9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Date of Decision: 17.01.2012
% W.P.(C) 4737/2010
YUGUL KISHORE DWIVEDI AND ORS ..... Petitioner
Through: Mr. Bankuri K and Mr. Sudhir
Kumar, Advocates
versus
GNCT OF DELHI AND ORS ..... Respondent
Through: Ms. Ruchi Sindhwani for R-1&2
Mr. Rajesh Raina and Mr. Pallav
Mongia for R-3
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
VIPIN SANGHI, J. (Oral)
1. Petitioner nos.2 and 3 are present along with their counsel. They state that they do not wish to pursue this petition. Accordingly, they are deleted from the array of parties.
2. By this writ petition filed under Article 226 of the Constitution of India, the petitioner, Yugul Kishore Dwivedi seeks the setting aside of the expulsion order dated 14.06.2010 passed by respondent no.3, Janta W.P.(C) 4737/2010 Page 1 of 9 Cooperative Bank Ltd., expelling him from the membership of the said cooperative bank.
3. The petitioner was issued a show cause notice under section 40 of the Delhi Cooperative Societies Act, 2003 on 06.11.2009 requiring him to show cause against his proposed expulsion within 15 days. On 17.11.2009, the petitioner sent his reply. The Board of Directors of the respondent bank held its meeting on 25.11.2009, wherein the expulsion of the petitioner was approved by the Board.
4. It appears that the respondent bank sent a communication on 03.12.2009 addressed to the Registrar of Cooperative Societies (RCS) to seek the approval of the Registrar in terms of section 40(2). However, this communication, though addressed to the RCS, was got received in the office of the Asst. Registrar (Banking). It appears that the respondent bank did not receive any approval or disapproval from the office of the RCS for a period of 180 days. In this scenario, the respondent bank sought to rely upon Sections 40(2) and 40(3).
Section 40(2) and (3) of the aforesaid Act read as follows: "(2) After the resolution for expulsion is passed as above by the committee, the resolution shall be referred to the Registrar for approval within a period of thirty days.
W.P.(C) 4737/2010 Page 2 of 9 (3) On receipt of the resolution for expulsion, the Registrar shall take cognizance of such resolution within thirty days and pass a final order either approving the expulsion or rejecting the proposal for expulsion within a period of one hundred and eighty days and if the matter is not decided by the Registrar within the aforesaid period, the expulsion of such a member shall be deemed to have been approved.
Provided that the Registrar, before approving the resolution, shall hear the parties in the manner prescribed and shall have power to summon and enforce attendance of witness including the parties interested or any of them and compel them to give evidence on oath, affirmation or affidavit and to compel production of documents by the same means as far as possible in the same manner as provided in the case of a civil court under the Code of Civil Procedure, 1908 (5 of 1908) and the order under this section so passed by the Registrar shall be final with a right for appeal before the Tribunal."
5. The respondent bank proceeded on the basis that since the RCS had not communicated any decision within 180 days, either approving or disapproving the proposal for expulsion of the petitioner, the petitioner stood expelled. Consequently, on 14.06.2010, respondent no.3 sent a communication to the RCS communicating the expulsion of the petitioner. This communication was received in the office of RCS on 15.06.2010. By another communication of the same date, the petitioner was informed about his expulsion and his share money and the deposit made by him was refunded.
6. Aggrieved by the said action, this petition has been preferred. W.P.(C) 4737/2010 Page 3 of 9
7. The submission of learned counsel for the petitioner is that the petitioner has not been granted any hearing by the RCS. He submits that the proposal for the petitioner's expulsion was submitted in the office of the Asst. Registrar (Banking), even though it is the RCS who is empowered to grant approval or disapproval of the proposal to expel a member. He points out that while the communication dated 03.12.2009 was received in the office of Asst. Registrar (Banking), the communication dated 14.06.2010 was got received in the office of the RCS. According to the petitioner, this was a deliberate and calculated move on the part of the respondent bank so as to prevent the RCS from taking action on the said proposal of the respondent bank.
8. On the other hand, the submission of counsel for the respondent bank is that this petition is not maintainable as the petitioner has an alternate efficacious remedy of preferring an appeal under section 40(4) before the Cooperative Tribunal. He, therefore, submits that this petition should not be entertained by this Court. He submits that there was no deliberate or calculated move on the part of the respondent bank in tendering the communication dated 03.12.2009 to the Asst. Registrar (Banking), as the Asst. Registrar (Banking) has been duly authorized to deal with all such W.P.(C) 4737/2010 Page 4 of 9 cases.
9. Learned counsel for RCS submits that the RCS has delegated his powers under section 40 to the Asst. Registrar (Banking). She, however, submits that the said communication should have been channeled through the office of the RCS, and should not have been submitted in the office of the Asst. Registrar (Banking) directly.
10. Having heard learned counsels for the parties, I am inclined to allow this petition and to direct the RCS to consider the proposal of the respondent bank for expulsion of the petitioner afresh, after complying with the provisions of section 40(3) of the aforesaid Act.
11. It is clear that the said proposal was not submitted in the office of the RCS. It may be that the respondent no.3 had no malafide in submitting the said communication before the Asst. Registrar (Banking). However, at the same time, it is not explained as to why the proposal was not sent to the RCS, while the subsequent communication was tendered in the office of RCS. As contended by learned counsel for RCS, the communication should have been channeled through the office of the RCS. This appears to be the reason for no action being taken on the respondent banks proposal for a period of 180 days.
W.P.(C) 4737/2010 Page 5 of 9
12. Apart from this, on a plain reading of section 40(3), it is clear that the said provision provides for the following mechanism:
i) On receipt of the resolution for expulsion, the RCS shall take cognizance of the resolution within 30 days;
ii) The RCS shall pass an order either approving the expulsion or rejecting the proposal for expulsion within a period of 180 days;
iii) If the matter is not decided by the RCS within the aforesaid period, the expulsion of the member shall be deemed to have been approved;
iv) The approval of the resolution shall be preceded by a hearing to the parties in the prescribed manner. Pertinently, before disapproving the said proposal, no such hearing is contemplated;
v) The RCS shall have the power to summon and enforce attendance of witness including the parties interested or any of them and compel them to give evidence on oath, affirmation or affidavit and to compel production of documents in the same manner as a civil court under the CPC.
vi) The order passed by the RCS shall be final and be subject to right W.P.(C) 4737/2010 Page 6 of 9 of the aggrieved party to appeal before the tribunal.
13. From the aforesaid, it is clear that RCS must take cognizance of the resolution within thirty days. If he is of the view that the resolution deserves to be rejected, he must pass an order rejecting the same. Before rejecting the proposal, he may not hear any of the parties. However, in case he does not consider it appropriate to outrightly reject the proposal of the society, he must call upon the parties to grant them a hearing. He must hear the parties and, if necessary, record evidence. The approval of the resolution to expel a member, whether it is a written approval granted by the RCS or a deemed approval, on account of the failure of the RCS to pass an order on the proposal for expulsion, has necessarily to be preceded by hearing to the parties. The RCS cannot defeat and deny the right of the parties to be heard before him, by choosing not to pass an order within a period of 180 days and by allowing the provision of deemed expulsion to kick in. The lack of an express decision by the RCS does not mean that he can allow the matter to pass by non-application of mind. His decision not to pass an express order has also to be taken by application of mind, and after granting a hearing to the parties, and has to be a conscious decision. The right of being heard, granted to the parties, before the grant of approval by the Registrar by the W.P.(C) 4737/2010 Page 7 of 9 express language of the proviso to section 40(3) cannot be whittled down by the fact that the Registrar may adopt the route of deemed approval to the expulsion of the member, by not passing an express order.
14. In the present case, the RCS has not granted any hearing to either of the parties, and the valuable right of the petitioner to be heard, prior to his deemed expulsion has been denied to him. The said action of the RCS is clearly in breach of section 40(3), and also in breach of the principles of natural justice. Consequently, the expulsion of the petitioner cannot be sustained.
15. The objection of learned counsel for respondent no.3 that this Court should not exercise its jurisdiction under Article 226 of the Constitution of India, as the petitioner has an alternate efficacious remedy by way of an appeal before the tribunal cannot be accepted, as it is well settled that the rule against exercise of discretionary jurisdiction under Article 226 of the Constitution of India is a self imposed restriction and in appropriate cases, the Court may waive the said rule. In a case where there is violation of principles of natural justice, it is well settled that the said rule cannot be invoked. (See Whirlpool Corporation v. Registrar of Trademarks & Anr., (1998) 8 SCC 1).
W.P.(C) 4737/2010 Page 8 of 9
16. Moreover, the dispute between the parties raised in this petition is purely a legal dispute, and does not require any factual determination of disputed facts. Consequently, this objection of respondent no.3 is rejected.
17. Accordingly, I allow this petition and direct the RCS to consider the proposal of the respondent bank afresh, after complying with section 40(3) of the Delhi Cooperative Societies Act, 2003. The RCS shall take cognizance of the resolution within thirty days. Unless he is of the view that the proposal of the respondent society deserves to be rejected, he shall grant a hearing to the parties, and thereafter take a decision on whether, or not, the proposal of expulsion of the petitioner deserves to be approved or not.
Petition stands disposed of.
VIPIN SANGHI, J JANUARY 17, 2012 sr W.P.(C) 4737/2010 Page 9 of 9