IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.
CWP No.1907 of 2007. .
Judgment reserved on : 13.06 . .2 P 017. Date of decision: 30 th June, 2017. Kamal Kumar and others f .… .PHetitioners. Versus
State of Himachal Pradesh and othe t rs o…..Respondents. Coram The Hon'ble Mr. Justice Tar u lok Sringh Chauhan, Judge. Whether approved o for reporting? 1 Yes For the Petitione C rs : Mr.Ashwani K.Sharma, Senior Advocate with Mr.Jeevan Kumar, Advocate. For the R h espondents: Ms.Meenakshi Sharma, Additional Advocate General, for respondents No.1 g
to 3. i
Mr.Raman Sethi, Advocate, for H
respondent No.4. Tarlok Singh Chauhan, Judge. This writ petition has been filed seeking judicial review of the order passed by the Registrar, Co-operative Societies, H.P., on 02.06.2007 in surcharge proceedings initiated against the petitioners under
Section 69 of the H.P. Co-operative Societies Act, 1968 (for short the
"Act").
2. The case has a chequered history. The "Daulatpur Agriculture Co-operative Society" was incorporated during pre-independence and registered on 09.08.1946. The father of petitioner No.1 was one of the founder members of the society and worked as its Secretary with effect
Whether the reporters of the local papers may be allowed to see the Judgment?Yes
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from 1946 uptill his death in 1981. Thereafter, the petitioner was appointed as a Secretary on 09.01.1981. .
3. During the course of the audit of the society f . or P the years 1994-95, 1995-96 and 1996-97, there were allegations that petitioner No.1 by abusing his position as Secretary had comm f itte d Hirregularities as he had purchased the land of the society in an illegal manner and had also caused losses by misutilization of the fun ds o of the society and surcharge
proceedings were initiated against r the t petitioners. It would be noticed that petitioner No.1 as a Secret u ary of respondent No.4 had purchased 18 marlas of land belonging to the society which according to the society was done in an illega C l and oclandestine manner and had thereby violated the provisions of Rule 57 of the Himachal Pradesh Co-operative Societies Rules, 19 h 71 (for short the "Rules") which read thus:-
ig "57. Prohibition against being interested in contracts etc.- H (1) Without prejudice to the provisions of the bye-laws, no- officer of a co-operative Society shall have an interest directly, or indirectly, otherwise than as such officer- (a) in any contract made with the society; or
(b) in any property sold or purchased or leased by, or to the society; or
(c) in any other transaction of the society except as an investment made or as a loan taken from the society or the provision of residential accommodation by the society to any paid employee of the society.
2. No officer of a society shall purchase, directly or indirectly, any property of a member of the society sold for the recovery of his dues to the society.
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3. The prohibition contained in the rule shall continue to apply for a period of two years after a person ceases to be an officer of the society. .
The rule debars the officers of the society to have inte P rest in any contract made with the society or any property sold, .purchased or leased by the society. Moreover, no officer H of the society can purchase the property of a loanee member , which is put to sale in default of non-payment." f
4. The Assistant Registrar, Co-o pe o rative Societies, Dharamshala (respondent No.3) initiated inquiry un t der Section 69 (1) of the Act vide order dated 27.01.1997 wherein thre District Audit Officer (Co-operative Societies), Dharamsha o la waus appointed as an Inquiry Officer. In the inquiry, petitione C r No.1 (Secretary), petitioner No.2 (Ex-President) alongwith Sa lig Ram (Ex-Committee Member) (since deceased) were found gu h ilty of the charge and were, therefore, held liable for the recovery o i f a g n amount of `1,23,073/-. The petitioner No.1 was also held liable for an addi tional sum of `24,426/-.
H 5. After conclusion of the inquiry under Section 69(1) of the Act, respondent No.3 carried out the surcharge proceedings under Section 69(2) of the Act against the petitioners and deceased Salig Ram and finally passed the order dated 17.05.1999 whereby he not only upheld the
findings of the Inquiry Officer, but ordered the recovery of the amount from
the petitioners as arrears of land revenue.
6. The petitioner assailed the order by filing an appeal before the Additional Secretary (Co-operative), who vide order dated 29.07.2000 remanded the case to respondent No.3 for fresh inquiry with a further direction to afford an opportunity of hearing to all the parties whose interests are likely to be affected.
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7. The order passed by the Additional Secretary was assailed before this Court by respondent No.4 (Society) by filing CWP No.20 . 1 of 2001 and vide judgment dated 16.04.2007 the learned single . Jud P ge of this Court held the order passed by the Additional Secretary (Co-operative) to be a non-speaking order and consequently the sa f me wa H s quashed and set aside and Registrar, Co-operative Societies (respondent No.2) was directed to hear the appeal afresh after ta o king into consideration all the
contentions raised by the parties and t a fter affording an opportunity of
hearing to them. Respondent No.2 r was also directed to pass a speaking
order after taking into co o nside u ration the entire material placed on record. 8. Resp C ondent No.2 vide order dated 02.06.2007 not only dismissed the appeal filed by the petitioners, but even modified the order dated 1 h 7.05.1999 passed by the Assistant Registrar, Co-operative S i oc g ieties, Dharamshala (respondent No.3) and directed petitioner No.1 to pay compensation in the sum of `5,00,000/- in addition to the amount
H already paid towards costs of land and building to the society within a period of four months, failing it was ordered that the society would be entitled to claim interest @ 12% on the amount of compensation with effect from 02.10.2007 till the realization of the entire amount.
9. In addition, it was also held that petitioner No.1 would also be liable to pay interest amount of `24,426/- as worked out upto 05.10.1996 till realization of the same. Whereas, petitioners No.2 and 3 were held liable to pay a sum of `25,000/- each as compensation to the society to be paid within a period of four months, failing which the society was held entitled to claim interest @ 12% from 02.10.2007.
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10. Respondent No.2 further observed that in case the petitioners failed to pay the aforesaid amount of compensation, the same would . be recoverable from their movable and immovable properties as P arrears of land revenue as prescribed under Section 87 of the Act and. it was also made clear that the findings would not in any way prec H lude the society to initiate any other proceedings to restore the posse f ss ion as existing prior to January, 1994 in respect of the land belon gin o g to the society.
11. The order passed by re t spondent No.2 was unsuccessfully assailed by the petitioners be u fore rthe Secretary (Co-operation), who vide his order dated 17.08 o .2007 held the petition to be not maintainable constraining the p C etitioners to file the instant petition. 12. h Th e orders passed by various authorities from time to time have been assailed in this writ petition on various grounds as taken in the m i e g mo of petition.
H 13. The official-respondents No.1 to 3 have filed their reply wherein they have supported their action in various inquiries conducted by them. As regards the society, it has filed a separate reply wherein various irregularities as alleged to have been committed by the petitioners have
been highlighted.
I have heard the learned counsel for the parties and gone
through the records of the case.
14. The word "surcharge" has not been defined in the Act. However, one of the meanings given to the word in the Black's Law Dictionary is "the amount that a Court may charge a fiduciary that has breached its duty".
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15. Section 69 of the H.P. Co-operative Societies Act, 1968 (for short the "Act"), reads thus:-
P. "69. Surcharge:- .
1. If in the course of an audit, inquiry, inspection or the winding up of a co-operative society, it is found that f an y p H erson who is or was entrusted with the organization or management of such society, or who is or has at any been an offic o er or an employee of the society, has made any payment contrary to the provisions of this Act, the rules or the bye-law or h r as t cau sed any deficiency in the assets of the society by breach of trust or willful negligence or has misappropriated u or fraudulently retained any money or other property bel o onging to the society, the Registrar may, of his own motion or on the application of the committee, liquidator or any credi C tor, inquire himself or direct any person authorized by him, by an order in writing in this behalf, to inquire into the conduct of such
gh
person; [Provided that no such inquiry shall be held after the expiry of six
i
years from the date on which any act of commission or omission referred to in this sub-section comes to knowledge.]
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(2) Where an inquiry is made under sub-section (1), the Registrar may, after giving the person concerned an opportunity of being heard, make an order requiring him to repay or restore the money or property or any part thereof with interest at such rate, or to pay contribution and cost or compensation to such extent, as the
Registrar may consider just and equitable.
(3)………"
16. The basis for a claim under surcharge proceedings is the misappropriation, fraudulent retention of any money or other property or commission of breach of trust in relation to the society or causing deficiency over the assets of the society by committing breach of trust or willful negligence of the person concerned. These are only some of the examples and not caste-iron imperatives.
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17. The surcharge proceedings are of quasi-criminal nature. However, such claim would relate to the dispute between the society . and its servant, employees etc. It is in the nature of a civil cla . im P where a Co-operative Society has to prove the same against whom such a claim is made and is liable for the same. H
18. Adverting to the order passed b o y resfpondent No.2 which has been impugned herein, it would be n t otic ed that the said authority after setting out the respective pleadings of the parties framed three issues for determination which read thus u :- r
"(a) Regarding p o urchase of land of the society measuring 0-04-81 Hect in Kh C asra No.23 situated at Daulatpur, Tehsil & Distt. Kangra by the ap pellant No.1, who was working as Secretary of the society at the h relevant time. g (b) Decision of the then managing Committee resolving to donate 5 i
marlas of land of the society to Sh.Kamal Kumar by way of Gift deed to install statue of late Sh.Ishwar Dass a freedom fighter/Ex- H
Secretary of the Society and to establish a library in his memory. (c) Regarding embezzlement/misappropriation of amount of Rs.67000/- advancement by the society to the appellant No.1 for purchase of land. The above amount remained with the appellant No.1 w.e.f. 31.3.1994 to 5.10.1996 and accordingly the appellant
was held liable for payment of interest amounting to Rs.24,426/- @
12 ½ % interest per annum."
Issue No.(a).
19. While answering issue No.(a), it was found that though a meeting of the General House of the society was held on 01.02.1995, however, there were conflicting statements of the committee members regarding actual numbers of the members, who were present in the meeting. While answering issue (a), respondent No.2 came to the conclusion that as per resolution passed in the meeting of the General
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House held on 01.02.1995 of the society, it was mentioned that the society has 0-18 marlas of land over which the society had constructed th . ree rooms and a store comprising of a verandah over an area of 5 . m P arlas. The store was constructed approximately in the year 1971. As per second para of the resolution, it had been mentioned that old store w H as in a dilapidated
condition and whenever it rains, all water enters i f nsi de the building and as
a result thereof PDS items and open sale s o goods are destroyed. Hence, the members had resolved to sell r the t land/building for a minimum price of `1,00,000/-. Any purchaser u who offers more than this price upto 01.03.1995, the society o would sell the land and building to that person. The Managing Committee of the society extended the date upto 10.04.1995 vid e C resolution dated 15.03.1995. It is here where the dispute arises.
2 i 0. g
hRespondent No.2 while examining the minutes of the meeting
found that there were over-writings made regarding the area and as per
H the original resolution recorded in the minutes book of the society, there was an over-writing "18 marlas of land" and, therefore a photocopy of the resolution was procured from respondent No.3 wherein the area so recorded in the resolution was 00-08 and not 0-18 marlas. It was on the
basis of this resolution that respondent No.3 from whom the approval for
sale of land and building was obtained had accorded his approval vide
letter dated 29.03.1995. It was further observed that the members of the
society were divided over the area of land which was to be sold by the
society. Petitioner No.2, who presided over the General House meeting in
his statement has stated that the resolution was passed for sale of 18
marlas of land by 30-35 members of the society and he had no knowledge
about the signatures of other members which were obtained lateron by the
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former Secretary because as per resolution the presence of 88 members had been recorded. S/Sh. Hamir Chand Dogra and Guru Lal, both . ex- committee members, had stated that their signatures were ob P tained by petitioner No.1 subsequent to the resolution passed and .they had no knowledge about the resolution for the sale of th f e b uil H ding of the society. Shri Hem Raj, Ex Vice President of the soc o iety, stated that he was out of station on 01.02.1995 and his signatures were subsequently obtained on the resolution. t
21. On the basis o u f cornflicting evidence coming on record, respondent No.2 came o to a categorical conclusion that petitioner No.1 had obtained the s C ignatures of the members after conclusion of the proceedings o f the meeting in the minutes book of the society and thereafte h r illegally managed to transfer 18 marlas of land and building t i he g reupon in his own name for a sum of `1,00,500/-. When petitioner No.1 was confronted with the resolution he himself admitted that there was a
H clerical mistake that had occurred on 10.04.1995. It was on the basis of overwhelming evidence that respondent No.2 concluded that petitioner No.1 had procured false and forged documents to grab the property of the society in connivance with petitioners No.2 and 3 because the General
House of society had resolved to sell 8 marlas of land alongwith structure
constructed thereupon, but the same was interpolated and made 18
marlas of land. That apart, respondent No.2 held the entire action of
petitioner No.1 in selling the land in his own name to be in violation of Rule
57 of the Rules (supra) and thereafter directed the petitioner to
compensate the society for having illegally grabbing its land.
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Issue No.(b).
22. Petitioner No.1 had acquired 5 marlas of land of the P societ.y by way of gift deed as per the resolution alleged to have been pa . ssed by the Managing Committee on 27.12.1993 out of land m H easuring 0-04-81 hectare. However, respondent No.2 found that as a matter of fact there was no resolution available on the record that hfad been passed by the
Managing Committee on the aforesaid da te o , but there was one resolution
dated 27.01.1994 in which memb r ers t of the Managing Committee had resolved that the society has u its own land measuring 1 Kanal and 5 marlas over which four rooms o and a store had been constructed and whatever vacant land is lef C t with the society, no construction will be done over that land. The Managing Committee had decided to establish a library and to install a s h tatue in memory of late Shri Ishwar Dass, Freedom Fighter, who h i ad g served the society for 42 years as a Secretary. It was also found that after passing of this resolution four lines were subsequently added after
H closing of the proceedings on 27.01.1994 which appeared to be in a congested manner, whereas, the resolution had been written "in a normal way". As regards these lines, which according to respondent No.2, were added subsequently, it was recorded that on the gifted land, petitioner
No.1, the then Secretary, will have a right to construct a library for which
gift deed was to be prepared in his name. Petitioner No.2 and one Salig
Ram, member, were authorized to sign transfer documents in favour of
petitioner No.1.
23. Thus, in this manner, a conspiracy was hatched by these three persons with a view to depriving the society of the property in an illegal manner. It was further observed that since the property belonged to all the members of the society, the same could not have been disposed of
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without their approval. Respondent No.2 further concluded that though the resolution dated 27.01.1994 had been shown to be passed in presenc . e of all the members of the Committee, yet three members of the . C P ommi ttee namely S/Shri Hem Raj, Hamir Chand and Guru Lal had categorically denied having passed the said resolution and it was o H n the basis of their
statements that respondent No.2 inferred that fou f r lin es empowering Shri
B.D.Shukla, petitioner No.2 and one S al o ig Ram to sign the transfer documents had been subsequently r ad t ded. Not only this, respondent No.2 held that the Managing Comm u ittee was not entitled to donate any property of the members of the s o ociety without prior approval of the General Body. Therefore, the action of petitioners No.1 and 2 alongwith Salig Ram, as aforesaid, was ille C gal and against the provisions of Rule 57 of the Act. Issue No h .(c).
2 i 4. g It was the case of petitioner No.1 that he had been advanced H a sum of `67,000/- for purchase of 9 marlas of land, however, respondent No.2 on the basis of the record came to the conclusion that there was no necessity to advance the said amount to petitioner No.1 as the amount could have been directly paid to the owner of the land once a deal had been finalized. Notably, it has come on record that this amount of
`67,000/- had been illegally retained by petitioner No.1 fore more than two
years and six months and utilized by him for his personal use and,
therefore, he was liable to pay interest on the advanced amount. Not only
this, it has specifically come on record that during the pendency of the
case, petitioner No.1 had admitted his negligence and the factum of
temporary misappropriation of the aforesaid amount. Petitioner No.1 also
submitted that he was ready to deposit the interest amount as worked out
by respondent No.3 on the said amount.
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25. It was on the basis of the findings recorded on three issues (supra) that respondent No.2 came to a categorical conclusion that . the petitioners were not only negligent and disloyal to the society, b P ut by their actions, they had inflicted huge losses on the society an H d its s.hareholders, who had been cheated. Here, it shall be ap f t to reproduce the final conclusion drawn by respondent No.2 which reads thus:-
"The detailed narrations in the fore o going paras have clearly brought out the misdeeds of the r app t ella nts while occupying the responsible positions in managing the affairs of respondent society. The appellants have n u ot only been negligent and disloyal to the society but by their o actions they have inflicted huge losses to the society and its share holders who have been cheated. Though ultimate autho C rity of society vests in shareholders but the appellants have ma de mockery of the entire process of system of check and h balances in the society. The appellant No.1 who had to safeguard the interests of the society indulged in selfservice at the cost of
ig
society. The entire chain of events proves his disloyalty to the employer. Though he has been removed from service but he has H
by his actions inflicted irreparable losses/damages on the society. His actions have been such that any amount of compensation awarded to the society will be inadequate. And keeping in view the obvious legal and practical difficulties such as determining the true market value of land at different points of times, assessing the cost of building raised on the land over the period of time, undoing the
sale transactions etc., it seems proper that he is required to
compensate the respondent society properly and adequately. This
is a clear case of forgery and cheating whereby Ex-Secretary has
deprived the society from its land & building. Therefore, appropriate
compensation needs to be imposed upon the 1st appellant for this
wrongful act. I, therefore, modify the order of Assistant Registrar
Co-operative Societies Dharamshala passed on 17.5.1999 and
direct the 1st appellant to pay a compensation of Rs.5.00 lac in
addition to the amount already paid towards the cost of
land/building to the society within a period of four months from
today failing which the society shall be entitled to claim interest @
12% on the amount of compensation w.e.f. 2nd October, 2007 till
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the realization of entire amount. In addition, he (appellant No.1) shall also be liable to pay interest amount of Rs.24,426/- as worked out upto 5.10.1996 (as awarded vide impugned order) plus inte.rest on this amount @ 12 ½ % till the realization of the entire P amount in respect of matter referred at point No.(c) above. T . he other two members of the managing committee have assisted the 1st appellant in disposing of property of the S H ociety in a wrongful manner, hence they are also held liable to play a sum of Rs.25,000/- each as compensation o to thfe society within a period of four months failing which the society shall claim interest @ 12% w.e.f. 2nd October, 2007. Si nce Sh. Salig Ram Ex-committee
member has expired, th r e atbove amount of Rs.25,000/- shall be paid to the Societ u y by Sh. Dharam Chand s/o the deceased. The above com o pensation awarded shall be in lieu of the amount awarded against the appellants vide the impugned order dated 17.5. C 1999. In case the appellants fail to pay the above amount of co mpensation, the same shall be recovered from h moveable/immovable properties of the appellants as an arrear of land Revenue in the manner prescribed under Section 87 of the g
H.P. Cooperative Societies Act, 1968. It is further made clear that i
this order and the findings therein shall not in anyway preclude the right of respondent society to initiate any other legal proceedings to
H
restore the position as obtained prior to January, 1994 in respect of land belonging to the society." 26. Even though, the learned counsel for the petitioners would vehemently argue that aforesaid findings are perverse, however, the said
plea cannot be accepted as I have no hesitation to conclude that the
findings rendered by respondent No.2 are detailed one and quite akin to
the findings recorded by the Civil Court wherein not only the pleadings, but
even evidence led by the par ties alongwith legal proposition has been
correctly appreciated.
27. What would be the scope of interference in a writ of certiorari is a question that stands decided by a learned Division Bench of this Court in CWP No.749 of 2017, titled Partap Singh versus State of Himachal
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Pradesh and others, decided on 22.05.2017, wherein it was held . as under:-
"5. The scope of interference is in a writ jurisdiction under Article 226 of the Constitution of India, is now well settled. .P
6. The principles on which the writ of c f erti ora H ri is issued are well-settled. The Constitution Bench in The Custodian of Evacuee Property Bangalore Vs. Khan Saheb Abdul Shukoor etc. (1961) 3 SCR 855 stated :- o
" The limit of the ju r risd t ictio n of the High Court in issuing writs of certiorari was considered by this Court in a 7-Judge Bench decision of this Court in Hari Vishnu Kamath Vs. Ahmad Ishaque 19 u 55-I S 1104 : ((s) AIR 1955 SC 233) and the following four propositions were laid down :- o "(1) Certiorari will be issued for correcting errors of jurisdiction;
C
(2) Certiorari will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an h
opportunity to the parties to be heard, or violates the principles of natural justice; g
(3) The court issuing a writ of certiorari acts in exercise i
of a supervisory and not appellate jurisdiction. One consequence of this is that the court will not review findings of fact reached by the inferior court or tribunal, H
even if they be erroneous. (4) An error in the decision or determination itself may also be amenable to a writ of certiorari if it is a manifest error apparent on the face of the proceedings, e.g., when it is based on clear ignorance or disregard of the provisions of law. In other words, it is a patent error which can be corrected by certiorari but not a mere
wrong decision."'
7. That an error apparent on face of record can be corrected by certiorari. The broad working rule for determining what is a patent error or an error apparent on the face of the record was well set out in Satyanarayan Laxminarayan Hegde and Ors. Vs. Mallikarjun Bhavanappa Tirumale, (1960) 1 SCR 890. It was held that the alleged error should be self-evident. An error which needs to be established by lengthy and complicated arguments or an error in a long-drawn process of reasoning on points where there may conceivably be two opinions cannot be called a patent error. In a writ of certiorari the High Court may quash the proceedings of the tribunal, authority or court but may not
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substitute its own findings or directions in lieu of one given in the proceedings forming the subject-matter of certiorari."
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28. Lord Hailsham in Chief Constable of North W . ale P s Police versus Evans (1982) 3 All ER 141 held as under:-
"The purpose of judicial review is to ens ur H e that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a m f atter which it is authorized
or enjoined by law to decide for itself a conclusion which is correct
in the eyes of law." t o
29. While dealing w u ith the r ambit of judicial review, the Hon'ble Supreme Court in Apparel Export Promotion Council versus
A.K.Chopra AIR 1999 S o C 625 observed as under:-
"1 8.J C udicial Review, not being an appeal from a decision, but a review of the manner in which the decision was arrived at, the h Court while exercising the power of Judicial Review must remain g
conscious of the fact that if the decision has been arrived at by the i
Administrative Authority after following the principles established by law and the rules of natural justice and the individual has received a H
fair treatment to meet the case against him, the Court cannot substitute its judgment for that of the Administrative Authority on a matter which fell squarely within the sphere of jurisdiction of that authority.
19. It is useful to note the following observations of this Court in Union Of India v. Sardar Bahadur ., (1972) 4 SCC 618 : (1972 Lab IC 627 at Pp. 630-31) :
"Where there are some relevant materials which the authority has accepted and which materials may reasonably support the conclusion that the officer is guilty, it is not the function of the High Court exercising its jurisdiction under Article 226 to review the materials and to arrive at an independent finding on the materials.
If the enquiry has been properly held the question of adequacy or reliability of the evidence cannot be canvassed before the High Court."
20. After a detailed review of the law on the subject, this Court while dealing with the jurisdiction of the High Court or Tribunal to interfere with the disciplinary matters and punishment in Union of
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India v. Parma Nanda, (1989) 2 SCC 177 : (AIR 1989 SC 1185) opined : (at P. 1192 of AIR): .
"We must unequivocally state that the jurisdiction of th P e Tribunal to interfere with the disciplinary matters or punishment cannot be equated with an appellate jurisdiction. The Tribunal cannot interfere with the findings of the Enquiry Officer o.r Competent
Authority where they are not arbitrary or utterly perverse. It is
appropriate to remember that the power to impose penalty on a
delinquent officer is conferred on the compHetent authority either
by an Act of Legislature or Rules mad e under the proviso to
Article 309 of the Constitution. If t f here has been an enquiry
consistent with the rules a nd in accordance with principles of natural justice what pun t ishment would meet the ends of justice is a matter of exclusively withion the jurisdiction of the competent authority. If the penalty can lawfully be imposed and is imposed on the proved m r isconduct, the Tribunal has no power to substitute its own discretion for that of the authority.
21. In B.C. Chaturvedi v. Union of India, (1995) 6 SCC 749: (1995 AIR SCW 43 o 74, thuis Court opined (at P.4379 of AIR SCW): C "The disciplinary authority is the sole judge of facts. Where appeal is presented, the appellate authority has coextensive power to reappreciate them evidence or the nature of h
punishment. In a Disciplinary Enquiry, the strict proof of legal evidence and findings on that evidence are not relevant. Adequacy of evidence or reliability of evidence cannot be g
permitted to be canvassed before the Court/Tribunal." i
Further it was held : (at P.4380 of AIR SCW): H
"A review of the above legal position would establish that the disciplinary authority, and on appeal the appellate authority, being fact-finding authorities have exclusive power to consider the evidence with a view to maintain discipline. They are invested with the discretion to impose appropriate punishment keeping in view the magnitude or gravity of the misconduct. The High Court/Tribunal, while exercising the power of judicial review, cannot normally substitute its own conclusion on penalty
and impose some other penalty. If the punishment imposed by
the disciplinary authority or the appellate authority shocks the
conscience of the High Court/Tribunal, it would appropriately
mould the relief, either directing the disciplinary/appellate
authority to reconsider the penalty imposed, or to shorten the
litigation, it may itself, in exceptional and rare cases, impose
appropriate punishment with cogent reasons in support thereof."
( Emphasis supplied)"
30. In State of U.P. and another versus Johri Mal (2004) 4 SCC 714, a Bench of three Hon'ble Judges of the Hon'ble Supreme Court held that power of judicial review of the Court was not intended to assume a
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supervisory role or done the robes of omnipresent and the following principles of judicial review were laid down:- .
"JUDICIAL REVIEW: .P
22. The power of judicial review is now well-defined in a series of decisions of this Court. It is trite that t heH court will have no jurisdiction to entertain a writ application f in a matter governed by contract qua contract (assuming such professional engagement to be one), as therein public la t w e lemoent would not be involved. (See Life Insurance Corporati r on Vs. Escorts Ltd. and Ors. [AIR 1986 SC 1370], F.C.I. and O u rs. Vs. Jagannath Dutta and Ors., [AIR 1993 SC 1494], State of Gujarat and Ors. Vs. Meghji Pethraj Shah Charitable Trust and Ors., [(1994) 3 SCC 552], Assistant Excise Commissioner and Ors. Vs. Issac Peter and Ors., (1994) 4 SCC
104], C Natioonal Highway Authority of India Vs. M/s. Ganga En terprises & Anr. 2003 (7) SCALE 171). h 23.In any event, the modern trend also points to judicial restraint in g
administration action as has been held in Tata Cellular Vs. Union of i
India [(1994) 6 SCC 651]. (See also Monarch Infrastructure (P) Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and Others
H
[(2000) 5 SCC 287] and W.B. State Electricity Board Vs. Patel Engineering Co. Ltd. and Others [(2001) 2 SCC 451)] and L.I.C. and Anr. vs. Consumer Education and Research Centre and Ors., [AIR 1995 SC 1811].
24. The legal right of an individual may be founded upon a contract or a statute or an instrument having the force of law. For a public law remedy enforceable under Article 226 of the Constitution, the actions of the authority need to fall in the realm of public law -be it a legislative act or the State, an executive act of the State or an instrumentality or a person or authority imbued with public law element. The question is required to be determined in each case having regard to the nature of and extent of authority vested in the State. However, it may not be possible to generalize the nature of the action which would come either under public law remedy or private law field nor is it desirable to give exhaustive list of such actions.
17
25.In Council of Civil Services Unions Vs. Minister for the Civil Service [(1985) AC 374] while extending the scope of judicial review the House of Lords decided that judicial review should. not be available if the particular decision under challeng P e was not justiciable. However, in granting relief the Court s . hall take into consideration the factors like national security issue. In Constitution Reform in the UK by Dawn Oliver, it is stated a H t page 210:
"In the CCSU case the House of Lord f s decided that judicial review should not available if the par o ticular decision under challenge was not justiciable. In effec t t they respected the political Constitution and deferred to government in some sensitive areas. In this case the Government wa r s alleg ing that for them to have consulted the unions before before the decision was taken would have provoked industrial ac u tion at GCHQ, which would in turn have been damaging to national security. In the view of the House of Lords this made an otherwise reviewable decision not suitable for judicia o l review - not justiciable. Other decisions taken under the royal prerogative, which the court indicated would be non- justiciable, included treaty making and foreign affairs. Despite the C outcome of the CCSU that the prerogative is in principle reviewable and that were it not for the national security issue the government should have consulted the unions before imposing these changes was a major step forward in the judicialization of h
government action, including the actual conduct of government, and a step away from the political Constitution."
ig
26.However, we may notice that judicial review was held to be available when justiciability of foreign relations came to be H
considered in R. (Abbasi) Vs. Secretary of State for the Foreign and Commonwealth Office and Secretary of State for the Home Department [2002] EWCA Civ., 6 November 2002 stating: "Although the statutory context in which Adan was decided was highly material, the passage from Lord Cross' speech in Cattermole supports the view that, albeit that caution must be
exercised by this Court when faced with an allegation that a
foreign state is in breach of its international obligations, this Court
does not need the statutory context in order to be free to express
a view in relation to what it conceives to be a clear breach of its
international obligations, this Court does not need the statutory
context in order to be free to express a view in relation to what it
conceives to be a clear breach of international law, particularly in
the context of human rights."
27.In Council of Civil Services Unions Vs. Minister of Civil Service
the power of judicial review was restricted ordinarily to illegality,
irrationality and impropriety stating:
"If the power has been exercised on a non-consideration or non- application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts
18
which do not exist and which are patently erroneous, such exercise of power will stand vitiated."
28. The Scope and extent of power of the judicial review of the . High Court contained in Article 226 of the Constitution o . f In P dia would vary from case to case, the nature of the order, the relevant statute as also the other relevant factors including H the nature of power exercised by the public authorities, namely, whether the power is statutory, quasi judicial or administrative. The power of judicial
review is not intended to assume a sufpervisory role or done the
robes of omnipresent. The power o is not intended either to review
governance under the rule of l aw nor do the courts step into the
areas exclusively reserv r ed bty the suprema lex to the other organs of the State. Decis u ions and actions which do not have adjudicative disposition m o ay not strictly fall for consideration before a judicial review court. The limited scope of judicial review, succinctly put is :
C (i) Courts, while exercising the power of judicial review, do not sit in appeal over the decisions of administrative bodies; h
(ii) A petition for a judicial review would lie only on certain well-defined grounds.
ig
(iii) An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself is perverse or H
illegal. (iv) A mere wrong decision without anything more is not enough to attract the power of judicial review; the supervisory jurisdiction conferred on a Court is limited to seeing that Tribunal functions within the limits of its authority and that its decisions do not occasion miscarriage of justice.
(v) The Courts cannot be called upon to undertake the Government duties and functions. The Court shall not ordinarily interfere with a policy decision of the State. Social and economic belief of a Judge should not be invoked as a substitute for the judgment of the legislative bodies. (See Ira Munn Vs. State of Ellinois, 1876 (94) US (Supreme Reports) 113)
29. In Wade's Administrative Law, 8th edition at pages 33-34, it is stated:
"Review, Legality and discretion The system of judicial review is radically different from the system of appeals. When hearing an appeal the court is concerned with the merits of a decision: is it correct? When subjecting some administrative act or order to judicial review, the court is concerned with its legality: is it within the limits of the powers granted? On an appeal the question is 'right or wrong?' On review the question is 'lawful or unlawful?'
19
Rights of appeal are always statutory. Judicial review, on the other hand, is the exercise of the court's inherent power to determine whether action is lawful or not and to award suitable relief. For this no statutory authority is necessary: the court is simply perfor . ming its ordinary functions in order to enforce the law. The basis of judicial review, therefore, is common law. This is none the less true because nearly all cases in administrative law P arise under some Act of Parliament. Where the Court quashes . an order made by a minister under some Act, it typically uses its common law power to declare that the Act did not entitle the minister to do what he did and that he was in some w f ay exc H eeding or abusing his powers. Judicial review thus is a fu o ndamental mechanism for keeping public authorities within due bounds and for upholding the rule of law. Instead of substitu t ting its own decision for that of some other body, as happens r when on appeal, the court on review is concerned only with the question whether the act or order under attack should be allowed to stand or not. If the Home Secretary revokes a t u elevision licence unlawfully, the court may simply declare that the revocation is null and void. Should the case be one in o volving breach of duty rather than excess of power, the question will be whether the public authority should be ordered to make good a default. Refusal to issue a television licence to someone entitled to have one would be remedied by an order of C the court requiring the issue of the licence. If administrative action is in excess of power (ultra vires), the court has only to quash it or declare it unlawful (these are in effect the same thing) and then no h
one need pay any attention to it. The minister or tribunal or other authority has in law done nothing, and must make a fresh decision."
ig
30.It is well-settled that while exercising the power of judicial review the Court is more concerned with the decision making process than H
the merit of the decision itself. In doing so, it is often argued by the defender of an impugned decision that the Court is not competent to exercise its power when there are serious disputed questions of facts; when the decision of the Tribunal or the decision of the fact finding body or the arbitrator is given finality by the statute which governs a given situation or which, by nature of the activity the
decision maker's opinion on facts is final. But while examining and
scrutinizing the decision making process it becomes inevitable to
also appreciate the facts of a given case as otherwise the decision
cannot be tested under the grounds of illegality, irrationality or
procedural impropriety. How far the court of judicial review can
reappreciate the findings of facts depends on the ground of judicial
review. For example, if a decision is challenged as irrational, it
would be well-nigh impossible to record a finding whether a
decision is rational or irrational without first evaluating the facts of
the case and coming to a plausible conclusion and then testing the
decision of the authority on the touch-stone of the tests laid down
by the Court with special reference to a given case. This position is
20
well settled in Indian administrative law. Therefore, to a limited extent of scrutinizing the decision making process, it is always open to the Court to review the evaluation of facts by the decision ma.ker.
31. In Chief Constable of the North Wales Police Vs. . EPvans [1982
(3) All ER 141], the law is stated in the follo H wing terms: (All ER p.144a)
"The purpose of judicial review is f to ensure that the individual receives fair treatment, an d not to ensure that the authority, after according fair treatment, re o aches on a matter which it is authorized or enjoined t by law to decide for itself a conclusion which is correct in t r he eyes of the court." 32. Prof. Bernard Schwartz in his celebrated book (Administrative Law, III Edn. Little Brown Company 1991) dealing with the present status of jud o icial re u view in American context, summarized as under: C "If the scope of review is too broad, agencies are turned into little more than media for the transmission of cases to the Courts. That would destroy the values of agencies, created to secure the benefit of special knowledge acquired through continuous h
administration in the complicated fields. At the same time, Court should not rubber-stamp agencies; the scope of judicial enquiry must not be so restricted that it prevents full enquiry into the action g
of legality. If that question cannot be properly explored by the i
Judge, the right to review becomes meaningless...in the final analysis, the scope of review depends on the individual judges estimate of the justice of the case."
H
33. Prof. Clive Lewis in his book (Judicial Remedies in Public Law 1992 Edn., at pp. 294-295) stated: "The Courts now recognise that the impact on the administration is relevant in the exercise of their remedial jurisdiction'...Earlier cases took a robust line that the law has to be observed and the
decision invalidated, what ever the administrative inconvenience
caused. The Courts now-a-days recognise that such an approach
is not always appropriate and may not be in the wider public
interest. The effect on the administrative process is relevant to the
Court's remedial discretion may prove decisive...They may also be
influenced to the extent to which the illegality arises from the
conduct of the administrative body itself, and their view of that
conduct."
34. Grahame Aldous and John Alder in "Applications for Judicial Review, Law and Practice" stated thus:
"There is a general presumption against ousting the jurisdiction of the courts, so that statutory provisions which purport to exclude judicial review are construed restrictively. There are, however, certain areas of governmental activity, national security being the paradigm, which the courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the government's claim is bona fide. In this kind of non-justiciable area
21
judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the royal prerogative are inherently unreviewable but since the speeches of the House of Lords in Council of Civil Service Unions Vs. Minister for the . Civil Service this is doubtful. Lords Diplock, Scaman and Roskili appeared to agree that there is no general distinction between powers, based upon whether their source is s P tatutory or prerogative but that judicial review can be limited . by the subject matter of a particular power, in that case n H ational security. Many prerogative powers are in fact concerned with sensitive, non- justiciable areas, for example, for f eign affairs, but some are reviewable in principle, including where national security is not involved. Another non-justiciable power is the Attorney General's preprogative to decide whether to institute legal proceedings on behalf of the public interest." o
35. In Wade's Administrative L aw, 8th Edition at p.551, the author states: rt
"Rights and Remedi u es: Rights o depend upon remedies. Legal history is rich in examples of rules of law which have been distilled from the system of C remedies, as the remedies have been extended and adapted from one class of case to another. There is no better example than habeas corpus. This remedy, since the sixteenth century the chief cornerstone of personal liberty, grew out of a medieval writ which h
at first played an inconspicuous part in the law of procedure: it was used to secure the appearance of a party, in particular where g
he was in detention by some inferior court. It was later invoked to challenge detention by the king and by the Council; and finally it i
became the standard procedure by which the legality of any imprisonment could be tested. The right to personal freedom was almost a by-product of the procedural rules.
H
This tendency has both good and bad effects. It is good in that the emphasis falls on the practical methods of enforcing any right. Efficient remedies are of the utmost importance, and the remedies provided by English administrative law are notably efficient. But sometimes the remedy comes to be looked upon as a thing in itself, divorced from the legal policy to which it ought to give expression. In the past this has led to gaps and anomalies, and to
a confusion of doctrine to which the courts have sometimes
seemed strangely indifferent."
31. In Jayrajbhai Jayantibhai Patel versus Anilbhai Nathubhai Patel and others (2006) 8 SCC 200, the law on the subject of judicial review was succinctly laid down in the following terms:-
"18. Having regard to it all, it is manifest that the power of judicial review may not be exercised unless the administrative decision is illogical or suffers from procedural impropriety or it shocks the conscience of the court in the sense that it is in defiance of logic or moral standards but no standardised formula, universally applicable to all cases, can be evolved. Each case has to be considered on its
22
own facts, depending upon the authority that exercises the power, the source, the nature or scope of power and the indelible effects it generates in the operation of law or affects the individual or soc.iety. Though judicial restraint, albeit self-recognised, is the o P rder of the day, yet an administrative decision or action which . is based on wholly irrelevant considerations or mate rial H ; or excludes from consideration the relevant material; or it is so absurd that no reasonable person could have arrived at it on the given material, may be struck down. In other word o s, whfen a Court is satisfied that there is an abuse or misuse of power, and its jurisdiction is invoked, it is incumbent on the Court t to in tervene. It is nevertheless, trite that the scope of judicial review is limited to the deficiency in the decision- making p u rocesrs and not the decision." 32. In Bank of o India and others versus T.Jogram (2007) 7 SCC 236, the Hon'ble Supreme Court held as under:-
"1 5. B C y now it is well-settled principle of law that judicial review is h not against the decision. It is against the decision making g
process…..." 3 i 3. In S.R.Tewari versus Union of India and another (2013) 6 H SCC 602, the Hon'ble Supreme Court reiterated the law on the subject in the following terms:- "19. In Commissioner of Income-tax, Bombay & Ors. v. Mahindra & Mahindra Ltd. & Ors., AIR 1984 SC 1182, this Court held that various parameters of the court's power of judicial review of
administrative or executive action on which the court can interfere
had been well settled and it would be redundant to recapitulate the
whole catena of decisions. The Court further held: (SCC p.402,
para 11)
"11….It is a settled position that if the action or decision is perverse or is such that no reasonable body of persons, properly informed, could come to, or has been arrived at by the authority misdirecting itself by adopting a wrong approach, or has been influenced by irrelevant or extraneous matters the court would be justified in interfering with the same."
20. The court can exercise the power of judicial review if there is a manifest error in the exercise of power or the exercise of power is manifestly arbitrary or if the power is exercised on the basis of
23
facts which do not exist and which are patently erroneous. Such exercise of power would stand vitiated. The court may be justified in exercising the power of judicial review if the impugn P ed ord.er suffers from mala fide, dishonest or corrupt practic . es, for the reason, that the order had been passed by the authority beyond the limits conferred upon the authority by the legislature. Thus,
the court has to be satisfied that the order ha H d been passed by
the authority only on the grounds of illeg ality, irrationality and
procedural impropriety before it i o nterfe
fres. The court does not have the expertise to c t orrect the administrative decision. Therefore, the court itse r lf may be fallible and interfering with the order of the authority may impose heavy administrative burden on the State or may lead to unbudgeted expenditure. (Vide: Tata Cellular v. Union u of India, AIR 1996 SC 11; People's Union for
Civil Libertie o s & Anr. v. Union of India & Ors., AIR 2004 SC 456; and S C tate of N.C.T. of Delhi & Anr. v. Sanjeev alias Bittoo, AIR 20 05 SC 2080). h 21. In Air India Ltd. v. Cochin International Airport Ltd. & Ors., g
AIR 2000 SC 801, this Court explaining the scope of judicial i
review held that the court must act with great caution and should exercise such power only in furtherance to public interest and not H
merely on the making out of a legal point. The court must always keep the larger public interest in mind in order to decide whether its intervention is called for or not. 22. There may be a case where the holders of public offices have forgotten that the offices entrusted to them are a sacred trust and
such offices are meant for use and not abuse. Where such
trustees turn to dishonest means to gain an undue advantage,
the scope of judicial review attains paramount importance. (Vide:
Krishan Yadav & Anr. v. State of Haryana & Ors., AIR 1994 SC
2166).
23. The court must keep in mind that judicial review is not akin to adjudication on merit by re-appreciating the evidence as an appellate authority. Thus, the court is devoid of the power to re- appreciate the evidence and come to its own conclusion on the proof of a particular charge, as the scope of judicial review is limited to the process of making the decision and not against the
24
decision itself and in such a situation the court cannot arrive on its own independent finding. (Vide: High Court of Judicature at Bombay through its Registrar v. Udaysingh s/o Ganpat P rao Na.ik Nimbalkar & Ors., AIR 1997 SC 2286; Government of Andhra Pradesh & Ors. v. Mohd. Nasrullah Khan, AIR 2006 . SC 1214;
and Union of India & Ors. v. Manab Kumar Gu H ha, (2011) 11 SCC 535).
24. The question of interference on the f quantum of punishment, has been considered by this Court in a catena of judgments, and it was held that if the punish t me nt oawarded is disproportionate to the gravity of the misco r nduct, it would be arbitrary, and thus, would violate the u mandate of Article 14 of the Constitution. In Ranjit Thakur v. Union of India & Ors., AIR 1987 SC 2386, this Court observ o ed as under: (SCC pp.620-21, paras 25 & 27) C "25.But the sentence has to suit the offence and the offender. It should not be vindictive or unduly harsh. It should not be so disproportionate to the offence as to shock the conscience and h
amount in itself to conclusive evidence of bias. The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on the aspect, which is otherwise, within the g
exclusive province of the Court Martial, if the decision of the i
Court even as to sentence is an outrageous defiance of logic, then the sentence would not be immune from correction. H
* * * 27. In the present case, the punishment is so stringently disproportionate as to call for and justify interference. It cannot be allowed to remain uncorrected in judicial review." (Emphasis supplied) (See also: Union of India & Anr. v. G. Ganayutham (dead by Lrs.), AIR 1997 SC 3387; State of Uttar Pradesh & Ors. v. J.P. Saraswat, (2011) 4
SCC 545; Chandra Kumar Chopra v. Union of India & Ors., (2012) 6
SCC 369; and Registrar General, Patna High Court v. Pandey
Gajendra Prasad & Ors., AIR 2012 SC 2319).
25. In B.C. Chaturvedi v. Union of India & Ors., AIR 1996 SC 484, this Court after examining various its earlier decisions observed that in exercise of the powers of judicial review, the court cannot
"normally" substitute its own conclusion or penalty. However, if the penalty imposed by an authority "shocks the conscience" of the court, it would appropriately mould the relief either directing the authority to reconsider the penalty imposed and in exceptional and rare cases, in order to shorten the litigation, itself, impose appropriate punishment with cogent reasons in support thereof. While examining the issue of proportionality,
25
court can also consider the circumstances under which the misconduct was committed. In a given case, the prevailing circumstances might have forced the accused to act in a certa.in manner though he had not intended to do so. The c P ourt may further examine the effect, if the order is set aside or . substituted by some other penalty. However, it is only in very rare cases that the court might, to shorten the litigation, think H of substituting its own view as to the quantum of puni shment in place of punishment awarded by the Competent Afuthority.
26. In V. Ramana v. A.P.S.R t .T.C . o& Ors., AIR 2005 SC 3417, this Court considered the sc r ope of judicial review as to the quantum of punishment is u permissible only if it is found that it is not commensurate with the gravity of the charges and if the court comes to the o conclusion that the scope of judicial review as to the quantum of punishment is permissible only if it is found to be
"sh oc C king to the conscience of the Court, in the sense that it was in defiance of logic or moral standards." In a normal course, if the h punishment imposed is shockingly disproportionate, it would be g
appropriate to direct the Disciplinary Authority to reconsider the i
penalty imposed. However, in order to shorten the litigation, in exceptional and rare cases, the Court itself can impose H
appropriate punishment by recording cogent reasons in support thereof. 27. In State of Meghalaya & Ors. v. Mecken Singh N. Marak, AIR 2008 SC 2862, this Court observed that: (SCC p.584, paras 13-
14)
"13….A Court or a Tribunal while dealing with the quantum of punishment has to record reasons as to why it is felt that the punishment is not commensurate with the proved charges.
14. In the matter of imposition of sentence, the scope for interference is very limited and restricted to exceptional cases. The punishment imposed by the disciplinary authority or the appellate authority unless shocks the conscience of the court, cannot be subjected to judicial review.
(See also: Depot Manager, A.P.S.R.T.C. v. P. Jayaram Reddy,
(2009) 2 SCC 681).
28. The role of the court in the matter of departmental proceedings is very limited and the court cannot substitute its own views or findings by replacing the findings arrived at by the authority on detailed appreciation of the evidence on record. In
26
the matter of imposition of sentence, the scope for interference by the court is very limited and restricted to exceptional cases. The punishment imposed by the disciplinary authority or the P appella.te authority unless shocking to the conscience of the co . urt, cannot be subjected to judicial review. The court has to record reasons as to why the punishment is disproportionate. Failure to give
reasons amounts to denial of justice. The mer H e statement that it
is disproportionate would not suffice. (Vi f de: Union of India & Ors. v. Bodupalli Gopalaswami, (2 01 o 1) 13 SCC 553; and Sanjay Kumar Singh v. Union of Ind t ia & Ors., AIR 2012 SC 1783). 29. In Union of India & O r rs. v. R.K. Sharma, AIR 2001 SC 3053, this Court explain u ed the observations made in Ranjit Thakur (supra) observing that if the charge was ridiculous, the punishment o was harsh or strikingly disproportionate it would warrant interference. However, the said observations in Ranjit Th ak C ur (supra) are not to be taken to mean that a court can, while exercising the power of judicial review, interfere with the h punishment merely because it considers the punishment to be g
disproportionate. It was held that only in extreme cases, which on i
their face, show perversity or irrationality, there could be judicial review and courts should not interfere merely on compassionate H
grounds." 34. What would be the scope of interference by the Court has also been succinctly laid down in the aforesaid decision in S.R.Tewari's case
(supra) in the following terms:-
"30. The findings of fact recorded by a court can be held to be perverse if the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is "against the weight of evidence", or if the finding so outrageously defies logic as to suffer from the vice of irrationality. If a decision is arrived at on the basis of no evidence or thoroughly unreliable evidence and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, the conclusions would not be treated as perverse and the findings would not be interfered with. (Vide: Rajinder
27
Kumar Kindra v. Delhi Administration, AIR 1984 SC 1805; Kuldeep Singh v. Commissioner of Police & Ors., AIR 1999 SC 677; Gamini Bala Koteswara Rao & Ors. v. State of Andh.ra Pradesh thr. Secretary, AIR 2010 SC 589; and Babu v. P State of Kerala, (2010) 9 SCC 189). .
31. Hence, where there is evidence f o f H malpractice, gross irregularity or illegality, interference is permissible."
35. It may be observed that the v ery o philosophy and the concept of the cooperative movement is imp t regnable with public interest. A cooperative society is a subs u titute r for self-interest of an individual or a group of individuals for the benefit of the whole community. Therefore, even the general body o o f the members cannot take any steps which may
be derogatory t C o the promotion of the interests of any one of its member( h s) or its employee(s) and the same is necessarily be in accordance with the cooperative principles. Conversely, the general b i od g y of the members cannot act in a manner so as to confer undue H benefit or advantage in favour of anyone of its member(s) or employee(s). Above all, the society unlike a private individual cannot act as it pleases and the decision taken by the general body has to be in accordance with the H.P. Cooperative Societies Act, 1968 (for short 'Act'), H.P. Cooperative Societies Rules, 1971 (for short 'Rules') and the
bye-laws of the society.
36. A Co-operative Society is registered on cooperative principles of democracy, equity, equality and solidarity. Democratic accountability, mutual trust, fairness, impartiality, unity and agreement amongst its members are some of the cardinal dimensions of the cooperative principles. Therefore, the decision taken by the executive body of the society should enjoy the confidence and must have the backing of majority of its members.
28
37. Moreover, the cooperative societies are corporations within the meaning of Article 31-A (1) (c) as held by the Hon'ble Supreme Cou . rt in Daman Singh and Ors. versus State of Punjab and Ors. 1 P 985 (2) SCC 670. The very philosophy and concept of H the c.ooperative movement is impregnable with public interest. Once a person becomes the member of the cooperative society, he lo o ses h f is
individuality qua the
society and he has no independent right except those given to him by the
statute and bye-laws. What is a co r rpo t rati on has been considered in the Daman Singh's case in the fo u llowing manners:- "5. What is a corporation? In Halsbury's Laws of England, fourth Edition, Volume 9, Paragraph 1201, it is said, A corporation may
be d C efined oas a body of persons (in the case of a corporation ag gregate) or an office (in the case of a corporation sole) which is h recognized by the law as having a personality which is distinct from the separate personalities of the members of the body or the g
personality of the individual holder for the time being of the office i
in question." H 38. A corporation is a substitute for self-interest of an individual or a group of individuals for the benefit of the whole community, therefore, the cooperative movement cannot be permitted to be polluted by certain vested interest at the helm of affairs.
39. In this context, it shall be advantageous to refer to the judgment rendered by the Bombay High Court in Hindurao Balwant Patil & Anr., versus Krishnarao Parshuram Patil and Ors., AIR 1982 Bombay 216, wherein it was observed:-
"Co-operative movement cannot be permitted to be polluted or choked by internal or individual strike nor it can be permitted to be polluted by party politics. Co-operative capitalism despotism is not co-operation. On the other hand co-operation is a substitute for self interest of an individual or a group of individuals for the benefit of whole community. Therefore, if the society itself while
29
framing and adopting its own code of conduct in the form of bye- laws, which are to be duly approved by the Registrar, has not made any provision for removal of the Chairman and v.ice Chairman by passing a vote of no confidence, it canno P t be said that the step taken by the Society or Registrar in that . behalf is not a regulatory one nor is in the interest of the society or the general public. The so-called mandate theory can H not be pushed to ridiculous extremes to convert co-operativ e movement into an arena or akhada of power politics. Wfhenever the legislature thought that a person is not fit to o continue as a member of the board, specific provisions are m ade for his removal. A person is elected as Chairman or Victe Chairman for a particular term. His office is controlled u by ther provisions of the Act………." 40. At this stag o e, I may also refer to the decision made by the Punjab & Haryana High Court in The Bapauli Co-operative Agricultural S er C vice Society versus The State of Haryana and Ors.,
AIR 1976 h P&H 283, wherein it was observed as under:-
ig
"The final authority in a co-operative society does of course vest in the general body of its members or its managing body elected H
in accordance with its bye-laws as laid down in Section 23 of the Act, but this authority is not absolute and free from restraints. Even the general body of the members cannot take any steps which may be derogatory to the promotion of the economic interests of the members of a society in accordance with co- operative principles; nor can the general body take any decision
which may be contrary to the Act or the Rules framed thereunder.
When considered in this light, Section 23 of the Act has to be
interpreted in such a manner so that its operation does not set at
naught some of the other provisions of the Act. It is settled law
that two provisions of a statute have to be read in such a manner
that one of them does not necessarily repeal the other. The
question of repeal of one provision of a statute by another arises
only when two of them are wholly incompatible with one another
or if they are read together they would lead to wholly absurd
consequences. If on a fair and proper interpretation these two
provisions can be reconciled with each other, the Courts of law
are under a duty to adopt such an interpretation and to give full
30
effect to the two provisions of the Act instead of holding that one of them is repealed by the other……….."
.
41. The principle of accountability and transparency P in the functioning of any institutions, be it a society, cooperativ H e soci . ety etc. are essential for its proper governance. The conduct of the Chairman/President, office bearers and the mem f be rs of the society in
discharge of their duties, has to be above b o oard and beyond censure till
and so long as the Act, Rules, and r By t e-la ws are occupying the field, the authorities cannot be left to u run the affairs in their subjective and whimsical approach and hotch-potch manner. Certain objective criterias have to be evolved to a o dminister the affairs of the society otherwise there
is bound to ha ve C an element of favourtism, nepotism and other sort of manipula h tions as are clearly evident in this case. 42. g It has to be remembered that registered cooperative s i ocieties like anybody corporate has a power to hold property and is H capable of entering into contract. However, it cannot be assumed that property which it holds is the property of its members or they are owners. This property in law is the property of the society. Likewise, the employees engaged by the society are employees of the society and not
the employees of any one member or members of the society. The
society has to act in accordance with its constitution and apply the
property for the purposes which it is held and likewise deal with its
employees as per the mandate of the Act, rules and bye-laws of the
society in a fair and transparent manner, without indulging in any
favourtism or nepotism.
43. Although a cooperative society cannot strictly be compared with a State, nonetheless, it is bound by and has to adhere to the provisions of the Act, Rules and Bye-laws framed by it, which do oblige
31
the society to conduct itself with high probity and candour with its employees. The managing committee of the society cannot act . as despots or monarchs and are obliged to act in accordance P with the principles of democracy, equity, equality and solidarity. .
44. Reverting back to the facts, it w f ould H be noticed that petitioner No.1 by purchasing the land of o the socie ty has violated the
provisions of Rule 57 of the Rules and all the issues raised herein already stand discussed threadbare b t y respondent No.2 in the decision impugned before this Court. I u t is m r ore than settled that this Court would not act as an Appellate o Authority. It is equally settled that a mere wrong decision without anything more is not enough to attract the powers of judicial review an C d the supervisory jurisdiction conferred on this Court is limited to h see that the adjudicatory authority functions within the limits of its g authority and its decision does not occasion miscarriage of justice. T i he findings of fact recorded by respondent No.2 can only be interfered H with in case the same are perverse which, however, is not the fact situation obtaining in the instant case. 45. As observed above, there is no illegality or perversity in the impugned orders. Hence, for all the reasons stated above, I do not find any
merit in this petition and the same is accordingly dismissed, so also the
pending application, if any.
( Tarlok Singh Chauhan), 30th June, 2017. Judge. (krt)
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