative society, he loses his individuality qua the society and he has no independent right except those given to him by the statute and bye-laws. What is a corporation has been considered in the Daman Singh's case in the following manners:-
"5. What is a corporation? In Halsbury's Laws of England, fourth Edition, Volume 9, Paragraph 1201, it is said, A corporation may be defined as a body of persons (in the case of a corporation aggregate) or an office (in the case of a corporation sole) which is recognized by the law as having a personality which is distinct from the separate personalities of the members of the body or the personality of the individual holder for the time being of the office in question."
18. A corporation is a substitute for self-interest of an individual or a group of individuals for the benefit of the whole ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 7 community, therefore, the cooperative movement cannot be permitted to be polluted by certain vested interest at the helm of affairs.
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19. In this context, it shall be advantageous to refer to the judgment rendered by the Bombay High Court in Hindurao Balwant Patil & Anr., Vs. Krishnarao Parshuram Patil and Ors., AIR 1982 Bombay 216, wherein it was observed:-
of "Co-operative movement cannot be permitted to be polluted or choked by internal or individual strike nor it can be permitted to be polluted by party politics. Co- operative capitalism despotism is not co-operation. On rt the other hand co-operation is a substitute for self interest of an individual or a group of individuals for the benefit of whole community. Therefore, if the society itself while framing and adopting its own code of conduct in the form of bye-laws, which are to be duly approved by the Registrar, has not made any provision for removal of the Chairman and vice Chairman by passing a vote of no confidence, it cannot be said that the step taken by the Society or Registrar in that behalf is not a regulatory one nor is in the interest of the society or the general public. The so-called mandate theory cannot be pushed to ridiculous extremes to convert co-
operative movement into an arena or akhada of power politics. Whenever the legislature thought that a person is not fit to continue as a member of the board, specific provisions are made for his removal. A person is elected as Chairman or Vice Chairman for a particular term. His office is controlled by the provisions of the Act.........."
20. At this stage, we may also refer to the decision made by the Punjab & Haryana High Court in The Bapauli Co-operative Agricultural Service Society vs. The State of Haryana and Ors., AIR 1976 P&H 283, wherein it was observed as under:-
"The final authority in a co-operative society does of course vest in the general body of its members or its managing body elected in accordance with its bye-laws as laid down in Section 23 of the Act, but this authority is not absolute and free from restraints. Even the general body of the members cannot take any steps which may be derogatory to the promotion of the economic interests of the members of a society in accordance ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 8 with co-operative principles; nor can the general body take any decision which may be contrary to the Act or the Rules framed thereunder. When considered in this light, Section 23 of the Act has to be interpreted in such a manner so that its operation does not set at naught some of the other provisions of the Act. It is settled law that two provisions of a statute have to be read in .
such a manner that one of them does not necessarily repeal the other. The question of repeal of one provision of a statute by another arises only when two of them are wholly incompatible with one another or if they are read together they would lead to wholly absurd consequences. If on a fair and proper interpretation these two provisions can be reconciled with each other, the Courts of law are under a duty to adopt such an interpretation and to give full effect to the two provisions of the Act instead of holding that one of them is repealed by the other..........."
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21. Adverting to the facts, it would be noticed that though the managing committee of petitioner No. 1 did try to grant rt extension in service to petitioner No. 2 vide resolution No. 6, dated 17.3.2015, however, the same was never ratified and did not have the backing of the General House as was required under Rule 12 of the Rules Relating to the Terms of Employment and Working Conditions of Employees of Primary Agriculture Credit Cooperative Societies, 2001 (hereinafter referred to as the 'Service Rules'), as applicable to this society, which at the relevant time read as under:-
12. Retirement - "An employee shall stand retired on attaining the age of 60 years. The date of retirement shall be the last date of the month in which the employee completes 60 years of age. The society with prior approval of General House and the Assistant Registrar, Co-operative Societies may grant extension up to one year in exceptional cases specifying reason thereo."
22. It is established on record that the General House did not assemble and the meeting of the General House had to be adjourned for want of quorum, which clearly indicates that the ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 9 managing committee, in fact, did not enjoy the trust, faith and confidence of the majority of the members of the society and, therefore, it could not muster the requisite strength to ratify the said .
resolution.
23. It is established on record that despite the managing committee having failed to have the resolution ratified by the General House yet it showed undue favour by continuing with the of services of petitioner No. 2, showing scant regard to the legal provisions which were violated with impunity only with a view to rt confer undue benefit on petitioner No. 2.
24. The managing committee appears to have forgotten and betrayed complete ignorance to the fact that the office entrusted to them are sacred trust and such offices are meant for use and not for abuse. Therefore, where such trustees turn to dishonest means to confer undue advantage upon one of its members, employees or officials, the scope of judicial review attains paramount importance.
25. The principle of accountability and transparency in the functioning of any institutions, be it a society, cooperative society etc. are essential for its proper governance. The conduct of the Chairman/President and the members of the society in discharge of their duties, has to be above board and beyond censure till and so long as the act, rules, and bye-laws are occupying the field, the authorities cannot be left to run the affairs in their subjective and ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 10 whimsical approach and hotch-potch manner. Certain objective criterias have to be evolved to administer the affairs of the society otherwise there is bound to have an element of favourtism, .
nepotism and other sort of manipulations as are clearly evident in this case.
26. We are at complete loss to understand as to why relentless efforts were made by petitioner No. 1 to retain petitioner of No. 2 in service after all no one can be so indispensable without whom the affairs of the society could not have run.
27. rt During the course of hearing, we were informed that petitioner No. 1 society, in fact, stands superseded by the appointment of administrator and rightly so, after all the working of petitioner No. 1 society, was definitely not above board.
28. The entire scenario presented before us shocks our conscience, to come across such a systematic fraud committed by those at the helm of the affairs of the cooperative society just to favour petitioner No. 2, who as observed earlier had, in fact, been arrayed as respondent No. 4 but after realizing that the petition itself on behalf of the cooperative society would not be maintainable, was arrayed as petitioner No. 2.
29. It has to be remembered that registered cooperative societies like anybody corporate has a power to hold property and is capable of entering into contract. However, it cannot be assumed that property which it holds is the property of its members ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 11 or they are owners. This property in law is the property of the society. Likewise, the employees engaged by the society are employees of the society and not the employees of any one .
member or members of the society. The society has to act in accordance with its constitution and apply the property for the purposes which it is held and likewise deal with its employees as per the mandate of the Act, rules and bye-laws of the society in a of fair and transparent manner, without indulging in any favourtism or nepotism.
30. rt Having regard to all the above, the irresistible conclusion is, fraud has reached its crescendo. Deeds as foul as these are inconceivable much less could be permitted to be perpetrated. Shakespeare aptly described such sordid affairs in the following manners: thus much of this, will make Black, white;
foul, fair; Wrong, right; Base, noble; Ha, you gods: why this?
31. As observed earlier, it is highly regrettable that the holders of the office of the Petitioner No. 1 cooperative society have been completely oblivious to the fact that the office entrusted to them are sacred trust and were meant for use and not for abuse.
32. Although a cooperative society cannot strictly be compared with a State. Nonetheless, it is bound by and has to adhere to the provisions of the act, rules and bye-laws framed by it, which does oblige the society to conduct itself with high probity ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 12 and candour with its employees. The managing committee of the society cannot act as despots or monarchs and are obliged to act in accordance with the principles of democracy, equity, equality .
and solidarity.
33. The Supreme Court in its recent judgment Vipulbhai M. Chaudhary vs. Gujarat Cooperative Milk Marketing Federation Limited and Ors. (2015) 8 SCC, made the following pertinent of observations:-
"[16] The principle of representative democracy is the election of representatives by the people otherwise eligible rt to caste their vote and the people thus elected, constituting the body for the management of an institution. Thus, in the case of cooperative societies, after the amendment in the Constitution, there has to be a Board of elected representatives, which may be called Board of Directors or Governing Body or a Managing Committee, etc., to which the members entrust the direction and control of the management of the affairs of the society.
That representative body selects one among the elected representatives as its Chairman or any other office bearer, as the case may be. Selection is the act of carefully choosing someone as the most suitable to be the leader or office bearer. Thus, there is a lot of difference between election of delegates/representatives to constitute a body and selection of a person by the body from amongst the elected members to be the leader. It is to be borne in mind that the management and control of the society is entrusted to the representative body, viz., the Board of Directors and that the Chairperson elected by the Board of Directors is the Chairperson of the society and not of the Board of directors.
[18] In Pratap Chandra Mehta v. State Bar Council of Madhya Pradesh and others, 2011 9 SCC 573 and in Usha Bharti v. State of Uttar Pradesh and others, 2014 7 SCC 663 the concept of democratic principles governing the democratic institutions have been discussed. In a democratic institution, confidence is the foundation on which the superstructure of democracy is built. The bedrock of democratic accountability rests on the confidence of the electorate. If the representative body does not have confidence in the office bearer whom they selected, democracy demands such officer to be removed in a democratic manner.::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 13
[19] A cooperative society is registered on cooperative principles of democracy, equity, equality and solidarity. Democratic accountability, mutual trust, fairness, impartiality, unity or agreement of feeling among the delegates, cooperativeness, etc., are some of the cardinal dimensions of the cooperative principles. A body built on .
such principles cannot be led by a captain in whom the co- sailors have no confidence.
[20] If a person has been selected to an office through democratic process, and when that person looses the confidence of the representatives who selected him, those representatives should necessarily have a democratic right to remove such an office bearer in whom they do not have confidence, in case those institutions are viewed under the Constitution/statues as democratic institutions."
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34. Adverting to the other contentions raised by petitioner No. 1 that petitioner No. 2 is entitled to continue in service in rt accordance with the amended Rule 12 carried out by the Registrar, Cooperative Society on 24.6.2016, raising the retirement age from 60 to 62 years. Suffice it to say that same is not applicable to the case of the petitioner as this benefit is available only to those employees who on the date of the issuance of this notification were in active service and have not attained the age of 60 years.
35. In view of the aforesaid discussion, we have no doubt in our mind that the petition is not only sans merit but is also gross abuse of the process of the law, whereby the petitioners have not only misused the process before this Court but have with impunity abused the same before the adjudicating authorities constituted under the Cooperative Societies Act.
36. We are informed by the learned counsel for respondent No. 3 that petitioner No. 2 on account of the various ::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 14 litigation instituted by him whereby he managed to continue in service has pocketed more than Rs. 8 lakhs as salary. In such circumstances, it is the duty of this court to neutralize any unjust .
enrichment and undeserved gain made by the litigants only on account of keeping the litigation alive.
37. In Indian Council for Enviro- Legal-Action vs. Union of India and others (2011) 8 SCC 161, the Hon'ble Supreme Court of held that conduct of the parties in pursuing the litigation is to be taken into consideration and it was held as follows:-
rt "197. The other aspect which has been dealt with in great details is to neutralize any unjust enrichment and undeserved gain made by the litigants. While adjudicating, the courts must keep the following principles in view:
1. It is the bounden duty and obligation of the court to neutralize any unjust enrichment and undeserved gain made by any party by invoking the jurisdiction of the court.
2. When a party applies and gets a stay or injunction from the court, it is always at the risk and responsibility of the party applying. An order of stay cannot be presumed to be conferment of additional right upon the litigating party.
3. Unscrupulous litigants be prevented from taking undue advantage by invoking jurisdiction of the Court.
4. A person in wrongful possession should not only be removed from that place as early as possible but be compelled to pay for wrongful use of that premises fine, penalty and costs. Any leniency would seriously affect the credibility of the judicial system.
5. No litigant can derive benefit from the mere pendency of a case in a court of law.
6. A party cannot be allowed to take any benefit of his own wrongs.
7. Litigation should not be permitted to turn into a fruitful industry so that the unscrupulous litigants are encouraged to invoke the jurisdiction of the court.::: Downloaded on - 15/04/2017 21:41:23 :::HCHP 15
8. The institution of litigation cannot be permitted to confer any advantage on a party by delayed action of courts."
38. In view of the aforesaid discussion, the petition is .
dismissed with Rupees one lakh as cost, out of which Rs.50,000/-
shall be paid by the then members of the Managing Committee, who instituted the litigation, whereas the remaining amount shall be paid by petitioner No. 2. This amount shall be deposited in the of coffers of the cooperative society within a period of four weeks, failing which the Registrar, Cooperative Society, shall initiate steps rt to have this amount recovered by filing execution petition in accordance with law.
(Mansoor Ahmad Mir )
Chief Justice
December 06, 2016 (Tarlok Singh Chauhan)
(sanjeev) Judge
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