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CASE NO.: Appeal (civil)  2661 of 2004

PETITIONER: Madhya Pradesh Rajya Sahakari Bank Maryadit

RESPONDENT: State of M.P. & Ors

DATE OF JUDGMENT: 22/02/2007

BENCH: A.K.MATHUR & H.S.BEDI

JUDGMENT: J U D G M E N T  

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 &

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REGISTRAR, COOPERATIVE SOCIETIES, MADHYA PRADESH

No. CR/AP-1/30/2                        Bhopal, Dated 6.3.1997.

                       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 :-          1.      The Managing Director, P.Rajya Sahakari Bank Maryadit,  Bhopal for information and necessary action.

2.      Deputy Registrar, I/C Audit, M.P.Rajya Sahakari Bank Maryadit,  Bhopal for information.

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

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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 aforesaid case.  

               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 :

               " (b)  "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:

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               "  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 matter.          

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       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.