Ugar Singh vs State of Punjab

B.R. Tuli, J.—The petitioner was elected as a member of the Managing Committee of the Mansa Cooperative Primary Land MOrtgage Bank and a complaint was made against him by one Jang Singh, resident of village Beniwal, Tehsil Mansa, District Bhatinda, that he had got a loan from the Ralla Cooperative Agricultural Service Society over and above his maximum limit. He became a defaulter of the loan outstanding against him and a defaulter of the share money. This complaint is dated December 9.1970, and was addressed to the Assistant Registrar, Cooperative Societies, Joga. The Sub Inspector made his report dated December 10. 1970, stating that the facts mentioned in the complaint were correct. Accordingly, The Assistant Registrar, wrote to the President of the Land Mortgage Bank that the petitioner incurred a disqualification under rules 25A and 26B of the Cooperative Societies, Joga Rules, 1963 (hereinafter called the "Rules"), and he ceased to be a Director of the Bank. On receipt of this letter, the President of the Bank and no agenda of any meeting would be hence forth sent to him. The petitioner filed an appeal against the orders of the Assistant Registrar and the President of the Land Mortgage Bank which was dismissed by the Joint Secretary to Government, Punjab, Development (Cooperative) Department, by order dated September 6, 1971. The petitioner then filed the present petition challenging the said orders. Written statement has been filed by respondent 2, Assistant Registrar, Cooperative Societies, Joga, Mansa.

It has been submitted by the learned counsel for the petitioner that before an elected Director can be asked to vacate his seat on account of any disqualification incurred by him, the matter has to be enquired into in his presence and he has to be afforded an opportunity of showing that he has not incurred any such disqualification. The removal of an elected Director from his office affects his civil rights and as held by the Supreme Court in the State of Orissa v. Dr. (Miss) Binapani Dei and others, A.I.R. 1967 S.C. 1269, such an order must be passed after observing the rules of natural justice, that is, after affording an opportunity of hearing to the person against whom the action is to be taken. Admittedly, no notice of the complain was issued to the petitioner inn this case nor was he afforded an opportunity to show that the report of the Sub Inspector, Cooperative Societies, was not correct. He was also not associated with the enquiry by the Sub Inspector. The complaint was receipt by the Assistant Registrar on December 9, 1970 and he forwarded the same to the Sub Inspector on that every day and on the next day the Sub Inspector made his report. I fail to understand what was the reason for his hurry to rush through the enquiry. The Sub Inspector should have associated the petitioner in the enquiry. The action taken by the Assistant Registrar or the President of the Land Mortgage Bank on the basis of that report, is, therefore, vitiated and is liable to be set aside.

It has then been submitted the learned counsel for the petitioner that according to the Division Bench Judgment in Lakha Singh v. The Registrar Cooperative Societies, Punjab, Chandigarh and others A.I.R. 1973 Pb & H. 12 (= 1972 P.L.J. 363), the matter should have been enquired into by the Registrar, Cooperative Societies, and not the Assistant Registrar, as to whether the petitioner had incurred the disqualification, as alleged, or not. The relevant observations are to be found in paragraphs 15 and 16 of the report.

Lastly, it is submitted by the learned counsel that, even on merits, the decision of the Assistant Registrar, and that of the Joint Secretary to Government, Punjab, on appeal are incorrect. It is stated in the order of the Joint Secretary that the maximum limit sanctioned to the petitioner for obtaining loans from the Cooperative Societies was Rs. 4,000/, and admittedly the loans which he had taken amounted to Rs. 3,630/, that is, within the maximum limit provided to him. The basis of the order of the Joint Secretary is that the limit had been wrongly fixed as Rs. 4,000/ it should have been Rs. 2.528/, that is, eight times his share capital. If that were the case, his maximum limit should have been amended and he should have been called upon to repay the excess amount of loan and if he failed to pay the excess amount, action might have been taken against him. No such produce was followed in this case.

For the reasons give above, this petition is accepted with the costs and impugned orders are quashed, Counsel''s fee Rs. 100/.