TMI Blog1970 (4) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... defects and irregularities mentioned in the notice. After examining the representation which was quite lengthy and detailed, the Registrar recorded an Order on 11th April, 1969 dealing with each charge and holding that the Committee had not been functioning properly and had failed to perform its duties and discharge its responsibilities as required under the Act. The Committee was ordered to be suspended for a period of one year from. 12th April, 1969 to 11th April, 1970. The Deputy Registrar of Cooperative Societies was appointed to work as a Special Officer and to manage its affairs for that period. The matter was taken in appeal to the Registrar by the Committee. The Registrar affirmed the Order of the Joint Registrar. Thereafter the President and the Director of the Cooperative Society moved the High Court under Article 226 of the Constitution. A number of points were taken in the writ petition but the main emphasis was laid on the proper procedure not having been followed under sections 64, 65 and 66 of the Act before taking action u/s 72. The learned single Judge of the High Court allowed the writ petition which had been filed by the President and the Director of the Co- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72 of the Act ? The Act was enacted to amend and consolidate the law relating to and to make better provision for the, Organisation of Cooperative Societies in the State of Madras. Section 2 (2) defines the expression Committee to mean the governing body of a registered society to whom the management of its affairs is entrusted. By Section 2 (1) the Registrar is defined to-mean a person appointed to perform the duties of a Registrar of Cooperative Societies under the Act, and includes a person on whom all or any of the powers of a Registrar under the Act have been conferred under section 3. Section 4 provides for the societies which may be registered. Chapter III gives the sections relating to the Qualifications of the members and their rights and liabilities. Chapter IV contains provisions in respect of management of registered societies. Under section 26 (1) the ultimate authority of a registered society vests in the general body of its members. Under section 27 the general body of a registered society has to constitute a Committee in accordance with the byelaws and entrust the management of the affairs of the registered society to such Committee. The term of office of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e audited by some person authorised by him in writing the accounts of every registered society once at least in every year. Under sub-section (4) every person who is or has been an officer or employee of the society and every member and past member has to furnish such information in regard to the transactions and working of the society as the Registrar or the person authorised by him may require. Sub-section (5) says that the Registrar may, by order in writing, direct any officer of the society to take such action as may be, specified in the order to remedy within such time as may be specified the defects, if any, disclosed as a result of the audit. Section 65 authorises the Registrar on his own motion or on the application of a majority of the Committee or on the request of the Collector, to hold an inquiry, or direct some person authorised by him in writing to hold an inquiry into the constitution, working and financial condition of a registered society. Under Subsection (2) powers have been conferred interalia to have free access to the books of accounts etc., summoning and examination of persons on oath having knowledge of the affairs of the society. When an inquiry is held u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... breach of trust or wilful negligence...... the Registrar may enquire into the conduct of such person, officer or servant and make an order requiring him to repay or restore the money or property or to contribute such sum to the assets of the society by way of compensation. Under the proviso, such an inquiry must be held within 6 years from the date of any act or omission and an opportunity must be afforded to the person against whom the order is sought to be made. Section 72 (1) (a) which is material for our purposes reads : 72(1) (a). If, in the opinion of the Registrar, the committee of any registered society is not functioning properly or wilfully disobeys or wilfully fails to comply with any lawful order or direction issued by the Registrar under this Act or the rules, he may, after giving the committee an opportunity of making its representations, by order in writing, dissolve the committee and appoint either a person (hereinafter referred to as the special officer) or a committee of two or more persons (hereinafter referred to as the managing committee) to manage the affairs of the society for a specified period not exceeding two years . Sub-section (6) makes it oblig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible to read a requirement while taking action u/s 72 of satisfying the provisions in the aforesaid sections by making a direction in the first instance to remedy the defects disclosed as a result of the audit, inquiry or inspection. The functioning of the society may be so irregular and the defects disclosed so blatant and prejudicial to the society that no question can arise of any direction being made in the first instance for their being remedied by the persons or officers concerned. It may be that when the Registrar acts under the second limb of section 72 (1) (a) and proposes to supersede the committee for wilful disobedience or wilful failure to comply with any lawful order or direction issued by the Registrar under the Act or the rules that the provisions contained in sections 64, 65 and 66 may become relevant. But that does not and cannot mean that the Registrar must as a condition precedent give a direction under those sections for the defects or the irregularities to be remedied and should take action only under the second limb i.e. when there is a wilful disobedience or wilful failure to comply with those orders or directions. It may be that the opinion which the Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found to be highly defective. The object of supersession apparently is to appoint a Special Officer or a managing committee in order to set the working of the society right. It is not difficult to envisage a situation where maladministration by a committee has so adversely affected the functioning of the society that it is essential in the interests of the society itself to give temporarily the control of its affairs to a neutral authority. At any rate if the operation of section 72 in certain circumstances is likely to operate harshly so far as certain members of the committee are concerned, it is not possible to read into it other provisions of the Act which are not incorporated in the section expressly or by necessary implication. We have been taken through the material parts of the orders of the Registrar and the Joint Registrar and we do not find any such infirmities in them which would justify interference by the High Court under Article 226 of the Constitution. The High Court could not act as an appellate Court and reappraise and re-examine the relevant facts and circumstances which led to the making of the orders of supersession as if the matter before it had been broug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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