Gaurav Coop. G.H. Socy. Ltd. And ... vs Regr. Of Coop. Socy. And Anr.
2002 Latest Caselaw 1175 Del

JUDGMENT

Khan, J.

1. Registrar issued show cause notice dated 24.6.99 to petitioner society charging it of failure to hold elections and disconnecting electric connections of certain members. The society replied to it and Registrar directed it to hold the elections within sixty days by order dated 9.9.99. He then asked it to submit some documents related to this election and eventually passed orders dated 30.5.2000 and 9.6.2000 superseding it and appointing one B.P. Mathur as Administrator. The order of supersession says that records produced by the society were examined by the concerned Assistant Registrar who had pointed out irregularities in the conduct of elections held on 31.10.99 and considering that show cause notice dated 24.6.99 related to conduct of elections and as Managing Committee of society had committed persistent default in holding the elections and even as directed elections were also not conducted in accordance with provisions of Act and Rules, hence the supersession.

2. Petitioner is aggrieved of this and has filed this petition to challenge these orders passed by Registrar.

3. Petitioner's short case is that Registrar's show cause notice dated 24.6.99 had become redundant if not nonest on holding of elections on 31.10.99 and in any case impugned orders were unsustainable, being violative of provisions of Section 32 of DCSA and Regulation 66 requiring issuance of a show cause notice before passing of order of Supersession.

4. The stand of R-1 and 2 is that show cause notice dated 24.6.99 was not superseded by merely holding the elections. The society was directed by Registrar to produce records for verification after holding of elections and as elections were not held on 21.12.97 in gross violation of bye-laws, it was superseded. It is explained that verification of election record was a part of show cause notice dated 24.6.99 and that order of supersession was well within the scope of this notice. Section 32 and Regulation 66 which assume crucial importance in the matter provide thus:-

Section 32

"(1) if, in the opinion of the Registrar, the committee of any cooperative society persistently makes default or if it is negligent in the performance of the duties imposed on it by this Act or the Rules or the bye-laws, or commits any act which is prejudicial to the interest of the society, or its members, the Registrar may, after giving the committee an opportunity to state its objections, if any, by order in writing, remove the committee; and (a) order fresh election of the committee, or

(b) appoint one or more administrators who need not be members of the society.

Regulation 66

1. The notice to show cause why the committee of a co-operative society should not be removed under Section 32 shall contain the grounds on which the proposed action is contemplated....."

A conjoint reading of the two provisions leaves no room for doubt that it was obligatory for Registrar to give the Committee an opportunity to state its objections before passing the order of supersession and that show cause notice in this regard was to contain grounds on which proposed action was to be based. In other words, it is the mandatory requirement to issue a show cause notice to the Society and such notice must state grounds on which order of supersession was to be passed to enable the society to respond to those grounds and to explain its position. The order of supersession was, therefore, to be based on the grounds contained in the show cause notice. Where the grounds of order are different from that of notice or at variance, the order of supersession would not hold good for reason of depriving the society of showing cause against such grounds.

5. All that remained to be seen in this conspectus was whether Registrar's show cause notice dated 24.6.99 constituted the basis for supersession. In our view, this notice falls short of requirement because it only charged the society of default in holding elections and disconnecting electric connections of some members. It nowhere pointed to any irregularity or violation of bye-laws or provisions of the Act or Rules committed by the society in holding of elections on 31.10.99. The order of supersession on the contrary proceeds on the ground that society had held elections in breach of bye-law and provisions of Act and Rules. It lists various violations committed by the society. The order, therefore, proceeds on a different basis altogether and has nothing in common with the grounds contained in the one and only show cause notice. Therefore, since this order was based on different grounds, it was incumbent on Registrar to issue a fresh show cause to society on these grounds and to invite its objections. It has failed to do so breaching the mandate of Section 32 and Regulation 66 in the process. The Registrar's order, therefore, does not bear scrutiny and is set aside, to allow this petition. It shall, however, be open to Registrar to take fresh action on satisfying requirements of relevant provisions of law, if still warranted in the present circumstances.