SAHKARI SAMITIYAN VYAVASTHAPAK UNION ETC. versus STATE OF RAJASTHAN AND ORS.

Citation: [1996] 3 S.C.R. 104 · Decided: 01-03-1996 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Dismissed

Judgment (excerpt)

A 
SAHKARI SAMITIYAN VYAVASTHAPAK UNION ETC. 
B 
v. 
STATE OF RAJASTHAN AND ORS. 
MARCH 1, 1996 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
Rajasthan Cooperative Societies Act, 1965-Sections 4(1), 147, 148 
Cooperative Societies Rules, 1966-Rule 41-Societies which may be 
C registered and classified under the Act-Officers and employees of co-opera-
tive societies-Cadre Authority Society constituted u/s 4( l}-Whether can be 
registered as a cooperative society-Held, No-Paid secretaries appointed by 
District Cooperative Societies, recrnited & controlled by Cadre Authority 
Society-Whether Primary Agriculture Credit Cooperative Societies are bound 
to take service of paid secretaries-Held, No-They are outside the scope of 
D cadre of these societies-Whether Registrar has power under Rule 41 to make 
Central Cooperative Bank Rules, 1969-Held, No. 
The Primary Agriculture Credit Cooperative Societies filed a writ 
petition challenging the validity of the constitution of the Rajas than Credit 
Cooperative Institutions Cadre Authority Limited and also the power of 
E 
the Registrar of the Cooperative Societies to make the rules calling upon 
Primary Cooperative Societies to contribute to the Manager's Salary Fund 
under Central Cooperative Bank Rules, 1969. The Cadre Authority Society 
constituted u/s 4(1) of the Rajasthan Cooperative Societies Act, 1965 had 
recruited paid secretaries who were sought to be posted to the Primary 
F 
Cooperative Societies fastening liability of their salary on the Primary 
Societies. The High Court held that the Cadre Authority Society cannot be 
registered as a cooperative society u/s 4 of the Act and that the Bank Rules 
were ultra vires the power of the Registrar under Rule 41 of the Cooperative 
Societies Rules, 1966. These appeals were filed against the judgment of the 
High Court. The appellants contended that the Registrar under Rule 41 of 
G the Cooperative Societies Rules r/w ss. 147 (2) and 148(2)(xxx) of the Act 
is empowered to regulate the service conditions of paid Secretaries and to 
prescribe qualifications and consequently, the Cadre Authority Society 
registered u/s 4(1) of the Act is a valid society; that the paid Secretaries 
are competent persons to work as liaison between the Primary Societies 
H and their members and that they are the members of the Primary Societies 
104 
' r 
y 
SARKAR! SAMITIY AN VYA V ASTHAPAK UNION v. STATE 
105 
and therefore, the Primary Societies are bound to contribute towards the A 
salary and allowances of the paid Secretaries. and that the Primary 
Societies are bound by the Bank Rules. 
The respondent State contended that the Registrar has no power to 
make Bank Rules nor has he power to direct the Primary Societies to 
contribute for the salary and allowance of the paid Secretaries. 
B 
The questions raised for consideration were whether Cadre 
Authority Society could be a cooperative society registered u/s 4(1) of the 
Act; whether the Primary Cooperative Societies are bound to take the 
service of the paid Secretaries; whether the Registrar as a delegate of the C 
Government, can make rules in that behalf or create a fund under the Bank 
Rules and whether the paid Secretaries appointed by the District Coopera-
tive Societies, recruited and controlled by the Cadre Authority Society are 
the officers or employees of the Primary Societies. 
Dismissing the appeals, this Court 
HELD : 1.1. The marginal note to Section 4(1) of the Rajasthan 
Co-operative Societies Act, 1965, indicates that the classified societies are 
to be registered under the Act. Subject to the provision of the Act, a 
cooperative society which has its object the promotion of the economic 
interests of "its members" in accordance with the cooperative principles, 
or a cooperative society established with the object of "facilitating the 
operations of such societies", may be registered under the Act. The Cadre 
Authority Society does not come under the first limb of Section 4(1). The 
cooperative structure is built upon three-tier system, viz., PACS consisting 
D 
E 
* 
of individual members, at the grass-root level within the area of operation F 
of that society, the District Cooperative Societies and the Central Coopera-
tive Bank. The District Cooperative Societies and the Central Cooperative 
Bank got the Cadre Authority Society which is not a lending institution, 
registered and the paid Secretaries, who are otherwise a third agency, 
recruited by it They are appointed 

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