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Allahabad High Court · body

1967 DIGILAW 294 (ALL)

Satyapal Gupta v. State of U. P.

1967-08-22

SATISH CHANDRA

body1967
ORDER Satish Chandra, J. - This petition under Article 226 of the Constitution prays that the order of the State Government of 15th May, 1967, be quashed and the respondents be directed not to interfere with the petitioner's functioning as Directors on the Board of Directors of the Budaun Zilla Sahkari Bank, Limited. 2. Budaun Zilla Sahkari Bank, Limited is a co-operative society registered under the Co-operative Societies Act, 1912. Under its bye-laws the Bank has three categories of shareholders. A class shareholders consist of the Uttar Pradesh Government or the Uttar Pradesh Co-operative Bank. These are called special members. Then other co-operative societies, whose registered office is in Budan, are called B class or ordinary members. The third category is of C class shareholders which is of individuals being over 18 years in age or who are residents in the district of Budaun or held property or carry on business or trade therein. Bye-law 49 provides for the constitution of the Board of Directors. The Board is to consist of the President, three nominees of A class shareholders and 12 other persons elected by B and C class shareholders. Bye-law 51 provides for the tenure of the directors. The Directors elected by B and C class shareholders are to -remain in office for three years till the holding of the annual general meeting. The Directors nominated by A class shareholders are to retain their offices till the next annual general meeting or the nomination of other persons. The annual general meeting of the Bank was held in January, 1967. On 17th March, 1967, the State Government nominated the two petitioners on the Board of Directors of the Bank. This order, a copy whereof is Annexure A to the petition, stated that the Government has nominated the following persons as their representatives on the Boards of the Bank for the current year. Thereafter on 15th May, 1967, the State Government cancelled the existing orders on the subject and nominated respondent Nos. 2 and 3 on the Board of the Bank for the current year. This order is challenged on two distinct grounds. It is urged that the order is without power. The State Government have no power under the bye- laws to cancel the nomination and change them before the next annual general meeting. 2 and 3 on the Board of the Bank for the current year. This order is challenged on two distinct grounds. It is urged that the order is without power. The State Government have no power under the bye- laws to cancel the nomination and change them before the next annual general meeting. In the next place it is submitted that the order was passed mala fide and was an abuse of power. 3. The first question depends upon the interpretations of bye-law 51. The bye- laws of the Bank are in Hindi. Bye-law 51 provides that except the three nominated Directors of A class all the other Directors will be elected by B and C class members. They will remain in office for three years till the holding of the annual general meeting. The actual phrase is : " tks rhu o"kZ rd okf"kd lk/kkj.k lHkk ds gksus rd bl in~ij inklhu jgsaxsaA" in respect of A class shareholders the phrase is:- " v Js.kh ds fgLlsnkjksa }kjk euksuhr lapkyd vxyhof"kZd lk/kkj.k lHkk ;k nwljs O;fDr euksuhr gksus rd inklhu jgsxsaA" 4. For the petitioner it was submitted that the elected Directors have a fixed tenure of three years ending with the annual general meeting. Similarly the Directors nominated by A class shareholders have a fixed tenure till the next annual general meeting. The provision that they will retain office till other persons are nominated refers to the nomination of their successors after the annual general meeting. This provision was made in order to avoid a gap between the retirement of the existing nominees and the taking over of the successor nominee Sri S. C. Khare, learned Counsel for the petitioners, invited my attention to the provisions in the various Acts Like the U.P. Municipalities Act, the Kshettra Samitis and Zifa Parishads Act, Companies Act. etc. to show that provision for continuance or retention of an office bearer till the successor takes charge is a well-accepted legislative practice. The provision in bye-law 51 in respect of the elected as well as the nominated directors only followed that practice. Learned Counsel did not submit that legislative practice can over-ride the clear language of the provision. 5. In my opinion the provision as to the tenure of elected and nominated directors is couched in different languages. The provision in bye-law 51 in respect of the elected as well as the nominated directors only followed that practice. Learned Counsel did not submit that legislative practice can over-ride the clear language of the provision. 5. In my opinion the provision as to the tenure of elected and nominated directors is couched in different languages. About the elected directors the bye-law says that they will remain in office till the holding of the annual general meeting. The two termini that is to say the three years and the annual general meeting are not dis- connected with each other. The three years, period is hence expressly provided as ending with the convening of annual general meeting. Such Directors are to be elected at the annual general meeting and hence their three years, term legitimately was provided to end with the holding of the annual general meeting. 6. But in the case of nominees of A class shareholders there is no provision for election by the A class shareholders. The nominees of A class shareholders remain on the Board till the next annual general meeting or till other persons are nominated. The word " or " is significantly present in the clause relating to A class shareholders. It has not been used in the clause dealing with the tenure of the directors elected by B and C class shareholders. The use of the word " or " in the context disjoins the two termini of their tenure. They are to remain in the office till the next annual general meeting or till other persons are nominated. The language of this clause, in my opinion, clearly contemplates two distinct termini of the tenure of the nominated directors, The term of the nominated directors is not fixed till the annual general meeting. Their term can acme to an end with the nomination of other persons also. 7. For the petitioner it was urgent that the second part of the clause refers to the nomination of the successors of the original nominees, and the successors were contemplated to b nominated only at the next annual general meeting. If the intention was to provide for the continuance of a nominee till his successor had been appointed at the annual general meeting, the bye-law would have at least utilised the proper word to denote a successor. If the intention was to provide for the continuance of a nominee till his successor had been appointed at the annual general meeting, the bye-law would have at least utilised the proper word to denote a successor. The word " successor " is translated in Hindi as" mrjkf/kdkjh". The bye-laws would have used the word instead of saying " nwljs O;fDr" (other -persons). By-law 5 of. the Bank providing for the various classes. of shareholders provides for a qualification of age in respect of C class shareholders. Then it says that the qualification of age will not apply to the successors " mrjkf/kfj;ksa" of dead persons and the nominated persons " euksuhrO;kDr;ksa" The authority making the bye-laws was conversant with these two concepts of words. It can be assumed that if the intention in bye-law 51 was as contended for by the learned Counsel for the petitioner the appropriate word would have been used. On its present language the position is clear. The nominees of A class shareholders have an insecure term. It comes to an end when other persons are nominated. The language of this clause shows that the power of A class shareholders to change their nominees is untrammelled. The impugned order of the State Government cancelling the earlier order nominating the present petitioners and making fresh nominations was within its powers. 8. The second point that the impugned order was in abuse of powers has not, in my opinion, been established. The petitioners claim that they belong to the Congress Party. In April 1967, the Congress Ministry in the State resigned and a new Government under the Chief Minister ship of Sri Charan Singh was formed by the United Legislative Party. The present Government adopted a policy to crust Congress men from the offices held by them in the different institutions in the State. The Minister and the Deputy Minister for Co-operative Department belong to Jan Sangh Party. On 15th May, 1967, a general order was issued by them to cancel the nominations of the Directors in various co-operative societies in the State and nominating members of the Jan Sangh party as Directors in their place. The petitioner has not alleged that the various nominated Directors on the Boards of different co-operative societies in the State were Congressmen when the impugned order was passed. The petitioner has not alleged that the various nominated Directors on the Boards of different co-operative societies in the State were Congressmen when the impugned order was passed. In the absence of any allegation or proof of this basic fact, the other assertions cannot be held to have proved-the allegation that the impugned orders have been passed in pursuance of the policy to oust Congressmen from the offices held by them in different institutions in the State. 9. It has also been alleged that numerous orders have already been passed or proceedings initiated against a large number of societies in Uttar Pradesh under rule 31 of the Co-operative Societies Rules or under rule 175 of the Co-operative Societies Rules simply to oust the members of the Indian National Congress from the control and management of the different co-operative societies in the State. No facts or details have been mentioned to sustain this vague assertion, except another equally vague allegation that a similar order in respect of Pratapgarh District Co-operative Federation was challenged in this Court by means of a writ petition. The writ petition was admitted and a stay order given by a Bench. This does not prove any- thing. Even the nature of the order challenged in that writ petition has not been mentioned. All these allegations have been denied in the counter-affidavit. It has been asserted that the changes have not been made with any ulterior motive, but the action has been taken in good faith to carry out the policy of the Government in a proper manner. The petitioners have not filed even a rejoinder affidavit. On this material the charge of mala fides and abuse of powers cannot be upheld. In the result, the petition fails and is dismissed with costs.