# Ashutosh Mishra v. State of U.P. & Ors

- **Citation:** (2020) 1 ILRA 2009
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-12-06
- **Case number:** Writ-C No. 39799 of 2019
- **Bench:** Bala Krishna Narayana, Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ashutosh-mishra-v-state-of-u-p-ors-45113
- **Pages:** 6

## Headnote

A. U.P. Cooperative Societies Act, 1965section 65- Reserve Bank of Indiacancelled
the
license
of
bank-and
directed the Registrar of Cooperative
Societies to wind up the bank and
appoint
a
liquidator-Registrar
have
power to suo moto initiate inquiry or
upon the application of 1/3 of the total
members of the society-Inquiry not bad.

Held, A careful reading of Section 65 of the Act
provides that Registrar may, of his own accord,
himself or by a person authorised by him by order in
writing, hold an inquiry into the constitution, working
and financial condition of a co-operative society. Thus,
Sub-Section (1) of Section 65 is crystal clear as far as
the powers of Registrar are concerned for suo moto
initiating inquiry by himself or by a person authorised
by him, as in the present case the Assistant
Commissioner/Assistant Registrar, who has been
delegated powers of the Registrar, proceeded to
initiate inquiry under Section 65 of the Act. (Para 12)

Writ Petition dismissed. (E-9)

List of cases cited: -

## Text

2010 INDIAN LAW REPORTS ALLAHABAD SERIES
(2020)1ILR 2009

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.12.2019

BEFORE
THE HON'BLE BALA KRISHNA NARAYANA, J.
THE HON'BLE ROHIT RANJAN AGARWAL, J.

Writ-C No. 39799 of 2019

Ashutosh Mishra ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri H.R. Mishra, Sri Krishna Mohan Mishra

Counsel for the Respondents:
C.S.C.

A. U.P. Cooperative Societies Act, 1965section 65- Reserve Bank of Indiacancelled
the
license
of
bank-and
directed the Registrar of Cooperative
Societies to wind up the bank and
appoint
a
liquidator-Registrar
have
power to suo moto initiate inquiry or
upon the application of 1/3 of the total
members of the society-Inquiry not bad.

Held, A careful reading of Section 65 of the Act
provides that Registrar may, of his own accord,
himself or by a person authorised by him by order in
writing, hold an inquiry into the constitution, working
and financial condition of a co-operative society. Thus,
Sub-Section (1) of Section 65 is crystal clear as far as
the powers of Registrar are concerned for suo moto
initiating inquiry by himself or by a person authorised
by him, as in the present case the Assistant
Commissioner/Assistant Registrar, who has been
delegated powers of the Registrar, proceeded to
initiate inquiry under Section 65 of the Act. (Para 12)

Writ Petition dismissed. (E-9)

List of cases cited: -

1. Hari Om Gupta Vs. State of U.P. and othersWrit Petition No. 37566 of 2019
2. Vishnu Kumar Jha Vs. Reserve Bank of India
and others, Public Interest Litigation (PIL) No.
48181 of 2017

(Delivered by Hon'ble Rohit Ranjan Agarwal, J.)

1. Heard Sri H.R. Misra, learned
Senior Counsel assisted by Sri K.M.
Misra, learned counsel for the petitioner
and learned Standing Counsel for the
respondent nos. 1 to 5.

2. This writ petition has been filed
assailing the order dated 29.08.2018
passed by the respondent no. 5 directing
inquiry under Section 65 of the U.P.
Cooperative
Societies
Act,
1965
(hereinafter referred to as the ''Act').

3. Facts, in brief, as narrated in the
writ petition, are that there is one
Brahmawarta Commercial Cooperative
Bank Limited (hereinafter referred to as
the ''bank') having its Head Office at 90,
M.I.G. Ratan Lal Nagar, Kanpur Nagar.
The aforesaid bank has been registered
under the provisions of the Act and was
granted banking license by the Reserve
Bank of India under the provisions of
Banking Regulations Act, 1949. The bank
in
question
is
a
Primary
Urban
Cooperative Bank having been insured
under the provisions of the Deposit
Insurance Corporation Act, 1961.

4. According to the petitioner there
are forty thousand individuals as members
of the bank. By order dated 26.06.2018,
relying upon the inspection report dated
31.03.2014, the Reserve Bank of India
cancelled the license of the bank in
question. On 26.06.2018, the Executive
Director of the Reserve Bank of India by
exercising powers under Section 22 read
with
Section
56
of
the
Banking
1 All. Ashutosh Mishra Vs. State of U.P. & Ors.
2011
Regulations Act, required the Registrar of
Cooperative Societies U.P. to wind up the
affairs of the bank in terms of Section 90B (II) of the Act read with Section 13-D of
the
Deposit
Insurance
and
Credit
Guarantee Corporation Act, 1961 and
further appoint a Liquidator.

5. Simultaneously, the General Manager of
the Reserve Bank of India referring to the letter of
the Executive Director on 28.06.2018 directed
the respondent no. 2 to appoint Official
Liquidator in the bank under Section 90-B (II) of
the Act. Against the orders of the Executive
Director of the Reserve Bank of India, the bank
preferred statutory appeal before the Central
Government under Section 22 (5) of the Banking
Regulations Act. On 03.07.2018 the respondent
no. 3 directed the respondent no. 4 to ensure
immediate action in regard to appointment of
Official Liquidator in the bank in question.
Pursuant thereto one Rakesh Kumar, A.D.C.O.
Kanpur Nagar, was appointed as the Official
Liquidator of the bank. It appears that the Official
Liquidator, so appointed, proceeded to issue an
office memorandum dated 10.07.2018, which
was challenged before this Court in Writ Petition
No. 17873 of 2018. On 27.09.2018. A coordinate Bench of this Court quashed the order
dated 10.07.2018 passed by the Official
Liquidator and held that the employees would be
deemed to be continuing in service without any
break with all consequential benefits. Thereafter,
the respondent no. 2 on 17.10.2018 appointed
one Raj Kumar Mishra, Regional Assistant
Commissioner/Assistant Registrar, Cooperative,
U.P. Kanpur Region, Kanpur as Official
Liquidator.

6. It was after the appointment of Sri
Mishra that the respondent no. 5 by the
order impugned dated 29.08.2018 had
directed for inquiry under the provisions of
Section 65 of the Act constituting a three
member committee.

7. Sri H.R. Misra, learned Senior
Counsel, appearing on behalf of the
petitioner, submitted that the inquiry
contemplated under Section 65 of the Act
can be held only on application of a
society or upon an application signed by
not less than 1/3 of the total members of
the society, or majority of the members of
the Committee of Management of the
society, as in the present case the bank is
under liquidation and no application has
been moved signed by1/3 of the total
members of the society nor majority of
members
of
the
Committee
of
Management have come up for such
inquiry, as such, the order passed by the
respondent no. 5 initiating the inquiry is
against the provisions of Sub-Section 2 of
Section 65 of the Act.

8. He further contended that the
Assistant
Commissioner/Assistant
Registrar, Cooperative Societies, Kanpur
Region, Kanpur is admittedly the Official
Liquidator, then in such a view of the
matter the order dated 29.08.2018 is
wholly illegal and without jurisdiction and
no inquiry can be initiated under Section
65 of the Act. Apart from these two
contentions no other point was pressed by
learned counsel for the petitioner. He
further placed reliance upon a decision of
co-ordinate Bench of this Court passed in
Writ Petition No. 37566 of 2019 (Hari Om
Gupta Vs. State of U.P. and others) where
a solitary member of the society had filed
petition for direction for initiating inquiry
and this Court declined to interfere in the
said case.

9. Per contra, learned Standing
Counsel submitted that there is no bar
under the Act that the Registrar cannot suo
moto himself initiate the inquiry under
Section 65 of the Act and also in a case
2012 INDIAN LAW REPORTS ALLAHABAD SERIES
where a society is under liquidation. He
further placed before the Court a decision
of a coordinate Bench of this Court passed
in Public Interest Litigation (PIL) No.
48181 of 2017 (Vishnu Kumar Jha Vs.
Reserve Bank of India and others) in
which similar prayer was made for inquiry
against the bank in question, and the Court
declined to entertain the petition and
directed that the petitioner may approach
the Registrar, Cooperative Societies, for
holding an inquiry in respect of the
financial irregularities. The said order
dated 13.10.2017 is extracted here as
under;

"The only prayer made in the
writ petition reads thus:

"I. Issue a writ, order or
direction in the nature of Mandamus
commanding the respondent no. 1 to set up
an investigating sleuth and conduct
through and proper enquiry of financial
embezzlement and corruption, being done
by the respondent no. 5, in the garb of
alleged ban imposed by the respondent no.
1- Brahmwart Commercial Cooperative
Bank Ltd. having its registered Office at
Ratan Lal Nagar, Kanpur Nagar."

We are not inclined to entertain
this writ petition for such a prayer since
there are several remedies available under
the provisions of the U.P. Cooperative
Societies Act, 1965 for redressal of his
grievance including under Section 65.
Under this provision, it is always open to
the petitioner to approach the Registrar,
Cooperative Societies, for holding an
inquiry
in
respect
of
financial
irregularities. Keeping that remedy open,
the petition is disposed of."

10. We have heard learned counsel
for the parties and perused the material on
record.

11. Before proceeding to appreciate
the respective arguments it would be
appropriate to have a glance of Section 65
of the Act, which is reproduced below;

"65. Inquiry by Registrar. - (1)
The Registrar may, of his own accord,
himself or by a person authorised by him
by order in writing, hold an inquiry into
the constitution, working and financial
condition of a co-operative society.

(2) An inquiry of the nature
referred to in sub-section (1) shall be held
by the Registrar or by a person authorised
by him in writing in this behalf on the
application of-

(a) a co-operative society to
which the society concerned is affiliated;

(b) not less than one-third of the
total members of the society;

(c) a majority of the members of the
committee of management of the society.

(3) The Registrar, or the person
authorised by him under sub-section (1)
shall for the purposes of any inquiry under
this section, have the following powers,
namely -

(a) he shall, at all times, have
access to the books, accounts, documents,
securities, cash and other properties
belonging to or in the custody of the
society and may summon any person in
possession of, or responsible for the
custody of any such books, accounts,
documents, securities, cash or other
properties, to produce the same at any
place at the headquarters of the society or
any branch thereof;

(b) he may summon any person
who, he has reason to believe has
knowledge of any affairs of the society to
appear before him at any place at the
headquarters of the society or any branch
thereof and may examine such person on
oath;
1 All. Ashutosh Mishra Vs. State of U.P. & Ors.
2013

(c) he may, notwithstanding any
rule or bye-law specifying the period of
notice for a general meeting of the society
required the officers of the society to call a
general meeting at such time and place at
the headquarters of the society or any
branch thereof and to determine such
matters as may be directed by him and
where the officers of the society refuse or
fail to call such a meeting he shall have
power to call it himself; and

(d) he may in the manner and for
the purpose mentioned in clause (c)
requires to be called of himself call a
meeting of the committee of management.

(4) Any meeting called under
clause (c) or clause (d) of sub-section (3)
shall have the powers of the general
meeting or meeting of the committee of
management, as the case may be, under
the bye-laws of the society and its
proceeding shall be regulated by such byelaws.

(5) When an inquiry is made under
this section, the Registrar shall communicate
the result of the inquiry to the society and, in
the case of inquiry on an application under
clause (a) of sub-section (2), also to the
applicant co-operative society."

12. A careful reading of Section 65
of the Act provides that Registrar may, of
his own accord, himself or by a person
authorised by him by order in writing, hold
an inquiry into the constitution, working
and financial condition of a co-operative
society. Thus, Sub-Section (1) of Section
65 is crystal clear as far as the powers of
Registrar are concerned for suo moto
initiating inquiry by himself or by a person
authorised by him, as in the present case
the
Assistant
Commissioner/Assistant
Registrar, who has been delegated powers
of the Registrar, proceeded to initiate
inquiry under Section 65 of the Act.

13. Sub-Section (2) of Section 65 of
the Act deals with a situation where any
society which is affiliated to the society in
question approaches with an application to
the Registrar or where 1/3 of the total
members of the society or majority of the
members
of
the
Committee
of
Management approach the Registrar for
initiating inquiry, then the Registrar may
initiate inquiry as provided under SubSection (1) of Section 65 of the Act. Thus,
from the conjoint reading of the SubSections 1 and 2 of Section 65, it is clear
that
both
sub-sections
operate
independently and Registrar under SubSection 1 has ample power to either
himself order for an inquiry or by any
person authorised by him order holding an
inquiry into the constitution, working and
financial condition of cooperative society.
Thus, there is no bar that only on
application by a society or 1/3 of the total
members of the society or majority of
members of Committee of Management
inquiry
can
be
initiated
into
the
constitution,
working
or
financial
condition of a society.

14. Rather, Sub-Section 2 has been
provided under Section 65 of the Act so as
to safeguard in those cases where Registrar
or his subordinate failed to exercise the
powers, so conferred on them, then on an
application by the society or 1/3 members
of the society or majority of members of
the Committee of Management an inquiry
can be held under Section 65.

15. The argument raised by Sri
Misra, learned Senior Counsel, cannot be
accepted to the extent that only on an
application of 1/3 members of the society
or majority of the members of the
Committee of Management, Registrar can
exercise power of inquiry under Section 65
2014 INDIAN LAW REPORTS ALLAHABAD SERIES
of the Act. The Act in noway bridles the
powers of Registrar suo moto exercising
power of inquiry into the constitution,
working and financial condition of a
cooperative society.

16. The second argument of the
learned Senior Counsel in regard to the
bank in liquidation and the Assistant
Commissioner/Assistant Registrar holding
the charge of Official Liquidator, hence,
Registrar cannot order for inquiry is also
not founded on any cogent reasons, as the
respondent no. 5, in the present case, had
constituted a three member committee for
holding inquiry under Section 65 of the
Act. Further, Section 72 of the Act
contemplates winding up of a cooperative
society if the Registrar after an inquiry as
has been held under Section 65 or upon
inspection made under Section 66, or on
receipt of an application made by not less
than 3/4 members of the cooperative
society is of the opinion that the society
ought to be wind up may pass an order for
winding up, meaning thereby that the
conditions precedent to the winding up are
that either an inquiry has been held under
Section 65 or an inspection has been made
under Section 66 or an application has
been made by not less than 3/4 of the
members of the society that society be
wound up.

17. As we have seen that the license
of the bank in question was cancelled by
the order of the Reserve Bank of India and
further on its directions the Registrar had
appointed Official Liquidator for winding
up, thus, the order passed by the
respondent no. 5 directing for inquiry
under Section 65 of the Act cannot be
faulted on either of the grounds, as the
Reserve Bank of India had already formed
the opinion that the functioning of the
bank was not proper and after the Reserve
Bank of India was satisfied not to allow
bank to carry on banking business any
further as it would be detrimental to the
interest
of
its
present
and
future
depositors, cancelled the license, which
was granted to it.

18. It is very strange to note that the
petitioner
before
this
Court
is
Secretary/General Manager of the bank,
which is under liquidation, who is resisting
the inquiry under Section 65 of the Act, as
the Reserve Bank of India had taken this
drastic step to save the money of the
depositors, which in the wisdom of the
Reserve Bank of India not much has been
left to pay its present and future depositors
put a safeguard by cancelling the license,
thus,
the
inquiry
directed
by
the
respondent no. 5 cannot be faulted.

19. From the perusal of the writ
petition, we find that petitioner has failed
to disclose any reason as to why he is
opposing the inquiry, so initiated, under
Section 65 of the Act, as he is the
Secretary/General Manager of the bank
and the inquiry, so conducted, would only
bring
to
surface
the
irregularities
committed in working and financial
condition of the society by the persons
concerned, who could be brought to
justice.

20. We fail to understand why this
petition on behest of the petitioner has
been filed to stall the inquiry, so initiated,
by respondent no. 5 in a bank which is
under liquidation, as the same would be
beneficial to the depositors and their
money lying in the bank.

21. In view of the above, we are not
inclined to interfere with the order
1 All. Ashutosh Mishra Vs. State of U.P. & Ors.
2015
impugned and writ petition is dismissed,
accordingly.
----------
(2020)1ILR 2014

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.12.2019

BEFORE
THE HON'BLE ANJANI KUMAR MISHRA, J.

Writ-C No. 41899 of 2019

Harish Chand & Ors. ...Petitioners
Versus
Commissioner Varanasi Division, District
Varanasi & Ors. ...Respondents

Counsel for the Petitioners:
Sri Kalp Nath, Sri Vivekanand

Counsel for the Respondents:
C.S.C., Sri Manoj Kumar Yadav, Sri
Rajendra Prasad Yadav

A. Uttar Pradesh Revenue Code, 2006 -
Section 66
- Inquiry into irregular
allotment
of
abadi
sites
-
U.P.
Consolidation of Holdings Act. - Section
49 - Bar to civil courts jurisdiction -
Grounds for cancellation of allotment -
petitioner is in possession over the land,
which
was
subject
matter
of
the
allotment as his Naad, Charan and
Khunta etc. exists, thereon - land in
dispute - recorded as naveen parti -
Neither any title nor any such claim
raised by petitioner during consolidation
operation - Any claim of title is now
clearly barred by Section 49 of the U.P.
Consolidation of Holdings Act - the land
in
occupation
of
an
unauthorized
occupation is vacant for the purposes of
an allotment by the Gaon Sabha. (Para 3,
11 & 12)

It is a house existing on the date of vesting,
which is settled that the occupier along with
the land appurtenant thereto - The extent of
the term "land appurtenant" used in the U.P.
Zamindari Abolition and Land Reforms Act has
been clearly spelt out by the Apex Court in the
decision of Maharaj Singh Vs. State of U.P. and
others, 1977 SCR (1)1072, as an area of 5
yards , surrounding a building - held - no
relevant pleadings in the application for
cancellation of the lease. Neither, the distance
of land subject matter of, allotment from the
house of the petitioner was spelt out therein.
(Para 8 & 9)

Held: - The revisional Court has rightly
dismissed the revision of the petitioner holding
that he is not an aggrieved person and
therefore, not competent to maintain the
application for cancellation. (Para 13)

Writ Petition dismissed. (E-7)

List of cases cited: -

1. Maharaj Singh Vs. State of U.P. and others,
1977 SCR (1)1072

(Delivered by Hon'ble Anjani Kumar Mishra, J.)

1. Heard learned counsel for the
petitioners, Shri Manoj Kumar Yadav for
the Gaon Sabha and Shri Rajendra Prasad
Yadav for the caveator respondent nos.3
and 4 as also learned Standing counsel for
the State-respondents.

2. The petition arises out of
proceedings under Section 66 of the U.P.
Revenue Code, 2006 for cancellation of
allotment of an abadi site made in favour
of the respondent nos.3 and 4.

3. The proceedings were initiated and the
allotment was sought to be cancelled on the
ground that the petitioner is in possession over
the land, which was subject matter of the
allotment as his Naad, Charan and Khunta etc.
exists, thereon.

4. The Upper Collector (Finance &
Revenue), Jaunpur vide order dated