JUDGMENT - Dr. G.F. COUTO, J.:---The short question that this writ petition gives rise to is whether it was open to the Government to appoint a Chief Executive to the petitioner Bank after it became a Multi State Co-operative Society. 2. The first petitioner is a Society registered under the provisions of the Maharashtra Co-operative Societies Act, 1960, as applied to the Union Territory of Goa, Daman and Diu. Its authorised share capital is of Rs. 1,25,00,000/-, the total subscribed capital being of Rs. 1,26,79,400/- out of which Rs. 50,39,000/- had been subscribed by the Government of Goa. The petitioner Bank's borrowings and debentures are guaranteed by the Government of Goa and besides, the bank has purchased Government bonds worth Rs. 60,00,000/-. Its area of operation and the objects extended to the whole territory of the then existing Union Territory of Goa, Daman and Diu and it has branches in Goa, Daman and Diu. The Multi State Co-operative Societies Act, 1984, for short, the Act, came into force on 16th September, 1985 but the Bye-laws of the first petitioner continued as originally framed without being altered or rescinded, and on 14th October, 1988, the Government of Goa issued and Order appointing Shri Shakti Sinha, I.A.S. ,Secretary (G.A.), Managing Director of the petitioner Bank. Petitioners contend that the aforesaid appointment is violative of the provisions of the Act, as the right to appoint the Chief Executive is exclusively vested in the Board of Director by section 42(2)(d) and reiterated in section 44, and not in the Government. 3. In order to elaborate the above submissions, Mr. S.K. Kakodkar, the learned Counsel appearing for the petitioners, invited our attended to the relevant provisions of the Act, particularly to section 2(b) which makes the Act applicable to all Multi State Co-operative Societies and to section 3(k) which defines Multi State Co-operative Society as meaning a Society registered or deemed to be registered under the Act, including a national Co-operative society. He then, took us through section 95 which deals with the Co-operative Societies functioning immediately before the reorganisation of a State and urged that with the reorganisation of the Union Territory of Goa Daman and Diu Reorganisation Act, 1987, the first petitioner became a Multi State Co-operative Society governed by the provisions of the Act. He then, took us through section 95 which deals with the Co-operative Societies functioning immediately before the reorganisation of a State and urged that with the reorganisation of the Union Territory of Goa Daman and Diu Reorganisation Act, 1987, the first petitioner became a Multi State Co-operative Society governed by the provisions of the Act. Its section 95 inter alia, provides, he argued that the existing Bye-laws of a Co-operative Society which became Multi State Co-operative Society after the reorganisation of the State within whose territory it had its objects will continue to govern such Society inasmuch as they are not inconsistent with the provisions of the Act. Now, Bye-law 43 of the petitioner Bank's Bye-laws imposes on the Government the obligation to appoint a Managing Director to it on such terms and conditions as the Government may deem fit. Such Managing Director is a ex-officio member of the Board of Directors and also is, by virtue of its Clause (b), the Chief Executive of the Bank who is responsible for its general administration. This Bye-law, particularly the aforesaid Clause (b), being according to Mr. Kakodkar, inconsistent in principle with the provisions of the Act inasmuch as the power to appoint the Chief Executive is vested in the Board of Directors and not in the Government, could not have been taken recourse of by the Government to appoint a Managing Director, any by necessary implication, a Chief Executive to the First petitioner. He, therefore, contended that the impugned Order appointing Shri Shakti Sinha as Managing Director of the petitioner Bank is not valid as it will necessarily also be, by virtue of the aforesaid Clause (b) of Bye-law 43, the Chief Executive of the Bank. The learned Advocate General did not dispute most of the above propositions and in particular, he conceded that after the organisation of the former Union territory of Goa, Daman and Diu and the creation of the State of Goa, the petitioner Bank has become a Multi State Co-operative Society, and further, that the said Society is deemed to be registered as a Multi State Co-operative Society under the corresponding provisions of the Act. He however, contended that Bye-Law 43 is not substantially inconsistent with the Act, for although the Managing Director is by virtue of its Clause (b) the Chief Executive of the Bank, the said Bye-law merely contemplates the appointment of a Managing Director. He however, contended that Bye-Law 43 is not substantially inconsistent with the Act, for although the Managing Director is by virtue of its Clause (b) the Chief Executive of the Bank, the said Bye-law merely contemplates the appointment of a Managing Director. Therefore, be urged, the impugned Order in entirely valid as merely incorporating the appointment of Shri Sinha as Managing Director of the petitioner Bank. 4. It is seen from the above rival contentions, that it is common ground that after the reorganisation of the former Union Territory of Goa, Daman and Diu and the creation of the Goa State, the petitioner's Society has become a Multi State Co-operative Society. Section 95 of the Act indeed provides that where the virtue of the provisions of Part II of the States reorganisation Act, 1956, or any other enactment relating to reorganisation of States, any Co-operative society which immediately before the day on which the reorganisation takes place, had its objects confined to one State becomes, as from that day, a Multi -State Co-operative society and shall be deemed to be a Multi State Co.-operative society registered under the corresponding provisions of the Act. It further provides that the Bye-Laws of such society shall, insofar as they are not inconsistent with the provisions of the Act, continue to be in force until altered or rescinded. It is thus clear that a Co-operative Society which had its objects confirmed to one State and has become a multi State Co-operative Society as a result of the reorganisation of the State will continue to be governed by its old Bye-Laws inasmuch as these Bye-laws are not inconsistent with the Act until they are altered or rescinded. 5. Admittedly, the Bye-laws of the first petitioner which were framed prior to its becoming Multi State Co-operative Society had not yet been altered, nor they were rescinded. Hence, the question that falls for our determination is whether the Bye-law 43 is inconsistent with the provisions of the Act. It reads as under :--- "(a) There shall be a Managing Director appointed by the Government of Goa, Daman and Diu on such terms and conditions as the Government may think fit. The Managing Director shall be the Ex Officio member of the Board of Directors and all Committees appointed by the Board. It reads as under :--- "(a) There shall be a Managing Director appointed by the Government of Goa, Daman and Diu on such terms and conditions as the Government may think fit. The Managing Director shall be the Ex Officio member of the Board of Directors and all Committees appointed by the Board. The Managing Director shall be an officer not below the rank of secretary or Joint secretary to the Government of Goa, Daman and Diu. (b) The Managing Director will be the Chief Executive of the Bank and will be responsible for the Central Administration of the Bank. (c) After the return of the share capital and loans provided, if any by the State Government, the Managing Director may be appointed by the Board of the Bank." In turn, section 42 of the Act which deals with the powers and the functions of the Board of Directors, provides in its sub-section (1) that the Board may exercise all such powers as may be necessary or expedient for the purpose of carrying out its functions under the Act and lays down in sub-section (2) that without prejudice to the generality of the aforesaid power, such power shall include inter alia, the power to appoint a Chief Executive and such other employees of the Society as are not required to be appointed by the Chief Executive. Then, section 44 deals with the Chief Executive and its sub-section (1) provides that there shall be a Chief Executive, by whatever designation called, of every Multi State Co-operative Society, to be appointed by the Board and he shall be a full-time employee of such Multi State Co-operative Society. It is thus clear from the above provisions of the Act and it is, as such, undisputable that the power to appoint Chief Executive is exclusively vested in the Board, and further, that the Chief Executive shall be a full time employee of the Multi State Co-operative Society. Now, under Bye-law 43, the Managing Director is to be appointed by the Government and he shall Ex-Officio Member of the Board of Directors as well as the Chief Executive of the Bank who will be responsible for its general administration. Now, under Bye-law 43, the Managing Director is to be appointed by the Government and he shall Ex-Officio Member of the Board of Directors as well as the Chief Executive of the Bank who will be responsible for its general administration. It unquestionably flows from the above, and without hesitation we so hold, that Clause (b) of Bye-Law 43 under which the Managing Director appointed by the Government becomes the Chief Executive of the Bank is materially inconsistent with the provisions of section 42(2)(d) as well as of section 44 of the Act. Indeed, the Managing Director of State Bank appointed under Bye-law 43 will be by virtue of its Clause (b) its Chief Executive, although under Clause (d) of section 42(2), the power to appoint the Chief Executive is vested in the Board and not in the Government . In addition, section 44 of the Act postulates that the Chief Officer appointed by the Board shall be a full time employee of the Multi State Co-operative Society, whereas Bye-law 43(a) prescribes that Managing Director appointed by the Government shall be an Officer not below the rank of Secretary or Joint Secretary. This circumstances, namely that the Managing Director appointed by the Government shall be an Officer not below the rank of Secretary or Joint Secretary is a pointer and indicates that such Managing Director appointed by the Government under Bye-law 43(a) will not in all probabilities, be a full-time employee of the Multi State Co-operative Society as required by section 44 of the Act. In our view, although there is no bar and it will be permissible for the Government under the Multi State Co-operative Societies Rules, 1985 to appoint under Bye-Law 43(a) a Managing Director to a Multi State Co-operative Society, such Managing Director shall, in truth, be merely a nominee of the Government and he shall not be entitled to exercise the powers and to discharge the functions of the Chief Executive, since under section 42(2)(d) of the Act, the power to appoint the Chief Executive is exclusively vested in the Board, with the result that as regards the Multi State Co-operative Societies, the Government has ceased to have the powers of appointment which were vested in it by Bye-law 43(b). 6. Mr. 6. Mr. Kakodkar is, therefore, entirely right in his submission that the Managing Director appointed by the Government under Bye-law 43, cannot be the Chief Executive of the first petitioner. However, in the view we have taken, it does not become necessary to quash the impugned Order dated 14th October, 1988, whereby Shri Shakti Sinha has been appointed Managing Director of the petitioner Bank. Such appointment constitutes, in the facts and circumstances of the case, a mere nomination to the Board of the Directors of the first petitioner. Mr. Sinha is therefore on the strength of such appointment, a Government's nominee to the said Board, but definitely not only Chief Executive of the petitioner Bank. 7. The result, therefore, is that the rule is made absolute as aforesaid. There will be no order as to costs, in the circumstances of the case. Rule made absolute. --------