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Himachal Pradesh High Court · body

1995 DIGILAW 73 (HP)

SHRI DHARAM PAL v. STATE OF H. P.

1995-09-24

A.L.VAIDYA, S.N.PHUKAN

body1995
JUDGMENT S. N. Phukan, C. J.—This application has been filed in connection with the writ petition, namely, C. W. P. No. 2301/95, The writ petitioner/ applicant by this application has prayed that he may be allowed to participate and contest the election of the Board of Directors of the respondent-Kangra Central Co-operative Bank Ltd. in accordance with law notwithstanding condition No. 10 imposed by the respondent-Bank vide Annexure P-2 to the writ petition. 2 The writ petitioner is an employee of the Government of Himachal Pradesh and he is working as Junior Engineer. The respondent-Bank notified election of the Board of Directors of the respondent-Kangra Central Co operative Bank Ltd, Dharamshala for the year 1995. The applicant-writ petitioner is a member of Thathal Co operative Agricultural Service Society Ltd, which is a primary Co-operative Society, whereas the respondent-Bank is a secondary Co operative Society. The petitioner was elected as a delegate from Ward No. 10 Under the respondent-Bank, which is a secondary Cooperative Society, there are 16 zones and one Director from each zone was to be elected. Accordingly, the respondent-Bank issued a Notice dated 9-11-1995 vide Annexure P-2 giving the election programme. In the said Notice, there is a condition, namely, condition No. 10, which runs as follows: "The candidate should not be salaried employee/officer of any Cooperative Bank, Co-operative Society or State Government or Central Government." 3. The petitioner being the employee of the Government under the above condition is not entitled to contest the election of the Board of Directors of the respondent-Bank, It may be stated that permission was duly granted to the petitioner by the State Government to contest the election vide Annexures P-3, P-4 and P-5. Though the petitioner was a delegate and his name was in the voters list, in view of above condition No. 10, he is not qualified being a salaried Government employee to contest the election. Hence, the present writ petition. According to the election programme, nomination papers have to be filed between 25th and 27th November, 1995. 4. We have heard learned Counsel for the petitioner, learned Advocate General and learned Counsel for the respondent-Bank. 5. We may refer to Rules 9, 11, 37 and 41 of the Himachal Pradesh Co-operative Societies Rules, 1971, The above Rules are quoted below: "9. Subject-matter of bye-laws. 4. We have heard learned Counsel for the petitioner, learned Advocate General and learned Counsel for the respondent-Bank. 5. We may refer to Rules 9, 11, 37 and 41 of the Himachal Pradesh Co-operative Societies Rules, 1971, The above Rules are quoted below: "9. Subject-matter of bye-laws. — (1) A society shall make bye-laws in respect of the following matters (a) name and the registered address ; (b) area of operation ; (c) the objects for which the society is established ; (d) the qualifications for membership, and the terms of admission of members ; (e) nature and the extent of the liability of members ; (f) withdrawal and expulsion of members and the payments if any, to be made to such members ; (g) transfer of shares or the interest of such members ; (h) manner of raising funds ; (i) general meeting and the procedure and the powers of such meeting; (j) appointment, suspension, and removal of the officers of the society and the members of the managing committee or the board of directors ; (k) constitution of the committee, or board of directors, or subcommittee and the procedure of holding its meetings, and as regards its powers and duties ; (1) powers and duties of the officers of the society ; (m) disposal of profits; (n) imposition of fines and penalties on members on consequences of the failure of any member to pay the sum due. (2) The bye laws of the Co-operative Society may further provide for such matters as are incidental to the organisation of the society, and the management of its business." “11. (2) The bye laws of the Co-operative Society may further provide for such matters as are incidental to the organisation of the society, and the management of its business." “11. Conditions of membership of individuals.—(1) No person shall be eligible for admission as a member of the society if he:— (a) is an applicant to be adjudicated a bankrupt or an insolvant or is an uncertified bankrupt; or is an undischarged insolvent ; or (b) has been sentenced for any offence involving moral turpitude and such sentence has not been reversed, or has not been pardoned ; or (c) is a minor, except when he happens to be minor heir, or nominee of a deceased member ; or (d) is of unsound mind ; or (e) is not a resident of the area of operation of the society, for the last six months ; or (f) carries on business similar to that conducted by the society of which he wishes to become a member ; or (g) does not fulfil such other conditions as specified in the bye-laws of the society. (2) A member of a society shall cease to be its member if he: (a) applies to be adjudicated, or is an adjudicated bankrupt, or an insolvent; or (b) is sentenced to any such offence as is prescribed in Clause (b) of sub-rule (1) above ; or (c) becomes of unsound mind ; or (d) leaves his residence in the area of operation of the society ; (e) begins to carry on the business similar to that conducted by the society of which he is a member ; or (f) ceases to fulfil such other conditions as specified in the byelaws for being a member of the society. (3) A member of a society may be expelled from membership for such other reasons also as may be specified in the bye-laws." "37. Election of Committee.— Notwithstanding anything contained in the foregoing rules, the members of the managing committee of a Co operative Society shall be elected in accordance with the rules given in Appendix A.” "41. (3) A member of a society may be expelled from membership for such other reasons also as may be specified in the bye-laws." "37. Election of Committee.— Notwithstanding anything contained in the foregoing rules, the members of the managing committee of a Co operative Society shall be elected in accordance with the rules given in Appendix A.” "41. Disqualification for membership of Committee.—(1) No person shall be eligible for appointment, or election as member of the committee of any society, if he:— (a) is an applicant to be adjudicated a bankrupt or is an insolvent or an uncertificated bankrupt or an undischarged insolvent ; or (b) has been sentenced for any offence other than an offence of a political character or an offence not involving moral delinquency, such sentence not having been reserved or the offence pardoned ; or (c) is of unsound mind ; or (d) a paid employee of the society or of any other Co-operative Society ; or (e) is in the same line of business as conducted by the society; provided that if any question arises whether a person is or is not in the same line of business, the question shall be referred to the Registrar and his decision shall be final; or (f) is concerned with the profits of any contract entered with the society except in transactions made with the Society as a member in accordance with the objects of the society as stated in the bye-laws, provided that if any question arises whether a person is or is not so concerned with the profits of any contract the question shall be referred to the Registrar and his decision shall be final; or (g) is, except with the sanction of the Registrar, already the member of the committee of any other society of the same type ; or (h) has been sued in arbitration in a society, and award given against him stands unsatisfied wholly or partially ; or (i) is a near relation of a paid employee of the society, provided that if any question arises whether a person has associated himself with the appointment of a near relation in the services of the society concerned, the question shall be referred to the Registrar and his decision shall be final; or (ii) the society, of which he is a representative becomes defaulter ; or (j) is a defaulter of any society ; or (jj) is a representative of a defaulter society ; or (k) has been debarred from becoming an officer of any society under Rule 58 ; or (1) is under 21 years of age. (2) A member of the committee of any society shall cease to hold office as such if he:— (a) applies to be adjudicated, or is adjudicated a bankrupt or an insolvent; or (b) is sentenced for any such offence as is described in Clause (b) of sub-rule (1); or (c) becomes of unsound mind ; or (d) becomes a paid employee of the society or any other society ; or (e) enters on the same line of business as conducted by the society ; or (f) becomes concerned with profits of any contract entered into by the society except in transactions made with society as a member, in accordance with the objects of the society as stated in the bye-laws ; or (g) becomes a member of the committee of any other society of the same type, except with the sanction in writing of the Registrar ; or (h) becomes a near relation of the paid employee of the society ; or (i) becomes a defaulter of any debt or dues directly, or indirectly of his society or of any other society ; or (j) is debarred from becoming an officer of any society under Rule 58 ; or (k) ceases to be a member of the society ; or (1) is found to be under 21 years of age.1 6. The first point urged on behalf of the petitioner is that as per Rule 41 (1) (d)f a person shall not be eligible for election as member of the Committee if he is paid employee of the Society or any other Co-operative Society. From Rule 37, we find that the members of the managing committee of a Co-operative Society shall be elected in accordance with the rules given in Appendix A’. Under the heading Rules of Election to the Committee, Clause 2 of Appendix A’ provides that no person shall be eligible for election as a member of the Committee if he is subject to any disqualification mentioned in Rule 41, Thus, the intention of the Rule makers is very clear that the election process has to be confined as per rules and is a separate process and no addition or alteration can be made in respect of the qualification laid down in Rule 41 read with Appendix ‘A’ to the Rules. From condition No. 10 of the Notice at Annexure P-2, the respondent-Bank has included one more condition, namely, banning salaried employee of the State Government or Central Government from contesting the election Therefore, this condition is in complete violation of the Rules framed in the Act, namely, the Himachal Pradesh Co-operative Societies Act, 1968. Therefore, we are of the opinion that debarring a Government servant whether of the Central Government or State Government by this condition No, 10, the same is illegal and inoperative as it is violative of the Rules framed under the Act as stated above. 7. At this stage, we need not refer to the decisions quoted at the Bar. We may only record the submissions of the learned Advocate General that the above condition No. 10 has been incorporated in accordance with the Bye-laws framed by the Co-operative Society and it cannot be done as it is violative of the provisions of the Act and the Rules as well as against the intention of the legislature. We accept the contention of the learned Advocate General. 8. A point has been urged that the election process has already been started and, therefore, this Court should not invoke the writ jurisdiction. In support of this submission made on behalf of the respondent Bank, reliance has been placed on Gujarat University v Shri N. U. Rajguru and others, AIR 1988 SC66 and S. T. Muihusami v; K, Natarajan and others, AIR 1988 SC 616 Another contention has been raised that there is a provision for referring the election dispute under section 72 of the H P. Co-operative Societies Act, 1968. 9. Regarding the election process, we are of the opinion that we are not interfering with the election process, but we are allowing the writ petitioner/applicant to contest the election. Therefore, the ratio laid down by the apex Court in the above two decisions is not applicable in the case in hand. 10. Regarding reference to the Arbitrator, the learned Advocate General has rightly pointed out that the above stage will come only when the election takes place and disputes arise. 11. For the reasons stated above, we allow the present application and direct the respondent-Bank to allow the writ petitioner to file his nomination papers and contest the election. Dasti copy on usual terms. Application allowed.