Board of Directors, Manasa Marketing Co-op. Federation v. Registrar, Coop. Societies, Bhopal
2009-02-28
K.C.SHARMA, P.D.MISHRA
body2009
DigiLaw.ai
JUDGMENT Mishra, Member -- 1. This second appeal filed against the order of Registrar Cooperative Societies, Bhopal in Case No. 78-359106-07 passed on 1.10.2007 has originally been decided by the Tribunal by its order dated 14.8.2008. As the respondents had preferred writ petition No. 5313/2008 in which Hon'ble High Court through its order dated 22.9.2008 has directed the Tribunal "to reconsider the matter of handing over the charge in accordance with law laid down by the apex Court as well as also take into consideration the agreement between the parties in the earlier litigation as noticed above." 2. As the present order is being passed in compliance of the directions of Hon'ble High Court in continuation of the order passed by the Tribunal on 14.8.2008 in the instant second appeal itself, this order naturally forms the supplementary part of the earlier order. Therefore the facts, of the appeal as mentioned in the former part need not be repeated here. However, to be brief and precise it can be stated that the order of the Tribunal was a sequence of the original order of Assistant Registrar, Coop. Societies, Neemuch superseding the Board of Directors of the appellant's under section 53(1) of M.P. Cooperative Societies Act, 1960 (in brief Act) dated 8.1.2007 which was upheld by the Registrar Cooperative Societies, Bhopal through the impugned order dated 1.10.2007. The Tribunal after hearing the matter in Second Appeal in its order dated 14.8.2008 had held that the order of the Assistant Registrar u/s 53(1) as well as the order of the Registrar in First Appeal dated 1.10.2007 were wrongful and they were consequently set aside. The Tribunal also had held that the affected directors of the outgoing Board would not incur any disqualification according to section 53(12) of the Act. However, as the fresh elections of the respondent society had already taken place on 27.7.2007, the appeal was taken to be rendered infructuous through the flux of time and no relief in this regard was granted. 3. Hon'ble High Court has considered this issue afresh in writ petition No.5313 of 2008 in context of its order dated 2.8.2007 commonly passed in WP No. 379812005, WP No. 3975/07, WP No. 3036/07, WP No. 3039/07, C.P. No. 131/06 & C.P. No. 287/07.
3. Hon'ble High Court has considered this issue afresh in writ petition No.5313 of 2008 in context of its order dated 2.8.2007 commonly passed in WP No. 379812005, WP No. 3975/07, WP No. 3036/07, WP No. 3039/07, C.P. No. 131/06 & C.P. No. 287/07. The petitioners in writ petition No. 53(13) of2008 have specifically drawn the attention of Hon'ble High Court towards clause No.5 of the agreement on the basis of which the earlier litigation was disposed off by Hon'ble High Court through its order dated 2.8.2007. The said clause 5 as incorporated in the order of Hon'ble High Court dated 2.8.2007 is reproduced as under: "It is also agreed between the learned senior counsel's that the elections held on July 18, 2007 and the subsequent election of President/Vice President/Office bearers of the Society held on July 27, 2007 shall abide by the final order passed by the appellate authority in appeal." The Hon'ble High Court in its order dated 22.9.2008 has observed in this contest as under: "A bare perusal of Clause-5 of the agreed order passed between the parties in the earlier litigation clearly depicts that the elections held on July 27, 2007 were to abide by the final order passed by the Appellate Authority in appeal. Once parties had agreed on that question, the Tribunal could not have permitted them to deviate from the same, and pass a different order, and even in violation of the directions issued by this Court. Besides the aforesaid fact, I find that the observations made by the apex Court in the case of Baby Samuel v. Tukaram Laxman Sable, 1995 Suppl. (4) SCC 215, are also relevant for the controversy in question, as follows: Because the State Government did not pass any orders on the stay petition filed by the appellant in his appeal preferred against the orders of removal/disqualification, the Collector notified and held an election to the office of the President whereas Shri Sable was elected as President. This election was again a consequence of the removal/disqualification of the appellant by the Collector. If so, once the order of removal/disqualification is set aside by the government, the appellant is entitled to be put back in the same position which he was in before he was removed. In other words not only should he be restored to the councillorship but also to the office of the President.
If so, once the order of removal/disqualification is set aside by the government, the appellant is entitled to be put back in the same position which he was in before he was removed. In other words not only should he be restored to the councillorship but also to the office of the President. Shri Sable was elected as the President in the vacancy caused by the removal/disqualification of the appellant and once the said removal/disqualification of the appellant goes, the consequential action cannot stand; it falls to ground along with the order of removal. Shri Sable must therefore yield ground to the appellant." Following the aforesaid law, this Court had also issued similar directions to grant requisite relief in case of Baleshwar Dayal Jaiswal v. State of M.P and others, Writ Petition No. 4644/2006 decided on October 9, 2007. 4. After hearing the two sides in accordance with the direction of Hon'ble High Court following facts emerged for the Tribunal to consider. (i) The newly elected Board has been constituted finally on 27 July 2007. (ii) It was also brought to the notice that election petition u/s 64 (2)(5) was duly filed by the appellant before Registrar Coop. Societies and the same is under consideration of the Registrar. (iii) Hon'ble High Court directed the Tribunal in writ petition No. 5313/08 to basically reconsider the matter in light of the law laid down by Hon'ble Supreme Court in Baby Samuel v. Tukaram Laxman Sabley, 1995 Supplementary (4) SCC 215. 5. Hon'ble Supreme Court had through this order allowed the appeal and the appellant had been restored forth with to the office of the counselor of the Muncipality as well as to the office of the President of the said Muncipality. The apex Court has held here that since respondent was elected as President in the vacancy was caused by the removal of the appellant once the removal order was set aside, the consequential action along with the removal order could not stand. The Tribunal, however, noticed a fine distinction in the present case as the newly elected Board of directors dated 27.7.2007 was not impleaded in the present case whereas in the case cited the respondent who was the newly elected President was impleaded as a party.
The Tribunal, however, noticed a fine distinction in the present case as the newly elected Board of directors dated 27.7.2007 was not impleaded in the present case whereas in the case cited the respondent who was the newly elected President was impleaded as a party. The appellants were accordingly directed to implead the newly elected Board as proper opportunity of hearing in accordance with the principles of natural justice was necessary for them to be afforded. As this exercise involved time, the Hon'ble High Court was requested to extend the period by two months for facilitating the Tribunal to decide the matter appropriately. 6. After hearing the rival contentions in the matter following substantial points for consideration are formulated. (i) Whether the affected Board of Directors of the appellants are entitled for taking over the charge of the respondent society in accordance with the provisions of section 49 (7-A)(i) of the Act. (ii) Whether the extended term under subsection 7-AA of section 49 be allowed to benefit the Directors of the superseded Board. 7. Point (i) & (ii) (Together) : As pointed out earlier the learned counsels of the appellant have basically argued for placing full reliance on the principle laid down by Hon'ble apex Court in the case of Baby Samuel v. Tukaram Laxman Sabley (supra). According to them the appellants were elected for five years in the annual general meeting held on 8.12.2001. The subsequent election of office bearers was held on 15.12.2001. According to provision of sub section 7 A of section 49, the term of the office of a Board of Directors is for five years. This according to them would naturally last till 15 .12.2006. The Board remained in power till 30.3.2005 when u/s 53 (13) Assistant Registrar took over the charge through an Officer. Again vide order dated 28.12.2006 the Board was under the supervisory authority of the department and ultimately the Assistant Registrar superseded the Board u/s 53 (1) vide order dated 8.1.2007. According to the calculation of the appellants provided, the appellant board remained out of office for 441 days out of a six years period of 2190 days. It was therefore pleaded that the appellants may be restored to powers for 441 days in accordance with the provision of the Act as well as the principle laid down by Hon'ble Supreme Court. 8.
It was therefore pleaded that the appellants may be restored to powers for 441 days in accordance with the provision of the Act as well as the principle laid down by Hon'ble Supreme Court. 8. On behalf of the counsel's of the respondents it was submitted that the Board of the Respondent Society came to power on 20.12.2001 and it could have completed its normal term on 19.12.2006. The period of cessation u/s 53 (13) or the period of suspension u/s 53 (10) cannot betaken into account as the same is not covered under the protection granted in proviso of section 49 (7-A) (i). Since the elections of the respondent society were completed on 20.12.2001 as submitted by the respondent society in its reply the period of the appellants Board should naturally commence from 20.12.2001. The five year term prescribed by section 49 (7-A) (i) would thus complete on 19.12.2006. The point for us to consider here is whether the appellants board have remained out of office during this period as contemplated in the proviso of sub-section (i) of section 49 (7- A). To be exact and distinct this provision is reproduced as below: 49 (7-A) (i) -- The term of the Board of Directors shall be five years from the date on which first meeting of the Board of Directors is held. Provided that where a Board of Directors superseded, suspended or removed under the Act is reinstated as a result of any order of any Court or Authority, the period during which the Board of Directors reamined under supersession, suspension out of office as the case may be, shall be excluded in computing the period of the term aforesaid. (ii) The term of the representative elected by the Board of Directors of the society shall be coterminus with the term of the Board of Directors of the society for which representative is elected. Provided that the representative of a Board of Directors shall continue to hold his office till the expiry of the term of the Board of Directors of which he is a member. (7-AA) The State Government may, be notification, for reasons to be stated therein, extend the term of the Board of Directors of a society or a class of societies from time to time, for a total period not exceeding twelve months.
(7-AA) The State Government may, be notification, for reasons to be stated therein, extend the term of the Board of Directors of a society or a class of societies from time to time, for a total period not exceeding twelve months. (7-AAA) Not withstanding the expiry of the maximum period of eighteen months specified in sub-section (7-AA) in respect of the Board of Directors between the period commencing on the 7th May, 1988 [hereinafter referred to as the said date) and ending on the date of publication of the Madhya Pradesh Cooperative Societies (Amendment) Ordinance, 1988] in Gazette the period in respect of such Board of Directors shall be deemed to have been extended for a period of six months with effect from the said date as if the notification for the extension of the period were issued under subsection (7-AA) on the said dates." 9. The proviso as quoted above requires the period of supersession, suspension and removal of a board to be taken into account for the exclusion of the term of five years provided. The board is superseded u/s 53 (1) its suspension takes place u/s 53 (10) and the removal takes place in section 53 (11). As regards the cessation of the board provided in section 53 (13) the same can neither be classified as a supersession nor a suspension or the removal to be clear about this provision is reproduced below as under: "53 (13). Notwithstanding anything contained in this Act, or rules made there under or byelaws of society, if the Board of Directors of society ceases to function due to order of any Court or otherwise, the Registrar may appoint a person or (Board of Directors ) of persons temporarily till the Court order is vacated or the new elections are held and the Board of Directors takes charge: Provided that in case of a Cooperative Bank, no person or committee of persons shall be appointed by the Registrar without previous consultation with the Reserve Bank : Provided further that if no communication containing the views of the Reserve Bank of India, on action proposed is received within thirty days of the receipt by that bank of the request soliciting consultation, it shall be presumed that the Reserve Bank of India agrees with the proposed action and the Registrar shall be free to pass such order as may be deemed fit." 10.
It is clear from the above that the circumstances in which the Registrar takes over the charge u/s 53 (13) is specific since in it. (i) the board ceases to function due to the order of any Court or otherwise. (ii) the temporary arrangement is till the vacation of the order of the Court or the new election to be held. It has therefore to be concluded that the period in which the appellants board has either remained under super session in section 53 (1) or under suspension u/s 53 (10) the period of its remaining out of office has to be excluded for giving them the advantage of enjoying it as per provision of law. 11. Following actions affecting the term of the board of the appellant have been taken by the Assistant Registrar : (i) The charge of the Board was taken over u/s 53 (13) on 30.3.2005. (ii) The Board was suspended u/s 53 (10) on 28.12.2006. (iii) The Board was superseded u/s 53 (1) on 8.1.2007. 12. It is important at this stage to consider if the extended period of the board under sub section 7-AA of section 49 should be taken into account for the calculation of the term prescribed for the appellant. It is clear that according to clause (i) the term is for five years from the date of the first meeting of the Board. This is the natural and normal term prescribed; It is a term, which is transparently made known for those who are contesting election for remaining in office according to it. It is a term for which the appellants contested the election and they knew it beforehand how much time they have to remain in office. The extended term under sub section 7-AA is an exceptional power of the State Government for extending the term of a class of society for reasons to be stated. The appellants at the time of their election in December, 2001 would not have imagined that the State Government for reasons to be recorded in 2007 would extend the term of this class of society by one year. It could also not be foreseen by any diligence that the Board in all circumstances would remain in office in all probabilities.
The appellants at the time of their election in December, 2001 would not have imagined that the State Government for reasons to be recorded in 2007 would extend the term of this class of society by one year. It could also not be foreseen by any diligence that the Board in all circumstances would remain in office in all probabilities. In case if the board is superseded or the Directors have otherwise been rendered disqualified, the extension of term by the Government would in no circumstance help them to come back and continue. The proviso under which the benefit is provided for computing the period of remaining out of office succeeds clause (i) of sub section 7-A only. This is thus a part of this sub section and aims at providing protection for those who have been affected under it only. There is no such protection provided by any proviso having been added to sub section 7-AA of the Act. We have thus to conclude that the benefit available through the proviso of clause-- (i) of sub section 7-A is confined to the original tern1 of five years available to the appellants for which they were elected i.e. 20.12.2001 to 19.12.2006. 13. In the light of above analysis the period for which the appellant can be considered is the period of their suspension by order dated 28.12.2006 u/s 53 (10) only. But as we have seen the Board according to its original term was entitled to remain in office till 19.12.2006 only of the suspension of it virtually took place on 28.12.2006 when its natural term had already come to have a close. 14. Therefore we do not find any merit in the present case for the appellants to be provided the benefit of any expired or extended term in the light of the above cited judgment of Hon'ble Supreme Court in Baby Samuel's case. The appeal is therefore disallowed. The parties to bear their own costs.