IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
C.W.P. No. 14459 of 2008
DATE OF DECISION : 18.08.2008
J.S. Ahlawat
.... PETITIONER
Versus
Special Secretary to Government of Haryana and others
..... RESPONDENTS
CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL
HON'BLE MRS. JUSTICE DAYA CHAUDHARY
Present: Mr. S.S. Dalal, Advocate,
for the petitioner.
***
SATISH KUMAR MITTAL , J.
The petitioner has filed this petition under Articles 226/227 of
the Constitution of India for quashing the order dated 11.4.2008, passed by
the Assistant Registrar, Cooperative Societies, Gurgaon, whereby a show
cause notice was given and further in exercise of the power under sub-
section (2) of Section 34 of the Haryana Co-operative Societies Act, 1984
(hereinafter referred to as `the Act’), the Managing Committee of the
Engineers Cooperative Group Housing Society Ltd., Gurgaon (hereinafter
referred to as `the Housing Society’) has been placed under suspension, and
for smooth running of the society, the Board of Administrators has been
appointed under Section 33 (1) of the Act, for six months.
In this case, a complaint was received by the Assistant
CWP No. 14459 of 2008 -2-
Registrar, Cooperative Societies from certain members of the Housing
Society. On the said complaint, notices were issued to the complainant as
well as the Housing Society. In spite of the notice, neither any
representative of the Housing Society came present nor record of the
Housing Society was produced. Again, a notice was issued to the petitioner,
who is the President of the Housing Society, to produce the entire record,
but on that also, no record was produced before the Assistant Registrar for
his inspection. In light of all these facts, the Assistant Registrar issued
notice under sub-section (1) of Section 34 of the Act to show cause as to
why the Managing Committee of the Housing Society be not removed, as
the Managing committee was persistently making defaults in the
performance of duties imposed on it by the Act. While proceeding to take
action under sub-section (1), the Assistant Registrar also passed the order of
suspension of the Managing Committee, after framing opinion that in the
interest of the Society, the Managing Committee is to be suspended. The
petitioner, who is the President of the Managing Committee of the Housing
Society, has filed the instant petition.
Learned counsel for the petitioner submits that the Assistant
Registrar can suspend the Managing Committee only after giving a show
cause notice and after receiving reply thereof, and hearing the petitioner.
Therefore, in the instant case, he has acted without jurisdiction, while
straight way suspending the Managing Committee without waiting for reply
to the show cause notice issued under sub-section (1) of Section 34 of the
Act. In support of his contention, learned counsel has relied upon decisions
CWP No. 14459 of 2008 -3-
of this Court in S.R. Goyal v. Mehtab Singh, Deputy Registrar, 1994 PLJ
219 and Bharat Singh v. Deputy Registrar, Co-op. Societies, Haryana,
Rohtak, 1995 PLJ 283.
After hearing counsel for the petitioner and going through the
impugned order, we do not find any force in the contention of learned
counsel for the petitioner. Section 34 of the Act provides for removal of
Committee and this provision reads as under :
“34. Removal of Committee – (1) If in the opinion of the
Registrar, a committee persistently makes default or is
negligent in the performance of duties imposed on it by this Act
or the rules or the bye-laws or commits any act which is
prejudicial to the interest of the society or its members, the
Registrar may after giving the committee an opportunity to state
its objections, if any, by order in writing, remove the
committee, and order fresh election of the committee or appoint
administrators in accordance with the provisions of Section 33.
Provided that the appointment of administrators shall be
for a period of one year which may be extended, from time to
time, up to three years.
(2) Where the Registrar, while proceeding to take action
under sub-section (1), is of the opinion that suspension of the
committee during the period of proceedings is necessary in the
interest of the co-operative society, he may suspend the
committee and make such arrangement as he thinks proper for
CWP No. 14459 of 2008 -4-the management of the affairs of the society till the proceedings
are completed;
Provided that if the committee so suspended is not
removed, it shall be re-instated and the period of suspension
shall count towards its tenure;
Provided further that the period of suspension shall not
exceed six months.
(3) The administrators appointed under sub-section (1) shall
arrange, for the election of a committee in accordance with the
bye-laws of the society failing which the Registrar shall arrange
to hold the election.
(4) Before taking any action under sub-section (1) in respect
of a co-operative society, the Registrar shall consult the
financing institution to which it is indebted.”
Section 35 of the Act provides for similar provisions for removal of
Committee members.
A reading of the aforesaid provisions shows that the Registrar is
empowered to remove the Managing Committee who is guilty of persistent
default or is negligent in the performance of duties imposed on it by the Act
or the Rules. Sub-section (2) further empowers the Registrar to suspend the
Committee, while proceeding to take action under sub-section (1), during
the period of those proceedings, if in his opinion it is necessary to do so in
the interest of the co-operative society and he may make such arrangement
as he thinks proper for the management of the affairs of the society till the
CWP No. 14459 of 2008 -5-
proceedings are completed. The provision to this sub-section further
provides that if the committee so suspended is not removed, it shall be re-
instated and the period of suspension shall count towards its tenure. The
second provision further provides that the period of suspension shall not
exceed six months. From the reading of the aforesaid provisions, it cannot
be inferred that it is imperative for the Registrar to issue show cause notice
and provide an opportunity of hearing, before passing order of suspension
under sub-section (2) of Section 34 of the Act. A show cause notice and
opportunity of hearing is required only before passing order of removal of
the committee. Sub-section (2) clearly empowers the Registrar to suspend
the Committee, while proceeding to take action under sub-section (1), if he
is of the opinion that, during the period of proceedings, it is necessary in the
interest of the co-operative society.
The aforesaid decisions of this Court, relied upon by learned
counsel for the petitioner, do not support the case of the petitioner. In S.R.
Goyal’s case (supra), it was held as under :
“A plain reading of sub-section (2) of Section 34 of the Act
makes it clear that powers under Section 34 (2) to suspend the
Managing Committee of the society can be exercised by the
Registrar only during the pendency of the proceedings under
sub-section (1) of section 34. Registrar can suspend the
Committee during the period of proceedings only if he forms an
opinion that it is necessary so to do in the interest of the Co-
operative Society. Pendency of proceedings under sub-section
CWP No. 14459 of 2008 -6-(1) of Section 34, is a condition precedent for invoking the
powers to suspend the committee, if no proceedings are
pending for removal of the committee under Section 34 (1) then
orders suspending the committee cannot be passed because the
order of suspension can be operative only during the period of
proceedings. In the absence of pendency of any proceedings,
the question of suspension of the committee thus cannot arise.
It is an admitted case before us that no proceedings under
section 34 (1) of the Act for removal of the Committee have
either been initiated or pending.”
This judgment is not applicable to the facts and circumstances of this case,
because in the instant case, undisputedly, the proceedings for removal have
been initiated under sub-section (1) of Section 34 of the Act and when the
order of suspension was passed in exercise of power under sub-section (2),
the proceedings were pending.
Similarly, in Bharat Singh’s case (supra), this Court held as
under :-
“4. A conjoint reading of the above quoted provisions of the
Act shows that the Registrar is empowered to remove any
member of the Committee who is guilty of persistent default or
is negligent in the performance of duties imposed on him by
Act or the rules or bye-laws or is guilty of committing any act
prejudicial to the interest of the society or its members.
However, what is imperative for the Registrar before he passes
CWP No. 14459 of 2008 -7-an order under Section 35 (1) of the Act is that he must give
such member an opportunity to submit his objection to the
proposed action and then to pass a reasoned order for removing
such member from the office. The language used in Section 35
(1) clearly shows that the Legislature has thought it proper to
engraft the basic principles of natural justice in the statute
itself. It can, thus, be said that before the Registrar passes an
order, he is required to give Show Cause Notice to the member
concerned, consider his representation and then pass
appropriate order. Issuance of Show Cause Notice under
Section 35 (1) can appropriately be equated with initiation of
enquiry. Logically it has to be held that till a Show Cause
Notice is issued with proposal to take action against the erring
member under Section 35 (1), the proceedings cannot be treated
as having been initiated.
5. Section 35 (2) of the Act empowers the Registrar to
suspend such member during the period of proceedings, if the
Registrar considers it necessary to do so in the interest of the
cooperative society. The expression “during the period of
proceedings” contemplates the pendency of proceedings as a
condition-precedent for taking action under Section 35 (2) and
if the proceedings have not been initiated under Section 35 (1),
the same cannot be treated as pending. In that situation, the
Registrar is not empowered to place a member under
CWP No. 14459 of 2008 -8-suspension.
6. A look at the impugned order shows that the Registrar
has suspended the petitioner even without issuing a notice
under Section 35 (1). Therefore, it has to be held that the
Registrar has exercised the power of suspending the petitioner
in contravention of the provisions of Section 35 (2) of the Act.”
This judgment is also not applicable to the facts and
circumstances of this case, because in that case, it was held that the
pendency of proceedings for removal is a condition precedent for taking
action under Section 35 (2) of the Act and if proceedings have not been
initiated under Section 35 (1), the same cannot be treated as pending. In the
instant case, since the proceedings for removal of the Managing Committee
were initiated under Section 34 (1) of the Act, therefore, the Registrar was
within his power to suspend the Managing Committee after framing the
opinion that the suspension of the committee is in the interest of the Society.
In view of the above, there is no merit in the instant writ
petition and the same is, hereby, dismissed.
( SATISH KUMAR MITTAL )
JUDGE
August 18, 2008 ( DAYA CHAUDHARY )
ndj JUDGE
Refer to Reporter