Allahabad High Court Judgement

Allahabad High Court Judgement

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JUDGEMENT HEADLINE : Guidelines For Appointment Of Administrator In Cooperative Socities - Laid Down.
JUDGEMENT TITLE : C/M Distt. Coop. Bank Ltd. Thru' Chairman & Anr. Vs. State Of U.P. Thru' Secy. (Coop.) & Ors. On 17/03/2005 By Allahabad High Court
CASE NO : WRIT - C NO. 38022 OF 2004
CORAM : Hon'ble Yatindra Singh,J. And Hon'ble Raghunath Kishore Rastogi,J.

HIGH COURT OF JUDICATURE AT ALLAHABAD

RESERVED

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
1. Civil Misc Writ Petition No 38022 Of 2004
Committee Of Management District Co-operative Bank Limited Through Chairman And Another
... Petitioners
State Of UP Through Secretary Co-operative And Others
... Respondents
Sri HR Misra
Sri MP Gupta
Sri Rajiv Joshi
Sri Siddharth Singh
... Advocates For Petitioners
Sri Sudhir Agrawal, Senior Advocate, Additional Advocate General
Sri Ravi Kant, Senior Advocate
Sri CS Singh, SC
Sri KK Roy
...Advocates For Respondents
Coram
Hon'ble Yatindra Singh, J
Hon'ble RK Rastogi, J.
Date Of Judgment 17.3.2005
Judgment
Connected With Following Writ Petitions
2.WP No. 39025 Of 2004
3.WP No. 40654 Of 2004
4.WP No. 42557 Of 2004
5.WP No. 42560 Of 2004
6.WP No. 43260 Of 2004
7.WP No. 44174 Of 2004
8.WP No. 44796 Of 2004
9.WP No. 45532 Of 2004
10.WP No. 51433 Of 2004
11.WP No. 55547 Of 2004
12.WP No. 55652 Of 2004
13.WP No. 55851 Of 2004
14.WP No. 01191 Of 2005
15.WP No. 03897 Of 2005
16.WP No. 05373 Of 2005
17.WP No. 09191 Of 2005
18.WP No. 13830 Of 2005

(Delivered By Hon'ble Yatindra Singh, J)
1. The Main Question Involved In These Writ Petitions Relates To The Interpretation And Scope Of Section 29(5) Of The UP Co-operative Societies Act, 1965 (the Act) And Deals With The Considerations/factors Governing Discretion Of The Registrar While Appointing An Administrator Or The Committee Of Administrators Under Section 29(5)(b) Of The Act. These Points Arises As The Appointments Of Private Persons As Administrators And In The Committee Of Administrators Under Section 29(5)(b) Of The Act Are Challenged In These Writ Petitions.

THE FACTS
2. A Co-operative Society {section 2(f) Of The Act} Means A Co-operative Society Registered Under The Act. Chapter III Of The Act Deals With 'MEMBERS OF CO-OPERATIVE SOCIETIES AND THEIR RIGHTS AND LIABILITIES'. Section 17 Of This Chapter Explains Who Can Be Members Of A Co-operative Society. It Shows That Not Only An Individual (natural Person) Can Be Member Of A Co-operative Society But State Government, Or Central Government, Or Firms, Or Other Incorporated Bodies (including Cooperative Bodies), Or Even Un-incorporated Bodies (if Approved By The Registrar) Can Be Member Of A Co-operative Society.

3. Members For Promotion Of Their Economic Interest May Form A Co-operative Society (section 4 Of The Act) In Accordance With Co-operative Principles. Co-operative Societies Are Broadly Divided Into Three Tiers.
(i)Primary Society
(ii)Central Society Or Central Co-operative Society.
(iii)Apex Society, Or Apex Level Society, Or State Level Co-operative Society.

4. Generally, The Primary Society Is At The Nyaya Panchayat Level And Has Individuals As Its Members. The Central Society Is At The District Level And Has Primary Co-operative Societies As Its Members. The Apex Society Is At The State Level And Has Central Or Primary Societies As Its Members.

5. 'Apex Society' Or Apex Level Society Or 'State Level Co-operative Societies 'are Defined In Section 2(a-4) Of The Act. Banking Is One Of The Ways To Promote Economic Interest And A Co-operative Society For Banking May Be Formed. The Apex Society In The Banking Sector Is UP Co-operative Bank Ltd. Lucknow (UP Co-operative Bank).

6. 'Central Society' Is Defined In Section 2(d-1) Of The Act. It Is A Society That Is Not A Primary Society And Has Other Co-operative Societies As Its Members. The Central Societies In Co-operative Banking Are Known As District Co-operative Banks (DCBs) Of That District. All District Co-operative Banks In The State Are Members Of The Apex Co-operative Society Namely UP Co-operative Bank.

7. The Word 'primary Society' Is Defined In Section 2(q-1) Of The Act. Its Ordinary Membership Is Not Open To Any Other Co-operative Society. Generally It Has Individuals Or Natural Persons As Its Members. There Are Different Kinds Of Primary Societies Facilitating Lending, Crediting And Banking. In Rural Area They Are At Nyaya Panchayat Level And There Could Be More Than One Primary Society In A Nyaya Panchayat Or One Primary Co-operative Society May Serve More Than One Nyaya Panchayat. Most Of The Primary Co-operative Societies Are Members Of Central Banking Society Namely The District Co-operative Bank (DCB) Of That District.

8. Banking In The Co-operative Sector Is Not Confined To The Rural Areas. It Has Operation In Urban Areas Also. Different Districts Have Urban Co-operative Banks UCBs) In Addition To DCB. There Can Be More Than One UCB In A District. UCBs Are Generally Primary Co-operative Societies And Are Defined Under Rule 2(qq) Of The UP Co-operative Societies Rules 1968 (the Rules). Non-agriculturist Individuals Can Be Members Of The UCBs. UCBs May Also Be Members Of The UP Co-operative Bank.

9. Chapter VII Of The Rules Is Titled As CONSTITUTION OF GENERAL BODY OF CO-OPERATIVE SOCIETIES. Rules 84-A Deals With The General Body Of A Co-operative Society. In Case The Co-operative Society Is Having Individuals (natural Persons) As Its Members, It Consists Of The Individuals. In Case The Members Are Individuals (natural Persons) And Other Persons, It Consists Of Individuals And Delegates Of Other Persons. DCBs Have Primary Co-operative Society As Its Members. Its General Body Consists Of Delegates Of The Co-operative Societies That Are Its Members As Detailed In Rule 85-A (a) Of The Rules.

10. Every Co-operative Society Has A Committee Of Management To Govern It. Chapter XXIX Of The Rules Is Titled As RULES FOR ELECTION IN THE CO-OPERATIVE SOCIETIES. General Body Of A Co-operative Society First Elects The Members Of The Committee Of Management. Certain Members Are Disqualified To Become Members Of The Committee Of Management. Disqualifications For Members Of The Committee Of Management Are Mentioned In Rule 453 Of The Rules. The Members Of The Committee Of Management Elect Chairman And Vice-chairman Among Themselves. They Also Elect Their Delegates To Represent Them Before The Co-operative Societies Of Which They Are Members.

11. The Primary Societies Who Are Members Of DCBs Elect Their Delegates To Represent Them Before DCB. These Delegates In Turn Become General Body Of The DCBs. These Delegates In Turn Elect The Committee Of Management Of The DCB. This Committee Of Management Elects Chairman And Vice-chairman Among Themselves And Elect Delegates To Represent That DCB Before The UP Co-operative Bank. The Delegates Elected By A DCB Or UCB Or Any Other Co-operative Society (which Is Member Of The UP Co-operative Bank) Become General Body Of The UP Co-operative Bank And They Elect Their Own Committee Of Management. So The Process Of Election Is First For The Committee Of Management In The Primary Society Then For Its Officer Bearers And Delegates; Thereafter In The Central Society And Finally In The Apex Society.

Details Of Appendix-I And II
12. Sub-section (2)(a) Of Section 29 Of The Act { Section 29(2)(a) Of The Act} (See Appendix-I) States That The Term Of The Committee Of Management Of All Co-operative Societies Is Five Years. Last Elections For The Committees Of Management, Office Bearers And Delegates Of The DCBs And UCBs Were Held In The Month Of July/August 1999. The Period Of Five Years Expired In The Year 2004. After Expiry Of The Term, Government Servants (GS) {either The District Magistrate (DM) Or The District Assistant Registrar (DAR)} Were Appointed As The Administrators (referred As GS Administrators). They Were Subsequently Changed. In Their Place A Private Person Has Been Appointed As An Administrator (referred To As Private Administrator) Or A Committee Of Administrators Has Been Appointed. In All Committees Of Administrators A Private Person Is Chairman And At Least Two GSs As Members. In Some Committees There Are Other Members Also Who Are Private Persons. A Chart Showing The Writ Petition, Date Of Appointment Of GS Administrator, The Date When The GS Administrator Was Replaced By The Private Administrator Or The Committee Of Administrators, And The Persons So Appointed Is Mentioned In Appendix -II To This Judgement. In This Chart It Has Also Been Indicated Whether The Private Person Was Chairman Or Member Of The Outgoing Committee Of Management Or Member Of The General Body Or Not.

13. The Registrar Can Also Supersede Committee Of Management Under Sub-section (1) Of Section 35 {section 35(1)} Of The Act. During Pendency Of Proceeding Under Section 35(1) Of The Act He May Suspend The Committee Of Management Under Sub-section 2 Of Section 35 {section 35(2)} Of The Act. In Case Of Proceeding Under Section 35(2) Of The Act, He May Make Arrangements For Management Under That Section. In Case There Is An Order Under Section 35(1), He May Also Appoint An Administrator Or A New Committee Of Management Under Sub-section (3) Of Section 35 {section 35(3)} Of The Act. In Some Cases Proceedings Under Section 35 Were Taken And The Committee Of Management Was Suspended/superseded And Appointments Were Made Under Section 35 (2) Or 35(3) Of The Act; Thereafter When The Term Was Over, Orders Under Section 29 (5)(b) Of The Act Were Passed. In These Cases The Dates On Which Administrators Were Appointed Under Different Sections Are Also Mentioned. The Details Of The Sections Are Mentioned Below The Dates In Column IV. In Case No Date Is Mentioned Below The Date In Column-IV Of Appendix-II Then It Means That It Is The Date On Which Appointments U/s 29(5)(b) Of The Act Were Made.

14. In WP 9191/05 Elections Were Held Sometime In October 2000 And Five Year Term Will Come To An End In October, 2005. The Committee Of Management In This Case Was Superseded On 4.2.2005. District Magistrate Was Appointed As An Administrator. Subsequently, On 22.2.2005 A Committee Of Administrators With One Sri Shiv Sagar Singh As The Chairman Of The Committee Of Administrators Was Appointed. During Pendency Of The Writ Petition, Sri Shiv Sagar Singh Was Assassinated And Now A New Person Is To Be Appointed.

POINTS FOR DETERMINATION
15. We Have Heard Counsel For The Parties. The Following Points Arise For Determination In These Writ Petitions:
(I)Whether The Outgoing Committee Of Management Is Entitled To Continue After Expiry Of Its Term.
(II)Whether The Petitioners Have Locus-standi (standing) To File The Present Writ Petitions.
(III)Whether The State Government Is Entitled To Issue Government Order Regarding Exercise Of Registrar's Discretion Under Section 29(5)(b) Of The Act.
(IV)Whether There Is Any Justification For The Delay In Holding The Elections. What Is The Effect Of Delay On The Exercise Of Power Under Section 29(5)(b) Of The Act.
(V)What Are The Considerations/factors For Exercising Power Under Section 29(5)(b) Of The Act.
(VI)Whether The Registrar Has Reasonably Exercised Its Power While Appointing Administrators Or The Committees Of Administrators.

POINT-I: OUTGOING COMMITTEE OF MANAGEMENT - CEASES AFTER ITS TERM
16. Chapter IV Of The Act Is Titled As MANAGEMENT OF SOCIETIES. Section 29 Of The Act Is In This Chapter. It Is Titled As 'Committee Of Management'. This Section Deals With The Committee Of Management Of A Co-operative Society. Sub-section (2)(a) Of Section 29 {section 29(2)(a)} Of The Act States That The Term Of Committee Of Management Shall Be 5 Years And The Term Of The Elected Members Of The Committee Of Management Shall Be Co-terminus With It. Sub-section 5(a) Of Section 29 {section 29(5)(a)} Of The Act States That The Existing Committee Of Management Shall Cease To Exist After Expiry Of Its Term Irrespective Of The Fact Whether The Election Of Committee Of Management Takes Place Or Not, In View Of Section 29(5)(a) Of The Act The Committee Of Management Is Not Entitled To Continue After Expiry Of Its Term. This Has Also Been So Held By A Division Bench Of Our Court Reported In Committee Of Management, District Co-operative Bank Ltd Vs. State Of UP And Others: {2003 (56) ALR 667} . We Agree With The Same.

17. In Case The Committee Of Management Can Not Continue After Its Term Then Someone Has To Manage The Co-operative Society: There Can Not Be Vacuum. A Co-operative Society Must Have A Governing Body. Sub- Section (5) (b) Of Section 29 {Section 29(5)(b)} Of The Act Takes Care Of This Situation. It Permits The Registrar To Appoint An Administrator Or A Committee Of Administrators. The Administrator Or Committee Of Administrators Is Entitled To Manage The Co-operative Societies Till Reconstitution Of The New Committee Of Management. It Is Possible That There Might Be Some Delay In Appointing The Administrator Or Committee Of Administrators. This Has Also Been Taken Care Of. Sub-section 5(e) Of Section 29 {Section 29 (5)(e)} Of The Act Further Clarifies That The Secretary Or The Managing Director Of The Co-operative Society Will Look After The Current Duties Of The Committee Of Management Till The Administrator Or Committee Of Administrators Is Appointed.

18. Here We Would Like To Clarify That In View Of Section 29(5)(a) Of The Act The Elected Committee Of Management Is Not Entitled To Continue Beyond The Period Of Its Term. However There Is No Prohibition On The Part Of Registrar To Appoint The Office Bearers Or The Members Of The Outgoing Committee Of The Management As The Administrator, Or As Chairman Or Members Of The Committee Of Administrators. Whether There Are Any Fetters On The Powers Of The Registrar Or In What Circumstances He May Appoint The Office Bearer Or Members Of The Outgoing Committee Of Management Or What Are Relevant Considerations/factors For Appointment Will Be Considered In Some Detail While Deciding The Remaining Points.

POINT-II: THE PETITIONERS HAVE LOCUS STANDI (STANDING)
19. These Writ Petitions Have Been Filed By The Outgoing Committees Of Management Or By The Persons Who Were Members Of The Outgoing Committee Of Management Or Are Members Of The General Body. In These Writ Petitions, Normally The Orders By Which The GS Administrator Have Been Replaced By The Private Persons As Administrator Or By A Committee Of Administrators Have Been Challenged. In Some Writ Petitions The Orders By Which Government Servants Were Initially Appointed As An Administrator Have Also Been Challenged. The Counsel For The Petitioners Have Made A Statement That They Are Not Pressing Their Prayer For Quashing Of The Orders Appointing The GS Administrators. Their Prayers Are Confined Against The Appointment Of Private Administrators Or The Committee Of Administrators. They Claim That
The Registrar While Appointing Private Administrator Or Committee Of Administrators Has Not Considered The Relevant Factors.
He Has Exercised His Power Arbitrarily In Replacing GS Administrators.
He Has Not Acted In The Interest Of The Co-operative Societies.

20. The Outgoing Committee Of Management, Or Its Office Bearer, Or Its Members, Or The Members Of The General Body Of The Co-operative Society Are Interested In The Welfare Of The Co-operative Society. They Are Aggrieved Persons If There Is Any Arbitrary Or Unreasonable Exercise Of Power Affecting The Co-operative Society,. It Can Not Be Said That They Do Not Have A Standing To File The Present Writ Petitions. Apart From It, As We Will Point Out While Deciding Point No. V And VI That In Case Private Persons Are Being Appointed As Administrators Or In The Committee Of Administrators Then The Office Bearers Or The Members Of The Outgoing Committee Of Management Or The Members Of The General Body Are Entitled To Be Considered For Being Appointed As Administrator Or In The Committee Of Administrators Under Section 29(5)(b) Of The Act. The Petitioners Have Locus Standi (standing) To File The Present Writ Petitions.

21. The Counsels For The Respondents Submitted That:
Many Of The Petitioners Are Corrupt.
They Are Not Entitled To Be Appointed As The Administrator Or In The Committee Of Administrators.
They Are Not Entitle To File The Present Writ Petitions.
These Writ Petitions Should Be Dismissed On This Ground At The Threshold.

22. We Have Not Investigated The Aforesaid Submission Of The Respondents: The Reason Is That Neither The Petitioners Have Been Appointed, Nor Their Appointment Is Challenged. If The Allegations Are Correct Then They May Not Be Appointed As Administrator Or In The Committee Of Administrators But This Does Not Mean That If A Wrong Person Is Appointed As An Administrator, Or As Member Of The Committee Of Administrator, Or Any Act Is Done Against The Interest Of The Co-operative Society Of Which They Are Members, Then They Are Debarred From Challenging The Same Or Their Writ Petition Should Be Thrown Out On The Ground That They Have No Standing.

POINT-III: GUIDELINES CAN BE ISSUED
23. The Registrar Under Section 29(5)(b) Of The Act, Has Power To Appoint An Administrator Or Committee Of Administrators After The Elected Committee Of Management Ceases To Exist. The Registrar Has Also Power To Change The Administrator Or Any Member Of The Committee Of Administrators Or To Appoint A Committee In Place Of Administrator Or Vice Versa. This Section Also Clarifies That The Administrator Or The Committee Of Administrators Is To Be Appointed In Accordance With The Provisions Of This Act, Rules And The Bye Laws Of The Society. Sub-section 5(c) Of Section 29 {Section 29(5)(c)} Of The Act States That The Committee Of Administrators Will Consist Of A Chairman And Not More Than Eight Members; Out Of These, At Least Two Have To Be Government Servants. It Is Not Disputed That Apart From This Sub-section There Is No Specific Provision In The Act Indicating How The Registrar Should Exercise His Discretion.

24. Section 113 Of The Act Permits The State Government To Make Rules. Sub- Section 1 Of Section 113 {Section 113(1)} Of The Act Permits The State Government To Make Rules For The Purposes Of This Act. Sub-section 2 Of Section 113 {Section 113(2)} Of The Act Provides Details Of Specific Areas Or Subjects Regarding Which The Rules Can Be Framed; It Is Without Prejudice To The General Powers Under Section 113(1) Of The Act. These Provisions Show That The State Government Can Frame Rules Regarding How The Registrar Should Exercise His Power Under Section 29(5)(b) Of The Act: It Is For This Reason That Section 29(5)(b) Specifically States That Exercise Of Power Has To Be In Accordance With The Rules. The Rules Have Been Framed By The State Government, But There Is No Rule Regarding Exercise Of Power Under Section 29(5))b) Of The Act.

25. Section 131 Of The Act Deals With The Byelaws Of The Society. The Different Co-operative Societies Have Also Framed Their Byelaws, However There Is No Specific Provision In The Byelaws Of Any Co-operative Society Regarding Exercise Of Power Under Section 29(5)(a) Of The Act,

26. The State Government Has Also Power To Remove Difficulties Under Section 133 Of The Act. It Is Also Not Disputed That The State Government Has Not Issued Any Notification Regarding Exercise Of Power By The Registrar. In Absence Of Any Specific Provision {except Section 29(5)(c)} In The Act, The Rules, The Bye-laws Of The Society Or Any Removal Of Difficulties Order, Is It Permissible For The State Government To Issue Guidelines In Form Of GOs?

27. The Registrar While Exercising The Powers Under Section 29(5)(b) Of The Act Is Neither Exercising Judicial Powers Nor Quasi-judicial Powers. There Is No Lis. The Registrar Is Merely Exercising Administrative/executive Powers Conferred Under The Act To Appoint The Administrator Or A Committee Of Administrators Till Regular Committee Of Management Is Elected. The State Has Overall Legislative As Well As Executive Powers Including The Power To Frame Rules And Remove Difficulties. The Registrar Is An Officer, A Functionary Of The State. He Has Not Been Created By The Act. He Is Under General Supervision Of The State And Is Subordinate To The State Government. In This Light--considering The Fact That The Registrar Is Not Exercising Judicial Or Quasi Judicial Power--it Cannot Be Said That The State Government Can Not Issue General Guidelines Regarding Exercise Of Discretion/power Under Section 29(5)(b) Of The Act.

28. We Would Like To Add That The Guidelines Issued By The State Government Can Not Be Contrary To The Act, Rules Or The Bye Laws Of The Society Or For That Matter Any Provision Of The Constitution Or Any Other Instrument Having Statutory Force. In Case They Are So Then That Would Be Illegal. It Is For This Reason That The Two Cases Cited By The Respondents Reported In UP State Road Transport Corporation Vs. Mohd. Ismail: AIR 1991 SC 1099 And Laxman Dundappa Dhamanekar Vs. Management Of Vishwa Bharata Sewa Samiti: 2001 (8) SCC 378 Are Distinguishable. In These Cases The Guidelines Were Contrary To The Rules Or Regulations Having Statutory Force.

29. In Case The Guidelines Issued By The State Government Are Not Contrary To Any Statutory Instrument Then They Can Be Issued And May Be Considered By The Registrar. Here We Would Like To Add That These Guidelines Do Not Have Statutory Force; They Are Not Binding Upon The Registrar. He May Depart From Them But For Some Reason And If He Does So Then The Guidelines Can Not Be Enforced In A Court Of Law. However He May Generally Follow Them And Depart From Them For Reasons Only (for Cases Kindly See End Note-2) . These Are General Guidelines Applicable In All Cases. Nevertheless The Same Thing Can Not Be Said Regarding Specific Cases For Appointment As It Would Amount To Dictation. And In Case The Registrar Follows Such An Order Then That Would Amount Abdication Of His Function.

30. The State Government Has Issued Many GOs; We Will Discuss Them While Discussing Points Number V And VI. We Would Also Like To Mention Here That The Respondents In These Writ Petitions Are State Government, State Officials And The Private Respondents Who Have Been Appointed As Administrators, Or Chairman Or As Members Of The Committees Of Administrators. In Some Cases The Ministers Have Issued Orders To Appoint Specific Persons As Administrators Or In The Committee Of Administrators. This Is Not Permissible; It Amounts To Dictation. The Respondents Defended The Orders Issued By The Minister To Appoint Specific Person As Chairman Or As Members Of The Committee Of Management, But Were Reluctant To Defend The General Guidelines Issued By The State Government. In Fact They Have Argued That The Guidelines Issued By The State Government Are Illegal And Specific Orders Are Legal. One Can Understand The Attitude Of The Private Respondents; They Are Interested In Their Appointment But This Attitude On Behalf Of The State Or State Officials Is Baffling And Does Not Befit Them Especially As We Will Show While Answering Point Numbers V And VI That The General Guidelines Are Good And Direction To Appoint Specific Person May Not Be Given By The Ministers.

POINT-IV: THERE IS JUSTIFICATION FOR THE REGISTRAR
31. Section 29(4) Of The Act Requires The Secretary Or The Managing Director Of The Co-operative Society To Send Requisition To The Registrar Four Months Before Expiry Of Term Of The Committee Of Management For Conducting Elections. In All These Cases, The Requisition Was Sent In Time And In Most Of The Cases Much Before Time. The Elections Ought To Have Been Done Before Expiry Of The Term Namely July/August 2004. The Elections Have Not Been Held So Far. However, The Process Is On. There Has Been Delay In Holding The Elections On The Part Of The Respondents. Is There Any Justifiable Reason? What Role Does Delay Play In Exercise Of Power Under Section 29(5)(b) Of The Act.

32. The Respondents Have Given Explanation For Not Holding Elections Earlier. It Has Been Stated That Before The Registrar Could Issue Election Programme, The Code Of Conduct For Parliamentary Elections Was Announced On 28/29th February 2004 For Parliamentary Elections And The Elections Could Not Be Held Till The Parliamentary Elections Were Finalised In May 2004. This Is Undoubtedly A Valid Reason As The Officials Were Busy In The Parliamentary Elections.

33. The Registrar Co-operative Society Notified The Election Schedule On 3.6.2004 But The State Government Under Second Proviso To Section 29(3) Of The Act Directed The Registrar To Postpone The Election For A Period Of Two Months In Order To Proceed With Recovery Drive. In Pursuance Of The Same The Registrar Postponed The Election On 16.6.2004. The State Government Again Directed For Postponement Of Election On 30.8.2004 And The Registrar Again Postponed The Same On 30.8.2004 And Re-scheduled It From 18.10.2004. The State Government Again Directed For The Postponement Of The Elections. Ultimately By Order Dated 16.11.2004 Election Schedule Has Been Announced From 16.1.2005. We Are Informed That These Elections Are Going On.

34. The Elections Have Been Postponed Three Times By The State Government. The Register Is Bound By The Directions Of The State Government; There Is Justification For The Registrar For Not Holding The Elections Earlier But This Does Not Mean That The State Government Was Justified In Directing The Registrar To Postpone The Elections. We Have Not Considered This Question As It Was Not Agitated Before Us Presumably For The Reason That Elections Are Going On, Though Apprehensions Were Expressed That They May Not Be Completed. We Leave This Matter Here, But There Is No Denial That There Has Been Delay In Holding Elections. We Will Consider The Role That Delay Plays On Exercise The Of Power Under Section 29(5)(a) Of The Act While Deciding The Remaining Points.

POINTS- V & VI: THE REGISTRAR HAS NOT APPLIED RELEVANT CONSIDERATIONS
35. The Counsel For The Respondents Submit That The Registrar Has Discretion To Appoint Anyone Under Section 29(5)(b) Of The Act And This Court Can Not Interfere In Exercise Of That Discretion. This Is Not Correct.

36. It Is Correct That The Registrar Has Discretion In The Matter, But It Is To Be Exercised On Relevant Factors; He Does Not Have Absolute Discretion. The Discretion Can Not Be Exercised On Irrelevant Factors. A Century Ago It Was Said,
'When Some Thing Is To Be Done Within The Discretion Of The Authorities ... That Something Is To Be Done According To The Rules Of Reason And Justice And Not According To Private Opinion, .....according To Law And Not Rumour. It Is To Be Not Arbitrary, Vague, Fanciful But Legal And Regular.' (Lord Halsbury In Sharp Vs Wakefield 1891 AC 173)
This Was Repeated Half A Century Ago,
'Law Has Reached Its Finest Moments When It Has Freed Man From The Unlimited Discretion Of Some Ruler, Some Official, Some Bureaucrat. Absolute Discretion Is Ruthless Master. It Is More Destructive Of Man's Freedom Than Any Of Man's Other Invention.' (Justice Douglas In (1951) 342 US 98 US Vs Wunderlich)
'Rule Of Law' Rather Than The Discretion Is The Master.

37. The Courts Have Carved Out An Area And Have Laid Down Grounds On Which An Administrative Decision Can Be Struck Down. A Few Countries Have Even Enacted Laws Specifying These Grounds Concisely And Succinctly. Australian Administrative Decisions (Judicial Review) Act, 1977 (The ADJR Act) As Well As The Barbados Administrative Justice Act, 1980 Are Two Such Acts (see Appendix-III). Similarly, French And Israel Parliaments Have Enacted Similar Laws. Not Only Our Indian Courts But Also The Courts World Over Are Reviewing Administrative Decisions On The Grounds Similar To Australian And Barbados Acts. In This Regard, The High Court Of Australia In Minister For Aboriginal Affairs Vs. Peko-Wallsend Ltd. {1987 LRC (Const) 822 At Page 835} Had Scanned The Law World Over And Has Held That Section 5(2)(b) Of The ADJR Act (Australian Act) Is Substantially Declaratory Of The Common Law. The Relevant Part Of The Judgement Is Reproduced As Appendix-IV To This Judgement. We Have Also Traversed A Similar Path; Our Law Is The Same; We Have Been Striking Down Administrative Decisions On Similar Grounds. A Decision Taken On Irrelevant Factor Or That Ignores Relevant Factors Is Illegal And Is Liable To Struck Down: No Shield Can Protect It.

38. In England A Committee On Administrative Reforms Have Made Recommendations Administrative Justice - Some Necessary Reforms: The Report Of The Committee Of The JUSTICE - All Souls Review Of Administrative Law In The United Kingdom. The Eleven Important Recommendations Of This Committee On Page 10 Are Detailed In Appendix-V To This Judgement. They Are Relevant And Lay Down Correct Principles. Some Of Them Have Become Part Of Our Administrative Jurisprudence; Others Should Be Adopted By Us.

39. It Is Too Late In The Day To Say That The Registrar Has Unfettered Discretion; He Has To To Make Appointments After Considering Relevant And Ignoring Irrelevant Factors. What Are Those Factors? Many Of Them Have Been Stated By The State In The Different GOs. Let's Consider Them.

The Details Of The GOs
40. The Details Of The GOs Are As Follows:
(i) The First Guideline Is The September 1984 GO. This Was Passed At The Time When The Power To Appoint The Administrator Or The Committee Of Administrators Was Contained In Section 29(4)(b) Of The Act. This Section Is Similar To The Present Section 29(5)(b) Of The Act. In These Guidelines It Has Been Stated That The Registrar May Consider Following Points Before Appointing Private Persons As Administrator Or In The Committee Of Administrators. The Registrar Was Also Required To Remove The Persons Who Were Already Appointed In Breach Of The Guidelines. These Guidelines Are That The Person, Should Not Be,
(a) Disqualified Under Rule 453 Or Any Other Provision Of The Act, Rules And Byelaws Of The Co-operative Society.
(b) Convicted Of Crime, Or Litigating Against The Government Or With The Co-operative Department, Or The One Against Whom Criminal Cases Are Registered By The Department.
(c) History Sheeter.
(d) Without Confidence In The Co-operative Movement.
(ii) The Second Guideline Is The Jul 1991 GO. It Recommends That The Government Servant Should Be Appointed As Administrators.
(iii) The Third Guidelines Is The Dec 2002 GO. It Is Applicable To The DCBs Whose Economic Condition Is Bad. This GO Has Been Issued On The Recommendations Of The Reserve Bank Of India. It Has Recommend That In These Banks The Committee Of Management Consisting Of The Persons Mentioned Therein May Be Appointed And Strict Action Be Taken So That Functioning Of These Banks May Improve.

41. Nothing Has Been Brought To Our Notice That These GOs Have Been Withdrawn Or Rescinded By The State Government. These GOs Lay Down Good Guidelines. They Are Not Contrary To Any Statutory Provision. They Ought To Have Been Followed. Nothing Has Been Brought To Our Notice As To Why They Were Not Followed. The Orders Replacing GS Administrators Are Liable To Be Set Aside On This Ground Also.

42. The Jul 1991 GO Is For Appointment Of Government Servant As An Administrator. In Pursuance Of This GO Initially In Every Co-operative Society GS Administrators Were Appointed. They Have Been Subsequently Changed. It Is This Change That Has Been Challenged. Nothing Has Been Shown To Us To Clarify That When This GO Was Initially Followed Then Why Later On Private Persons Have Been Appointed? We Are Aware That The GOs Are Not Statutory And Merely Lay Down The Guidelines Only, Yet They Can Only Be Ignored For Sufficient Reasons. And No Reasons Have Been Indicated. The Orders Replacing The GS As Administrator Are Illegal And Are Liable To Be Quashed. The Registrar Should Reconsider The Appointments Made In All Co-operative Societies Whether Challenged Before This Court Or Not And Follow The Guidelines Unless There Is Any Reason For Not To Do So.

43. The Dec 2002 GO Applies To Those Banks Where Financial Conditions Were Not Good And Action Had Been Recommended. According To The State, Among These Cases Before Us, There Was Mismanagement In Six Cases And Financial Condition Was Not Good And So The Committee Of Management Was Superseded. These Cases Are Covered By The Dec 2002 GO. In These Cases, If The GS Administrator Was To Be Replaced It Should Have Been Done As Indicated In The Dec 2002 GO Rather Than The Private Persons. There Was No Justification For Not To Follow The Dec 2002 GO Or The Jul 1991 GO And To Appoint Private Persons; At Least Nothing Has Been Brought To Our Notice To Show That Justification.

Factors To Be Considered - When Private Persons Are Appointed
44. We Are Aware That These GOs Are Merely Guidelines And Can Be Departed For Sufficient Reasons. Private Persons Can Be Appointed As An Administrator And In Suitable Cases It May Be Done So. However The Facts Of Different Writ Petitions Show That The Registrar Has Applied Inconsistent Standards; There Has Been Lack Of Understanding Regarding Exercise Of His Discretion. In View Of This, We Would Also Like To Clarify The Guidelines To Be Followed By Him While Considering Appointment Of Private Persons.

45. Since Our Independence, We Have Made Great Strides And Overcome Many Obstacles But Some Areas Have Remained Problematic. They Are Also On Increase. They Are Acting As White Ants And Eating Away Our Progress; Unless We Check Them, Our Future Is Doomed. In Our Opinion, All Our Efforts Should Be Made To Remove Them Or At Least To Reduce Them. It Should Be Fundamental In All Spheres Of Our Governance Including Appointments. These Areas Are As Follows:
I.Criminalisation: Our Lives Are Being Criminalised; It Is Imperative That We Weed It Out. No Person Should Be Appointed Who Is Convicted Or Is Involved In Criminal Cases. Of Course There May Be Distinction Between Technical Offences On The One Hand And Offences Of Serious Nature Including The Ones Involving Moral Turpitude On The Other Hand. The Registrar, Before Making Any Appointment Should Ensure And Obtain An Affidavit In This Regard From The Person Concerned That He Is Neither Convicted Of Any Offence Nor Any Criminal Case Is Pending Against Him. In Case Affidavit Is Found To Be False Then The Person Should Be Replaced And Appropriate Legal Action For Filing Forged Affidavit May Be Taken.
II.Corruption: Corruption Is Difficult To Prove As The Person Offering The Bribe Is Also Involved. Nonetheless There Are Ways To Check It. One Of The Ways Is To Obtain Statement Of Property (movable And Immovable) Not Only Of Those Persons But Also Of Their Spouses And Minor Children. This Ensures Accountability. In Case The Persons Are Found To Have More Property Than The One Declared By Them Appropriate Legal Action Can Be Taken. The Registrar Before Making Any Appointment Should Ensure That The Persons Submit Signed Statement Regarding The Properties Held By Them, Spouses, And Their Minor Children. In Case It Is Found To Be Incorrect, The Person Should Be Removed And Appropriate Legal Action May Be Taken For Corruption And For Giving False Documents. If It Is Considered Proper The Property Statement May Be Obtained Every Year.
III.Population: Our Population Is Increasing By Leaps And Bounds. It Is The Reason Of Many Of Our Problems. The Time Has Come When We Must Take Strong Measures By Providing Incentives For Small Family And Disincentive For Large Families. The Supreme Court Has Upheld A Haryana Law Debarring The Persons To Become Pradhan Of A Gram Panchayat If They Have More Than Two Living Children In Javed And Others Vs. State Of Haryana 2003 (6) JT 283. The Supreme Court Observed The Provision To Be 'salutary And In Public Interest'. A Person Who Has More Than Two Living Children May Not Be Appointed.
IV.Office Bearer Of The Political Parties: There Has Been Allegation In These Writ Petitions That Persons With Political Affiliation Have Been Appointed. We Would Like To Clarify That Every One Has A Right To Have Political Philosophy And Practise The Same. Every One Has A Right To Be Part Of Political Party Of Their Choice; Unless It Is Declared Illegal. As A Matter Of Fact It Is Everyone's Duty To Cast Vote. It Is Not Disqualification To Be Part Of Any Party And Merely For This Ground No Appointment May Be Questioned. Nevertheless When An Office Bearer Of Any Political Party Is Appointed And He Continues To Be The Office Bearer Of The Party Even After The Appointment Or Accepts The Post Of Office Bearer Of Any Political Party During His Appointment Then There May Be Conflict Of Interest. In Order To Avoid It, The Persons Who Are Office Bearers Of Any Political Party At Any Level May Not Be Appointed Or It May Be Ensured That They Resign From That Post And Undertake That They Will Not Accept The Post Of Office Bearer At Any Level Of Any Political Party During Their Tenure.
These Principles Are Sound And Should Necessarily Be Adhered To While Making Appointments Under Section 29(5)(b) Of The Act.

Office Bearers And Members Of Outgoing Committee
46. It Is Correct That Section 29 (5)(a) Of The Act States That The Committee Of Management After Expiry Of Its Term Ceases To Exist But This Does Not Mean That Office Bearers Or The Members Of The Committee Of Management Can Not Be Appointed As An Administrator Or In The Committee Of Administrators Under Section 29(5)(b) Of The Act. The Outgoing Committee Was Elected By The General Body And In Case It Completes Its Terms Successfully And There Are No Charges Of Mismanagement Then The Office Bearers And Members Of The Committee Of Management May Be Considered First For Being Appointed As An Administrator Or The Chairman Of The Committee Of Administrators; After All They Have Been Elected By The General Body.

47. The Point Mentioned In The Preceding Paragraph May Be Looked Into From Another Aspect. We Have Already Held That There Was Justification For The Registrar For Not Holding The Elections Earlier, But This Does Not Mean That There Was No Delay In Holding The Elections. It Was For This Reason That We Considered Whether There Was Justification For The Registrar Or Not. There Was No Fault On The Part Of The Outgoing Committee Of Management. It Had Sent Information In Time. In Case A Government Servant Is Appointed As An Administrator At Least He Is A Neutral Person. The Appointment Of Private Person May Not Be A Way To Introduce A Person Who Was Defeated Or Rejected By The General Body; At Least Not In Those Cases Where There Was No Mismanagement On Part Of The Outgoing Committee Of Management. There Should Not Be A Back Door Entry.

48. There May Be Many Reasons For Not Appointing Anyone From The Outgoing Committee Of Management. The Office Bearers And The Members Of The Committee Of Management That Has Been Unsuccessful Or Mismanaged The Affairs Of The Co-operative Society Or Was Suspended Or Superseded May Be Avoided. If This Is Done Then It Would Be Justified: After All Every Member Was Part Of Such A Committee. Appointment Of Such Person Should Be Avoided. Here Exactly Opposite Has Been Done In WP 39025 Of 2004 (DCB Siddharth Nagar). The Outgoing Committee Of Management Was Superseded. The Registrar Has Appointed One Of Its Members As Chairman Of The Committee Of The Administrators.

49. We Would Also Like To Observe That In Case Action Is Taken Against A Co-operative Society Under Section 35 Of The Act Then The Registrar Has Power To Appoint Persons To Manage The Co-operative Society Under Section 35(2) As Well As 35(3) Of The Act As The Case May Be. In These Cases Also The Registrar Should Not Appoint A Person Who Is An Office Bearer Or Member Of The Committee Of Management That Was Suspended Or Superseded.

50. There May Be Many Reasons For Not Appointing The Office Bearers Or The Members Of Out Going Committee Of Management. We Have Indicated Some Of The Reasons And Have Not Enumerated All Of Them. This Is First To Be Considered By The Registrar In Each Case On Its Merit. In Case Office Bearers Or The Members Of The Committee Of Management Can Not Be Appointed, Then Other Persons May Be Considered For Appointment. Let's Consider The Relevant Factors/considerations In Making Such Appointment.

Members Of The General Body
51. Every Co-operative Society Has A General Body Which Elects The Committee Of Management. Every Person Can Not Be Part Of The Committee Of Management. Some Are Disqualified. This Is Detailed In Rule 453 Of The Rules. A Person Who Is Qualified To Become A Member Of The Committee Is Concerned With The Affairs Of The Co-operative Society. In Case There Is No One From The Outgoing Office Bearers Or The Committee Of Management Who Could Be Appointed, Then The Appointments May Be Made From The Persons Who Are Qualified To Be Members Of The Committee Of Management; After All They Are The Persons Who Are Interested In The Welfare Of The Co-operative Society. This Is Also Part Of The Guidelines Mentioned In The Sep 1984 GO. In This Connection Sub-section (3) Of Section 35 {Section 35(3)} Of The Act May Also Be Seen.

52. Section 35 Of The Act Empowers The Registrar To Suspend And Supersede A Committee Of Management. Section 35(3) Of The Act Empowers The Registrar To Appoint A New Committee Of Management Or Administrators In Case It Is Superseded. This Sub-section Empowers Registrar To Appoint A Person Who Is Not The Member Of The General Body Of The Co-operative Society. There Is No Such Power Under Section 29(5)(b) Of The Act. If The Legislature Wanted That Such Person May Be Appointed Under Section 29 (5) (b) Of The Act Then It Would Have Specifically Said So As Stated In Section 35(3) Of The Act. The Reason Why It Is There In Section 35(3) Of The Act Is Also Clear: There May Not Be Any Member Who Is Fit Enough To Be Appointed As The Committee Of Management Is Superseded For Mismanagement. In Our View, Normally A Person Who Is Disqualified Under Rule 453, Or Any Provision Of The Act, Or Any Other Rule, Or Under Bye Laws Of The Society To Become A Member Of The Committee Of Management May Not Be Appointed Under Section 29(5)(b) Of The Act Unless The Case Was Covered Under Section 35 Of The Act.

53. We Would Also Like To Clarify That While Making Appointment, Care Should Be Taken To Appoint A Person, Who Is Knowledgeable In The Field Which Is The Primary Objective Of That Co-operative Society And Can Manage The Affairs Of The Co-operative. In The Present Case All The Co-operative Societies Are Related To Banking So Persons With Expertise In Banking May Be Considered.

54. We Have Already Held That The Replacement Of GS Administrator By Private Persons Is Wrong And Orders Are Liable To Be Quashed. We Have Also Enumerated The Factors That May Be Considered While Appointing Private Persons. In The Light Of These Principles Let's Consider The Appointments Made By The Registrar.

Specific Instances Of Illegality
55. The General Guidelines Are To Be Followed But The Registrar Has To Apply His Independent Mind; He Is Not To Be Guided By Dictates Of The Higher-ups. In WP 39025 Of 2004 (DCB Siddharth Nagar) There Was A Letter Of The Then Labour Minister And The Present Speaker And In WP 3897 Of 2005 (DCB Shahjahanpur) There Was A Letter Of The Present Co-operative Minister And The Same Persons Named In Those Letters Have Been Appointed. These Letters Are Not Denied. The Ministers Are Superior Authority And Their Recommendations Can Not Be Ignored By A Subordinate Officer. Ministers Are Entitled To Lay Down The General Policy, But Are Not Entitled To Give Direction For Appointment Of A Specific Person. These Appointments Are Illegal.

56. We Have Indicated In Paragraph 43 Of This Judgment That The December 2002 GO May Be Applicable In Six Cases That Are Before Us. In One {DCB Siddharthnagar (WP 39025/ 2004)}, Out Of These Five Cases, The Registrar Instead Of Following The Dec 2002 GO Has Appointed A Person As The Chairman Who Was Member Of The Superseded Committee Of Management And This Too On The Direction Of The Then Labour Minister And The Present Speaker. The Registrar Should Re-examine All Cases Whether Brought Before This Court Or Not And See Which Cases Are Covered By The Dec 2002 GO. He Should Change And Appoint Persons In Accordance With This GO. We Are Informed That In Some Of These Cases The Superseded Or Suspended Committee Of Management Has Taken Legal Proceeding Against Their Suspension Or Supersession. We Clarify That We Have Not Considered Whether Suspension Or Supersession Is Valid Or Not. Those Proceedings May Be Decided In Accordance With Law Without Being Influenced By Any Of Observations Made In This Judgement.

57. In WPs 55652 Of 2004 (DCB Etah), 1191/05 (DCB Firozabad), 3897/05 (DCB Shahjahanpur) The Committee Of Management Completed Its Entire Term And The Chairman Of The Outgoing Committee Of Management Was Appointed As Chairman Of The Committee Of Administrators. However, In The WPs 38022/04 (DCB Deoria), 40654/04 (DCB Basti), 42560/04 (DCB Mathura), 44174/04(DCB Bijnore), 45532/04(DCB Lalitpur), 51433/04 (DCB Bulandshahar), 55547/04 (DCB Mainpuri), And 5373/05 (DCB Moradabad) Also, The Committees Of Managements Completed Their Term Successfully But The Chairmen Of The Outgoing Committees Of Management Have Not Been Appointed As The Chairmen Of The Committees Of Administrators Despite The Fact They Successfully Completed Their Terms. The Respondents Neither Have Indicated Any Reason For Not Doing So, Nor Have Brought Anything To Our Notice To Show That These Persons Were Even Considered. It Is True That The Registrar Is Not Bound To Appoint Them, But He Should Have At Least Considered Them.

58. Many Persons Who Are Neither Members Of The Committee Of Management Nor Members Of The General Body Have Been Appointed. Details Of These Persons Have Also Been Mentioned In The Appendix-II To This Judgement. The Word NGB Has Been Mentioned After The Names Of These Persons. There Is No Material On Record To Show That They Are Eminent Or Have Expertise In The Field Of Banking. These Appointments Are Illegal.

59. The Person Who Has Been Appointed As An Administrator In WP 45532/04 (DCB Lalitpur) Has Twenty Four Criminal Cases (including One U/s 302 IPC) Pending Against Him. He Ought Not To Have Been Appointed As The Administrator.

60. In WP No. 42560 Of 2004 It Is Not Disputed That The Person Who Has Been Appointed As Chairman Was Neither Member Of Outgoing Committee Of Management, Nor Member Of General Body. It Is Also Admitted That She Is Wife Of Sitting Lokdal MLA Supporting The Ruling Party. There Is No Justification For Appointing Her As Chairman Of The Committee Of Administrators. The Appointment Is Illegal.

SOME OBSERVATIONS
61. The Counsel For The Respondents Submitted That In Case We Come To The Conclusion That Appointments Are Illegal Then They May Not Be Quashed But The Registrar May Be Granted Liberty To Change The Order In Light Of Our Observations In This Judgement. According To Them, In Case We Do Not Do So, Then Many Actions Of The Administrators Will Become Illegal.

62. We Are Afraid, We Can Not Accept It. The Orders Of Appointments Of Private Persons Are Illegal And In Case We Do Not Quash Them Then We Would Be Continuing The Illegality And Shirking Our Duty. In Case The Orders Are Illegal, Then It Is Our Duty To Quash Them. So Far As The Legality Of Any Action Taken By The Administrator Or Committee Of Administrators Is Concerned, The Law Will Take Its Own Course. The Defacto Doctrine To The Extent That It Applies Will Be Applicable. We Are Not Required To Say Anything In That Regard At Present.

63. We Are Informed That Private Administrators Or Committees Of Administrators Have Been Appointed In Many Co-operative Societies. All Cases Are Not Here. The Cases That Are Not Here Neither Can Be Considered By Us Nor Can We Pass Any Orders Thereon But The Registrar Shall Examine All Such Cases Within A Period Of Three Months. In Case The Appointments Are Not In The Light Of Our Judgement Then The Registrar Will Change Them So As To Bring Them In Accordance With The Observations Made In This Judgement.

64. We Have Held That The Registrar While Exercising Powers Under Section 29(5)(b) Of The Act Is Not Exercising Quasi Judicial Or Judicial Powers. He Is Merely Exercising Administrative Power For Appointing A Person As Administrator Or The Committee Of Administrators. We Have Also Laid Down Relevant Considerations Of The Factors To Be Taken Into Account While Exercising The Powers. We Clarify That This Judgement May Not Be Taken To Mean That The Registrar Is Required To Pass A Reasoned Or Speaking Order. However, In Case Any Appointment Is Challenged Then The Material May Be Brought Before The Court Or The Person Making The Appointment Should File His Personal Affidavit That He Has Considered Them.

SOME SUGGESTIONS
65. We Have Laid Down Certain Principle For Appointment Under Section 29(5)(b) Of The Act. However, Some Principles Namely Mentioned In Paragraph 45 Of This Judgement Are Fundamental And May Be Followed In All Appointments. The State May Constitute A Committee. This Committee May Consider Following Points In Regard To The Appointments Other Than The Ones Considered By Us.
Whether The Principles Mentioned In Paragraph 45 Of This Judgement Should Be Adhered To In Making All Other Appointments Or Not.
Whether These Principles Should Be Made Applicable To Not Only In The Case Of Appointments But Also For Any Elected Office.
Whether The Condition Of Two Living Children May Be Reduced To One Child Or In Case It Is Not Reduced, Then What Other Incentives Can Be Given To Persons Having One Child.
In Case The Committee Considers Appropriate, Then Suitable Rules Be Framed Or Law Be Enacted So Far As Other Appointments Are Concerned. If Possible, The Chief Secretary May Constitute The Committee Within Three Months To Consider These Aspects.

CONCLUSIONS
66. Our Conclusions Are As Follows:
(a) The State Government Has Power To Issue General Guidelines For Exercise Of Power Under Section 29(5)(b) Of The Act. However, They Are Neither Statutory Nor Mandatory. They Are Merely Guidelines And May Be Departed For Sufficient Reasons.
(b) Neither We Are Informed Of Any Reason, Nor Anything Has Been Brought To Our Notice To Show As To Why The Dec 2002 GO In Cases Under Section 35 Of The Act And The July 1991 GO In Other Cases Were Not Followed.
(c) The Outgoing Committee Ceases To Continue After Expiry Of Its Term And Can Not Claim Continuation After Its Term As A Matter Of Right. However This Does Not Bar The Registrar From Appointing The Office Bearers Or Members Of The Committee Of Management As Administrator Or As Members In The Committee Of Administrators
(d) The Orders Replacing The Government Servant By Private Administrators Or By The Committees Of Administrators Consisting Of Private Persons Are Illegal. The Appointments Of Private Persons Have Been Made Without Considering The Relevant Considerations/factors.
(e) Individuals Capable Of Managing The Affairs Of The Co-operative Society And Having Expertise In The Field Of Primary Objective Of The Co-operative Society May Be Considered For Appointments Provided That:
I.They Are Not Disqualified To Become Member Of The Committee Of Management Under The Act, Rules Or The Bye-laws Of That Society Except In A Case Covered By Section 35 Of The Act.
II.They Are Neither Convicted Nor Involved In Criminal Cases And File Affidavit To This Effect.
III.They File Signed Statements Of The Property Held By Them, Their Spouse, And Of Their Minor Children.
IV.They Do Not Have More Than Two Living Children.
V.They Are Not Office Bearer Of Any Political Party. And In Case They Are Then They Must Step Down.
VI.The Persons Also Undertakes Not To Accept Office Of Any Political Party During Their Appointment.
VII.Among The Persons Who Qualify The Above Conditions, The Office Bearers And Members Of Outgoing Committee Of Management¾if They Have Successfully Completed The Term And Are Suitable¾may Be Considered First.
VIII.It Will Neither Be Necessary To Consider The Office Bearers Or Members Of The Committee Of Management If They Do Not Qualify Under Preceding Conditions Detailed In Paragraph 66(e) (i) To 66 (e) (vi). The Persons Covered By Paragraph 66(e)(i) To 66(e)(vi) May Not Be Appointed.
IX.It Will Also Be Not Necessary To Consider Any Office Bearer Or Members Of Committee Of Management If The Committee Of Management Had Mismanaged The Affairs Of The Society, Or Was Suspended Or Superseded Under Section 35 Of The Act. Such Persons May Not Be Appointed.

67. In View Of Our Conclusions The Writ Petitions Are Allowed. Different Orders By Which The Private Persons Have Been Appointed As Administrators Or In The Committee Of Administrators Or The Government Servants Were Replaced By Them As Mentioned In Column IV Of Appendix-II Are Quashed. The Government Servants Who Were Initially Appointed As Administrators Will Manage The Co-operative Societies Till The Registrar Reconsiders The Appointments In The Light Of The Observations Made By Us. In Case No GS Administrator Was Appointed And Private Persons Were Appointed From Very Beginning Then The Collector Of The District Will Manage Them.

68. The Registrar Shall Reconsider--all Other Cases That Are Not Before Us But In Which Private Persons Have Been Appointed As Administrators Or In The Committees Of Administrators--within Three Months. The Registrar Shall Change Them In Case Their Appointment Is Not In The Light Of The Observations Made In This Judgement. In Case The Matter Can Not Be Reconsidered In Three Months Then If The Case Is Covered By The Dec 2002 GO, The Private Administrators Or The Committees Consisting Of Private Members Shall Be Replaced By The Persons Mentioned Therein And In Other Cases By The GS Administrator As Indicated In The Jul 1991 GO. And If The Need Be Then The Private Persons May Be Appointed In The Light Of The Observations Made In This Judgement.

69. The Chief Secretary Will Appoint A Committee Within Three Months To Consider The Points Mentioned Under The Heading 'SOME SUGGESTIONS'. And The Follow Up Action Will Be Taken.

70. The Writ Petitions Are Allowed With The Aforesaid Observations And Directions.
Date: 17.3.2005
BBL

End Note-1: We Would Like To Put On Record Our Appreciation For Sri CS Singh, Sri HR Misra, Sri Siddharth Singh And Sri Sudhir Agrawal For Looking Into Part Of Our Judgement Under Heading 'The FACTS', 'POINTS FOR DETERMINATION', 'APPENDIX-I', And 'APPENDIX-II' For Mistakes. However, There May Be Some Mistakes, They Are Ours.

End Note-2: Administrative Instructions Are To Be Followed Unless There Is Some Reason For Not Doing So.
Dr. Amarjit Singh Ahluwalia Vs. State Of Punjab; AIR1975 SC 984 (8, 9) = 1975(3) SCC 503
State Of UP Vs. Chandra Mohan Nigam; AIR 1977 SC 2411 (26, 27) = 1977(4) SCC 345
State Of Gujarat Vs. Akhilesh C. Bhargava And Others; 1987(4) SCC 482 (7)
Home Secretary, Union Territory Chandigarh Vs. Darshjit Singh Grewal; 1993(4) JT 387
Trilok Chand Vs. State Of UP; 1986 AWC 923



Appendix-I
(Section 29 Of The Act Is As Follows)

29. Committee Of Management.-(1) The Management Of Every Co-operative Society Shall Vest In A Committee Of Management Constituted In Accordance With This Act, The Rules And The Bye-laws, Which Shall Exercise Such Powers And Perform Such Duties As May Be Conferred Or Imposed By This Act, The Rules And The Bye-laws.
(2) (a) The Term Of Every Committee Of Management Shall Be Five Years And The Term Of The Elected Members Of The Committee Of Management Shall Be Co-terminus With The Term Of Such Committee.
(b) The Provisions Of Clause (a) Shall Apply Also To A Committee Of Management In Existence On The Date Of The Commencement Of The Uttar Pradesh Co-operative Societies (Amendment) Act, 2002 And To The Elected Members Of Such Committee.
(c) The Term Of A Committee Of Management, Which Has Completed, On Or Before The Date Of The Commencement Of The Act Referred To
in Clause (b), The Period Of Three Years From The Date Of Its Constitution, And The Term Of Its Elected Members, Shall Expire On Such Commencement.
(3) Election To Reconstitute The Committee Of Management Of A Co-operative Society Shall Be Completed In The Prescribed Manner Under The Superintendence, Control And Direction Of The Registrar At Least Fifteen Days Before The Expiry Of The Term Of The Committee Of Management And The Members So Elected Shall Replace The Committee Of Management Whose Term Expires Under Sub-section(2):
Provided That Notwithstanding Anything In This Act, The Administrator Or The Committee Of Administrators Appointed Under This Section, As It Stood Before The Commencement Of The Uttar Pradesh Co-operative Societies (Second Amendment) Act, 1994 Shall Continue To Exercise The Powers And Perform The Duties Of The Committee Of Management Till The Committee Of Management Is Reconstituted Under This Act Or Till December 31, 2000 Whichever Is Earlier:
Provided Further That Where The State Government Is Satisfied That Circumstances Exist Which Render It Difficult To Hold The Election On The Date Fixed By The Registrar, It May Direct The Registrar To Postpone The Election, And Thereupon The Registrar Shall Postpone The Election, And All Proceedings With Reference To The Election Shall Be Commenced Afresh In All Respects.
(4) It Shall Be The Duty Of The Secretary Or, As The Case May Be, The Managing Director Of The Co-operative Society To Send To The Registrar, Four Months Before The Expiry Of The Term Of Committee Of Management, A Requisition For Conducting The Election And To Furnish All Such Information As May Be Required By Him Within Such Period As May Be Fixed By Him.
(5) (a) Where, For Any Reason Whatsoever, The Election Of The Elected Members Of The Committee Of Management Has Not Taken Place Or Could Not Take Place Before The Expiry Of The Term Of Elected Members, The Committee Of Management Shall, Notwithstanding Anything To The Contrary In This Act Or The Rules, Or The Bye-laws Of The Society, Cease To Exist On The Expiry Of Such Term.
(b) On Or As Soon As May Be After The Expiry Of Such Term, The Registrar Shall Appoint An Administrator Or A Committee Of Administrators (hereinafter, In This Section, Referred To As The Committee) For The Management Of The Affairs Of The Society Until The Reconstitution Of The Committee Of Management In Accordance With The Provisions Of The Act, The Rules And The Bye-laws Of The Society, And The Registrar Shall Have The Power To Change The Administrator Or, As The Case May Be, Any Member Of The Committee Or To Appoint A Committee In Place Of An Administrator Or Vice Versa From Time To Time.
(c) Where A Committee Is Appointed Under Clause (b), It Shall Consist Of A Chairman And Such Other Members Not Exceeding Eight As May Be Nominated By The Registrar, Out Of Which At Least Two Shall Be Government Servants.
(d) The Procedure For Summoning And Holding Of Meetings Of The Committee, The Time And Place Of Holding Such Meetings, The Conduct Of Business At Such Meetings And The Number Of Members Necessary To Form Quorum Thereof Shall Be Such As May Be Prescribed.
(e) So Long As No Administrator Or, As The Case May Be , The Committee Is Appointed Under Clause (b), The Secretary Or The Managing Director, As The Case May Be, Of The Society Shall Be In Charge Only Of The Current Duties Of The Committee Of Management.
Explanation- Where Results Of The Election Of Members Of The Committee Of Management Have Not Been Or Could Not Be Declared, For Any Reason Whatsoever, Before The Expiry Of The Term Of The Elected Members Of The Outgoing Committee Of Management, It Shall Be Deemed That The Election Of The Elected Members Of The Committee Of Management Has Not Taken Place Within The Meaning Of This Sub-section.
(6) The Administrator Or The Committee Appointed Under Sub-section (5) Shall, Subject To Any Directions Which The Registrar May From Time To Time Give, Have The Power To Perform All Or Any Of The Functions Of The Committee Of Management Or Of Any Officer Of The Society And Shall Be Deemed For All Purposes Under This Act, The Rules And The Bye-laws Of The Society To Be The Committee Of Management And The Chairman Of Such Committee Shall Exercise The Powers And Perform The Functions Of The Chairman Of The Committee Of Management.
(7) The Administrator Or The Committee, As The Case May Be, Appointed Under Sub-section (5), Shall As Soon As May Be, But Not Later Than The Expiry Of Two Years And Six Months From The Date Of Appointment, Arrange For The Reconstitution Of The Committee Of Management In Accordance With The Provisions Of This Act, The Rules And The Bye-laws Of The Society To Take Over The Management Of The Society From The Administrator Or The Committee, As The Case May Be:
Provided That Where An Administrator Is Replaced By A Committee Or A Committee By An Administrator As Provided In Clause (b) Of Sub-section (5), The Period Of Two Years And Six Months Shall Count From The Date The Administrator Or The Committee, As The Case May Be, Was Originally Appointed.
Explanation- Notwithstanding That The Process Of Election May Have Commenced Before The Appointment Of Administrator Or The Committee Under Sub-section(5), A Fresh Process Of Election Shall Commence After Such Appointment.


Appendix-II
The Chart Containing The Serial Number, Number Of The Writ Petition, And Other Details Are As Follows

I.DCB Means District Co-operative Bank.
II.UCB Means Urban Co-operative Bank.
III.GS Means Government Servant.
IV.In Case Administrator Has Been Appointed Then His Name Only Is Mentioned And In Case Committee Of Administrators Has Been Appointed Then The First Name Is That Of The Chairman Of The Committee Of Administrators And The Others Are Members Of The Committee.
V.''Dec 2002 GO' In Column II Means That The Bank Is Covered By The Dec 2002 GO.
VI.We Have Also Indicated Whether The Committee Of Management Completed Its Term Or Was Superseded By Writing ''Completed' Or ''Superseded In Column II.
VII.NGB Means That The Person Is Neither Member Of The General Body Of The Co-operative Society Nor The Office Bearer Or Member Of The Outgoing Committee Of Management.
VIII.MGB Means That The Person Is Member Of The General Body Of The Co-operative Society But Was Neither Office Bearer Nor Member Of Outgoing Committee Of Management.
IX.MCM Means That The Person Was Member Of The Outgoing Committee Of Management But Was Not Its Office Bearer.
X.OB Means The Person Was Office Bearer Of The Outgoing Committee Of Management.


I
II
III
IV
V
Sr.
No
WP Number
Name Of The Bank
GS Administrator

GS Replaced
Administrator/
Committee Of Administrator
1
38022/04
DCB Deoria
Completed
31/08/04
09/06/04

Sri RP Yadav (MGB)
Sri S Kushwaha (NGB)
Sri D Ahmad (NGB)
GS
GS
2
39025/04
DCB Sidhartnagar
Superseded
Dec 2002 GO
24/05/2003
u/s 35(3)
06/07/04
22/07/04
u/s 35(3)
28/08/04
u/s 29(5)(b)
Sri Sudhir Kumar (MCM)
Sri Tufail Ahmad (NGB)
Sri S Singh (NGB)
Sri V Tiwari (NGB)
GS
Nominee Of UPCB
3
40654/04
DCB Basti
Completed
07/07/04
08/06/04

Sri Ram Kewal Yadav
(Neither Office Bearer Nor Member Of Committee Of Management. Not Clear Whether Member Of General Body Or Not)
4
42557/04
DCB Gorakhpur
Superseded
Dec 2002 GO


01/10/03
u/s 35 (2)
24/01/04
u/s 35 (3)
28/02/04
u/s 35(3)
08/03/04
u/s 29(5)(b)
Sri RD Vidyarthi (MGB)
Sri A Yadav (NGB)
Sri Ashok Lohia (NGB)
Sri Manjur Ahmad (NGB)
Sri Angad Kumar (NGB)
Sri RG Yadav (NGB)
Sri Kali Shankar (NGB)
5
42560/04
DCB Mathura
Completed
07/07/04

09/10/04

Smt Arti Singh (NGB)
GS
GS
6
43260/04


Same As WP 42557/04 At Sr. No. 4
7
44174/04
DCB Bijnore
Completed
07/06/04

09/10/04

Sri MD Sharma (NGB)
8



44796/04
DCB Meerut
Superseded
Dec 2002 GO
30/01/04
u/s 35(2)
06/07/04

16/09/04



Sri Jabar Singh (MGB)
9


45532/04
DCB Lalitpur
Completed
07/06/04

08/07/04

Sri Tilak Yadav (NGB)
10



51433/04
DCB Bulandshahar
Completed

07/06/04

09/10/04

Sri S Singh (MGB)
11


55547/04
DCB Mainpuri
Completed
07/06/04

08/06/04

Dr. RK Yadav (NGB)
12


55652/04
DCB Etah
Completed
07/07/04

24/07/04

Sri KC Yadav (OB)
13



55851/04
UCB Ghaziabad
Superseded
Dec 2002 GO
09/12/04

27/11/04
Sri SPS Tomar (NGB)
14


1191/05
DCB Firozabad
Completed
07//07/04
21/07/04

Sri Jai Veer Singh (OB)
Sri DS Tomar (MGB)
Sri Ram Pal Singh (MGB)
Sri K Yadav (MGB)
Sri SL Yadav (MGB)
GS
GS
15




3897/05
DCB Shajahnpur
Completed
07/07/04

27/07/04
Sri DS Yadav (OB)
Sri Sarnam Singh (MCM)
Sri P Pandey (MCM)
GS
GS
16





5373/05
DCB Moradabad
Completed
27/07/04

08/12/04





Sri Nanak Singh (MGB)
Sri Yakoob Ali (NGB)
Sri VB Singh (NGB)
GS
GS
17





9191 Of 2005
DCB Allahabad
Superseded
Dec 2002 GO
04/02/05
u/s 35(3)
22/02/05
Sri SS Singh (MGB) Assassinated On 27.2.05
Sri S Tripathi (NGB)
Sri RPS Baghel (MGB)
GS
GS
18



13830 Of 2005
DCB Ghaziabad
Superseded
Dec 2002 GO
13/02/04
27/10/04
Sri SP Singh (MGB)


APPENDIX-III
(Section 5 Of The (Australian) Administrative Decisions (Judicial Review) Act, 1977 Is As Follows)

Applications For Review Of Decisions:
5(1) A Person Who Is Aggrieved By A Decision To Which This Act Applies That Is Made After The Commencement Of This Act May Apply To The Court For An Order Of Review In Respect Of The Decision On Any One Or More Of The Following Grounds:
(i)that A Breach Of The Rules Of Natural Justice Occurred In Connection With The Making Of The Decisions;
(ii)that Procedures That Were Required By Law To Be Observed In Connection With The Making Of The Decision Were Not Observed;
(iii)that The Person Who Purported To Make The Decision Did Not Have Jurisdiction To Make The Decision;
(iv)that The Decision Was Not Authorised By The Enactment In Pursuance Of Which It Was Purported To Be Made;
(v)that The Making Of The Decision Was An Improper Exercise Of The Power Conferred By The Enactment In Pursuance Of Which It Was Purported To Be Made;
(vi)that The Decision Involved An Error Of Law, Whether Or Not The Error Appears On The Record Of The Decision;
(vii)that The Decision Was Induced Or Affected By Fraud;
(viii)that There Was No Evidence Or Other Material To Justify The Making Of The Decision;
(ix)that The Decision Was Otherwise Contrary To Law.

(2) The Reference In Paragraph (1) (e) To An Improper Exercise Of A Power Shall Be Constructed As Including A Reference To-
(a)taking An Irrelevant Consideration Into Account In The Exercise Of A Power;
(b)failing To Take A Relevant Consideration Into Account In The Exercise Of A Power;
(c)an Exercise Of A Power For A Purpose Other Than A Purpose For Which The Power Is Conferred;
(d)an Exercise Of A Discretionary Power In Bad Faith;
(e)an Exercise Of A Personal Discretionary Power At The Direction Or Behest Of Another Person;
(f)an Exercise Of A Discretionary Power In Accordance With A Rule Or Policy Without Regard To The Merits Of The Particular Case;
(g)an Exercise Of A Power That Is So Unreasonable That No Reasonable Person Could Have So Exercised The Power;
(h)an Exercise Of A Power In Such A Way That The Result Of The Exercise Of The Power Is Uncertain; And
(i)any Other Exercise Of A Power In A Way That Constitutes Abuse Of The Power.

(3) The Ground Specified In Paragraph (1)(h) Shall Not Betaken To Be Made Out Unless-
i.the Person Who Made The Decision Was Required By Law To Reach That Decision Only If A Particular Matter Was Established, And There Was No Evidence Or Other Material (including Facts Of Which He Was Entitled To Take Notice) From Which He Could Reasonably Be Satisfied That The Matter Was Established; Or
ii.the Person Who Made The Decision Based The Decision On The Existence Of A Particular Fact, And That Fact Did Not Exist.
(Section 4 Of The Barbados Administrative Justice Act, 1980 Is As Follows)
Grounds For Relief:
4. The Grounds Upon Which The Court May Grant Relief By Way Of The Remedies Mentioned In This Act Are
i.that An Administrative Act Or Omission Was In Any Way Unauthorised Or Contrary To Law;
ii.excess Of Jurisdiction;
iii.failure To Satisfy Or Observe Conditions Or Procedures Required By Law;
iv.breach Of The Principles Of Natural Justice;
v.unreasonable Or Irregular Or Improper Exercise Of Discretion;
vi.abuse Of Power;
vii.fraud, Bad Faith, Improper Purposes Or Irrelevant Considerations;
viii.acting On Instructions From An Unauthorised Person;
ix.Conflict With The Policy Of An Act Of Parliament;
x.Error Of Law, Whether Or Not Apparent On The Fact Of The Record;
xi.Absence Of Evidence On Which A Finding Or Assumption Of Fact Could Reasonably Be Based; And
xii.Breach Of Or Omission To Perform A Duty.


Appendix-IV

The High Court Of Australia In Minister For Aboriginal Affairs Vs. Peko-Wallsend Ltd. (1987 LRC (Const)822 At Page 835) Has Summarised The Law 'when An Administrative Decision Can Be Struck Down'. The Relevant Part Of The Decision Is As Follows:
''The Failure Of A Decision Maker To Take Into Account Relevant Consideration In The Making Of An Administrative Decision Is One Instance Of An Abuse Of Discretion Entitling A Party With Sufficient Standing To Seek Judicial Review Of Ultravires Administrative Action. That Ground Now Appears In Section 5(2) (b) Of The ADJR Act Which, In This Regard, Is Substantially Declaratory Of The Common Law. Together With The Related Ground Of Taking Into Account Irrelevant Considerations, It Has Been Discussed In A Number Of Decided Cases, Which Have Established The Following Proposition:
The Ground Of Failure To Take Into Account A Relevant Consideration Can Only Be Made Out If A Decision - Maker Fails To Take Into Account A Consideration Which He Is Bound To Take Into Account In Making That Decision (Sean Investment Pvt. Ltd. Vs. MacKellar (1981) 38 ALR 363, At P. 375; Creednz Inc Vs. Governor General [1981]1 NZLR 172, At Pp. 183, 196-197; Ashby Vs. Minister Of Immigration [1981] 1 NZLR 222, At Pp. 225, 230, 232-235 ). The Statement Of Lord Greene, M. R., In Associated Provincial Picture House Ltd. Vs. Wednesbury Corporation [1948] 1 KB 223, At P. 228, That A Decision Maker Must Take Into Account Those Matters Which He "ought To Have Regard To" Should Not Be Understood In Any Different Sense In View Of His Lordships Statement On The Following Page That A Person Entrusted With A Discretion "must Call His Own Attention To The Matters Which He Is Bound To Consider.
What Factors A Decision Maker Is Bound To Consider In Making The Decision Is Determined By Construction Of The Statute Conferring The Discretion. If The Statute Expressly States The Considerations To Be Taken Into Account, It Will Often Be Necessary For The Court To Decide Whether Those Enumerated Factors Are Exhaustive Or Merely Inclusive. If The Relevant Factors- And In This Context I Use This Expression To Refer To The Factors Which The Decision Maker Is Bound To Consider- Are Not Expressly Stated, They Must Be Determined By Implication From The Subject Matter, Scope And Purpose Of The Act. In This Context Of Judicial Review On The Ground Of Taking Into Account Irrelevant Considerations, This Court Has Held That, Where A Statute Confers A Discretion Which Is In Its Terms Is Unconfined, The Factors That May Be Taken Into Account In The Exercise Of The Discretion Are Similarly Unconfined, Except In So Far As There May Be Found In The Subject Matter, Scope And Purpose Of The Statute Some Implied Limitation On The Factors To Which The Decision Maker May Legitimately Have Regard (see R Vs. Australian Broadcasting Tribunal Exparte 2 HD Pvt. Ltd. (1979) 144 CLR 45, At Pp. 49-50, Adopting The Earlier Formulation Of Dixon,J., In Swan Hill Corporation Vs. Bradbury (1937) 56 CLR 746, At PP. 757-758, And Water Conservation And Irrigation Commission (NSW) Vs. Browning (1947) 74 CLR 492, At P-505. By Analogy, Where The Ground Of Review Is That The Relevant Consideration Has Not Been Taken Into Account And Discretion Is Unconfined By The Terms Of The Statute, The Court Will Not Find That The Decision Maker Is Bound To Take A Particular Matter Into Account Unless An Implication That He Is Bound To Do So Is To Be Found In The Subject Matter, Scope And Purpose Of The Act.
Not Every Consideration That A Decision Maker Is Bound To Take Into Account But Fails To Take Into Account Will Justify The Court Setting Aside Impugned Decision And Ordering That The Discretion Be Re-exercised According To Law. A Factor Might Be So Insignificant That The Failure To Take Into Account Could Not Have Materially Affected The Decision (see, For Example, The Various Expressions Baldwin And Francis Ltd. Vs. Patents Appeal Tribunal [1959] AC 663, At P. 693; Hanks Vs. Minister Of Housing And Local Government [1963] 1 QB 999, At P 1020; R Vs. Chief Registrar Of Friendly Societies, Exparte New Cross Building Society [1984] QB 227, At P. 260). A Similar Principle Has Been Enunciated In Cases Where Regard Has Been Had To Irrelevant Considerations In The Making Of An Administrative Decisions (R. Vs. Bishop Of London (1899) 24 QBD 213, At Pp 226-227; R Vs. Rochdale Metropolitan Borough Council, Exparte Cromer Ring Mill Ltd [1982] 3 All ER 761, At Pp. 769-770). The Limited Role Of A Court Reviewing The Exercise Of An Administrative Discretion Must Constantly Be Borne In Mind. It Is Not The Function Of The Court To Substitute Its Own Decision For That Of The Administrator By Exercising A Discretion, Which The Legislature Has Vested In The Administrator. Its Role Is To Set Limits On The Exercise Of That Discretion, And A Decision Made Within Those Boundaries Cannot Be Impugned (Wednesbury Corporation, At P. 228).
It Follows That, In The Absence Of Any Statutory Indication Of The Weight To Be Given To Various Considerations, It Is Generally For The Decision Maker And Not The Court To Determine The Appropriate Weight To Be Given To The Matters Which Are Required To Be Taken Into Account In Exercising The Statutory Power (Sean Investments Pty. Ltd. Vs. Mackellar, At P. 375; R Vs. Anderson, Exparte Ipec-Air Pty Ltd. (1965) 113 CLR 117, At P 205; Elliot Vs. Southwark London Borough Council [1976] 53 WLR 499, At P. 507; [1976] 2 All ER 781 At P 788; Pickwell Vs. Camden London Borough Council [1983] QB 962, At P 990). I Say "generally" Because Both Principle And Authority Indicate That In Some Circumstances A Court May Set Aside An Administrative Decision, Which Has Failed To Give Adequate Weight To A Relevant Factor Of Great Importance, Or Has Given Excessive Weight To A Relevant Factor Of No Great Importance. The Preferred Ground, On Which This Is Done, However Is Not The Failure To Take Into Account Relevant Considerations Or The Taking Into Account Of Irrelevant Consideration, But That The Decision Is "manifestly Unreasonable". This Grounds Of Review Was Considered By Lord Greene, M.R., In Wednesbury Corporation, At Pp. 230, 233-234, In Which His Lordship Said That It Would Only Be Made Out If It Were Shown That The Decision Was So Unreasonable That No Reasonable Person Could Have Come To It. This Ground Is Now Expressed In Sections 5(2) (g) And 6(2)(g) Of The ADJR Act In These Terms. The Test Has Been Embraced In Both Australia And England (Parramatta City Council Vs. Pestell (1972) 128 CLR 305, At P. 327; Bread Manufacturer Of NSW Vs. Evans (1981) 56 ALJR 89, At P. 96; Re Moore, Exparte Cooperative Bulk Handling Ltd. (1982) 41 ALR 221, At Pp. 221-222; Hall And Co. Ltd. Vs. Shoreham-By-Sea Urban District Council [1964] JWLR 240, At Pp. 248, 255; R Vs. Hillindon London Borough Council, Exparte Royco Homes Ltd [1974] QB 720 At Pp -731-32; Newbury District Council Vs. Secretary Of State For The Environment [1981] AC 578, At Pp. 599-600, 608). However, In Its Application, There Has Been Considerable Diversity In The Readiness With Which Courts Have Found The Test To Be Satisfied (compare, For Example, Wednesbury Corporation, At P. 230, And Parramtta City Council, At P. 328, With The Conclusion Reached In The South Oxfordshire District Council Vs. Secretary Of State For The Environment [1981] 1 WLR 1092, At P. 1099; Shoreham-By-Sea Urban District Council And Ministry Of Housing And Local Government Vs. Hartnell [1965] AC 1134, At P.1173). But Guidance May Be Found In The Close Analogy Between Judicial Review Of Administrative Action And Appellate Review Of A Judicial Discretion. In The Context Of The Letter, It Has Been Held That An Appellate Court May Review A Discretionary Judgement That Has Failed To Give Proper Weight To A Particular Matter, But It Will Be Slow To Do So Because A Near Preference For A Different Result Will Not Suffice (Lovell V. Lovell (1959) 81 CLR 513 At P.519; Gronow V. Gronow (1979) 144 CLR 513, At Pp. 519-520, 534, 537-538; Mallet V. Mallet (1984) 58 ALJR 248, At Pp. 252, 252. So, Too, In The Context Of Administrative Law A Court Should Proceed With Caution When Reviewing An Administrative Decision On The Ground That It Does Not Give Proper Weight To Relevant Factors, Lest It Exceed Its Supervisory Role By Reviewing The Decision On Its Merits.
The Principles Stated Above Apply To An Administrative Decision Made By A Minister Of The Crown (Murphyores Incorporated Pty Ltd. V. The Commonwealth (1976) 136 CLR 1; Re Hunt, Ex Parte Sean Investiments Pty. Ltd. (1979) 53 ALJR 552; Padfied V. Minister Of Agriculture, Fishries And Food [1968] AC 997; Secretary Of State For Education And Science Vs. Tameside Matropolitan Borough Council [1977] AC 1014). However, In Conformity With The Principle Expressed In (b) Above, Namely That Relevant Considerations May Be Gleaned From The Subject Matter, Scope And Purpose Of The Act, Where The Decision Is Made By The Minister Of The Crown, Due Allowance May Have To Be Made For Taking Into Account Of Broader Policy Considerations Which May Be Relevant To The Exercise Of A Ministerial Discretion.'

APPENDIX-V
(Recommendations From Report Of The Committee Of The JUSTICE - All Souls Review Of Administrative Law In The United Kingdom : Administrative Justice - Some Necessary Reforms)

1.Purpose Of Discretionary Power : An Administrative Authority Must Use A Power Exclusively For The Purpose For Which It Is Conferred. Legislation Should Make Clear The Purpose For Which A Power Is To Be Used.

2.Objectivity And Impartiality: Relevant Factors Must Be Taken Into Account In Reaching A Decision And Irrelevant Factors Must Be Disregarded. The Term 'factor' Includes The Legal Basis For A Decision. The Administrative Authority Should Endeavour To Acquaint Itself With All Material Information.

3.Equality Before The Law : Like Cases Must Be Treated In Like Manner And Discrimination Must Be Avoided.

4.Proportionality : An Appropriate Balance Must Be Maintained Between The Adverse Effects Which An Administrative Authority's Decision May Have On The Rights, Liberties, Or Interests Of The Person Concerned And The Purpose Which The Authority Is Seeking To Pursue.

5.Reasonable Time : Decision Must Be Taken By Administrative Authorities Within A Reasonable Time. What Constitutes A Reasonable Time Varies With The Circumstances, Such As The Complexity Of The Matter At Stake, Its Urgency, And The Number Of Persons Involved. Speed Is Highly Desirable Where The Grant Of An Authorisation Or License Is In Issue And Where The Administrative Authority, By Taking Some Step, Creates Uncertainty As Regards The Scope Of The Rights, Liberties, Or Interests Of Persons Affected. Delay Can Cause Considerable Practical Difficulties And May Constitute A Hidden Form Of Arbitrariness.

6.Application Of Guidelines: General Administrative Guidelines ( Such As Circulars, Codes Of Practice, Office Memoranda, And Other Administrative Measures Of An Internal Nature) Must Be Applied In A Consistent Manner, But, At The Same Time, Account Must Be Taken Of The Particular Circumstances Of Each Case.

7.Publicity Of Guidelines: General Administrative Guidelines Which Govern The Exercise Of A Discretionary Power Must
(a) Be Made Public, And
(b) Be Communicated To The Person Concerned At His Request. The Request May Be Made Before Or After The Decision Is Taken.

8.Departure From Guideline : Where An Administrative Authority Departs From A General Administrative Guideline In Such A Manner As To Affect Adversely The Rights, Liberties, Or Interests Of A Person Concerned, He Should Be Given The Reasons For The Decision (either Together With The Decision Or, Upon Request, Subsequently).

9.Nature Of Control. By Recourse To A Court Or Other Independent Body It Must Be Possible To Control The Legality Of An Act Taken In The Exercise Of A Discretionary Power. This Principle Does Not Exclude The Possibilities (a) That The Act Is Subject To Preliminary Control By An Administrative Authority Empowered To Decide Both On Legality And On The Merits Or (b) That The Control By The Court Or Other Independent Body Extends To The Merits As Well As To Legality. The Commentary Recognizes That The Limits Of The Concepts 'legality' And 'merits' Are Not Always 'precise And Clear'.

10.Abstention On The Part Of An Administrative Authority : Where No Time-limit Is Laid Down By Law For Taking A Decision In The Exercise Of A Discretionary Power, The Authority's Failure To Decide Within A Reasonable Time Should Be Subject To Control By A Competent Authority. (Obviously This Principle Is Closely Linked With Principle 5 Above).

11.Power Of The Control Body To Obtain Information: The Court Or Other Independent Body, Which Controls The Exercise Of A Discretionary Power, Must Have Such Powers Of Obtaining Information As Are Necessary For The Exercise Of Its Function. In Particular It Must Have Access To The Information On The Basis Of Which The Administrative Authority Took Its Decision. This Principle Does Not Exclude Those Systems Where Only The Parties To A Case And, Notably, The Administrative Authority Are Allowed To Produce The Relevant Elements, Provided Always That The Control Body Has Power To Order Certain Elements To Be Produced

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