HAPPY NOOK CO-OPERATIVE HOUSING SOCIETY LTD v. STATE OF WEST BENGAL
2005-03-18
SOUMITRA SEN
body2005
DigiLaw.ai
SOUMITRA SEN, J. ( 1 ) IN this application the petitioners have challenged an order dated 24th December, 2004, passed by the Deputy Registrar of Co-operative society thereinafter referred to as DRCS) whereby and whereunder the board of Directors of the petitioner No. 1 was directed to call a special general meeting of the said Society under Clause (b) of sub-section 1 of section 29 of the West Bengal Co-operative Societies Act, 1983 (hereinafter referred to as the said Act), within three months from the date of issue of the said order for the purpose of dissolving the Board of the said Society and to re-constitute the same. The facts of the case are as follows :- the tenure of the previous Board of Directors of the respondent no. 1 (hereinafter referred to as the said Society) expired on or about 16th December, 2003. Accordingly, the election process for constitution of the Board of Directors commenced on 13th of december, 2003 and which was adjourned till 20th December, 2003, when the election was completed and the presenl Board of Directors were elected. The said Board continued to function for about four months, thereafter it received the order dated 21 st April, 2004, issued by the DRCS intimating that in exercise of power conferred under section 93 (1) of the said Act an enquiry officer has been appointed to conduct an enquiry into the Constitution, working and financial condition of the said Society which special reference to a complaint dated nil lodged by the one Shri B. K. Ghosh and 20 other-persons stated to be the members of the said Society. ( 2 ) THE said Enquiry Officer by a letter dated 28th of April. 2004, directed the said Society to appear before him on 6th of May, 2004 and to produce certain records and particulars whereof are given in the said letter. ( 3 ) ON 6th May, 2004, the representatives of the said Society duly attended the office of the Enquiry Officer as he was not present the matter did not proceed any further. By another order dated 8th of April, 2004, passed by the DRCS, the authority of the enquiry officer to hold the enquiry and extend dated 1 st of April, 2004.
By another order dated 8th of April, 2004, passed by the DRCS, the authority of the enquiry officer to hold the enquiry and extend dated 1 st of April, 2004. By another order dated 22nd of June, 2004, the said DRCS informed the Society that a petition has been filed by the said Shri B. K. Ghosh and 7 other persons raising some allegations in the matter of election of Board of Directors held in the Annual General meeting of the Society held on 20th December, 2003. By the said order the society was directed not to destroy the ballot papers and other records relating to the election during further orders. The said direction was given in exercise of power conferred under Rule 36 (20) of the Rules framed under the said Act (hereinafter referred to as the said Rules ). ( 4 ) IN the said order dated 22nd of June, 2004, the DRCS had mentioned that the petition filed by the said Shri B. K. Ghosh and 7 others was dated 17th of June, 2004. However, the copy, whereof which was furnished to the said Society, appears to be dated 12th of May, 2004. The date of receipt the seal on the body of the letter is dated 17th of June, 2004, but the same seems to be have been scored out. ( 5 ) THE Society by a letter dated 21 st of June, 2004 addressed to the said Enquiry Officer sought to deny the allegations made against the Society. By a letter dated 23rd of June, 2004, the said Society forwarded a letter dated 20th June, 2004, written by 49 members of the Society stating that they have full faith in the present Board and that the elections were fairly conducted. In the said letter it was also mentioned that two of the signatories to the letter of complaint mentioned earlier were directors of the present board and have been duly attending the Board meetings for the past 6 months and have not recorded any objections about the election process and have aiso not prayed for dissolution of the Board.
In the said letter it was also mentioned that two of the signatories to the letter of complaint mentioned earlier were directors of the present board and have been duly attending the Board meetings for the past 6 months and have not recorded any objections about the election process and have aiso not prayed for dissolution of the Board. ( 6 ) AS there was some confusion with regard to the status of Shri kushal Roy who according to the complainants was wrongfully appointed gs the Joint-Secretary as he was the office-bearer in the last 2 consecutive terms, the DRCS by a communication dated 24th September, 2004, informed the said Society that in the opinion of the said DRCS the appointment of kushal Roy as the present Secretary was in violation of the provisions of section 27 (9) and as such he was directed to vacate the post of Joint- secretary as the said post was the post of an "office-bearer" in accordance with the provisions of the said Act. ( 7 ) BY reason of such direction given by the DRCS on 13th of October, 2004, the said Kushal Roy resigned from the post of Secretary. On 18th of november, 2004, the Enquiry Officer filed his report and proposed that a special general meeting should be convened for re-constitution of the Board in accordance with the provisions of Section 29 (1) of the said Act by reason of serious irregularities on points of law. ( 8 ) THE said Society by its letter dated 1st of December, 2004, gave a comprehensive reply to the points raised by the Enquiry Officer in the said report. By a letter dated 17th of December, 2004, the said Shri B. K. Ghosh informed the DRCS that the proposed action of the Enquiry Officer was correct. The said letter further sought to justify their complaint made earlier. ( 9 ) ON 24th December, 2004, the impugned order was passed. In the writ petition the first complaint on the basis of which the Enquiry Officer was appointed to conduct an enquiry was not annexed.
The said letter further sought to justify their complaint made earlier. ( 9 ) ON 24th December, 2004, the impugned order was passed. In the writ petition the first complaint on the basis of which the Enquiry Officer was appointed to conduct an enquiry was not annexed. It was submitted on behalf of the petitioners that they have never received the copy of the initial complaint and the only copy which was furnished to them in course of the proceedings before the Enquiry Officer was the complaint which was forwarded along with the communication dated 22nd June, 2004, wherein it was clearly stated that the said Shri B. K. Ghosh and 7 other persons have filed, a petition dated 17th of June, 2004. The learned Advocate appearing on behalf of the concerned respondent-authorities have handed over a copy of the said initial complaint from which it appears that about 23 members of the said Society have raised a complaint primarily with regard to removal of one Shri Subrata Ray who was a Chairman of the said Society during the first and second terms of the Board. The another issue which was raised in the said complaint was with regard to continuation of Shri Kushal Roy as an office-bearer of the said Society in violation of the provisions of Section 27 (9) of the said Act and as also under Article 48 (iii) of the by-laws of the said Society. Therefore, the initial enquiry which was sought to be conducted was on the basis of the complaint made on the above two specific issues. ( 10 ) THE subsequent complaint on the basis of which the enquiry actually proceeded contained certain other issues apart from the issues, which were raised in the initial complaint. The additional issues were, with regard to the election procedure where one Shri Arunava Moitra was appointed as the Presiding Officer, to conduct the election and with regard to entrusting the responsibility of treasury and accounts to one person. ( 11 ) THEREFORE, it is obvious that the scope of the initial enquiry was enlarged by reason of the subsequent complaint filed by the said Shri B. K. Ghosh and 7 others.
( 11 ) THEREFORE, it is obvious that the scope of the initial enquiry was enlarged by reason of the subsequent complaint filed by the said Shri B. K. Ghosh and 7 others. It is admitted position that by reason of the specific directions given by the DRCS, Shri Kushal Roy has resigned as the secretary and as complaint was made with regard to appointment of one single person both as a treasurer and as an accountant, the said person had also tendered his resignation. ( 12 ) THE said Society in its reply has sought to give a detailed explanation with regard to the allegations made against the Board. It was pointed out that in accordance with the prescribed procedure a panel of three candidates were prepared for acting as the Presiding Officer but as none of the empanelled candidates could have been appointed as the presiding Officer for the reasons as recorded in their reply the said Shri arunava Moitra was appointed as the Presiding Officer. ( 13 ) IT was pointed out that the appointment of Arunava Moitra was informed to all the members by a notice dated 29th of November, 2003, which was displayed in the Notice Board. None of the members of the society raised any objections to the appointment of Arunava Moitra as the presiding Officer. From the subsequent complaint made by Shri B. K. Ghosh and some other members it appears that the then Chairman was in the chair but he allowed Arunava Moitra to act as the Presiding Officer. ( 14 ) IT has been pointed out by the said Society to the Enquiry Officer in their reply to the points raised in the enquiry report that some of the directors namely one Shri Biswatosh Sarkar and Shri Satyajit Roy did not record any objection about the election process and took part as the member of the said Board and were attending and participating in the meetings of the Board since its Constitution. But the same persons after 6 months of the Constitution of the Board have sought to raise objection with regard to the election process. ( 15 ) IT is also significant to note that the first complaint on the basis of which the Enquiry Officer was appointed, the issue with regard to the appointment of the Presiding Officer and violation of the election procedure was never raised.
( 15 ) IT is also significant to note that the first complaint on the basis of which the Enquiry Officer was appointed, the issue with regard to the appointment of the Presiding Officer and violation of the election procedure was never raised. On behalf of the respondent-authorities it has been submitted that upon enquiry certain irregularities in complying with legal provisions have been noticed. The alleged violations are as follows :- it was submitted that while fixing the date and time of the election up to which time the election would continue, was not mentioned. Accordingly, there was a violation of Rule 36 (5) (ii) (f ). ( 16 ) IT was submitted that since there was already a Chairman, he was required to preside over the meeting as such the appointment of the presiding Officer other than the Chairman was in violation of Rule 36 (4) read with Rule 23 (1 ). It was also submitted that the Society have taken transfer fees in violation of a notification dated 23rd June, 2003. It was further submitted that handing over the charge of treasury and accounts to one person was in violation of Rule 74 of the said Rules. It was urged on behalf of the State respondent that appointment of Shri Kushal Roy was in violation of provisions of Section 27 (9) of the said Act. ( 17 ) ON behalf of the added respondents it was submitted that this application was not maintainable inasmuch as the impugned order is an appealable order. It was further submitted with great emphasis that the removal of Shri Subrata Ray from the Board for violation of Rule 40 (f) is in violation of the principle of natural justice since the said Shri Subrata Ray was not given any notice for the meeting that were held in which he was absent. With regard to the other issues the submissions on behalf of the added respondents were same as that of the State-respondents. ( 18 ) ON behalf of the petitioners, on the ground of maintainability, it was submitted that as on the date of moving the instant application there was no properly constituted Tribunal to hear out any appeal. In fact, one of the members of the Tribunal was under an order of transfer long prior to the filing of the writ application and as such no matters were being heard.
In fact, one of the members of the Tribunal was under an order of transfer long prior to the filing of the writ application and as such no matters were being heard. Accordingly, it was submitted that the alternative remedy in the facts and circumstances of the case was not an efficacious one and therefore, they were entitled to move this writ application. ( 19 ) AFTER hearing the respective submissions of the parties, I am of the firm belief that the disputes which are the subject-matter of the instant writ application is due to the disputes between two polarized group among the members of the said Society. The disgruntled group appears to be a miniscule minority. There are about 175 members in the said Society the initial complaint on the basis of which the enquiry was started was signed by about 23 members. The subsequent complaint on the basis of which the enquiry actually proceeded, according tc the DRCS was signed by about 8 persons and before me, though about 26 persons have been added as respondents, only Shri B. K. Ghosh had been represented and no power of attorney has been filed on behalf of the any other person. Therefore, the entire action of the Co-operative Society whereby the election was held as between 175 members and Board of Directors have been elected, only one member has come forward to challenge the same. It has been pointed out to me by the Advocate appearing on behalf of the petitioners, which contention has not been denied and/or disputed by any Advocates on behalf of other respondents that the said Shri B. K. Ghosh had stood for election and has failed to get elected in the Board of Directors. Therefore, he is clearly a defeated candidate.
Therefore, he is clearly a defeated candidate. ( 20 ) WITH regard to the removal of Shri Subrata Ray from the Board of directors it was submitted on behalf of the added respondent that the Board have acted mala fide by removing the said person by holding repeated meetings of the Board knowing fully well that he would be absent inasmuch as the Chairman of the said Society was informed by the said Shri Subrata ray by a letter dated 14th February, 2004 that as he would be going to usa on 15th of February, 2004, and will romain out of the country for about 4 months and he requested that any issue with regard to the business and affairs of the Co-operative Society, his opinion may be solicited if thought necessary at the addresses mentioned in the said letter and the said address is of a place U. S. A. Therefore, it is obvious that the said Shri Subrata Ray did not have any complaint with regard to the formation of the Board. On the contrary, he obviously thought that the Board was a duly constituted board irrespective of any alleged legal irregularities. If the said Shri Subrata ray had any complaint with regard to the formation of the Board he would not have informed the Chairman of Society, that his opinion might be solicited on any issue relating to the business and affairs of the Society. Therefore, the grievance of Shri Subrata Ray is strictly personal in nature ; he can always ventilate his personal grievance with regard to alleged wrongful removal of Board. But his personal cause of action cannot be ventilated by another person, this, in my opinion, is resorting to subterfuge. Section 95 of the said Act clearly lays down that any dispute concerning of the business of the Co-operative Society which is capable of being the subject of civil litigation or any dispute relating to the affairs of the Co-operative Society shall be referred to the Registrar of the Co-operative Society for his adjudication. It is admitted position that no complaint has been made to the registrar either by the said Shri Subrata Ray or by Shri B. K. Ghosh with regard to the election procedure.
It is admitted position that no complaint has been made to the registrar either by the said Shri Subrata Ray or by Shri B. K. Ghosh with regard to the election procedure. ( 21 ) WITH regard to the other violation of legal provisions it seems that certain irregularities were sought to be rectified in accordance with the directions given by the DRCS. Once the irregularities have been rectified, the legal provisions on the basis of which the irregularities were alleged cannot be taken recourse to for dissolution of Board, which has been constituted on the wishes of the majority of the Society. ( 22 ) APART from appointment of a personal as the Presiding Officer no other serious irregularities in the election procedure have either been alleged by the complainants or noticed by the Enquiry Officer. It is alleged that the meeting continued up to very late at night. Curiously enough the first complaint on the basis of which the enquiry was initiated, the said allegation does not find any mention in the said complaint. Further more, it is apparent from the conduct of the parties that the said allegations are purely an after thought and at the material point of time no one had any grievance with regard thereto. The principal grievance at all material times was with regard to removal of Shri Subrata Ray from the Board and allowing Shri Kushal roy to act as the Secretary. I have already indicated with regard to my opinion about the removal of Shri Subrata Ray. I may further add here that from the reply given by the said Society it appears that some meetings were required to be held to conduct some urgent business of the Board. A director of the Board, no matter howsoever important, cannot expect that the Board will stop functioning during his absence and will seek his advice on the affairs of the Society from U S. A. No individual member of the Board is indispensable when there are other elected members present. Further, since the member had himself informed the Board he will remain absent for 4 months. There is no question of giving any notice to him during the said period as he had made his intention quite clearthat he will not be available in India during the said period.
Further, since the member had himself informed the Board he will remain absent for 4 months. There is no question of giving any notice to him during the said period as he had made his intention quite clearthat he will not be available in India during the said period. It was submitted on behalf of the added respondent Shri B. K. Ghosh that in order to apply the provisions of Rule 40 of the said Rules IT pre-supposes service of notice. However, in the facts and circumstances of the case, I am not inclined to accept the said submission. Moreover, from the records, it is clear that the said Shri Subrata ray did not attend a number of meetings, whcih are numbering more than six. ( 23 ) FROM the recommendation of the enquiry officer which has been accepted by the DRCS it appears that inspite of not finding any irregularities of any serious nature in the affairs of the Society and inspite of not finding any defalcation of funds, dissolution of Board has been directed under section 29 (1) by reason of alleged serious irregularities on the point of law. I have already indicated that the initial enquiry commenced on the basis of complaint made with regard to two specific issues. This scope of the enquiry was enlarged by leason of a subsequent complaint. The views of another set of members numbering about 49, who had reposed complete faith on the Board, appears to have been totally ignored by the enquiry officer. Certain issues on which the enquiry officer has given his opinion, also appears to be out side the scope of the complaint. In none of the complaints, the members have made any allegations against the Board with regard to accepting any money fortransfer of the flats in violation of Rule 142 (2), but the enquiry officer appears to have raised an issue with regard thereto. Neither the members nor the alleged transferees have raised any allegations with regard thereto. Further more, the Society in their reply have clearly stated that there is nothing on their record to show that they have accepted any amount as transfer fees. Moreover, the period during which such alleged transfer fee has been accepted is for a period when the Final Accounts are yet to be prepared.
Further more, the Society in their reply have clearly stated that there is nothing on their record to show that they have accepted any amount as transfer fees. Moreover, the period during which such alleged transfer fee has been accepted is for a period when the Final Accounts are yet to be prepared. Therefore, without the Final Accounts being prepared and submitted in accordance with law the said allegation cannot be sustained at this stage. ( 24 ) IT also appears from the enquiry report that the enquiry officer inspite of not finding any mis-management of the affaris of the Society have decided to punish the Society for violation of certain provisions of law. However, majority of the irregularities have been rectified pursuant to the directions given by the DRCS. The Society is for the maintenance of the large number of flats, which are owned by the members of the Society. The members are required to decide whether the Board has their confidence or not. The DRCS cannot take it upon himself the responsibility of espousing the cause of some disgruntled members who are bound to be there in a society, which is constituted of large number of members. What is to be seen is whether the Society is functioning in such a manner, which is detrimental or prejudicial to the interest of the members at large. Some legal irregularities of which have been subsequently rectified, cannot be the cause to dissolve the Board, which obviously in the facts and circumstances of the case, has the confidence of the overwhelming majority. If any individual member has any specific grievance in respect of their personal interest their fee to take recourse in accordance with law. But the provisions of Section 29 and Section 30 are to be taken recourse to under certain special and exceptional circumstances. ( 25 ) FROM the language of Section 29 ot the said Act, it is clear that the Registrar can direct the Board to call a special general meeting of the co-operative Society to dissolve the Board if he is satisfied that the Society is mismanaging its affairs.
( 25 ) FROM the language of Section 29 ot the said Act, it is clear that the Registrar can direct the Board to call a special general meeting of the co-operative Society to dissolve the Board if he is satisfied that the Society is mismanaging its affairs. The explanation to sub-section 1 of Section 29 makes it clear that for the purpose of the said sub-section the expression "mismanaging its affairs" shall include any act of wilfully disobeying or failing to comply with any lawful order or direction issued by the State Government or the Registrar. Though ignorance of law is no defence, however since a co-operative Society is constituted by the members who are lay persons in case of minor legal infractions and/or irregularities, directions may be issued to rectify the same. If such direction is not complied with then provisions of section 29 may be resorted to. In the instant case, it is significant to note that the complainant never informed to this Board to rectify the alleged irregularities even after 4 months from the date of Constitution of the Board, and some of the complainants after having participated in the proceedings of the Board, complained to the DRCS directly. On the basis of the said complaint the DRCS have also issued certain directions clearly under section 29 for rectification and/or curing the irregularities which has been duly complied with. ( 26 ) THE only substantial issue, which is required to be dealt with, is the appointment of the Presiding Officer in the election, which is a fait accompli and cannot be rectified and with regard to removal of Shri Subrata ray. With regard to the appointment of the Presiding Officer it was submitted that on the date of the election, the Chairman was not a candidate standing for election, as his nomination paper had already cancelled on technical reasons. However, the said Chairman himself was present at the meeting and allowed the Presiding Officerto continue the election. Moreover, having filed a nomination the Chairman had clearly expressed his intention to stand for election. Therefore, having regard to the intention of the legislature and also having regard to the facts and circumstances of the case that the empanelled Presiding Officer could not be appointed, in my opinion no serious irregularity has been committed by appointing Shri Arunava Moitra as the Presiding Officer.
Therefore, having regard to the intention of the legislature and also having regard to the facts and circumstances of the case that the empanelled Presiding Officer could not be appointed, in my opinion no serious irregularity has been committed by appointing Shri Arunava Moitra as the Presiding Officer. More so, no serious allegations in the matter of conducting the elections have been made nor found by the Enquiry Officer. ( 27 ) THE circumstances, under which Section 29 and Section 30 of the said Act operate, are entirely different. Under Section 30, certain circumstances as contained in sub-section 1 of Section 30, warrants dissolution, of Board and appointment of Administrator. Whereas under section 29 an expression 'mismanaging its affairs' have been included which is absent in Section 30. The expression 'mismanaging its affairs' have not been defined anywhere in the Act. The submission made on behalf of the added respondent that the expression 'mismanaging its affairs' should be given the same meaning of mismanagement contemplated under the companies' Act, cannot be accepted since Section 5 of the said Act clearly takes Companies' Act outside the purview of the said Act. Therefore, we have to understand the meaning of 'mismanaging its affairs' as is understood in common parlance. The irregularities in conducting the election, in my opinion, cannot be termed as a mismanagement of the affairs of the Society. The mismanagement of the affairs of the Society would include the mismanagement in day to day affairs and administration of the Society. In the instant case, even after making extensive enquiry nothing untoward with regard to mismanagement of the affairs of the Society has been noticed by the Enquiry Officer. In my opinion, the allegation with regard to irregular procedure of election is a matter, which is required to be decided under section 95 of the said Act and does not come within the purviiew of section 29. ( 28 ) AFTER going through the report of the enquiry officer, I have no doubt in my mind that the enquiry officer had exceeded his jurisdiction and/ or authority vested in him in law. The enquiry officer is merely to enquire. He is not even required in law to pass any order or opinion with regard to the enquiry. The enquiry officer does not carry out any judicial function.
The enquiry officer is merely to enquire. He is not even required in law to pass any order or opinion with regard to the enquiry. The enquiry officer does not carry out any judicial function. But in the instant case, the enquiry officer has held that the removal of Shri subrata Ray is in violation of the principle of natural justice. This observation made by the Enquiry Officer is not within his domain. The conclusion of the enquiry officer is even more curious. He has clearly stated that it was very difficult to recommended any course of action in respect of business and affairs of the said Society within the ambit of law, but even then he has to recommend some course of actions as an enquiry officer. If he has felt that there was nothing wrong with the business and affairs of the Society I do not see any reason why there was any compulsion on his part to recommend some course of action just because he was an enquiry officer. If the irregularities, noticed by the Enquiry Officer, were not regularized by the society inspite of directions given by the DRCS steps could have been taken either under Section 29 or even under Section 30. But in the instant case, whatever opinion that was expressed by the DRCS, both with regard to appointment of Shri Kushal Roy as the Secretary and appointment of shri Dipak Kumar De as the treasurer and accountant have been duly rectified by those members by tendering their resignation. Apart from the question of appointment Shri Arunava Moitra as the Presiding Officer and removal of Shri Subrata Ray from the Board no other major issue remains. ( 29 ) IN this case, it is an admitted position that the Board was not asked to regularize and/or rectify any error by the complainants. The complaint was made directly to the respondent authorities who took steps in terms thereof. In fact the Board was not afforded any opportunity to rectify and/or regularize any error prior to making of the complaint before the concerned authority. ( 30 ) ANOTHER significant fact, which I have already stated earlier that shri B. K. Ghosh had stood for election and did not succeed.
In fact the Board was not afforded any opportunity to rectify and/or regularize any error prior to making of the complaint before the concerned authority. ( 30 ) ANOTHER significant fact, which I have already stated earlier that shri B. K. Ghosh had stood for election and did not succeed. When the application was moved after coming to know that the impugned order was passed on the basis of complaint made by number of persons, I had directed the petitioners to implead those persons. Pursuant thereto the added respondent No. 5-31 have been added, but curiously enough the power of attorney has been given only on behalf of Shri B. K. Ghosh and no other person has come forward to make any submissions before this Hon'ble court. The right of Shri Subrata Ray for being allegedly wrongfully removed from the Board is a personal right. Therefore, the cause of Shri Subrata ray cannot be espoused by Shri B. K. Ghosh. It appears to me that what shri B: K. Ghosh could not achieve directly is sought to be done indirectly. ( 31 ) THE petitioners had initially submitted that the Deputy Registrar of the Co-operative Society could not have passed the impugned order, as an order under Section 29 is required to be passed by the Registrar. However, in view of the provisions of Section 10 read with Section 2 (37) and a Memo dated 3rd July, 1990, a copy of which has been furnished to this Hon'b\e Court. I am of the opinion that the Deputy Registrar has the competence to pass an order in terms of Section 29 as the powers of registrar has been delegated to him. ( 32 ) FROM the records produced before me it appears that the Board is still functioning, the members are attending the proceedings. In fact some of the directors who had complained had also participated in the proceedings of the Board until very recently. From the Minutes of the Meeting of the 9th annual General Meeting held on 27th February, 2005, it appears that the said Shri Subrata Ray participated in the AGM and had no objection if the agm continued with Agenda Nos.
From the Minutes of the Meeting of the 9th annual General Meeting held on 27th February, 2005, it appears that the said Shri Subrata Ray participated in the AGM and had no objection if the agm continued with Agenda Nos. 1, 2 and 3, but threatened that if the meeting continued beyond the Agenda No. 3 then he would go to appropriate forum and seek invocation of Section 30 for appointment of an Administrator significantly, the Agenda No. 1 is for conformation of proceeding of the last agm, which was held on 27th March, 2004 and third agenda was for deliberation with regard to the Audit Report of 2003-2004. ( 33 ) CONSIDERING the said facts, it is obvious that apart from some personal agenda of some of the members, the large majority of the members of the Society do not have any serious allegation and/or grievance against the Board. Keeping in consonance with democratic principles, such elected representatives of the members should not be upset at the instance of some persons, who may have some personal grievance for which they are to seek appropriate reliefs before an appropriate forum. ( 34 ) SOME of the other issues, which have been raised in the impugned order. appear to have been fished out only to justify an order to be passed under Section 29 of the said Act. ( 35 ) FROM the enquiry report it appears that the Enquiry Officer was of the opinion that there has been violation of certain Rules 161 (C) and 169 of the said Rules in the matter of preparation of the accounts for the year 2002-2003. It is an admitted position that the present Board was not responsible for preparation of the accounts pertaining to the said period. ( 36 ) THE said Enquiry Officer had also contended in his enquiry report that the provisions of Rule 115 of the said Rules have been violated by not remitting contribution towards the Co-operative Education Fund. A plain reading of the said Rule clearly suggests that it does not apply as far as the instant Co-operative is concerned, as it is not a profit making Co-operative. The Rule 115 clearly says that every Co-operative Society shall, after close of each year, contribute five per cent of its net profit subject to a maximum of rupees seven thousand and five hundred to the Co-operative Education fund.
The Rule 115 clearly says that every Co-operative Society shall, after close of each year, contribute five per cent of its net profit subject to a maximum of rupees seven thousand and five hundred to the Co-operative Education fund. This clearly pre-supposes that the Co-operative Society, which makes profit, would be under an obligation to contribute but not otherwise. Therefore, I have no doubt in my mind that the Enquiry Officer had proceeded in a motivative manner. ( 37 ) MY conviction is strengthened by the fact that in none of the complaints either the initial or the subsequent it does not mention anything about violation of some of the rules which was sought to be raised by the enquiry Officer himself. The purpose of Section 29 and Section 30 is to prevent mismanagement of the affairs of the Co-operative Society the enquiry which is carried out by the Registrar under Section 93 is not for the purpose of making a roving and fishing enquiry into the affairs of the co-operative Society only in order to justify an action. The authorities would be perfectly competent to take steps against the Board of Directors of the Co-operative society if it mismanages its affairs to the prejudiced and detriment of the members at large. But the provisions, which have been resorted to. should not be taken as a means of redressal of grievance of any individual member. ( 38 ) ON behalf of the added respondent the decision reported in 2003 (5) SCC 399 (Seth Chand Ratan v. Pandit Durga Prasad (D) By LRs. and ors.) was relied upon for the proposition that where a statute provides a remedy by way of an appeal before the High Court itself against the order of District Judge as a decree, a writ petition challenging the order would not be maintainable. The facts of the said case are quite different from the instant one. In the said case the order of the District Judge was appealable before the High Court itself. Therefore, the High Court was exercising an authority was the appellate authority. Moreover, in the instant case I had already held that by reason of the peculiar facts and circumstances of the case the alternative remedy available was neither equal nor efficacious. The appellate forum at the material point of time was non-functional.
Therefore, the High Court was exercising an authority was the appellate authority. Moreover, in the instant case I had already held that by reason of the peculiar facts and circumstances of the case the alternative remedy available was neither equal nor efficacious. The appellate forum at the material point of time was non-functional. On the date when the application was moved the appellate forum was not functioning inasmuch as one of the members had been transferred. In the said case the hon'ble Supreme Court had also held that in exceptional cases the High Court could exercise its discretion to entertain writ petition irrespective of alternative remedy. Mere filing of an appeal before an appellate forum does not give any relief to a litigant unless he can pursue the appeal. It is an admitted position that the writ petitioners could not have pursued the appeal, even if the same was filed, as there was no properly constituted appellate forum. Therefore, in my opinion there exists an exceptional circumstances in the instant case which requires exercise of discretion under Article 226 of the Constitution of India. ( 39 ) ANOTHER decision reported in 1997 (88) Company Cases 245 (Akbarali A. Kalvert and Anr. v. Konkan Chemicals Pvt. Ltd. and Ors.), has been relied upon on behalf of the added respondent for the proposition as to what would constitute mismanaging its affairs. The said case was decided in relation to the provisions of oppression and mismanagement under section 397 of the Companies Act. It was submitted that if the rights of an individual shareholder are directly affected then interference by the Court is warranted. However, the right of a shapeholder under the Companies Act is quite different from the right of a member of a CO-operative Society. Particularly in a Co-operative Society, which is a non-profit organisation. The rights and obligations of the members of the Society are circumscribed under the said Act. Under Section 5 of the said Act it has been specifically provided that the provisions of the Companies Act, 1956, will not apply as far as the Co-operative Society is concerned. Therefore, in my opinion the said decision does not apply in the facts and circumstances of the instant case.
Under Section 5 of the said Act it has been specifically provided that the provisions of the Companies Act, 1956, will not apply as far as the Co-operative Society is concerned. Therefore, in my opinion the said decision does not apply in the facts and circumstances of the instant case. ( 40 ) ANOTHER decision reported in AIR 1973 SC 2389 (Parmeshwari prasad v. Union of India), has been relied upon on behalf of the added respondent for the proposition that if notice to one director is not given the resolution passed at such a meeting is invalid, but the same resolution can be validated by a regularly constituted meeding. In the said decision the hon'ble Supreme Court was concerned with the question of ratification. In the instant case, the said Shri Subrata Ray who has been removed from the Board relying upon Rule 40 of the said Rules had subsequently participated in the AGM and had also consented to passing of certain resolutions with regard to decisions taken by the Board, which are clearly for the management, and affairs of the Society. Therefore, in a way the said Shri Subrata Ray has not raised any objections with regard to his removal and had also raised no objection to the Board carrying on with the affairs of the Society. More so, the said Shri Subrata Ray has not come forward to raise any objection with regard to his removal either before the registrar or before the Court. ( 41 ) ON behalf of the writ petitioners the decision reported in AIR 1969 sc 1294 (State of Gujarat v. R. G. ,teredesai), was relied upon for the proposition that the Enquiry Officer is under no obligation to make any recommendation in the matter of punishment. In the instant case, the Enquiry officer was directed to enquire into the matter. The order of punishment under the Act is required to be passed by the Registrar and/or any Enquiry officer delegated by him. The Enquiry Officer obviously was not acting as an authority delegated by the Registrar for the purpose of imposition of punishment.
In the instant case, the Enquiry officer was directed to enquire into the matter. The order of punishment under the Act is required to be passed by the Registrar and/or any Enquiry officer delegated by him. The Enquiry Officer obviously was not acting as an authority delegated by the Registrar for the purpose of imposition of punishment. Therefore, strictly speaking the Enquiry Officer is only to enquire as to the alleged irregularities what order is required to be passed on the basis of such enquiry report is strictly within the domain of the Registrar and the enquiry Officer cannot recommended any punishment as have been done in the instant case. For the reasons as aforesaid, I am of the opinion that the impugned order passed by the DRCS is erroneous and the same is hereby set aside. The writ petition is allowed in the manner as indicated above. No order as to costs. .