# Committee of Management, The Meerut Sahkari Avas Samiti Ltd., Meerut & Ors v. State of U.P. & Ors. 1312 INDIAN LAW REPORTS ALLAHABAD SERIES

- **Citation:** (2024) 1 ILRA 1311
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-12-16
- **Case number:** Writ-C No. 18413 of 2023
- **Bench:** Manoj Kumar Gupta, Acting C.J. Manish Kumar Nigam
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/committee-of-management-the-meerut-sahkari-avas-samiti-ltd-meerut-ors-v-state-50866
- **Pages:** 14

## Headnote

A. Civil Law - Cooperative Societies - U.P.
Cooperative Societies Act, 1965- Section
38(1) - Jurisdiction - Petitioners challenged
orders
dated
11.05.2023
directing
the
Committee of Management to remove the
Chairman and Secretary, alleging lack of
jurisdiction and violation of natural justice -
Held, under Section 38(1), the Registrar can
direct the Society to remove an officer for
contravening the Act, Rules, or Bye-Laws, and
the general body of the Society, not the
Committee of Management, has the authority to
act on such direction after providing an
opportunity of hearing - The orders were validly
issued to the Committee to convene a general
body meeting, not to directly remove officers, as
clarified by Smt. Vandana Varma Vs St. of U.P..
(Paras 4, 9, 10, 11, 13, 15, 20, 21)

B. Principles of Natural Justice - Stage of
Application
Under
Section
38(1)
-
Petitioners contended that the orders dated
11.05.2023 were void for not providing a showcause notice - Held, at the stage of issuing
directions under Section 38(1), the Registrar is
not required to afford a hearing, as the
obligation to provide an opportunity of being
heard lies with the Society's general body when
considering
removal
-
The
Registrar's
supervisory role under Section 38(1) does not
mandate prior notice, unlike Section 38(2),
which requires a hearing when the Registrar
directly removes an officer, per Smt. Vandana
Varma Vs St. of U.P.. (Paras 9, 11, 15, 22, 23,
24, 25, 26)

C. Role of Committee of Management -
Convening
General
Body
Meeting
-
Petitioners argued that the Registrar's direction
to the Committee of Management to remove
officers was ultra vires, as the Committee lacks
removal powers - Held, the direction under
Section 38(1) was to the Committee to convene
a general body meeting for the Society to
consider removal, not to exercise removal
powers itself - Section 33 empowers the
Committee to call such meetings upon the
Registrar's requisition, and the orders, though
not clearly worded, align with this procedure.
(Paras 10, 11, 16, 19, 20, 21)

D. Distinction Between Section 38 and
Rule 454 - Independent Provisions -
Petitioners
claimed
the
Registrar's
orders
conflated powers under Section 38(1) and Rule
454 of the U.P. Cooperative Societies Rules,
1968 - Held, Section 38 and Rule 454 are
independent;
Section
38
addresses
contraventions or forfeiture of office rights,
while Rule 454 deals with disqualifications - The
Registrar's orders were explicitly under Section
38(1), not Rule 454, and no jurisdictional error
occurred, as per Smt. Vandana Varma Vs St. of
U.P.. (Paras 12, 13, 14, 21)

E. Alternative Remedy - Appeal Under
Section 98(1)(d) - Respondents argued that
the petition was not maintainable due to an
appealable order dated 04.07.2023 under
Section 38(2), not challenged in the petition -
Held, the petition focused on jurisdictional
issues regarding the orders dated 11.05.2023,
which were decided without delving into merits
- Petitioners were granted liberty to challenge
the 04.07.2023 order before the tribunal under
Section 98(1)(d), ensuring no prejudice to their
appellate rights. (Paras 5, 6, 8, 29, 30, 31)

Writ Petition Disposed.

List of Cases cited:

## Text

_Characters 0–39,924 of 45,226. This is a partial read: ask again with offset=39924 for what follows._

1 All. Committee of Management, The Meerut Sahkari Avas Samiti Ltd., Meerut
 & Ors. Vs. State of U.P. & Ors.
1311
के मािदण्ड नियम 109 के उपनियम 5 में
प्रानवर्ानित हैं नजसमें कमोवेि नियम
131(1) के उपनियम (ब) व (द) को
यथास्वरूप समानहत नकया गया है। अतः
यह स्पष्ट् है नक बींिवािा वाद में कुिाा निनमात
किते समय यथा सम्भव यह प्रयास नकया
जािा चानहये नक वादग्रस्त सम्पनि के छोिे-
छोिे िुकडोीं के कुिे ि बिाये जायें औि
पक्षकािोीं को सींगनठत कुिाा प्रदि नकया जाये
नजसमें इस बात का ध्याि िखा जािा
आवश्यक है नक सभ पक्षकािोीं को समाि
प्रकाि क भूनम उिके अींिािुरूप प्राप्त हो
सके।

8. वतामाि प्रकिण में अवि
अप ल य न्यायालय में इस आिय का स्पष्ट्
तथ्यात्मक निष्कर्ा अींनकत नकया है नक
लेखपाल द्वािा अपिे प्रनतपि क्षण के दौिाि
यह बताया गया नक 3 िम्बिाि अथाात गािा
सींख्या 756,758 व 760 आबाद से सिे
िम्बिाि हैं, नजसमें से गािा सींख्या 758 व
760 पूणातः वाद को तथा 758 के अींि पि
वाद को कुिाा प्रदि नकया गया है जबनक
प्रनतवाद को उस गािा सींख्या 758 के िेर्
िकबे पि वाद के समतुल्य िकबे का कुिाा
प्रदि नकया गया है। पि क्षण न्यायालय तथा
अवि अप ल य न्यायालय द्वािा उपिोि
िम्बिािोीं को आबाद से सिा होिे का
तथ्यात्मक निष्कर्ा अींनकत नकया गया है।
वह ीं गािा सींख्या 742 को कुछ दूि पि क्तथथत
होिा बताया गया है। उि गािा सींख्या 742
में दोिो पक्षोीं को 0.0650 है०-0.0650 है० का
समाि िकबा कुिे के माध्यम से उपलब्ध
किाया गया है। अतः सृनजत सािभूत नवनर्क
प्रश्न के सम्बन्ध में इस न्यायालय का यह दृढ
मत है नक अवि न्यायालयोीं द्वािा बींिवािा
वाद निणीत किते समय सुसींगत प्रानवर्ािोीं
का अिुपाल सुनिनश्चत नकया गया है। प्रकिण
में सनजत नकया गया सािभूत नवनर्क प्रश्न
तदिुसाि निस्तारित नकया जाता है।"

32. In view of all that is discussed
hereinabove, the findings recorded by all
the three Revenue Courts below are
concurrent, based on admissible evidence
and reasoning. There is no perversity in the
findings recorded by the courts below.
Therefore, it cannot be said that the Courts
below have ignored the law in arriving at
their findings.

33 . Accordingly, this Court finds no
manifest error of law, perversity, illegality
or procedural irregularity in the impugned
orders and does not find any cogent reason
that warrants interference by this Court
with the concurrent findings recorded by
the three Revenue Courts below while
passing the impugned orders.

34. The writ petition is liable to be
dismissed being devoid of merit and is
hereby dismissed. No order as to cost.
----------
(2024) 1 ILRA 1311
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.12.2023

BEFORE

THE HON'BLE MANOJ KUMAR GUPTA,
ACTING C.J.
THE HON'BLE MANISH KUMAR NIGAM, J.

Writ-C No. 18413 of 2023

Committee of Management, The Meerut
Sahkari Avas Samiti Ltd., Meerut & Ors.
 ...Petitioners
Versus
State of U.P. & Ors. ...Respondents
1312 INDIAN LAW REPORTS ALLAHABAD SERIES
Counsel for the Petitioners:
Sri Ratnakar Upadhyay, Sri H.N. Singh (Sr.
Adv.)

Counsel for the Respondents:
C.S.C., Sri Abhishek Mishra, Sri Krishna
Mohan Asthana, Sri Shiv Prakash Gupta, Sri
Sunil Kumar Mishra, Sri H.R. Mishra (Sr.
Adv.)

A. Civil Law - Cooperative Societies - U.P.
Cooperative Societies Act, 1965- Section
38(1) - Jurisdiction - Petitioners challenged
orders
dated
11.05.2023
directing
the
Committee of Management to remove the
Chairman and Secretary, alleging lack of
jurisdiction and violation of natural justice -
Held, under Section 38(1), the Registrar can
direct the Society to remove an officer for
contravening the Act, Rules, or Bye-Laws, and
the general body of the Society, not the
Committee of Management, has the authority to
act on such direction after providing an
opportunity of hearing - The orders were validly
issued to the Committee to convene a general
body meeting, not to directly remove officers, as
clarified by Smt. Vandana Varma Vs St. of U.P..
(Paras 4, 9, 10, 11, 13, 15, 20, 21)

B. Principles of Natural Justice - Stage of
Application
Under
Section
38(1)
-
Petitioners contended that the orders dated
11.05.2023 were void for not providing a showcause notice - Held, at the stage of issuing
directions under Section 38(1), the Registrar is
not required to afford a hearing, as the
obligation to provide an opportunity of being
heard lies with the Society's general body when
considering
removal
-
The
Registrar's
supervisory role under Section 38(1) does not
mandate prior notice, unlike Section 38(2),
which requires a hearing when the Registrar
directly removes an officer, per Smt. Vandana
Varma Vs St. of U.P.. (Paras 9, 11, 15, 22, 23,
24, 25, 26)

C. Role of Committee of Management -
Convening
General
Body
Meeting
-
Petitioners argued that the Registrar's direction
to the Committee of Management to remove
officers was ultra vires, as the Committee lacks
removal powers - Held, the direction under
Section 38(1) was to the Committee to convene
a general body meeting for the Society to
consider removal, not to exercise removal
powers itself - Section 33 empowers the
Committee to call such meetings upon the
Registrar's requisition, and the orders, though
not clearly worded, align with this procedure.
(Paras 10, 11, 16, 19, 20, 21)

D. Distinction Between Section 38 and
Rule 454 - Independent Provisions -
Petitioners
claimed
the
Registrar's
orders
conflated powers under Section 38(1) and Rule
454 of the U.P. Cooperative Societies Rules,
1968 - Held, Section 38 and Rule 454 are
independent;
Section
38
addresses
contraventions or forfeiture of office rights,
while Rule 454 deals with disqualifications - The
Registrar's orders were explicitly under Section
38(1), not Rule 454, and no jurisdictional error
occurred, as per Smt. Vandana Varma Vs St. of
U.P.. (Paras 12, 13, 14, 21)

E. Alternative Remedy - Appeal Under
Section 98(1)(d) - Respondents argued that
the petition was not maintainable due to an
appealable order dated 04.07.2023 under
Section 38(2), not challenged in the petition -
Held, the petition focused on jurisdictional
issues regarding the orders dated 11.05.2023,
which were decided without delving into merits
- Petitioners were granted liberty to challenge
the 04.07.2023 order before the tribunal under
Section 98(1)(d), ensuring no prejudice to their
appellate rights. (Paras 5, 6, 8, 29, 30, 31)

Writ Petition Disposed.

List of Cases cited:

1. Smt. Vandana Varma Vs St. of U.P., Full
Bench judgment (not fully cited in the text but
referenced in Paras 13, 14, 15)

2. Prabhakar Dwivedi Vs St. of U.P., 2012 (2)
ADJ 396

(Delivered by Hon'ble Manish Kumar
Nigam, J.)

1. Heard Sri H. N. Singh, Senior
Advocate
assisted
by
Sri
Ratnakar
1 All. Committee of Management, The Meerut Sahkari Avas Samiti Ltd., Meerut
 & Ors. Vs. State of U.P. & Ors.
1313
Upadhyay for the petitioners, Sri H. R.
Mishra, Senior Advocate assisted by Sri
Abhishek Mishra and Sri Sunil Kumar
Mishra for the respondents and learned
Standing Counsel for the State.

2. This writ petition has been filed for
the following reliefs:-

"(i) Issue a suitable writ, order
or direction in the nature of certiorari
quashing the impugned orders dated
11.05.2023 passed by the Additional
Housing
Commissioner/
Additional
Registrar, U.P. Avas Evam Vikas Parishad,
Lucknow (Annexure Nos. 8, 9 and 10 to
the writ petition) and the impugned orders
dated 05.04.2023 and 15.05.2023 passed
by the Sahkarita Adhikari (Avas), U.P.
Avas
Evam
Vikas
Parishad,
Meerut
(Annexure Nos. 5 and 11 to the writ
petition).

(ii) Issue a suitable writ, order or
direction in the nature of mandamus
commanding the respondents not to give
effect to the impugned orders referred to
above and stay its effect and operation and
all
further
proceedings
consequent
thereupon during the pendency of the writ
petition.

(iii) Issue any other writ, order or
direction which this Hon'ble Court may
deem fit and proper in the facts and
circumstances of the case.

(iv) Award the cost of the writ
petition."

3. Brief facts of the case are that
Meerut Sahkari Awasi Samiti Ltd, Saket,
Meerut (hereinafter referred to as the
'Society') is a Housing Society registered
under U.P. Cooperative Societies Act, 1965
(hereinafter referred to as 'the Act of
1965'). Petitioner no. 1 is the Committee of
Management of the Society, petitioner no.
2 is the elected Chairman of the Society
and the petitioner no. 3 is the Secretary
appointed under Section 31 of the Act of
1965 and as such is the Chief Executive
Officer of the Society. The election of the
Society was held on 16.02.2023 and the
election of Chairman and Vice Chairman
was held on 17.02.2023. The term of
Committee of Management is five years
and therefore, is entitled to continue till
February, 2028. At present, the Society is
governed by the current model bye-laws
issued on 17.03.2021, applicable to all the
Cooperative Housing Societies, registered
in State of Uttar Pradesh. The Model ByeLaws are annexed at page no. 41 of the
paper book.

4. On 11.05.2023, two orders dated
11.05.2023 were passed by Additional
Housing
Commissioner/Additional
Registrar/respondent no. 2 being patrank
no. 516 and patrank no. 515. By order
patrank
no.
516
dated
11.05.2023,
respondent no. 2 directed the Committee of
Management of the Society, in exercise of
power under Section 38(1) of the Act of
1965, to remove the Chairman of the
Society within one month and inform
accordingly to respondent no. 2. By the
other
order
patrank
no.
515
dated
11.05.2023, respondent no. 2 directed the
Committee of Management of the Society
to remove the Secretary of the Society
within
one
month
and
inform
him
accordingly. Both the orders have been
passed on the basis of an enquiry report
dated 28.04.2023 submitted by one Hriday
Ram, Cooperative Officer (Awas), Meerut
(respondent no. 3). The said enquiry was
got conducted by respondent no. 2 by order
dated 11.04.2023 on a complaint made by a
1314 INDIAN LAW REPORTS ALLAHABAD SERIES
member Atul Kumar Singh (respondent no.
5). He has found the President and
Secretary of the Society acting against the
interest of the Society and guilty of
violation of the provision of the Act, Rules
and Bye-Laws of the Society. The orders
dated 11.05.2023 are under challenge in the
present writ petition.

5. During pendency of the writ
petition, respondent no. 2 has passed an
order
directing
for
removal
of
the
Chairman of the Society on 04.07.2023 in
exercise of powers under Section 38(2) of
the Act of 1965. Copy of the aforesaid
order has been brought on record by the
petitioners by means of supplementary
affidavit filed on 06.07.2023.

6. It has been contended by learned
counsel for the respondent that since the
order
dated
04.07.2023
passed
by
respondent no. 3 is not under challenge in
the present writ petition, therefore, no
useful purpose would be served in
considering the merits of the orders
impugned. It is further submitted that the
order
dated
04.07.2023
passed
by
respondent no. 2 is appealable and
therefore, the petitioners be relegated to the
remedy of appeal and the writ petition be
dismissed.

7. Learned counsel for the petitioners
submitted that he would be raising only
jurisdictional issue in relation to the
impugned
order
and
therefore
the
petitioners may not be relegated to the
alternative remedy of appeal.

8. Both the parties have agreed that
this Court may examine the validity of the
orders impugned, only on the jurisdictional
plank without considering the merits of the
orders. For the said reason, counsel for the
respondents agreed to argue the case
without
filing
counter
affidavit.
Accordingly, with consent of the parties,
the present petition is being decided finally
at the stage of first hearing in view of the
third proviso to Rule 1 of Chapter XXII of
Allahabad High Court Rules (Rules of
Court, 1952).

9. Learned counsel for the petitioners
raised the following jurisdictional issues:

i. Before passing the order dated
11.05.2023, no opportunity was given to
the petitioners to show cause. As such, the
orders are non-est in the eyes of law

ii. By order dated 11.05.2023,
respondent
no.
2
has
directed
the
Committee of Management for removal of
petitioner nos. 2 & 3 from the office of
Chairman and Secretary of the Society in
exercise of power under Section 38(1) of
the Act of 1965. The orders are without
jurisdiction as under Section 38(1) of the
Act
of
1965,
the
Committee
of
Management has no power of removal. It is
only the Society which can pass an order of
removal.

10. Per contra, learned counsel
appearing for the contesting respondent
made the following submissions:

i. Society being a body corporate,
act through its officers and final authority
of a cooperative Society vests in the
general body of its members in general
meeting. The management of every Society
vests
in
Committee
of
Management
constituted under Section 29 of the Act of
1965 and the Secretary is the Chief
Executive Officer of the Society. Since,
removal of Chairman of the Committee of
Management and of the Secretary of
1 All. Committee of Management, The Meerut Sahkari Avas Samiti Ltd., Meerut
 & Ors. Vs. State of U.P. & Ors.
1315
Society was to be considered, therefore,
order was issued to the Committee of
Management to take action as envisaged
under Section 38(1) of the Act of 1965. It
would not mean that Committee of
Management was directed to remove the
president of Society in the meeting of the
Committee of Management.

ii. The purpose of the direction
to the Committee of Management was to
ensure that Committee of Management
which is responsible for management of
the Society convenes meeting of general
body for consideration of removal of the
Chairman as well as Secretary of the
Society. It cannot be interpreted to mean
that direction was to the Committee of
Management
to
itself
remove
the
Chairman and Secretary of the Society as
contended by learned counsel for the
petitioners.

iii. At the stage of order under
Section 38(1) of the Act of 1965, there is
no need to issue show cause notice calling
for explanation from the officer sought to
be removed. It is only when the general
body in exercise of power under Section
38(1) of the Act of 1965 considers the
removal of the officer, the opportunity is
required to be given. As such the orders
impugned are not vitiated for want of
notice or for non adherence to the
principles of natural justice.

11. Before considering the rival
contentions of the learned counsel for the
parties, it would be appropriate to consider
the relevant statutory provisions:

Section 2(e) defines "Committee
of Management" to mean the committee of
a co-operative society, by whatever name
called, to which the management of the
affairs of the society is entrusted under
Section 29;

Section 2(f) of the Act, 1965
defines "Co-operative Society" to mean a
Society registered or deemed to be
registered under this Act;

Section 2(o) defines "Office of a
Co-operative
Society"
to
mean
the
president, vice-president, chairman, vicechairman, secretary, member of committee
of
management,
treasurer,
liquidator,
administrator
or
any
other
persons
employed by co-operative society whether
with or without remuneration to carry on
the business of the society or to supervise
its affairs;

Section 9 of the Act, 1965
provides that registration of a Society shall
render it a body corporate by the name
under which it is registered. Section 9 is
quoted as under:

"9. Co-operative societies to be
bodies corporate.- The registration of a
Society shall render it a body corporate by
the name under which it is registered,
having perpetual succession and a common
seal, and with power to hold property, enter
into contracts, institute and defend suits and
other legal proceedings and to do all things
necessary for the purpose for which it was
constituted."

Section 28 of the Act of 1965
provides that the final authority of a Cooperative Society shall vests in general
body of its members. Section 28 is quoted
as under:

"28. Final authority in cooperative
Society.-
Subject
to
the
provisions of this Act and the rules the final
1316 INDIAN LAW REPORTS ALLAHABAD SERIES
authority of a co-operative Society shall
vest in the general body of its members in
general meeting:

Provided
that,
in
such
circumstances as may be prescribed, [the
final authority shall vest in the delegates of
such members elected in the manner
prescribed] and assembled in general
meeting and in such case all references in
this Act, the rules or the bye-laws to the
general body and general meeting shall be
deemed to be references to the body
consisting of such delegates of members
and to the general meeting of such
delegates."

Section 29 of the Act of 1965
provides for Committee of Management of
a Co-operative Society. Section 29 is
quoted as under:

"29.
Committee
of
Management.- (1) The management of
every co-operative Society shall vest in a
Committee of Management constituted in
accordance with this Act, the rules and the
bye-laws, which shall exercise such powers
and perform such duties as may be
conferred or imposed by this Act, the rules
and the bye-laws.

[(2)(a)
The
term
of
every
Committee of Management shall be five
years and the term of elected members of
the Committee of Management shall be coterminus
with
the
term
of
such
Committee."

Section 30 of the Act of 1965
provides for the Chairman and its duties.
Section 30 is quoted as under:

"30. Chairman. [(1) Every cooperative Society shall have a Chairman
and Vice-Chairman elected, nominated or
appointed
in
accordance
with
the
provisions of this Act, the rules and bye-
laws.]

(2)
The
Chairman
shall
be
responsible for the control, supervision and
guidance of the affairs and business of the
Society and shall exercise such powers and
perform such duties as may be conferred or
imposed on him by this Act, the rules, the
bye-laws and the resolutions of the
committee of the management. When
present, he shall, except as otherwise
provided in the rules, preside at the meeting
of the general body and the committee of
management.

(3)....

(4)..."

Section 31 of the Act of 1965
provides for Secretary of Society. Section
31 is quoted as under:

"31.
The
Secretary,
his
emoluments and functions.- (1) [Except
in the case of an apex Society there shall be
a Secretary of every co-operative Society,
to be appointed and removable by the
Society subject to the provisions of the
rules and regulations framed under Sections
121 and 122. The emoluments and other
conditions of service of the Secretary shall
be such as may be prescribed in the byelaws of the Society made in conformity
with the rules and regulations made in this
behalf:

Provided that where a service for
the post of secretaries common to any class
of co-operative societies has been created
under Section 122-A, the recruitment,
appointment, removal and other conditions
1 All. Committee of Management, The Meerut Sahkari Avas Samiti Ltd., Meerut
 & Ors. Vs. State of U.P. & Ors.
1317
of service of persons appointed to such
posts, including persons appointed to such
posts before the creation of such service,
shall be governed by the provisions of that
section and the rules made thereunder.]

(2) The Secretary shall be the
Chief Executive Officer of the Society
and
subject
to
such
control
and
supervision of the Chairman and the
committee of management as may be
provided in the rules or the bye-laws of
the Society shall -

(a) be responsible for the sound
management of the business of the Society
and its efficient administration;

(b) carry on the authorized and
normal business of the Society;

(c) subject to the provisions of the
bye-laws of the Society, operate its
accounts and, except where the Society has
a cashier or treasurer, handle and keep in
his custody its cash balances;

(d) sign and authenticate all
documents for and on behalf of the Society;

(e) be responsible for the proper
maintenance of various books and records
of the Society and for the correct
preparation and timely submission of
periodical
statements
and
returns
in
accordance with this Act, the rules, the byelaws and the instructions of the Registrar or
the State Government;

(f) convene meetings of the
general
body,
the
committee
of
management
and
any
sub-committee
constituted
by
the
committee
of
management and maintain proper records
of such meetings; and

(g) perform such other duties and
exercise such other powers as may be
imposed or conferred on him under the
rules or the bye-laws of the Society."

Section 38 of the Act of 1965
provides for removal of an officer of the
Co-operative Society. Section 38 is quoted
as under:

"38. Removal of an officer of a
co-operative Society.- (1) If in the opinion
of the Registrar, any officer of a cooperative Society has contravened or
omitted to comply with, any provisions of
this Act, the rules or the bye-laws of the
Society, or has forfeited his right to hold
office, the Registrar may, without prejudice
to any other action that may or can be taken
against him, call upon the Society to
remove, within a specified period such
officer from the office held by him and
where necessary also to disqualify him
from holding any office under that Society
for a period not exceeding three years,
whereupon
the
Society
shall,
after
affording opportunity of being heard to the
officer concerned, pass such orders as it
may deem fit.

[Provided that on the request of
the Reserve Bank of India the competent
authority shall remove a director or the
Secretary/chief executive officer of a
Central Co-operative Bank or the Uttar
Pradesh Co-operative Bank, who do not
fulfill the criteria stipulated by the Reserve
Bank of India after giving him an
opportunity of being heard.]

(2) On the failure of the Society
to take action under sub-section (1), the
Registrar may, after affording opportunity
of being heard to the officer and for reasons
to be recorded and communicated to the
1318 INDIAN LAW REPORTS ALLAHABAD SERIES
person and the Society concerned, remove,
or remove and disqualify for a period not
exceeding three years, the officer from
holding any office under that Society.

(3) An officer removed under subsection (1) or sub-section (2), shall with
effect from the date of communication of the
order, cease to hold the office and, if
disqualified, shall not be eligible to hold any
office under that Society for the period
specified in the order."

Section 98 of the Act of 1965
provides for appeal against the order passed
under sub-section (2) of Section 38 of the
Act, 1965, removing or disqualifying any
member of a Society, which is quoted as
under:

"98. Appeal against the awards,
orders and decisions.-(1) An appeal against-

(a)...., (b)... ., (c)....

(d) an order of the Registrar under
sub-section(2) of Section 27 expelling or
removing a member or under sub-section (2)
of Section 38 removing or disqualifying any
officer of a co- operative Society;

(e).....,(f)......,(g).....,(h).....,(I)......,(j)
.....,(k).....,(l).....,(m)....,(n)......

(2) An appeal under [clauses (c), (d), (e), (f),
(g), (k) and (l) of sub-section (1) shall be
preferred to the Tribunal, and an appeal
under [clauses (a), (b), (h), (i), (j), (m) and
(n) of the said sub-section shall be
preferred-

(a) if the decision or the order
was made by the Registrar, to the State
Government; or

(b) if the decision or order or
award was made by any other person or
authority, to the Registrar.

[(c) if the order or award was
made on a dispute relating to an election, to
the Tribunal]."

12. Rule 454 of the U.P. Co operative
Society Rules 1968 (hereinafter referred to
as 'Rules of 1968') provides for removal of
member of the society. Rule 454 of Rules
of 1968 is quoted as under:

"454. It shall be the duty of the
Committee of Management of a cooperative society to ensure that no person
incurring any of the disqualifications
continues to hold office of a member of the
Committee of Management. As soon as the
fact that a member is subject to any
disqualification whether it was incurred
prior or subsequent to his being such
member, comes to the knowledge of the
Committee of Management, the committee
shall consider the matter in a meeting to be
called for the purpose. A copy of the
agenda of such meeting shall be served on
the member (against whom action is
proposed) either personally or by registered
(acknowledgment
due)
post.
Where
resolution for removal of the person
concerned from the membership of the
committee has been passed for reasons of
such disqualifications a copy of such
resolution shall also be sent to the person
concerned by registered (acknowledgment
due) post and thereupon such member shall
not be allowed to attend any meeting of the
Committee of Management or to function
as the member of the Committee of
Management in any other way. The office
held by such member shall be declared
vacant. If that person feels aggrieved by
such action, he may, within thirty days
1 All. Committee of Management, The Meerut Sahkari Avas Samiti Ltd., Meerut
 & Ors. Vs. State of U.P. & Ors.
1319
from the date of the receipt of the notice,
seek arbitration under the provisions of the
Act and the Rules."

13. The scope of power of Registrar
under Section 38 has been considered by a
Full Bench of this Court in Smt. Vandana
Varma and others v. State of U.P. and
others1. The issue arose while considering
the
question
as
to
whether
approval/sanction of Registrar is required
by the Committee of Management under
Section 38 (1) for proceeding under Rule
454. It has been held that:

"38. A bare perusal of section 38
of U.P. Act, 1965 shows that Registrar, if
forms an opinion, that an "Officer" of a Cooperative Society has contravened or
omitted to comply with any provision of
U.P. Act, 1965 or Rules framed thereunder
or Bye-laws of the Society or has forfeited
his right to hold office, he may call upon
the Society to remove such officer within a
specified period from the office. If
necessary, Registrar shall also call upon the
Society to disqualify such "Officer" from
holding any office under that Society for a
period not exceeding three years. When
such direction is issued by Registrar, the
Society is under an obligation to pass such
order as is necessary but before passing
such order principles of natural justice shall
be complied with and the "Officer"
concerned shall be given an opportunity of
hearing by the Society.

39.
Section
38(1)........contemplates a direction from
Registrar to Society concerned to do the
needful when the conditions, as noticed
above, are satisfied that the "Officer"
concerned has not acted in accordance with
Statutes or otherwise has forfeited his right
to hold office and it would then be an
obligation of the Society to comply the said
direction.

41.........when Society acts under
sub-section (1) of Section 38, it gets
jurisdiction from an order/direction issued
by Registrar himself to take such action.
This is a supervisory/administrative control
of Registrar over the Management of Cooperative Society so that an "Officer" of
Society, if not functioning within the four
corners of the Statute or otherwise, has
forfeited his right to hold office, such
person shall not be allowed to continue to
hold office, and, at the first instance,
Society itself should remove him and if
Society fails, then it shall be done by
Registrar himself."

14. The Full Bench has also explained
the difference in scope of Section 38 and
Rule 454 as follows:

43. .......There is no need to read
this provision in conjunction with Section
38 or to hold that Rule 454 is controlled by
Section 38. In fact, both the provisions are
independent in their intent. Where a person
holding office of member of Committee of
Management,
has
incurred
any
disqualification and continued to hold
office and no direction has been received
from Registrar under Section 38(1), still
there is an obligation upon Committee of
Management of Co-operative Society to
ensure that such erring and disqualified
person is not permitted to hold office of
member of Committee of Management, any
longer......"

49. Section 38 talks of a situation
where Committee of Management of a
Society, may be for the reasons of lack of
knowledge, or otherwise, has not acted
against a person, incurring disqualification
1320 INDIAN LAW REPORTS ALLAHABAD SERIES
to hold office of member of Committee of
Management, then Registrar may issue
direction under Section 38(1)and when
such a direction is issued, then Cooperative Society shall be under an
obligation to proceed accordingly. Section
38 can be resorted by Registrar even to
such contingencies as are not within the
ambit of Rule 454 for causing removal;
and/or, removal and disqualification, of a
member of Co-operative Society if the
circumstances specified under Section
38(1), namely, contravention of provisions
of U.P. Act, 1965 or Rules framed
thereunder or Bye-laws of the Society or
omission to comply with certain statutory
obligations provided in such Act, Rules or
Bye-laws is found.

51. Thus both the provisions i.e.
Section 38 and Rule 454 are independent,
though contemplate an action against
Member of Committee of Management, by
the Society but in different manner and
apparently it appears to be overlapping but
on deeper scrutiny, we do not find any such
overlapping. On the contrary, there are
apparent distinctions inasmuch as under
Rule 454 action against Member of
Committee of Management is contemplated
when he suffers a disqualification and on
removal, office shall be rendered vacant
while section 38 talks of a limited duration
only.

56. These distinctions leave no
manner of doubt in our mind that neither
Section 38 controls Rule 454, nor the two
provisions are overlapping, nor there is any
reason to read Rule 454 as supplementing
Section 38, nor to read Rule 454 as
subordinate to Section 38......."

15. It flows from the Full Bench
judgment that the power under Section
38(1) is with the general body of the
Society
and
not
the
Committee
of
Management. The general body of the
Society gets invested with the power under
Section 38(1) only when direction is issued
by the Registrar to remove any officer or to
remove and disqualify him from holding
any office under the Society. Upon being
so directed by the Registrar, the Society is
obliged to follow the direction of the
Registrar.
The
Society
shall
afford
opportunity of hearing to the officer
concerned and pass such order as it may
deem fit. On failure of the Society to take
action under sub-section (1), the Registrar
has discretion, after affording opportunity
of being heard to the officer and for reasons
to be recorded, remove and disqualify the
officer for a period not exceeding three
years. While the Society is obliged to
follow the direction of the Registrar while
acting under Section 38(1), the Registrar
has ample discretion to remove or not to
remove the officer while exercising powers
under sub-section (2) of Section 38.

16. It has been submitted by learned
counsel for the respondents that in the
present case, the orders impugned are not
happily worded but since the same has been
passed in exercise of powers under Section
38(1) of Act of 1965, no interpretation
other than that the direction was for the
Committee of Management to convene a
meeting of the Society to consider the
mandate given by the Registrar, can be
given.

17. On the other hand, contention of
the learned counsel for the petitioners is
that no such intention can be read in the
orders
impugned
as
there
was
no
impediment for Registrar to himself call
meeting
of
the
general
body
for
consideration of the removal of the
1 All. Committee of Management, The Meerut Sahkari Avas Samiti Ltd., Meerut
 & Ors. Vs. State of U.P. & Ors.
1321
Chairman and the Secretary of the Society.
In support of his submissions, learned
counsel for the petitioners further contented
that under Section 35 of the Act of 1965
read with Rule 118 of Rules of 1968, the
Registrar can call a meeting of the general
body of the Society and there was no
occasion for him to direct the Committee of
Management to call the meeting as
contended by learned counsel for the
respondents.

Section 35 of the Act of 1965 is
quoted as under:

"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, has
failed to conduct the election in accordance
with the provisions of this Act before the
expiry of the term of the Committee of
Management
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:

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.]

2......

3.....

4....

5....."

Rule 118 of the Rules of 1968 is
quoted as under:

"118.
For
the
purpose
of
obtaining the opinion of the general body
of a co-operative Society under sub-section
(1) of Section 35, the Registrar shall call a
general meeting of the general body of the
Society, for which purpose he shall issue a
notice to the members of the general body
whose names have been intimated to him
by the Society or ascertained by him from
the records. Non-receipt of the notice by
any members shall not invalidate the
proceedings of such meeting."

18. Contention of learned counsel for
the petitioners is misconceived as Section
35 of the Act of 1965 contemplates
supersession
of
the
Committee
of
Management and not the removal of any
individual officer or member of the
Committee of Management as per the
provision prescribed under the aforesaid
section. Rule 118 of the Rules of 1968 is
only applicable for the purpose of obtaining
the opinion of the general body of a cooperative Society under sub-section (1) of
Section 35 of Act of 1965 and empowers
the Registrar to call a general meeting of
the Society for the aforesaid purpose.
Generally, the power to convene a meeting
lies with the Committee of Management.

19. Section 33 of the Act of 1965
provides that Committee of Management
shall call a general meeting of general body
1322 INDIAN LAW REPORTS ALLAHABAD SERIES
of the Society after the receipt of
requisition in writing from the Registrar or
from at least 1/5 members of the general
body of the Society. Section 33 of the Act
of 1965 is quoted as under:

"33. Other general meeting.- (1)
The Committee of Management may as
often as may be necessary for the
transaction of business of the co-operative
Society call a general meeting of the general
body of the Society (to be called ordinary
general meeting).

(2) The Committee of Management
shall call a general meeting of the general
body
of
the
Society
(to
be
called
extraordinary general meeting) within one
month after the receipt of a requisition in
writing from the Registrar or from at least
one-fifth of the members of the general body
of the Society. In default of the Committee of
Management to call meeting, the Registrar or
any person duly authorized by him in this
behalf shall have the power to call the
extraordinary general meeting at such place
and time as he may direct."

(emphasis supplied)

20. Section 38 (1) of the Act of 1965
does not contemplate for calling a meeting of
the general body at the behest of Registrar
and the same can only be called by the
Committee of Management. Since, in the
contemplated meeting, removal of Chairman
and Secretary was to be considered, therefore,
the Registrar has addressed the Committee of
Management instead of Chairman or
Secretary of Committee of Management to
proceed under Section 38 and remove their
officers.

21. So far as the contention of the
learned counsel for the petitioners that no
direction can be issued by Registrar to the
Committee of Management to exercise
power under Rule 454 of Rules of 1968, it
has no force. It has been specifically
mentioned in the orders that the directions
are issued under Section 38(1) of the Act of
1965 and not under Section 454 of the
Rules of 1968. It is correct that the
impugned orders are not very happily
worded. It would have been better if the
Registrar would have further elaborated
that the Committee of Management was
required to convene meeting of the general
body of the Society to remove the President
and Secretary. However, since the orders
specifically directs the management to
proceed under Section 38 (1) of the Act, it
would only mean that the procedure
provided thereunder was to be followed.
The Committee of Management of the
Society,
in
whom
the
power
of
management vests, was under obligation to
call meeting of the general body of the
Society for considering the directive of the
Registrar. It would not mean that the
Registrar had, thereby, conferred power on
the Committee of Management, which it
does not possess under Section 38(1). The
argument, though attractive, has no force
and is rejected.

22. So far as the contention of the
learned counsel for the petitioners that
before passing the orders impugned, no
notice was issued to the petitioners,
therefore, impugned orders are non-est, it is
also not sustainable in law.

The power under Section 38(1) of
the
Act
of
1965
is
a
supervisory
power/administrative
control
of
the
Registrar over management of the cooperative Society, so that an officer of the
Society, if not functioning within four
corners of the statute or otherwise has
1 All. Committee of Management, The Meerut Sahkari Avas Samiti Ltd., Meerut
 & Ors. Vs. State of U.P. & Ors.
1323
forfeited his right to hold his office, shall
not be allowed to continue to hold his
office and at the first instance the Society
should remove him and if the Society
fails, it shall be done by the Registrar
himself.

23. Section 38, when we read it in its
entirety we find that when action is
initiated under sub-clause (1) of Section 38
by the Registrar by giving direction to the
Society, it is the Society which has to take
action after affording opportunity of being
heard to the officer concerned. At this
stage, the Registrar has nothing to do
except for calling upon the Society to
consider the action proposed and therefore,
there is no requirement of giving notice or
providing for observance of principle of
natural justice. It is only the Society which
is required to give opportunity of hearing to
the officer concerned as the decision, if
any, is to be taken by the Society itself and
not by the Registrar.

24. Sub-section (2) of Section 38 talks
of the situation where despite direction
given by Registrar, Society failed to
comply with such direction and did not take
any action against the "Officer" concerned,
who is rendered disqualified to hold the
office. In such eventuality, when Society
has failed, sub-section (2) of Section 38
confers power upon Registrar to take action
himself and to disqualify, remove or both,
such "Officer" from the office.