Calcutta High Court (Appellete Side)
Sukumar Bera vs The State Of West Bengal & Ors on 6 September, 2021
Author: Shampa Sarkar
Bench: Shampa Sarkar
03 06.09.2021 W.P.A 13557 of 2021
as
Sukumar Bera
Vs.
The State of West Bengal & Ors.
Mr. Soumya Majumdar,
Mr. Srijib Chakraborty,
Mr. Aditya Mondal.
...for the Petitioner.
Mr. Kishore Datta, ld. Adv. General,
Mr. Anirban Ray, ld. G. P.,
Mr. Srijan Nayak,
Mr. Sayan Sinha.
....for the State.
Mr. Jaydip Kar, Sr. Adv.,
Mr. Billawadal Bhattacharyya,
Mr. Anish Kr. Mukherjee.
...for the Respondent No.8.
Mr. Pratik Dhar, Sr. Adv., Mr. Ritwik Pattanayak.
...for the Respondent Nos.6, 9 to 18.
The writ petition has been filed by one of the Directors of the Contai Co-operative Bank praying for setting aside and/or quashing of the resolution dated August 24, 2021 adopted by the respondent Nos.9 to 18 for removal of the Chairman. The Chairman has not filed any writ petition aggrieved by the resolution by which he has been removed.
A preliminary objection has been raised by the learned Advocate General appearing on behalf 2 of the State respondents and Mr. Pratik Dhar, learned Senior Advocate along with Mr. Pattanayak, learned Advocate on behalf of the requisitionists and the Bank. According to them, the person actually aggrieved by the resolution, which is challenged before this Court is the erstwhile Chairman, who has been removed in accordance with law. The writ petition ought to have been filed by him. Reliance has been placed on the decision of this Court in the matter of Lutfa Begum & Anr. Vs. State of West Bengal & Ors., reported in 2006 SCC OnLine Cal 538 : (2007) 2 CHN 57. In this judgement, it was decided by a Co-ordinate Bench of this Court as follows:
"34. Since the Pradhan is an elected post, the Pradhan has to accept the majority decision which was adopted in a democratic process for his removal. In democracy the voice of the majority should be honoured, otherwise the entire foundation of democracy will collapse.
35. Here of course, Pradhan has not come forward to challenge his removal. Thus, this Court can safely presume that Pradhan has accepted the majority decision regarding his removal.
36. Since none of the petitioners is the Pradhan of the said Gram Panchayat, they cannot be affected by the majority decision which was taken for removal of the Pradhan. The petitioners being the members of the said Gram Panchayat can neither be affected by the removal of the Pradhan nor can they be aggrieved by the removal of the Pradhan and as such, the petitioners do not have any locus to challenge the majority decision taken regarding removal of the Pradhan.3
37. This Court, thus, does not find any justification to interfere with the impugned order of the prescribed authority and/or the impugned notice issued by the requisitionists for the reasons as above.
38. The writ petition, thus, stands rejected. The interim order which was passed earlier, thus, stands vacated. The prescribed authority is thus directed to take the ultimate decision on the resolution adopted in the meeting held on 5th September, 2006 in accordance with law positively within a week from the date of communication of this order.
39. The prescribed authority is also directed to keep constant watch and/or supervision over the activities of the said Gram Panchayat until such decision is taken by the prescribed authority, so that the normal activities of the said Gram Panchayat is not affected during the period of this turmoil."
The contention of the petitioner is that as Rule 51 sub-rule (3) of the West Bengal Co- operative Societies Rules, 2011 (hereinafter referred as the said 'Rules, 2011') has been violated, the petitioner has the locus standi to move the writ petition as a director and member of the Board by challenging the procedural irregularity.
In a democratic process, voice of the majority should be honoured, otherwise the entire foundation of the democracy collapses. As the Pradhan, in Lutfa Begum (supra) had not come forward challenging his removal, the Court held that it could be safely presumed that the Pradhan 4 had accepted the majority decision. In this case, prima facie, it appears to the Court that the petitioner as a member of the Board has challenged the removal of the Chairman. The Chairman has not filed any writ petition being aggrieved by the resolution but has supported the petitioner in this proceeding.
Prima facie, this Court is of the view that when the sole challenge in the writ petition is the removal of the Chairman, the petitioner may not have the locus to move the writ petition praying for setting aside the resolution by which the Chairman has been removed. However, with regard to the other contention of infraction of law and non-service of notice, the locus standi of the petitioner shall be decided after exchange of affidavits at the final hearing. Although, this court is prima facie of a similar view taken by this court in Lutfa Begum (supra).
The background of this case is that the petitioner had moved another writ petition before this Court challenging a decision of the Secretary of the said Bank dated July 9, 2021 by which a meeting for removal of the Chairman which had been cancelled, was once again called by the Secretary on the basis of the self-same requisition. 5 The writ petition was registered as WPA No.11163 of 2021.
The locus standi of the petitioner was also challenged in that writ petition by the respondents/requisitionists but the Court was of the view that when a decision of a Secretary is questioned before the Court, which affects the internal affairs of the Board and right of each and every member of the Board, the petitioner had the locus standi. However, the Court had specifically observed that had it been a case where the Chairman had been removed, the aggrieved party would be the Chairman and such removal would have to be challenged by the Chairman himself.
Upon setting aside the decision of the Secretary, the Court had granted liberty to the requisitionists to bring a fresh requisition in accordance with law and directed that the said requisition should be reached to its logical conclusion. On the basis of the liberty granted, the requisitionists brought another requisition and the Chairman was removed by an adequate quorum in accordance with law. The petitioner challenged the order of this Court dated July 20, 2021 before a Hon'ble Division Bench of this Court. The Hon'ble Division Bench took up the matter on August 25, 6 2021, a day after the Chairman was removed. The subsequent event of removal was brought to the notice of the Court by the petitioner by filing a supplementary affidavit. Apart from challenging the liberty granted by this Court, arguments were also advanced before the Hon'ble Division Bench challenging the legality of the requisition, as according to the bank, the requisitionists had ceased to be the members of the Board according to the provisions of Section 10A(2A) of the Banking Regulation Act, 1949. The order of the Hon'ble Division Bench records such submission made on behalf of some of the respondents therein and the Court recorded the submission of the appellant therein, (the petitioner) that the removal of the Chairman at the behest of disqualified members of the Board of Directors was a nullity. The Court was of the view that the matter was to be decided on affidavits. Thereafter, this writ petition has been filed.
Mr. Majumdar, learned Advocate appearing for the petitioner submits that the removal of the Chairman should be set aside in view of the disqualification of the requisitionists who have been in office as directors for more than eight years. Next, it is submitted that the Chairman in 7 exercise of power under Rule 54 of the Rules, 2011 had cancelled the meeting called by the Secretary under Section 51(3) of the said Rules. He further submits that the locus standi of the petitioner to challenge the infraction of rules has been recognised by the Court in a previous round of litigation. Allegation has been made that the notice was not received by the petitioner.
Mr. Kar, learned Senior Advocate appearing on behalf of the removed Chairman reiterates the submissions of Mr. Majumdar. He submits that the meeting was not held in accordance with the provisions of Rule 51 (3) of the said Rules, 2011 as the Chairman had cancelled the meeting by a letter dated August 21/23, 2021. Subsequent notice of the meeting with seven clear days was not issued and the resolution adopted at the meeting must be set aside for such procedural lapse. According to Mr. Kar, once the decision/resolution adopted in the meeting on the basis of the invalid notice loses its force, the same becomes a nullity and all subsequent actions based on such a decision in the meeting is also null and void and non-est in the eye of law. Reliance has been placed in the decision of Swarup Singh & Anr. Vs. Union of India & 8 Anr, reported in (2011) 11 SCC 198.
Next, he contends that the provision of Section 10A (2A) of the Banking Regulation Act has been made applicable in case of Co-operative Societies by way of an amendment with effect from June 29, 2020. The requisitionists have been directors for more than eight years continuously and cannot hold such office. The requisition brought by them was invalid.
The learned Advocate General submits that Section 10A of the Banking Regulation Act is not applicable in case of Co-operative Societies. He relies on a decision of the Hon'ble Apex Court in the matter of Pandurang Ganpati Chaugule Vs Vishwasrao Patil Murgud Sahakari Bank Limited reported in (2020) 9 SCC 215.
Learned Advocate General refers to this decision in order to impress upon the Court that the Hon'ble Apex Court had made a distinction with regard to the applicability of the Banking Regulation Act in case of Co-operative Societies. According to him, the provisions with regard to incorporation, regulations, management of the affairs of the Co-operative Society would be guided by the West Bengal Co-operative Societies Act. The aspects of banking would be regulated by the 9 Banking Regulations Act, 1949. According to him, in keeping with the constitutional mandate and the Entries in Schedule VII of list I and II, the provisions with regard to removal of the Chairman being a part of the regulations and the management of the Co-operative Societies would be guided by the West Bengal Co-operative Act and Rules and not by the Banking Regulation Act. Thus, he denies the allegation that the directors in this Co-operative Society who had held office beyond eight years could not bring the requisition. The learned Advocate General submits that the argument of Mr. Majumdar with regard to the applicability of Section 10A(2A) is barred by issue estoppel at this interim stage as the Division Bench did not accept such contention and refrained from passing any interim order staying the notice as also the decision for removal of the Chairman. The resolution was not stayed or interfered with.
Mr. Dhar, learned Senior Advocate submits that the requisitionists took office as the members of the Board in the year 2017. Their office would come to an end after five years, sometime in December, 2021/January, 2022. Thus, even if the applicability of Section 10A (2A) is accepted, in 10 that case too, the requisitionists are entitled to continue as members.
Mr. Dhar and Datta both raise the point of constructive res judicata as this plea was available to the petitioner even when the earlier writ petition was moved and they object to the prayer of the petitioner for an interim order.
It is the contention of the requisitionists that the members who had brought the requisition had been elected as members of the Board who assumed office in 2017, their tenure of five years have not expired. The applicability of the provisions of Section 10A(2A) is thus prima facie negated. Unless, a contrary is proved that these persons have been staying beyond a period of eight years since the last election. The emphasis in this case in my prima facie view, is not in the number of years, they have been members of the Board of Directors but whether they have been in office for more than eight years continuously since the last election or without any election having been held, after the expiry of five years. There is nothing on record contrary to what Mr. Dhar submits before this Court with regard to the tenure of these persons. They are persons democratically elected as per law from the delegates and prima facie, I do 11 not find any prohibition under the law, by which a person who has served one tenure for five years as a director, cannot be again elected as a director in a subsequent election process.
The further applicability of Section10A(2A) will be decided after exchange of affidavits. The Court also notices that the Hon'ble Division Bench had not passed any interim order against such removal although similar submissions had been made by Mr. Kar with regard to the eligibility of the requisitionists and/or their disqualification in terms of the amended provision of the Banking Regulation Act, 1949.
Also, the letter written by the Chairman cancelling the notice of the Secretary dated August 23, 2021 in his capacity as the Chairman does not have any legal effect, in my prima facie view, as the same is not warranted by law. The Secretary, in terms of Rule 51(3) of the said Rules, 2011 issued a notice calling for a meeting on August 24, 2021. The then Chairman on his own has written a letter to the Secretary that the requisition to remove him was not at per law. The law does not grant any such jurisdiction or power to the Chairman. Prima facie, such instruction to the Secretary by the then Chairman cancelling a meeting called in terms of 12 Rule 51(3) of the said Rules, 2011 is not sustainable in law. Thus, the contention of Mr. Majumder and Mr. Kar with regard to the infraction of the provision of Rule 51(3) of the said Rules is not prima facie accepted by the Court. In a requisition meeting brought for removal of the Chairman, the Chairman cannot in my prima facie view, direct that such meeting should not be held. The Chairman did not challenge such requisition or the notice of the meeting. If such requisition is brought as per law and the Secretary issues the notice, the motion to remove the Chairman will be decided in the floor of the house in the meeting itself.
It appears from the records that the Secretary in my prima facie view rightly did not pay any attention to the letter of the Chairman dated August 21/23, 2021 and allowed the meeting to be held on August 24, 2021 at 11.00 a.m. as per the notice. I prima facie hold that further fresh seven clear days notice was not required.
The contention, whether the petitioner was aware of the meeting or not shall be decided on affidavits. After all, the petitioner has been challenging the requisitions one after another. 13
I do not find any reason to interfere with the notice and result of the meeting for reasons stated hereinbefore and also because the Chairman, who has been removed, is not before the Court. There cannot be any stay of the resolution adopted, removing the Chairman at this stage. The resolution and the result of the meeting are not interfered with.
Let affidavit-in-opposition be filed within a period of six weeks; reply thereto, if any, be filed within a period of two weeks thereafter. Point of maintainability and locus is kept open.
Liberty is granted to the parties to mention the matter before the appropriate Bench after expiry of the above mentioned period.
(Shampa Sarkar, J.)