2014 (5) TMI 1162 - SC - Indian Laws

Supreme Court Upholds Decision on Co-op Societies Act Challenge

The Supreme Court upheld the High Court's decision, dismissing the challenge to the provisions of the M.P. State Co-operative Societies Act, 1960. The ... Validity of Section 3 of the M.P. State Co-operative Societies Act, 1960 - power of State Government to appoint the Registrar of the Co-operative Society, as well as Additional Registrar, Joint Registrar, Deputy Registrar, Assistant Registrar etc. - constitutional validity of proviso added to Section 77(3)(b) and Section 77(6) of the Act - Held that: - the Registrar is discharging pure administrative functions - limited powers are given to the Registrar to entertain certain kinds of disputes and take decision thereupon as well. One such provision is Section 55 of the Act which, inter-alia, provides that regarding terms of employment, working conditions and disciplinary action taken by a Society, if a dispute arises between a Society and its employees, the Registrar or any officer appointed by him (not below the rank of Assistant Registrar) shall decide the dispute. Likewise, Section 64 of the Act provides that the Registrar shall decide the dispute touching upon the Constitution, management or business, terms and conditions of employment of a Society or the liquidation of the Society. No doubt the Registrar exercising powers under Section 48 of the Bihar and Orissa Cooperative Societies Act is held to be a Court - it does not necessarily follow from that the Registrar exercising such powers has to be necessarily a person with judicial/legal background. We would like to emphasize the need for appointment of suitable persons not only as Registrar, Joint Registrar etc. but as Chairman and members of the tribunal as well. While discharging quasi-judicial functions Registrar, Joint Registrars etc. have to keep in mind that they have to be independent in their functioning. They are also expected to acquire necessary expertise to effectively deal with the disputes coming before them. They are supposed to be conscious of competing rights in order to decide the case justly and fairly and to pass the orders which are legally sustainable. The State Government shall, keeping in mind the objective of the Act, the functions which the Registrar, Joint Registrar etc. are required to perform and commensurate with those, appointment of suitable persons shall be made - for appointment of the Chairman and Members of the Tribunal, the selection to these posts should preferably be made by the Public Service Commission in consultation with the High Court. SLP dismissed. Issues Involved:1. Validity of Section 3 of the M.P. State Co-operative Societies Act, 1960.2. Constitutionality of proviso added to Section 77(3)(b) and Section 77(6) of the Act.3. Maintainability of the Writ Petition as Public Interest Litigation (PIL).Detailed Analysis:1. Validity of Section 3 of the M.P. State Co-operative Societies Act, 1960:The Petitioner challenged Section 3 of the Act, which allows the State Government to appoint the Registrar and other officers of the Co-operative Society, arguing that these roles require legal education due to their judicial functions. The High Court dismissed this challenge, and the Supreme Court upheld this decision. The Court noted that the Registrar's primary role is administrative, with some quasi-judicial functions. It emphasized that the Registrar's decisions are subject to appeal before the M.P. State Cooperative Tribunal, which includes judicial members. The Court concluded that the administrative nature of the Registrar's duties justifies the current appointment structure and rejected the challenge to Section 3.2. Constitutionality of proviso added to Section 77(3)(b) and Section 77(6) of the Act:The Petitioner argued that these provisions are unconstitutional. Section 77(3)(b) stipulates the composition of the Cooperative Tribunal, including a judicial Chairman and two members with administrative and legal backgrounds. The Court found this composition appropriate, ensuring a balance between administrative experience and legal expertise. Section 77(6) allows the State Government to terminate the appointment of the Tribunal's Chairman or members if deemed unfit, provided a reasonable opportunity to show cause is given. The Court held that this power is not arbitrary and includes safeguards against misuse, thus upholding its constitutionality.3. Maintainability of the Writ Petition as Public Interest Litigation (PIL):The Respondents contested the Writ Petition's maintainability, arguing that the Petitioner had a personal interest due to his pending cases before the Cooperative Court. The High Court dismissed the petition on merits without addressing the maintainability issue explicitly. The Supreme Court reviewed the High Court's judgment and the Petitioner's submissions, ultimately finding no merit in the challenge to the Act's provisions. The Court did not explicitly rule on the maintainability but proceeded to address the substantive issues raised.Conclusion:The Supreme Court dismissed the Special Leave Petition, upholding the High Court's judgment. The Court found no constitutional infirmity in the challenged provisions of the M.P. State Co-operative Societies Act, 1960. It emphasized the administrative nature of the Registrar's role and the adequate judicial oversight provided by the Cooperative Tribunal. The Court also highlighted the need for appointing suitable persons to these roles, ensuring they can effectively discharge their quasi-judicial functions.