Calcutta High Court (Appellete Side)
Suvendu Adhikari vs The State Of West Bengal & Ors on 9 September, 2021
Author: Shampa Sarkar
Bench: Shampa Sarkar
09.09.2021
Court No. 19
Item no.03
CP
WPA 14111 of 2021
Suvendu Adhikari
vs.
The State of West Bengal & ors.
(via video conference)
Mr. Jaydip Kar, Ld. Sr. Advocate
Mr. Billwadal Bhattacharyya
Mr. Srijib Chakraborty
Mr. Saket Sharma
.....for the petitioner.
Mr. Pratik Dhar, Ld. Sr. Advocate
Mr. R. Pattanayak
.....for the respondent nos. 6 & 9 to 18.
Mr. Kishore Dutta, Ld. Advocate General Mr. Anirban Ray, Ld. Govt. Pleader Mr. Lalit Mohan Mahata, Ld. Sr. Govt. Advocate Mr. Raja Saha Mr. Sayan Sinha .....for the State.
The petitioner has challenged the impugned resolution dated August 24, 2021 by which the petitioner was removed from his office as Chairman of the Contai Cooperative Bank Limited. It is the second writ petition filed challenging the same impugned decision. The first writ petition being WPA 13557 of 2021 was filed by a director of the bank and the petitioner was a respondent in the said proceeding, supporting the writ petition. 2 The contentions of the petitioner in this writ petition are similar to those raised by the other writ petitioner, namely, Sukumar Bera. Elaborate arguments were advanced by both the said Sukumar Bera and the writ petitioner on the legality of the resolution by which the petitioner was removed from his office as chairman. The illegality in the requisition, procedure followed by the cooperative bank in calling and holding the meeting, the disqualification of the requisitionists who had brought the requisition for removal of the chairman pursuant to a leave granted by this court, were canvassed. The disqualification of the requisitionists who had allegedly ceased to hold office as directors by operation of the provisions of Section 10A(2A) of the Banking Regulation Act, 1949 was vehemently urged. By an order dated September 6, 2021, this court considered the issues raised and was not prima facie, satisfied to pass any interim order.
Today, the writ petition has been filed challenging the self-same resolution and prayer has been made for an order, restraining the bank from giving effect to the impugned resolution.
Mr. Dhar, learned senior advocate and Mr. Dutta, learned Advocate General raise the points of abuse of the process of court and the bar in maintaining the writ petition, the same being hit by 3 the principles of constructive res judicata. It is urged by them that challenging the removal of the chairman/petitioner, at least, three writ petitions have been filed before this court. One by Mr. Sukumar Bera, the second one by the petitioner herein and another by a member of the cooperative bank by way of a public interest litigation. They have contended that the parties impugning the decision to remove the petitioner have indulged in forum shopping. These two issues will be decided in final form after exchange of affidavits.
Mr. Kar, learned senior advocate appearing on behalf of the petitioner, submits that the order passed by this court in WPA 13557 of 2021 refusing to stay the decision of removal of the petitioner, was an interim order and the petitioner was within his right to maintain the writ petition and urge further points in support of his contention which may not have been looked into or considered by this court when the earlier writ petition was heard.
Mr. Kar's argument is a reiteration of the arguments that were advanced by him in the earlier round of litigation. Mr. Kar's first contention being that the applicability of Section 10A(2A) of the Banking Regulation Act, 1949 has been upheld by the Hon'ble Supreme Court with regard to banking activities of co-operative societies and that the 4 instant cooperative society essentially being a banking company was guided by the provisions of Section 10A(2A) of the Banking Regulation Act, 1949. That the Hon'ble Supreme Court in the matter of Swarup Singh vs. Union of India & anr., reported in (2011) 11 SCC 198, had also held that even if there was a minor trenching in the law, the same shall not invalidate any action taken or to be taken under the provisions of the Banking Regulation Act. His further submission is that the provisions of Section 10A(2A) had been made applicable on and from September 2020 and, as such, the directors who have brought the motion for removal of the petitioner after the said amendment had taken effect, could not have done so as they were disqualified. The said point was urged in the previous round of litigation as well. The court is of the prima facie view that the provision of the Banking Regulation Act, 1949 by which the requisitionists had allegedly lost their position as directors could not be read in a way which would nullify the result of a meeting held in accordance with the provisions of the Cooperative Societies Act. The directors including the petitioner were elected as per the provisions of the West Bengal Cooperative Societies Act. Prima facie, the court feels that they hold office if they are so elected as per the procedure laid down in the rules for each term of five years. The 5 expression 'continuously' appearing in Section 10(2A) of the Banking Regulation Act, 1949 was prima facie, interpreted by this court on the earlier occasion to mean continuous eight years in the office as director from the last election without any election of the board, in case of a co-operative society. Mr. Kar referred to the provision of Sub-Section (6) of Section 32 of the West Bengal Cooperative Societies Act, 2006 and submitted that even under the said law there was a bar upon the directors holding office for more than two terms, i.e., 10 years.
This additional point has been urged today which the court finds is not, prima facie, applicable in view of the fact that Sub-Section (6) of Section 32 puts a restriction on the 'office bearers' to hold office for more than two terms. An office bearer has been defined under Section 4(46) of the 2006 Act to mean a president, vice-president, chairperson, vice- chairperson, secretary or treasurer of a cooperative bank or any person elected by the board of the cooperative bank. In a cooperative society which has over 3000 members, first delegates are elected. Thereafter, the board of directors are elected and thereafter the office bearers are elected from the board of directors. By this procedure also the petitioner had become a chairman of the bank. However, as the petitioner's term as a chairman had 6 been exhausted by operation of the provisions of Section 32(6) of the West Bengal Cooperative Societies Act, 2006, an exemption was made by the Government by a notification under Section 11(1) of the West Bengal Cooperative Societies Act, 2006. The said notification has been placed before the court. Further it appears that the elected list of the board of directors of the said cooperative bank was published on February 5, 2017, and, as such, the requisitionists have assumed office thereafter and their tenure of eight years as mentioned in Section 10A(2A) has not been exhausted. Whether the expression 'continuous' would be from the date when for the first time these directors had been elected as directors in the Board or would be interpreted as a 'continuous' holding of office for more than eight years after a particular election, is yet to be decided and requires a further probe upon exchange of affidavits. Thus, the extended argument of Mr. Kar, over and above the argument which was made on the earlier occasion on similar lines on the applicability of Section 10A(2A), does not impress the court at this interim stage.
The question of disqualification of the requisitionists to continue in office since the election in 2017 will be decided at the final hearing. 7
The second argument of Mr. Kar that the secretary was absent from the meeting because the secretary had acted on the direction of the chairman who had declared the resolution to be ineffective and invalid by issuing a notice of cancellation, is not supported by any document at this interim stage. Whether, the secretary had communicated to all the members as directed by the chairman that the meeting could not be held is a matter of fact and the document has to be before the court by way of an affidavit. The requisitionists are before the court and they shall satisfy the court at the final hearing about the compliance of Rule 51(3) of the Co-operative Societies Rules. The court has already taken a prima facie view that the chairman could not have passed an order rejecting the requisition brought because the law did not empower the chairman to consider the legality of a motion brought for his removal as per the rules.
The final argument of Mr. Kar that the Division Bench had not expressed any opinion with regard to the issues involved in this writ petition and had not passed any order which would be in conflict with any of the prayers made before this court, is now taken into consideration. It is on record that on the order passed by this court and the liberty granted, the requisition was brought. The liberty granted by 8 this court was challenged in an appeal being MAT 808 of 2021. The said appeal was taken up for hearing on August 25, 2021. On the date the appeal was being heard, the requisitionists produced the documents indicating that the petitioner had already been removed from his office as chairman. The Division Bench recorded in the opening paragraph of the order dated August 25, 2021 that the chairman had been removed on the basis of a requisition meeting of the board of directors. One of the arguments of the appellant before the Division Bench was that the Single Judge had failed to take into consideration a previous decision of the Division Bench in which the Division Bench had directed that status quo should be maintained with regard to the composition of the board. Mr. Kar, learned senior advocate who appeared on behalf of some of the respondents in the appeal and the bank, also urged that the requisitions were disqualified by application of the provisions of the Banking Regulation Act, which is the same argument which had been advanced by Mr. Kar in this proceeding. These facts were recorded in the order and the Division Bench was of the opinion that the steps taken by the parties shall abide by the result of the appeal and had called for affidavits.
9
Thus when the disqualification of the directors of the board who brought the requisition and the allegation of illegal removal of the petitioner were urged before the Division Bench and similar arguments were advanced, the Division Bench ordered that steps that shall be taken will abide by the result of the appeal.
My prima facie, understanding of the expression 'steps taken shall abide by the result of the appeal' would mean and include within its ambit all steps that have been taken pursuant to the requisition, namely, the removal of the petitioner from office and subsequent steps following such removal. The steps to be taken pursuant to the removal of the chairman shall abide by the result of the appeal is the interim direction of the Division Bench in my understanding. This court in an earlier round of litigation on the self-same cause of action has rejected the prayer for interim order with reasons and the same shall apply.
Nothing further remains to be decided at the interim stage in favour of the petitioner. Either the writ petitions or the appeal is to be decided in final form.
Moreover, on the one hand, it was the argument of the appellant before the Division Bench that the liberty granted by the court on the basis of 10 which the requisition was brought was contrary to a decision of the Division Bench which had directed that the composition of the board shall not change and on the other hand, arguments were made that these directors who form part of the same board were disqualified.
Next, whether the petitioner who was appointed in terms of the provisions of the West Bengal Cooperative Societies Act, 2006 can now continue to be the chairman by invoking the provisions of the Banking Regulation Act, 1949 is to be looked into. Moreover, the removal took place on August 24, 2021 and there is no scope for any interim order staying such removal or any action which shall follow in accordance with law. Allowing the interim prayers would amount to allowing the writ petition in the final form. Moreover, no new points have been urged by Mr. Kar before the court which would persuade the court to take a different view than the one taken on September 6, 2021 on the self-same issue.
No interim orders are passed. The reasoning of the order dated September 6, 2021 dealing with the arguments advanced by the petitioner shall be deemed to be applicable in this case too. 11
Let affidavit-in-opposition be filed within six weeks from date. Reply thereto, if any, to be filed within two weeks thereafter.
Liberty to mention.
However, the issue with regard to locus standi is not applicable as the petitioner himself has challenged his removal.
Let the matter be heard along with WPA 13557 of 2021.
Parties are to act on the server copy of this order.
(Shampa Sarkar, J.)