Calcutta High Court (Appellete Side)
Ramkrishna Das vs The State Of West Bengal And Others on 26 April, 2022
Author: Sabyasachi Bhattacharyya
Bench: Sabyasachi Bhattacharyya
In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
The Hon'ble Justice Sabyasachi Bhattacharyya
W.P.A. No. 5924 of 2022
Ramkrishna Das
Vs.
The State of West Bengal and others
For the petitioner : Mr.Jamiruddin Khan,
Ms.Sayanti Sengupta
For the
Respondent nos. 1, 2 & 3 : Mr. Srijan Nayak,
Ms. Rituparna Maitra For the Respondent nos. 6, 8, 10 & 11 : Mr. Jayanta Kumar Mitra, Mr. Ashit Kr. Chakraborty, Mr. Sunanda Mohan Ghosh Hearing concluded on : 20.04.2022 Judgment on : 26.04.2022 Sabyasachi Bhattacharyya, J:-
1. The writ petitioner is a member of the respondent no.6-Society and was elected on August 29, 2014 as one of the Directors of the Board of Directors of the Society. The term of the said Board, which included the petitioner, expired in accordance with law after five years, that is, on August 28, 2019. Since, during the tenure of the petitioner and his board, the election of the Society could not be completed by the 2 Authorities as mentioned in Section 36 of the West Bengal Co-operative Societies Act, 2006 (hereinafter referred to as "the 2006 Act"), a Board was nominated by the Registrar of the Co-operative Societies, the tenure of which was further extended for tenures of six months each from time to time, lastly till August, 2021.
2. It is argued that, due to the pandemic situation, the election could not be held prior to August, 2021. It is relevant to mention that the nominated Board also comprised of the petitioner and the erstwhile Board members. However, the further extension sought by the Chairman of the nominated Board by a letter dated August 5, 2021 was turned down by the Registrar of Co-operative Societies, West Bengal. Accordingly, the petitioner and the other Directors vacated their respective offices on August 29, 2021.
3. After August 29, 2021, the respondent-Authorities did not extend the tenure of the earlier elected Board, nor took any steps for holding elections of the Co-operative Society.
4. It is contended that videthe impugned notification dated March 7, 2022, after a gap of seven months, the Deputy Secretary, Co-operation Department, Government of West Bengal appointed a Board of Administrators by selecting some members of the Society, who are the private-respondents herein.
5. The said Board of Administrators was entrusted with the regular management and affairs of the Society.
6. It is contended that Section 35 of the 2006 Act envisages appointment of one person as Administrator, and not a Board of several persons. 3
7. Secondly, it is argued that no specific reason was disclosed in the impugned notification, as contemplated under Section 35 of the 2006 Act.
8. Thirdly, in the notification itself, the operation of Section 35 was first exempted but subsequently applied again, which is inherently contradictory.
9. It is next contended that the proper legal recourse available to the Authorities was appointment of a Special Officer under Section 36 and not appointment of Administrator under Section 35 of the 2006 Act.
10. By placing reliance on the impugned notification (annexure P-4 at page
31) dated March 3, 2022, it is submitted that the Board of Administrators were not State Government employees, as contemplated in the definition of 'officer' as defined in Section 4(47) of the 2006 Act.
Moreover, the Board of Administrators was illegally appointed to manage the affairs of the Society for a period of six months with effect from the date of issuance of the notification,that is, March 3, 2022. Hence, it is argued that the said Board will have direct access to the electoral process of the Co-operative Societies, even if held under the aegis of the Co-operative Election Commissioner.
11. Learned counsel appearing for the respondent nos. 1 to 3 contends that the petitioner allowed several extensions of nominations of the Board comprised of the same members whose tenure had expired, including the petitioner. As such, the petitioner is estopped now from urging that recourse to Section 36 ought to have been taken at the 4 point of time when the stipulated period under the said Section expired after their election.
12. That apart, the tenure of the Board expired as long back as on August 29, 2019, that is, five years after the election of the erstwhile Board on August 29, 2014 under Section 29(5)(a) of the 2006 Act. It is submitted that the election is the first priority for the Co-operative Society, in the interest of the welfare of the Society itself and already an ARO has been appointed for the said purpose. If a Special Officer is appointed now by the interference of the Court, the same will disturb the election process itself.
13. It is also submitted by learned counsel for the respondent nos. 1 to 3 that the petitioner has vested interest in the continuance of the nominated Board, of which he was one of the Directors and, as such, the writ petition ought not to be entertained at his behest.
14. The learned Senior Advocate appearing for the respondent nos. 6, 8, 10 and 11 contends that the petitioner, by allowing the erstwhile Board to be nominated and extended to function for so long, waived his right to challenge the entire process on the ground of irregularity/illegality at such a belated stage.
15. It is submitted that the entire process, all along, proceeded in consonance with law. Upon the expiry of the tenure of the erstwhile elected Board on August 29, 2019, the Registrar constituted the nominated Board of Administrators under Section 29(7) on August 30, 2019 itself, that is, the very next date.
5
16. By placing reliance on the several orders of extension of the nominated Board, annexed at Pages 25 to 28 of the writ petition, the learned Senior Advocate points out that the each of the said orders clearly mentioned that a nominated Board of Directors comprising nine members was constituted as per provision of Section 29(7) of the 2006 Act in terms of Order No.3937/IV-3427/11 (Paschim Medinipur Pt.) dated August 30, 2019. However, the said nominated Board of Directors having failed to hold elections, Section 35(1-A) was invoked. It is submitted that sufficient reasons were given in the impugned notification dated March 3, 2022 for such invocation.
17. It is further submitted that Section 36 is not applicable in the present case, since the language thereof contemplates an immediacy in appointment of Special Officer after expiry of the stipulated period from the election of the Board. Here, since August 29, 2019, such provision has not been invoked, thereby ruling out the same being invoked at this belated stage.
18. As regards the appointed Board of Administrators, it is argued that the law permits one or several persons to be appointed as Administrators. A liberal view ought to be taken, it is contended, even if the Board of Administrators was not comprised of State Government functionaries as stipulated in Section 35 of the 2006 Act.
19. Even if Section 36 was invoked, the Special Officer would also be a State Government Officer, which would not be much different. Rather, the existing members, who are appointed the Board of Administrators, are much more acquainted with the functioning of the Co-operative 6 Society and are in a much better position than an appointed Special Officer to conduct the elections.
20. Lastly, it is submitted that under Section 96(8) of the 2006 Act, the Election Commission is to conduct the elections. As such, no apprehension of partiality or bias can be imputed. Moreover, it is argued that no mala fides have been pleaded in the entire writ petitions on the part of the members of the Board of Administrators.
21. Upon hearing learned counsel, a perusal of the relevant Sections is required to come to a definite conclusion as regards the issue involved in the matter.
22. Section 29(7) of the 2006 Act reads as follows:
"29.......
(7) If the election as referred to in the third proviso to sub-section (1A) of section 35 or in sub-section 92) of section 36 cannot be held owing to an order of any court or for any other reasons or if the directors of the board elected in a general meeting cannot function owing to an order of any court or for any other reason, of if the elected directors of the board resign simultaneously, the Registrar may constitute a board of directors from amongst the members or delegates or representatives of the Co-operative Society in conformity with section 32 and the constituted board shall elect its office-bearers from amongst themselves:
Provided that the board, so constituted, shall function till the directors of the board elected under this section assume charge."
23. That apart, Section 35 and Section 36 of the Act are also germane in the context. The said Sections are set out below:
35. Supersession and suspension of board and interim management.- [(1) Notwithstanding anything contained in this Act or in any other law for the time being in force, no board shall be superseded or kept under suspension for a period exceeding six months :
Provided that in case of a Co-operative Society carrying on the business of banking, the provisions of this section shall have the effect as if for the words "six months", the words "one year" had been substituted.] [(1A) If the State Government is of the opinion that-7
(a) any board -
(i) has made persistent default; or
(ii) is negligent in the performance of its duties; or
(iii) has committed any act prejudicial to the interests of the Co-operative Society or its members; or
(b) the constitution or function of any Co-operative Society has come to a stalemate, or
(c) the Co-operative Election Commission has failed to conduct election in accordance with the provisions of this Act, the State Government may, by notification stating reasons therefor, supersede the board and the directors of such board shall forthwith vacate their offices and by the said notification the State Government shall appoint one of its officers to manage the affairs of the Co-operative Society who shall be called the administrator, for the period specified in sub-section (1) :
Provided that the board of any such Co-operative Society shall not be superseded or kept under suspension where there is no Government shareholding or loan or financial assistance or any guarantee by the Government :
Provided further that in case of a Co-operative Society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 (10 of 1949) shall apply :
Provided also that the administrator appointed to manage the affairs of such Co- operative Society shall arrange for conduct of election in a general meeting to be convened for the purpose in accordance with the Act, rules and by-laws within, the period specified in sub-section (1) and handover the management to the newly elected board :
Provided also that if an elected board cannot be reconstituted within the period specified in sub-section (1), the administrator shall be removed from his office by the State Government and thereupon the provision contained in sub-section (7) of section 29, shall be followed] (2) During the tenure of office of the administrator appointed under sub-section (1) -
(a) all properties of the Co-operative society shall vest in the Registrar; and
(b) subject to the control of the Registrar and notwithstanding the preferring of any appeal under section 147, the administrator shall exercise all the powers and perform all the duties which may be exercised or performed by the board or any officer of the Co-
operative society under this Act or the rules or the by-laws. [(3) The conditions of service of an administrator shall be such as may be prescribed.]
36. Expiry of term of board and appointment of special officer.- (1) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where election of the board of directors of any Co-operative Society has not been held within a period of thirty-six months from the date of their election where such election was held before the date of commencement of this Act or within a period of sixty months from the date of their election under sub-section (1) of section 29 of this Act, the directors of the board of such Co-operative Society shall be deemed to have vacated their offices immediately on expiry of the period of thirty-six months from 8 the date of their election where such election was held before the date of commencement of this Act or sixty months from the date of their election under sub-section (1) of section 29 of this Act, as the case may be, and the State Government shall, thereupon by notification, appoint special officer from amongst its officers for managing the affairs of the Co-operative Society for a period not exceeding six months from the date of such expiry of the period :
Provided that in case of a Co-operative Society carrying on the business of banking, the provisions of this clause shall have the effect as if for the words "six months", the words "one year" had been substituted;] (2) The special officer appointed to manage the affairs of such Co-operative Society shall arrange for conduct of elections within the period specified in sub-section (1) and handover the management to the newly elected board;
(3) If an elected board of directors cannot be reconstituted within the term of the special officer, he shall be removed from office by the State Government and thereupon the provision contained in sub-section (7) of section 29 shall be followed; (4) With effect from the date of expiry of the term of the board under clause (a)-
(a) all properties of the Co-operative Society shall vest in the Registrar and shall remain vested till a new board assumes office; and
(b) subject to the control and direction of the Registrar and notwithstanding the preferring of an appeal under section 147, the special officer shall exercise all the powers and perform all the duties which may, under this Act or the rules or the by-laws, be exercised or performed by the board or any officer of the Co-operative Society.
24. Sections 35 and 36 have their independent fields of operation. Section 35 deals with supersession and suspension of Board of Directors and interim management of the Society. Sub-section (1A) of Section 35 provides the grounds on which the State Government may, by notification stating reasons therefor, supersede the Board and the Directors of such Board shall forthwith vacate their offices and by the said notification the State Government shall appoint one of its officers to manage the affairs of the Co-operative Society who shall be called the 'administrator'.
25. It is relevant to note that the notification must state the reasons on which the administrator is appointed and the Board is superseded. 9
26. Section 36, on the other hand, provides incidents of expiry of the term of board and contemplates the appointment of Special Officer, also from amongst its Officers, for managing the affairs of the Co-operative Society for a period not exceeding six months from the date of the expiry of the stipulated period. In the event the election of the Board of Directors has not been held within a period of thirty-six months from the date of their election, where it was held before the commencement of the Act, or within sixty months from the date of the election under Section 29(1) of the Act, when the Directors of the Board shall be deemed to have vacated their offices immediately on expiry of the said terms, as applicable.
27. One of the premises of the petitioner's argument is that Section 36 could, at best, be invoked, in view of the stipulated period in the said Section, having expired after the previous election was held. In the absence of any specific reason as stipulated in Section 35, an Administrator could not have been appointed, it is argued.
28. Section 35, as amended, provides that even more than one officer can be appointed as Administrators. However, the expression 'officer' as defined in Section 4(47) of the 2006 Act, contemplates and includes a chairman, vice-chairman, secretary, joint secretary, assistant secretary, treasurer, director of a board and managing director, general manager, deputy general manager, assistant general manager, development officer, chief executive, deputy manager, assistant manager, field executive officer, and any other person appointed and 10 authorised by the board to give direction relating to the affairs of the Co-operative society and also includes a Government Officer appointed under section 33 and Special Officer appointed under section 36 or an administrator appointed by the State Government or the Registrar under section 34 to manage the affairs of the Co-operative society.
29. In the present case, a 'Board of Administrators', in other words, several Administrators were appointed. However, there is nothing on record to substantiate that the said Administrators, who were all members of the Co-operative Society itself, came within the purview of persons contemplated in sub-section (47) of Section 4.
30. In such context, the learned Senior Advocate appearing for the respondent nos. 6, 8, 10 and 11 has cited K. L. Tripathi Vs. State Bank of India and others, reported at (1984) 1 SCC 43, where it was held that the concept of fair-play in action, which is the basis of natural justice, must depend upon the particular lis between the parties. Where there is no lis regarding the facts, no real prejudice could be caused to a party by absence of any formal opportunity of cross-examination and that, per se, would not invalidate or vitiate the decision arrived at fairly.
31. The application of the principles of natural justice, it was held, must always be in conformity with the scheme of the Act and the subject- matter of the case. It is not possible to lay down rigid rules, as to when the principles of natural justice are to apply nor as to their scope and extent. There must have been some real prejudice to the complainant; there is no such thing as a merely technical infringement of natural 11 justice. The requirement of natural justice must depend on the facts and circumstances of the case, the nature of the enquiry, the rules under which the Tribunal is acting, the subject-matter to be dealt with and so forth, it was observed. The learned Senior Advocate submits that in the present case, no prejudice was caused to the parties by virtue of the technical violation of Section 35 by appointing some members of the Society, and not an Officer of the State Government, as Administrators. It is submitted that the members have vast experience and are more acquainted with the workings of the Society in order to properly manage the affairs thereof and to assist the Election Commissioner in conducting the election of the Society.
32. In the present case, a plausible chain of events has been established, sufficient to satisfy the test of preponderance of probabilities.
33. It is evident from the several extensions and nominations of the nominated Board of Directors over a considerable period, that is, from August 30, 2019 onwards, for several tenures of six months each (as evident from the documents annexed at pages 25 to 28 of the writ petition), that, by Office Order No.3937/IV-3427/11 (Paschim Medinipur Pt.), dated August 30, 2019, a nominated Board of Directors comprising nine members was constituted initially as per provision of Section 29(7) of the 2006 Act for the concerned Society. Section 29(7) is pressed into operation if the election, as referred to in the third proviso to sub-section (1-A) of Section 35 or sub-section (2) of Section 36 cannot be held owing to an order of any court "or for any other reasons" or if the Directors of the Board elected in a General Meeting 12 cannot function owing to an order of a court or for any other reason or if they resign simultaneously.
34. In the present case, the initial Board of Directors was elected on August 29, 2014 and, upon expiry of their tenure after five years therefrom on August 29, 2019, all the said elected Directors of the Board, including the present petitioner, tendered their resignations, thereby attracting Section 29(7), under which the nominated Board was constituted by the Registrar.
35. Such nomination was extended from time to time till the last tenure expired, during which period no election could be held, primarily due to the pandemic situation.
36. In such circumstances, Section 35 was apparently invoked vide the impugned notification dated March 3, 2022, wherein it was specifically mentioned that election for reconstitution of a fresh Board of Administrators of the said society was yet to be held and it had been felt necessary that the Board of Administrators was to be appointed in the Society with a view to facilitating the constitution of elected Board of Directors therein and to manage all the affairs of the said Society.
37. Although it was mentioned in the notification that in exercise of the powers conferred under Section 11(1) of the 2006 Act, the said Society had been exempted from application of Section 35, such exemption apparently pertained to the definition of 'officer' as provided in sub- section (47) of Section 4 insofar as the said definition includes Board of Administrators appointed under Section 35 of the 2006 Act. Section 11(1) of the 2006 Act provides that the State Government may, by 13 notification, for such reasons as may be prescribed, to be recorded in writing, exempt any Co-operative Society or class of Co-operative Societies from the operation of any of the provisions of the Act considered unsuited thereto and thereupon the said provision shall not apply to such Society until such provisions are applied thereto by notification. The first proviso thereto says that no notification to the prejudice of the Co-operative Society shall be issued without an opportunity being given to it to represent its case.
38. A liberal view of the said provision can be taken in the present case, in view of no Board of Directors being available at the relevant juncture due to expiry of the tenure of the nominated Board, to represent the Society for the purpose of the first proviso to Section 11(1). Moreover, in the circumstances of the urgency involved, there is no reason why the State Government, in its discretion, could not exempt the operation of Section 4(47) insofar as it pertained to Section 35 of the 2006 Act. The members of the Society, who were appointed as the Administrators, would have been some of the fittest persons to represent the interest of the Society and to manage its affairs and conduct its elections, being obviously more acquainted with the nitty gritty of the Society's functioning than any Officer of the State Government.
39. Since the notification not only contained reasons for appointing the Board of Administrators, but also provided for exemption under Section 11(1) of the 2006 Act, the same cannot be invalidated on the score of not adhering to the definition of 'officer' under Section 4(47) of 14 the 2006 Act. Hence, the Authorities acted well within the scope of their powers in issuing such notification.
40. Moreover, the primary grievance of the writ petitioners is that the election of the society is getting delayed, which issue is taken care of since the election process has already been initiated and an ARO has been appointed for such purpose.
41. The entire process would be disturbed and jeopardised if it is interfered midway, at this juncture, by introduction of a Special Officer who would be a stranger to the scene.
42. The learned Senior Advocate appearing for the respondent nos. 6, 8, 10 and 11 was also justified in contending that not only did the petitioner never challenge the entire procedure after the elected Board finished its tenure on August 29, 2019 and a nominated Board was formed, with the writ petitioners as one of its Directors, the writ petitioner has nowhere levelled any allegation of mala fides, bias or any other form of turpitude against the members of the existing Board of Administrators which could be reason enough to remove them now unnecessarily in the midst of the election process.
43. Hence, a prudent course would be to allow the present Administrators to continue to operate and, under the aegis of the Election Commission, to conclude the election process of the Co-operative Society as expeditiously as possible.
44. Accordingly, WPA No.5924 of 2022 is disposed of by directing the present Board of Administrators appointed by the impugned notification dated March 3, 2022 to cooperate with the Election 15 Commissioner to conclude the election process of the Daspur Block-1 Co-operative Agricultural Marketing Society Ltd. as expeditiously as possible, preferably within a period of six months from date.
45. The impugned notification is not interfered with.
46. There will be no order as to costs.
47. Urgent certified copies of this order shall be supplied to the parties applying for the same, upon due compliance of all requisite formalities.
( Sabyasachi Bhattacharyya, J. )