West Bengal State Co-operative Bank Limited v. State of West Bengal
1981-09-16
A.K.SARKAR, M.M.DUTT
body1981
DigiLaw.ai
JUDGMENT M.M Dutt. J :– The appellants, the West Bengal State Co-operative Bank Limited and its Chairman Shri Ajit Kumar Saba have in this appeal, challenged the propriety of the order dated September 25, 1980 of a learned single Judge of this Court. The said order which has been signed by the learned Judge and appealed from is the "Operative portion of the order”. The judgment is stated to have been delivered, but the same is not to be found on record. Be that as it may, it is not disputed before us that two points were argued before the learned Judge on behalf of the appellant namely, (1) the provisions of section 26A incorporated in the West Bengal Co-operative Societies Act, 1973, hereinafter referred to as the Act, by the West Bengal Co-operative Societies (Second Amendment) Act, 1978 with effect from February 3, 1979 is ultra vires the provisions of Articles 14 and 19(1)(c) of the Constitution and (2) the appellant no 1, the West Bengal State Co-operative Bank Limited does not come within the Fifth Schedule also inserted in the Act by the said Amendment Act. 2. The appellant no. 1, the West Bengal State Co-operative Bank Limited, hereinafter referred to as the Society, is a co-operative society within the meaning of the Act. The last general meeting of the Society was held on September 24, 1976. In that meeting, the managing committee of the Society was re-constituted by the election of 1/3rd of its members in accordance with the provision of sub-s. (1) of S. 21 of the Act. Sub-section (3) of S. 21 inter alia provides that on the failure of the managing committee of the co-operative society to call the general meeting within the period of fifteen months, the Registrar shall call, or authorise any of his officers to call, a general meeting within the period of three months from the date of expiry of the aforesaid fifteen months. Under sub-s. (4) of S. 23, the State Government may, in special circumstances, permit the Registrar to call the general meeting even after the expiry of eighteen months, from the date of the last preceding meeting held under sub-s. (1). 3.
Under sub-s. (4) of S. 23, the State Government may, in special circumstances, permit the Registrar to call the general meeting even after the expiry of eighteen months, from the date of the last preceding meeting held under sub-s. (1). 3. As the list general meeting of the Society was held on September 24, 1976, the next general meeting was to be held and the managing committee to be re-constituted within the period of fifteen months, that is to say, by December 24, 1977. It Is also the case of thl: appellants that the general meeting could not be held by December 24, 1977 under certain unavoidable circumstances which are stated hereinafter. 4. The Society in its meeting held on August 14, 1977, decided to hold the next general meeting on December 18, 1977. Before the said general meeting could be held on the date fixed therefor, on October 31, 1977, the State Government in exercise of its power under proviso to S. 26(1) of the Act superseded the managing committee of the Society by a notification published in that regard in the Calcutta Gazette. The order of supersession was challenged by two Directors of the Society, one of whom being the appellant no. 2, by filing a writ petition in this Court on November 4, 1977. The said writ petition was admitted and a Rule Nisi being C.R. 6030(W) of 1977 was issued by this Court. An interim injunction was also granted restraining the respondents from giving any effect to the said notification dated October 31, 1977 and for interfering with the functioning of the managing committee of the Society. The said interim order was, however, vacated by A.K. Mookerji J by his order dated December 8, 1977. The petitioners in the said Rule Nisi preferred an appeal to the Division Bench of this Court against the said order vacating the interim injunction and filed an application for an interim order.
The said interim order was, however, vacated by A.K. Mookerji J by his order dated December 8, 1977. The petitioners in the said Rule Nisi preferred an appeal to the Division Bench of this Court against the said order vacating the interim injunction and filed an application for an interim order. The division Bench consisting of Anil Kumar Sen and B.C. Ray JJ, disposed of the appeal and the application for interim order by restoring the order of interim injunction passed by the learned trial Judge on November 4, 1977, but further restricting the same to the effect that the managing committee should carry on routine and day-to-day administration and should not sanction any loan or incur any non-routine expenditure except on prior sanction of the Secretary of the Co-operative Department, Government of West Bengal. On January 19, 1979, the said Rule Nisi in which the order of supersession of the managing committee of the Society was challenged came up for hearing before A.K. Mookerji J. It was represented before the learned Judge on behalf of the respondents that the order of supersession had been withdrawn and the managing committee of the Society had been restored on October 14, 1977. In view of the said representation, it was recorded by the learned Judge in his order that the Rule had become infructuous and, accordingly, the learned Judge discharged the Rule. It is the case of the appellants that in view of the supersession of the managing committee, the general meeting of the Society could not be held within the due date. 5. As the period of eighteen months had long expired since the holding of the last general meeting on September 24, 1976, after the order of supersession was withdrawn as represented to the learned Judge and as recorded by him in his order dated January 19, 1979, a letter dated February 5, 1979 was written on behalf of the managing committee of the Society to the Secretary, Government of West Bengal, Department of co-operation, requesting him to take appropriate steps for convening the general meeting of the Society in exercise of the power of the Government under sub-s. (4) of S. 21 of the Act.
Before the said letter, another letter dated January 3, 1979 was written by Shri J Sengupta, Managing Director of the Society who was an officer of the State government, to the Registrar of Co-operative Societies, West Bengal requesting him to take steps for the holding of the next general meeting. No action appears to have been taken by the State Government or by the Registrar regarding the holding of the general meeting. In the mean time, a writ petition was also filed by Shri Sudhir Chandra Neogy, one of Directors of the Society praying for a direction upon the respondents to hold the general meeting of the Society in exercise of the power of the Government under S. 21(4) of the Act. A rule Nisi was issued on the said application. While the said Rule was pending, the West Bengal Legislature passed the West Bengal Co-operative Societies (Second Amendment) Act, 1978. The said Act received the assent of the President of India on January 31, 1979 and came into effect from February 3, 1979. The provision of S. 26A and the Fifth Schedule were inserted into the Act, Section 26A provides as follows : “26A. Dissolution of managing committee in certain cases and appointment of special officer.
The said Act received the assent of the President of India on January 31, 1979 and came into effect from February 3, 1979. The provision of S. 26A and the Fifth Schedule were inserted into the Act, Section 26A provides as follows : “26A. Dissolution of managing committee in certain cases and appointment of special officer. – Notwithstanding anything to the contrary contained in this Act or in any other law for the time being in force – (a) the managing committee of any of the co-operative societies mentioned in the Fifth Schedule shall, if the election of members of the managing committee of such society has not been held within a period of fifteen months after the date of the last preceding meeting held under sub-s. (1) of S. 21, stand dissolved with effect from the date immediately following the day on which the said period of fifteen months expires; (b) with effect from the date of dissolution of the managing committee of a co-operative society under clause (a), the members of the managing committee of the said co-operative society shall be deemed to have vacated their offices; (c) upon such dissolution of the managing committee the Registrar shall, by notification in the Official Gazette, appoint a special officer for managing the affairs of the co-operative society and for making arrangement for the reconstitution of a new managing committee of the co-operative society in accordance with the provisions of this Act and the rules made thereunder and the by laws of the society within a period not exceeding one year from the date of such dissolution. Provided that till such special officer is appointed under this clause, the highest executive of the society, by whatever designation he may be called, shall manage the affairs of such society.
Provided that till such special officer is appointed under this clause, the highest executive of the society, by whatever designation he may be called, shall manage the affairs of such society. Explanation – In case of any dispute as to who is the highest executive of the society, the Registrar's decision shall be final; (d) with effect from the date of dissolution of the managing committee of a co-operative society under clause (a) – (i) all prosperities of the cooperative society shall vest in the Registrar; and (ii) subject to the control and direction of the Registrar the highest executive of the society or the special officer, as the case may re, shall exercise all the powers and perform all the duties which may, under this Act, the rules and the by-laws, be exercised or performed by the managing committee or any officer of the society; (e) where a special officer has been appointed under clause (c), the Registrar may, by order, fix the remuneration of the special officer, and the remuneration so fixed shall be paid out of the funds of the co-operative society whose affairs are managed by such special officer ; (f) the special officer appointed under clause (c) shall hold office until the managing committee is reconstituted.” The Fifth Schedule is also set out below : “FIFTH SCHEDULE Co-operative Societies (See section 26A) (1) Apex society; (2) Central Co-operative bank. (3) Central Co-operative land development bank. (4) Central society (5) Co-operative land development bank. (6) Primary co-operative bank,” 6. According to the respondents nos. 1 to 3, as the election of members of the Society was not held within a period of fifteen months after the date of the last preceding meeting held on September 24, 1976, the managing committee of the Society stood dissolved in view of the provision of S. 26A read with the Fifth Schedule inserted in the Act by the said West Bengal Co-operative Societies (Second Amendment) Act. 1978. 7. On February 12, 1979, the appellants moved a writ petition before A.K. Mookerji J challenging the constitutional validity of the West Bengal Co-operative Societies (Second Amendment) Act, 1978 inter alia inserting into the Act S. 26A and the Fifth Schedule A Rule Nisi out of which this appeal arises was issued. The Rule Nisi came up for hearing before another learned Judge of this Court.
The Rule Nisi came up for hearing before another learned Judge of this Court. As stated already the Rule was disposed of by an order dated September 25, 1980 of the learned Judge stated to be the “Operative portion of the order” though the judgment is not to be found on record. The first paragraph of the said order is as follows : “Operative portion of the order–This application is allowed and the Rule is made absolute so far as the provision of S. 26A(d)(i) is concerned, So far as the rest of the application is concerned it is dismissed and the Rule discharged. All interim orders are vacated. There will be no order as to costs.” By the remaining portion of the said order. the learned Judge refused the prayer of the appellants far stay of the operation of the said order and appointed Mr. Sunil Sengupta, Barrister-at-law and a retired officer of the National and Grindlays Bank Limited, as a Special Officer to carry out the functions and duties of the Special Officer within the meaning of S. 26A of the Act including all powers of the managing of committee and the Chairman and Vice-chairman thereof Being aggrieved by the said order of the learned Judge, the present appeal has been tiled. 8. The principal argument on behalf of the appellant has been made by Mr. R.C. Deb. His argument is supplemented by his learned Junior Mr. Mohitosh Majumdar. The contention of Mr. Deb is two-fold. First, he submits that S. 26A is an arbitrary piece of legislation and is violative of Article 14 of the Constitution. In elaborating this contention, the learned Counsel pointed out that though S. 26A(c) provides for the re-constitution of the managing committee of a co-operative society by the Special Officer appointed by the Registrar, in accordance with the provisions of the Act and the rules made thereunder and the by laws of the co-operative society within a period not exceeding one year from the date of dissolution, the rules do not provide for the election of all the members, but 1/3rd of the members. Under S. 26A(c), the arrangement for the election of the members of the Society has been directed to be held within a period not exceeding one year from the date of dissolution.
Under S. 26A(c), the arrangement for the election of the members of the Society has been directed to be held within a period not exceeding one year from the date of dissolution. It is further pointed out by the learned Counsel that if no election is held within a period of one year, there will be no election or Respondents-constitution of the managing committee of the co-operative society and by virtue of clause (f) of S. 26A a Special Officer appointed under clause (c) will held office permanently. It is contended that as S.21 of the Act contains the provision for holding election, there was no necessity for enacting S.26A. Counsel submits that S. 26A is bad for improper classification between those who are unable to hold the annual general meeting and those who are deliberately avoiding to hold the same. It is submitted that this improper classification is apparent on the face of the statement of objects and reasons as given in the bill that introduced the West Bengal Co-operative Societies (Second Amendment) Act, 1978. In view of the above, it is submitted by the learned Counsel that S. 26A is an arbitrary piece of legislation and is violative of Article 14 of the Constitution. In this respect we may note the contention of Mr. Majumdar. It is submitted by him that S. 26A is also violative of the fundamental right of the appellant no. 2 as guaranteed by Article 19(1)(c) of the Constitution. 9. The next contention of Mr. Deb, learned Counsel for the appellant is that the Society does not come within the Fifth Schedule of the Act and, as such, the provision of S. 26A does not apply to the Society. The Fifth Schedule contains six different types of co-operative society. It is the contention of the appellants that the appellant Society is not one of the co-operative societies as mentioned in the Fifth Schedule and, accordingly, there is no scope for the application of S. 26A to the Society. The dispute in this regard between the parties is whether the appellant Society is an apex society or not. It has been urged on behalf of the appellant that it is not an apex society and is not, therefore, amenable to the provision of S.26A. 10. On the other hand, Mr. Arun Prokash Chatterjee, learned Senior Standing Counsel appearing on behalf on the respondents nos.
It has been urged on behalf of the appellant that it is not an apex society and is not, therefore, amenable to the provision of S.26A. 10. On the other hand, Mr. Arun Prokash Chatterjee, learned Senior Standing Counsel appearing on behalf on the respondents nos. 1, 2 and 3 disputes the contention of Mr. Deb that S.26A is ultra vires Article 14 of Constitution on the ground of arbitrariness or improper discriminatory treatment. It is submitted by him that arbitrariness is a concept which is applicable only to the executive or administrative orders and not to legislative policies. It has been urged by the learned Senior Standing Counsel that S. 26A has not made equals unequals, and that in any event S. 26A has not made any hostile inequality. He submits that it is incorrect to say the rules framed under the Act do not provide for the election of all members of the Society. In this regard, he refers to rules 27, 28 and 29 of the Rules. With regard to the provision for re-constitution of the managing committee, it is submitted by him that under S.26A(c), the Special Officer has to make arrangement for the re-constitution of the managing committee within a period not exceeding one year from the date of dissolution. He has not to hold the election or re-constitute the managing committee within a period of one year from the date of dissolution. The constitution of the managing committee, according to the learned Counsel, can be made even after the expiry of the period of one year. It is submitted that there is, therefore, no question of arbitrariness in S. 26A(c) as contended on behalf of the appellants. It is also submitted by him that the statement of objects and reasons clearly shows the circumstances justifying the enactment of S. 26A. It is submitted that S. 26A is quite legal and valid and is not ultra vires either Article 14 or Article 19(1)(c) of the Constitution. 11. As to the question whether the Society comes within the Fifth Schedule of the Act, it is urged by the learned Senior Standing Counsel that the Society is an apex society and it, therefore, comes under the Fifth Schedule and the provision of S.26A is applicable to it.
11. As to the question whether the Society comes within the Fifth Schedule of the Act, it is urged by the learned Senior Standing Counsel that the Society is an apex society and it, therefore, comes under the Fifth Schedule and the provision of S.26A is applicable to it. Further, it is submitted by him that the members of the managing committee of the Society had no locus standi to file a writ petition and challenge the constitutional validity of S. 26A. It is contended that in view of S. 23(2) of the Act read with Rule 35(d) of the Rules all the members of the Society have now become disqualified as they have been in office for more than three years. It is submitted that all the members have ceased to hold office and they cannot seek election. So all the members will have to be elected and that is the provision of S. 26A. It is also the contention of the learned Senior Standing Counsel that the writ petition is not maintainable at the instance of any member of the managing committee of the Society as none of the members of the managing committee bas minimal legal interest. So, it is submitted that the appellant no. 2, the Chairman of the Society has no locus standi to represent the Society and maintain the writ petition. 12. We may first of all consider whether the appellant Society is an apex society or not. Apex society has been defined in section 2(b) of the Act as follows : “(b) “apex society” means a co-operative society whose area of operation extends to the whole of the State and the primary object of which is promotion of the objects, and the provision of facilities for the operation, of other co-operative societies which are its members.” Section 2(z9) provides that the “State co-operative bank” has the same meaning as in the Reserve Bank of India Act, 1934, (2 of 1934). Section 2(f) of the Reserve Bank of India Act defines State Co-operative Bank as follows : “(f) ‘State co-operative bank” means the principal co-operative society in a State, the primary object of which is the financing of other co-operative societies in the State.
Section 2(f) of the Reserve Bank of India Act defines State Co-operative Bank as follows : “(f) ‘State co-operative bank” means the principal co-operative society in a State, the primary object of which is the financing of other co-operative societies in the State. Provided that in addition to such principal society in a State or where there is no such principal society in a State the State Government may declare any one or more co-operative societies carrying on business in that State to be a State co-operative bank or banks within the meaning of this definition.” The following differences between an apex society as defined in S. 2(b) of the Act and a State co-operative bank as defined in section 2(z9) of the Act read with section 2(f) of the Reserve Bank of India Act arise : (1) The area of operation of an apex society is confined within the State ; the area of operation of a State co-operative bank extends to the whole of India by virtue of S. 1(2) of the Reserve Bank of India Act. (2) The primary object of an apex society is concerned only with the affairs of the co operative societies which are its members, but in the case of a State co-operative bank the primary object is not so confined to its members but extends to all other co-operative societies in the State. (3) The primary object of an apex society is the promotion of the objects, and the provision of facilities for the operation, of other cooperative societies which are its members, but the primary object of a State co-operative bank is only financing of other co-operative societies in the Sate. 13. The differences noted above in the respective definitions of an apex society and a State co-operative bank are substantial and significant too. One the face of the two definitions, it is difficult to say that a State co- operative bank is an apex society. The primary object of a State co-operative bank is financing, but the primary object of an apex society is not financing. In view of S. 3(c) read with the provision of Chapter V of the Banking Regulation Act, 1949, the provision of the said Act apply to a State co-operative bank.
The primary object of a State co-operative bank is financing, but the primary object of an apex society is not financing. In view of S. 3(c) read with the provision of Chapter V of the Banking Regulation Act, 1949, the provision of the said Act apply to a State co-operative bank. By virtue of S.6 of the Banking Regulation Act, a State co-operative bank may in addition to the business of banking carry on any one or more of the forms of business as mentioned in the several clauses of S.6. In other words, a State co-operative bank may carry on the banking business and other forms of business like a State co-operative bank. Under S.7 as amended by S. 56 of Part V of the Banking Regulation Act, no co-operative society other than a co-operative bank shall use as part of its name any of the words ‘bank’ ‘banker’ or ‘banking’ and no co-operative society shall carry on the business of banking in India unless it uses as part of its name at least one such words. Thus it appears that an apex society is debarred from carrying on the business of banking. The definition of an apex society as contained in S. 2(b) of the Act also does not provide for the carrying on of any banking business by an apex society ; whereas under the definition of a State co-operative bank as contained in S. 2(z9) read with S. 2(f) of the Reserve Bank of India Act, a State co-operative bank is entitled to carry on banking business. In this connection, we may refer to the definition of ‘financing bank’ as contained in S. 2(f) of the Act. It means the State Bank of India, a nationalized commercial bank, a central co-operative bank, a state co-operative bank, a central co-operative land development bank or any other bank, to be notified by the State Government the objects of which include the creation of funds out of which money is to be lent to the co-operative societies or other institutions or both. In is not disputed that an apex society is not a financing bank.
In is not disputed that an apex society is not a financing bank. We may now refer to S. 82 of the Act which provides as follows : (1) Every co-operative society shall be liable at any time to inspection – (a) by the Registrar or any person authorized by the State Government or by the Registrar in this behalf by general or special order ; (b) by the financing bank, if any or which it is a member and a debtor ; and (c) by the apex or central society, if any, of which it is a member.” It appears from clauses (b) and (c) of S. 82(1) of the Act that a destination has been made between financing bank and an apex or central society in case a State co-operative bank, which is a financing bank, was an apex society there would not have been any necessity for making such a distinction between an apex society and a State co-operative bank is not an apex society. 14. Apart from the co-operative societies which have been mentioned in the Fifth Schedule other co-operative societies have been defined in S. 2 of the Act. It is not the contention of the respondents that any co-operative society which has been defined in S. 2 of the Act is an apex society. It is the contention of Mr. Deb that the definition of a co-operative society under S. 2 of the Act is intended to cover that given in the definition. It is submitted by him that if a State co-operative bank come within the purview of the definition of an apex society, there was no necessity to define the State co-operative bank over again. It is contended that as a State co-operative bank is not an apex society, so it has been defined under S. 2(z9) of the Act read with S. (2f) of the Reserve Bank of India Act. In our opinion the contention is of much substance. When the things are similar and is covered by one definition, it is not necessary to define the said two things separately. We have already pointed out the differences between an apex society and a State co-operative bank. In our view, an apex society and a State cooperative bank are dissimilar having regard to their respective areas of operation, primary objects and the nature of business.
We have already pointed out the differences between an apex society and a State co-operative bank. In our view, an apex society and a State cooperative bank are dissimilar having regard to their respective areas of operation, primary objects and the nature of business. An apex society is a co-operative society simpliciter and not a bank, but a State co-operative bank is a co-operative society doing banking business within the meaning of the Banking Regulation Act. It is a scheduled bank being placed under the Second Schedule of the Resave Bank of India Act. Therefore, it is not correct to say that a State co-operative bank is an apex society. 15. The learned Senior Standing Counsel has drawn our attention to a certain statement under explanatory notes in the ‘Handbook of Concepts and Definitions or terms used in the Compilation of Statistical Statements relating to the Co-operative Movement in India’ issued by the Reserve Bank of India. In clause (i) of the explanatory notes, it is stated that a State co-operative bank, otherwise called the apex bank, is the principal co-operative society in a State which is registered under the Co-operative Societies Act in force in the State and the primary object of which is the financing of other co-operative societies in the State. Much reliance has been placed on the said statement by the learned Senior Standing Counsel. We do not, however. think that anything turns out of that statement. It is true that in that statement a State co-operative bank has been called the ‘apex bank’. But, in our opinion, no importance should be given on the said statement, as the expression ‘apex bank’ seems to have been loosely used. The question before us is whether a State co-operative bank is an apex society and not whether it is an apex bank. So, the said statement is of no help to the respondents nos. 1 to 3. 16. The learned Senior Standing Counsel has handed over to us a resolution of the Board of Directors of the Society, being resolution no. 5, dated September 22. 1978. It appears that by the said resolution it was resolved that the Society be affiliated to the West Bengal State Co-operative. Union as its member and empowered its Managing Director to sign the declaration form on behalf of the Society and to do all things necessary for the purpose.
5, dated September 22. 1978. It appears that by the said resolution it was resolved that the Society be affiliated to the West Bengal State Co-operative. Union as its member and empowered its Managing Director to sign the declaration form on behalf of the Society and to do all things necessary for the purpose. It is submitted that the decision of the Society to become a member of the West Bengal State Co-operative Union is an admission that the Society is an apex society Our attention has been drawn to rule 57 of the Rules which provides inter alia that all apex societies, district cooperative unions. co-operative societies having their areas of operation extending over more than one district etc. shall on payment of such annual membership fee as specified in the Schedule appended to rule 57, become members of the State Co-operative Union It is submitted that unless the Society is an apex Society, it could not be a member of the State Cooperative Union. 17. We are unable to accept the above contention of the learned Senior Standing Counsel. If under the statute concerned, the Society is not an apex society, we are afraid, the Society cannot by some acts convert it into an apex society Moreover, as pointed out by Mr. Deb, under rule 57 there is no bar of a State co-operative bank to become a member of the State Co--operative Union. It is submitted by him that the Society, which is not an apex society, can become a member of the State Co-operative Union as a co-operative society having its area of operation extending over more than one district in terms of rule 57. Be that as it may, whether a co-operative society is an apex society or not has to be decided on the basis of the provisions of the Act and where the co-operative society is a State co-operative bank also on the basis of the provisions of the Reserve Bank of India Act, 1934 and the Banking Regulation Act, 1949. Having considered the provisions of the said Acts, we have come to the conclusion that the Society is not an apex society within the meaning of S. 2(b) of the Act.
Having considered the provisions of the said Acts, we have come to the conclusion that the Society is not an apex society within the meaning of S. 2(b) of the Act. We, therefore, hold that the Society does not come under and is not included within the Fifth Schedule of the Act and that accordingly, the provision of S. 26A is not applicable to the Society• 18. There is another difficulty of the respondents nos. 1 to 3 apply the provisions of S. 26A to the Society. In Ali Ahmed v. State of West Bengal & ors. (F.M.A.T. No. 843 of 1981, disposed of on August 5, 1981, it has been held by us that S. 26A is prospective and not retrospective in operation, and that the section will apply only to those cases where the period of fifteen months expired after the section had come into force. In the instant case, the period of fifteen months had expired on December 24, 1977, that is to say, long before the enactment of the West Bengal Co-operative Societies (Second Amendment) Act, 1978 which inserted in the Act S. 26A and the Fifth Schedule. Thus it appears that apart from the question whether the Society is an apex society or not, S. 26A is inapplicable to the Society so far as the holding of the next meeting and the election of members of the managing committee are concerned. It is, however, contended by the learned Senior Standing Counsel that as the section is prospective, that is more the reason why it will apply to the Society. We are unable to accept the contention. Section 26A being prospective, it is not understandable how it would be operative in a case, like the present one, where the period of fifteen months and the period of one year mentioned in clause (c) of S. 26A had both expired before the provision of S. 26A came into force. The contention in our opinion, is unsound and is, therefore, rejected. 19. It is, however, contended by the learned Senior Standing Counsel that in any event the election of all the members has to be held, for all the members of the managing committee of the Society having been there for over three years they are disqualified for being elected or to remain as members of the managing committee.
19. It is, however, contended by the learned Senior Standing Counsel that in any event the election of all the members has to be held, for all the members of the managing committee of the Society having been there for over three years they are disqualified for being elected or to remain as members of the managing committee. In support of his contention the learned Senior Standing Counsel has drawn our attention to S. 23(2) of the Act and rule 35(d) of the Rules. Section 23(2) inter alia provides that no person who has been a member of a managing committee of a co-operative society for consecutive there terms or there years, whichever is less, shall be eligible for being a member of the managing committee of the said Society through re-election or by appointment or co-option within a period of two years from the date of his retirement or voluntary resignation, as the case may be. Under rule 35(d), a director shall cease to hold office if he becomes subject to any disqualification which debars him from seeking election as a director. Section 23(2) relates to the disqualification of a member of a managing committee to seek re-election, but rule 35(d) relates to cessation of a director to hold office if he is disqualified to seek election Sub-section. (4) of S. 23 lays down the disqualifications of a member of a co-operative society for being chosen as a member of the managing committee of a co-operative society. So rule 35(d) has no bearing on S. 23(2) of the Act. A member of the managing committee who is debarred from seeking Respondents-election in view of S. 23(2) of the Act is not debarred from continuing as a member of the managing committee. In this connection, reference may be made to the letter dated May 22, 1975 of the Jt. Registrar of Co-operative Societies, West Bengal to the Asst. Registrar of Co-operative Societies (Banerjee’s Co-operative Law and Practice in West Bengal, 4th Edition, page 168). In the said letter it has been stated that in opinion of the Government the continuance of a director, who is debarred from seeking re-election in terms of S.23(2) of the Act, will not be illegal because of the provision of rule 35(d). Therefore, even if the members of the managing committee of the Society are all debarred from seeking re-election, their continuance is lawful.
Therefore, even if the members of the managing committee of the Society are all debarred from seeking re-election, their continuance is lawful. Moreover, it is not the case of the respondents that any member of the managing committee of the Society has incurred any disqualification as mentioned in S. 23(4) of the Act so that he is debarred from seeking election. 20. Even assuming that the appellant no. 2 and the other directors have ceased to be members of the managing committee the question is whether or not such directors including the appellant no. 2 have locus standi to maintain a writ petition. It is not disputed that such directors still continue as the members of the Society. Therefore, they are not strangers to the Society, but they are interested in the affairs of the Society like an other member. It is difficult to hold that a member of a co-operative society will have no locus standi to file a writ petition relating to the constitution or Respondents-constitution of the managing committee. On the question of locus standi we may refer to a decision of the Supreme Court in Fertilizer Corporation Kamagar Union v. Union of India, AIR 1981 SC 344 in which Krishna Iyer J observed : “If a citizen is no more then a wayfarer or officious intervener without any interest or concern beyond what belongs to any one of the 660 million people of this country, the door of the Court will not be ajar for him. But he belongs to an organization which has special interest in the subject matter, if he has some concern deeper than that of a busybody, he cannot be told off at the gates, although whether the issue raised by him is justiciable may still remain to be considered.” Surely, an ordinary member of a co-operative society is not a mere person in the street or a busybody. He has undoubtedly a deeper concern than anybody who is not a member. Therefore a writ petition filed by him cannot be thrown away on the ground that he has no locus standi. We have so far preceded on the assumption that the directors have ceased to hold office which they have not. In the circumstances the contention of the learned Senior Standing Counsel relating to the locus standi of the appellant no. 2 is rejected. We hold that the appellant no.
We have so far preceded on the assumption that the directors have ceased to hold office which they have not. In the circumstances the contention of the learned Senior Standing Counsel relating to the locus standi of the appellant no. 2 is rejected. We hold that the appellant no. 2 has locus standi to maintain the writ petition. 21. In view of our findings that the Society is not an apex society and is not included within the Fifth Schedule of the Act, and that the provision of S. 26A of the Act is not applicable to the Society, we are not inclined to consider and decide the question whether the provision of S. 26A is ultra vires Article 14 or 19(1)(c) of the Constitution as argued on behalf of the appellants. 22. In the circumstances, the impugned order dated September 25, 1980 passed by the learned Judge is set aside and the Rule Nisi is made absolute. It is declared that the Society does not come under and is not included within the Fifth Schedule of the Act, that the provision of S. 26A is not applicable to the Society, and that the managing committee of the Society has not stood dissolved. The respondents nos. 1 to 3 and each of them is restrained from applying the provision of S. 26A of the Act to the Society or to take any action on the basis of the said provision. Let appropriate writ or writs in the above terms be issued. 23. The Administrators appointed by this Court are directed that they shall, within a fortnight from date, hand over charge of the Society to the appellant no. 2, the Chairman of the Society who will take over the charge of the Society on behalf of the managing committee of the Society, arid upon deli very of the charge, the Administrators shall stand discharged. 24. The appeal is allowed to the extent indicated above. There wilt, however, be no order as to costs. 25. The operation of this judgment will remain stayed for a period of one month from date. 26. While the judgment was being delivered, we were told by the learned Senior Standing Counsel that a Special leave petition was filed by the State respondent before the Supreme Court against our judgment in Ali Ahmed's case (supra).
25. The operation of this judgment will remain stayed for a period of one month from date. 26. While the judgment was being delivered, we were told by the learned Senior Standing Counsel that a Special leave petition was filed by the State respondent before the Supreme Court against our judgment in Ali Ahmed's case (supra). The leave petition was disposed of by an agreed order and our judgment was directed to be replaced by the agreed order. It was submitted by him that in the circumstances, we should not place any reliance on the said judgment. It was however, admitted by the learned Senior Standing Counsel that our judgment was not considered by the Supreme Court on merits, but by consent of parties, the Supreme Court disposed of the Special Leave Petition. We do not, therefore, think that there is any bar to our referring to and relying on the judgment in Ali Ahmed’s case (supra). A.K Sarkar, J. – I agree. Appeal allowed.