The Bihar Cooperative Societies (Amendment) Act 1989

THE BIHAR COOPERATIVE SOCIETIES (AMENDMENT)

ACT 1989

( BIHAR ACT NO 5 1989)

AN

ACT

TO MENDTHE BIHAR AND ORISSA COOPERATIVER SOCIETIES ACT 1935

Be, it enacted by the Legislature of the State of Bihar in the fortieth year of the Republic of India as follows:

Whereas, under Article 38 of the Constitution it shall be the duty of the State to strive to promote the welfare of the people by securing and protecting as effectively as it may the social order in which inter a liar justice social economic and political shall inform all the institutions of the national life

And whereas the associations of the community on cooperative basis shall be necessary for the fulfilment of the aforesaid objective

And whereas the remedial provision as presently have not proved effective or conclusive to the proper development of cooperatives;

And whereas it is necessary to make effective the provision for the association of the weaker sections of the community as well as the State for purposes of ensuring proper development of cooperatives

And whereas, with a view to placing the cooperative societies on a sound financial footing it is necessary to make provision of state aid to cooperative societies in various forms such as investment in share capital loans subsidies and guarantee on the payment of the principal and interest

And whereas, the State has invested large sum of public money in purchase of shares of cooperative societies and it is necessary to have effective Stat representation in their management.

And Therefore, it is necessary to amend the Bihar & Orissa cooperative societies Act 1935 (Bihar and Orissa Act 6, 1935)-

1. Short title and commencement – (1) This Act may be called the Bihar cooperative societies (Amendment) Act 1989.
2. It shall come into force at once.

2 to 11. Inserted in the body of the Act.

12. Repeal and Savings – (1) The Bihar cooperative societies (Amendment) second ordinance 1989 (Bihar Ordinance no 24 of 1989) is hereby repealed.

(2) Notwithstanding such repeal anything done or any action done or any action taken in exercise of any power conferred by or under the said ordinance shall be deemed to have been done or taken in exercise of the powers conferred by or under this Act as if this Act were in force on the day on which such thing or action was done or taken.

Case Laws

BIHAR COOPERATIVER SOCIETIES ACT 1935

-Section 48 r/w rule 33- a dispute between cooperative Bank and its employees is not amenable to writ jurisdiction where the Bank is completely privately managed and controlled by its Board of Directors – the situation may be different where a society has been superseded and a special officer has been appointed by the Registrar .S. Itrat Hussain Vs Registrar Coop Societies 2001 (2) PLJR 253.

-Section 48(8) – an appellate order can be challenged before the Registrar in a duly constituted revision- if a revision is heard and finally decided by the Registrar the Chapter for high court comes to an end while exercising his jurisdiction the Registrar is obliged to record a finding that he considers advisable to refer the matter to the District Judge- but in a case where the Registrar does not consider it advisable to refer the matter to the District Judge and proposes to decide the matter under his own hand then after a final decision he would have no power u/s 48(8) to make a reference to the District Judge fr his decision Ramadhar Sharma Vs State of Bihar 2002 (1) PLJR 646 .

Section 66B – Notification dated 9.2.1989- it is not for the Committee constituted Resolution dated 9.2.1989 to go all over the State making recruitments/ promotions in the different State level Co-operative societies- it is for the concerned Corporation to identify the post needed to be filled up either by recruitment or by promotion and then to approach the official constituting the committee for necessary recruitment regularisation and promotion petitioners regularisation and promotion being plainly in contravention of section 66B were rightly recalled Administrator should identify the need based posts in the Corporation and make suitable and valid appointments in the light of Resolution dated 9.2.1989 which is constitutionally valid Ram Kumar Singh Vs B.S.S.C. Co-op. Dev. Corpn. Ltd 2002 (2) PLJR 744.

Section 33 and 41- deplorable State of affairs prevailing in Biscomanu threadbare analysis showing the factors causing not in Biscomaun tenants housed in the building of Biscomaun mostly corporate bodies or government departments are enjoying free accommodation and bleeding Biscomaun as a Corporate body. is running into galloping liabilities this Corporate body in a State of ad hocism whose accounts are un audited its management redderiess and superseded and petty officials have been made ad hoc administrators Biscomaun is facing litigation in several cases Administrator director to get the accounts audited either through A.G. Bihar or a C.A and file a full report on the assets and liabilities Administrator Biscomaun Vs Ramadhar Sharma 2002 (3) PLJR 46.

-Section 66B- notification dated 9.2.89 Section 66B and Notification dated 9.2.89 are constitutionally valid any appointment in the Bihar State Co-operative Bank can only be filledup-0 following the provisions of notification dated 9.2.89 any absorption/ regularisation of deputationists in the service of the Bank would be contrary to the provisions of the notification Priya Ranjan Sinha Vs State of Bihar 2002 (3) PLJR 33.

-Section 66B- State Government constituted a recruitment committee vide notification dated 9.2.89 laying down the mode of recruitment virus of section 66B and validity of notification was upheld by this court earlier petitioner earlier regularisation and promotion was held to be in complete violation often notification and petitioner’s earlier writ was also dismissed again petitioner subsequent promotion and regularisation on the same post cannot be held legal as the same was not done by the committee any appointment/promotion/regularisation made after 9.2.89 by any authority other than recruitment committee is in contravention of the notification however direction made to the administrator to identify the need based posts and take steps to make suitable and valid appointments either by direct recruitment or regulation of promotion of earlier incumbents in accordance with law and resolution dated 9.2.1989 Ram Kumar Singh Vs B.S.C.C.D. Corporation Ltd. 2002 (3) PLJR 202.

-Section 14(5) (as amended by Bihar Cooperative Societies (Amendment) Act 2002- Petitioner holding the charge of Chairman on tenure posting in a cooperative Bank facing deemed removal from his office on promulgation of the amendment of the amendment- petitioner cannot delay his removal from office on the ground that he was not aware of the amendment immediately on its publication in the official gazette when theamended provision in the Act was meant to affect only the office bearers nominated by Government and the amendments were mandated to come into force at one. Nawal Kishore Yadav Vs State of Bihar 2002 (4) PLJR 426.

-Sections 48 and 57- dispute between the members of the society about the identity of land suit filed for adjudicating the dispute maintainability of suit challenged on the ground that the same is barred u/s 57 of the Act- section 57 of the Act bars the jurisdiction of suit I respect ofdispute touching the business of a registered society arises amongst the members shall be decided by the Registrar and no civil or RevenueCourthave any jurisdiction with regard to same the dispute which can besaid to be the touching the business of a registered society not only includes the business ofa registered societybut it also includes the affaris of a registered society a wider meaning has been given to the provision identification of the land and putting the members oin possession over the land sold to them is a part of the business of the registered society or at any rate it relates to the affairs of registered society it cannot be said that it has no connection with the business of a registered society suitheld to be barred u/s 57 of the Act S. Radha Krishna Jaiswal Vs Sheela Kanchan 2003 (1) PLJR 18.

-Section 48 r/w Rule 21-X of Bihar Cooperative Societies Rules 1959- petitioner appellant challenging the participation ofrespondents in the election by way ofwrit petition as a remedy has been provided u/s 48 itself the writ petition was misplaced and misconceived petitioner ought to have moved the Registrar to seek a statement of a case to the District Judge petitioner given liberty to take recourse to remedy u/s 48(8) within 30 days Vijay Kumar Vs State of Bihar 2003 (2) PLJR 647.

Vires no member of a cooperative society can seek election as delegate ifhe has a proceeding pending for clearance of a public debt with an order of the appellate authority declaring that an amount is due to be aid by the board of Directors ( jointly or severally) this circumstances came in theway of petitioner is not being able to have his nomination paper acceptedmerely because this may be a situation is no ground for the High ‘Court to look into an aspect whether the Act is ultra vires should the petitioner depost the amount even as apassport to enter the election he may save the situation for himself it is entirely upto the petitioner to make the deposit or otthis isnot a good ground for the High Court to consider whether the Act is ultra vires Narendra Kumar Vs State of Bihar 2003 (3) PLJR 410.

- Section 66B- change in manner of payment of salary of managers of PACs by opening of specified account in every Central Coop Bank to which the PACs may be attached is with a view to improve the functioning of PACs and does not amount to altering the service condtions Bihar Rajya Sahakarita Prabhandak Sangh Vs State of Bihar 2000 (3) PLJR 322.

-Section 66B State exercises pervasive control over cooperative Societies and thusthe cooperative societies virtually act as an extended arm of the State therefore the State Government virtually controls the service conditions of the managers of the PACs and their pay scale is also fixed by it since their pay is fixed by the State Government and is at the subsistence level the denial of protection from price rise by providing D.S. is violation of Articles 14 and 21 of the Constitution Bihar Rajya Sahakarita Prabhandak Sangh Vs State of Bihar 1999 (3) PLJR 110.

- Section 66B- Managers of PACs even though not State Government employees annot be denied ust and reason alee pay as a citizen of India their pay having been fixed by the State Government and not an expert body like pay commission denial of D.A to them amounts to exposing them to the vararies of the market unlike State Government employees who enjoy such protection a welfare State wedded to the principle of social justice cannot be allowed to do it, it being unreasonable unfair and unconstitutional Managers of PACs are entitled for D.A. at par with State Government employees ibid.

- Section 66B read with Rule 33 ofBihar and OrissaCo-operativeSocieties Rule 1959- appointment ofStaff for class IV posts by Vice Chairman ofCo-operativeSociety- any appointment made in violation of procedure prescribed for registered societies by State Government circular will be illegal. Anjani Kumar Singh Vs. manager Jamui Central Cooperative Bank Ltd 1194(2) POLJR 761

- Section 66B- order for termination of service ofBranch Manager of primary AgricultureCo-operative Societies passed without initiating department proceedings termination of service on account of failure to achieve norms laid down for recovery of loans for the financial year- mere service ofsow cause notice withoutinitiating disciplinary proceeding does not fully comply with principles ofnatural justice.Kapileshwar Sharma Vs. State of Bihar 1993(2) PLJR 552

- Section 66B- State of Bihar is competent toexercise its jurisdiction over all the cooperative societies within theState ofBihar it therefore necessarily has the statutoryright tolay down thecriteria for appointment and the method of recruitment such matters squarely fall within the purview of section 66B Ranchi Dist Cadre Cooperative Society Ltd Vs. P.O.1988 PLJR 59.

- Section 66B- State Government has no power to cancel the appointments made by a Cooperative Bank what section 66B conters on State Government ispower tolay down general policy with regared to recruitmet etc a order of termination of service of temporary employees of the cooperative Bank passed by its special officer ( a functionary of the State Government) in obedience of the direction ofState Government cannot be termed as an independent order of the Special officer Shiv Shankar Prasad SinhaVs. State ofBihar 1987 PLJR 270.

-Section 66(1) notification under this section providing for constitution of selection authority and creating embargo against maki9ng any appointment from any source other than the panel prepared by the selection authority- legality of the notification cannot be dobted Ranchi Teja Prasad Vs. State of Bihar 1992(2) PLJR 568

-Section 66 (2) Petitioners claim their rights under order of appointment which is per se void in terms oft Act such appointment cannot be said to be in existence right since inception and therefore it has not created orvested any right in them ibid.

-Section 66(2) appointment of petitioners who were appointed on daily wages at first instance and then on regular basis concelled by impugned order on the ground that the appointments were contrary to te government order notified earler in face ofexpress bar provided in the Act it is difficult to hold that regular appointments can be made withoutfollowing the prescribed metod and procedure orany norms of selection and from other sources merely because selection Authority had not been fully constituted ibid.

-Section 66(2) Petitioners appointed after theday an order was issued under this section prescribiingmodeand metod ofrecruitmet ofpersonnel nby the coperatidve societies prior to this notification a general order was issued by the Governments restraining the societies from the making appointments impugned appointments swere made without following themandale of the order there cannot by any doubt having regard to the claear and unambiguous language of the provision that the consequence would automatically set in the contravention of the order of State Government is so patent that o determination as to the natue of appointment being null and void is required to be made ibid.

-Section 66(2) read with Article 14 of the Constitution of India vires of this section challenged on the ground that it confers wide powers on the State Government to make rules without any indication by the legislature as to what constitutes contravention of the Act or its extent and also on the ground that it excludes therule ofnatural justice submission has no substance as such grievance can be made only if any adjudication is necessary with some element of discretion in the authority if the Legislature itself provides and declares certain category of appointment voidnothing requires to be adjudicated rles of na\tuarl justice are not styatutory rulesthe application of which cannot be excepted it its exclusion is permissible even by necessary implication the provision cannot be said to be arbitary and violavie of Article 14 of the Constitution ibid.

-Section 66B(2) read with Articles 14 and 16 of the Constitution of India an employee appointed on compassionate ground terminated on theground of contravention of section 66B in his appointment ther isno statutory sanction for appointment on compassionate groundand theright flowing from executive circulars executive circular annot override statutory order it is difficult stto make distinctiojn between such appointment with general appointment on sthe touch stone of the section all that he is entitiled to is consideration of his case as a separate class as such an appointment is in the nature of exception to the general rule contained in Article 14 and 16 the matter has therefore to bedealt with circumspection ibid

-Section 66B read with Article 23 of the Constitution of India and Section70 of Indian contract Act there cannot be any recovery of money (recived as salary or allowance) from employees whose services were terminated employer is obliged to compensate for every lawful non gratuitious act done or service rendered by any person to him there is substance in the sumbmission that if a person has actually worked he cannot be deprived of his emplouments actually received or receivable by him ibid.

Bihar Self supporting cooperative Societies Act,1996

Section 4- A society registered under this Act isnot entitled to preferential treantment wich is available for societies registered under Bihar and Orissa Cooperative Societies Act 1935 Gandhi Sharamik Swawlambi Samiti Ltd Vs. State of Bihar 1999(2) PLJR 114.