# C/M Kaasampur Gadhi Kisan Sewa Sahkari Samiti Ltd., Bijnor & Anr v. State of U.P. & Ors

- **Citation:** (2022) 7 ILRA 93
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-05-25
- **Case number:** Writ C No. 11266 of 2022
- **Bench:** Manoj Kumar Gupta, Dinesh Pathak
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/c-m-kaasampur-gadhi-kisan-sewa-sahkari-samiti-ltd-bijnor-anr-v-state-of-u-p-ors-48677
- **Pages:** 4

## Headnote

A. Civil Law - UP Cooperative Society Act,
1965 - Sections 35 & 65 - Suspension of
Committee of Management - Power, when
can be exercised by the Registrar -
Section 35 (1) contemplates two overt
acts by the Registrar indicating that
proceeding
for
suspension
has
commenced, namely (i) issuance of show
cause notice calling for explanation of the
Committee
of
Management
and
(ii)
obtaining the opinion of general body of
the society in a general meeting called for
the purpose - Non compliance of provision
of S. 35(1) - Effect - Held, the Registrar
though has formed an opinion that
suspension of the petitioner Committee of
Management is necessary, but has not
taken any steps towards supersession of
the Committee of Management - The
impugned order of suspension has been
passed at a premature stage before the
proceeding for supersession has actually
commenced. (Para 7 and 8)
Writ petition allowed. (E-1)
List of Cases cited :-

## Text

7 All. C/M Kaasampur Gadhi Kisan Sewa Sahkari Samiti Ltd., Bijnor & Anr. Vs. State of U.P. &
 Ors.
93

34. As a matter of fact from the bare
reading of the aforesaid order of the High
Court, I do not find that any plea regarding
membership was ever raised.

35. Thus, Committee of Management
that had validly continued until the
elections were set aside, its conduct of
proceeding including resolution adopted by
it, shall stand saved by virtue of de facto
doctrine.

36. In view of the above, therefore, I
do not find any good ground to interfere
with the order passed by the Assistant
Registrar, Societies. Liberty rests with the
petitioner to apply for common law
remedy.

37. This petition lacks merit and is,
accordingly, dismissed with no order as to
cost.

38. Consigned to records.
----------
(2022)07ILR A93
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.05.2022

BEFORE

THE HON'BLE MANOJ KUMAR GUPTA, J.
THE HON'BLE DINESH PATHAK, J.

Writ C No. 11266 of 2022

C/M Kaasampur Gadhi Kisan Sewa Sahkari
Samiti Ltd., Bijnor & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Uday Pratap Singh, Sri Rakesh Pande
(Senior Adv.)

Counsel for the Respondents:
C.S.C., Sri Sujeet Kumar Rai

A. Civil Law - UP Cooperative Society Act,
1965 - Sections 35 & 65 - Suspension of
Committee of Management - Power, when
can be exercised by the Registrar -
Section 35 (1) contemplates two overt
acts by the Registrar indicating that
proceeding
for
suspension
has
commenced, namely (i) issuance of show
cause notice calling for explanation of the
Committee
of
Management
and
(ii)
obtaining the opinion of general body of
the society in a general meeting called for
the purpose - Non compliance of provision
of S. 35(1) - Effect - Held, the Registrar
though has formed an opinion that
suspension of the petitioner Committee of
Management is necessary, but has not
taken any steps towards supersession of
the Committee of Management - The
impugned order of suspension has been
passed at a premature stage before the
proceeding for supersession has actually
commenced. (Para 7 and 8)
Writ petition allowed. (E-1)
List of Cases cited :-
1. Veerpal Singh Vs The Registrar, Co-operative
Societies, U.P. & ors.; A.I.R. 1973, SC 1249
(Delivered by Hon'ble Manoj Kumar
Gupta, J.
&
Hon'ble Dinesh Pathak, J.)

1. The petitioners have called in
question an order dated 9.3.2022 passed by
respondent no.2, Joint Commissioner and
Joint
Registrar,
Cooperative,
U.P.
Moradabad
Mandal,
Moradabad
suspending the first petitioner, which is
Committee of Management of a primary
agricultural
Cooperative
Society,
in
exercise of power under Section 35 (2) of
the U.P. Cooperative Societies Act, 1965
(hereinafter referred to as 'the Act').
Respondent no.2, while passing the above
94 INDIAN LAW REPORTS ALLAHABAD SERIES
order, has placed reliance on an interim
enquiry report submitted under Section 65
of the Act and has concluded that financial
irregularities seem to have been committed
by
the
petitioner
Committee
of
Management. He has also held that there
are repeated defaults on part of the
petitioner Committee in observing its duties
imposed upon it under law and in future
there is likelihood of an adverse report
coming against the petitioner Committee in
enquiry that is pending under Section 65 of
the Act. Consequently, it is desirable to
keep
the
petitioner
Committee
of
Management under suspension. By the
same order, he has proceeded to appoint an
interim
Committee
comprising
of
Additional District Cooperative Officer
(Banking),
Bijnor,
Additional
District
Cooperative Officer, Tehsil Nagina and
Additional
Development
Officer
(Cooperative), Vikas Khand, Dhampur.

2. Sri Rakesh Pande, learned senior
counsel appearing on behalf of the
petitioners submitted that the impugned
order suspending the petitioner Committee
of Management is erroneous in law
inasmuch as no proceeding for supersession of the Committee of Management
has yet been initiated. In support of his
contention, he has placed reliance on the
language used in sub-section (2) of Section
35 of the Act and the judgement of the
Supreme Court in Veerpal Singh Vs. The
Registrar, Co-operative Societies, U.P.
and others, A.I.R. 1973, SC 1249.

3. Learned counsel for the petitioners
further submitted that even otherwise, the
impugned order is manifestly illegal
inasmuch as the formation of opinion to
keep
the
petitioner
Committee
of
Management under suspension is based on
conjecture that in future there is likelihood
of an adverse report being submitted
against the petitioner Committee in enquiry
pending under Section 65 of the Act. He
further
submitted
that
certain
other
irregularities alleged relate to the period
when
the
petitioner
Committee
of
Management was not in power, therefore, it
cannot be held accountable for the same.

4.

Learned
standing
counsel
appearing on behalf of State respondents
and Sri Sujeet Kumar Rai, who has been
heard as an intervenor, submitted that the
stage of calling general body meeting as
contemplated under sub-section (1) of
Section 35 of the Act has yet not arrived.
They submitted that in view of serious
irregularities coming to knowledge of
respondent no.2, he was justified in
suspending the petitioner Committee of
Management.

5. Section 35 (1) and (2), which are
relevant for the present controversy, are
reproduced below:-

"35. Supersession or suspension
of Committee of Management.- [(1) Where,
in the opinion, of the Registrar the
Committee
of
Management
of
any
Cooperative Society persistently makes
default or is negligent in the performance
of the duties imposed on it by this Act or the
rules or the bye-laws of the society or
commits any act which is prejudicial to the
interest of the society or its members, or is
otherwise not functioning properly, the
Registrar after affording the Committee of
Management a reasonable opportunity of
being heard and obtaining the opinion of
the General Body of the society in a
general meeting called for the purpose in
the manner prescribed may, by order in
writing, supersede the Committee of
Management:
7 All. C/M Kaasampur Gadhi Kisan Sewa Sahkari Samiti Ltd., Bijnor & Anr. Vs. State of U.P. &
 Ors.
95

Provided that where under the
prescribed circumstances it is not feasible to
convene a general meeting of the General
Body of the society, the Registrar may
dispense with the requirement of obtaining
the opinion of the General Body of the
society:

Provided further that in the case of
Central Co-operative Bank or the Uttar
Pradesh Co-operative bank, the suspension
or supersession of the Committee of
Management shall not be made by the
Registrar unless the Reserve Bank of India
has been consulted:

Provided also that the Committee
of Management of the Primary Agriculture
Co-operative
Credit
Society
can
be
superseded by the Registrar only on the
following grounds-

(i) if a society incurs losses for
three consecutive years, or

(ii)
if
serious
financial
irregularities or fraud have been committed,

(iii) if there are judicial directives
to this effect or there is perpetual lack of
quorum.

(2) Where the Registrar, while
proceeding to take action under sub-section
(1) is of opinion that suspension of the
Committee of Management during the period
of proceeding is necessary in the interest of
the society, he may suspend the Committee of
Management which shall thereupon cease to
function and make such arrangement as he
thinks proper for the management of the
affairs of the society till the proceedings are
completed:

Provided that if the Committee of
Management so suspended is not superseded
it shall be reinstated and the period during
which it has remained suspended shall count
towards its term."

6. The power of Registrar to place
Committee
of
Management
of
a
Cooperative Society under suspension has
been dealt with by the Supreme Court in
Veerpal Singh (supra) in paragraphs 12, 13
and 14 as follows:-

"12. The Registrar has power
under Section 35 (1) of the Act to,
supersede the committee of management.
The circumstances. under which he can
exercise his powers are when in the opinion
of the Registrar the society makes default
or is negligent in the performance of duties
imposed on it by the Act or the rules or the
bye-laws of the society or commits any act
which is prejudicial to the interest of the
society or its members, or, is otherwise not
functioning properly, the Registrar after
affording the committee of management a
reasonable opportunity of being heard and
obtaining the opinion of the general body
of the society in a general meeting called
for the purpose in the manner prescribed
may, by order in writing, supersede the
committee of management.

13. These provisions indicate the
circumstances under which the Registrar
has power to supersede or suspend the
committee of management and, to appoint
an administrator. Sect-ion 35(2) of the Act
confers power on the Registrar to suspend
the committee of management during the
period of proceedings for supersession. The
Registrar has also power under Section 35
(2) of the Act to make arrangement, as he
thinks proper for the management of the
society till the proceedings are completed.
The power to suspend the committee of
management
during
the
period
of
proceedings
is
exercisable
when
proceedings
for
supersession
have
commenced. Section 35 (1) of the Act shows
that when the Registrar is of opinion that
the committee of a cooperative society
makes default or is negligent in the
performance of duties or is otherwise not
96 INDIAN LAW REPORTS ALLAHABAD SERIES
functioning properly the Registrar may
supersede the committee of management
and has to give an opportunity to the
society to be heard in that behalf. The
Registrar has also to obtain the opinion of
the ,general body of the society. Therefore,
the opinion of the Registrar is to be
followed by some definite act which will
commence
the
proceedings
for
supersession. The provisions in the Act
indicate that some definite step like the
issue of, a notice must be taken under the
provisions of Section 35 (1) of the Act with
a view to show that proceedings for
supersession of the committee are set in
motion.

14. It is therefore manifest that
power exercisable under Section 35 (2) of
the Act is confined to the time during the
period
of
supersession
proceedings.
Unless the proceedings have started as
indicated earlier the Registrar cannot call
in aid the power exercisable under Section
35 (2) of the Act."

7. It is clear from the enunciation of
law as made by the Supreme Court in the
above judgement that the power to
suspend the Committee of Management
has to be preceded by an act which reflects
that the proceeding for supersession has
commenced. Sub-section (1) of Section 35
contemplates two overt acts by the
Registrar indicating that proceeding for
suspension has commenced, namely (i)
issuance of show cause notice calling for
explanation
of
the
Committee
of
Management and (ii) obtaining the opinion
of general body of the society in a general
meeting called for the purpose. A perusal
of the impugned order reveals that none of
the above two steps have been taken so
far. The Registrar though has formed an
opinion that suspension of the petitioner
Committee of Management is necessary,
but has not taken any steps towards
supersession
of
the
Committee
of
Management.

8. Consequently, we are of the
opinion that the impugned order of
suspension has been passed at a premature
stage
before
the
proceeding
for
supersession has actually commenced.

9.

Learned
standing
counsel
appearing on behalf of State respondents
and Sri Sujeet Kumar Rai appearing for
the intervenor submitted that the Registrar
be granted liberty to pass a fresh order
instead of keeping the matter pending, as
it will delay the matter and there are
charges of financial irregularities against
the petitioner Committee of Management.

10. Having regard to the above
submissions, we quash the impugned order
leaving it open to respondent no.2 to pass
a fresh order in the light of the
observations made above.

11. In the result, the writ petition
succeeds in part and is allowed.
----------
(2022)07ILR A96
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 22.07.2022

BEFORE

THE HON'BLE DEVENDRA KUMAR
UPADHYAYA, J.
THE HON'BLE RAJNISH KUMAR, J.

Writ C No. 15034 of 2018

Rishipal Sharma ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner: