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1974 DIGILAW 213 (KAR)

FAKIRAIAH CHANNAMALLAIAH HIREMATH v. SAVANUR TALUKA PRIMARY CO-OP LAND DEVPT BANK

1974-09-09

K.J.SHETTY

body1974
( 1 ) THE validity of an order made by the Deputy Registrar of Co-operatlive soceities, Dharwar, under bye-law 18 (b) of the Savwuir Taluk Primary co-operative Land Development Bank Ltd (hereinafter called 'the bank'), is challenged in this petition under Art. 226 of the Constn. ( 2 ) THE petitioners were nominted to the first Board of Directors of the Bank, for a period of one year with effect from 19-4-1971, Their term was again extended by one more year from 18-4-1972 to 18-4-1973. During the second term, the bye-law18 (b) of the Bank was amended on 14-6-1972 providing for nomination of the first Board of Directors for a period of three years On 13-4-1973 the Deputy Rgeistrar made an order reconstituting the Board of Directors nominating petitioners 5 to 7 and respondents 2 to 7. The reconstituted Board would remain till 19-4-1974. The case of the petitions is that the Denuty Registrar had no power to reconstitute the Board of Directors, when the petitioners had a right to remain in office for a full term of three years up to 17-4-1974. They, therefore, challenge the validity of the order of the Dy Registrar primarily on the ground that that order has taken away, their vested right, conferred on them by the amended byw-law18 (b ). It is also contended that they have a right to remain in office until a new Committee of management is elected in accordance with law, as provided by the proviso to Rule 13 (3) of the Karnataka co-operative Societies Rules, 1960. ( 3 ) BOTH the rights claimed by the petitioners are closely linked with each other. If the petitioners establish their they have a right to remain in office for three years, them perhaps they may have a right to continue till a new Committee of management is elected, but not othenwise. But it seems to me that the first right claimed by the petitioners cannoft be the subject-matter of investigation in this petition under Art. 226 That right in claimed under the Bye-law which has no statutory force. The Bye -laws have been framed no doubt under the provisions of the Karnataka Co-op societies Act, but they are similar in nature to the Articles of Association of a Company incorporated under the Companies Act. The Bye -laws have been framed no doubt under the provisions of the Karnataka Co-op societies Act, but they are similar in nature to the Articles of Association of a Company incorporated under the Companies Act. Dealing with similar bye-laws, the Supreme Court in Co-op Central Bank v. Addl Industrial tribunal, AIR 1970 SC 245 , observed at Page 252 thus :"we are unable to accept the submission that the Bye-laws of a co-operative Society framed in pursuance of the provisions of the Act can be held to be law or to have the force of law. It has no doubt been held that, if a statute gives power to a Govt or other authority to make rules, the rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute. That principle, however, does not apply to Bye-law of the nature that a co-operatives society is empowered by the Act to make. The Bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society. They may be binding between the persons affected by them, but they do not have the force of a statute. In respect of By-laws laying down conditions of service of the employees of a society, the Bye-laws would be binding between the society and the employees just in the same mpniuar as conditions of service laid down by contract between the partier In fact, alter such Bye-laws laying down the conditions of service are made and any person enters the employment of a society those conditions of service will have to be treated as conditions accepted by the employee when entering the service and will thus bind him like conditions of service specifically forming part of the contract of service. The bye-laws that can be framed by a society under the Act are similar in nature to the Articles of Association of a Company incorporated under the Companies Act and such Articles of Association have never been held to have the force of law. "following the said decision, this Court in d. P. Dharuka v. Stock exchange, Bombay, WP. 2271/74 dt. "following the said decision, this Court in d. P. Dharuka v. Stock exchange, Bombay, WP. 2271/74 dt. 5-9-74, observed :" If a member contravenes the terms of the Bye-laws or if the stock Exchange proceeds in contravention of the Bye-laws, which have no statutory force, the aggrieved party cannoit approach the High court for relief under Art. 226. " ( 4 ) WHEN the Bye-laws have no statutory force, the contravention of any, even assuming it be true, cannot form the basis for a petition under art. 226 of the Constitution. ( 5 ) THERE is one other reason to dismiss petition. The petitioners claimed that they have right to remain in office till 17-4-1974. They have obtained an order staying the order of the Deputy Registrar reconstituting the Beard of Directors. The result is, the petitioners are continuing in office till today i. e. , 9-9-1974. They have secured more relief than what they have claimed. The petition has thus become infructuous. ( 6 ) TN the result, the petition fails and is dismissed. In the circumstances. I make no order as to costs. --- *** --- .