IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.14606 of 2007 RANJIT SINGH, son of late Tapeshwar Singh, resident of village Asani,P.S.Udwant Nagar, District- Bhojpur ……………….. Petitioner Versus 1. THE STATE OF BIHAR 2. The Secretary to the Gsovernment of Bihar, Co-operative Department, Vikash Bhawan, Patna 3. The Registrar, Co-operative Societies, Bihar, Patna 4. Shri P.P. Ojha, Joint Registrar, Co-operative Societies and State Monitoring Officer (ICDP), DNS Institute of Co-operative Management, Shastri Nagar, P.S. Shastri Nagar, District-Patna 5. The National Agricultural Co-operative Marketing Federation of India Ltd. (NAFED), Sidharth Enclave, Ashram Chowk, Ring Road, New Delhi – 110014 through its Managing Director 6. Udwant Nagar Vyapar Mandal Sahyog Samiti Ltd. At and P.S. Udwant Nagar, District-Bhojpur through its Manager 7. Shri Sunil Kumar Singh, Manager, Udwant Nagar Vyapar Mandal Sahyog Samiti Ltd., at and P.S. Udwant Nagar, District-Bhojpur 8. The Chairman of Udwant Nagar Vyapar Mandal Sahyog Samiti Ltd. At and P.S. Udwant Nagar, District-Bhojpur 9. Shri Vishal Singh, son of Late Ajit Kumar Sidngh, Santosha Complex, Flat Nos. -803/804, Bundar Bagicha, P.S.- Kaotwali Town and District-Patna 10. The Bihar State Co-operative Marketing Union Ltd. (BISCOMAUN) West Gandhi Maidan, Patna through its Managing Director 11. Vinod Kr. Verma, Addl. Secretary to the Govt. Department of Co- operation, Bihar, Patna 12. Keshar Singh, Chairman, Udwant Nagar Vyapar Mandal Sahyog Samiti Ltd., Udwant Nagar, Dist. Bhojpur 13. Sunil Kr. Singh, Manager, Udwant Nagar Vyapar Mandal Sahyog Samiti Ltd., Udwant Nagar District-Bhojpur ……………………. Respondents. ----------- For the petitioner: - M/S Y.V.Giri, Sr. Advocate, Nitiranjan Jha, Advocate and Punita Kumari Singh, Advocate. For the State: - Mr. Kameshwar Pd. Gupta For Respondent No. 5 :- Mr. Lakshmi Kant Tiwary, Advocate For Respondent No. 9:- M/S Yogendra Mishra,Advocate, Yamuna Kant Khan, Advocate and Raghunath Kumar, Advocate For Respondent No. 10 :- Mr. Ishwari Singh, Advocate. -------------- 10. 25.11.2008 Heard learned counsel for the parties. The petitioner has come to this Court for quashing of - 2 - the recommendation made by the Registrar, Co-operative Societies to the Secretary, Co-operative Department by his official note dated 20.9.2007 (Annexure-5) in which while endorsing the report of respondent no. 4 the Joint Registrar, Co-operative Societies, he has given a finding on the question of delegateship of the petitioner from the Udwant Nagar Vyapar Mandal Sahyog Samiti Ltd. to the National Agricultural Co-operative Marketing Federation of India Limited (NAFED), respondent no. 5, and has recommended the respondent no. 9 to be accepted as the valid delegate to NAFED and has also held the resolution dated 16.8.2007 (Annexure-2) of the Managing Committee of the said Society as illegal. Further prayer has been made for quashing the enquiry report of respondent no. 4 dated 20.9.2007 (Annexure-4) submitted to the Registrar, Co-operative Societies, respondent no. 3 and also the resolution dated 11.8.2007 of the Society by which respondent no. 9 has been shown to have been nominated to the general meeting as well as other Co-operative Institutions such as NAFED and BISCOMAUN as delegate of the society and also for declaring the resolution dated 16.8.2007 of the Managing Committee of the Society as valid by which the petitioner has been nominated delegate of the society to NAFED, BICOMAUN, etc. The short facts relevant for the present decision are that upon the death on 1.8.2007 of Late Ajit Kumar Singh who was nominated to represent the aforesaid society to NAFED, BISCOMAUN and various other co-operative societies., resolutions - 3 - are purported to have been passed by the Managing Committee of the respondent-society and by the resolution dated 16.8.2007 of the Managing Committee the petitioner was co-opted as member of the Managing Committee of the society on the vacancies caused by the death of Late Janardan Chaudhary and also nominated as a delegate of the society to IFFCO, NAFED and KRIBHCO in place of Late Ajit Kumar Singh. By another resolution of the same date the petitioner was nominated to represent the society in BISCOMAUN in place of Late Ajit Kumar Singh. It appears that there was another resolution purported to have been passed by the respondent-society on 11.8.2008 by which the respondent no. 9, Vishal Singh had been nominated as a delegate to various Apex Co-operative Institutions, namely, NAFED, BISCOMAUN, etc. Both the aforesaid resolutions were sent separately to NAFED. Faced with a piquant situation, the authorities of NAFED by letter dated 10.9.2007 (Annexure-3) addressed to the Secretary, Co- operative Department, Government of Bihar, referring to the two separate resolutions in favour of the petitioner and respondent no. 9, stated that they had taken legal opinion from their legal Advisor who had opined that the verification of the fact as to whose nomination is correct should be got done through the Co-operative Department, Patna. Accordingly, a request was made in the said letter to get the matter verified and inform the NAFED about his decision expeditiously. The Secretary, Co-operative Department, Bihar referred the matter to the Registrar to get the matter enquired and place his - 4 - report before him. The Registrar, thereafter by his letter dated 11.9.2007 directed the respondent no. 4, the Joint Registrar, Co- operative Societies and State Monitoring Officer (ICDP), to enquire into the matter and report. The said report was given after making an enquiry by respondent no. 4 vide memo no. 435 dated 20.9.2007 (Annexure-4). In the said report the Enquiry Officer after making inquiries from the Chairman and various other members of the Managing Committee had ultimately come to the conclusion that the resolution passed in favour of respondent no. 9 was correct and valid. The matter was reported by the Registrar, Co-operative Societies to the Secretary, Co-operative Department in which he expressed himself in favour of the enquiry report. Accordingly, the NAFED was informed by the Secretary, Co-operative Department and respondent no. 9 was accepted as a delegate of the respondent-society by NAFED. On the basis of the resolution dated 16.8.2007 in favour of the petitioner which was duly certified by the Joint Secretary, Co-operative Societies BISCOMAUN had accepted the petitioner as delegate of the respondent-society but subsequently by letter dated 19.9.2007 of the Joint Registrar, Co-operative Societies, it was informed that the matter was being enquired into and finally by letter no. 5810 dated 29.10.2007 (Annexure-6) of the Registrar, Co- operative Societies addressed to the Managing Committee, BISCOMAUN, on the basis of the enquiry report submitted by respondent no. 4, it has been informed that respondent no. 9 has been - 5 - selected as the delegate of the respondent-society, which is as per the rules. By letter dated 14.12.2007 (Annexure-E/10) BISCOMAUN requested the Registrar, Co-operative Societies to reconsider the matter on the basis of the entire facts on the record and pass a fresh order in accordance with law. Learned counsel for the petitioner has mainly submitted that the petitioner was nominated as a delegate of the respondent-society in a duly constituted meeting on the basis of the resolution passed by the Managing Committee and the same could not have been over-turned by the Registrar without giving an opportunity to the petitioner to be heard. The admitted position is that neither the Enquiry Officer, respondent no. 4, nor the Registrar had heard either the petitioner or respondent no. 9 before the said enquiry report or order/recommendation were made by them. It is thus submitted by learned counsel that the same suffers from gross violation of principles of natural justice and accordingly both the enquiry report and the order/recommendation based upon it ought to be struck down. Learned counsel also refers to Section 48 of the Bihar Co-operative Societies Act, 1935 under which, if any dispute touching the business of a registered society (other than a dispute regarding disciplinary action taken by the society or its managing Committee against a paid servant of the society) arises, inter alia, whether between members or between a member of the society or its Managing Committee, etc. or between the society or any other registered society, such dispute shall be referred to the Registrar. It is - 6 - submitted by learned counsel for the petitioner that the ambit of the word „any dispute‟ is very wide and includes all type of disputes except the one excluded by the section itself, namely, the dispute regarding disciplinary action taken against the paid servant of the society and thus the present matter also being a dispute between two members of the society who had been nominated as delegate to the apex Co-operative Societies by different resolutions purportedly passed by the Managing Committee, the same would amount to a dispute between members or between a member of the society or its Managing Committee and the same ought to have been considered by the Registrar under Section 48 of the Act and accordingly dealt with. It is stated that the moment the Secretary, Co-operative Department had written to the Registrar to enquire into the matter and report, the Registrar ought to have proceeded in the matter in accordance with law since the same related to a dispute touching the business of the society and he was not supposed to merely act as post office after getting an enquiry done through his subordinate officer. In support of the proposition that the ambit of the term „any dispute‟ would include all disputes except one which has been specifically taken out by the Section itself, learned counsel for the petitioner refers to a decision of this Court in the case of Bihar Co- operative Bank Employees Union Vs. Ranchi-Khunti Central Co- operative Bank Limited & ors: 2000(4) PLJR 179. In the relevant part of para-25 it has been held as follows:- “Therefore, under Section 48 of the said Act, a dispute regarding „disciplinary action‟ taken by the Society or its managing committee against a paid servant of the - 7 - Society is one which, even though touches the business of the society, has been expressly excluded by the statute. Therefore, applying the principle of „expressio unius exclusio alterius”, this Court holds that all other disputes touching the business or affairs of the society must be construed to be included within the ambit of Section 48 of the said Act. “ Regarding the application of the principles of natural justice as also the principle that the Registrar ought to have proceeded under Section 48 of the Act in the present matter, learned counsel relies upon a decision of this Court in the case of Shri Narain Mishra and others Vs. The State of Bihar & ors: 1985 PLJR 579. In the said case the dispute related to the election of delegates held on 27.12.1983 under the Presidentship of two different persons at separate times. The dispute between the two sets of parties was reported to the Registrar, Co-operative Societies by the District Magistrate and thereafter the Registrar, Co-operative Societies by his decision gave approval to the resolution passed under the presidentship of the respondents. Accordingly, the petitioner approached this Court taking the plea that the matter ought to have been treated by the Registrar, Co-operative Societies as a reference under Section 48 of the Act on the basis of the letter of the District Magistrate. The other plea raised was that the petitioners not having been heard before the Registrar before passing the order adverse to them such decision of the Registrar is violative of the principles of natural justice. Both the contentions were upheld by this Court, in paras 11,14 and 15 of the judgment which are quoted below:- “11. In Annexure 6, respondent no. 3 has mentioned that according to the programme the annual general - 8 - meeting and the election was held at 9 A.M. but the Additional District Magistrate (Supply), the observer appointed by him, reached the venue at 9.30 A.M. and on his arrival, respondent no. 19 informed him that the proceeding of the meeting which started at 9 A.M. was completed and thereafter he left the place. It has also been mentioned therein that, on the other hand, the other meeting of the Honorary Secretary and his persons was held under the presidentship of respondent no. 11. The proceedings of both the meetings were submitted to respondent no. 2 by respondent no.3. On the basis of Annexure 6, the proceeding books and reports of respondent no. 3, respondent no. 2 decided that the meeting held under the presidentship of respondent no. 11 and the resolution passed therein were valid and should be recognized. From a perusal of Annexure 6 and Annexure 1 it clear that the proceeding of the two annual general meetings, one held under the presidentship of Chairman (respondent no. 19) and the other held under the presidentship of respondent no. 11 were very much before the Registrar and the claims and counter claims of the petitioners and respondent no. 7 and others were before him. It is also clear that two versions running counter to each other were before him. In this situation he should have decided the matter after giving opportunity of hearing to all the persons concerned and should not have passed the order, Annexure 1, in this manner. The effect of this order is that the petitioners have been deprived of their right to run the administration of the Society to which they were entitled according to the claim made by them. Even if it is assumed that respondent no. 2 passed this order in his administrative capacity, he was not entitled to do it in this manner, i.e. without giving any opportunity to the petitioners of hearing them or showing cause. This view also gets support and strength from Bye-Law 40 of the Society published at page 126 of the Bihar Co-operative Societies Manual, Volume III (Govt. publication, 1967) which empowers the Registrar to rescind the resolution and proceeding of the Society or the managing committee or its any officer after giving opportunity of hearing to the concerned parties. This order having been passed without giving opportunity of hearing to the petitioners and other concerned persons is not fit to be sustained and is illegal. 14. On the basis of rule 68 of the Bihar Cooperative Societies Rules 1959, it has been contended on behalf of the contesting respondents that Annexure 6 cannot - 9 - be treated as letter of reference under section 48 of the Act and it cannot be said that reference of an election dispute has been made to the Registrar, because according to them, under rule 68(1) reference may be made by the managing committee of the registered society interested in the dispute or by any party to the dispute or by the member of the society if the dispute relates to the society from a member of the managing committee and in the present case the dispute having not been referred to either by the managing committee of the society or by any party to the dispute or by any of its member as contemplated by rule 68(1) (a) and (b) of the aforesaid rules, it cannot be said that reference regarding election dispute was made to respondent no. 1 and that there was two election disputes before respondent no. 2. In this regard sub- rule (13) (a) of rule 68 is to be considered which reads as follows: “(13)(a). Reference of a dispute to the Registrar shall be made in Form no. XII, application for decision shall be made in Form no. XIII, notices to parties shall be issued in Form no. XIV and summons shall be issued in Form no. XV.” From the perusal of different forms it is clear that no particular form has been prescribed for making reference of election dispute to the Registrar and hence it cannot be said that rule 68 is exhaustive and the reference has to be made only in the forms and by the persons prescribed by the said rule. By section 48 of the Act no method or by whom the reference has to be made has been prescribed. But, as it has been stated above, it has been held that election dispute is also a dispute within the meaning of section 48 of the Act. In the circumstances, it cannot be said that if the reference has been made by any of the persons mentioned in rule 68, it will not be a reference because rule 68 will not and cannot control the meaning and scope of section 48 of the Act. In the case of Pandit Raghav Jha (supra) it has been held as follows: “The rules cannot control the meaning of the section. If there is any ambiguity, help may be taken from the rules. Simply because the Government of Bihar in the year 1959 prescribed one form only which can cover one kind of dispute, it cannot be held that other kinds of dispute envisaged by section 48 of the Act thereby had been - 10 - excluded from the operation of that section. To illustrate, I may specifically refer to clause ( c) of sub-section (1) of Section 48 which provides for the reference of dispute between society or its managing committee and any past or present officers, agent or servant of the society without limiting it to the financial dispute. It could not be disputed that even the dispute regarding the dismissal of an officer of the society will be a dispute „between the society‟ and the „officer‟ touching the business of the „registered society‟. This obviously is not covered by form 12.” Therefore, in my opinion, the District Magistrate can make a reference of an election dispute to the Registrar and the reference made by respondent no. 3 was the reference made under section 48 of the Act though it was not made by the persons mentioned in rule 68 (1)(a) and (b) of the Rules. It cannot limit the scope of section 48 of the Act. 15. On receipt of the reference from respondent no. 3, respondent no. 2 should have proceeded in accordance with section 48(2) of the Act and not to decide the dispute in the manner he has done by Annexure 1.” Reference is also made to Bye-Laws related to Vyapar Mandal Sahyog Samiti Ltd. published by the Co-operative Department in 1987 which lays down that if there is any dispute in connection with the functions of the society related to the co-operative societies then the same shall be referred to the Registrar whose decision shall be final. Learned counsel for respondent no. 9, on the other hand, contends that the Registrar has not acted under the provisions of the Co-operative Societies Act in the present matter rather the request of NAFED was made to the Secretary, Co-operative Department to make a verification as to which of the two persons, namely, the - 11 - petitioner and respondent no. 9 have been validly nominated as delegates to NAFED. It is submitted that the Secretary, Co-operative Department had merely directed the Registrar, Co-operative Society to make an enquiry and report to him and the Registrar got the same done through respondent no. 4 and on the basis of the said report informed the Secretary of the Department regarding the findings. It is thus, submitted that the action of the Registrar does not amount to adjudicating the dispute under Section 48 of the Act nor it is in the nature of enquiry under Section 35 of the Act but was merely verification of the matter which had been directed by the Secretary of the Co-operative Department. It is thus submitted that there was no occasion for the application of the principles of natural justice in the course of such verification of facts. Learned counsel for the respondent no. 9 has also sought to support the said decision on the basis of the findings recorded in the enquiry report. It is submitted that the enquiry report has clearly held after making inquiries from the Chairman and other members of the Managing Committee of the society that the resolution passed in favour of the petitioner was not in accordance with law rather it even lacked quorum whereas the resolution passed in favour of respondent no. 9 was valid and legal. However, this aspect of the matter can only be looked into once the issue of the application of principles of natural justice or fairness is brushed aside. Learned counsel further submits that the principles of natural justice are not required to be followed in each and every case - 12 - and it depends upon the facts involved. It is submitted that in the situation in which the decision has been taken it was not at all required to provide any opportunity of hearing either to the petitioner or respondent no. 9 since the verification had to be made from the Chairman and members of the Managing Committee which has been done and for the said reason neither the petitioner nor even respondent no. 9 were required to be heard or were heard. It is further submitted by learned counsel that the present matter is not a dispute under Section 48 of the Act. In any case, it is submitted that even if the same is treated to be a dispute then the reference has to be made by one of the persons who are entitled to refer a dispute in terms of Rule 68 of the Bihar Co-operative Societies Rules, 1959. Under the said rules a dispute under Section 48 has to be referred to the Registrar in writing and the reference can be made only by the Managing Committee of the registered society interested in the dispute or any party to the dispute or any member of the society if the dispute relates to the society or members or the Managing Committee. Learned counsel submits that none of the said parties has come forward to refer the dispute to the Registrar and accordingly the matter has not been considered by the Registrar, Co-operative Societies under his jurisdiction under Section 48 of the Act. It is further submitted that the Bye-Laws that has been produced before this Court is not a Bye-Laws of the Udwant Nagar Vyapar Mandal Sahyog Samiti Ltd. rather the same appears to be general model Bye-Laws and unless the petitioner is able to show that - 13 - the same has been adopted by the society and thereafter approved by the Registrar, Co-operative Societies, no reliance can be placed upon the Bye-Laws. In any view of the matter, learned counsel contends that the Bye-Laws have no force of law and they cannot be applied to the present matter. Learned counsel for the BISCOMAUN, however, supports the stand of the petitioner and states that at the very least the letter dated 14.12.2007 (Annexure-E/10) written by the Managing Director to the Registrar, Co-operative Societies ought to have been treated as a reference under Section 48. He also submits that in such an important matter affecting the rights of a party the decision could not have been taken without hearing the affected parties. On a consideration of the entire facts and circumstances of the case and the submissions made by learned counsels for the parties, this Court is of the view that the matter is squarely covered by the decision of this Court in the Shri Narain Mishra‟s case (supra). In the present matter also a dispute between petitioner no. 1 and respondent no. 9 had come to the notice of the Registrar when the matter was referred to him by the Secretary, Co- operative Department on the basis of the request of NAFED. The Registrar, Co-operative Societies is a statutory authority under the provisions of the Bihar Co-operative Societies Act, 1935 and it is expected by him to exercise his statutory powers as per the provisions of the Act and in such matters he is not supposed to act under the directions issued by the Secretary, Co-operative Department. Once it - 14 - had come to the knowledge of the Registrar, Co-operative Societies that a dispute of a serious nature regarding the