Allahabad High Court
Gaura Udyog Audhogik Utpadan ... vs State Of U.P. Thru Sachiv And ... on 22 October, 2018
Bench: Amreshwar Pratap Sahi, Harsh Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Court No. - 40
Case :- WRIT - C No. - 17823 of 2012
Petitioner :- Gaura Udyog Audhogik Utpadan Sahkari Samiti Ltd.
Respondent :- State Of U.P. Thru Sachiv And Others
Counsel for Petitioner :- Dr. H.N. Tripathi
Counsel for Respondent :- C.S.C.
Hon'ble Amreshwar Pratap Sahi,J.
Hon'ble Harsh Kumar,J.
Heard Dr. H.N. Tripathi, learned counsel for the petitioner and Sri Sujit Kumar Rai for the respondent no. 3 and the learned Standing counsel for the respondent nos. 1, 2, 4 and 5.
A counter affidavit has been filed on behalf of the third respondent to which a rejoinder affidavit has been filed by the petitioner.
The order under challenge before this Court is dated 29th July, 2011 whereby the respondent no. 3 has proceeded to cancel the registration of the petitioner-society exercising his powers purportedly under the notifications dated 30th October, 1986 and 2nd December, 1986, on the ground that the society has been conducting its affairs against the objects of the society for which it was established and it had failed to get its audit carried out for the past five years. It is also mentioned in the impugned order that the election papers have not been made available therefore also the cancellation is being proceeded with.
In the counter affidavit, the same reasons are reiterated and it has been stated that since the tenure of the Committee of Management has come to an end there is no occasion for taking action under Section 35 of the 1965 Act.
An enquiry report has also been filed on record to contend that the action against the petitioner has been found to be justified. A rejoinder affidavit to the same has been filed denying the said allegation.
The main contention advanced by Dr. H.N. Tripathi while raising a challenge to the impugned order is that the same has been passed in violation of principles of natural justice and that the same is without complying with the provisions of Section 72 of the U.P. Cooperative Societies Act, 1965. The cancellation order is premature, inasmuch as, no order has been passed for winding up of the cooperative society under Section 72 of the 1965 Act.
Sri Sujit Kumar Rai submits that the action had to be taken keeping in view the deficiencies pointed out and therefore the impugned order does not call for any interference.
We have considered the submissions raised. Section 76 of the 1965 Act is extracted hereinunder:-
"76. Cancellation of registration of a co-operative society. - Where in respect of co-operative society which has been ordered to be wound up under Section 72, the Registrar is of opinion that it is not necessary to appoint a liquidator, or where the affairs of a co-operative society in respect of which a liquidator has been appointed under Section 73, have been wound up, the Registrar shall make an order cancelling the registration of the society and the society shall be deemed to be dissolved and shall cease to exist as a corporate body from the date of such order of cancellation."
A perusal thereof would indicate that where an order of winding up has to be passed under Section 72, the same would be followed by the cancellation of Registration under Section 76. Section 72 is extracted hereinunder:-
"72. Winding-up of co-operative societies. - (1) If the Registrar, after an inquiry has been held under Section 65, or an inspection has been made under Section 66, or on receipt of an application made by not less than three-fourth of the members of a co-operative society is of the opinion that the society ought to be wound up, he may pass an order directing it to be wound up.
(2) The Registrar may of his own motion and after giving such notice as may be prescirbed pass an order directing the winding up of a co-operative society -
(a) where the registration of the co-operative society was obtained by fraud or mistake; or
(b) where the number of ordinary members has been reduced to less than such minimum as provided in Section 6 for the registration of such society; or
(c) where the co-operative society has not commenced working within a reasonable time or has ceased to function; or
(d) where the co-operative society is no longer fulfilling its objects or complying with the requirements of clause (d) of sub-section (1) of section 7."
Admittedly no action or order has been taken or passed under Section 72 of the 1965 Act. It is here, we find it necessary to refer to Rule 286 of The U.P. Cooperative Societies Rules 1968, the same is extracted hereinunder:-
"286. (a) The winding up proceedings of a co-operative society shall ordinarily be closed within a period of three years from the date the order of winding up takes effect, unless the period is extended by the Registrar.
Provided that the Registrar shall not grant any extension for a period exceeding one year at a time and the total period of such extension shall not, without the approval of the Stale Government, exceed four years.
(b) As soon as winding up proceedings are completed, the Registrar shall pass orders cancelling the registration of the co-operative society."
It is thus evident from the aforesaid provisions that it is only after the winding up proceedings are completed that the order for cancellation of the registration can be passed. In the present case, the said provisions have not been followed, and consequently, the impugned order dated 29th July, 2011 cannot be sustained.
The writ petition is accordingly allowed and the order dated 29th July, 2011 is quashed.
Order Date :- 22.10.2018
S.Chaurasia
