( 1 ) THIS writ petition is filed under Art. 226 of the Constitution of India. Having regard to the nature of the case, it is treated as a petition under article 227 also. ( 2 ) THE petitioners are constituents of a Co-operative Bank called 'the Devanagere Urban Co-operative Bank Ltd'. They have challenged in this case an interim order passed on 29-12-1973 by the Hon. Arbitrator of Co-operative Societies, who has been impleaded as the Ist Respt. in this petition, in Case Mis. 3/73-74 prohibiting the holding of the meeting of the board of Directors until further orders. Under the Bye-laws of Co-operative bank a Committee consisting of 15 members elected by the general body is entrusted with the power to manage the affairs of the Co-operative bank. Under Bye-law 34 it is provided that one-third of the members of the Committee should retire every year and that their successors should be elected at the annual general body meeeting held at the end of that year. ( 3 ) THE term of five members of the Committee expired on 23-9-1973 an which date the general body meeting was held to transact the severals items of business including the election of five members in the place of five retiring members On account of the rejection of the nomination paper of one of the candidates, disputes arose regarding the holding of the election. The order of rejection of nomination paper was challenged before this Court in WP. 2746 of 1973. In that case a stay order was issued prohibiting the holding of election. It is not disputed that the general body has not elected five members to succeed the five retiring members till today. When the meeting of the Board of Directors was called to transact the business of the Co-operative Bank on 26-10-1973, notices were mot sent to the five persons whose term expired on 23-9-1973. Aggrieved by the action of the bank in not sending them the notices, of the meeting, a dispute was raised by one of them by name Dodda Rudrappa under S. 70 of the Karnataka co-operative Societies Act, 1959 before the Asst. Registrar of Co-operative societies.
Aggrieved by the action of the bank in not sending them the notices, of the meeting, a dispute was raised by one of them by name Dodda Rudrappa under S. 70 of the Karnataka co-operative Societies Act, 1959 before the Asst. Registrar of Co-operative societies. His case before the Asst, Registrar of Co-operative Societies was that until his successor was elected, he was entitled to function as a member of the Committee by virtue of the proviso to sub-rule (3) of R. 13 of the Karnataka Co-operative Soctieties Rules, 1960, hereinafter referred to as the Rules. The said dispute was referred to the 1st Respt. for adjudication during the pendncy of the said dispute, the 1st Respt. passed an interim order on 28-12-1973 directing that further meetings of the Board of Directors should not be held without sending notices of meeting to the petitioner before him and to four other Directors who had also retired along with him. Although the interim order issued by the Arbitrator is is not quite happily worded, what he intended by that order was that whenever any Board meeting was held during the pendency of the said dispute before him. all the retiring members should be called to attend the said meeting. But on the next date, that is on 29-12-1973, he passed another ordpr directing that the Bank should not conduct the meetings of the Board of Directors until further orders. In view of the said interim order dt. 29-12-1973, the Board of Directors could not meet and dispose of the business of the Bank which it alone could deal with It would appear that the petitioners had made applications to the Bank to, grant them loans. Those applications could not be disposed of because the Board of Directors could not meet and 'dispose, of those applications. Hence the petitioners have approached this Court by this writ petition requesting the Court to set aside the order passed on 29-12-1973 and to direct the Bank to transact its business in accordance with law. ( 4 ) SRI Rama Jois, learned Counsel for the petitioners submits that the impugned order has brought the business of the Bank to a halt and unless the said order is set aside, the petitioners and several others who are constituents of the Bank would be seriously prejudiced. ( 5 ) SRI Deshpande, learned Counsel for the 3rd Respt.
( 4 ) SRI Rama Jois, learned Counsel for the petitioners submits that the impugned order has brought the business of the Bank to a halt and unless the said order is set aside, the petitioners and several others who are constituents of the Bank would be seriously prejudiced. ( 5 ) SRI Deshpande, learned Counsel for the 3rd Respt. Secretary of the Bank-submits that an order may be passed permitting the Secretary to convene a meeting of the remaining 10 Directors and to transact the business of the Bank. Sri Jayali, learned Counsel for the 2nd Respt. sub-mits that in view of the proviso to sub-rule (3) of Rule 13 of the Rules, the five members of the Committee whose term of office expired on 23-9-73 should also be permitted to participate in the meeting of the Board of directors. Sub-rule (3) of Rule 13 reads as follows : * * * * * * ( 6 ) THE contention of Sri Javali is that under the proviso, the 2nd respt, and the other four Directors who retired on 23-9-1973 are entitled to participate at the meeting of the Board of Directors. The argument of sri Deshpande is that the proviso applies only to a case where the entire body of Directors retire on any specified date or on the date of the annual general body meeting, but would not apply to the case of those Directors who retire by rotation. In other words, he argues that in a case where one- third of the Directors retire on any specified date or at the general body meeting whether election is held to fill up their places or not, the remaining directors alone can constitute the Committee until election is held to fill up the vacancies caused by the retirement of one-third of the Directors. In support of his argument Sri Deshpande points out that whereas in the main part of sub-rule (3) of Rule 13 there is a reference to the expiry of the term of office of the members of the Committee, in the proyiso, the reference is only to a Committee whose term of office expires on any specified date.
In support of his argument Sri Deshpande points out that whereas in the main part of sub-rule (3) of Rule 13 there is a reference to the expiry of the term of office of the members of the Committee, in the proyiso, the reference is only to a Committee whose term of office expires on any specified date. He therefore submits that the proviso is applicable only to a case where the term of office of all the members of the Committee comes to ah end on a specified date and not to a case where one-third of the members of the Board of Directors retire. I find it difficult to agree with the submission made by Sri Deshpande. The main part qf sub-rule (3) deals with the election of members of a Committee and the time within which it should be held. The rule provides that if no date is specified in the bye-laws, the term of office of the members of the Committee shall be deemed to expire at the time qf the annual general meeting and the election of the new members shall be held at such annual general meeting. Sub-rule (3) refers not merely to a case where all the members of a Committee retire on a specified date but also to a case where only certain members of the Committee retire. The proviso to the said rule should be interpreted in the context of the rule. It is a settled rule of construction that a proviso should be interpreted as including within its scope the subject matter which is dealt with in the rule 10 which it is added as a proviso. In Mullins v. Treasurer of the Counter of Surrey, (1880) 5 QBD. 170, 173 it is observed as follqws :" When one finds a proviso to the section, the natural presumption is that but for the proviso the enacting part of the section would have included the subject matter of the proviso. "applying the above rule of construction it should be held that the proviso in this case applies to all caes where the term of office of the members of a Committee conies to an end either on a specified date or at the annual general meeting where the election of new members would take place to succeed the retiring members The proyiso to sub-rule (3) has a purpose to fulfil.
Co-operative institutions are corporate bodies, and they function through a Board of Directors or a Managing Committee consisting of members who are elected from time to time. In order to avoid a break or hiatus in the continuity of the tenure of members on the Board, the proviso has been enacted so that retiring members can continue to hold the office of the members until their sucessors are elected. I am of the view that there is no reason to hold that the proviso does not apply to a case where only some of the members of the Committee or Board retire. The contention of Sri Deshpande has therefore to be rejected. ( 7 ) THE impugned order dt 29-12-1973 is liable to be set aside as it interferes seriously with the working of the Bank and also for the reason that the order in questiion is in excess of the jurisdiction of the 1st Respt. It was not open to the 1st Respt. to pass an order prohibiting the holding of the meetings qf the Board of Directors in a case where the limited question for enquiry was whether the five members whose term expired on 23-9-1973 should be invited to the meetings of the Directors or not. The order passed by the 1st Reapt. dt. 29-12-1973 is therefore set aside. ( 8 ) IT is declared that all the five members of the Board of Directors of the Co-operative Bank who retired on 23-9-1973 are entitled to function as members of the Board of Directors by virtue of the proviso to sub-rule (3) of Rule 13 of the Rules until their successrs are elected. The Hon. Secty. of the Bank is directed to issue notices to the five members of the Board who retired on 23-9-1973 to all the meetings of the Board of Directors until their successors are ejected. The abqve case is disposed of accordingly. No costs. --- *** --- .