Madhya Pradesh Rajya Sahakari Bank Maryadit Vs. State Of M.P. & Ors  Insc 186 (22
A.K.MATHUR & H.S.BEDI
A.K. MATHUR, J.
This appeal is directed against the order passed by the Division Bench of
Madhya Pradesh High Court at Jabalpur in Writ Petition No. 1415 of 1997 by the
order dated 11.3.2003 whereby the Division Bench of the Madhya Pradesh High
Court has set aside the order passed by the Registrar of Co-operative Societies
in exercise of power under Section 55(1) of the Madhya Pradesh Co-operative
Societies Act, 1960 (hereinafter referred to as the 'Act of 1960') dated
6.3.1997 as ultra vires and allowed the writ petition. Aggrieved by that the
present appeal was filed by the Madhya Pradesh Rajya Sahakari Bank Maryadit
(hereinafter to be referred to as the 'appellant').
We have heard learned counsel for the parties and perused the records.
Learned counsel for the appellant has submitted that the Registrar of
Co-operative Societies under Section 55 of the Act of 1960 has full power to
frame rules relating to service conditions for the Co-operative Societies.
Therefore, in exercise of the aforesaid power, the Registrar of Co-operative
Societies has issued order dated 6.3.1997 whereby under Chapter 4 Conditions of
Recruitment, Rule 5 of the Madhya Pradesh Rajya Sahakari Bank Employees (Terms
of Employment and working conditions )Rules, 1976 (hereinafter to be referred
to as the 'Rules of 1976') was amended and the following amendment was added:
" The Managing Committee of the Bank shall decide the percentage of
employees to be necessarily recruited from Scheduled Tribes, Scheduled Castes,
Backward Classes and handicapped persons provided that a minimum percentage of
the posts, as may be advised by the State Government from time to time, shall
be reserved for the candidates of Scheduled Tribes, Scheduled Castes, Backward
Classes and handicapped persons. Relaxation in the conditions of recruitment as
per instruction issued by Registrar.
Co-operative Societies, Madhya Pradesh, Bhopal from time to time may be
granted to the Ex- serviceman and Scheduled Castes/ Scheduled Tribes, Backward
Classes and physically handicapped persons."
The order dated 6.3.1997 passed by the Registrar of Co-operative Societies
is also reproduced as under:
"OFFICE OF THE COMMISSIONER, COOPERATION &
REGISTRAR, COOPERATIVE SOCIETIES, MADHYA PRADESH No. CR/AP-1/30/2 Bhopal,
O R D E R In exercise of the powers of the Registrar, Cooperative Societies,
Madhya Pradesh under sub-section (1) of Section 55 of the Madhya Pradesh
Cooperative Societies Act, 1960 (No. 17 of 1961) conferred upon no.Vide
Government of Madhya Pradesh, Cooperation Department order No.2419/7060/XV/62
dated 16.6.1962, I U.P.Gupta, Joint Registrar, Cooperative Societies, M.P.
hereby amend in Chapter 4- condition of Recruitment Rule No.5 and Chapter-3
File No.15 (b)-2 of the M.P.Rajya Sahakari Bank Maryadit Employees Service
Rules, 1976 as per enclosed herewith.
The above amendment shall come into force from the date of issue of the order.
(J.P.GUPTA) JOINT REGISTRAR COOPERATIVE SOCIETIES, M.P.
No. CR/AP-1/30/2/774 Copy forwarded to :-
The Managing Director, P.Rajya Sahakari Bank Maryadit, Bhopal for
information and necessary action.
Deputy Registrar, I/C Audit, M.P.Rajya Sahakari Bank Maryadit, Bhopal for
JOINT REGISTRAR COOPERATIVE SOCIETIES, M.P."
Learned counsel for the appellant submitted that this power of the Registrar
under Section 55 of the Act of 1960 is not regulated by the Madhya Pradesh Lok
Seva (Anusuchit Jatiyon, Anusuchit Jan Jatiyon Aur Anya Pichhade Vargon Ke Liye
Arakshan) Adhiniyam, 1994 ( No.21 of 1994 (hereinafter to be referred to as the
'Act of 1994'). Therefore, it was contended that the Registrar of the Co-
operative Societies under Section 55 (1) of the Act of 1960 has full power to
give direction for reservation under the Act in order to implement the
Constitutional provision under Article 16(4)((a) of the Constitution of India.
It was also contended that writ is not maintainable because Co-operative
Society is not a 'State ' within the meaning of Article 12 of the Constitution.
As against this, it was contended that the Act of 1994 clearly lays down that
reservation will only be applicable in the establishment where the State
Government has more than 51 per cent share-holding. Therefore, Act of 1994
which regulates the reservation of vacancies of ST/SC in State stipulates that
reservation shall be made in establishment wherein holding of the State
Government is more than 51 per cent and not in other establishments.
We have considered the rival submissions of learned counsel for the parties.
Article 16 of the Constitution of India was amended and Clause (4-A) was
subsequently added in view of the decision rendered by this Court in Indra Sawhney&
Ors. v. Union of India &
Ors. [ 1992 Supp.(3) SCC 217] and in order to obviate the law laid down by
this Court whereby reservation for Scheduled Castes and Scheduled Tribes was
also made permissible in the matter of promotion. The validity of Article
16(4-A) was again challenged before this Court and the matter was referred to
the Constitution Bench. The Constitution Bench in its decision in M.Nagaraj
& Ors. v.
Union of India & Ors. [ (2006) 8 SCC 212] upheld the validity of Article
16(4-A) of the Constitution of India but with certain conditions that it is
left open to the State to identify and collect quantifiable data showing
backwardness of the class and inadequacy of representation of that class in
public employment, keeping in mind maintenance of efficiency in administration
and such reservation is subject to the judicial review. Their Lordships further
laid down the ceiling of limit of maximum of 50 per cent. Their Lordships
warned that in case the parameters laid down in M.Nagaraja (supra) are not
fulfilled, then such matter will be subject to the judicial review by the
Court. In the light of the recent decision of the Constitution Bench in
M.Nagaraja (supra) one thing is clear that reservation can be made in promotion
by the Government subject to the limits laid down by this Court in the
Now, the question before us in the present case is whether the power
exercised by the Registrar of Co-operative Societies under Section 55 of the
Act of 1960 can be sustained or not in the light of Act of 1994. Act of 1994
was promulgated by the State Government for the benefit of providing
reservation in the vacancies in public services and posts in favour of persons
belonging to Scheduled Castes, Scheduled Tribes and other Backward Classes.
Therefore, this Act only contemplates reservation in public services. In order
to claim reservation in public offices, the definition of establishment as
mentioned in Section 2(b) of the Act of 1994 will have to fulfilled. Section
2(b) of the Act of 1994 reads as under :
"Establishment" means any office of the State
Government or of a local authority or statutory authority constituted under any
Act of the State for the time being in force, or a University or a Company,
Corporation or a Cooperative Society in which not less than fifty one percent
of the paid up share capital is held by the State Government and includes a
work charge or contingency paid establishments."
Therefore, Section 2(b) clearly says that the establishment would include
any office of the State Government or local authority or statutory authority
constituted under the Act of the State or a University, or a company,
Corporation or a Co-operative Society in which not less than 51 percent paid up
share capital is held by the State Government and including work charge and
contingency paid establishments shall be 'establishment' and in that case
reservation can be made for the members of Scheduled Castes, Scheduled Tribes
and other Backward classes. The very object of the Act is to provide
reservation in public service and posts. Therefore, it confined only for
reservation in public services and not any other private institutions. For the
purpose of public service, an establishment should answer the requirement as
given in Section 2(b) of the Act of 1994. Therefore, reading the object and
reason along with the definition of establishment it clearly transpires in the
context of the Co-operative Society in which the State Government has paid up
share capital of 51 percent or more, then the reservation can be made in such
Co-operative Society. The object & reason of the Act reads as under:
" An Act to provide for the reservation of vacancies in public services
and posts in favour of the persons belonging to the Scheduled Castes, Scheduled
Tribes and other Backward Classes of citizens and for matters connected
therewith or incidental thereto. "
Therefore, reading of objective of the Act of 1994 along with the definition
of establishment it transpires that the Registrar under Section 55 of the Act
of 1960 can lay down service condition for Co- operative Society in which the
State has 51 percent of share capital.
In case any Co-operative Society in which the State does not have 51 percent
of share capital, then that Co-operative Society will not come within the
definition of establishment under Section 2(b) of the Act of 1994 and the
Registrar of Co-operative Societies shall have no power to frame rule for
reservation. It is true that under Section 55 of the Act of 1960 the Registrar
can give direction for reservation for the Scheduled Castes and Scheduled
Tribes and other Backward classes while exercising the mandate under Article
16(4-A) of the Constitution but at the same time he cannot ignore the State
legislation i.e. the Act of 1994. In fact, the Act of 1994 was also promulgated
for achieving the object under Article 16(4-A) of the Constitution. Once the
State Legislature has framed an Act which is subsequent legislation in point of
time i.e. the Madhya Pradesh Co- operative Societies Act, 1960 (Act 17 of 1961)
came in 1960 whereas the present Act has come in 1994. It is presumed that
Legislature was aware of the power of the Registrar of the Co- operative
Societies under Section 55 of the Act of 1960 to frame condition of service of
employees of Co-operative Societies despite that the Legislature has
promulgated the Act of 1994 and laid down ceiling that the reservation in
favour of Scheduled Castes, Scheduled Tribes and other Backward classes should
be made in the establishment where Government has more than 51% share holding.
Thus, on reading of both these two enactments it is more than clear that the
Registrar of Co-operative Societies under Section 55 of the Act of 1960 has
power to frame rules but at the same time he cannot ignore the impact of the
Act of 1994. The Registrar of Co-operative Societies can lay down the
reservation in favour of Scheduled Castes, Scheduled Tribes and other Backward
classes as general condition of service only in Co-operative societies in which
the State has more than 51 percent paid up share capital and not for any other
co-operative societies. But the notification dated 6.3.1997 is of general in
nature and does not make any distinction with Co- operative societies which do
not have 51 per cent paid up share capital of State. Therefore, to this extent
the rule framed by the Registrar of Co-operative Societies, Madhya Pradesh by
notification dated 6.3.1997 cannot be upheld and the same is struck down. But
by this it does not mean that the Registrar of Co-operative Societies, Madhya
Pradesh is not denuded of his power to frame rules but he will have to keep in
view the impact of the Act of 1994.
Learned counsel for the respondents has also submitted that the Co-operative
society is not a State within the meaning of Article 12 of the Constitution,
therefore, the writ petition is not maintainable. We need not go into this
aspect as in view of the recent decision of this Act in Supriyo Basu & Ors.
v. W.B.Housing Board & Ors. [(2005) 6 SCC 289] their Lordships have laid
down what are the parameters for challenging the orders passed by the Co-
operative Societies. It has been held that writ would be maintainable against a
Co-operative society if it is established that a mandatory statutory provision
of a statute has been violated. Therefore, nothing turns on this aspect of the
As a result of our above discussion, we do not find any merit in this appeal
and the same is dismissed with no order as to costs.