Well Thought Off Policy Decision In Public Interest: Delhi HC Upholds Amendment To Section 35(10)(cc) Of Cooperative Societies Act
While observing that an amendment made to an existing Statute cannot be modified, looked into or set aside simply because the same is not viable or suitable to a party, the Delhi High Court held that there is no reason for declaring the provisions of Section 35(10)(cc) of the Delhi Co-operative Societies Act, 2003 to be ultra-vires as there is no mala fide and/ or personal gain to anyone or the legislature in inserting Section 35 (10)(cc) vide the 2004 Amendment and the later amendment thereto vide the 2011 Amendment.
The Division Bench of Justice Manmohan and Justice Saurabh Banerjee therefore observed that “the amendment carried out to Section 35(10)(cc) of the 2003 Act by the 2011 Amendment is logical and a well-thought off policy decision taken in larger public interest which need not be interfered with. The insertion of Section 35(10(cc) in the 2003 Act by the 2004 Amendment and the subsequent amendment thereof by the 2011 Amendment were both made after due deliberation and taking proper precaution at every level from time to time”.
Advocate Anju Bhattacharya appeared for the Petitioner, whereas Advocate Sujata Kashyap appeared for the Respondent.
Going by the background of the case, a member store of the Respondent Society-The Delhi Consumer Co-operative Wholesale Store Limited filed a petition with the principal object of doing wholesale and retail business in consumer goods as per their bye-laws. The Petitioner approached the High Court seeking declaration of Section 35(10)(cc) of the 2003 Act as ultra vires and for passing of a writ of mandamus or any other writ or direction(s) to the Society and Delhi Government to conduct time bound elections of the Committee within a period of three months based on membership records along with any other relief/s against the Society, Registrar and the Delhi Government.
After considering the submission, the Division Bench noted that as the percentage of issued equity shares held by the Delhi Government and the percentage of members of the Committee to be nominated by it already stood introduced/ changed/ proportionately increased way back in the year 2003, the only change vide the 2011 Amendment to Section 35(10)(cc), as challenged by the Petitioner was with respect to the increase of percentage of members to be nominated to the Committee.
Finding that the Petitioner having not challenged the insertion of Section 35(10)(cc) in the 2003 Act vide the 2004 Amendment till the filing of the present writ wherein it has sought to challenge a subsequent amendment carried out by the 2011 Amendment, the Bench observed that the Petitioner is most certainly guilty of delay, laches and acquiescence.
“Merely because the petitioner is losing emerging business/ economic opportunities is not sufficient for this Court to declare the amendment made to Section 35(10)(cc) of the 2003 Act by the 2011 Amendment as ultra vires without challenging the insertion thereof by the 2004 Amendment”, added the Bench.
Stating that the insertion of Section 35(10)(cc) vide the 2004 Amendment proved to be a lifeline for a Society that was hitherto starving with hardly any business activity, the Bench highlighted that no mala fide or personal gain can be attributed to any of the Respondents or the legislature in incorporating the impugned Section 35(10)(cc) in the 2003 Act.
Noting that there was a reasonable nexus of the said incorporation and amendment to Section 35(10)(cc) with the object of aiding public policy as it was able to sustain and aid the Society, the High Court observed that as the co-operative societies, which from the inception are governed by the Statute, are created by the Statute and are controlled by the Statute, there can be no objection to statutory interference with their composition on the ground of contravention of the individual right of freedom of association.
“After all, it is a matter of fact that since voluntarily joining as a member of the Society, the petitioner, being governed by the Statute is bound to follow what is laid down in the Act, rules, regulations and bye-laws, including any subsequent amendments thereto, if any, lest it will defeat the purpose of a Society”, added the Court.
Accordingly, highlighting that a member in/ of a Society ceases to represent the self and has no individual existence, right, title or interest of its own as it is a part of a communion, the High Court dismissed the petition while refusing to issue any directions to either the Society or the Registrar to conduct elections to the Committee.
Cause Title: THE SUDHAR SABHA CONSUMER CO-OPERATIVE STORE LTD v. THE DELHI CONSUMER CO-OPERATIVE WHOLESALE STORE LTD. and ORS. [Neutral Citation: 2023: DHC: 4072-DB]
