Dismissed

Prabhat Kumar Singh v. State of Jharkhand

Jharkhand HC8 Feb 2021WPC/336/2020

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging the supersession of a Deoghar Co-operative Grain Bank society's managing committee. The Court held that since the committee was not validly constituted due to non-compliance with mandatory female reservation provisions, the supersession order could not be quashed, even without an enquiry into specific irregularity allegations.

What did the court decide?

The writ petition was dismissed. The supersession order dated 19th August, 2019 was upheld.

Prabhat Kumar Singh Vs State of Jharkhand — Company and Corporate | Jharkhand HC (2021)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 336 of 2020

Prabhat Kumar Singh

..... … Petitioner

Versus

State of Jharkhand.

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The Registrar, Co-operative Societies, Jharkhand, having its office at Engineers Hostel, Dhurwa, Ranchi.

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The Joint Registrar, Co-operative Societies, Santhal Pargana Division, Dumka.

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The District Co-operative Officer, Deoghar.

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The Assistant Registrar, Cooperative Societies, Deoghar.

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…. …. Respondents

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CORAM : HON’BLE MR. JUSTICE RAJESH SHANKAR

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-----For the Petitioner : Mr. Mrinal Kanti Roy, Advocate For the Respondents : Mr. Sandeep Verma, A.C. to Sr. S.C. III --------

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08/08.02.2021 The present writ petition is taken up today through Video conferencing.

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2. The present writ petition has been filed for quashing/setting aside the order as contained in memo no.2954(6)/Ranchi dated 19^th August, 2019 issued under the signature of the Registrar, Co-operative Societies, Jharkhand, Ranchi-respondent no.2, whereby the Managing Committee of the Deoghar Co-operative Grain Bank Ltd., Deoghar has been superseded and Shri Niranjan Kumar, District Co-operative Officer, Deoghar has been appointed as administrator of the said society for a period of six months.

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3. The learned counsel for the petitioner submits that one Varun Kumar Rai, who was an employee of the said Society had been terminated from service. He made a complaint to the respondent no.2 alleging irregularities in the said society upon which the respondent no.2 vide memo no.2954 (6)/Ranchi dated 19^th August, 2019 superseded the managing committee of the said society and the petitioner was directed by the respondent no.4 to hand over the charge of necessary records relating to the society to Shri Niranjan Kumar vide memo no.542 dated 21^st August, 2019. It is further submitted that there were some allegations against the previous honorary secretary, namely, Shri Jai Prakash Narayan Singh and one Ravindra Sharma, who is said to be a paid employee of the said society. It is also submitted that the respondent no.2 neither conducted enquiry with regard to the affairs of

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the said society nor afforded sufficient opportunity to the present managing committee to reply the allegations levelled against it. On plain reading of the impugned order it would appear that the same has been passed in exercise of the power conferred under Section 41 (1) of the Bihar (now Jharkhand) Co-operative Societies Act, 1935 (hereinafter to be referred as the ‘Act, 1935’), however, the said power was required to be exercised after providing due opportunity of hearing to the petitioner. Moreover, in view of the amended provisions of Section 41 as has been amended by the Jharkhand Co-operative Societies Amendment Act, 2015, the managing committee of only such societies can be superseded or kept under suspension where the State government has contributed to the share capital or has provided loan or financial aid on government guarantee. The Registrar may supersede the board of the co-operative society for a period not exceeding six months after providing due opportunity of hearing to the managing committee to put forth its objection. The proviso to the said section makes it clear that the board of any such co-operative society cannot be superseded or kept under suspension, where there is no government shareholding or loan or financial assistance or any guarantee by the government. It is further submitted that the government has neither contributed substantially to the share capital of the said society nor has provided loan or financial aid or guarantee of any sort to the said society and as such the respondent no.2 had no power to pass the impugned order. It is also submitted that the respondents cannot be permitted to take a stand to defend the impugned order contrary to what has been stated in the same. It would appear from the content of the impugned order that the same was passed on the basis of a complaint made by one Varun Kumar Rai against the previous honorary secretary of the said society, namely, Jai Prakash Narayan Singh and against one Ravindra Sharma who is said to be a paid employee of the said society, before the respondent no.2 as well as before the office of learned Lokayukta, Jharkhand, Ranchi alleging irregularities committed by them. As such the respondents cannot be allowed to take altogether different stand for passing the impugned order by stating in counter affidavit that the managing committee was not superseded on the basis of irregularities committed

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by the previous managing committee. Moreover, there is nothing to indicate that any election petition has been filed under Section 48 of the Act, 1935 challenging the election of the managing committee which assumed office on 31^st January, 2018. The election of the co-operative society cannot be set aside except by way of filing of an election petition. Even if the stand of the respondent that the managing committee was superseded since it was not properly constituted is assumed to be correct, the impugned order is cryptic and vague, so far as it only says that the Board of Directors has not been constituted in accordance with law. It does not elaborate as to how the managing committee/board has not been properly constituted. The contention of the respondents that the Board of Directors of the society did not comprise of the requisite number of female candidates, cannot be accepted as the said ground has been taken for the first time in the counter affidavit. The Board of Directors in the meeting held on 23^rd April, 2018 had taken up the issue of co-opting female candidates to the Board of Directors in order to meet the requirements of law at Agenda No.4 and the honorary Secretary (the petitioner herein) was authorized to fill the quota of female members branch-wise in the managing committee. It is also submitted that had any opportunity of hearing been given to the petitioner before issuance of the impugned order, he would have brought the said fact to the knowledge of the concerned authority.

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4. Per contra, the learned counsel for the respondents submits that the amended provisions of Section 14(2) of the Act, 1935 as amended vide Amendment Act, 2015 clearly mandates that the management of registered society shall be vested in a managing committee constituted in accordance with the provisions of this Act and rules/bye-laws of the society made under this Act with the proviso that at least 50% seat of the managing committee shall be reserved for the women members out of which two seats shall be reserved for the schedule castes or scheduled tribes women in the managing committee of every co-operative society consisting of individuals as members and having members from such class or category of persons. The seats so reserved shall be filled up amongst the women members of the schedule castes or schedule tribes either by election or/and by co-option. However, the managing

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committee of the said society was not constituted in accordance with the mandatory provision of Section 14(2) of the Act, 1935 (as amended) and as such the same was not valid under law. Consequently, the said managing committee was duly superseded vide the order dated 19^th August, 2019 passed by the respondent no.2 exercising the power vested under Section 41 (1) of the Act, 1935 (as amended). It is further submitted that the managing committee was not superseded on the ground of the charges of irregularities against the previous Chairman of the managing committee as well as against the said employee of the society, rather the said managing committee was superseded as the same was not validly constituted in view of mandatory provisions of Section 14(2) of the Act, 1935 (as amended) and hence there was no necessity for conducting an enquiry on the part of the respondent no.2 with respect to the aforesaid charges of irregularities against the previous chairman as well the said employee. It is also submitted that before superseding the managing committee of the said society, an enquiry was conducted by a competent officer i.e., the Assistant Registrar, Co-operative Societies, Deoghar Anchal, Deoghar. There is no question of violation of the principles of natural justice as the very constitution of the managing committee itself indicates that the mandatory provisions of reservation was not complied as provided under Section 14(2) of the Act, 1935 (as amended), even after lapse of more than 18 months since the date of its constitution. It is further submitted that the State Government has contributed an amount of Rs.50,000/- to the share capital of Deoghar Cooperative Grain bank Ltd. which would be evident from the Bill-cum-Report of the Audit Committee for the years 2015-18 bearing memo no.24 dated 23^rd January, 2019 and the State Government has also given financial aid and loan from time to time to all the primary agricultural co-operative credit societies (PACCS) of the duly registered Deoghar, Co-operative Grain Bank Ltd. The amended provision does not curtail the power of the Registrar in superseding the managing committee if it has not been constituted according to the mandatory provisions of Section 14(2) of the Act, 1935 (as amended) and as per rules and bye-laws of the society.

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5. Heard the learned counsel for the parties and perused the

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materials available on record. The learned counsel for the petitioner has given much stress to the argument that the respondent no.2 has not followed the principles of natural justice before passing the impugned order dated 19^th August, 2019 as mandated under Section 41 of the Act, 1935 which is based on the allegations levelled against the previous managing committee for which the present managing committee cannot be penalized. The learned counsel appearing on behalf of the respondents has vehemently submitted that the present managing committee has not been superseded on the ground of irregularities committed by the previous managing committee as alleged by the petitioner, rather the same has been superseded on the ground that it has not been constituted by following the mandatory provision of Section 14(2) of the Act, 1935 (as amended).

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6. The learned counsel for the petitioner has not controverted the said argument of the learned counsel for the respondents to contend that the present managing committee has been constituted in conformity with the amended provisions of Section 14(2) of the Act, 1935.

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7. If it is found by the competent authority that any managing committee has not been constituted in conformity with the mandatory provisions of the statute, this Court cannot allow it to perpetuate even if there appears to be some irregularity in the order of supersession of the said managing committee. Thus, the argument of the learned counsel for the petitioner to the extent that the impugned order has not been passed by following the procedure prescribed for the same, has no much relevance.

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8. In the case of Municipal Committee, Hoshiarpur Vs. Punjab State Electricity Board and Others reported in (2010) 13 SCC 216, the Hon’ble Supreme Court has held as under:-

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“31. The principles of natural justice cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case. Thus, they cannot be put in a straitjacket formula.

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“13. … Natural justice is [not an] unruly horse, no lurking landmine, nor a judicial cure-all. If fairness is shown by the decision-maker to the man proceeded against, the form, features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of.”

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32. The two rules of natural justice, namely, nemo judex in causa sua, and audi alteram partem now have a

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definite meaning and connotation in law and their contents and implications are well understood and firmly established; they are nonetheless non-statutory. The court has to determine whether the observance of the principles of natural justice was necessary for a just decision in the facts of the particular case. (Vide Board of Mining Examination and Chief Inspector of Mines v. Ramjee [(1977) 2 SCC 256] , SCC p. 262, para 13; Union of India v. Tulsiram Patel [(1985) 3 SCC 398] ; and ECIL v. B. Karunakar [(1993) 4 SCC 727] .)

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33. There may be cases where on admitted and undisputed facts, only one conclusion is possible. In such an eventuality, the application of the principles of natural justice would be a futile exercise and an empty formality. (Vide State of U.P. v. Om Prakash Gupta [(1969) 3 SCC 775], S.L. Kapoor v. Jagmohan [(1980) 4 SCC 379] and U.P. Junior Doctors' Action Committee v. Dr. B. Sheetal Nandwani [(1990) 4 SCC 633] .)”

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9. In the case of Dharampal Satyapal Limited Vs. Deputy Commissioner of Central Excise and Others reported in (2015) 8 SCC 519 , the Hon’ble Supreme Court has held as under:-

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“39. We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasising that the principles of natural justice cannot be applied in straitjacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason—perhaps because the evidence against the individual is thought to be utterly compelling—it is felt that a fair hearing “would make no difference”—meaning that a hearing would not change the ultimate conclusion reached by the decision-maker—then no legal duty to supply a hearing arises. Such an approach was endorsed by Lord Wilberforce in Malloch v. Aberdeen Corpn. [(1971) 1 WLR 1578 : (1971) 2 All ER 1278 (HL)] , who said that: (WLR p. 1595 : All ER p. 1294)

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“… A breach of procedure … cannot give [rise to] a remedy in the courts, unless behind it there is something of substance which has been lost by the failure. The court does not act in vain.”

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Relying on these comments, Brandon L.J. opined in Cinnamond v. British Airports Authority [(1980) 1 WLR 582(WLR p. 593 : All ER p. 377)

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“… no one can complain of not being given an opportunity to make representations if such an opportunity would have availed him nothing.”

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In such situations, fair procedures appear to serve no purpose since the “right” result can be secured without according such treatment to the individual.

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45. Keeping in view the aforesaid principles in mind, even when we find that there is an infraction of principles of natural justice, we have to address a further question as to whether any purpose would be served in remitting the case to the authority to make fresh demand of amount recoverable, only after issuing notice to show cause to the appellant. In the facts of the present case, we find that such an exercise would be totally futile having regard to the law laid down by this Court in R.C. Tobacco [(2005) 7 SCC 725].

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47. In Escorts Farms Ltd. v. Commr. [(2004) 4 SCC 281] , this Court, while reiterating the position that rules of natural justice are to be followed for doing substantial justice, held that, at the same time, it would be of no use if it amounts to completing a mere ritual of hearing without possibility of any change in the decision of the case on merits. It was so explained in the following terms: (SCC pp. 309-10, para 64)

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“64. Right of hearing to a necessary party is a valuable right. Denial of such right is serious breach of statutory procedure prescribed and violation of rules of natural justice. In these appeals preferred by the holder of lands and some other transferees, we have found that the terms of government grant did not permit transfers of land without permission of the State as grantor. Remand of cases of a group of transferees who were not heard, would, therefore, be of no legal consequence, more so, when on this legal question all affected parties have got full opportunity of hearing before the High Court and in this appeal before this Court. Rules of natural justice are to be followed for doing substantial justice and not for completing a mere ritual of hearing without possibility of any change in the decision of the case on merits. In view of the legal position explained by us above, we, therefore, refrain from remanding these cases in exercise of our discretionary powers under Article 136 of the Constitution of India.”

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10. The principles of natural justice cannot be applied in a straitjacket formula. There is no legal duty to provide an opportunity of hearing, where it would not change the ultimate conclusion to be reached by the decision-maker. A breach of procedure cannot give rise to a remedy in courts unless behind it, there is something of substance which has been lost by such failure. The Court has to determine as to whether the observance of the principles of natural justice was necessary for a just decision in the facts of a particular case. There may be cases where on admitted and undisputed facts, only one conclusion is possible and in such an eventuality, the application of the principles of natural justice would be a futile exercise and an empty formality.

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11. One of the arguments of the learned counsel for the petitioner is that the issue with regard to filling the reserved quota of female candidates was already discussed in the first meeting of the new managing committee. However, the said argument of the learned counsel for the petitioner cannot be accepted since the meeting was held on 23^rd April, 2018 and even after expiry of about eighteen months of the said meeting, the quota of female members was not filled. Thus, the impugned order passed by the respondent no.2 cannot be interfered merely on the ground that the said issue was discussed in the aforesaid

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meeting.

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12. In view of the aforesaid facts and circumstance, I do not find any merit in the present writ petition and the same is, accordingly, dismissed.

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(Rajesh Shankar, J.)

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Rohit/NAFR

Prabhat Kumar Singh v. State of Jharkhand

Case brief

What is this about?

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Prabhat Kumar Singh v. State of Jharkhand

Case brief

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