Sri Purna Chandra Misra and ors. Vs. the State of Orissa and ors. - Court Judgment

SooperKanoon Citationsooperkanoon.com/532968
SubjectTrusts and Societies
CourtOrissa High Court
Decided OnSep-07-1992
Case NumberO.J.C. No. 2715 of 1992
JudgeD.P. Mohapatra and ;S.K. Mohanty, JJ.
Reported in1993(II)OLR557
ActsOrissa Co Operative Societies Act, 1962 - Sections 28, 28A, 31 and 123
AppellantSri Purna Chandra Misra and ors.
RespondentThe State of Orissa and ors.
Appellant AdvocateP. Acharya, Adv.
Respondent AdvocateGovt. Adv. and ;A. Mohanty, U.P. Mohanty and R.K. Das
Cases ReferredSocieties and Anr. v. K. Kunjabmu and Ors.
Excerpt:
- labour & services pay scale:[tarun chatterjee & r.m. lodha,jj] fixation - orissa service code (1939), rule 74(b) promotion - government servant, by virtue of rule 74(b), gets higher pay than what he was getting immediately before his promotion - circular dated 19.3.1983 modifying earlier circular dated 18.6.1982 resulting in reduction of pay of employee on promotion held, it is not legal. statutory rules cannot be altered or amended by such executive orders or circulars or instructions nor can they replace statutory rules. - that it was running smoothly and was doing well; referring to preamble of the act, the court observed that the legislation was intended to facilitate the formation and working of co-operative societies for the promotion of thrift, self-help and mutual aid among agriculturists and other persons with common economic needs so as to bring about better living, better business and better methods of production and for that purpose to consolidate and amend the law relating to co-operative societies in the state of madras. the court accepted the position that determination of constitutionality of statute and interpretation of legislative entry taking into account legislative history and practice is well-established principle. 10. another justification suggested for the action, though feebly is the stay order passed by the registrar in the revision case on account of which the election programme could not be completed.d.p. mohapatra, j.1. in this writ application the petitioners have assailed the order dated 27-3-1992 of the state govt. in the co-operation department vide annexure-2, where in purported exercise of the power conferred by section 123 of the orissa co-operative societies act, 1362 (orissa act 2 of 1963) (for short 'the act') the puri urban co-operative bank limited, puri has been exempted from the provisions of section 28 excluding sub-section (1), section 28-a of the said act and it is ordered that the provisions of sub-sec, (1) of section 31 of the said act shall apply to the aforesaid society with the modification as specified in the order and also the order issued by the state government on the same day (annexure 3) in purported exercise of the powers conferred by section 31 of the act, nominating the president and four directors' of the bank.2. the relevant facts which emerge from the averments made in the writ application may be shortly stated thus :the petitioners are members of the puri urban co-operative bank ltd. the bank was established in the year 1941-45 with the initiative taken by some local people and it was registered as a co-operative society under the bihar and orissa cooperative societies act,1935. in course of time the society has gained popularity; its business has grown manyfold ; its membership has increased; the membership of the society stood at 23184 in the year 1988-89; and deposits grew from rs. 3000/- to rs. 4,24,98,289,61 as revealed in the audit report of the addl. registrar, co-operative societies (audit) for the year 1989-90. the society has not received any assistance from the stale government in any form. all these years the management of the bank vested in a board of directors duly elected under the provisions of the act and of the bye-law of the society. the terms of the last committee expired in july. 1991, prior to that the asst. registrar-cum-election officer of the sank issued the notice vide his office order no. 2163 dated 11-4-1991 setting out the programma for election of the members of the committee. after the election process had commenced and it was yet to be completed* the state government issued the impugned order as per annexures 2 and 3, thereby frustrating the election process and vesting of management of the bank in the hands of its nominees. the action taken by the state government is challenged on the grounds, inter alia, that it is against the provisions of the act, the intent and purpose of the statute; that it is without any basis; that it is motivated by political consideration and to the benefit of some loyalist of the party in power; and that the orders have been passed without due application of mind. the state government represented by the secretary, co-operation department, registrar, co-operative societies, orissa. bhubaneswar, deputy secretary, co-operation department, asst. registrar co-operative societies, puri are impleaded as opp. parties 1 to 3 and 3 respectively, the president and the nominated directors are impleaded as opp. parties 4 to 7 and the secretary of the bank is impleaded as opp. party no. 9 in the writ application.3. opp. parties 1 to 3 in their counter affidavit have not controverted the factual positions that the bank has not received any assistance from the state government; that it was running smoothly and was doing well; that the election process for election of the members of the committee had already commenced when the impugned orders were passed. their plea, shortly put, is that when the election process was in progress, opp. party no. 2, registrar, co-operative societies passed an interim order of stay in a revision case challenging the election by which further steps for election could not be taken; the asst. registrar who was kept in charge of management of the bank could not devote sufficient time to look into the day to day functions of the bank; in such situation the state government thought it fit to intervene and vest the power of management of the bank in the hands of the person whom it considered to be competent and sufficient for the purpose. with that end in view the government took recourse to its power under section 123 of the act and also passed order nominating the president and directors in exercise of its power under section 31 of the act. the averments in the writ application convey an impression that the measure is a temporary one. it is, however, admitted in the counter affidavit that sub-sequently the registrar vacated the interim order of stay and negatived the challenge raised to the election in the revision petition and dismissed the case.opp. parties 4 to 7, the beneficiaries under the impugned order annexure-3, in their counter affidavit also do not refute the facts dis- cussed earlier. they also contend that the registrar had illegally and erroneously passed an order of stay stalling the election process; how- ever, he subsequently vacated the order and dismissed the case. in the meantime the state government, in exercise of the statutory power vested in it, has passed the impugned orders. the said opposite parties deny that the impugned orders are vitiated by mala fide on favourtism on the part of state government. it is also their case that the arrangement is a temporary one. the opposite parties have challenged the locus stand of some of the petitioners to file the writ petition.opp. party no. 9, the secretary of the bank, has taken similar stand in the separate counter affidavit tiled by him. he has also made a grievance against the interim order of stay of the election proceeding passed by the registrar. he has reiterated the stand taken by the other opposite parties that the impugned orders were necessary due to peculiar situation arising from the stay order.4. in course of his arguments, sri acharya appearing for the petitioner reiterated the contentions as noted earlier and also raised the question of invalidity of section 123 on the ground of excessive delegation of legislative function. he also submitted that even if the statutory provisions is held to be valid, action taken by the state government in the present case should be held to be invalid since it goes against the intent and purpose of the act. the learned govt. advocate and sri a. mohanty, counsel for the opposite parties, on the other hand, supported the impugned orders on the ground of bona fide exercise of power to meet the particular situation. 6. before pr6ceeding to discuss the case it will be helpful to notice some of the statutory provisions relevant for appreciation of the contentions raised by the petitioners.section 28(1) of the act lays down that the management of a society shall vest in a committee constituted in accordance with the rules and its bye-laws, and the committee so constituted shall exercise such powers and perform such duties as may be conferred or imposed by or under the act.sub-section (1-a) provides that the term of office of the committee shall be four years from the date of assumption of office by the committee.section 28 (1-b) provides as follows :'(1-b) the expiration of the period of four years shall operate as a dissolution of the committee and thereupon ;(i) the members including the president of the committee shall be deemed to nave vacated their offices ;(ii) if the election of a new committee i$ not completed by the date of such dissolution, the management of the society shall vest with the registrar and, upon such vesting, the registrar or any officer subordinate to him and authorised by him in that behalf shall manage the affairs of the society and take steps for constitution of the committee within six months from the date of dissolution of the committee in accordance with the provisions of this act, the rules made thereunder and the bye-laws of the society :provided that the registrar may, by order for sufficient cause, extend the aforesaid period as may be specified in the order, so, however, that the total period shall not exceed one year.'sub-section (3) of section 28 lays down the provisions regarding constitution of committee of a society which is assisted by the state government in any of the forms specified in sub-section (1) of section 31.section 31 deals with the nominees of the government on the committee of a society.sub-section (1) of section 31 provides that where the state government or central government :(a) has subscribed to the share capital of a society or has granted any assistance in cash or in kind or in any other manner : or(b) has assisted indirectly in the formation or augmentation of the share capital of a society as provided in chapter vi ; or(c) has guaranteed the repayment of principal and payment of interest on debentures issued by a society ; or(d) has guaranteed the repayment of principal and payment of interest on loans and advances to a society ;the state government or the central government, as the case may be, or any authority specified by such government in this behalf shall have the right to nominate one-third of the total number of members of the committee of such society ;provided that the number of members so nominated shall in no case exceed three,in sub-section (3) it is laid down that a person nominated to the committee of a society under sub-section (1) shall not be eligible to contest any election for the office of the president or any other office-bearer of the committee of a society, section 123 which is particularly material for the present purpose deals with the power to exempt a class of societies. it lays down that the state government may, by general or special order, exempt any society or any class of societies from any of the provisions of the act, or may direct that such provisions shall apply to such society or class of societies with such modifications as may be specified in the order.rule 30-a of the orissa co-operative societies rules, 1965 contains the provisions regarding the manner and procedure for holding ejection of the committee,6. from the above provisions and other provisions of the act, it is clear to us that the scheme of the act is to encourage collective efforts by citizens subject to certain regulatory measure by the state and its functionaries and to help the members of a society to be involved in its management. with that end in view provisions have been made to maintain internal democracy in functioning of the society and to till up the committee of the management and office bearers by election.7. at this stage some decisions cited by the counsel for the parties may be noticed.the apex court in the case of m/s. babu ram jagadish kumar and co. v. state of punjab and ors., reported in air 1979 sc 1475 reviewing the previous decisions of the court observed that the delegation of power by the legislature to a local authority or to the executive government to vary or modify an existing law would not be unconstitutional so long as such delegation does not involve the abdication of essential legislative power by the legislature ; that such delegations of legislative power have been upheld by this court on several varied and diverse grounds, such as, the scheme and policy of the statute under which the power is delegated, the presence of guidelines in the statute regarding the exercise of delegated power, the lack of time for the legislature to make provision with regard to all the details involved in the administration of the law, the incapacity of the legislature to foresee all future events, the nature of the subject-matter of legislation and the nature of the donee of power, etc. the court further observed that even in matters relating to taxation laws, it has been consistently held that the legislature can delegate the power to fix rates of tax, provided there are necessary guidelines regarding such fixation on the ground that in a modern society, taxation is one of the methods by which economic and social goals of the state can be achieved and the power to tax, therefore, should be a flexible power and capable of being easily altered to meet the exigencies of circumstances and such delegation has been held to be not amounting to delegation of essential legislative function.dealing with the challenge of the constitutional validity of section 60 of the madras co-operative societies act (6 of 1932) which vested power in the state government to exempt of societies from application of the provisions of the act the apex court in the case of the registrar of co-operative societies and anr. v. k. kunjabmu and ors., reported in air 1880 sc 360 ruled that sec, 60 is not void on the ground of excessive delegation of legislative power. the power given to, the government under section 60 of the act is to be exercised so as to advance the policy and objects of the act, according to the guidelines as may be gleaned from the preamble and other provisions which are clear.referring to preamble of the act, the court observed that the legislation was intended to facilitate the formation and working of co-operative societies for the promotion of thrift, self-help and mutual aid among agriculturists and other persons with common economic needs so as to bring about better living, better business and better methods of production and for that purpose to consolidate and amend the law relating to co-operative societies in the state of madras. the court further observed that the objectives are clear and the guidelines are there. there are numerous provisions of the act dealing with registration of societies, rights and liabilities of members, duties of registered societies, privileges of registered societies, property and funds of registered societies, inquiry and inspection, supersession of committees of societies, dissolution of societies, surcharge and attachment, arbitration etc. but, numerous as the provisions are they are not capable of meeting the extensive demands of the complex situations which may arise in course of the working of the act and the formation and the functioning of the societies. in fact, the too rigorous applications of some of the provisions of the act may itself occasionally result in frustrating the very objects of the act, instead of them.on the above analysis and observations, the court negatived the challenge and upheld the constitutional validity of section 60.in the case of d.k. trivedi and sons and ors. etc. v. state of gujarat and ors., reported in air 193 6 sc 1323, the court upheld the constitutional validity of section 15(1) of the mines and minerals (regulation and development) act '(67 of 1957), which vested rule-making power in the state. the court accepted the position that determination of constitutionality of statute and interpretation of legislative entry taking into account legislative history and practice is well-established principle.the court decided that sub-section (t) of section 15 is constitutional and the rule-making power conferred thereunder upon the state governments does not amount to excessive delegation of legislative power to the executive. the guidelines for the exercise of the rule-making power under section 15(1) are, thus, to be found in the object for which such power is conferred (namely, 'for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith'), the meaning of the word 'regulating', the scope of the phrase 'for purposes connected therewith'', the illustrative matters set out in sub-section (2) of section 13, and in the restrictions and other matters contained in sections 4 to 12.8. from the principles discussed in the decisions of the apex court noted above it is clear that it is permissible for the legislature to delegate its legislative function in favour of an authority or the executive government under a statute and in such event the provisions in the statute cannot be held to be unconstitutional or invalid provided that there are sufficient guidelines in the statute, its preamble, aims and objects and such legislative function is exercised with a view to advance the aim, object and purpose of the enactment. as held by the supreme court in air 1980 sc 350 (supra), the power is vested in the state government to exempt any registered society from any of the provisions of the act or to direct that such provision shall apply to such society with suitable modification, with a view to meet certain contingency which is not covered by the provisions of the act or which creates serious difficulty in smooth functioning of the society.in this case the power of exemption is vested under section 123 of the act. the power in the very nature of it is a drastic one and entails far-reaching and serious consequence. therefore, such power should be cautiously and sparingly exercised in extraordinary circumstances.9. in the present case, the impugned notification as per annexure-2 indicates that section 28 excluding sub-section (1) thereof shall not apply to the society and section 31 shall apply to the society with the modification that instead of elected president and members the committee shall comprise of nominees of the state govt. only. the only justification for such a drastic measure as urged by on behalf of the opp. parties is that the asst. registrar who was kept in charge of the management of the society after expiry of the term of office of the last committee could not devote sufficient time to look into the day-to-day activities of the society.the statute provides that after expiry of the term of office of the committee, the management gets automatically vested: in the registrar of co-operative societies and it will be open for him to look after the management himself or appoint an officer subordinate to him for the purpose. neither is it stated in the counter affidavits nor urged during hearing of the case that the registrar made any attempt to resolve the difficulty due to the inability or incapacity of the concerned asst. registrar to manage the affairs of the society. the problem as we see was a fairly simple one which could be solved by taking suitable administrative action for the purpose of efficient administration/management of the society ; for that it was not necessary to take any drastic measure to exempt the society from the provisions of section 28 and substitutes section 31 in the manner noted earlier. the inevitable conclusion is that the steps taken by the state government was, as noted earlier, to substitute a committee constituted in the manner prescribed under the statute with a few nominees of the state government. such unnecessary and unwarranted action gives ample scope for criticism that the plea taken on behalf of the opposite parties is a mere ruse to take over management of the society. such a measure cuts at the root of the smooth functioning of the co-operative society which appears from the aims, objects and preamble and the provisions of the act.10. another justification suggested for the action, though feebly is the stay order passed by the registrar in the revision case on account of which the election programme could not be completed. as noted earlier, the registrar himself subsequently vacated the interim order. if pendency of the revision petition caused any difficulty then a move could have been made in an appropriate manner for expeditious disposal of the case. for this it was not necessary to take drastic measure of exempting the society from certain provisions of the act and modifying section 31 in the manner aforesaid,11. on careful consideration of the entire matter our conclusion, is that the impugned orders are unsupportable and unsustainable and have to be clashed. it is ordered accordingly. we direct the opp. parties to take prompt, steps for constitution of the committee for management of the society as expeditiously as possible. till the committee comes to office, the registrar, co-operative societies or any officer nominated by him shaft remain in charge of the management of the society. there will be no order for cost.s.k. mohanty, j.12. i agree.
Judgment:

D.P. Mohapatra, J.

1. In this writ application the petitioners have assailed the order dated 27-3-1992 of the State Govt. in the Co-operation Department vide Annexure-2, where in purported exercise of the power conferred by Section 123 of the Orissa Co-operative Societies Act, 1362 (Orissa Act 2 of 1963) (for short 'the Act') the Puri Urban Co-operative Bank Limited, Puri has been exempted from the provisions of Section 28 excluding Sub-section (1), Section 28-A of the said Act and it is ordered that the provisions of Sub-sec, (1) of Section 31 of the said Act shall apply to the aforesaid society with the modification as specified in the order and also the order issued by the State Government on the same day (Annexure 3) in purported exercise of the powers conferred by Section 31 of the Act, nominating the President and four Directors' of the Bank.

2. The relevant facts which emerge from the averments made in the writ application may be shortly stated thus :

The petitioners are members of the Puri Urban Co-operative Bank Ltd. The Bank was established in the year 1941-45 with the initiative taken by some local people and it was registered as a co-operative society under the Bihar and Orissa Cooperative Societies Act,1935. In course of time the society has gained popularity; its business has grown manyfold ; its membership has increased; the membership of the society stood at 23184 in the year 1988-89; and deposits grew from Rs. 3000/- to Rs. 4,24,98,289,61 as revealed in the Audit report of the Addl. Registrar, Co-operative Societies (Audit) for the year 1989-90. The society has not received any assistance from the Stale Government in any form. All these years the management of the Bank vested in a Board of Directors duly elected under the provisions of the Act and of the Bye-law of the society. The terms of the last Committee expired in July. 1991, Prior to that the Asst. Registrar-cum-Election Officer of the Sank issued the notice vide his office order No. 2163 dated 11-4-1991 setting out the programma for election of the members of the Committee. After the election process had commenced and it was yet to be completed* the State Government issued the impugned order as per Annexures 2 and 3, thereby frustrating the election process and vesting of management of the Bank in the hands of its nominees. The action taken by the State Government is challenged on the grounds, inter alia, that it is against the provisions of the Act, the intent and purpose of the statute; that it is without any basis; that it is motivated by political consideration and to the benefit of some loyalist of the party in power; and that the orders have been passed without due application of mind. The State Government represented by the Secretary, Co-operation Department, Registrar, Co-operative Societies, Orissa. Bhubaneswar, Deputy Secretary, Co-operation Department, Asst. Registrar Co-operative Societies, Puri are impleaded as opp. parties 1 to 3 and 3 respectively, the President and the nominated Directors are impleaded as opp. parties 4 to 7 and the Secretary of the Bank is impleaded as opp. party No. 9 in the writ application.

3. Opp. parties 1 to 3 in their counter affidavit have not controverted the factual positions that the Bank has not received any assistance from the State Government; that it was running smoothly and was doing well; that the election process for election of the Members of the Committee had already commenced when the impugned orders were passed. Their plea, shortly put, is that when the election process was in progress, opp. party No. 2, Registrar, Co-operative Societies passed an interim order of stay in a revision case challenging the election by which further steps for election could not be taken; the Asst. Registrar who was kept in charge of management of the Bank could not devote sufficient time to look into the day to day functions of the Bank; in such situation the State Government thought it fit to intervene and vest the power of management of the Bank in the hands of the person whom it considered to be competent and sufficient for the purpose. With that end in view the Government took recourse to its power Under Section 123 of the Act and also passed order nominating the President and Directors in exercise of its power Under Section 31 of the Act. The averments in the writ application convey an impression that the measure is a temporary one. It is, however, admitted in the counter affidavit that sub-sequently the Registrar vacated the interim order of stay and negatived the challenge raised to the election in the revision petition and dismissed the case.

Opp. parties 4 to 7, the beneficiaries under the impugned order Annexure-3, in their counter affidavit also do not refute the facts dis- cussed earlier. They also contend that the Registrar had illegally and erroneously passed an order of stay stalling the election process; how- ever, he subsequently vacated the order and dismissed the case. In the meantime the State Government, in exercise of the statutory power vested in it, has passed the impugned orders. The said opposite parties deny that the impugned orders are vitiated by mala fide on favourtism on the part of State Government. It is also their case that the arrangement is a temporary one. The opposite parties have challenged the locus stand of some of the petitioners to file the writ petition.

Opp. party No. 9, the Secretary of the Bank, has taken similar stand in the separate counter affidavit tiled by him. He has also made a grievance against the interim order of stay of the election proceeding passed by the Registrar. He has reiterated the stand taken by the other opposite parties that the impugned orders were necessary due to peculiar situation arising from the stay order.

4. In course of his arguments, Sri Acharya appearing for the petitioner reiterated the contentions as noted earlier and also raised the question of invalidity of Section 123 on the ground of excessive delegation of legislative function. He also submitted that even if the statutory provisions is held to be valid, action taken by the State Government in the present case should be held to be invalid since it goes against the intent and purpose of the Act. The learned Govt. Advocate and Sri A. Mohanty, counsel for the opposite parties, on the other hand, supported the impugned orders on the ground of bona fide exercise of power to meet the particular situation.

6. Before pr6ceeding to discuss the case it will be helpful to notice some of the statutory provisions relevant for appreciation of the contentions raised by the petitioners.

Section 28(1) of the Act lays down that the management of a society shall vest in a committee constituted in accordance with the Rules and its bye-laws, and the committee so constituted shall exercise such powers and perform such duties as may be conferred or imposed by or under the Act.

Sub-section (1-a) provides that the term of office of the committee shall be four years from the date of assumption of office by the committee.

Section 28 (1-b) provides as follows :

'(1-b) the expiration of the period of four years shall operate as a dissolution of the committee and thereupon ;

(i) the members including the President of the committee shall be deemed to nave vacated their offices ;

(ii) if the election of a new committee i$ not completed by the date of such dissolution, the management of the society shall vest with the Registrar and, upon such vesting, the Registrar or any officer subordinate to him and authorised by him in that behalf shall manage the affairs of the society and take steps for constitution of the committee within six months from the date of dissolution of the committee in accordance with the provisions of this Act, the Rules made thereunder and the bye-laws of the society :

Provided that the Registrar may, by order for sufficient cause, extend the aforesaid period as may be specified in the order, so, however, that the total period shall not exceed one year.'

Sub-section (3) of Section 28 lays down the provisions regarding constitution of committee of a society which is assisted by the State Government in any of the forms specified in Sub-section (1) of Section 31.

Section 31 deals with the nominees of the Government on the committee of a society.

Sub-section (1) of Section 31 provides that where the State Government or Central Government :

(a) has subscribed to the share capital of a society or has granted any assistance in cash or in kind or in any other manner : or

(b) has assisted indirectly in the formation or augmentation of the share capital of a society as provided in Chapter VI ; or

(c) has guaranteed the repayment of principal and payment of interest on debentures issued by a society ; or

(d) has guaranteed the repayment of principal and payment of interest on loans and advances to a Society ;

The State Government or the Central Government, as the case may be, or any authority specified by such Government in this behalf shall have the right to nominate one-third of the total number of members of the committee of such society ;

Provided that the number of members so nominated shall in no case exceed three,

In Sub-section (3) it is laid down that a person nominated to the committee of a society under Sub-section (1) shall not be eligible to contest any election for the office of the President or any other office-bearer of the committee of a society, Section 123 which is particularly material for the present purpose deals with the power to exempt a class of societies. It lays down that the State Government may, by general or special order, exempt any society or any class of societies from any of the provisions of the Act, or may direct that such provisions shall apply to such society or class of societies with such modifications as may be specified in the order.

Rule 30-A of the Orissa Co-operative Societies Rules, 1965 contains the provisions regarding the manner and procedure for holding ejection of the committee,

6. From the above provisions and other provisions of the Act, it is clear to us that the scheme of the Act is to encourage collective efforts by citizens subject to certain regulatory measure by the State and its functionaries and to help the members of a society to be involved in its management. With that end in view provisions have been made to maintain internal democracy in functioning of the society and to till up the committee of the management and office bearers by election.

7. At this stage some decisions cited by the counsel for the parties may be noticed.

The Apex Court in the case of M/s. Babu Ram Jagadish Kumar and Co. v. State of Punjab and Ors., reported in AIR 1979 SC 1475 reviewing the previous decisions of the Court observed that the delegation of power by the legislature to a local authority or to the Executive Government to vary or modify an existing law would not be unconstitutional so long as such delegation does not involve the abdication of essential legislative power by the legislature ; that such delegations of legislative power have been upheld by this Court on several varied and diverse grounds, such as, the scheme and policy of the statute under which the power is delegated, the presence of guidelines in the statute regarding the exercise of delegated power, the lack of time for the legislature to make provision with regard to all the details involved in the administration of the law, the incapacity of the legislature to foresee all future events, the nature of the subject-matter of legislation and the nature of the donee of power, etc. The Court further observed that even in matters relating to taxation laws, it has been consistently held that the legislature can delegate the power to fix rates of tax, provided there are necessary guidelines regarding such fixation on the ground that in a modern society, taxation is one of the methods by which economic and social goals of the State can be achieved and the power to tax, therefore, should be a flexible power and capable of being easily altered to meet the exigencies of circumstances and such delegation has been held to be not amounting to delegation of essential legislative function.

Dealing with the challenge of the constitutional validity of Section 60 of the Madras Co-operative Societies Act (6 of 1932) which vested power in the State Government to exempt of Societies from application of the provisions of the Act the Apex Court in the case of the Registrar of Co-operative Societies and Anr. v. K. Kunjabmu and Ors., reported in AIR 1880 SC 360 ruled that Sec, 60 is not void on the ground of excessive delegation of legislative power. The power given to, the Government Under Section 60 of the Act is to be exercised so as to advance the policy and objects of the Act, according to the guidelines as may be gleaned from the preamble and other provisions which are clear.

Referring to preamble of the Act, the Court observed that the legislation was intended to facilitate the formation and working of co-operative societies for the promotion of thrift, self-help and mutual aid among agriculturists and other persons with common economic needs so as to bring about better living, better business and better methods of production and for that purpose to consolidate and amend the law relating to co-operative societies in the State of Madras. The Court further observed that the objectives are clear and the guidelines are there. There are numerous provisions of the Act dealing with registration of societies, rights and liabilities of members, duties of registered societies, privileges of registered societies, property and funds of registered societies, inquiry and inspection, supersession of committees of societies, dissolution of societies, surcharge and attachment, arbitration etc. But, numerous as the provisions are they are not capable of meeting the extensive demands of the complex situations which may arise in course of the working of the Act and the formation and the functioning of the societies. In fact, the too rigorous applications of some of the provisions of the Act may itself occasionally result in frustrating the very objects of the Act, instead of them.

On the above analysis and observations, the Court negatived the challenge and upheld the constitutional validity of Section 60.

In the case of D.K. Trivedi and sons and Ors. etc. v. State of Gujarat and Ors., reported in AIR 193 6 SC 1323, the Court upheld the constitutional validity of Section 15(1) of the Mines and Minerals (Regulation and Development) Act '(67 of 1957), which vested rule-making power in the State. The Court accepted the position that determination of constitutionality of statute and interpretation of legislative entry taking into account legislative history and practice is well-established principle.

The Court decided that Sub-section (T) of Section 15 is constitutional and the rule-making power conferred thereunder upon the State Governments does not amount to excessive delegation of legislative power to the executive. The guidelines for the exercise of the rule-making power Under Section 15(1) are, thus, to be found in the object for which such power is conferred (namely, 'for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith'), the meaning of the word 'regulating', the scope of the phrase 'for purposes connected therewith'', the illustrative matters set out in Sub-section (2) of Section 13, and in the restrictions and other matters contained in Sections 4 to 12.

8. From the principles discussed in the decisions of the apex Court noted above it is clear that it is permissible for the legislature to delegate its legislative function in favour of an authority or the executive Government under a statute and in such event the provisions in the statute cannot be held to be unconstitutional or invalid provided that there are sufficient guidelines in the statute, its preamble, aims and objects and such legislative function is exercised with a view to advance the aim, object and purpose of the enactment. As held by the Supreme Court in AIR 1980 SC 350 (supra), the power is vested in the State Government to exempt any registered society from any of the provisions of the Act or to direct that such provision shall apply to such society with suitable modification, with a view to meet certain contingency which is not covered by the provisions of the Act or which creates serious difficulty in smooth functioning of the society.

In this case the power of exemption is vested Under Section 123 of the Act. The power in the very nature of it is a drastic one and entails far-reaching and serious consequence. Therefore, such power should be cautiously and sparingly exercised in extraordinary circumstances.

9. In the present case, the impugned notification as per Annexure-2 indicates that Section 28 excluding Sub-section (1) thereof shall not apply to the society and Section 31 shall apply to the society with the modification that instead of elected President and members the Committee shall comprise of nominees of the State Govt. only. The only justification for such a drastic measure as urged by on behalf of the opp. parties is that the Asst. Registrar who was Kept in charge of the management of the society after expiry of the term of office of the last committee could not devote sufficient time to look into the day-to-day activities of the society.

The statute provides that after expiry of the term of office of the committee, the management gets automatically vested: in the Registrar of Co-operative Societies and it will be open for him to look after the management himself or appoint an officer subordinate to him for the purpose. Neither is it stated in the counter affidavits nor urged during hearing of the case that the Registrar made any attempt to resolve the difficulty due to the inability or incapacity of the concerned Asst. Registrar to manage the affairs of the society. The problem as we see was a fairly simple one which could be solved by taking suitable administrative action for the purpose of efficient administration/management of the society ; for that it was not necessary to take any drastic measure to exempt the society from the provisions of Section 28 and substitutes Section 31 in the manner noted earlier. The inevitable conclusion is that the steps taken by the State Government was, as noted earlier, to substitute a committee constituted in the manner prescribed under the statute with a few nominees of the State Government. Such unnecessary and unwarranted action gives ample scope for criticism that the plea taken on behalf of the opposite parties is a mere ruse to take over management of the society. Such a measure cuts at the root of the smooth functioning of the co-operative society which appears from the aims, objects and preamble and the provisions of the Act.

10. Another justification suggested for the action, though feebly is the stay order passed by the Registrar in the Revision Case on account of which the election programme could not be completed. As noted earlier, the Registrar himself subsequently vacated the interim order. If pendency of the revision petition caused any difficulty then a move could have been made in an appropriate manner for expeditious disposal of the case. For this it was not necessary to take drastic measure of exempting the society from certain provisions of the Act and modifying Section 31 in the manner aforesaid,

11. On careful consideration of the entire matter our conclusion, is that the impugned orders are unsupportable and unsustainable and have to be clashed. It is ordered accordingly. We direct the opp. parties to take prompt, steps for constitution of the committee for management of the society as expeditiously as possible. Till the Committee comes to office, the Registrar, Co-operative Societies or any Officer nominated by him shaft remain in charge of the management of the society. There will be no order for cost.

S.K. Mohanty, J.

12. I agree.