NDLI: State of M.p. and Others Vs. Sanjay Nagayach and Others

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Reserve Bank Madhya Pradesh Co-operative Societies Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Constitution of India Madhya Pradesh Co-operative Societies Act, 1960 (17 of 1961)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Madhya Pradesh Co-operative Societies Act, 1960: s.31(1), second and third provisos and s.31(2) read with s.49(7 A)(i), proviso - Supersession of Board of Directors of District Co-operative Bank - Without prior consultation with RBI . Held: When an authority invested with the power purports to act on its own but in substance the power is exercised by external guidance or pressure, it would amount to non-exercise of power, statutorily vested - In the instant case, there is sufficient evidence to conclude that Joint Registrar was acting under extraneous influence and under dictation - Order of supersession is not only in clear violation of second proviso to s.53(1), but also allegations raised in show cause notice are deficiencies mostly relating to systems and procedures and are of general nature and not grave enough to overthrow a democratically elected Board of Directors - Board of Directors was superseded illegally, and, therefore, in view of proviso to s. 49(7 A)(i), they need to be put back in-office and allowed to continue for the period they were put out of office - Ordered accordingly - Costs imposed on State Government and officer concerned - Legislation - Legislative intent. s.31 (1) second proviso - Expression 'previous consultation with the Reserve Bank' - Connotation of - Held: Previous consultation is a condition precedent before forming an opinion by Joint Registrar to supersede the Board of Directors or not - Mere serving a copy of show cause notice on RBI with supporting documents is not what is contemplated under second proviso to s. 53(1) - For a meaningful and effective consultation, copy of reply filed by Bank to various charges and a/legations levelled against them should also be made available to RBI as well as the action proposed by Joint Registrar, after examining the reply submitted by Bank - Only then, there will be on effective consultation and views expressed by RBI will be a relevant material for deciding whether elected Board be superseded or not - In addition to six propositions laid down in the case of Indian Administrative Services (SCS) Association, U.P., one more proposition that may be added is that when the outcome of proposed action is to oust a democratically elected body, previous consultation with RBI is to be construed as mandatory. Constitution of India, 1950: Art. 226 - Writ petition - Alternative remedy - Held: In the instant case, Division Bench of High Court has rightly exercised its jurisdiction under Art. 226 and the alternative remedy of appeal is no bar in exercising that jurisdiction, since the order passed by Joint Registrar was arbitrary and in clear violation of second proviso to s.53(1) of the Act - Madhya Pradesh Co-operative Societies Act, 1960 - s. 78.Co-operative Societies: Supersession of elected bodies - Held: Co-operative philosophy on society must rest on free universal association, democratically governed and conditioned by equity and personal liberty - Registrar/Joint Registrar, while exercising power of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with final decision and he is bound to follow judicial precedents - The manner in which State Government took so much interest by spending huge public money pursuing the matter upto Supreme Court, that too without following bindingprecedents of High Court, deprecated - In view of mushrooming of cases in various courts challenging orders of supersession of elected committees, general directions given - Precedent - Judicial deprecation.
Judge	Hon'ble Mr. Justice K.S. Panicker Radhakrishnan
Neutral Citation	2013 INSC 347
Petitioner	State Of M.p. And Others
Respondent	Sanjay Nagayach And Others
SCR	[2013] 3 S.C.R. 738
Judgement Date	2013-05-16
Case Number	4691

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