Registrar Cannot Be a Judge of His Own Cause: Punjab and Haryana High Court Quashes Amendments

Court rules amendments by Administrator-cum-Registrar violate statutory provisions under Punjab Co-operative Societies Act, 1961. In a landmark judgment, the Punjab and Haryana High Court quashed the amendments made by the Registrar of Co-operative Societies, Punjab, who also served as the Administrator of the Punjab State Cooperative Banking. The amendments were declared illegal and beyond the Registrar's jurisdiction under the Punjab Co-operative Societies Act, 1961. The bench, comprising Justices Sanjeev Prakash Sharma and Sukhvinder Kaur, underscored the improper dual role assumed by the Registrar and stressed the importance of adhering to the statutory framework.

The petitions were filed by Rajinder Kumar Malhotra and Sukhdev Singh challenging the amendments made to the Punjab State Cooperative Financing Institutions Service (Common Cadre) Rules, 1970-71, dated November 29, 2010. The amendments were initiated and approved by the Registrar, who had appointed himself as an Administrator of the Punjab State Cooperative Banking. The petitioners argued that such actions were illegal and contravened the provisions of the Punjab Co-operative Societies Act, 1961, and the Punjab Co-operative Societies Rules, 1963.

The court noted that the Registrar, acting as both the Administrator and the Registrar, amended the rules unilaterally. The judgment stated, "The Registrar, who appointed himself as Administrator, recommended and approved the amendment, acting in dual capacities, which is not permissible under the law."

The court emphasized the cooperative movement's ethos, highlighting the importance of member participation in managing society affairs. "The amendments wrested powers from the apex body and vested them in the Managing Director, an IAS officer, which undermines the cooperative principles and statutory provisions," the bench observed.

The court examined various sections of the Punjab Co-operative Societies Act, 1961, particularly Section 84-A, which pertains to the constitution of a common cadre of employees. It found that the amendments should have been framed by the apex society with prior approval from the Registrar, not unilaterally by an Administrator. "The Administrator could not be empowered to amend the rules or frame new ones," the judgment read.

The court dismissed the respondents' argument citing the doctrine of necessity. It held that policy decisions could not be made by an Administrator, as such actions go beyond the intended scope of administrative duties during the tenure of an Administrator.

Justice Sanjeev Prakash Sharma remarked, "The very ethos of the cooperative movement is based on the role of members in managing their own affairs. The exercise of power by the Registrar in this case is a classic example of colorable exercise of authority, which cannot be sustained."

The Punjab and Haryana High Court's ruling reinstates the importance of adhering to the statutory procedures laid out in the Punjab Co-operative Societies Act, 1961, and the cooperative principles. By quashing the amendments made by the Registrar-cum-Administrator, the court has set a precedent emphasizing the need for proper governance and adherence to legal frameworks in cooperative societies. The judgment is expected to reinforce the legal boundaries within which administrators and registrars must operate, ensuring that the cooperative movement's democratic principles are upheld.

Date of Decision: May 3, 2024