The Baghal Land Looser Transport Cooperative Society vs @ State of H.P. & Ors.

Jyotsna Rewal Dua, Judge

The petitioner, ‘The Baghal Land Looser Transport Cooperative Society’, has raised grievance against office orders 19.01.2022 (Annexure P-7) and 17.02.2022 (Annexure P-9), whereunder the Regulatory Committee on its own inducted respondent No.5-Sh. Dhani Ram as member of the petitioner-Society.

Heard learned counsel for the parties and considered the case file.

Learned Senior Counsel for the petitioner-Society contends that the impugned orders passed by the Regulatory Committee are against the clear provisions of the Himachal Pradesh Co-operative Societies Act, 1968, the Rules framed thereunder as well as the approved Bye-Laws of the petitioner-Society. Learned Additional Advocate General defended that impugned orders on the strength of order dated 26.03.2010 issued by District Magistrate, Solan.

Relevant provisions.

3(i). Section 17 of the Himachal Pradesh Co-operative Societies Act, 1968 (for short ‘the Act’) describes the persons who can be admitted to the membership of Co-operative Societies. The Section reads as under:-

“17. Persons who may become members.- No person shall be admitted to membership of a co-operative society except the following, namely:-

(a) an individual competent to contract under section 11 of the Indian Contract Act, 1872 (9 of 1872);

(b) any other registered society (except a society under liquidation proceedings);

(c) State Government; and

(d) such class or classes of persons or associations of persons as may be notified by the State Government in this behalf.”

3(ii). Rule 15 of the Himachal Pradesh Co-operative Societies Rules, 1971 (for short ‘the Rules’) deals with disposal of application for admission of members and the same reads as follows:-

Disposal of application for admission of members - (1) A Co-operative Society shall dispose of an application received for admission as a member as early as possible and in no case later than the expiration of a period of 30 days from the date of receipt of the application by the society. In case of refusal to admit, such society shall communicate its decision together with reasons therefore to the applicant.

(2) If no decision has been taken and communicated to the applicant within the period specified in sub-rule (1) the applicant shall be deemed to have been refused the admission to membership.

(3) The applicant who has been refused admission under sub-rule (1) or (2) he shall have the right of appeal to the Registrar; whose decision in the matter shall be final.

The management of a society is bound to dispose of an application for admission as member, within 30 days from its receipt. In case the admission is refused the management shall have to intimate the reasons, of rejections to the applicant, who may prefer an appeal to Registrar, whose decision on the matter shall be final. If the management fails to dispose of the application within the specified period, the admission shall be deemed to have been disallowed.

In terms of the above extracted Rule, it is for the Co-operative Society to dispose of the application received for becoming member of the concerned Co-operative Society. The Rule also provides right of appeal to the Registrar, to an applicant, who has been refused admission as member of the Co-operative Society.

3(iii). In terms of the approved Bye-Laws of the petitioner-Society in particular Bye-Laws No.7 and 8, it is the prerogative of the Managing Committee of the Co-operative Society though subject to approval of the General Body to decide the application for admission as member of Co-operative Society. These Bye-Laws are as under:-

“7. No individual shall be member of the society, if:

i) he has applied for bankruptcy.

ii) he has been declared insolvent.

iii) he has been sentenced for dishonesty or moral turpitude.

Application for admission as members shall be disposed of by the Managing Committee subject to approval of General Body. If the Managing Committee or General Body refuses to admit a person, it shall record its reasons for refusal and communicate them to the person, concerned. Any person, who has been refused admission shall have the right of an appeal to the Registrar, within one month of the date of communication of refusal. The decision of the Registrar on such appeal shall be binding on the society and the appellant.”

Virtually, the above provisions reflect the intent of Rule 15 of the Rules.

Consideration.

4(i). From a reading of the relevant provisions of the Act, the Rules and the Bye-Laws, it becomes evident that it is the sole prerogative of the Co-operative Society to take first call on the application of an interested person for becoming member of the Society. The decision of the Co-operative Society refusing to grant membership can be challenged by the aggrieved applicant before the Registrar.

4(ii). In the instant case, under the impugned order, the Regulatory Committee on its own has decided to induct respondent No.5 as member of the petitioner-Society. This decision is not in consonance with the scheme of provisions in the Act, the Rules and the Bye-Laws. The respondents in their reply have defended the impugned order on the strength of an order dated 26.03.2010 (Annexure P-3) passed by the District Magistrate, Solan. Under this order, taking note of flouting of applicable provisions and previous directions issued for induction of new members and trucks, a Regulatory Committee headed by Sub-Divisions Magistrate was constituted. This order, inter alia, states that “the enrollment of new members will be decided by this body the Regulatory Committee in order to avoid any kind of membership dispute in future”.

In view of the provisions existing in the Act, the Rules and the Bye-Laws, the Regulatory Committee does not have the jurisdiction to decide upon the membership of interested persons. The role of the Regulatory Committee, inte alia, can be to oversee, as to whether the new members inducted by the Co-operative Society are eligible to be the members or not; whether they fulfill the parameters laid down or not etc. In other words, the Regulatory Committee cannot sit over the statutory provisions and interfere with the specific powers given to the Co-operative Societies under the Act, the Rules and the Bye-Laws.

In view of above discussion, this writ petition is allowed and impugned office orders dated 19.01.2022 (Annexure P-7) and 17.02.2022 (Annexure P-9) inducting respondent No.5 as member of the petitioner-Society, are quashed and set aside. Pending applications, if any, also stand disposed of.