2012 PLP 1067 (CLC)

C.M. No.343 of 2012 and Main case UMAR ATA BANDIAL, J.

The order dated 13-1-2012 by the Secretary Co-operatives ("Secretary") is under challenge in this writ petition for unlawfully upholding the order of the Registrar Cooperative Societies ("RCS") dated 5-11-2011 passed under section 44-D of the Cooperative Societies Act, 1925 ("Act"). By his afore noted order the RCS deleted agenda item proposed by the Managing Committee of the respondent No.4, Co-operative Model Town Society ("Society") for consideration by its annual general meeting ("AGM") to be held on 13-11-2011 for the deletion of its Byelaw No.42 (a) which provides to the following effect:-- "The tenure of the Managing Committee shall be 3 years and no member of the Committee including the President and the Vice-President shall hold office for more than two terms, consecutive or part thereof. The Committee shall automatically stand dissolved on the completion of its term i.e. after 3 years, if fresh elections have not been held."

2. The Secretary has affirmed the order of the RCS on the following grounds: Firstly, that the petitioners do not have locus standi to file the present petition which should be filed by the respondent No.4 Society or its Managing Committee. Secondly, the order of the RCS does not discriminate the petitioners because permission granted for third term contest by candidates in the case of other housing societies is, unlike the respondent No.4 Society, permissible under the Bylaws of such societies. Thirdly, the judgment of this Court dated 21-11-2005 given in Writ Petition No.13621 of 2002 titled Anwar-ul-Haq Khan and others v. The RCS Cooperatives Societies Punjab, Lahore and others by consent of the Society deems Bylaw No.42(a) as a valid part of its Constitution. Consequently, the deemed effect of Bylaw No.42(a) estops the Society or its controllers from challenging the same. Fourthly, that the 18"' Amendment to the Constitution, 1973 removing bar of third term election of the Chief Executive and of the Head of the State has no nexus with the election of office-bearers of a cooperative housing society. The constitutional principle dealing with political principles does not enure to the benefit of the office-bearers of a Society which is organized on cooperative principles. He has referred to principles governing the cooperative movement, democratic administration and prevalent practice in the cooperative housing sector in the Province. Consequently, the Secretary determined the order by RCS to be valid and founded on the criteria of interest of justice, equity and fair play.

3. Learned counsel for the petitioners submits that the impugned order misunderstood the petitioners' challenge made before the Secretary. Learned counsel for the Society has asserted that order of the Court dated 21-11-2005 does not create an embargo on amendment or deletion of Bylaw No.42(a) of the Constitution. Learned Addl. A.-G. has defended the impugned order by the Secretary as being relevant and well reasoned. Learned counsel for the applicant in C.M.No.342 of 2012 for impleadment has defended the impugned order for the alleged misconduct of the petitioners and that the proposed A.G.M. held on 13-12-2011 was being held beyond the time permissible under law.

4. Heard. There is force in the submissions made by the learned counsel for the petitioners that the resolution proposed by the Managing Committee for the A.G.M. to amend Bylaw No.42(a) of the Society includes the proposal to over-ride the consent order dated 21-11-2005. The order of the RCS as affirmed by the Secretary without giving an express finding treats the consent order dated 21-11-2005 as creating a permanent embargo on the Society from amending, inter alia, Bylaw No.42(a) which was retained in the Constitution in terms of the said order. That view of the Secretary does not have force. This is because the consent order dated 21-11-2005 holds, inter alia, Bylaw No.42(a) to have the effect of a valid provision of the Constitution and not an immutable part thereof. The order reads:

"Both amendments shall be deemed to have validly been made by the Society, the respondent No.2 and approved by the RCS, the respondent No.l."

5. The Constitution of the Society provides a mechanism for amending the provisions of the Constitution itself. This mechanism, in the first place, contemplates an amendment resolution of the General Meeting of the Society to be passed under, Bylaw 40(a) read with, Rule 6 of the Punjab Cooperative Societies Rules, 1927. An amendment resolution is subject to the approval of the RCS under section 16 of the Cooperative Societies Act, 1925, where after it can take legal effect. The action by the RCS in his impugned order dated 5-11-2011 to delete agenda item proposed by the Managing Committee for amendment of clause 42 (a) deprived the competent authority in the Society, namely, its members in general meeting from considering, and deciding the retention of an embargo on the third term of elected representatives/office-bearers of the Society. By doing so, the RCS and also the Secretary gave Bylaw No.42(a) an entrenched status higher than the rest of the Constitution. The consent order dated 21-11-2005 does not intend such an effect.

6. Furthermore, by dropping the agenda item regarding deletion of Bylaw No.42(a) the impugned orders wrongly presumed that an amendment resolution by the A.G.M. has legal effect. Actually an amendment resolution by itself has no legal force unless the same is approved by the RCS himself. Accordingly, appropriate stage for the RCS to apply his mind to the question of validity is when an amendment resolution is scrutinized by him for grant of approval under section 16 of the Act.

7. Finally, insofar as the presumed binding effect of the consent order dated 21-11-2005 is concerned,, it is obvious that, such an order can be modified by consent of the parties thereto. Quite apart from the terms of the said order conferring validity rather than immutability to Bylaw No.42(a), the consent given by RCS as a public authority depends upon objective criteria and not subjective wishes. Consequently, the only basis on which an amendment resolution by the A.G.M. of the Society can be opposed at the time of consideration under section 16 of the Act is either, factual or legal criteria that are valid on the touchstone of fairness and relevance in relation to the cooperative movement and like principles. Hence, if the case of the petitioners succeeds on such criteria there is no ground for RCS to deny approval pretending that consent given under the order dated 21-11-2005 is not reviewable.

8. On the foregoing analysis it is clear that whereas both RCS and the Secretary are right in holding that exemption from Bylaw No,42(a) which impose embargo on third term of office-bearers of the Society cannot be granted. However, they are wrong in denying the Managing Committee of the Society from proposing to its members in the General Meeting for amending Bylaw No.42(a).

9. A request by the learned counsel for the petitioners that the petitioners be allowed interim relief to contest for third terms in the A.G.M. scheduled for 26-2-2012 presumes that a resolution passed by the members in general meeting revoking Bylaw No.42(a) has been approved by the RCS. Such a presumption cannot be made by the Court unless the event so occurs. Resultantly, the RCS shall allow the respondent Society to call a special general meeting to consider a proposal by the Managing Committee to delete Bylaw No.42(a) from the Constitution of the Society.

10. Petition partly allowed. M.H./T-8/L Order accordingly.