Citation Codes

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Case Number

O.J.Cs Nos. 109, 356 & 388 of 1970

Advocates

U.Nanda
L.Rath
G.G.Das

Judges

R.N Misra
B.K Ray, JJ.

Acts

provisions of the Bihar and Orissa Co-operative Societies Act and under Section 133 of the Orissa Act 2 of 1963,
Section 14(3) of the Orissa Co-operative Societies Act, 2 of 1963 (hereinafter referred to as the Act)
provision in sub-section (3) of Section 14
CO OPERATIVE SOCIETIES ACT 1912
Orissa Co-operative Societies Act
sub-section (3) of Section 14

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Smart Summary

Structured Summary of the Opinion (R.N. Misra, J.)

Factual and Procedural Background

This opinion arises from three separate writ applications under Article 226 of the Constitution challenging orders of the Assistant Registrar of Co-operative Societies, Balasore Circle, directing amalgamation of several petitioning Co-operative Societies with other societies (the proposed new or existing service co-operative societies). The three matters are:

O.J.C. No. 109 of 1970 — Govindpur Agricultural Credit Co-operative Society (and a member) challenged an order dated 26-12-1969 directing amalgamation with Balanga Service Co-operative Society. The petitioning society was registered (registration No. 82 of 1951) and had grown in membership and business by 1969.
O.J.C. No. 356 of 1970 — Mandarada Co-operative Society (through Secretary and President) challenged amalgamation ordered on 26-12-1969. The society had earlier registration under the Bihar and Orissa Co-operative Societies Act (registered 1943, No. BL-13).
O.J.C. No. 388 of 1970 — Balisahi Agricultural Credit Co-operative Society (through Secretary and President) challenged amalgamation ordered on 26-12-1969. The society was originally registered under the Co-operative Societies Act of 1912 (registration BL-221 in 1918).

All three applications were heard together. The Assistant Registrar filed a common-pattern affidavit defending the amalgamation orders. Preliminary objections on maintainability were raised and considered in relation to two of the three petitions. The court ultimately dismissed two petitions on maintainability grounds and allowed one petition on substantive and procedural grounds.

Legal Issues Presented

Whether the writ applications under Article 226 are maintainable where the petitioning societies have joined in the formation or are signatories to the bye-laws of the new society (estoppel / consent issue).
Whether the Assistant Registrar was obliged to act in a quasi-judicial manner and afford the affected society an opportunity of hearing before directing amalgamation (principles of natural justice / audi alteram partem).
Whether the procedural preconditions in Section 14(3) of the Orissa Co-operative Societies Act — in particular inspection under Section 64 and compliance with 'prescribed conditions' — were complied with before ordering amalgamation.
Whether public policy or public good considerations can justify dispensing with procedural fairness or requirements of the statute when ordering amalgamation.

Arguments of the Parties

Petitioners' Arguments (as recorded)

The amalgamation order was made without affording the society any opportunity of hearing and thus violated the principles of natural justice; had they been heard they could have shown the Registrar's conclusion to be incorrect.
Section 14(3) of the Act had not been properly followed; the inspection under Section 64 was mala fide or improperly used to justify a preconceived policy of amalgamation.
No rules had been made prescribing the conditions contemplated by Section 14(3) (the phrase "subject to the prescribed conditions") and therefore the power to order amalgamation could not properly be exercised.

Respondent / Assistant Registrar's Arguments (as recorded)

The order of amalgamation was open to appeal under the statute and, therefore, an application under Article 226 was not maintainable.
The amalgamation was made in the interest of the members since the petitioning societies were not economically viable units; the financing bank was consulted and had consented.
In two matters (O.J.C. 356 and 388), the petitioning societies had joined in formation of the new society and were signatories to the bye-laws submitted for registration; therefore they were estopped from challenging the amalgamation.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Wiseman v. Borneman, 1971 AC 297	Statutory authorities expected to act fairly; where statute is silent courts will imply the rule that principles of natural justice apply to statutory tribunals deciding final questions affecting rights.	The court relied on this authority to support the proposition that the Assistant Registrar, when reaching an objective conclusion affecting a society's rights, was required to act fairly and to give an opportunity to be heard.
In re Pergamon Press Ltd., (1971) 1 Ch D 388	In applying the concept of fair play there must be flexibility to meet different situations without rigid rules.	The court cited this decision to emphasize that natural justice/fair play requirements are flexible and must be adapted to circumstances where a statutory authority acts judicially.
Digambar v. Addl. Dist. Magistrate, Dhenkanal, AIR 1970 Orissa 110	Where an order affects a person's right (here, licence cancellation) the affected party is entitled to a hearing even if the statute is silent; natural justice supplements the law.	The court used this local authority to reinforce that cancellation or alteration of a legally protected status (here, society's corporate status) requires hearing by the revoking authority.
Dr. Harekrushna Mahatab v. The Chief Minister of Orissa, AIR 1971 Orissa 175	If an administrative order adversely affects any right or interest, principles of natural justice must be observed unless statute expressly or by necessary implication prohibits it.	The court quoted this authority to support the conclusion that the amalgamation order, which adversely affected the society's rights, required observance of natural justice.
A.K. Kraipak v. Union of India, (1969) 2 SCC 262; AIR 1970 SC 150	To determine whether a power is administrative or quasi-judicial one must consider the nature of the power, consequences of its exercise and the manner expected to be exercised; State instrumentalities must discharge functions fairly and justly.	The court applied these principles to hold that the Assistant Registrar's power to order amalgamation was quasi-judicial in nature and that the Registrar was required to act justly and fairly (i.e., give a hearing).
Enderby Town Football Club Ltd. v. Football Association Ltd., (1970) 3 WLR p.1021 (Lord Denning M.R.)	Public policy/public good is not an absolute justification to disregard principles of fairness; courts can and should control public policy excesses.	The court rejected the respondent's contention that public policy/public good justified the procedure followed, citing Lord Denning's warning that public policy cannot excuse failure to follow fair procedure.
Nagle v. Feilden, (1966) 2 Q.B. 633 (referenced within Enderby)	Serves as an example where public policy considerations were applied — referenced in discussion on public policy's proper use.	Referenced by the court via the Enderby judgment to illustrate that public policy may be applied but does not absolve requirement of fair procedure; no independent application beyond citation.
1964 AC 40 (referenced)	Referenced as prior authority stating that natural justice must be observed when administrative orders adversely affect rights unless statute prohibits.	Quoted in the opinion (via Harekrushna) to reinforce the established position on natural justice; used to support the obligation to hear affected parties.

Court's Reasoning and Analysis

The court proceeded in two distinct strands corresponding to the grouped matters.

1. Maintainability and estoppel (O.J.C. 356/1970 and O.J.C. 388/1970)

The Assistant Registrar asserted that the petitioning societies in these two matters had joined in the formation of the new society and had signed the bye-laws submitted for registration.
The petitioners' rejoinders denied the correctness of that statement but did not seriously dispute the allegation. In one case an affidavit of the secretary of the opposite party also deposed consent by the petitioning society's secretary to the formation and registration of the larger society.
Given these facts, the court held that the petitioning societies were estopped from disputing amalgamation because, by their own actions in joining formation, they could not invoke the court's discretionary jurisdiction under Article 226 to challenge the order.
Accordingly, the court dismissed those two writ applications as not maintainable without examining merits.

2. Substantive and procedural review (O.J.C. 109/1970 — Govindpur Society)

Petitioners argued that the amalgamation order violated natural justice because no hearing was given, that Section 14(3) had not been followed, that inspection under Section 64 was mala fide or improperly used to justify a predetermined policy, and that rules prescribing conditions under Section 14(3) were not made.
The court analyzed authorities (Wiseman; Kraipak; Digambar; Harekrushna; Pergamon; Enderby) and reiterated the proposition that where a statutory authority must reach an objective conclusion affecting rights, it is expected to act quasi-judicially and to apply principles of natural justice, unless statute prohibits it by express or necessary implication.
On this basis the court held that the Assistant Registrar was obliged to give a hearing to the society before making an order of amalgamation because the order affected the society's status and had adverse civil consequences for it and its members.
The court noted that because it was quashing the amalgamation order on natural justice grounds it was not necessary to fully resolve the contention concerning the timing and purpose of the inspection under Section 64; nevertheless the court observed there was force in the petitioners' submission that inspection is a condition precedent to action under Section 14(3) and that the statutory scheme did not contemplate reaching a conclusion of amalgamation first and then ordering an inspection to justify it.
Concerning the phrase "subject to the prescribed conditions" in Section 14(3), the court interpreted 'prescribed' as meaning conditions prescribed by rules made under the Act (per Section 2(h)) and observed that rules had not been made; accordingly the court declined to accept the respondent's attempt to locate those conditions in subsection (4) and left it to Government to consider whether an order can be made without prescribed conditions.
The court rejected the submission that public policy or public good could justify dispensing with procedural fairness in the circumstances, relying on the cited authorities to show that public policy does not excuse failure to afford a hearing.
On these grounds, the court quashed the amalgamation order dated 26-12-1969 insofar as it directed amalgamation of the petitioner society in O.J.C. 109/1970, granted costs and assessed the hearing fee at Rs. 100.

Holding and Implications

Holding:

For O.J.C. 109 of 1970: The court quashed the order of amalgamation dated 26-12-1969 made by the Assistant Registrar of Co-operative Societies, Balasore Circle, by issuing a writ of certiorari; the petitioners' writ was allowed, their costs were awarded, and the hearing fee was assessed at Rs. 100.
For O.J.C. 356 of 1970 and O.J.C. 388 of 1970: The writ applications were dismissed as not maintainable on the preliminary ground of estoppel (petitioning societies had participated in formation/bye-laws of the new society), and the court did not proceed to examine the merits.

Implications:

Direct consequences for the parties: The amalgamation order against the Govindpur Agricultural Credit Co-operative Society (O.J.C. 109/1970) is set aside; petitioners recover costs and a hearing fee is fixed. The two other petitioners (O.J.C. 356 and 388) are precluded from challenging the amalgamation in these proceedings due to estoppel and their petitions are dismissed as not maintainable.
Procedural consequence: The court emphasized that officers exercising powers that affect rights in a manner akin to judicial determinations must act quasi-judicially and afford an opportunity of hearing; an inspection under Section 64 should not be used to rubber-stamp a preconceived policy of amalgamation and rules contemplated by Section 14(3) are to be those 'prescribed' under the Act.
No new legal principle or landmark precedent was announced; the court applied and reiterated established authorities on natural justice and quasi-judicial duties. The opinion leaves to Government the question whether an order of amalgamation may validly be made without rules prescribing conditions under Section 14(3).

Judge B.K. Ray concurred. The petition in O.J.C. 109/1970 was allowed.

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The Govindpur Agricultural Credit Co-Operative Society And Another v. Assistant Registrar, Co-Operative Societies, Balasore Circle And Another Opposite Parties.

R.N Misra, J.:— These are three applications under Article 226 of the Constitution on behalf of different parties seeking for writs of certiorari to quash orders made by the Assistant Registrar of Co-operative Societies. Balasore Circle, amalgamating the petitioning Co-operative Societies with some other societies which have been impleaded as opposite parties in the respective cases.;

2. All these applications were heard analogously at the request of parties and common arguments were advanced. The points that arise for consideration are also common. There are, however, allegations of fact in each of the applications which may briefly be noticed. O.J.C No. 109 of 1970 — The petitioners here are two in number. Govindpur Agricultural Credit Co-operative Society is the first petitioner. It has come through its Secretary. The second petitioner is a member of the Society. It is alleged that on application being made under the Act the Society was duly registered and assigned registration number 82 of 1951. It began with a membership of 12 and at the relevant time in 1969, it had a membership of 149. Its business assets and turnover had expanded considerably during the 18 years of activities. The Assistant Registrar of Co-operative Societies Balasore Circle (Opp party No. 1) directed by order dated 26-12-1969 that the petitioner Society should be amalgamated with the Balanga Service Co-operative Society (opp. party No. 2). Annexure A to the petition is the impugned order by which that direction was given. The justification for the order is found in the following portion of the impugned order:

“In order to set up appropriate pattern of Co-operative Societies, so that they can effectively undertake various service functions for the benefit of village farmers and in order to provide co-operative credit facilities to all the areas of the district, the Registrar, Co-operative Societies. Orissa has already ordered to take up the Action Programme as approved by the Deputy Registrar. Co-operative Societies, by marginal adjustment to achieve the object of credit societies in all the areas and for avoidance of duplication of membership and overlapping of finance in more than one society.

Recently the Deputy Registrar. Co-operative Societies No. II Central Division, Cuttack has already approved the Action Programme of Baliapal Panchayat Samiti in the district of Balasore. According to the approved programme, the following societies are to come under amalgamation, so that Balanga Service Co-operative Society in the above-named Block will be immerged……………

Further to examine the justification of amalgamation of the societies mentioned above and to implement the order of the Deputy Registrar. Co-operative Societies, the Co-operative Extension Officer of the Panchayat Samiti referred to above conducted inspections of the societies proposed to come under amalgamation and he is of view for amalgamating the societies already mentioned above, so that a viable Service Co-operative Society will be emerged which will be able to appoint well-paid people residing within the area of operation of the proposed Service Co-operative Society, as the existing small type of societies neither able to appoint the paid and qualified secretaries nor the societies take any interest to render proper service to the people……………”

3. The Assistant Registrar therefore, directed in exercise of powers conferred under Section 14(3) of the Orissa Co-operative Societies Act, 2 of 1963 (hereinafter referred to as the Act) that

“the Balanga G.P.G.G and Govindpur Co-operative Societies having similar objects in regard to finance, shall amalgamate to form a new Service Co-operative Society by the name ‘the Bolanga Service Co-operative Society’, the area of operation of which shall conform to the following villages………”

4. This order by which incorporation was withdrawn from the petitioner-society and it was asked to get amalgamated with a new society (opp. party No. 2) is impugned in this case.

5. O.J.C 356 of 1970 — The Mandarada Co-operative Society through its Secretary and its President and the petitioners. This Society was registered in September, 1943 under the Bihar and Orissa Co-operative Societies Act and was assigned registration number BL-13. It began with a membership of 16 and by the time of the order of amalgamation its total membership was 149. Its business activities had also substantially extended by the time the order for amalgamation was made. As in the earlier case, here also on the same day i.e 26-12-1969 the Assistant Registrar of Co-operative Societies. Balasore Circle, directed amalgamation of the petitioning Society with the opposite party No. 2. The reasons are more or less similar as in the earlier case.

6. O.J.C 388 of 1970.—The Balisahi Agricultural Credit Co-operative Society through its Secretary is the first petitioner and its President is the second petitioner. It is alleged that the Society is a very old one having been registered under the Co-operative Societies Act of 1912. When it was registered in 1918, it was given registration number BL-221. It started with a membership of 12 and by the time of the order of amalgamation its membership was 94. On the 26th of December, 1969, the Assistant Registrar of Co-operative Societies. Balasore Circle, directed its amalgamation with the opposite party No. 2 Society. On similar grounds as indicated above, amalgamation has been ordered.

7. In each of the cases, the Assistant Registrar has given an affidavit of a common, pattern apart from contending that the order was open to appeal under the statute and therefore, an application under Article 226 of the Constitution is not maintainable. The order has been justified as being in the interest of the members of the society. It is further contended that the petitioning societies were not economically viable unite and therefore, the order of amalgamation, is in the interest of the petitioning society itself. The financing bank was consulted and its consent has been duly obtained. In O.J Cs. 356 of 1970 and 388 of 1970, it has been further contended in the respective counter affidavit that the petitioning Co-operative Society in each of the cases is one of the signatories in the Bye-laws for the newly constituted society (i.e opp. party No. 2) and, therefore, the writ application challenging the amalgamation should not be entertained.

8. So far as the latter two cases are concerned (i.e O.J Cs. 356 of 1970 and 388 of 1970). the preliminary objection raised regarding maintainability, in our opinion, must be sustained. Each of the petitioning societies in those two cases is estopped from challenging the order of amalgamation inasmuch as it has joined in the formation of the new society into which the petitioning society was to amalgamate. By its own action, it must now be found that the petitioner is estopped from disputing the amalgamation. The allegation in the counter affidavit is not seriously disputed in a rejoinder filed on behalf of the petitioning society in each of the cases. This is what has been said in the rejoinder—

“……… The statement that the petitioner is one of the applicants for the registration of the new society and has signed the Bye-law submitted for registration is not correct and also this no way affects the present case”

9. In O.J.C 388 of 1970, the secretary of opposite party No. 2 society into which the petitioning society of that case has been ordered to amalgamate has given an affidavit. In paragraph 6 thereof, it has been alleged that—

“Sri Haripada Chakrabarti as secretary of Balisahi society, gave his consent to the formation of the larger Sri Sri Sitala Service Co-operative Society Ltd. after which the same was allowed to be registered by the Assistant Registrar.”

10. In view of these circumstances, we would hold that our discretionary jurisdiction should not be allowed to be invoked by the petitioners in those cases. The writ applications are accordingly dismissed as not maintainable without examination of merits of the allegations raised in these petitions.

11. O.J.C 109 of 1970. — Mr. Rath for the petitioners contends that the order of amalgamation is contrary to principles of natural justice. No hearing was ever afforded though the impugned order affected the status of the society and brought about devastating consequences so far as the society and its members are concerned. His next contention is that Section 14(3) of the Act has not been followed and the inspection made under Section 64 of the Act was a mala fide act. His third contention is that rules having not yet been made to prescribe the conditions contemplated under Section 14(3) of the Act the power was not exercisable. These contentions of Mr. Rath may now be examined.

12. Contention No. 1. — The Govindpur Agricultural Credit Co-operative Society Ltd. was registered and duly incorporated as a society under the provisions of the Bihar and Orissa Co-operative Societies Act and under Section 133 of the Orissa Act 2 of 1963, that society has to be treated as a society duly registered under the Orissa Act. A detailed procedure is laid down for registration and once registration is granted, the society is made a body corporate and is entitled to hold property, enter into contracts, institute and defend suits and other legal proceedings and do all things necessary for the purpose for which the society is constituted. A status is acquired upon registration. Certain privileges are conferred and certain obligations are also simultaneously laid. Learned Additional Government Advocate does not dispute the contention of Mr. Bath that registration brings about a change in the status and confers advantages provided under the Act and the Rules as also in dealings with Government and other public bodies. Subject to regulatory provisions under the Act and the Rules as also the Bye-laws, a Co-operative Society has the right to carry on its business, control its dealings with its members and manage its own affairs. Under the statutory provisions and the Bye-laws, the society has a President, a Board of Management, a Secretary and many of these are elective offices. Those who hold such offices have also a status. The Assistant Registrar of Co-operative Societies came to make an objective assessment of the situation before directing amalgamation and asked for amalgamation to be made only upon such satisfaction being reached.

13. The petitioners have alleged that no opportunity was given to them of being heard before the order of amalgamation was made. Given an opportunity they would have been in a position, they assert, to satisfy the Assistant Registrar that the opinion which he formed leading to the order of amalgamation was not correct or appropriate. It is settled law by now that if a tribunal or a statutory authority has to reach an objective conclusion affecting rights of others, he has to act quasi-judicially. As indicated by the Law Lords in the case of Wiseman v. Borneman, 1971 AC 297, the statutory authorities are expected to act fairly and fairplay requires those who are likely to be affected to be given an opportunity to participate in the enquiry undertaken for reaching objective conclusions. Guest. L.J stated:

“It is reasonably clear on the authorities that where a statutory tribunal has been set up to decide final questions affecting parties' rights and duties, if the statute is silent upon the question, the Courts will imply into the statutory provision a rule that the principles of natural justice should be applied. This implication will be made upon the basis that Parliament is not to be presumed to take away parties' rights without giving them an opportunity of being heard in their interest.”

14. Lord Reid added:

“………… Natural justice requires that the procedure before any tribunal which is acting judicially shall be fair in all the circumstances, and I would be sorry to see this fundamental general principle degenerate into a series of hard and fast rules. For a long time the Courts have, without section from Parliament, supplemented procedure laid down in legislation where they have found that to be necessary for this purpose………………”

15. Lord Justice Sachs in the case of (In re Pergamon Press Ltd.), (1971) 1 Ch D 388 rightly indicated:—

“In the application of the concept of fair play, there must be real flexibility, so that very different situations may be met without producing procedures unsuitable to the object in hand……………”

16. In the case of Digambar v. Addl. Dist. Magistrate. Dhenkanal AIR 1970 Orissa 110, this Court dealing with the provisions of the Arms Act and a case of cancellation of a licence without giving a hearing to the licensee indicated:—

“As the right of the petitioner to hold the licence is clearly affected by the order of cancellation, the petitioner is entitled to a hearing by the original revoking authority and a reasonable opportunity of defending this right. Section 17, doubtless, makes no provision for hearing the party. It is exactly here the principle of natural justice would be invoked to supplement the law.”

17. In the case of Dr. Harekrushna Mahatab v. The Chief Minister of Orissa, AIR 1971 Orissa 175, at page 187, the learned Justice has indicated:

“As has already been stated in 1964 AC 40, if any administrative order adversely affects any right or interest then the principles of natural justice must be observed in the inquiry unless the statute either expressly or by necessary implication prohibits it………

18. In the case of A.K Kraipak v. Union of India, (1969) 2 SCC 262 : AIR 1970 SC 150, their Lordships have stated:

“……… For determining whether a power is an administrative power or a quasi-judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised……………”

19. And again, their Lordships stated:—

“The concept of rule of law would lose its validity if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered, inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision. In recent years the concept of quasi-judicial power has been undergoing a radical change. What was considered as an administrative power some years back is now being considered as a quasi-judicial power.”

20. In view of what has been stated in these decisions, we must hold that the Assistant Registrar of Co-operative Societies in making the order in question was expected to act quasi judicially and in so acting he was obliged to give a hearing to the affected society and in view of the position that no such hearing was given, the impugned order of amalgamation which affects the society and results in civil consequences adverse to the society and its members is bad.

21. The learned Additional Government Advocate indicated that the action can be justified as a measure of public good and therefore, be protected as an instance of giving effect to public policy. This stand of the learned counsel does not appeal to us at all. Lord Denning M.R in the case of Enderby Town Football Club Ltd. v. Football Association Ltd., (1970) 3 WLR p. 1021, has stated

“……………. I know that over 300 years ago Hobart, C.J, said the ‘Public policy is an unruly horse’. It has often been repeated since. So unruly is the horse it is said that no Judge should ever try to amount it lest it run away with him. I disagree. With a good man in the saddle, the unruly horse can be kept in control. It can jump over obstacles, it can leap the fences put up by fictions and come clown on the side of justice, as indeed was done in Nagle v. Feilden, (1966) 2 Q.B 633. It can hold a rule to be invalid even though it is contained in a contract.”

22. In this case justification for the amalgamation is contended to be on a finding of necessity, While the Assistant Registrar was engaged in the fact finding inquiry, it was equally necessary that he should have heard the society so that a proper conclusion in the matter could be reached. The plea of Public goods or public policy cannot be held out as justification for the procedure adopted by the Assistant Registrar in making of the impugned order.

23. Contention No. 2—The next contention was that there has been no compliance with the requirements of the Section 14(3) of the Act. That section provides—

“The Registrar, after an inspection is made under Section 64 or an enquiry is held under Section 65 may with the consent of the concerned financing bank, if any and subject to the prescribed conditions, order—

(i) that two or more societies with the same or having overlapping or adjoining areas of operation and having similar objects shall amalgamate themselves and form a new society; or

(ii) that a society shall be divided into two or more societies.”

24. Mr. Rath contends that the power is available to be exercised when in normal course an inspection of the books of a society is undertaken under Section 64 of the Act and the result of inspection shows that action under Section 14(3) is necessary. An inspection under Section 64 cannot be directed to justify a preconceived conclusion that amalgamation must be ordered. Mr. Rath argues that the reading of the order of amalgamation — Annexure A — clearly gives the impression that the policy was first decided and to implement it an inspection was ordered. This was like. Mr. Rath contends, putting the cart before the horse. The counter affidavit of the Assistant Registrar is somewhat different from what was stated in the order of amalgamation in regard to making of the inspection. As we propose to quash the order of amalgamation as it has been made in breach of principles of natural justice, it is not necessary to examine this contention of Mr. Rath at any length, but there is force in his contention that the inspection provided for under Section 64, is one of the conditions precedent to taking of action under Section 14(3) of the Act. The scheme of the statute, is not that a conclusion for amalgamation must be first reached and thereafter to justify it an inspection would be ordered.

25. Contention No. 3.—The third contention is based upon the provision in sub-section (3) of Section 14 that the order is to be made ‘subject to the prescribed conditions’. The learned Additional Government Advocate contends that the conditions are laid down in sub-section (4) itself where provision is made to the following effect:—

“The resolution of a society under sub-section (1) or sub-section (2) or the order made under sub-section (3) shall contain all particulars of the transfer, division or amalgamation as the case may be.”

26. We are not prepared to accept this contention because, the word ‘prescribed’ has been defined in Section 2(h) of the Act to mean ‘prescribed by rules made under this Act’. Besides, what is provided in sub-section (4) cannot be taken to be the conditions contemplated to be prescribed in making an order of amalgamation. Admittedly rules have not been made prescribing the conditions.

27. We need not deal with the matter further. It is for Government to consider whether an order of amalgamation can be made without the conditions being prescribed as laid down in sub-section (3) of Section 14 of the Act.

28. We would accordingly quash the order of amalgamation made on 26-12-1969 by the Assistant Registrar of Co-operative Societies. Balasore Circle, directing amalgamation of the petitioner society with the opposite party No. 2 by issuing a writ of certiorari. The petitioners shall have their costs. Hearing fee is assessed at rupees one hundred.

29. B.K Ray, J.:— I agree.

30. Petition allowed.

The Govindpur Agricu... v. Assistant Registrar,...