JUDGMENT
Sivaraman Nair, J.
1. Petitioners challenge the constitutional validity of,Sections 3 and 5 of A.P. Co-opdrative Societies (Amendment) Act 13/90. ‘The facts leading to these writ petitions are representative in character in view of the averments and the reliefs sought in them. We will therefore, refer to facts in W.P.No. 17035 of 1990.
2. Peittioher was elected as President of the District Co-operative Central Bank, Karimnagar in the year 1987. In that capacity, he was a Member of the General Body and Managing Committee of the A.P. State Co-operative Bank as also the A.P. State Agricultural Land Development Bank. These will be referred to hereafter as “Apex Banks”. These apex banks elected the petitioner as their President. The term of office of elected members of Management Committees was three years according to the provisions contained in A.P. Co-operative Societies Act, 1964. The period was extended to five years by A.P. Co-operative Societies (Amendment) Act 16/1989. The period of three years was to end on 30-6-1990. The Governor promulgated A.P. Co-operative Societies (Amendment) Ordinance 5/90 on that day reducing the term of office of the elected Directors from five to three years. Simultaneously, Government issued three Orders – G.O.Ms.Nos. 418,419 and 420 Food & Agriculture (Co-operative) Department dated 30-6-1990. The first order contained guidelines for appointment of Persons-in-charge to be in management of the Societies till elections were conducted. The other two namely G.Os.419 and 420 appointed officails of the Department as Persons-in-charge of the two apex banks pettioners and others whoe (sic) Distric (sic) tral banks and who, in that capacity, were Members of the Managing Committees of the two apex banks filed W.P.No .9202 /90 on 2-7-1990 challenging the Ordinance as also the Orders issued pursuant thereto. Those writ petitions were heard by a Division Bench which delivered its judgment (two separate but concurrent judgments) dated 18-9-1990 reported in B. Kota Malliah v. Commissioner & Registrar of Co-operative Societies, . One of us (V. Sivaranan Nair, J.) was a member of that Bench.
3. The Bench upheld the constitutional validity of the Ordinance, but struck down G.O.Ms.Nos. 418, 419 and 420 and directed the Government and the Registrar of Co-operative Societies to consider the out-going Members of the time-expired — Committees for appointment as Persons-in-charge to manage the Societies including the apex banks, if there had been nothing to disentitle them from being considered for such appointment. The Bench also held that Section 32(7)(a) of the Act did not contain any principle of law necessitating or even justifying exclusion of out-going Members of the erstwhile Managing Committees of the various Co-operative Societies from appointment as Persons- in-charge. In the light of those findings, the Division bench directed the Registrar and the Government to consider appointment of Persons-in-charge on a consideration of the claims of the out-going Members of the erstwhile Committees as well. That was to be done within two weeks from the date of pronouncement of the judgment. It is necessary to extract the relevant portions of the judgment which are as follows:
“……In view of the above discussion, we hold that the bar under Section 3 of the Ordinance does not apply to the jurisdiction of this Court under Article 226 of the Supreme Court under Article 32 of the Constitution of India. We also hold that all such appointments which have been made under the various Government Orders issued in pursuance of Ordinance No. 5 of 1990 are set aside and the Government Orders, viz., G.O.Ms.Nos. 418,419 and 420 dated 30-6-1990, the Proceedings of the Registrar of the Co-operative Societies in Rc.No. 50493/90 Cr.l(b) dated 30-6-1990 and the consequential orders passed by the subordinate officers pursuant thereto, are struck down with a direction that appropriate and prompt action may be taken within two weeks from today by the Government or the Registrar, as the case may be, for the appointment of a person or persons under Section 32(7) of the Act in the light of the directions given above. The time limit imposed for holding elections as per sub-clause (2) of clause (4) of the Ordinance shall be adhered to strictly and there should be no occasion to seek further extension of time for the holding of elections to the Co-operative Societies.” (Sardar Ali Khan, J.)
“In the result, I hold in agreement with my learned brother Sardar Ali Khan, J. that the challenge against Ordinance 5 of 1990 has to fail and that the bar under Section 3 of the Ordinance does not apply to the jurisdiction of this court under Article 226 or of the Supreme Court under Article 32 of the Constitution of India. The Writ Petitions are allowed to the extent of strking down the Government Orders mentioned above viz., G.O.Ms.Nos. 418,419 and 420 dated 30-6-1990, the proceedings of the Registrar of Co-operative Societies in Rc.No. 50493/90 Cr.l(b), dated 30-6-90 and the consequential orders passed by the subordinate officers in pursuance thereto.” (V. Sivaraman Nair, J.)
4. The period of two weeks expired on 2-10-1990. In the mean time, the State Legislature enacted A.P. Co-operative Societies (Amendment) Act 13/90. It is necessary to refer to that enactment in detail.
5. Section 1(2) of the Amending Act provides that the Act should be deemed to have come into force on 30-6-1990. Section 2 provides for reduction of the term of office of the elected Directors from five years to three years by substitution of the former by the latter, in Section 31(2) of the A.P. Co-operative Societies Act, 1964, herein after referred to as the ‘Principal Act’. Section 3 which is now challenged is in the folowing terms:
“Insertion of New Section 32-A:-
(3) Section 32-A of the Principal Act shall be renumbered as Section 32- B and before the section as so renumbered, the following section shall be inserted namely:-
32-A. Notwithstanding anything contained in clause (a) of sub-section (7) of Section 32, or in any Judgment, decree or order of any court, tribunal or other authority, no office-bearer or member of a committee who ceased to hold office either by efflux of time or otherwise shall have a right to be appointed as person-in-charge or persons-in- charge.”
6. Section 4 provides that the Committee which had continued in Office beyond the term of three years shall cease to function. Sub-section (2) which is relevant is in the following terms:
“Notwithstanding anything in clause (b) of sub-section (2) of Section 31 of the Principal Act, elections to such societies whose Committees cease to hold office under sub-section (1) shall be held by the Registrar within a period of six months from the date of commencement of this Act, in accordance with the provisions of the principal Act and the rules made thereunder:
Provided that the Government may, by order and for reasons to be recorded in writing, extend from time to time, the period of six months aforesaid; so, however, the total period shall not exceed one year from the date of commencement of this Act.”
6 (a). The main controversy relates to Section 5 of the Amending Act which is in the following terms:
“5. Notwithstanding anything in any Judgment, decree or order of any court, tribunal or other authority to the contrary all orders or proceedings issued either by the Government or by the Registrar in pursuance of the Andhra pradesh Co-operative Societies (Amendment) Ordinance, 1990 and any action taken in pursuance thereof shall be and deemed always to have been valid and accordingly no suit or other proceeding shall be maintained or continued in any court against the State Government, Registrar or any person or authority whatsoever.”
7. The preliminary points which are to be decided in this case are two-fold. Firstly, whether the Government is bound to give effect to the directions contained in the operative portion of the judgment which may be extracted as:
“….. consider the claims of out-going members of time-expired -Committees for appointment as Persons-in-charge…..” and secondly, whether Section 5 has the effect of validating G.O.Ms.Nos. 418,419 and 420 Food & Agriculture (Co- operative) Department dated 30-6-1990, the orders of the Registrar as also the orders issued by the subordinate officers pursuant to the Ordinance by the enactment of Section 5 of the Amending Act. These questions have become academic now in view of the fact that elections of Committees of Management have been conducted in all Co-operative Societies including the two apex Banks and those Committees have been or are being inducted into office. But the question of validity of Sections 3 and 5 of Act 13 of 1990 endures and have to be decided.
8. Act 13/1990 was published in the official gazette on September 28,1990 having received the assent of the Governor on the previous day. Petitioner filed Special Leave Petition before the Supreme Court assailing the judgment of the Division Bench of this court in so far as it held Ordinance to be constitutionally valid. Simultaneously, he also filed W.P.No. 1Q76/90 under Article 32 of the Constitution of India before the Supreme Court. These came up for consideration on 9-11-1990.
9. Counsel appearing for the State Government assured the Supreme Court that the election of the Managing Committees to the Co-operative Societies in the State would be completed by December 30,1990. On the basis of the above assurance, the Supreme Court disposed the Special Leave Petition and W.P.No,1706/90 by the following order:
“We have heard learned counsel on both sides. Section 4(2) of the Andhra Pradesh Act 13/90 requires the Registrar to hold elections within a period of six months from the date of the commencement of the Act, which is 30th June, 1990. Though the period is extendable by the Government under the proviso to Section 4(2) for a total period of one year from the date of the commencement of the Act, it would be in the fitness of things in the instant case that the elections are held within the time stipulated under Section 4(2) of the Act without putting to use the proviso. Therefore, the elections must take place in the near future in terms of Section 4(2) of the Act for the existent exigencies. Learned counsel for the respondents assured is that such a process would be set in motion so that the elections are complete in all respects by December 30,1990. We are of the view that on such assurance of the respondents it is not necessary to “determine the question of law whether the Amendment Act could take away the effect of the decided cases of the Andhra Pradesh High Court and other ancillary questions. We leave thus these questions open disposing of the Writ Petition as well as the Special Leave Petition.”
10. Petitioner thereafter filed this writ petition in the meantime on 6-12-1990 before this Court seeking a declaration that Sections 3 and 5 of Act 13/90 are unconstitutional. The application for interim suspension of those two provisions came up before one of us (Sivaraman Nair, J.). In W.P.M.P. No. 21889/90 the petitioner sought a direction to allow the erstwhile Managing Committees under the Presidentship of the petitioner to manage the affairs of the two apex banks, pending disposal of the writ petition.
11. Petitioner had also filed Contempt Case No. 32/91 to take action against the respondents for non-implementation of the directions contained in the judgment of the Division Bench in W.P.No. 9202/90 which was disposed of by the common judgment in B. Kota Mallaiah (1 supra). The State Government had in the meantime filed Special Leave Petitions before the Supreme Court against the above judgment.
12. The Special Leave Petitions were heard on 8-4-1991. The State seems to have contended that it was disabled from appointing persons-in-charge in implementation of the directions contained in B. Kota Mallaiah (1 supra) because of the interim orders of stay is issued in these writ petitions. Special Leave Petitions (C) 4324 to 4408 and 5172/91 were disposed of by the Supreme Court by its orders on 8-4-1991 affirming the judgment of the Division Bench of this Court dated 18-9-1990 in B. Kota Mallaiah (1 supra). The Supreme Court also requested this Court “to bring all the stay orders in relation to these matters in line with their judgment in C.W.P.No. 8783/90”. Pursuant to mat request a Division Bench of this Court passed consequential orders on 24-4-1991.
13. The State has filed a detailed counter-affidavit. We do not propose to consider the controversy relating to facts, because the only point in issue is, validity of Sections 3 and 5 of Act 13/1990. We have extracted these two provisions earlier. The defence of the State about the validity of these provisions is that Section 3 was enacted with retrospective effect from 30-6-1990 to make the position clear, that out-going Members of the erstwhile Committees have no right to be appointed as Persons-in-charge and Sections was only a consequential provision validating orders passed on 30-6-1990. It is also submitted that “the validation of the Acts under the Ordinance under Section 5 of the Amending Act is legal as the basis for the judgment of this Court stood altered by virtue of Section 3 of the Amending Act.”
14. After hearing Counsel and the Advocate General at length, we are of the opinion that the very basis for enacting Sections 3 and 5 of Act 13/90 is a total misapprehension. The basic assumption which is wrong is, that the Division Bench (1 supra) had held in the judgment that the outgoing Members of the erstwhile Committees have got a right to be appointed as Persons-in-charge in the interregnum if the elected Committees cease to hold office. This is clear from the following observations of Sardar AM Khan, J. in the Division Bench judgment (1 supra):
“…. We therefore, hold that it is the duty of the Registrar while exercising his statutory discretion to appoint a person or persons under Section 32(7)(a) to examine the case of each and every society individually to determine whether it would be fit and proper to continue the Managing Committee which had held office earlier and if the Registrar comes to the conclusions that that body alone can discharge the functions to the satisfaction of one and all and promote the interests of the Co-operative Society, there shall be no bar against the appointment of such Managing Committee under Section 32(7)(a) of the Act. There cannot be any hard and fast rule with regard to the matter of appointment of a person or persons to manage the affairs of the society. The over-all object of appointment of such a person or persons is to ensure the smooth functioning of the Co-operative Society and whosoever is found fit and proper to be appointed, the Registrar may appoint him as a person under Section32(7)(a). It is needless to mention that while arriving at a decision in this regard the Registrar must apply a fair and objective mind to the facts of each and every case of the Society and come to a conclusion of his own.”
It is also relevant to refer to the following observations in the same judgment:
“…..We have taken the view that the Ordinance cannot decree in positive terms that the erstwhile Managing Committees which have been functioning creditably are under no circumstances to be appointed as persons-in-charge under Section 32(7)(a). We are inclined to hold that if the Committee has acquitted itself creditably and if there is nothing to complain about the functioning of the Committee, it would be well within the discretion of the Registrar to appoint such a Committee as a personor persons in charge. Moreover, there is nothing in the Ordinance to prohibit the appointment of such Managing Committee as person or persons in charge and, therefore, they cannot be totally excluded from consideration for appointment as a person or persons-in-charge in deserving cases.”
The position was made further clear in the following observations:
“……In other words, there cannot be any exclusion of the erstwhile Managing Committees of the various Co-operative Societies for consideration for appointment as a person or persons under Section 32(7)(a). The case of each Co-operative Society must be considered on its own merits and the discretion vested in the Government in regard to the other societies shall be exercised independently in making such appointments.
We are convinced that the statutory discretion vested in the Registrar cannot be obviated or compromised by a wholesale order of appointment of official persons in charge to the various Co-operative Societies….. For this purpose the best available person or persons including the erstwhile Managing Committee or some of its members, if they have acquitted themselves creditably in the past, or other independent person or persons who may be deemed fit and suitable for running the affairs of the Society may be considered and appointed as such.”
15. The emphasis of the Judgment was not on any assumed right in the outgoing members of erstwhile committee to be appointed as person-in-charge till elections are held. On the other hand, it was postulated on the proper exercise of discretion by the Registrar or the Government to appoint person or persons including the erstwhile Managing Committee or some of its Members or other independent person or persons who may be deemed fit and suitable for running the affairs of the Society. There was therefore, no warrant in assuming that the Division Bench declared that out going Members of erst while Committees had a right to be appointed as Persons-in-charge of the Co-operative Societies. The same line of thought can be gleaned from the following observations in the concurring Judgment of Sivaraman Nair, J.
“……I have no doubt that Section 32(7)(a) of the principal Act conferred a very wide discretion on the Government or the Registrar to appoint persons-in-charge of the management of the affairs of the Co-operative Societies ‘if there is no Committee or in the opinion of the Government or the Registrar, it is not possible to call a general meeting for the purpose of conducting election of members of the Committee’. It is true that the only circumstances in which such appointment can be made are specified in the section, but there are no indications as to who may be appointed. Attempts were made by this court on more occasions than one to find some guideline in ‘the purposes of the Act, “the principles and ideals underlying the co-operative movement’ and ‘the spirit and scheme of the Act’ as controlling the rather wide discretion………….. I further hold that in effecting such appointments to tide over any interregnum caused otherwise than due to default of the committee and till regular elections are conducted, the Government/Registrar shall ordinarily prefer the erstwhile committee of management for appointment as Persons-in- charge, unless the committee as a whole or some of its members are found guilty of acts or omissions which disentitle them to be so appointed.”
16. It is clear from the above observations that neither of the two Judges constituting-the Division Bench proceeded on the assumption that out-going Members of erstwhile Committiees of management had any right to be appointed as persons-in-charge during the interregnum before the next election is conducted. The Division Bench (1 supra) proceeded on the assumption that Section 32(7)(a) conferred a wide discretion on the State Government or the Registrar, as the case may be, to select the personnel to the appointed as Persons- in-charge. In view of the width of the discretion, it was found necessary to rein in the unbridled discretion by locating and identifying factors which would regulate the exercise of that discretion. One of such factors was stated to be consideration of any person, officials or non-officials, erstwhile Committee Members, or others, to be appointed as Persons-in-charge, in the interests of the concerned Society. There is no reason for assuming that the Division Bench had held that outgoing Members of erstwhile Committees had a right to be ‘appointed’ as Persons-in-charge. At best, it can only be said that the Court found that any such out-going Member had a right to be considered for appointment. If that is the only effect of the judgment of the Division Bench (1 supra), it is very difficult to understand Section 3 of the Act as it is enacted at present.
17. Even otherwise, we feel that the objection taken to Section 3 of the Act is sustainable. The effect of Section 3 is to hold that outgoing Members of erstwhile Committees of Management would not be entitled for appointment as Persons-in-charge. In other words, any Member of the Society may be entitled; even outsiders may be eligible. For the only reason that a person was a Member of an erstwhile Committee of Management, the period of which has expired, he is disentitled from being appointed as a Person-in-charge of the same Society eventhough he may be ‘the best available person’. It is axiomatic that appointment of Persons-in-charge shall be made only for the effective and efficient administration of the affairs of the Society during the interregnum between the cessation of office of one Managing Committee and the assumption of office by the other. Continuity in effective management is necessarily the most important consideration in making such appointments. There may be cases where members of the previous Committee of Management had no discharged their duties effectively or efficiently – may be some Members had abused their office for personal gains – may be some others had created factions in the working of the Society making it desirable to exclude them from being considered for election or appointment as Members of the Managing Committee for a succeeding term. In all those situations such Members can be eliminated. The Division Bench (1 supra) had held that the Registrar of Co-operative Societies has got a wide ranging discretion in the matter of appointment of Persons-in-charge. This is clear from the expressive phraseology of our learned brother Sardar. Ali Khan, J. whose observations we have extracted in paragraph No. 14 supra.
18. If we assume, as we are bound to, in view of the decision of the Division Bench, which has now the approval of the Supreme Court of India, that the State Government or the Registrar, in appropriate cases, have got a discretion to appoint the best available person or persons – either Members or others – who have been deemed fit and suitable for running the affairs of the Society, there must be specific reason why the most eligible from the category of the persons, are excluded from appointment as Persons-in-charge. May be in certain cases where one person or the same set of persons, were ruling the roost for a long period of time as Member or Members of the Committee of Management resulting in some situation like a monopoly of power to control Co-operative Societies, the Legislature may provide against indefinite continuance of such Members either as Directors or as Persons-in-charge of the same Co-operative Society or Societies. It is evident that no such prohibition is contemplated by the present Statute. As a matter of fact, there is no prohibition against election of the same set of persons or any one of them, as Member or Members of the Managing Committee/Committees for successive terms. Even the most cantankerous and factious or dishonest or corrupt Member of a Committee of management, can manage to get himself elected for successive terms. There shall be some germane and relevant reason why, for carrying on the affairs of the Society during an interregnum, the outgoing Members of the erstwhile Committee shall be totally disqualified and eliminated by a statutory provision – germane and relevant in the context of the interests of the Society and having a nexus with the effective and efficient management of the affairs of the Society. We do not find any averment or argument justifying the total prohibition imposed by the statute, by providing that members of Committees of Management whose term has run put, have no right for consideration for appointment as persons in charge.
19. There are two ways of understanding the provisions of Section 32-A as inserted by Section 3 of the Amending Act. If it denies right automatically of Members of erstwhile Committees to continue as Persons-in-charge, the provision is understandable. If it is a total prohibition against appointment of any such Member as a Persons-in-charge, it is to be explained with specific reference to germane and relevant considerations having a nexus with the object namely/efficient and effective administration of the Society during the interregnum. We should point out here that the case of the State, in its counter affidavit, is that Section 3 of the Amending Act was enacted to provide “in express terms that such Members of outgoing Managing Committee shall have no right to be appointed as Persons-in-charge. In view of such unambiguous adumbration, the legal position stands clarified and altered.”
20. If the legal position emanating from the decision in the Division Bench (1 supra) or the earlier decisions in Giddareddy v. Deputy Registrar, Kurnool , (F.B.). or State of Andhra Pradesh v. Multi-co-ops. 1987(1) ALT 197. or M. Ranga Reddy v. State, AIR 1989 A.P. 83., had directly or by implication held that the outgoing Members of erstwhile Committees of Management had any right to be appointed as Persons-in-charge, there may be some justification for this provision. But all these decisions uniformly held that the Government or the Registrar had a discretion, unfettered as it was, in the matter of appointment of Persons-in-charge or in extending or otherwise the term of office of elected Committees which had expired. The Division Bench (1 supra) did not hold otherwise. There was, therefore, no justification in assuming- that this Court had held that outgoing Members of erstwhile Committees of Management had any right to be ‘appointed’ as Persons-in- charge and in altering the legal basis by legislative intervention. Appointment of Persons-in-charge was held to be almost entirely discretionary. All the decisions held, however, that such discretion should be properly guided by relevant considerations and that in exercising the discretion, ‘the spirit of the statute’ or its ‘underlying principles’ or ‘co-operative democracy’ should be borne in mind. The decisions did not proceed any further than holding that the appointing authorities should consider the question whether Out-going Members of erstwhile Committees of Management should also be considered for appointment. That was not to say, that they have a right to be ‘appointed’. There was therefore, no need to clarify or alter the legal position. Enactment of Section 3 is therefore, no more or less than an exercise in futility.
21. We are also of the opinion that the legislative declaration, that put-going Members of erstwhile Committees of Management have no right to be appointed as Persons-in-charge of those very co-operative institutions, does not supply a legal basis which was lacking, because we should state, at the cost of repetition, that no court had held otherwise in any antecedent decision. What all was said was, that such persons may be considered for appointment along with others – Members and non-Members including officials in the interest of effective and efficient administration of the Society. We do not understand Section 3 of the Amending Act to have altered that position even a little. The legal position seems to be the same. The Government or the Registrar in appropriate cases have got a far-flung discretion to choose the. personnel to be appointed as Persons-in-charge, to administer the Societies during the period of interregnum. This was what one of us (Sivaraman Nair, J.) held in the Division Bench case (1 supra) as follows:
“…..I am of the opinion that ‘purposes of the Act’ its scheme and spirit, its soul – for that matter, of any legislative instrument – are the leading strings which shall rein in the unruly horse of arbitrary power; and ‘bona fides’ and ‘relevant grounds’ are check-mates to ensure that the executive entrusted with any power does not behave as a bull in a china shop in its exercise. The State may like to be beyond all controls in its actions. The Court has a duty to be the sentinel against such absolutism and arbitrariness.”
22. If the State felt that this was an offending statement of law, and that had to be removed by legislative intervention and Section 3 was product of such legislative action, we are not in a position to uphold the validity of Section3. The principle, according to us, needs no reiteration mat any legislative action which confers arbitrary and unbridled power on authorities functioning under the Statute have to be reined in, have to be regulated, and controlled with reference to relevant and germane considerations culled out of the provisions of the Statute including its preamble. What the judgment of the Division Bench (1 supra) did was to find such regulatory factors as emanating from the Statute itself, such being ‘the purpose of the Act’ or ‘the spirit and scheme of the Act’ or ‘democracy in co-operative movement’ and ‘bona fide exercise of power on relevant grounds’. These considerations are of everlasting importance in judging any legislative or administrative action. These controlling considerations are part of our Constitution, Article 14 of which provides against arbitrariness in State action in any sphere. If it is the case of the State that the observations finding the need to regulate the exercise of power either by the Government or by the Registrar in the matter of appointment of Persons-in-charge was a wrong understanding of law and it had to be rectified by incorporating a total ban against consideration of one group of persons for such appointment, we can only interject an emphatic negative to mat wanton exercise of power.
23. In this view, we hold that Section 3 of the A.P. Co-operative Societies (Amendment) Act, if it is meant to impose a total prohibition against consideration of outgoing Members of erstwhile Committees of management of Co-operative Societies in the State, for appointment as Persons-in-charge of administration of the Societies, till new elections are conducted is void and inoperative in so far as it has no nexus to the governing purpose, namely – excellence in efficient and effective management of the affairs of the Society during the interregnum. We also hold that in so far as it excludes one class of Members who are otherwise qualified to be elected as Members of the Committee of Management of the Societies from consideration for appointment as Persons- in-charge for no justifiable reason, is discriminatory and violative of Article 14 of the Constitution of India.
24. The only justification for enactment of Section 5 of the Act, according to the counter affidavit of the State, was that in the back-ground of the provision in Section 3 of the Amending Act that Members of the outgoing Managing Committees shall have no right to be appointed as Persons-in-charge, Section 5 ‘validates all the past acts of the Government under the Ordinance’. It is asserted that it was not the objective of the impugned Act to overrule any judicial determination since that contention is wholly misconceived. It is also stated that the legislature never intended to exercise power of judicial review as alleged, much less was there any usurpation of the jurisdiction of the courts.
25. We have now to examine what are the ‘past acts of the Government under the Ordinance’ which were validated by Section 5. Those were the Government Orders – G.O.Ms. Nos. 418, 419, 420 and orders which the Registrar of Co- operative Societies and his subordinate officers had passed in pursuance of the Ordinance. The only ground on which those orders were set aside was that, there was no ground for the assumption that members of outgoing Managing Committes were not to be considered for appointment. What the Division Bench (1 supra) had held, as we have repeate.dly pointed out, was, that those orders were struck down only because the Government and the Registrar did not take into account the relevant considerations at the time when they issued them in exercise of their statutory discretion.
26. The legislative intent in enacting the amendment was stated to be to negative any right to office-bearers of Members of a Committee which ceases to hold office, to be appointed as Person/Persons-in-charge. The counter affidavit explains that having re-stated the law as above “not with standing any Judgment, decree or order of court”, Section5 proceeded to validate all orders or proceedings, issued either by the Government or by the Registrar in pursuance of Ordinance 5/90 by providing that any action taken in pursuance thereof, shall be deemed to have always been validly made. A further consequential provision is made that no suit or other proceeding shall be maintained or continued in any court against the State Government, Registrar or any person or authority whatsoever. The argument of Mr. Ramana Reddy, counsel appearing for the petitioners is that Section 32-A, as introduced by Section 3 of the Amending Act, did not have the effect of invalidating the judgment of the Division Bench (1 supra), in that it did not furnish a legal basis which was found to be lacking and therefore, the retrospective validation of orders notwithstanding the judgment of court, amounts to usurpation of judicial functions.
27. We are inclined to accept this submission. We have held that the Division Bench (1 supra) had not predicated its directions to any right in the outgoing Members of erstwhile Committees to be appointed as Persons-in-charge. It is worth repetition that this Court had only held that they along with others were eligible to be considered. It was because of the wholesale condemnation of all outgoing Members of erstwhile Committees of Management, that the Division Bench (1 supra) held:
“…… We are convinced that the statutory discretion vested in the Registrar cannot be obviated or compromised by a wholesale order of appointment of official persons in-charge to the various Co-operative societies. We are of the view that the overall object of the appointment of a person or persons under Section 32(7)(a) is to ensure the smooth and efficient functioning of the Co-operative Societies. For this purpose the best available person or persons including the erstwhile Managing Committee or some of its members, if they have acquitted themselves creditably in the past, or other independent person or persons who may be deemed fit and suitable for running the affairs of the Society may be considered and appointed as such.”
It is for that reason, the Division Bench (1 supra) held that:
“……All such appointments which have been made under the various Government Orders issued in pursuance of Ordinance No. 5 of 1990 are set aside and the Government Orders, viz., G.O.Ms.Nos. 418,419 and 420 dated 30-6-1990, the proceedings of the Registrar of the Co-operative Societies in Rc.No. 50493/90. Cr.l(b), dated 30-6-1990 and the consequential orders passed by the subordinate Officers pursuant thereto, are struck down with a direction that appropriate and prompt action may be taken within two weeks from today by the Government or the Registrar, as the case may be, for the appointment of a person or persons under Section 32(7) of the Act in the light of the directions given above.”
28. It seems to us obvious that the Government Orders, the proceedings of the Registrar and other consequential proceedings of subordinate Officers were set aside, not due to any assumption that outgoing Members of erstwhile Commitees of Management had any right to be appointed, but that the discretion which the appointing authorities had was to be, but was not exercised reasonably. That proposition cannot be objectionable, nor is it the case of the state that the appointing authorities had any unbridled discretion in the matter. According to the counter of the State, the three Government Orders, the order of the Registrar and other consequential orders are validated only by reason of the enactment of Section 3 of the Amending Act by which Section 32-A has been introduced in the principal Act. We have found that the legislative declaration that outgoing Members of erstwhile Committees of management had no right to be appointed was absolutely unnecessary, since no court, much less the Division Bench (1 supra) had stated anything even approximating such an assertion. The enactment of Section 3 was, therefore, not sufficient to supply the legal basis for validating such orders retrospectively. That is the avowed object of the scheme involved in Sections 3 and 5 of the Amending Act. We hold that that object could not be achieved for the reasons stated above.
29. If Section 3 did not supply a new legal basis which the Division Bench found lacking and due to which the Bench set aside G.O.Ms.Nos. 418,419 and 420 and other consequential orders, the effect of Section 5 of the Amending Act is only to overrule the judgment of the Division Bench and give validity to orders which could not be and have not been legally validated. It is not necessary to cite authorities for the proposition that the Legislature is not entitled to overrule judicial-determinations. In the absence of the need for a new statement of law supplying a legal basis which was not in existence earlier, there was no need for any validation either. Even assuming that there was need for a fresh statement of the law, such statement shall be constitutionally permissible and be operative as a validating provision. If the legal basis which was sought to be supplied is itself unconstitutional, being discriminatory, arbitrary and therefore, violative of Article 14 of the Constitution of India, it cannot supply the basis for validation of what was found to be unconstitutional. Here again, the same conclusion is inescapable that in the absence of a need for validationor in the absence of constitutional validity for the attempted validation, the only effect of Section 5 can be to wantonly overrule the judgment of the Division Bench of this Court (1 supra) which followed a series of decisions viz., Giddareddy v. Dy. Registrar (2 supra), State of A.P. v. Multi-co-ops. (3 supra) and M. Ranga Reddy v. State (4 supra).
30. We therefore, hold that Section 3 to the extent to which it was enacted for supplying a legal basis to justify the “whole-sale order of appointment of official-persons-in-charge of the various Co-operative Societies” had failed to take off; and to the extent to which it was enacted for declaring that outgoing Members of erstwhile Committees of Management of Co-operative Societies have no right to be appointed as Persons-in-charge, it did not contain any new statement of law justifying appointments exclusively of officials, because the law even previously did not postulate any right in such persons to be so appointed. The Division Bench (1 supra) scrupulously avoided discovering any such right in the outgoing Members. It carefully found that the appointing authorities – Government or the Registrar, as the case may be – had discretion in the matter. The Court only observed that such discretion had to be circumscribed by relevant and germane considerations. That remains to be the law before and after the enactment of Section 3 of the Amending Act. If there has been no change in nor any need to clarify the law, as we do find, Section 3 has not supplied any new legal basis or foundation, the absence of which resulted in the judgment of the Division Bench (1 supra). We also hold that if the intention was to exclude outgoing Members of erstwhile Committees of Management of Co-operative Societies, even from being considered for appointment as Persons-in-charge, Section 3 would be unconstitutional as an arbitrary exercise of legislative power violative of Article 14 of the Constitution of India. If the professed object of it is to exclude one group of eligible persons wantonly and unreasonably from being considered for appointment as Persons- in-charge, it would amount to hostile discrimination violative of the same constitutional provisions. In any case, we hold that Section 3 was not necessary and that it did not have the desired effect.
31. We also hold that in so far as Section 3 of the Amending Act did not supply any legal basis or foundation for the ‘whole-sale orders of appointment’ of officials as Persons-in-charge of the Co-operative Societies all over the State, Section 5 could not have provided nor did not provide validation of the orders which the Division Bench of this Court (1 supra) had quashed. We hold that in the absence of effective validation, the effect of Section 5 was only to over-rule a judicial pronouncement and in that sense, it was beyond the competence of the State Legislature as was held by the Supreme Court in Shri Prithvi Cotton Mills Ltd., v. Broach Borough Municipality, . The following observations of the Constitution Bench in that decision lays down the law governing validating acts succinctly:
“……When a legislature sets out to validate a tax declared by a Court to be illegally collected under an ineffective or an invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition, of course, is that the legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the Court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the legislature does not possess or exercise. A Court’s decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a Court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed and the tax thus made legal. Some times this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and men by fiction making the tax already collected to stand under the re-enacted law. Sometimes the legislature gives its own meaning and interpretation of the law under which the tax was collected and by legislative fiat makes the new meaning binding upon Courts. The legislature may follow any one method or all of them and while it does so it may neutralise the effect of the earlier decision of the Court which becomes ineffective after the change of the law. Whichever method is adopted it must be within the competence of the legislature and legal and adequate to attain the object of validation. If the legislature has the power over the subject-matter and competence to make a valid law, it can at any time make such a valid law and make it retrospectively so as to bind even past transactions. The validity of a validating law, therefore, depends upon whether the legislature possesses the competence which it claims over the subject-matter and whether in making the validation it removes the defect which the Courts had found in the existing law and makes adequate provisions in the validating law for a valid imposition of the tax.”
We do not propose to multiply authorities on this point.
32. We alloy these writ petitions holding that Sections 3 and 5 of the Amending Act 13/90 are unconstitutional, invalid and inoperative. Since elections have been held of the Managing Committees of the various Societies, it is not necessary for us to issue any further directions. Petitioners will be entitled to their costs including Advocate’s fee of Rs. 500/- in each of the petitions.