Case Analysis : Zeeshan Mehdi v. Union of India & Ors.

INTRODUCTION: 

In the silence of the statute, no voice of authority can emerge. Based on the basic precepts of administrative law, this doctrine is brought to life in Zeeshan Mehdi v. Union of India & Ors., wherein the Bombay High Court analyzed the limitations of executive discretion in co-operative government. The case challenged an extra-statutory check exercised by the Central Registrar—without any explicit requirement under the Multi-State Co-operative Societies Act, 2002—on an elected Chairman. Under Article 226, the Court highlighted that in public office, power is never assumed—it has to be established under law.

FACTS OF THE CASE : 

The current writ petition was moved by Zeeshan Mehdi, who was a Chairman and Director of Bombay Mercantile Co-operative Bank Ltd., a multi-state co-operative bank regulated under the Multi-State Co-operative Societies Act, 2002. On 16th May 2018, the Central Registrar of Co-operative Societies, operating under the Ministry of Agriculture and Farmers Welfare, issued an order restraining the petitioner from functioning in any way as Chairman/Director of the bank and from participating in any Board meetings. The above-mentioned order also instructed that the Vice-Chairman would perform the functions of the Chairman for the duration.

The challenged order did not mention any provision of the statute under which the same was made, nor was the petitioner given a hearing before passing it. The Registrar subsequently tried to rationalize the move by invoking Sections 29(d), 122, and 123 of the MSCS Act, 2002. These provisions pertain to disqualification criteria, policy directives of the Central Government, and supersession of the board, respectively—and not interim limitations on individual directors.

The petitioner argued that the order was jurisdictional, against natural justice, and beyond the scope of powers vested by the MSCS Act. He also invoked a prior show cause notice dated 1st August 2017, which had not led to final action. Several third parties interfered in the proceedings—some accusing the petitioner of impropriety, while others challenged the legality of the Registrar’s action. The High Court accepted the case for final hearing on admission stage, addressing whether or not there was a legal ground for the Central Registrar to issue such an extreme, interim order ousting an elected office-bearer without formal investigation or statutory process.

ISSUES :

1. Whether the Central Registrar of Co-operative Societies had the statutory authority under the MSCS Act, 2002 to restrain the petitioner from acting as Chairman/Director of the bank?
2. Whether Sections 29(d), 122, and 123 of the MSCS Act empowered such an interim and drastic order without due process?

JUDGEMENT:

The Bombay High Court, which consisted of Justice A.S. Oka and Justice A.S. Gadkari, gave an oral judgment on 5th February 2019, wherein it declared the impugned order dated 16th May 2018 passed by the Central Registrar of Co-operative Societies as illegal and not sustainable in law.

The Court observed that the challenged order was draconian in nature, as it totally barred an elected Chairman and Director from performing his statutory duties and from participating in Board meetings. The Court particularly asked for any statutory authority under which such immense power was wielded at the hearing. Significantly, the challenged order did not mention any statutory provision. In reply, the Central Registrar cited Section 29(d) (disqualification clause), Section 122 (power of Central Government to issue directions), and Section 123 (power of Central Government to supersede the Board) of the Multi-State Co-operative Societies Act, 2002. 

The Court considered each section judiciously:

1. Section 29(d) is about disqualification of members, but the order impugned has not noted any findings or even a prima facie view that the petitioner had stood disqualified under this section.
2. Section 122 gives powers to the Central Government to issue directions in public interest. But the impugned order has been passed by the Central Registrar, not the Government, and therefore this provision could not be relied upon to justify the act.
3. Section 123 addresses the supersession of the whole Board of a particular co-operative society by the Central Government, under certain conditions and in accordance with due process. The section does not contemplate an interim order against a single Chairman or Director.
4. Thus, the Court held that there was no power under these provisions to vest in the Central Registrar the authority to make the impugned order. It noted that a drastic and punitive order like this had to be supported by express statutory powers, which were conspicuously missing in this case. The action was an overreach of administrative authority.

In addition, the Court noted that even if the petitioner’s term as Chairman had lapsed, as indicated in his own letter dated 11th June 2018, the challenged order also debarred him from functioning as a Director, which still impacted his rights. The Court did not rule on the factual issue of whether or not the petitioner’s term had expired, as it was beside the point to the legality of the order. The Court also disposed of the 1st August 2017 show cause notice, and held that its proceedings could proceed independently and in accordance with law notwithstanding the quashing of the impugned order.

REASONING :

1. The 16th May 2018 impugned order was issued by the Central Registrar without any reference to any legal provision. The respondents subsequently referred to Sections 29(d), 122, and 123 of the MSCS Act, 2002. The Court, however, adjudged that none of these sections provided authority to the Registrar to issue such an order. It reasserted that “executive authority must flow from statute and not from assumption” (State of Madhya Pradesh v. Bharat Singh). The lack of enabling legislation made the action ultra vires.
2. Section 29(d) addresses disqualification but the order did not make any prima facie finding of disqualification. Section 122 allows only the Central Government, and not the Registrar, to make policy directions, and Section 123 provides for full board supersession and not interim restraint on a person. The Court explained that “where a statute prescribes a means of doing something, it must either be done in that way or not at all” — based on the Taylor v. Taylor rule, affirmed in Nazir Ahmad v. King Emperor
3. The petitioner had no chance to be heard before such a serious order was passed. The Court ruled that this was in breach of the cardinal principle of audi alteram partem, a basic principle of natural justice. Referring to Maneka Gandhi v. Union of India the Court reaffirmed that “even an administrative action which impinges upon civil rights must be preceded by a fair hearing.”
4. The Court ruled that the Central Registrar, as a statutory body, could not exert powers not conferred on him. In assuming powers under provisions intended for the Central Government, the Registrar has patently gone beyond his authority. The principle of “the subordinate legislation or functionaries must operate within the limits of the parent Act” was emphasized, as in judgments in Bennett Coleman v. Union of India
5. The petitioner had stated that his term was near expiration, but the Court explained that legality of an administrative order should be determined on the date it was enacted, not in light of later occurrences. The Court based its decision on the principle enunciated in Kiran Singh v. Chaman Paswan, that an error of jurisdiction vitiates the act and it cannot be retrospectively cured, and thus the pending show cause notice was left unaffected and permitted to go on separately.

CONCLUSION : 

This case restates the basic constitutional principle that no power can operate in excess of its legal authority, and that even executive discretion is required to trace its origin to statutory authority. The judgment ensures the integrity of democratically elected offices in co-operative institutions and reaffirms that due process and lawfulness are essential in administrative decision-making.

REFERENCES : 

1. https://www.casemine.com/judgement/in/638e7e319cfa784fd8fa91b7
2. M.P. Jain – Indian Constitutional Law
3. D.D. Basu – Commentary on the Constitution of India

Written by Reethikaa Ganesan; an Intern under Legal Vidhiya.

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