Calcutta High Court (Appellete Side)
Sri Asit Baran Chattopadhyay & Anr vs The State Of West Bengal & Ors on 8 September, 2017
Author: Arijit Banerjee
Bench: Arijit Banerjee
In The High Court At Calcutta
Constitutional Writ Jurisdiction
Appellate Side
WP 6455 (W) of 2014
Sri Asit Baran Chattopadhyay & Anr.
-vs.-
The State of West Bengal & Ors.
Coram : The Hon'ble Justice Arijit
Banerjee
For the petitioners : Mr. Moloy Basu, Sr. Adv.
Mr. Krishnendu Banerjee, Adv.
Mr. Vineet Kothari, Adv.
For the State : Mr. Sadhan Roy Chowdhury, Adv.
Mr. Manas Kumar Sadhu, Adv.
For Co-operative Election Commission: Mr. Srijan Nayak, Adv.
Mrs. Rituparna Moitra, Adv.
Mr. Raja Saha, Adv.
Mr. Arindam Mitra, Adv.
For respondent Nos. 8 to 10 : Mr. Asit Kumar Chakraborty, Adv.
Mr. Sunanda Mohan Ghosh, Adv.
For respondent no. 13 : Mr. Sanatan Ghosh, Adv.
Mr. B.B. Saha, Adv.
Heard On : 21.07.2015, 13.01.2017, 10.02.2017 CAV On : 24.02.2017 Judgment On : 08.09.2017 Arijit Banerjee, J:- Brief background of the case:- (1) The petitioner No. 2 is a Primary Agricultural Credit Co-operative
Society within the meaning of Sec. 4(55) of the West Bengal Co- operative Societies Act, 2006. The petitioner no. 2 is affiliated to the Hooghly District Central Co-operative Bank Limited (in short the 'respondent Bank'). The petitioner no. 1 is an Elected Director of the petitioner no. 2.
(2) There are nine seats on the Board of Directors of the respondent Bank. The nine seats are divided amongst three constituencies being Chinsura Sadar (three seats), Chandannagar (three seats) and Arambag (three seats). Out of the three seats in each constituency two seats are for Primary Agricultural Co-operative Societies (in short 'PACS') and one seat is for non-PACS.
(3) Because of its affiliation to the respondent Bank, the petitioner no. 2 is entitled to nominate a delegate to the respondent Bank for the purpose of holding AGM of the Bank and also to hold post of Director of the respondent Bank.
(4) For holding election to the Board of Directors of the respondent Bank, the Special Officer of the Bank by a notice dated 27 July, 2012 requested all the societies affiliated to the said Bank for sending the names of their delegates/representatives. The petitioner no. 2 sent the name of the petitioner no. 1 as its representative/delegate to the said Bank.
(5) The Assistant Returning Officer published a final list of delegates/representatives on 1 October, 2012. The petitioner no. 1 submitted his declaration form and certificate issued by the petitioner no. 2 society, along with duly filled in nomination form for the purpose of participating in the AGM of the respondent Bank and for contesting the election of the Board of Directors of the respondent Bank. The said form, inter alia, contained the condition that the petitioner no. 2 society is not a defaulter of the respondent Bank and the certificate issued by the petitioner no. 2 society contained, inter alia, the declaration that the petitioner no. 1 is not a defaulter of the petitioner no. 2 society as on 16 October, 2012.
(6) The election that was scheduled to be held on 18 November, 2012 was postponed and ultimately the Special General Meeting for the election of directors of the respondent Bank was held on 12 May, 2013. In Chinsura constituency six candidates filed nomination for two PACS seats. Four nominations including the nomination of the respondent no. 13 (in short 'Giridhari') were cancelled by the respondent Bank during scrutiny. The petitioner no. 1 (in short 'Asit') and one Dulal Ghosh were elected un-contested from the Chinsura constituency. Seven other delegates/representatives of three co-operative societies were also elected. A certificate dated 12 May, 2013 was issued by the Assistant Election Officer certifying that Asit was elected as Director from Hooghly Sadar Sub-Division Constituency. (7) Giridhari filed a Dispute Case No. 6/CEC of 2013 before the Co- operative Election Commission challenging the rejection of his nomination and acceptance of the nomination of Asit. The Co- operative Election Commission after hearing all parties concerned rejected the case by an order dated 2 August, 2013 holding, inter alia, that the election procedure had been conducted in terms of the West Bengal Co-operative Societies Act, 2006 and the West Bengal Co- operative Election Commission Regulations, 2012. However, liberty was granted to Giridhari to approach the Additional Registrar of Co- operative Societies (Law) West Bengal for redressal of his grievance. (8) Subsequently Giridhari filed a dispute case before the Registrar of Co-operative Societies, West Bengal, being Dispute Case No. 55/RCS of 2013 praying for cancellation of Asit's delegation and for restraining Asit from acting as office bearer of the respondent Bank. The dispute was referred to an Arbitrator under Sec. 202 of the 2006 Act who issued summons to Asit. Asit appeared before the Arbitrator and challenged the maintainability of the case as the same related to election conducted by the Election Commission, West Bengal. He also contended that he did not make any false declaration for contesting the election as alleged by Giridhari and that Giridhari could not produce any evidence in support of such allegation. The Arbitrator passed an interlocutory order on 29 August, 2013 restraining Asit from acting as a director of the respondent Bank. Being aggrieved, Asit filed an appeal before the West Bengal Co-operative Tribunal being Appeal No. 36 of 2013. Since the Tribunal was not functional, he moved a writ petition in this Court being WP No. 28497(W) of 2013 challenging the interlocutory order primarily on the ground of maintainability of the dispute. The writ petition was disposed of by an order dated 20 September, 2013 by which the Arbitrator was directed to decide the question of maintainability of the dispute first and to pass an order accordingly before passing any further order.
(9) Thereafter, upon hearing the parties the Arbitrator passed an order dated 17 November, 2013 holding that the 'dispute' was not maintainable. However, the case was remanded back to the Co- operative Election Commission.
(10) In the aforesaid factual background vide order dated 5 February, 2014 the Co-operative Election Commission declared the delegate election of Hooghly Sadar PACS Constituency as null and void in exercise of power under Sec. 96(4) of the 2006 Act and ordered for holding fresh delegate election in the aforesaid constituency for filling up the two concerned seats. Subsequently, the said Commission issued an order dated 12 February, 2014 appointing the respondent nos. 11 and 12 as Assistant Returning Officers for conducting the election of delegates of the said constituency. These two orders dated 5 February, 2014 and 12 February, 2014 are under challenge in the present writ petition.
Contention of the petitioners:-
(11) Mr. Molay Kumar Basu, Learned Senior Advocate appearing for the petitioners submitted that the impugned orders are liable to be set aside for the following reasons:-
(a) The Election Commission heard Giridhari's grievance and vide order dated 2 August, 2013 rejected his prayer for rejecting Asit's nomination and for accepting his nomination. The same Election Commission did not have power to suddenly reverse its own order and issue the impugned orders and that too, at the instance of an Enquiry Officer who had no jurisdiction to form any opinion even assuming that the appointment of the Enquiry Officer was valid and good in law.
(b) There is no finding or formation of opinion by the Election Commission. It solely and blindly relied upon the finding of the Enquiry Officer.
(c) The petitioners were never informed about holding of any enquiry. The purported enquiry was conducted behind the back of the petitioners without giving any opportunity of hearing.
(d) The impugned orders did not contain any reason and on that ground alone are liable to be set aside as being violaive of the basic canons of natural justice and fair play.
(e) The Co-operative Election Commission acted at the request of the Addl. Registrar of Co-operative Societies (Law), but the said Addl.
Registrar of Co-operative Societies had no jurisdiction to say anything about the concerned election.
(f) The Election Commission purportedly acted on the basis of an enquiry report of an Enquiry Officer who was purportedly delegated the power to enquire by a Dy. Registrar whom the Arbitrator appointed to enquire and such exercise of power to appoint Enquiry Officer was beyond the scope of the power conferred on the Arbitrator.
(g) Since admittedly the Arbitrator had no jurisdiction to decide the dispute, all the actions including the order for enquiry were nullity and hence any enquiry report prepared on the basis of such void order of the Arbitrator is also null and void.
(h) There is no legal bar to acceptance of Asit's nomination since he is neither a defaulter to his society nor the society he represents is a defaulter of the respondent Bank. Hence, the cancellation of his nomination on the alibi of ethics is absolutely illegal and arbitrary. Contention of Respondent no. 13 (Giridhari):-
(12) Mr. Ghosh, Learned Counsel for Giridhari referred to the enquiry report submitted by the CDO, Hooghly, Range (H.Q.) and submitted that it would appear therefrom that Asit was a director of Pandua Engineering Co-operative Society Limited which had taken a loan of Rs.6 lacs from the respondent Bank. The said society defaulted in payment of the loan. Asit was a director of the said society.
Criminal case was initiated against the said society and the directors thereof including Asit. Hence, Asit's nomination should not have been accepted.
(13) Learned Counsel submitted that the enquiry report is a public document as envisaged by Sec. 74 of the Evidence Act and hence, can be accepted as evidence in any proceeding. In this connection learned Counsel relied on a decision of the Hon'ble Supreme Court in the case of Union of India-vs-H.C. Goel, AIR 1964 SC 364 and also on a judgment in the case of Nikhil Chandra Deb-vs.-State of West Bengal, (2013) 2 CHN (Cal) 342.
(14) Learned Counsel then referred to Sec. 32(7) of the 2006 Act which reads as follows:-
"Sec. 32(7). No member of a co-operative society shall be eligible (for being elected on the board and continued on the Board if-)
(a)He has been adjudged by competent court to be insolvent or of unsound mind;
(b) He has been convicted by a court of any criminal offence including moral turpitude or of any offence under this Act and sentenced to fine to imprisonment or both;
(c) He holds any office of profit in the co-operative society;
Provided that a member of an industrial co-
operative society composed of artisans or workmen or of a transport co-operative society composed of persons who live on manual labour, skilled or unskilled or of an engineers' co-
operative society or of a co-operative society established by tribals in receipt of salaries or wages from such category including labour and service co-operative societies shall be eligible for being elected on the board of the respective category or co-operative society;
(d) He has any interest in any business of the kind carried on by the co-operative society;
(e)(i) he is an individual, and is in default of payment of loans or price of goods received by him on credit from the co-operative society on the date of filing nomination or on the date of election, as the case may be;
(ii) he is an individual representing a co-operative society which is in default of payment of more than forty per cent of loans or price of goods received by it on credit from the co-operative society in relation to the board to which the election relates on the date of filing nomination or on the date of scrutiny, as the case may be;
(f) He has a direct or indirect interest in any agreement or contract to which the co-operative society is a party;
(g) He received any salary from the co-operative society except member of such societies which provide employment;
(h) Member disqualified under proviso to sub-
section (4) of section 31."
Referring to Clause (d) under Sub-Sec. 7 of Sec. 32, learned Counsel submitted that Asit has interest in the business of Pandua Engineering Co-operative Society which is a defaulter and is still in existence. The said society has not been dissolved in accordance with Sec. 106 of the 2006 Act and there is no publication as per Sec. 109 of the Act. Asit may not be a director of the society any more, but his membership of the said society continues. Hence, he is not eligible for being elected on the Board of a Co-operative Society. (15) Learned Counsel also referred to Rule 31(iv)(d) of the Bye-Laws of the respondent Bank which provides that a candidate for election to the office of the Board of Director of the Bank shall have no direct or indirect personal interest in any agreement or contract executed by the Bank nor he shall have gained in any form therefrom. (16) Learned Counsel then submitted that no consent of the Registrar of Co-operative Society was obtained as required under Rule 107 of the West Bengal Co-operative Society Rules, 2011. (In short 'WBCS Rules'). (17) Learned Counsel submitted that fraud unravels everything. It is true that Sec. 17 of the 2006 Act provides that a Co-operative Society is to be a body corporate. However, in the facts of the case, the corporate veil of the Pandua Co-operative Society should be lifted and the directors of the said society including Asit should be held guilty of the fraud committed in the name of the society. On the issue of fraud, learned Counsel relied on a decision of the Hon'ble Apex Court in the case of United India Insurance Co. Ltd.-vs.-Rajendra Singh, AIR 2000 SC 1165. He also relied on a decision of the Hon'ble Apex Court in the case of Ashoka Marketing Ltd.-vs.-Punjab National Bank, (1990) 4 SCC 406, in support of his submission that there is a difference between a corporation and a body corporate. Co-operative society is a body corporate and not a corporation and, hence, the distinct corporate personality that the law ascribes to a corporation cannot be done to a body corporate. The directors of a cooperative society are responsible for defaults committed by the society. (18) Learned Counsel further submitted that even assuming that a body corporate has a separate legal entity, the fictional corporate veil should be lifted in certain cases and particularly to prevent fraud and the facts of the present case warrant lifting of such corporate veil. In this connection learned Counsel relied on a decision of the Hon'ble Apex Court in the case of Delhi Development Authority-vs.-Skipper Construction Company (P) Ltd., (1996) 4 SCC 622. (19) On the aspect of lifting the corporate veil, learned Counsel also relied on a decision of the Hon'ble Apex Court in the case of New Horizons Limited-vs.-Union of India, (1995) 1 SCC 478. (20) Learned Counsel then submitted that in all circumstances, principle of natural justice need not be applied. Further, an order passed without observing the principles of natural justice need not be quashed in all situations. In this connection, Learned Counsel relied on a decision of the Hon'ble Apex Court in the case of Aligarh Muslim University-vs.-Mansoor Ali Khan, (2000) 7 SCC 529. Learned Counsel relied on paras 21, 22, 23 and 35 of the judgment which read as follows:-
"21. As pointed recently in M.c. Mehta-vs.-Union of India, (1999) 6 SCC 237 there can be certain situations in which an order passed in violation of natural justice need not be set aside under article 226 of the Constitution of India. For example where no prejudice is caused to the person concerned, interference under Article 226 is not necessary. Similarly, if the quashing of the order which is in breach of natural justice is likely to result in revival of another order which is in itself illegal as in Gadde Venketaswara Rao-vs.-Govt. of A.P. AIR 1966 SC 828 it is not necessary to quash the order merely because of violation of principles of natural justice.
22. In M.C. Mehta it was pointed out that at one time, it was held in Ridge-vs.-Baldwin, 1964 AC 40 that breach of principles of natural justice was in itself treated as prejudice and that no order 'de facto' prejudice needed to be proved. But, since then the rigour of the rule has been relaxed not only in England but also in our country. In S.L. Kapoor- vs.-Jagmohan, (1980) 4 SCC 379, Chinnappa Reddy, J. followed Ridge-vs.-Baldwin and set aside the order of suppression of the New Delhi Metropolitan Committee rejecting the argument that there was no prejudice though notice was not given. The proceedings were quashed on the ground of violation of principles of natural justice. But even in that case certain exceptions were laid down to which we shall presently refer.
23. Chinnappa Reddy, J. in S.L. Kapoor laid down two exceptions namely, if upon admitted or indisputable facts only one conclusion was possible, then in such a case, the principle that breach of natural justice was in itself prejudice, would not apply. In other words if no other conclusion was possible on admitted or indisputable facts, it is not necessary to quash the order which was passed in violation of natural justice. Of course, this being an exception, great care must be taken in applying this exception.
25. The 'useless formality' theory, it must be noted, is an exception. Apart from the class of cases of 'admitted or indisputable facts leading only to one conclusion' referred to above, there has been considerable debate on the application of that theory in other cases. The divergent views expressed in regard to this theory have been elaborately considered by this Court in M.C. Mehta referred to above. This Court surveyed the views expressed in various judgments in England by Lord Reid, Lord Wilberforce, Lord Woolf, Lord Bingham, Megarry, K. and Straughton L.J. etc in various cases and also views expressed by leading writers like Prof. Garner, Criag, De Smith, Wade, D. H. Clark etc. Some of them have said that orders passed in violation must always be quashed for otherwise the court will be prejudiced must be shown. Yet, some others have applied via media rules. We do not think it necessary in this case to go deeper into these issued. In the ultimate analysis, it may depend on the facts of a particular case."
(21) Learned Counsel then submitted that Pandua Engineering Co- operative Society is a necessary party in the present writ petition. Since such a necessary party has not been impleaded, no effective order can be passed in the writ application. In this connection, he relied on a decision of the Hon'ble Apex Court in the case of Vijoy Kumar Kaul-vs.-Union of India, (2012) 7 SCC 610. (22) Learned Counsel finally submitted that the antecedents of Asit are extremely dubious. Criminal charges were brought against him. He was discharged on the technical ground of non-filing of charge- sheet within the statutory period. He submitted that verification of the character and antecedents is one of the important criteria to decide whether a person is suitable for a responsible post. In this connection, learned Counsel relied on a decision of the Hon'ble Apex Court in the case of Jainendra Singh-vs.-State of Uttar Pradesh, (2012) 8 SCC 748.
Petitioner's in reply:-
(23) Mr. Basu submitted that Asit never took any loan from either Pandua Engineering Co-operative or from the petitioner no. 2 society.
The petitioner no. 2 society which Asit is representing is not a defaulter to the respondent Bank. Pandua Engineering Co-operative Society has no bearing upon Asit's nomination at present. (24) As regards Sec. 32 of the Act Mr. Basu submitted that the provisions of Sec. 32 have no manner of application to the facts of the instant case since the petitioner no. 2 is a co-operative credit structure entity. Hence, all submissions made on the basis of Sec. 32 are irrelevant. Asit has the requisite qualification for nomination as per the relevant provisions of law which is Sec. 134(C)(10) of the 2006 Act.
(25) To sum up, Mr. Basu submitted that the impugned orders are without any legal basis and are arbitrary. No reason has been given to come to the conclusion that nomination of Asit should be cancelled. The Co-operative Election Commission has not given any finding of its own. The Commission relied upon the finding of the Enquiry Officer who had no right to arrive at any finding. The enquiry report is a nullity since the Arbitrator who directed such enquiry, had no jurisdiction to do so. Hence, the impugned orders relying on such enquiry report are liable to be quashed.
Court's View:-
(26) The order that is principally under challenge is the one dated 5 February 2014 passed by the Commissioner, Co-operative Election Commission, West Bengal (in short the 'impugned order'). The order dated 12 February, 2014 passed by the Commissioner is a consequential order. If the impugned order goes, the subsequent order will necessarily also go.
(27) The impugned order records, inter alia, as follows:-
"Whereas, the enquiry report reveals three major aspects, firstly, rejection of nomination paper of Sri Giridhar Kar representing Belmuri Radhaballavpur GSKUS Ltd. for which the Enquiring Officer states that, 'The loan A/C status report of Belmuri Radhaballavpur GSKUS Ltd.....states that Sri Giridhar Kar has no overdue outstanding with the Society. It also states that Belmuri Radhaballavpur GSKUS Ltd. has overdue ST SAO A/C with branch...before 2001 as per books. Obviously, this has no relevance with the scrutiny of nomination paper on 17.10.2012. The ARO had to assess the loan position as on 17.10.2012 and it is not understood how the ARO rejected the nomination paper of Sri Giridhar Kar...'. The second aspect is the acceptance of nomination paper of Sri Asit Baran Chattopadhyay representing Shibnagar o' Jahira SKUS Ltd. for which the Enquiring Officer states that, 'it is alleged that Sri Asit Baran Chattopadhyay was a director of Pandua Egineering Co-op. Society Ltd. which took loan of Rs.6.00 lakhs from the Bank. The said Society has defaulted in payment of the same.' Though in the instant matter, 'the sole involvement of Sri Chattopadhyay could not be assessed', but his relationship with the defaulter society raised questions of ethics in terms of his nomination. The third aspect is the acceptance of nomination paper of Sri Dulal Chandra Ghosh representing Haral BBM SKUS Ltd. for which the Enquiring Officer states that, 'The Branch Manager and the concerned Supervisor of the Boinchi Branch of the Bank clearly informed on 16.12.2012 that the said Haral BBM SKUS Ltd. is defaulter of the Bank for more than one year. The ARO should have rejected the nomination of Sri Dulal Ch. Ghosh as per provisions of Section 134C (10) of the WBCS (Amendment) Act, 2010.' And Whereas, the enquiry officer commented upon 'that the scrutiny of nomination papers of the Hooghly Sadar Sub-Division (from where two members of the BOD are supposed be elected from 'B' class member societies like PACS & FSCS) has not been done by the ARO in proper observation of the provisions of the WBCS Act 2006 read with the WBCS (Amendment) Act, 2010 and is void ab initio.' In the circumstances as stated above; I am inclined to agree with the views of the Enquiring Officer and the undersigned has the reasons to believe that there remains serious discrepancies in the process of nomination of the delegate election in Hooghly Sadar PACS Constituency.
In exercise of power conferred upon me under Section 96(4) of the WBCS Act, 2006, I hereby declare the delegate election of the Hooghly Sadar PACS Constituency in Hooghly DCCB Ltd. as null and void and order that fresh delegate election be held in Hoogh Sadar PACS Constituency and consequently two seats of the Board of Directors of the Hooghly District Central Co-operative Bank Ltd. will be filled up from that constituency."
(28) The said order has been passed entirely on the basis of the report of the Enquiry Officer appointed by the Arbitrator. It is the specific case of Asit that such enquiry was held without any notice to him and without his knowledge. No opportunity of hearing was given to Asit. Asit did not get a chance to refute the allegations made against him which find reflection in the enquiry report. In my opinion, such an enquiry report cannot be used in any manner to pass any order that adversely affects Asit. It is an elementary principle of law that the report of an enquiry which has been held behind the back of a person without giving him an opportunity of putting forth his case or his version of the facts, cannot bind such person in any manner and no steps can be taken on the basis of such report which has adverse consequence for that person. This is a corollary of the principle of natural justice. No person can be condemned unheard. This assertion of Asit that the enquiry report was prepared behind his back could not be controverted by any of the respondents and nothing could be shown to establish that Asit had opportunity to present his case before the Enquiry Officer. Hence, I have to hold that nothing in such enquiry report is binding on Asit. Consequently, the order impugned which is based entirely on the report of the Enquiry Officer must be held to be bad and liable to be set aside.
(29) Further, the Commissioner of the Co-operative Election Commission does not appear to have applied his mind independently to the facts of the case before passing the impugned order. He blindly adopted the observations of the Enquiry Officer in the report. The Election Commission had earlier rejected Giridhari's prayer for rejecting Asit's nomination vide its order dated 2 August, 2013. Even assuming that the Commission still had the power to revisit the issue and declare the process of nomination of the delegate election in Hooghly Sadar PACS Constituency to be bad, such power ought to have been exercised by the Commissioner judiciously and after applying his mind independently to the facts of the case. Instead, after referring to the observations of the Enquiry Officer in his report, the Commissioner recorded a bald statement to the effect that he agreed with the views of the Enquiry Officer and had reasons to believe that there was serious discrepancies in the process of nomination of the delegate election in the Hooghly Sadar PACS Constituency. Such an order cannot be said to be a reasoned order. It is well-established that reasons are the life-blood of an order whether it be judicial/quasi- judicial/administrative/executive in nature. Such an order which has adverse civil consequence for a person must be informed with reasons so that the person concerned knows as to why the order was passed. Additionally, unless such an order is supported by reasons, an appellate or reviewing authority would not know what prompted the authority whose order is under appeal/review, to pass the order. Reasons indicate how the mind of an authority has worked in passing an order. Indicating reasons in support of an order has become a requirement of Rule of Law and a wing of the principle of natural justice. An unreasoned order is a dead order. On this ground also the impugned order cannot be sustained.
(30) Another reason which has persuaded me to set aside the impugned order is that the Arbitrator himself held that he had no jurisdiction in the matter and the dispute referred to him was not maintainable. If that be so, then appointment of Enquiry Officer by the Arbitrator was also without jurisdiction. The enquiry was null and void in the eye of law and so was the Enquiry Officer's report. A void report is non-est in the eye of law. Hence, the impugned order based entirely on the basis of such a report suffers from incurable infirmity. (31) I have carefully considered the contentions advanced by learned Counsel for Giridhari. With great respect to learned Counsel, none of the points urged by him has appealed to me. I am inclined to agree with Mr. Malay Basu's submission that the erstwhile directorship of Asit in Pandua Engineering Co-operative Society Ltd. has no bearing upon Asit's present nomination. The said society may have defaulted in repayment of loan to the respondent Bank and criminal action may have been initiated against the said society and the directors thereof including Asit. However, admittedly Asit was discharged, albeit on a technical ground as submitted by Learned Counsel for Giridhari. (32) It is not in dispute that the petitioner no. 2 is a Co-operative Credit Structure Entity. Sec. 134C (10) of the West Bengal Co- operative Societies Act, 2006 contains special provisions applicable to Co-operative Credit Structure Entities. Sub-Sec. 10 of Sec. 134C reads as follows:-
"S. 134C (10) No person shall be elected, nominated or co-opted or allowed to continue as a member of the board of a co-operative credit structure entity, if he is-
(a)A person who represents a society other than a primary agricultural credit co-operative society or a co-operative agriculture and rural development bank on the board of a central cooperative bank, the State Co-operative Bank or the State Cooperative agriculture and rural development bank, if such society he represents has committed a default towards the payments of such bank for a period exceeding ninety days;
(b) A person who committed a default towards the payments to a primary agricultural credit cooperative society or a cooperative agriculture and rural development bank, as the case may be, or represents a primary agricultural credit cooperative society or a cooperative agriculture and rural development bank on the board of a central cooperative bank or the State cooperative bank or the State cooperative agriculture and rural development bank, if such society he represents has committed a default towards the payments of such bank for a period exceeding one year unless the default is cleared;
(c) A person, who represents a society whose board is superseded."
(33) It is nobody's case that either Asit has defaulted in payment of any loan taken by him from the petitioner no. 2 society or that the petitioner no. 2 society has defaulted in repayment of any loan taken from the respondent bank. Hence, prima facie, Asit has the qualification for being nominated on the Board of Directors of the respondent Bank. I cannot accept the submission made on behalf of Giridhari to the effect that since Pandua Engineering Co-operative Society had defaulted in repayment of loan to the respondent Bank and since Asit had at that time been a Director of the said society, on the grounds of morality Asit's nomination by the petitioner no. 2 should not have been accepted.
(34) Neither Sec. 74 of the Evidence Act nor the decisions in Union of India-vs.-HC Goel (supra) and Nikhil Chandra Deb-vs.-State of West Bengal (supra) cited by learned Counsel for Giridhari have any manner of application to the facts of the present case. Further, the decisions on fraud and lifting the corporate veil cited by learned Counsel for Giridhari also, in my opinion, are in no way germane to the facts of the present case. Sec. 32(7) of the West Bengal Co-operative Societies Act, 2006 would not apply to the facts of the present case since admittedly the petitioner no. 2 is a Co-operative Credit Structure Entity and would be governed by the provisions of Sec. 134C of the said Act.
(35) I, however, make it clear that my observations regarding apparent eligibility of Asit to be nominated as a Director of the respondent Bank is prima facie and is not to be treated as a conclusive finding. The grounds for setting aside the impugned order are indicated in the other paragraphs above.
(36) In view of the aforesaid, the impugned orders dated 5 February, 2014 and 12 February, 2014 are quashed. This will, however, not prevent the respondent authorities from taking any action in accordance with law as they may be entitled to upon observing the principles of natural justice.
(37) In view of the aforesaid, WP No. 6455 (W) of 2014 is disposed of without, however, any order as to costs.
(38) Urgent certified photocopy of this judgment and order, if applied for, be given to the parties upon compliance with necessary formalities.
(Arijit Banerjee, J.)