Case: M.P. Rajya Sahakari Bank Maryadit Vs. State Of M.P.

This appeal is directed against the order passed by the Division Bench of Madhya Pradesh High Court at Jabalpur in Writ Petition No. 1415 of 1997 by the order dated 11.3.2003 whereby the Division Bench of the Madhya Pradesh High Court has set aside the order passed by the Registrar ofSocieties in exercise of power under Section 55(1) of the Madhya PradeshCooperative Societies Act, 1960(hereinafter referred to as the Act of 1960) dated 6.3.1997 as ultra vires and allowed the writ petition. Aggrieved by that the present appeal was filed by the Madhya Pradesh Rajya Sahakari Bank Maryadit (hereinafter to be referred to as the appellant).

Court's reasoning:
10. Therefore, Section 2(b) clearly says that the establishment would include any office of the State Government or local authority or statutory authority constituted under the Act of the State or a University, or a company, Corporation or aCooperative Society in which not less than51 percent paid up share capital is held by the State Government and including work charge and contingency paid establishments shall be establishment and in that case reservation can be made for the members of Scheduled Castes, Scheduled Tribes and other Backward classes. The very object of the Act is to provide reservation in public service and posts. Therefore, it confined only for reservation in public services and not any other private institutions. For the purpose of public service, an establishment should answer the requirement as given in Section 2(b) of the Act of 1994. Therefore, reading the object and reason along with the definition of establishment it clearly transpires in the context of theCooperative Society in whichthe State Government has paid up share capital of 51 percent or more, then the reservation can be made in such. Therefore, reading of objective of the Act of 1994 along with the definition of establishment it transpires that the Registrar under Section 55 of the Act of 1960 can lay down service condition forCooperative Society in whichthe State has 51 percent of share capital. In case anyCooperative Society in whichthe State does not have 51 percent of share capital, then thatSociety will not come within the definition of establishment under Section 2(b) of the Act of 1994 and the Registrar ofSocieties shall have no power to frame rule for reservation. It is true that under Section 55 of the Act of 1960 the Registrar can give direction for reservation for the Scheduled Castes and Scheduled Tribes and other Backward classes while exercising the mandate under Articleof the Constitution but at the same time he cannot ignore the State legislation i.e. the Act of 1994. In fact, the Act of 1994 was also promulgated for achieving the object under Articleof the Constitution. Once the State Legislature has framed an Act which is subsequent legislation in point of time i.e. the Madhya PradeshCooperative Societies Act, 1960(Act 17 of 1961) came in 1960 whereas the present Act has come in 1994. It is presumed that Legislature was aware of the power of the Registrar of theSocieties under Section 55 of the Act of 1960 to frame condition of service of employees ofSocieties despite that the Legislature has promulgated the Act of 1994 and laid down ceiling that the reservation in favour of Scheduled Castes, Scheduled Tribes and other Backward classes should be made in the establishment where Government has more than 51% share holding. Thus, on reading of both these two enactments it is more than clear that the Registrar ofSocieties under Section 55 of the Act of 1960 has power to frame rules but at the same time he cannot ignore the impact of the Act of 1994. The Registrar ofSocieties can lay down the reservation in favour of Scheduled Castes, Scheduled Tribes and other Backward classes as general condition of service only insocieties in which the State has more than 51 percent paid up share capital and not for any othersocieties. But the notification dated 6.3.1997 is of general in nature and does not make any distinction withsocieties which do not have 51 per cent paid up share capital of State. Therefore, to this extent the rule framed by the Registrar ofCooperative Societies, MadhyaPradesh by notification dated 6.3.1997 cannot be upheld and the same is struck down. But by this it does not mean that the Registrar ofCooperative Societies, MadhyaPradesh is not denuded of his power to frame rules but he will have to keep in view the impact of the Act ofneed not go into this aspect as in view of the recent decision of this Act in Supriyo Basu & Ors. v. W.B.Housing Board & Ors. [(2005) 6 SCC 289] their Lordships have laid down what are the parameters for challenging the orders passed by theSocieties. It has been held that writ would be maintainable against asociety if it is established that a mandatory statutory provision of a statute has been violated. Therefore, nothing turns on this aspect of the matter.