Allahabad High Court
Brijesh Kumar Singh And 11 Others vs The Central Registrar Co-Operative And ... on 31 May, 2023
Author: Mahesh Chandra Tripathi
Bench: Mahesh Chandra Tripathi
HIGH COURT OF JUDICATURE AT ALLAHABAD Neutral Citation No. - 2023:AHC:122675-D A.F.R. Judgment reserved on 09.05.2023 Judgment delivered on 31.05.2023 Case :- WRIT - C No. - 8913 of 2021 Petitioner :- Brijesh Kumar Singh and 11 Others Respondent :- The Central Registrar Co-Operative and 3 Others Counsel for Petitioner :- Balwant Singh,Umesh Vats Counsel for Respondent :- A.S.G.I.,Atul Kumar Shahi,Kartikeya Saran,Krishna Ji Shukla,Narendra Kumar Chatterjee Hon'ble Mahesh Chandra Tripathi,J.
Hon'ble Manjive Shukla,J.
1. Heard Mr. Umesh Vats and Mr. Balwant Singh, learned counsel for the petitioners; Mr. H.N. Singh, learned Senior Advocate assisted by Mr. Atul Kumar Shahi, learned counsel for respondent no.2 and Mr. Krishna Ji Shukla, Advocate, holding brief of Mr. N.K. Chatterjee, learned counsel for the Union of India.
2. By means of present writ petition, the petitioners have sought following reliefs:-
"i) Issue a writ, order or direction in the nature of mandamus commanding and directing to the Central Registrar, Co-operative Societies, Department of Agriculture and Co-operative, Government of India, New Delhi to take appropriate decision on the matter of the petitioners and appoint returning officer to hold the election of the bank (North Eastern & East Central Railway Employees' Multi - State Primary Co-operative Bank Limited, Gorakhpur).
ii) Issue a writ, order or direction in the nature of mandamus directing to the Central Registrar (respondent no.1) to send report to the Reserve Bank of India regarding the expiration of the terms of the general body as well as Board of Directors of the Bank to the Reserve Bank of India (respondent no.4).
iii) Issue a writ, order or direction in the nature of mandamus commanding and directing to the Reserve Bank of India to take appropriate decision to supersede the Board of Directors i.e. North Eastern & East Central Railway Employees' Multi - State Primary Co-operative Bank Limited, Gorakhpur and administrator upon.
iv) Issue a writ, order or direction in the suitable nature which this Hon'ble Court may deem fit and proper under the circumstances of the case.
v). Award the cost of the writ petition to the petitioners."
3. By means of an amendment application, which was allowed by this Court on 27.03.2023, further relief was added:-
"i-A) Issue a writ, order or direction in the nature of certiorari quashing the elections dated 08.01.2020, 18.02.2020 and 19.02.2020 held by the respondent nos.2 & 3."
4. The brief facts of the case are that "North Eastern & East Central Railway Employees Multi State Primary Co-operative Bank Limited, Gorakhpur"1 is a Co-operative Society, which was established in the year 1921 and initially registered under the Cooperative Societies Act, 19122. Subsequently, it was brought under the provisions of "Multi State Cooperative Societies Act, 1942" for extending the objects of the Society. Thereafter, "Multi State Cooperative Societies Act, 1984"3 was enacted for incorporation, regulation and winding up of Multi State Cooperative Societies. Since, the area of operation of the said Society is more than one State and therefore, it was also registered under the provisions of the Act, 1984. Later on, the Act, 1984 was amended and "Multi-State Co-operative Societies Act, 2002"4 was enacted. The Society was again registered under the provisions of Act, 2002. The Society has its own registered bye-laws. It does not receive any fund from the State Government or Central Government. The bank is running and functioning according to the provisions of the Act, 2002 and the provisions of Multi-State Co-operative Societies Rules, 20025.
5. It also appears from the record that the terms of delegates, members and office bearers of the Board are five years. Once the term of the general body of the Bank was going to expire in the month of August, 2015 then the Board of Directors of the Bank had proceeded to pass a resolution on 10.04.2015 for holding a meeting of the general body of the bank as well as the board of the bank. The said resolution was duly intimated to the Central Registrar on 30.04.2015. The election programme was notified on 11.05.2015 and the election of the general body/delegates was held and the result was declared on 26.06.2015, wherein 250 delegates from 11 departments were elected. The Returning Officer notified the election of the members of the board and office bearers on 29.06.2015 and the same was duly informed to the Central Registrar on 30.06.2015. The election of the members of the board was held in the general meeting of the bank on 30.07.2015 and the election of Chairman and Vice Chairman of the bank was held on 31.07.2015, wherein, the first petitioner was elected as Chairman of the Board of Directors of the Bank.
6. Meanwhile, out of nine, six Directors of the bank prepared the alleged resolution dated 27.09.2018, wherein, the first petitioner was removed from the office of the Chairman on the 'no confidence motion' brought by Rajesh Kumar Singh, Director. The petitioners had challenged the aforesaid resolution in Writ C No.42730 of 20186 which was disposed of by a coordinate Bench of this Court with following observations:-
"We have heard Sri P.N. Saxena, learned Senior Advocate assisted by Sri Amit Saxena for the petitioners; Sri Balwant Singh for respondents 3 to 9.
After some arguments, Sri P.N. Saxena, learned Senior Counsel appearing for the petitioners, has confined his arguments in respect of the second prayer made in the petition which is for a direction upon the Central Registrar of Cooperative Societies, Department of Agriculture and Cooperation, Government of India, New Delhi to take a decision on the reference petition of the petitioners filed under Section 84 of the Multi- State Cooperative Societies Act, 2002.
According to the petitioners a forged and fabricated Resolution No. 25 dated 27.9.2018 has been set up to disclose that the petitioner no. 1 (Brajesh Kumar Singh) had abused his position as Sabhapati of the Board and, therefore, by a resolution has been removed from office.
It has been submitted that the said resolution is in the teeth of the proviso to Section 47 of the Multi-State Cooperative Societies Act, 2002 as no opportunity was given to the petitioner no. 1 to make a representation on the allegations and otherwise also the resolution has not been passed by requisite strength as is required by law. It is also stated that there was no agenda for consideration of any such resolution.
He prays that since the reference application has already been filed under Section 84 of the Multi-State Cooperative Societies Act, 2002 a direction may be issued upon the first respondent (The Central Registrar of Cooperative Societies, Department of Agriculture and Cooperation, Government of India, New Delhi) to take a decision within a specified period.
Considering the nature of the dispute as also the prayer made, we deem appropriate to dispose off the writ petition with a direction upon the respondent no. 1 to ensure expeditious decision on the reference petition of the petitioners, preferably, within a period of two months from the date of production of certified copy of this order.
It is made clear that this court has not expressed any opinion on the merits of the claim and, before taking decision, the first respondent shall provide opportunity of hearing to the parties concerned."
7. In pursuance of the aforesaid order dated 20.12.2018, the Central Registrar had refused to refer the matter under Section 84 of the Act, 2002 on 28.05.2019. The said order was again assailed by the petitioners in Writ C No.29112 of 20197 in which notices were issued to the respondents on 16.9.2019 and they were directed to file counter affidavit in the matter. Again the petitioners made a complaint before the Central Registrar on 23.03.2019 stating, therein, that six Directors, whose names are mentioned in paragraph-15 of the writ petition, are not informing the petitioners about the meeting of the Board of Directors. Again the petitioners alongwith 57 delegates/members of the general body made a complaint under Section 78 of the Act, 2002 before the Central Registrar on 10.04.2019, alleging number of irregularities being committed by the present management of the bank and sought a detailed enquiry. Again the first petitioner alongwith Ashok Kumar Pandey had approached this Court by preferring Writ C No.38998 of 2019 and a Division Bench of this Court had proceeded to dispose of the writ petition on 13.1.2020, with following observations:-
"Heard Shri Amit Saxena, learned Senior Advocate, assisted by Shri Balwant Singh, learned counsel for the petitioners and Shri Vibhu Rai, learned counsel for the respondents.
The petitioners claim that they are members of the Board of the Society and that they have moved an application before the Central Registrar under Section 78 of the Multi-State Co-operative Societies Act, 2002, for an enquiry into the affairs of the Society and that the same be directed to be considered and decided by the Central Registrar.
Shri Vibhu Rai, learned counsel for the respondents, contends that the petitioners have no locus to make any such application.
Since the petitioners have invoked the powers under Section 78 of the Act, 2002, it is incumbent upon the Central Registrar to consider the application in that regard though in considering the same, he may also Rule with regard to the maintainability of the application as well as the locus of the petitioners in filing the same.
In view of the aforesaid facts and circumstances, we dispose of the writ petition with the direction to the Central Registrar to consider the above application of the petitioner filed under Section 78 of the Act, 2002, in accordance with law and in so considering it may decide the locus of the petitioners as well as the maintainability of the writ petition after giving proper opportunity of hearing to all concerned parties most expeditiously preferably within a period of six weeks from the date of submission of copy of this order before him.
In view of the above, the writ petition stands disposed of."
8. In pursuance of the said order dated 13.1.2020, the Central Registrar of Cooperative Societies heard both the parties and passed an order on 02.03.2020 for holding the enquiry into the matter. The order dated 02.3.2020 is reproduced hereinafter:-
"1. Complainant had approached Hon'ble High Court of Allahabad for a direction to this authority regarding inquiry under Section 78 of the MSCS Act, 2002 in the NE & EC Railway Employees Primary Cooperative Bank Limited, Gorakhpur (hereinafter referred to as bank). The complainant had alleged number of irregularities being committed by the current management of the bank with regard to which they had sought a detailed inquiry. The Hon'ble High Court vide its order dated 13.01.2020 had directed this authority to consider the application with regard to maintainability as well as locus of the petitioner/complainants. This authority has also been directed to consider the application of petition/complaint filed under Section 78 of the Act in accordance with law.
2. All the concerned parties were issued a notice in compliance of direction of Hon'ble High Court. The complainants have submitted that the current management of the bank has committed a series of irregularities which are serious in nature and require a detailed inquiry. It has also been submitted that as per Section 78 of MSCS Act, 2002, 1/3rd of the total number of Directors may require an inquiry to be conducted by the Central Registrar or an officer nominated by him to inquire into any complaint regarding constitution, working and financial condition from Multi State Cooperative Society. There are 9 Directors of the bank which are currently part of the Board and they are three Directors, therefore, they have locus standi to request for an inquiry.
3. The respondents represented by the current Chairperson and Secretary of the Society submitted that the complainants have not attended three consecutive meetings of the Board in spite of notice thereby incurred disqualification under Section 43 (m) of the Act and therefore, they do not have the locus standi to file a complaint under Section 78 of the Act.
4. After hearing both the parties, this authority enquired about the process of notice which was issued giving intimation of the date and place of the Board meetings to all the members of the Board. After going through the papers shown by the respondents and the notices that are purported to be issued, it is evident that due process has not been followed, therefore, the question of incurring disqualification for absence from these meetings does not hold ground. Therefore, the argument of disqualification is rejected. Since, out of 9 existing members of the Board, three have made an allegation of inquiry into affairs of the bank. Therefore, this authority comes to the conclusion that inquiry under Section 78 can be ordered.
5. The allegation made in the complaint alongwith the relevant documents be sent to Divisional Commissioner, Gorakhpur Division for conducting inquiry within a period of 90 days of this order. Both the parties shall remain present before Commissioner, Gorakhpur Division on 18.3.2020."
9. In pursuance of the order of Central Registrar dated 02.03.2020 the first petitioner and Ashok Kumar Pandey appeared before the Commissioner, Gorakhpur Division, Gorakhpur on 18.03.2020. The next election of the general body as well as Board of Directors of the bank was due in the year 2020 and the election process was to be commenced in April-May, 2020. On 08.01.2020 the delegates for forming the general body were elected and the election of Board of Directors as per the election schedule was held on 18.2.2020 and the Chairman and Vice Chairman was held on 19.02.2020, which have been subsequently challenged in the aforesaid writ petition.
10. Mr. Umesh Vats, learned counsel for the petitioners vehemently submitted that the Bank is a registered cooperative society under the provisions of the Act, 2002. The affairs of the Bank is to be run and managed strictly in consonance with the provisions as contained under the Act, 2002 and the by-laws framed thereunder. The strength of the general body of the bank, who participate in the election for electing the delegates, is more than 50,000 and they are working in three States namely Uttrakhand, Uttar Pradesh and Bihar. The petitioner nos.1 and 2 claimed to be members of Board of Directors, which was constituted on 31.07.2015 for a period of five years. On 23.10.2018 the Acting Secretary of the Bank informed to the first petitioner that by resolution dated 27.09.2018 he had been removed from the office of Chairman of the Board of Directors on the 'no confidence motion' brought by Rajesh Kumar Singh, Director and Sri Anurag Khare, Vice President has been appointed as the acting Chairman/President. The petitioners questioned the validity of the said resolution in Writ C No.42730 of 2018, alleging therein that a forged and fabricated Resolution No.25 dated 27.9.2018 was mooted just to dislodge the first petitioner as Chairman of the Society and the said resolution was in teeth of provisions contained under Section 47 of the Act, 2002. The relief was confined to the extent that since the reference application has already been filed under Section 84 of the Act, 2002, a direction may be issued to the Central Registrar of Cooperative Societies to take a decision within stipulated time. The Division Bench without touching the merits of the case had disposed of the writ petition with direction to the respondent i.e. Central Registrar of Cooperative Societies to decide the said reference. In response to the said decision the Central Registrar had refused to refer the matter under Section 84 of the Act, 2002 vide his order dated 28.5.2019.
11. In this backdrop, Mr. Vats, learned counsel for the petitioners has vehemently submitted that the intention of six Directors and acting Secretary was to grab the property of the bank and therefore, in order to grab the property in question they prepared forged and fabricated proceeding for dislodging the first petitioner. Again the petitioners moved a representation on 23.3.2019 to the Central Registrar of Cooperative Societies for making an enquiry under Section 78 of the Act, 2002. It is also claimed that more 30% delegates of the bank had also made similar request on 10.4.2019. Again they filed Writ C No.38998 of 2019, which was disposed of by the Division Bench on 13.1.2020 with direction to the Central Registrar to consider the application of the petitioners with regard to maintainability as well as locus of the petitioners/complainants. In pursuance of the aforesaid order, the Central Registrar has decided the matter in favour of the petitioners on 02.03.2020 for holding an inquiry.
12. Mr. Vats submitted that a person is elected as a Chairman or Vice Chairman for a particular term, which cannot be curtailed by illegal resolution/no confidence motion. The Board of Director and office bearers are elected by the procedure prescribed under the Act, 2002 read with the Rules, 2002 and the Bye-laws framed thereunder, and which guaranteed a tenure of five years, which is prescribed in Section 35 (d) of the bye-laws. No procedure is prescribed in the Act, 2002, Rules, 2002 and bye-laws of the Bank for removing the President/Chairman of the Board of the Director of the Bank by way of 'no confidence motion'. The alleged resolution/no confidence motion is in breach of proviso to Section 47 of the Act, 2002 as no opportunity was given to the first petitioner to move a representation against the alleged resolution. Neither any charge was levelled against the first petitioner nor any specific reason has been given in the 'no confidence motion', which indicated malafide intention of the six Directors namely Anurag Khare, Rajesh Kumar Singh, Afroz, Rama Shankar Singh, Arvind Chand and Manoj Kumar Vishwakarma. It was submitted that the bank has more than 50,000 shareholders and near about 250 working employees. The capital of the bank is more than Rs.200 crores.
13. It has been submitted before us that the term of the Board of Directors of the Bank has been expired and no election for constituting the general body of the Bank as well as the Directors of the bank has been held. In the aforesaid circumstances, the Central Registrar is required to appoint the Returning Officer to hold the election for constituting the general body as well as the Board of Directors. It is further required to send a report to the Reserve Bank of India for exercising its powers under Section 56 of the Banking Regulation Act, 1949 to supersede the Board of Directors of the Bank and appoint an Administrator in the Bank. The bank also holds a Banking licence issued by the Reserve Bank of India and is also governed by the Banking Regulations Act, 1949 (As applicable to Co-operative Societies). Section 36AA of the Banking Regulations Act, 1949 provides that where the Reserve Bank is satisfied that in the public interest or for preventing the affairs of a banking company being conducted in a manner detrimental to the interests of the depositors or for securing the proper management of any banking company, it is necessary so to do, the Reserve Bank may, for reasons to be recorded in writing by order, remove the Board of Directors of such Multi State Cooperative Bank from office for a period not exceeding five years, as may be specified in the order, which may be extended from time to time, so, however, that total period shall not exceed five years.
14. Learned Advocate for the petitioners submitted that as per Schedule-I of Rules, 2002 the Board of Directors in office shall meet atleast 60 clear dates in advance of the date of expiration of its term and by resolution determine the date, time and place for convening a general body meeting for conducting the election. This provision will also apply mutatis mutandis to such Multi State Cooperative Society as are under the charge of the Administrator appointed under sub-section (1) of Section 130. The Board of Directors in this meeting shall also appoint a Returning Officer but the alleged election was held on 08.01.2020, which is in gross violation of the Rules, 2002. Schedule-1 of the Rules, 2002 further states that a copy of the decision shall forthwith be sent to the Central Registrar but in the present case, no such information was sent to the Central Registrar, which is also evident from the reply given by the office of Central Registrar to Mr. A.K. Singh under the Right to Information Act, 2005. The said Schedule further states that the Society shall immediately forward such report and return of the result furnished by the Returning Officer to the Central Registrar but the said provision has not been followed. Schedule I (f) further says that the notice of the general body meeting shall be sent to the members by any of the modes i.e. by local delivery or under postal certificate or by publication in the newspaper having wide circulation but the members of the general body of the Society were not informed by any mode. Further the Circular dated 27.12.2019 issued by the Central Registrar clearly provides that the Board of the Multi State Cooperative Societies/Banks may appoint the Returning Officer for conducting the elections of the Societies from the panel of serving officers mentioned in the said Circular but the said procedure has not been followed.
15. Learned counsel for the petitioners further submitted that the Rules, 2002 provides that every decision of the Board of Directors qua election and election result will be communicated from time to time to the Central Registrar. Schedule-I of the Rules, 2002 deals with the procedures for notification and holding of election. The election programme will be published in daily newspapers, which has wide circulation but in the present matter, the said procedure has not been followed. The petitioners have made several representations before the Central Registrar regarding appointment of the Returning Officer for holding the election of the Bank but till date, the same has not been decided. The alleged resolution/no confidence motion is in breach of proviso to Section 47 of the Act, 2002 as no opportunity was given to him to make a representation on the said allegation. Neither any charge was levelled against him nor any specific reason has been given in the no confidence motion, which indicated malafide intention of the aforesaid six Directors.
16. In support of his submission, he has placed reliance on the judgment of Calcutta High Court in A.S.T. No.91 of 20088, wherein, the appellant Ranjit Bose (since deceased), who was respondent no.4 in the said writ, filed the appeal, which was registered as AST 91 of 2008, challenging the interim order dated 14th February, 2008 passed in W. P. No.334 (W) of 2008. In the said writ petition, the petitioners had questioned the validity of the order of the Chief Director (Co-operative) in the office of the Central Registrar of Co-operative Societies, dated December 31, 2007 directing the Chairman of the first petitioner, which is Multi-State Co-operative Society, governed by the provisions of the Act, 2002, not to appoint any employee in the co-operative society during the progress of the election process. Finally, a Division Bench of Calcutta High Court had proceeded to allow the said appeal and set aside the interim orders passed by the learned Trial Judge.
17. On the other hand, Mr. H.N. Singh, learned Senior Counsel for respondent no.2 vehemently opposed the writ petition and submitted that Sunil Kumar Singh is presently posted as Secretary of the Bank. The terms of delegates, members of Board of the Bank and office bearers of Board are five years. The first petitioner was elected as the Chairman of the Bank for the first time from 2008 to 2010 and thereafter, he was elected as Chairman for the second time from 2010 to 2015. Again the election of the members of the board was held on 30.07.2015 and the election of Chairman and Vice Chairman was held on 31.07.2015, wherein the first petitioner was elected as member of the board for the third time, which was against Section 44 (2) of the Act, 2002. Eventually, he was removed on the 'no confidence motion' on 27.09.2018.
18. It was also submitted that before the board meeting on 27.9.2018, there were 26 proposals under the agenda items, out of which 19 were approved and 07 were rejected. During the said board meeting, 24 proposals were passed by the first petitioner. However, one of the Director namely Rajesh Kumar Singh introduced the 'no confidence motion' against the first petitioner (Proposal No.25) and after placing the said proposal, the first petitioner walked out of the meeting and refused to sign the minutes of the said proposal. On the proposal no.25, out of 09 members of the Board, 06 favoured; 01 member casted vote against the said proposal and 01 member was absent. In this backdrop, it is submitted that as per the bye-laws no.33 the members of the board may elect the Chairman and Vice Chairman by majority vote. Under the democratic set up once they can elect the Chairman and Vice Chairman by majority vote then they may also have their rights to remove them by majority and accordingly, the resolution was passed. In the aforesaid meeting, it was decided to hold the fresh election of the Board of Co-operative Bank. For that purpose, a meeting of the Board was held on 25.10.2019 in which one Ravi Kumar Singh was appointed as an Election Officer for conducting the election. By the same resolution, the date of publication of tentative voter list, inviting objection, finalization of the list and other schedule of election was finalised. The Secretary of the Bank, who is working as Chief Executive Officer and a paid employee of the Bank/Society, sent the information of appointment of the election officer to the Central Registrar on 04.11.2019.
19. It was contended that the Returning Officer had sent a letter on 29.10.2019 for publishing the election schedule in daily newspaper "Gorakhpur Keshari" and the actual publication was made on 30.10.2019 for election of delegates/representatives from respective constituencies for forming the general body for the purpose of election of member of the board. As per the schedule of general body election, tentative and final voter's list was published and the election was held on 06.1.2020 from 8 AM to 5 PM at respective voting places in respective Divisions and Headquarters. After collecting the same, the final result was declared on 08.01.2020, whereby the electoral college was constituted for the purpose of conducting the election of Board of Directors. After declaration of the result of delegates/members of general body further publication was made in daily newspaper "Gorakhpur Keshari" on 10.01.2020 publishing the election schedule for conducting the election of member of the board fixing date on 18.02.2020 for filing of nomination, inviting objection, scrutiny of nomination papers, withdrawal of nomination, publication of final nomination list and time for voting, if necessary and declaration of the result at 4 PM. The election schedule for election of the Chairman and Vice Chairman was simultaneously published fixing date of election on 19.02.2020 and its declaration after completing all formalities on same date at 12.30 PM. The election of Board of Directors and its office bearers was held on 18.2.2020 as per provisions of Clause 26 of the bye-laws of the Society. The election of Chairman and Vice Chairman was held on 19.02.2020 and its intimation was sent to the Central Registrar on 20.02.2020.
20. It was submitted that the first petitioner had concealed the fact that prior to the election of the year 2015, he had already been elected as Chairman of the Board for two consecutive terms i.e. from 2008 to 2010 and from 2010 to 2015 and he was again elected as Chairman in the election for the third time on 31.07.2015. However, the petitioner no.1, who was illegally holding the office of the Chairperson in third consecutive term, was removed on 27.09.2018 on the 'no confidence motion' moved by Rajesh Kumar Singh and the charge of the Chairman was handed over to Anurag Khare in officiating capacity. Finally, the Central Registrar vide his order dated 28.05.2019 had decided that the first petitioner is not eligible for being elected as per provisions contained in Section 44 (2) of the Act, 2002. The order of the Central Registrar dated 28.05.2019 has not been challenged and for all practical purposes the same has attained finality. Meanwhile, the Board of Directors, who were elected on 31.07.2015, completed its term of five years on 31.07.2020. Thereafter, it was decided to hold the fresh election of the Board of Co-operative Bank and for that purpose, the meeting of the Board was held on 25.10.2019 in which Ravi Prakash Singh was appointed as Returning Officer to conduct the election. The same was also duly communicated to the Central Registrar through registered post on 04.11.2019. Fresh election had also taken place and the new Board was constituted on 19.02.2020, wherein 11 Directors including the Chairman and Vice Chairman, were elected and the new Board is discharging its duties with effect from 19.02.2020. Except the petitioners, who are only 12 in number, others have not raised any objection and as such, the claim of the petitioners is no more in existence.
21. He submitted that the Central Registrar can conduct the election, only if the existing Board has failed to conduct the election within due time as provided under Section 45 (6) of the Act, 2002. Once in the present matter, the election process had already been commenced with the appointment of Returning Officer on 25.10.2019 and the election of the delegates had already been held on 08.01.2020 then there was no occasion for the petitioners to make any request before the Central Registrar on 08.02.2021 for appointment of the Returning Officer. The petitioner nos.1 and 2 are not members of the Board and they have not been elected as Members of the Board in the election held on 18.02.2020. Further, no objection was made against the said election and as such, after expiry of the limitation period, as provided under Section 85 of the Act, 2002, the election proceedings have attained finality and the writ petition is liable to be dismissed. He submitted that the writ petition against the cooperative society is not maintainable. Undisputedly the cooperative society cannot be termed as State within the meaning of Article 12 of Constitution of India. The Cooperative Society had been formed to espouse and protect the interests of employees of the Indian Railways and its functions were clearly private in character.
22. Mr. H.N. Singh, learned Senior Advocate had lastly opposed the writ petition on the ground of limitation and submitted that the writ petition was entertained in the year 2021 and at the initiate stage, the petitioners had not asked any relief qua the election, which took place in the month of January-February, 2020. Once the said election had not been challenged well within the limitation period, as contemplated in Section 85 of the Act, 2002 then at this stage, the election of the year 2020 cannot be upset. In support of his submission, he has placed reliance on the Full Bench judgment of this Court in Vikas Trivedi and others vs. State of UP and others9; the Division Bench judgments in Jyoti Kumar Malviya vs. Indian Farmers Fertilizers Co-operative Ltd. Others10 and Matsya Jivi Sahkari Samiti Ltd. vs. State of UP and others11. He has further placed reliance on the judgment of the Delhi High Court in W.P. (C) No.2059/202112, wherein, the petitioners have challenged the steps initiated by the respondents for the purposes of election of delegates of the Northern Zone Railway Employees Thrift and Credit Society Limited, which is admittedly governed by the Act, 2002 read with the Rules, 2002 and the Bye-laws framed thereunder and the Delhi High Court has proceeded to dismiss the writ petition as not maintainable, leaving it open to the petitioners to raise those issues, if so chosen and advised, before the appropriate forum.
23. Mr. Krishna Ji Shukla, Advocate, holding brief of Mr. N.K. Chatterjee, learned counsel for Union of India submitted that Section 45 of the Act, 2002 deals with the elections of the members of the board. Section 45 (1) provides that the conduct of elections to the board of a Multi-State Cooperative Society shall be the responsibility of the existing board. A Multi-State Cooperative Society is an autonomous body accountable to their members. The Multi-State Cooperative Society is required to function as per the provisions of the Act, 2002, the Rules, 2002 and its approved bye-laws. Section 45 (6) of the Act, 2006 provides that where the board fails to conduct the election of the members of board, the Central Registrar shall hold the election within a period of 90 days from the date when such election became due. Rule 19 of the Rules, 2002 deals with the procedure for conduct of elections. Rule 19 (1) provides that the election of members of the board shall be conducted by a Returning Officer appointed by the board in its meeting. The Returning Officer so appointed shall not be a member or an employee of the society. The Society vide letter dated 20.02.2020 had submitted the election report to the office of Central Registrar. Further the provision of Section 123 of the Act, 2002 is only applicable for supersession of the board of a Multi-State Cooperative Society/Bank and the Society in question does not fall under the said category.
24. Mr. Shukla contended that in compliance of the order of the Court dated 20.12.2018 passed in Writ C No.47230 of 2018, the personal hearing was accorded on 02.05.2019 and the petitioner no.1 and other concerned parties appeared before the Central Registrar. Finally, the Central Registrar vide his order dated 28.05.2019 had found no reason to refer the matter for arbitration under Section 84 of the Act, 2002 as requested by the first petitioner. He submitted that the provisions of Section 44 (2) of the Act, 2002 are attracted in the present case, wherein the first petitioner has become ineligible for the third term to the post of Chairperson of the Bank. Again the first petitioner filed Writ C No.38998 of 2019 for issuing direction to the Central Registrar to hold an enquiry under Section 78 of the Act, 2002. The said writ petition was disposed of on 13.1.2020 with direction to the Central Registrar to consider the application of the petitioner dated 10.4.2019 filed under Section 78 of the Act, 2002 in accordance with law. Finally, the Central Registrar vide order dated 02.03.2020 directed to the Commissioner, Gorakhpur Division to make an enquiry in the matter under Section 78 of the Act, 2002. Section 84 of the Act, 2002 deals with the reference of disputes. As per Section 84 (2) (c) of the Act, 2002 any dispute arising in connection with the election of any officer of a Multi-State Cooperative Society shall be deemed to be dispute touching the constitution, management or business of a Multi-State Cooperative Society.
25. Heard rival submissions and perused the record.
26. Before proceeding to consider the rival submissions, it would be appropriate to re-produce the relevant provisions of the the Act, 2002 read with the Rules, 2002 and the Bye-laws framed thereunder:-
"Section 28. Members not to exercise rights till due payment made.
No member of a multi-State cooperative society shall exercise the rights of a member, unless he has made the payment to the society in respect of membership, or has acquired such interest in the society, as may be specified in the bye-laws.
Section 32. Manner of exercising vote.
Every member of a multi-State co-operative society shall exercise his vote in person and no member shall be permitted to vote by proxy:
Provided that a multi-State co-operative society or a co-operative society or any other institution which is a member of any other multi-State co-operative society may, subject to the provisions of subsection (3) of section 38 and the rules, appoint its representative to vote on its behalf in the affairs of such multi-State co-operative society.
Section 38. Constitution, powers and functions of general body (1) The general body of a multi-state cooperative society shall consist of all the members of such society:
Provided that where the bye-laws of a multi-state cooperative society provide for the constitution of a smaller body consisting of delegates of members of the society elected or selected in accordance with such bye-laws, that smaller body shall exercise such powers of the general body as may be prescribed or as may be specified in the bye-laws of the society.
(2) Subject to the provisions of this Act, the rules and the bye-laws, the ultimate authority of a multi-state cooperative society shall vest in the general body of its members:
Provided that nothing contained in this sub-section shall affect the exercise by the board or any officer of a multi-state cooperative society of any power conferred on such board or such officer by this Act or the rules of the bye-laws.
(3) Where in any meeting of the general body or the board of a Multi-State Co-operative Society, a co-operative society or another Multi-State co-operative Society is to be represented, such co-operative Society or other Multi-State Co-operative society shall be represented in such meeting only through the Chairperson or the President or the Chief Executive Officer or a member of the board of such co-operative Society or other Multi-State Co-operative Society, as the case may be, if such member is so authorized by the board and where there is no board of such co-operative Society or other Multi-State Co-operative Society or other Multi-State Co-operative Society for whatever reasons, through the administrator, by whatever name called, of such co-operative society or other Multi-State Co-opertive Society:
Provided that where the bye-laws of a Multi State Co-operative Society provide for representation of other institutions in any meeting of general body or the board of such Multi State Co-operative Society, such institutions shall be represented through its nominee.
Section 44. Prohibition to hold office of chairperson or president or vice-chairperson or vice-president in certain cases.
(1) No member of a board shall be eligible to be elected as the chairperson or president or vice-chairperson or vice-president of a multi-State co-operative society if such member is a Minister in the Central Government or a State Government.
(2) No member of a board shall be eligible to be elected as the chairperson or president of a multi State co-operative society, after he has held the office as such during two consecutive terms, whether full or part:
Provided that a member, who has ceased to hold the office of the chairperson or president continuously for one full term, shall again be eligible for election to the office as such.
Explanation.--where any member holding the office of the chairperson or president at the commencement of this Act is again elected to that office after such commencement, he shall for the purpose of this section, be deemed to have held office for one term before such election.
(emphasis supplied) Section 45. Elections of members of board.
(1) The conduct of elections to the board of a multi-State cooperative society shall be the responsibility of the existing board.
(2) The election of members of board shall be held by secret ballot in the manner as may be prescribed.
(3) The election of the members of the board shall be held in the general meeting of the members of the multi-State co-operative society.
(4) The elected members of the board shall, if the bye-laws of such society permit, be eligible for re-election.
(5) The term of office of the elected members of the board shall be such, not exceeding five years from the date of elections, as may be specified in the bye-laws of a multi-State co-operative society:
Provided that elected members shall continue to hold office till their successors are elected or nominated under the provisions of this Act or the rules or bye-laws and assume charge of their office.
(6) Where the board fails to conduct election of the members of board, the Central Registrar shall hold the election within a period of ninety days from the date when such election became due.
(7) No person shall be eligible to be elected as a member of the board of a multi-State co-operative society unless he is a member of the general body of that society.
(8) The expenses for holding election by the Central Registrar shall be borne by the multi-State cooperative society.
(9) The Central Government may make rules generally to provide for or to regulate matters in respect of election of members of the board."
Section 47 - Removal of elected members by general body An elected member of a board, who has acted adversely to the interests of multi-State co-operative society, may on the basis of a report of the Central Registrar or otherwise be removed from the board upon a resolution of the general body passed at its meeting by a majority of not less than two-third of the members present and voting at the meeting:
Provided that the member concerned shall not be removed unless he has been given a reasonable opportunity of making a representation in the matter.
Section 78. Inquiry by Central Registrar.
(1) The Central Registrar may, on a request from a federal cooperative to which a multi-State co-operative society is affiliated or a creditor or not less than one-third of the members of the board or not less than one-fifth of the total number of members of a multi-State cooperative society hold an inquiry or direct some person authorised by him by order in writing in this behalf to hold an inquiry into the constitution, working and financial condition of a multi-State cooperative society:
Provided that no inquiry under this sub-section shall be held unless a notice of not less than fifteen days has been given to the multi-State co-operative society.
(2) The Central Registrar or the person authorised by him under sub-section (1) shall have the following powers, namely:--
(a) he shall at all reasonable times have free access to the books, accounts, documents, securities, cash and other properties belonging to or in the custody of the multi-State co-operative society and may summon any person in possession or responsible for the custody of any such books, accounts, documents, securities, cash or other properties to produce the same, at any place specified by him;
(b) he may, notwithstanding any bye-law specifying the period of notice for a general meeting of the multi-State co-operative society, require the officers of the society to call a general meeting of the society by giving notice of not less than seven days at such time and place at the headquarters of the society to consider such matters, as may be directed by him; and where the officers of the society refuse or fail to call such a meeting, he shall have power to call it himself;
(c) he may summon any person who is reasonably believed by him to have any knowledge of the affairs of the multi-State co-operative society to appear before him at any place at the headquarters of the society or any branch thereof and may examine such person on oath.
(3) Any meeting called under clause (b) of sub-section (2) shall have all the powers of a general meeting of the society called under the byelaws of the society and its proceedings shall be regulated by such bye-laws.
(4) The Central Registrar shall, within a period of three months of the date of receipt of the report, communicate the report of inquiry to the multi-State co-operative society, the financial institutions, if any, to which the society is affiliated, and to the person or authority, if any, at whose instance the inquiry is made.
Section 84. Reference of disputes.
(1) Notwithstanding anything contained in any other law for the time being in force, if any dispute [other than a dispute regarding disciplinary action taken by a multi-State cooperative society against its paid employee or an industrial dispute as defined in clause (k) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947)] touching the constitution, management or business of a multi-State co-operative society arises--
(a) among members, past members and persons claiming through members, past members and deceased members, or
(b) between a member, past members and persons claiming through a member, past member or deceased member and the multi-State co-operative society, its board or any officer, agent or employee of the multi-State co-operative society or liquidator, past or present, or
(c) between the multi-State co-operative society or its board and any past board, any officer, agent or employee, or any past officer, past agent or past employee, heirs or legal representatives of any deceased officer, deceased agent or deceased employee of the multi-State co-operative society, or
(d) between the multi-State co-operative society and any other multi-State co-operative society, between a multi-State co-operative society and liquidator of another multi-State co-operative society or between the liquidator of one multi-State co-operative society and the liquidator of another multiState co-operative society, such dispute shall be referred to arbitration.
(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or business of a multi-State co-operative society, namely:--
(a) a claim by the multi-State co-operative society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor where the multi-State co-operative society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of any officer of a multi-State co-operative society.
(3) If any question arises whether a dispute referred to arbitration under this section is or is not a dispute touching the constitution, management or business of a multi-State co-operative society, the decision thereon of the arbitrator shall be final and shall not be called in question in any court.
(4) Where a dispute has been referred to arbitration under sub-section(1), the same shall be settled or decided by the arbitrator to be appointed by the Central Registrar.
(5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996.
85. Limitation.--
(1) Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963), but subject to the specific provisions made in this Act, the period of limitation in the case of a dispute referred to arbitration shall,--
(a) when the dispute relates to the recovery of any sum including interest thereon due to a multi-State co-operative society by a member thereof, be computed from the date on which such member dies or ceases to be a member of the society;
(b) save as otherwise provided in clause (c), when the dispute relates to any act or omission on the part of any of the parties referred to in clause (b) or clause (c) or clause (d) of sub-section (1) of section 84, be six years from the date on which the act or omission, with reference to which the dispute arose, took place;
(c) when the dispute is in respect of an election of an officer of a multi-State co-operative society, be one month from the date of the declaration of the result of the election.
(2) The period of limitation in the case of any dispute, except those mentioned in sub-section (1), which are required to be referred to arbitration shall be regulated by the provisions of the Limitation Act, 1963 (36 of 1963), as if the dispute were a suit and the arbitrator a civil court.
(3) Notwithstanding anything contained in sub-sections (1) and (2), the arbitrator may admit a dispute after the expiry of the period of limitation, if the applicant satisfies the arbitrator that he had sufficient cause for not referring the dispute within such period.
(emphasis supplied) (Rules, 2002) Rule 19 - Procedure for conduct of elections (1) The election of members of the board shall be conducted by a returning officer appointed by the board in its meeting. The returning officer so appointed shall not be a member or an employee of the society:
Provided, that the Central Registrar shall appoint the returning officer to conduct the election of the National multi-state cooperative societies, multi-state urban cooperative banks, multi-stage agricultural processing cooperatives and Railway Employees Credit Societies. The Central Registrar may also appoint returning officer for the conduct of a election of a society if so requested by the board of Directors of such society.
(2) The election of the members of the board referred to in sub-rule (1) shall be conducted by secret ballot in the manner as specified in the schedule attached with these rules.
Rule 26 of the bye laws - Constitution of the general body i. The general body of the bank shall consist of all the members of the bank.
ii. Subject to the provisions of the Act, Rules and these bye-laws, the ultimate authority of the bank shall vest in the general body of its members.
iii. Since the society is having more than 1000 members, smaller representative of general body is formed on the following manner.
iv. One delegate for every one hundred members but not exceeding 20 from each constituencies and shall exercise such powers of the general body Assistant Registrar prescribed and specified in the bye-laws, the delegates shall be elected for a period of five years from the date of their election.
Provided that delegates shall hold their office till their successor are elected and assume charge of their office.
v. Each of the department or office mentioned herein shall form a constituency for the purpose of election of delegates.
1. Accounts Department.
2. Managing, Personnel, Audit Department, Statistical office, Railway Safety, Commissioner's office and the Bank.
3. Operating.
4. Commercial.
5. Civil Engineering.
6. Mechanical Engineering.
7. Stores.
8. Electrical Engineering.
9. Medical.
10. Signal and Telecommunication Engineering.
11. Security.
vi. The election of delegates to the General Body shall be conducted in the manner prescribed under Election Regulation framed by the Bank in consonance with Act & Rules as approved by the general body.
Rule 35 of the bye laws - Election of members of Board i. The conduct of election to the Board of the Bank shall be the responsibility of the existing Board. The Board of Directors in office shall meet at least sixty clear days in advance of the date of expiration of its term and by resolution determine the date, time and place for convening a General Body meeting for the conduct of the elections of its successor Board.
ii. The election of the members of the Board shall be held in the manner specified in the election schedule annexed to the Multi-State Co-operative Societies Rules, 2022.
iii. The elected members of the Board shall be eligible for re-election.
iv. The term of office of the elected members of the Board shall be five years from the date of their election.
Provided that the elected member shall continue to hold office till their successors are elected or nominated under the provisions of the Act, Rules or bye-laws and assume charge of their office."
(emphasis supplied)
27. In order to rule upon the rival submissions, the Court deems it apposite to notice the following facts. The Bank was established on 23.11.1912 and recently, it is governed by the Act, 2002. The bank also holds a Banking licence issued by the Reserve Bank of India. The cooperative society had been formed to espouse and protect the interests of employees of the Indian Railways. The affairs of the Society is to be run and managed strictly in consonance with the provisions as contained under the Act, 2002 and the by-laws framed thereunder. The bank does not receive any grant from Government. The Board of Director and office bearers are elected by the procedure prescribed under the Act, 2002; the Rules framed thereunder and registered bye-laws, which has guaranteed a tenure of five years in Section 35 (d) of the bye-laws. Co-operatives are democratic institutions, where the members elect the board and the board members amongst themselves elect the Chairman and the Vice Chairman. Further Section 44 (2) of the Act, 2002 prescribes that no member of a board shall be eligible to be elected as the Chairperson or President of a Multi State Cooperative Society, after he has held the office, as such during two consecutive terms, whether full or part. The first petitioner was elected as the Chairman of the Bank for the first time from 2008 to 2010 and thereafter, he was elected as Chairman for the second time from 2010 to 2015. Again the election of the members of the board was held on 30.07.2015 and the election of Chairman and Vice Chairman was held on 31.07.2015, wherein the first petitioner was elected as Chairman for the third time. Since the first petitioner was holding the office of the Chairperson, which was against the provisions of Section 44 (2) of the Act, 2002 and as such, he was removed on 27.09.2018 on the 'no confidence motion' moved by Rajesh Kumar Singh and the charge of the Chairman was handed over to Anurag Khare in officiating capacity.
28. From the record it further transpires that the first petitioner filed the reference before the Central Registrar under Section 84 of the Act, 2002 on 28.10.2018. He had also filed Writ C No.42730 of 2018, which was disposed of by a coordinate Bench of this Court on 20.12.2018 with direction to the Central Registrar of Cooperative Societies to ensure expeditious decision on the reference petition of the petitioners, preferably within two months. Thereafter, the first petitioner and the respondents were called upon for personal hearing and during the personal hearing held on 2nd May, 2019, the board members raised the issue that the first petitioner was continuing for the third term and as such, the 'no confidence motion' was moved by one board member namely Rajesh Kumar Singh. While this point was raised by the board members of the bank during the personal hearing held on 2nd May, 2019, the first petitioner did not raise any argument against this allegation. Finally, the Central Registrar vide order dated 28.05.2019 had refused to make reference under Section 84 of the Act, 2002 on the ground that the first petitioner has been the Chairman for two consecutive terms and in view of the provisions contained in Section 44 (2) of the Act, 2002, which creates prohibition to hold the office of the Chairperson for more than two consecutive terms whether full or part, the first petitioner was ineligible for the third term on the post of the Chairperson of the Bank. The order of the Central Registrar dated 28.05.2019 and its findings were not challenged before any competent authority or court, therefore for all practical purposes, the said order has attained finality.
29. On perusal of the record, it would be further evident that the cooperative society is admittedly one, which is governed by the provisions of the Act, 2002. As per the Bye-laws framed thereunder, its area of operations are spread across the States of Uttar Pradesh, Uttarakhand, and Bihar. As per details of members, which is appended as Annexure No.2 to the writ petition, the Bank has 52010 members as on 31.03.2016 and near-about 250 employees are working in the bank. Under the Bye-laws, elections are to be held for delegates and for constituting its Board of Directors. The primary members of the cooperative society elect delegates, who in turn choose the constituents of the Board of Directors. As per the membership details, which have been disclosed by the respondents, 215 delegates are elected by the primary members of the cooperative society and it is these delegates which then proceed to elect members of the Board of Directors. Section 45 (2) of the Act, 2002 specifies the tenure as not exceeding 5 years by using the word "shall". The two words 'shall' and 'not exceeding' are indicative of mandatory provision declaring the term of office of elected members as 5 years maximum, though the proviso speaks that the elected members shall continue to hold office till a new body assumes charge. From the said proviso it appears that continuation of the elected members after expiry of 5 years period has been subjected to holding of election of a new body and assumption of charge thereof. The legislature practically intended that election must be held by the Board itself within the tenure of the Board. Considering the situation that if a Board of Directors is negligent to complete the election, sub-section (6) was enacted, which provides power to the Central Registrar to hold the election within a period of 90 days from the date when such election became due. There is a statutory mandate directing to conduct election by the Board in terms of Schedule of the Rule, 2002, wherein in Rule 35 (i) it is provided that the Board of Directors in office shall meet atleast 60 clear days in advance of the date of expiration of its term and by resolution determine the date, time and place for convening a general body meeting for the conduct of election of its successor Board. Under Clause (b) of the said Schedule such decision is required to be sent forthwith to the Central Registrar, who under Clause (c) of the said Schedule will appoint a Returning Officer for the purpose of holding election. The last undisputed elections were held in 2015 and thus, the term of the elected body was to come to an end in 2020. It is in that backdrop, the existing Board had passed the resolution on 25.10.2019 and appointed Ravi Prakash Singh, as an Election Officer. According to the respondents, the election was held on 06.1.2020 from 8 AM to 5 PM across the various constituencies of the cooperative society and the final result was declared on 08.01.2020, whereby electoral college was constituted for the purpose of conducting the election of Board of Directors. After declaration of the result of delegates/members of general body further publication was made in daily newspaper "Gorakhpur Keshari" on 10.01.2020 publishing the election schedule for conducting the election of members of the Board on 18.02.2020 and simultaneously, the election schedule for election of Chairman and Vice Chairman was published fixing date of election on 19.02.2019. As per the election schedule, the election of the member of Board of Directors was held on 10.02.2020 and the Chairman and Vice Chairman on 19.02.2020, wherein 11 Directors including the Chairman and Vice Chairman, were elected and the new Board is discharging its duties with effect from 19.02.2020.
30. We have also occasion to peruse the order of the Central Registrar of Cooperative Societies dated 28.5.2019, wherein it has been observed that the first petitioner namely Brijesh Kumar Singh was elected as the Chairman of the Bank for the first time for the period from 2008 to 2010 and thereafter, he was elected as Chairman for the second time from 2010 to 2015. Again he was elected for the third time on 30.07.2015. It is specifically provided in sub-section (2) of Section 44 of the Act, 2002 that no member of a board shall be eligible to be elected as the Chairperson or President of a Multi-State Co-operative Society, after he has held the office as such during two consecutive terms, whether full or part. Before the board meeting dated 27.09.2018, 26 agenda items were proposed for approval before the then Chairman Brijesh Kumar Singh (first petitioner), however, some items were not approved by him including point no.5 pertaining to consider the matter regarding the third term of the existing Chairman, Brijesh Kumar Singh in the light of Central Registrar's order dated 17.08.2017. Although the said item was not included in the agenda of the board meeting, however, the 'no confidence motion' was moved during the board meeting dated 27.09.2018 by Rajesh Kumar Singh, one of the Directors of the bank. In para 5.2 of the order it has been observed that the first petitioner had pleaded that he was not informed about the meeting and that no meeting took place. However, as per point no.4.3 of the submissions made by the respondents, the first petitioner was present in the meeting and walked out, when the 'no confidence motion' was moved.
31. From the facts noticed above, it is an admitted position that the first petitioner was elected as the Chairman of the Bank for the first time from 2008 to 2010; thereafter he was elected as Chairman for the second time from 2010 to 2015 and he was again elected for the third time on 30.07.2015, which is against Section 44 (2) of the Act, 2002, which creates prohibition to hold the office of the Chairperson for more than two consecutive terms whether full or part. Consequently, the first petitioner was removed on 27.09.2018 on the 'no confidence motion' moved by Rajesh Kumar Singh and the charge of the Chairman was handed over to Anurag Khare in officiating capacity. The Central Registrar vide order dated 28.05.2019 had also refused to make reference under Section 84 of the Act, 2002 on the ground that the first petitioner is ineligible for the third term on the post of the Chairperson of the Bank. Moreover, in response of the order dated 13.01.2020 passed in Writ C No.38998 of 2019, while considering the complaints of the petitioner on 02.03.2020, the Central Registrar of Cooperative Societies had observed that the complainants (petitioners) have submitted that the current management of the bank has committed a series of irregularities, which are serious in nature and require a detailed inquiry. Therefore, it is misconceived argument on behalf of the petitioners that at the said stage the management of the bank was not available. The Registrar further observed in para-3 of the order that the respondents represented by the current Chairperson and Secretary of the Society have also taken further objection that the complainants have not attended three consecutive meetings of the Board in spite of notice, which incurred disqualification under Section 43 (m) of the Act, 2002. Therefore, they had no locus standi to file any complaint under Section 78 of the Act, 2002. Therefore, it is not disputed that the first petitioner, who was holding the office of the Chairman in third consecutive term, was removed on 27.09.2018 and the charge of Chairman was handed over to Anurag Khare in official capacity. Nothing has been brought on record by the petitioners to indicate that with effect from 27.9.2018 to 31.07.2020 the first petitioner being as Chairman had ever performed any work in the Society as Chairman. The term of the elected body also came to an end in July, 2020. The election of the member of Board of Directors were held on 10.02.2020 and the Chairman and Vice Chairman on 19.02.2020, wherein 11 Directors including the Chairman and Vice Chairman, were also elected and the new Board is discharging its duties since 19.02.2020.
32. The High Court of Calcutta in Madan Mohan v. State13, was considering the question, whether a Cooperative Society, registered under the Bengal Cooperative Societies Act, 1940, or its Managing Committee was amenable to writ jurisdiction. Their Lordships held that the management of the affairs and activities of the Society, were inter alia, controlled by the Registrar of Cooperative Societies, who was a public authority. Such affairs could not be private affairs. It was not necessary that a body, in order to be a public body, ought to be constituted by a statute, though its powers and duties were created by an Act or the Rules. Even, where the Society was a person, there could not be any broad and general proposition, that no writ would lie against such a person. It depends on particular facts of each case.
33. In P.B.K. Rajachidambaram v. R.P. Rathana Sharma14, the Madras High Court held that the writ could be issued against a cooperative society.
34. In Praga Tools v. Imanual15, their Lordships of the Supreme Court were considering the question, whether a writ would lie against a Company, incorporated under the Companies Act. Though, the writ was disallowed, but it was held that the writ could be issued, only in case of legal right to performance of legal duty. It was further held that it was not necessary that the person or the Authority, in whom the statutory duty was imposed, need be a public official or an official body. However, at the same time, their Lordships observed that the Company, being a non-statutory body and, once incorporated under the Companies Act, there was neither a statutory nor a public duty imposed on it, by a statute, in respect of which, enforcement could be sought by means of a mandamus.
35. So far as the issue of no-confidence motion is concerned, a Full Bench of this Court in Vikas Trivedi and others vs. State of U.P. and others (supra) has considered this aspect and held as under:
"Our answers to the questions referred including the question No.1, which has been re-framed by us, are as follows:-
(i) The requirement of giving notice by the Collector under Section 15(3)(ii) in the prescribed form as required by Rule 2 and Form-2 is held not to be mandatory and on substantial compliance of the provisions the proceeding shall not be vitiated. Whether there has been substantial compliance of the said provisions, depends on the facts and circumstances of each case.
(ii) The observation of the Division Bench in Ram Nath Tripathi's case (supra) that notice in prescribed form along with its annexures in complete format is mandatory does not lay down the correct law. The judgment in Smt. Krishna Jaiswal's case (supra) lays down the correct law and is approved.
(iii) The notice sent by the Collector convening the meeting to consider the motion of no confidence cannot be invalidated on the ground that copy of the notice with the name of the person who had signed the written notice of intention, was not sent along with the notice. When proposed motion of no confidence is signed by the requisite members, the notice convening the meeting cannot be invalidated merely on the ground that some pages of the proposed motion containing signatures of some members only were sent along with the notice."
36. In the case of Jyoti Kumar Malviya vs. Indian Farmers Fertilizers Co-operative Ltd. Others (supra) the Division Bench has considered the provisions of Article 12 and 226 of Constitution of India and held that IFFCO cannot be said to be an "instrumentality" of the State as the IFFCO does not discharge any "public function" and so it cannot be said to be amenable to the writ jurisdiction.
37. In Matsya Jivi Sahkari Samiti Ltd. vs. State of UP and others (supra), a Division Bench of this Court has dismissed the writ petition filed seeking direction to decide the claim of the petitioner with regard to election proceedings of a Co-operative Society. The order reads as follows:-
"8. The aforequoted provisions indicate that the manner of settlement of disputes is provided for under Chapter IX of the Act, 1965.
9. Section 70 is in respect of disputes which may be referred to arbitration and in terms thereof, the disputes specified under sub-section (1) are to be referred to the Registrar for action in accordance with the provisions of the Act and the rules and no Court shall have jurisdiction to entertain any suit or other proceedings in respect of any such dispute.
10. In terms of the proviso to sub-section (1) of Section 70, a dispute relating to an election under the provisions of the Act or the rules made thereunder, shall not be referred to the Registrar until after the declaration of the result of such election.
11. Sub-rule (1) of Rule 444-C provides that the election in a co-operative society shall not be called in question either by arbitration or otherwise except on the grounds specified under clause (a) and clause (b) under sub-rule (1).
12. In terms of sub-rule (2) a dispute relating to an election shall be referred by the aggrieved party within forty-five days of the declaration of the result.
13. In the case at hand, as per the case set up by the petitioner, the elections of the co-operative society in question, have already been held and the results thereof have also been declared. In view of the aforesaid facts and situation, any complaint, grievance or dispute which is being sought to be raised with regard to the elections, is to be referred to the Registrar on an appropriate application by the aggrieved party.
14. A conjoint reading of the provisions contained under Section 70 of the Act, 1965 and Rule 444-C of the Rules, 1968 leave no manner of doubt that a complete procedure for settlement of disputes and the manner of reference of such disputes, including a dispute relating to an election under the provisions of the Act or the Rules made thereunder, is provided for. Any grievance, complaint or dispute relating to the election proceedings of a co-operative society can be called in question on the grounds specified under sub-rule (1) of Rule 444-C by applying for a reference by making an appropriate application under Section 70 of the Act, 1965.
15. A complete mechanism with regard to settlement of disputes relating to election in a co-operative society having been provided for in the manner as aforestated, we are not inclined to exercise our extraordinary jurisdiction under Article 226 of the Constitution, in the facts of the present case.
16. It would be open to the petitioner to invoke the appropriate remedy, provided in terms of the statutory provisions under the Act, 1965 and the Rules made thereunder.
17. Subject to the aforesaid observation, this writ petition stands dismissed."
38. In the case of Sushil Kumar vs. Central Registrar of Coop. Society and ors (supra), the Delhi High Court has dismissed the writ petitions, challenging the steps initiated by the respondents for the purposes of election of delegates of the Northern Zone Railway Employees Thrift and Credit Society Limited, as not maintainable on the ground that merely because a body is obligated to comply with various statutory requirements, that cannot be conclusive to answer the question of whether it is discharging a public function.
"27. The following undisputed facts emerge from the aforesaid discussion. The cooperative society has essentially been formed to promote and safeguard the welfare of its members who are all employees of the Indian Railways. As its objects would indicate, it is enjoined to work towards the upliftment and betterment of the condition of its members through self-help and mutual aid in accordance with "cooperative principles". It raises funds from its members by requiring compulsory deposits, issuing shares and other means permissible under the Byelaws. In NZRECTC, the learned Judge albeit dealing with the issue of whether the respondent cooperative society could be treated as a public authority for the purposes of the Right to Information Act, 2005, in unambiguous terms found that it receives no funds or financial aid from the Government. That decision significantly noted that the cooperative society was not a statutory corporation and had merely applied for registration under the Act. It was then observed that it was not found to satisfy the test of substantial finance by the Government and was funded principally on the basis of contributions made by its members. NZRECTC then found that even the Bye-laws did not vest any control in the Central Government or the Railways over its affairs. It was further observed that the mere fact that the cooperative society was governed by the provisions of the Act would have no bearing on the question of whether it was a public authority. It ultimately and in light of the conclusions noticed above found that the cooperative society would not be covered by the Right to Information Act, 2005.
28. From the aforesaid findings on facts as recorded in NZERCTC and which were not disputed by the petitioners, it is manifest that there is no deep or pervasive control exercised by the Government. It is a cooperative society formed by employees of the Indian Railways to promote and safeguard the interests of its members. From its aims and objects it is apparent that it is principally concerned with ameliorating the conditions of its members, to extend loans, work toward their welfare, acquire land for the purposes of establishing its offices and for construction of residences for its members and to lend money to its shareholders and members. Its finances are founded on share money and contributory deposits made by its members. In order to hold that a body would be amenable to the writ jurisdiction of this Court as conferred by Article 226 of the Constitution it would have to be necessarily found that it is either State or an authority as envisaged by Article 12. The well settled tests propounded in the decisions of the Supreme Court noticed above include whether the body is substantially funded or financially controlled by the Government, whether it is functionally or administratively controlled by the Government and whether it performs a public function or discharges a public duty.
29. From the facts noticed above, it is apparent that the cooperative society is neither substantially financed nor funded by the Government. A reading of its Byelaws establishes beyond a measure of doubt that it is also not administratively controlled by the Government. There is no dominant or overriding power that the Government may be recognised to wield over the affairs of the cooperative society. The Government is not shown to control the cooperative society either in the management of its affairs or the formulation of policy. The Court also bears in mind that the cooperative society has not been conferred with any monopoly status. It clearly comes across as an autonomous body formed by employees of the Indian Railways as a part of their to intent to adopt "cooperative principles" for the promotion of the welfare and well-being of its members. The Court thus comes to the firm conclusion that the cooperative society fails to satisfy the test of "deep and pervasive control" as enunciated in the body of precedents noted above.
30. That then takes the Court to consider whether the cooperative society discharges a public function and whether its registration under the provisions of the Act would have any bearing on the question that stands posited. Dealing firstly with the issue of a public function, it becomes apposite to note that the Supreme Court in Ramakrishna Mission pertinently observed that in order to satisfy the public function test it must be found that the body is discharging functions that are akin to the sovereign functions of the State. For a body to be recognised as performing a public function, it must be found that its activities and functions are imbued with a character touching upon public interest as opposed to something which may be of a purely private character. The Court fails to discern any public function element that may flow from the Byelaws of the society. That instrument in fact and to the contrary indicates that the cooperative society is essentially concerned with protecting the private interests of its members.
31. Turning then to the registration of the cooperative society under the Act, it may at the outset be observed that the affairs of various bodies may be regulated and controlled by myriad statutes in respect of a wide range of activities and functions that may be performed by them. However, merely because the affairs of a particular body may be regulated by statute, that cannot be determinative of the question that stands raised. As was aptly observed by the Supreme Court in Ramakrishna Mission, law is a "ubiquitous phenomenon" and touches various aspects of the functioning of a body. It was observed that merely because a body is obligated to comply with various statutory requirements, that cannot be conclusive to answer the question of whether it is discharging a public function. The fact that the cooperative society is registered under the Act or that the Byelaws or the procedure of elections owe their genesis to the Act and the Rules, would not be sufficient to hold that it would be amenable to the writ jurisdiction of the Court. This Court also bears in mind the principles enunciated by the Full Bench of the Allahabad High Court in Vijay Behari Srivastava where it was pertinently observed that merely because the affairs of a society are controlled by the Registrar that would not make that body "State" as contemplated under Article 12 of the Constitution. In S.S. Rana the Supreme Court held that the general regulation of a society by statute is merely meant to ensure its proper functioning and would not render the activities of that entity as being subject to State control. The aforesaid position in law clearly emerges from the decision of this Court in Mohinder Singh. It would be pertinent to note that both Sushila Devi Bhaskar and S.K. Gambhir, on which reliance was placed by Mr. Garg, were dealing with cases where the Court had found that the cooperative societies had become instruments and vehicles for implementation of State policy and acting as an adjunct to the Delhi Development Authority. It was in that backdrop that the writ petitions were held to be maintainable.
32. The Court further notes that the writ petition neither rests on an allegation of a statutory provision having been violated nor does it impugn a decision or action of a public authority. The decision of the Supreme Court in A. Umarani which was cited by Mr. Garg also does not come to the aid of the petitioners for the aforesaid reasons. It may be observed that Byelaws constitute a contract between the society and its members and members inter se. A mere infraction of those Byelaws would not justify the invocation of Article 226 of the Constitution. For this reason, also it must be held that the writ petition would not be maintainable.
33. The Court may while parting note that while Mr. Garg had addressed various contentions touching upon the merits of the dispute, those have not been dealt with in light of the conclusion of the Court that the writ petition itself is not maintainable. The Court consequently leaves it open to the petitioners to raise those issues, if so chosen and advised, before the appropriate forum and in accordance with law.
34. Accordingly, and for the aforesaid reasons, since the writ petition has been found to be not maintainable under Article 226 of the Constitution, it shall stand dismissed. All interim orders shall consequently stand discharged."
39. Admittedly, in the election held on 31.07.2015, the first petitioner was elected as Chairman of the Board for the third time. The meeting of the board took place on 27.09.2018; acting Secretary had submitted 26 proposals to be under agenda items, out of which 07 proposals were rejected and 19 proposals were approved. It transpires from the record that 24 proposals were passed by the first petitioner. However, one Rajesh Kumar Singh introduced proposal no.25. At the time of discussion over the said item, the first petitioner walked out of the meeting and refused to sign the minute. Out of nine members of the Board, six members voted in favour of the 'no confidence motion' and only one member voted against the 'no confidence motion' and the first petitioner was absent. As per bye-law no.33, which provides that the members of the Board elect the Chairman and Vice Chairman by majority, therefore they can also remove them by majority. Admittedly, the resolution was under challenge in Writ C No.42730 of 2018, wherein the coordinate Bench of this Court vide order dated 20.12.2018 had accorded reprieve to the extent that since the petitioners have already moved reference under Section 84 of the Act 2002, accordingly a direction was issued upon the first respondent (Central Registrar of Cooperative Societies, Department of Agriculture and Cooperation, Government of India, New Delhi) to take a decision. Consequently, the Central Registrar had refused to refer the matter under Section 84 of the Act, 2002 vide order dated 28.05.2019 which was again subject matter of challenge in Writ C No.29112 of 2019. Consequently, the case has also been set up by the petitioners while moving the complaint to the Central Registrar on 23.03.2019, wherein it was alleged that 06 Directors were convening the meeting of the Board of Directors without any information to the petitioners. Later on, the petitioners moved an application under Section 78 of the Act, 2002 before the Central Registrar for an enquiry into the affairs of the Society. Once the Central Registrar has not taken any cognizance on the said complaint then the first petitioner alongwith Ashok Kumar Pandey had again preferred Writ C No.38998 of 2019. In the said writ petition, the petitioners never claimed any relief qua 'no confidence motion' and while disposing of the writ petition on 13.01.2020, the Central Registrar was asked to consider the application of the petitioners filed under Section 78 of the Act, 2002. While deciding the said application the Central Registrar, Cooperative Societies had passed an order for holding an enquiry on 02.03.2020. The said order has already been reproduced hereinabove, wherein the petitioners acknowledged and accepted before the Central Registrar the status of the contesting respondents as Chairperson and Secretary of the Society. Therefore, at this belated stage the challenge to the 'no confidence motion', which took place in the year 2018, is not tenable in law and accordingly, the same is rejected.
40. Section 44 (2) of the Act, 2002 provides that no member of a board shall be eligible to be elected as the Chairperson or President of a Multi State Co-operative Society, after he has held the office as such during two consecutive terms, whether full or part. While deciding the complaint of the petitioners by the Central Registrar on 28.05.2019 it was held that the first petitioner was not eligible for being elected as per provisions contained under Section 44 (2) of the Act, 2002. So far as the said observation is concerned, till date the same is not upset by any competent court and therefore, the same has attained finality. It is admitted position of the parties that the first petitioner was elected third time as Chairman in the year 2015. Moreover, 'no confidence motion' was acted upon. Admittedly, the first petitioner has not discharged any work as Chairman of the Bank since 2017 to 2020. The Board of Directors, who were elected on 31.07.2015, had to complete its term of 05 years upto 31.07.2020. The Board of Directors of the Cooperative Bank had convened the meeting on 25.10.2019 in which the Returning Officer was appointed to conduct the election, which was also communicated through registered post on 04.11.2019 to the Central Registrar. The fresh election took place and the new Board was constituted on 19.02.2020, wherein 11 Directors including the Chairman and Vice Chairman were elected. The new Board is discharging its duties with effect from 19.02.2020. Considering the fact, that the said election was never challenged under the limitation period as provided under Section 85 of the Act, 2002 and therefore, for all practical purpose, the election, which took place on 18.02.2020 and 19.02.2020, has attained finality.
41. Therefore, at this stage we would like to add that in case there is any vacuum or Cooperative Board fails to conduct the election of the members of the Board, the Central Registrar is empowered to hold the election within the period of 90 days from the date when such election became due, as per Section 45 (6) of the Act, 2002. Moreover, Rule 19 (1) of the Rules, 2002 also provides that the election of members of the board shall be conducted by the returning officer appointed by the board in its meeting. It is also claimed that after the election due information was sent to the office of the Central Registrar and therefore, at no stage there was any situation of supersession of the Board of Multi State Cooperative Society/Bank to attract the provisions of Section 123 of the Act, 2002.
42. In view of the foregoing discussions, we are of the view that the contentions raised by the petitioners are not sustainable in law and accordingly, no relief can be accorded to the petitioners. As such, we are not inclined to exercise our discretionary jurisdiction under Article 226 of Constitution of India.
43. Accordingly, the writ petition is dismissed.
Order Date :- 31.05..2023 RKP/