JUDGMENT : BELA M. TRIVEDI, J. 1. All the petitions being interconnected with each other, were heard together with the consent of the learned advocates appearing for the parties and hence this common order is being passed. 2. Special Civil Application No. 19715 of 2015 was filed by Natwarlal Pitambardas Patel and 8 others on 26.11.2015, apprehending that the respondent-State Authorities would nominate/appoint the Directors in the Board of Directors of Mehsana District Central Cooperative Bank Limited (hereinafter referred to as “the Bank”). Hence, following prayers were sought: “(A) The Hon'ble Court be pleased to issue a writ of prohibition or writ in nature if prohibition or any other appropriate writ, order or direction, restraining the respondent State Authorities from nominating any Directors/appointing any Directors in the Board of Directors of Mehsana District Central Cooperative Bank Limited. (B) Pending final hearing and disposal of the petition, the Hon'ble Court be pleased to restrain the respondent State Authorities from nominating any Directors/appointing any Directors in the Board of Directors of Mehsana District Central Cooperative Bank Limited. (C) Pending final hearing and disposal of the petition, the Hon'ble Court be pleased to restrain any nominated Director/Director appointed by the State Authorities to vote at the elections of office bearers of Mehsana District Central Cooperative Bank Limited. (D) The Hon'ble Court may be pleased to grant such other and further reliefs as deemed just ad proper by this Hon'ble Court in the interest of justice.” 3. It appears that initially there was no interim order passed by the Court and the Custodian had scheduled to hold election of the Chairman and the Vice Chairman of the Managing Committee of the respondent Bank on 29.12.2015. The petitioners therefore had moved the Civil Application No. 13447 of 2015, seeking an interim relief. The Single Bench on 28.12.2015 passed the following order: “10. The election process which is scheduled for tomorrow i.e. 29.12.2015 is not stayed. As stated by learned Additional Advocate General Mr. Jani that the Government is likely to appoint a nominee as by now the subscription to the share capital of the society must have been deposited with the bank and therefore, the nominee that would be appointed by the State Government cannot be restrained from casting his vote in the meeting at this stage.
Jani that the Government is likely to appoint a nominee as by now the subscription to the share capital of the society must have been deposited with the bank and therefore, the nominee that would be appointed by the State Government cannot be restrained from casting his vote in the meeting at this stage. Therefore, the process of election shall take place tomorrow, but the vote caste by the nominee of the State Government shall be kept in a separate sealed cover and the result of the election shall not be declared until further orders that may be passed in the writ petition. The bye-laws of the society provide for policy/voting raising finger. Since by this order, it is directed that the vote of the nominee of the Government shall kept in sealed cover by consent of the counsel for both the sides, it is directed that the polling/voting shall by ballot paper as a special case limited for the election schedule on 29.12.2015 only as a departure from the provisions of the bye-laws. This order is passed without prejudice to the contention of both the sides.” 4. In the meantime, two Professional Directors having been co-opted by the Custodian and one Director having been nominated by the State Government in the respondent-Bank, Special Civil Application No. 97 of 2016 came to be filed by the same petitioners namely Natwarlal Pitambardas Patel and 8 others on 04.01.2016 for quashing and setting aside the order dated 26.11.2015 passed by the Custodian of the respondent Bank, co-opting two professional Directors i.e. respondent Nos. 6 and 7 in the Board of Directors of the respondent Bank, and also for setting aside the order passed by the State Authorities nominating the Director i.e. respondent No. 8 under Section 80 of the Gujarat Cooperative Societies Act (hereinafter referred to as “the said Act”) in the Board of Directors of the respondent-Bank. They also prayed to set aside the election of the Chairman and the Vice Chairman of the respondent-Bank held on 29.12.2015, and to hold fresh election of the Chairman and the Vice Chairman from amongst the 17 Directors i.e. 15 elected Directors, 1 representative of the Registrar and 1 representative of the Gujarat State Cooperative Bank, excluding the three nominated and co-opted Directors.
The said petition was amended by incorporating the prayer for setting aside the resolution of the State government dated 28.12.2015 to subscribe to the share capital of the Bank and its consequential resolution dated 28.12.2015 to nominate the respondent No. 8 as its nominee. 5. Thereafter Special Civil Application No. 10429 of 2018 came to be filed on 02.07.2018 by the petitioners-Amitaben Vipulbhai Shah and Babaldas Nagjibhai Patel, who were appointed as the Professional Directors in the Managing Committee of the respondent-Bank, challenging the order dated 14.06.2018 passed by the respondent Bank i.e. the Custodian removing the petitioners as the Professional Directors from the Managing Committee of the Bank. 6. Special Civil Application No. 224 of 2019 has been filed by the petitioner Navinchandra Jagjivandas Patel seeking directions against the respondent Authorities to hold elections of the Chairman and the Vice Chairman of the respondent-Bank. 7. All the petitions have chequered history which may be summarized in a tabular form as under:- S. No. Date Event SCA No. SCA No. 19715 of 2015 97 of 2016 1 30.10.2014 A proposal to hold elections came to be submitted by the respondent-Bank to the Collector requesting to hold the election of the members of the Managing Committee. 20 2 06.02.2015 Special Civil Application No. 2355 of 2015 came to be filed by the respondent Bank seeking direction against the State Authorities to initiate the process of election. The said petition came to be withdrawn as per the order dated 24.02.2015 passed by the Division Bench, on the affidavit filed by the State Government to the effect that election shall be held and concluded as early as possible and preferably before 30.04.2015. 3 01.04.2015 The term of the elected body of the respondent Bank expired. 4 07.04.2015 Special Civil Application No. 6065 of 2015 came to be preferred by the petitioners namely Vitthalbhai Madhavlal Patel and others on the apprehension that the Custodian would be appointed. In the said petition Notice was issued on 08.04.2015, however no interim relief was granted. 5 10.04.2015 An amendment was made in the Gujarat State Cooperative Societies Act effective from 10.04.2015. 6 13.04.2015 Pursuant to the amendment in the Act the custodian was appointed in the respondent Bank.
In the said petition Notice was issued on 08.04.2015, however no interim relief was granted. 5 10.04.2015 An amendment was made in the Gujarat State Cooperative Societies Act effective from 10.04.2015. 6 13.04.2015 Pursuant to the amendment in the Act the custodian was appointed in the respondent Bank. 7 16.04.2015 Letters Patent Appeal No. 831 of 2015 was preferred by the petitioners of the Special Civil Application No. 6065 of 2015 against the order dated 08.04.2015, whereby no interim relief was granted. 8 24.04.2015 Division Bench allowed the Letters Patent appeal No. 831 of 2015 and restrained the Custodian from functioning. 26 9 06.05.2015 The State Government preferred Special Leave to Appeal (C) No. 1389 of 2015 challenging the order passed in Letters Patent Appeal No. 831 of 2015, wherein the Supreme Court directed that the Custodian appointed shall continue. 10 27.07.2015 The Special Civil Application No. being 11961 of 2015 came to be filed by 6 Cooperative Societies seeking direction to initiate the process of election in which the Division Bench had issued Notice on 28.07.2015. 11 12.08.2015 Special Civil Application No. 11961 of 2015 came to be disposed of along with Special Civil Application No. 12602 of 2015 directing the State Government to complete the election within a period of 60 days from 13.08.2015. 75 26 12 09.09.2015 A contempt petition being Misc. Civil Application 2583 of 2015 was filed by the petitioners of Special Civil Application No. 11961 of 2015 alleging that the elections were not being held despite the directions of the Division Bench (the said Misc. Civil Application was disposed of on 06.11.2015, on the AGP placing on record the notification published in the newspaper for holding the election). 13 30.09.2015 Special Civil Application No. 8960 of 2015 filed by one Mahadevbhai Chaudhari for restraining the Custodian from enrolling new members in the respondent Bank was partly allowed. 14 30.09.2015 One Patel Parshottambhai Gangaram preferred Special Civil Application No. 15938 of 2015 seeking direction against election officer to hold election of 3 Directors of the respondent Bank. 15 12.10.2015 The Special Civil Application No. 15300 of 2015 was filed by one Ucharpi Seva Sahakari Mandali apprehending that the State Government shall subscribe to the share capital of the respondent Bank. The said petition came to be disposed of as not pressed for.
15 12.10.2015 The Special Civil Application No. 15300 of 2015 was filed by one Ucharpi Seva Sahakari Mandali apprehending that the State Government shall subscribe to the share capital of the respondent Bank. The said petition came to be disposed of as not pressed for. 147 16 26.10.2015 Special Civil Application No. 15938 of 2015 came to be dismissed against which Letters Patent Appeal No. 1362 of 2015 was filed, however was dismissed by the Division Bench by order dated 04.11.2015. 95 43 17 27.10.2015 Special Civil Application No. 18059 of 2015 came to be filed by one Natwarlal Pitambardas Patel challenging the rejection of his nomination form on the ground that he had incurred disqualification on 24.10.2015 as per Section 27(2) of the Act and the bye-laws. 18 02.11.2015 Special Civil Application No. 18059 of 2015 came to be allowed by the Single Bench directing the Election Officer to include the name of the petitioner. 160 82 19 05.11.2015 Letters Patent Appeal No. 1368 of 2015 was preferred, however the Division Bench rejected the Appeal and upheld the order passed in Special Civil Application No. 18059 of 2015. 149 96 20 17.11.2015 Special Leave to Appeal (C) No. 31974 of 2015 challenging the order dated 04.11.2015 in Letters Patent Appeal No. 1362 of 2015 was preferred, however the same was dismissed. 133 81 21 18.11.2015 List of valid candidates of individual constituencies was published by the Election Officer. 134 22 19.11.2015 General Elections of the respondent Bank for 12 seats were held. 23 26.11.2015 Special Civil Application No. 19715 of 2015 was filed by the petitioners Natwarlal Pitambardas Patel and 8 others on the apprehension that the Government shall appoint government nominee on the Board of Directors. 24 26.11.2015 Custodian of the respondent bank passed an order nominating/co-opting two Professional Directors-Amitaben Vipulbhai Shah and Babaldas Nagjibhai Patel (respondent Nos. 6 and 7 in Special Civil Application No. 97 of 2016 and petitioners in Special Civil Application No. 10429 of 2018). 25 16.12.2015 The Registrar issued Notices against the petitioners No. 7 and 8Dipakbhai Prahaladbhai Patel and Tusharbhai Natwarlal Patel in Special Civil Application No. 19715 of 2015 and Special Civil Application No. 97 of 2016 under Section 23 and Section 11 of the said Act.
25 16.12.2015 The Registrar issued Notices against the petitioners No. 7 and 8Dipakbhai Prahaladbhai Patel and Tusharbhai Natwarlal Patel in Special Civil Application No. 19715 of 2015 and Special Civil Application No. 97 of 2016 under Section 23 and Section 11 of the said Act. The said petitioners challenged the said Notices by filing Special Civil Application No. 19835 of 2015 which was dismissed by the single bench vide order dated 16.12.2015. 26 17.12.2015 Letters Patent Appeal No. 1459 of 2015 came to be filed against the order dated 16.12.2015 in Special Civil Application No. 19834 of 2015, and the said Letters Patent Appeal was allowed. 109 27 19.12.2015 A communication was sent to the election officer by the Incharge Manager of the 252 Bank informing the names and addresses of the Directors of the new Managing committee. 28 21.12.2015 The petitioners of Special Civil Application No. 19715 of 2015 had preferred Special Civil Application No. 20876 of 2015 seeking direction against the respondent authorities to immediately convene the first meeting of the newly elected committee members of the respondent Bank. The said petition came to be disposed of as not pressed for, on the AAG placing on record the communication dated 19.12.2015 sent to all the elected Directors scheduling the meeting on 29.12.2015. 29 23.12.2015 A Civil Application No. 13369 of 2015 came to be filed by the petitioners of Special Civil Application No. 19715 of 2015 apprehending that the State Government may nominate the Director on the Board of Directors. 30 28.12.2015 A Civil Application No. 13347 of 2015 came to be filed by the petitioners of Special Civil Application No. 19715 of 2015 seeking stay of execution and implementation of the order nominating/appointing of any Director in the Board of Directors of the respondent Bank. The Court passed the order as stated herein above. 31 28.12.2015 Another petition being 142 Special Civil Application No. 21190 of 2015 came to be filed by one Dipakbhai Prahaladbhai Patel and two others seeking direction against the respondent to participate in the first meeting of the elected Directors which was scheduled on 29.12.2015. 32 28.12.2015 A Lawad Suit No. 230 of 2015 challenging the induction of the petitioners nos. 7 and 8 i.e. Dipakbhai Prahaladbhai Patel and Tusharbhai Natwarlal Patel as members was filed before the Board of Nominees.
32 28.12.2015 A Lawad Suit No. 230 of 2015 challenging the induction of the petitioners nos. 7 and 8 i.e. Dipakbhai Prahaladbhai Patel and Tusharbhai Natwarlal Patel as members was filed before the Board of Nominees. 33 29.12.2015 Special Civil Application No. 21204 of 2015 was filed challenging the jurisdiction of the Board of Nominees, in which the Court permitted the petitioners to cast their votes. 222 34 29.12.2015 Election of the Chairman and the Vice Chairman of the Managing Committee of the respondent Bank was held. 35 04.01.2016 Special Civil Application No. 97 of 2016 was filed by the same petitioners of the Special Civil Application No. 19715 of 2015 for quashing and setting aside the order dated 26.11.2015 passed by the custodian nominating two professional directors in which Notices were issued by the Court however no interim relief was granted on 05.01.2016. 36 07.01.2016 Since the elections were held on 29.12.2015, the two candidates i.e. Dashrathbhai Jethabhai Patel and Gauranbhai Naranbhai Patel who had contested for the post of Chairman and Vice Chairman preferred an application being civil Application No. 285 of 2016 for impleading them as party respondent in Special Civil Application No. 19715 of 2015. 37 08.01.2016 Since the petitioners did not object their impleadment, the said two applicants Dashrathbhai Jethabhai Patel and Gauranbhai Naranbhai Patel were impleaded as party respondent Nos. 5 and 6 in Special Civil Application No. 19715 of 2015. 38 14.06.2018 The custodian of the respondent bank canceled the appointment/ nomination of the two professional directors Amitaben Vipulbhai Shah and Babaldas Nagjibhai Patel. 39 02.07.2018 The said two Professional Directors filed Special Civil Application No. 10429 of 2018. 40 12.07.2018 The Court by way of interim order in Special Civil Application No. 10429 of 2018 directed that any appointment on the post of Professional Directors shall be subject to the final outcome of the petition. 41 07.01.2019 The Special Civil Application No. 224 of 2019 came to be filed by the petitioner Navinchandra Jagjivandas Patel seeking direction to hold the election of the Chairman and the Vice Chairman of the respondent Bank. 8. At the outset, it may be mentioned that on 24.12.2018 the petitions being Special Civil Application Nos.
41 07.01.2019 The Special Civil Application No. 224 of 2019 came to be filed by the petitioner Navinchandra Jagjivandas Patel seeking direction to hold the election of the Chairman and the Vice Chairman of the respondent Bank. 8. At the outset, it may be mentioned that on 24.12.2018 the petitions being Special Civil Application Nos. 19715 of 2015 and 97 of 2016 were sought to be withdrawn by the concerned learned Advocates appearing for the petitioners, with a request to detach the Special Civil Application No. 10429 of 2018. The Coordinate Bench had accordingly disposed of the said two petitions as not pressed for and directed to hear the Special Civil Application No. 10429 of 2018 on 17.01.2019. The Court had further observed in the said order that the election process shall now be completed in accordance with law. Thereafter Misc. Civil Application No. 3 of 2018 came to be filed in Special Civil Application No. 19715 of 2015 by the applicant-Patel Ishwarbhai Jivabhai (original petitioner No. 4) and Misc. Civil Application No. 4 of 2018 came to be filed in Special Civil Application No. 19715 of 2015 by the applicant Patel Dashrathbhai Jivanbhai (original petitioner No. 6) seeking prayer to recall the order dated 24.12.2018 and restore the petitions being Special Civil Application No. 19715 of 2015 and Special Civil Application No. 97 of 2016 along with all interim orders, and further praying to delete the respondent Nos. 1 to 7 (original petitioner Nos. 1 to 3, 5,7, 8 and 9) as the party petitioners in the restored petitions. The Misc. Civil Application No. 5 of 2018 in Special Civil Application No. 19715 of 2015 and the Misc. Civil Application No. 2 of 2018 in Special Civil Application No. 97 of 2016 also came to be filed by the applicants-State of Gujarat, the Registrar and the District Registrar (original petitioner Nos. 1 to 3) seeking modification in the order dated 24.12.2018 passed by the Court so far as the direction with respect to completion of the election process was concerned. The Coordinate Bench passed the common order on 18.01.2019 allowing all the said Misc. Civil Applications and recalling the order dated 24.12.2018 passed by it and further restoring the Special Civil Application No. 19715 of 2015 and Special Civil Application No. 97 of 2016 to their respective original files.
The Coordinate Bench passed the common order on 18.01.2019 allowing all the said Misc. Civil Applications and recalling the order dated 24.12.2018 passed by it and further restoring the Special Civil Application No. 19715 of 2015 and Special Civil Application No. 97 of 2016 to their respective original files. It was observed in the said order that with the restoration of the two main petitions, the position prevailing prior to the withdrawal of the two petitions also would stand restored. 9. When the matters were listed before this Court, all the concerned learned Advocates appearing for the parties had requested the Court to hear the matters finally and accordingly the Court had directed to hear the matters finally at the admission stage as per the order dated 06.05.2019. On 19.06.2019, when the matters were taken up for hearing, the learned Advocate Mr. Dipen Desai appearing for the petitioner Nos. 1 to 3, 5, 7, 8 and 9 in both the petitions i.e. Special Civil Application Nos. 19715 of 2015 and 97 of 2016 had stated at the Bar that the said petitioners would adhere to the contents of the petitions filed by them and that he had no objection if the petitions were decided on merits, and that he also had no objection if the learned Senior Advocate Mr. Kavina appearing for learned Advocate Mr. Harshil Dattani appearing for the petitioner Nos. 4 to 6 in both the petitions, led the said two petitions. Accordingly the Court had recorded the said statement of learned Advocate Mr. Desai in the order dated 19.06.2019 and heard the learned Advocates for the parties in all the four petitions. 10. All the learned Advocates appearing for the parties had made lengthy submissions which are summarized as under: (I) Submissions by learned Senior Advocate Mr. Kavina appearing for the petitioners in Special Civil Application No. 19715 of 2015 and 97 of 2016: (i) Mr. Kavina taking the Court to the chronology of dates and events and to the provisions contained in the Act submitted that the original Special Civil Application No. 19715 of 2015 was filed by the petitioners apprehending that the Custodian as well as the State Government would nominate Directors with a view to convert the minority members into majority members in the election and to defeat the very purpose of the said Act.
The Custodian had deliberately delayed the process of election of the Managing Committee of the respondent No. 4Bank. According to him, the Custodian had acted malafide by appointing two Professional Directors under the provisions contained in Section 74(2) and the State Government had illegally nominated one Nominee Director under Section 80(1)(3) of the said Act, one day prior to the date of election of the Chairman and the Vice Chairman of the Managing Committee of the said Bank with a view to change the equation at the time of the election of the Chairman and Vice Chairman. (ii) According to Mr. Kavina the appointment of two Professional Directors by the Custodian was absolutely without jurisdiction and contrary to the procedure laid down under the law. In the present case, the election process was completed on 19.11.2015 qua 12 seats and on 27.11.2015 qua three seats. Hence, if the date 19.11.2015 is considered to be the date on which the Managing Committee was construed to be elected, the Custodian could not have appointed Professional Directors on 26.11.2015 as the term of the Custodian had stood automatically expired, and if the date 27.11.2015 is considered to be the date on which the election process was completed, as per the mandate of Section 74(2), the Custodian could not have appointed the Professional Directors at all. (iii) It was further submitted that the Custodian was required to discharge the functions of the Managing Committee and not to exercise the powers of the Managing Committee. The appointment/cooption of the Professional Directors of the Managing Committee of the Bank by the Directors of the Managing Committee was the rudimentary aspect of the cooperative movement which was not followed by the Custodian. Appointments of the Professional Directors were also made without inviting the applications by issuing the public notice and therefore also the same were illegal. (iv) The very fact that during the pendency of the petitions, the said appointments of the Professional Directors were canceled, suggested that the Custodian had acted illegally while making their appointments. It was lastly submitted that the term of the Chairman and the Vice Chairman being limited to two and half years and since the results could not be declared because of the pendency of these petitions, the office bearers cannot claim extension further for the term of two and half years.
It was lastly submitted that the term of the Chairman and the Vice Chairman being limited to two and half years and since the results could not be declared because of the pendency of these petitions, the office bearers cannot claim extension further for the term of two and half years. Since the term of the Office Bearers is for a period of two and half years from the date of election, the same has to be counted from the date of election i.e. 29.12.2015 and therefore the term of the Chairman and the Vice Chairman is required to be construed as having expired in June, 2018. Thus, according to him, the Special Civil Application No. 224 of 2019 automatically stands allowed by the implications of law and at the same time Special Civil Application No. 10429 of 2018 automatically gets rejected considering the fact that the very basis of the appointment of Directors did not hold the ground any more. (II) Submissions by learned Senior Advocate Mr. Anshin Desai with learned Advocate Mr. Zalak Pipaliya on behalf of respondent Nos. 9 and 10 in Special Civil Application No. 19715 of 2015 and Special Civil Application No. 97 of 2016. (i) Special Civil Application No. 19715 of 2015 is rendered infructuous by passage of time. In Civil Application No. 13447 of 2015 (for stay) in Special Civil Application No. 19715 of 2015, an order was passed on 28.11.2015 for getting the election result in a sealed cover but the elections of the Chairman and the Vice Chairman were not stayed. (ii) Special Civil Application No. 19715 of 2015 was preferred on presumptions and assumptions, and even otherwise the respondents were not impleaded as the party respondents and therefore it deserved to be dismissed on the ground of non-joinder of the necessary parties. It was only when the present respondents moved an application No. 285 of 2016 for impleadment, they were impleaded as such by the order of the Court on 08.01.2016. The Special Civil Application No. 97 of 2016 is hit by constructive res-judicata.
It was only when the present respondents moved an application No. 285 of 2016 for impleadment, they were impleaded as such by the order of the Court on 08.01.2016. The Special Civil Application No. 97 of 2016 is hit by constructive res-judicata. (iii) The State Government in its reply filed in Special Civil Application No. 19715 of 2015 has justified the action of the co-opting two Professional Directors and one nominee Director, and the stand of the State Government cannot be permitted to be changed, which otherwise would amount to approbate and reprobate in view of the decision of the Supreme Court in case of Suzuki Parasrampuria Suitings Private Limited vs. Official Liquidator of Mahendra Petrochemicals Limited and Others, 2018 (10) SCC 707 and in case of Sanjay Kumar vs. State of Bihar and Another, 2014 (9) SCC 230 . (iv) The term of the committee according to section 74 (1) of the said Act can be said to have been started on 27.11.2015 as three Individual Directors were declared uncontested on 27.11.2015. (v) The issue of challenge to the appointment of the Custodian made on 13.04.2015 in Special Civil Application No. 6065 of 2015 had come to an end when the said petition was disposed of. The Supreme Court also thereafter had directed the Custodian to continue and therefore also the said challenge had paled into insignificance. (vi) Distinguishing the judgment of the Single Bench in Special Civil Application No. 8960 of 2015, it was submitted that the said judgment was not applicable to the facts of the present case, as in the said case, the issue was with regard to the admission of the new members and in the said context it was held that Section 74(D) of the said Act did not contemplate powers to admit new members. However in the present case, the issue is with regard to the compliance with the mandate of Section 74(2), which obliges the concerned Bank to co-opt the Professional Directors on the committee. (vii) As on 26.11.2015, it was declared that none of the 15 Directors were holding any qualification of the Professional Directors, and therefore the Custodian had no option but to co-opt the Professional Directors.
(vii) As on 26.11.2015, it was declared that none of the 15 Directors were holding any qualification of the Professional Directors, and therefore the Custodian had no option but to co-opt the Professional Directors. (viii) The question of holding fresh election of the Chairman/Vice Chairman does not arise as the result of the election held on 29.12.2015 has not been declared by virtue of the interim order passed by the Court and therefore their term could not be said to have expired on completion of two and half years of the general election of the members of the Managing Committee. (III) Submissions made by learned Additional Advocate General Mr. P.K. Jani appearing for the respondent-State. (i) The Elections of the Chairman and the Vice Chairman took place on 29.12.2015. The term of the Chairman and the Vice Chairman was for two years and six months from the date of election and accordingly has come to an end on 28.06.2018. Both the writ petitions therefore have become infructuous, so far as the prayers to quash and set aside the election of the Chairman and the Vice Chairman are concerned. (ii) In view of the provisions contained in Section 74(2)(i) and Section 74(2)(iv) of the said Act, the term of the office bearers having expired, fresh elections for the Chairman and the Vice Chairman is required to be held. (iii) The State Government has powers to subscribe to the share capital in a cooperative society in exercise of the powers conferred to it under Section 51 read with Section 80 of the said Act. At the request of the Custodian, the State government had decided to subscribe to the share capital of the respondent Bank, which decision was preceded by the letters of the said respondent-Bank addressed to the Registrar-Cooperative Societies and the letter by the Registrar-Cooperative Societies to the State Government in that regard. The State Government had subscribed to the share capital after taking into consideration all the letters and resolutions of the Custodian on behalf of the Bank, and had appointed its nominee on 28.12.2015 in exercise of powers conferred under Section 80(1) read with Section 80(3) of the said Act. Mr. Jani has placed reliance on the decision of this Court in case of Amreli District Cooperative Sale and Purchase Union vs. State of Gujarat, 1984 (2) GLR 1244 .
Mr. Jani has placed reliance on the decision of this Court in case of Amreli District Cooperative Sale and Purchase Union vs. State of Gujarat, 1984 (2) GLR 1244 . (iv) Since the two Professional Directors were appointed by the Custodian, it is for the Custodian to make submissions in that regard. (v) Special Civil Application No. 6065 of 2015 was filed by some of the petitioners apprehending the appointment of the Custodian as the term of the elected body of the respondent Bank was to come to an end on 04.04.2015. Since the Single Bench did not grant any ad-interim relief, the said petitioners had preferred Letters Patent Appeal No. 831 of 2015 in which the Division Bench had passed the order on 24.04.2015 directing the Custodian, who was appointed on 15.04.2015, to hand over the charge of the committee forthwith. However being aggrieved by the said order the State Government having filed the Special Leave Petition in the Supreme Court, and by virtue of the Order passed by the Supreme Court the Custodian was continued in the respondent Bank. (vi) Pending the Special Leave Petition, on 19.11.2015, the election of the members of the Managing Committee had taken place and the result was declared and therefore in the eye of law, the new committee had come into existence. However on 27.11.2015, the Supreme Court allowed the Special Leave Petition and allowed the Custodian to continue. Thereafter the Special Civil Application No. 6065 of 2015 also came to be disposed on 21.06.2016, as there remained no proceedings in the eye of law in relation to the challenge to the appointment of the Custodian. (vii) So far as the prayers contained in the para 6 (C) in Special Civil Application No. 97 of 2015, with regard to the quashing the election of the Chairman and the Vice Chairman is concerned, the said prayer has become infructuous as two years and six months have already elapsed from the date of election of the Chairman and the Vice Chairman, and fresh election is required to be held for the remainder term. As regards the prayers contained in para 6(B) in Special Civil Application No. 97 of 2016, it is submitted that the State Government has appointed Government Nominee in accordance with the provisions contained in Section 80 of the said Act and therefore the said prayer may not be granted.
As regards the prayers contained in para 6(B) in Special Civil Application No. 97 of 2016, it is submitted that the State Government has appointed Government Nominee in accordance with the provisions contained in Section 80 of the said Act and therefore the said prayer may not be granted. (IV) Learned Advocate Mr. B S Patel appearing for the respondent Custodian has adopted the submissions of learned AAG Mr. P.K. Jani. (V) Submissions made by learned Advocate Mr. H.C. Buch on behalf of co-opted Professional Directors, who are the respondent Nos. 6 and 7 in Special Civil Application No. 97 of 2016 and who are the petitioners in Special Civil Application No. 10429 of 2018. (i) The provisions contained in Section 74(2) of the said Act mandate that there shall be two professional members on the committee of the Central Cooperative Bank. The Reserve Bank of India as well as the NABARD have fixed the qualifying criteria of the persons to be appointed as professional members. The bye-laws of the respondent-Bank also provide for the appointment of the professional members on the committee. The Custodian appointed in the respondent-Bank, after considering the said criteria and qualifications of the respondent Nos. 6 and 7 had co-opted them as the Professional Directors in the respondent Bank vide resolution dated 26.11.2015 on the basis of the communication dated 21.11.2015 of the State Registrar. (ii) The Custodian had powers under Section 74D(3) of the Act to perform all or any of the functions of the managing committee and to follow the instructions of the Registrar and take all actions as may be required in the interest of the society. Therefore the cooption of the respondent Nos. 6 and 7 was in accordance with the said provisions. None of the authorities had doubted the powers of the Custodian to co-opt respondent Nos. 6 and 7 as the Professional Directors. (iii) As regards the removal of the said Professional Directors by the Custodian vide order dated 14.06.2018 (challenged in the Special Civil Application No. 10429 of 2018), it was sought to be submitted that the said order was void ab initio inasmuch as it was passed in gross violation of the principles of natural justice and was passed without jurisdiction. According to him, the Custodian did not have the power to remove any member of the committee.
According to him, the Custodian did not have the power to remove any member of the committee. The said order being stigmatic in nature, the said Professional Directors were required to be given an opportunity of hearing before removing them. (iv) When the challenge to the cooption in Special Civil Application No. 97 of 2016 is pending adjudication where the Custodian has defended his action in appointing the Professional Directors, the order of their removal is passed by the Custodian with a view to overreach the process of law. (v) The Co-opted Professional Directors are the 'Officers' as defined under Section 2(14) of the Act and therefore the power to remove the Officer is conferred upon the Registrar only under Section 76B of the said Act. (vi) When the statute provides for a mechanism to be undertaken to perform a statutory function in a particular manner, it shall be performed in that manner only and not in any other manner. The contention of the Custodian that the power to appoint includes the power to remove and/or the availability of the 'doctrine of pleasure' is misconceived and contrary to the provisions of the Act. (vii) The term of the professional co-opted member is coextensive with the term of the other co-opted members and the professional members have all the rights of the members including the right to vote as per Section 74(2) of the said Act. Hence, such appointment or cooption of the Professional Directors cannot be at the sweet-will of the elected members or the Custodian. (VI) Submissions of learned Advocate Mr. S.N. Thakkar on behalf of the respondent- Custodian in Special Civil Application No. 10429 of 2018. (i) The petitioners in Special Civil Application No. 10429 of 2018 were co-opted Professional Directors in the respondent-Bank by the Custodian in exercise of the powers conferred under Section 74(2) of the said Act read with the byelaw No. 32(1)(b) of the bye-laws of the respondent-Bank, and they are not elected members in the respondent-Bank.
(i) The petitioners in Special Civil Application No. 10429 of 2018 were co-opted Professional Directors in the respondent-Bank by the Custodian in exercise of the powers conferred under Section 74(2) of the said Act read with the byelaw No. 32(1)(b) of the bye-laws of the respondent-Bank, and they are not elected members in the respondent-Bank. As per the settled law, the co-opted or nominated members having been appointed at the pleasure of the appointing authority, they can be removed by the said authority even before the expiry of the term for which they were appointed, as the power to appoint carried with it the power to remove the Professional Directors as per the provisions contained in Section 16 of the Bombay General Clauses Act. (ii) Mr. Thakkar has relied upon the various decisions of the Supreme Court and of this Court to buttress his submission that the power to co-opt/appoint carried with it the power to remove and that no opportunity of hearing is required to be given before the removal of the nominated members. (iii) The Professional Directors have been co-opted by the Custodian in exercise of the powers conferred under Section 74(2) of the Act read with the bye-laws 32(1) (b) of the bye-laws of the respondent-Bank. Whereas the definition of the 'Officer' as contained in Section 2(14) of the said Act would include the person elected or appointed by the society and would not include the person co-opted as the Director or the member in the respondent-Bank. As per the settled legal position, while interpreting the statute, due regard must be given to the plain terms of the statute and it is not open for the Court to add or subtract any word into the said provision. In this regard, the reliance is placed on the decision of the Supreme Court in the case of Thalappalam Service Cooperative Bank Ltd. vs. State of Kerala and Others, 2013 (16) SCC 82. (iv) The co-opted members cannot claim parity with the elected members, as held by the Supreme Court in case of Babaji Kondaji Garad vs. Nasik Merchants Cooperative Bank Limited, Nasik and Others, 1984 (2) SCC 50 .
(iv) The co-opted members cannot claim parity with the elected members, as held by the Supreme Court in case of Babaji Kondaji Garad vs. Nasik Merchants Cooperative Bank Limited, Nasik and Others, 1984 (2) SCC 50 . (v) Alternatively, it has been submitted that the provisions contained in Section 76(B) of the said Act only enables the Registrar to remove an officer of the Cooperative Society for the circumstances mentioned therein and thereafter the Registrar can direct the concerned society to reelect or appoint such officer, however the said provisions ipso facto did not take away the powers of the Bank to remove the co-opted Professional Directors. (VII) Submissions made on behalf of the learned Advocate Mr. Baiju Joshi appearing for the petitioners in Special Civil Application No. 224 of 2019. (i) As per the amended provisions of Section 84(2)(i), the term of the Managing Committee of the specified society is five years from the date of election. Even if the date of election of the respondent-Bank which is a specified society and also a federal society is treated as date of declaration of result of the election of the committee to be 19.11.2015, the term of the committee will come to an end on 18.11.2020. (ii) As per Section 74(2)(C)(ii), the term of the office bearers of the managing committee is two and half years from the date of election. Therefore, even if the date of election is to be treated as 19.11.2015, the term of two and half years had come to an end on 18.05.2018. Section 74(C)(2)(iv) of the Act provides that the elected members of the Managing Committee and the Office bearers shall cease to hold their office upon the expiry of their term. Under the circumstances, the term of the Managing Committee will end on 19.11.2020 and the term of the office bearers has come to end on 18.05.2018 and therefore the office bearers had ceased to hold the office on 18.05.2018. Under the circumstances, the prayer of the petitioners to hold the election of the office bearers amongst the members of the managing committee of the respondent-Bank deserves to be allowed. (iii) After the expiry of the term of two and half years as per the provisions contained in the Act, such statutory period cannot be extended by any authority or the Court.
(iii) After the expiry of the term of two and half years as per the provisions contained in the Act, such statutory period cannot be extended by any authority or the Court. (iv) The respondent-Bank being the specified society as well as Federal Society under Section 74(C) of the Act, its election would be governed under Chapter XI of the Act. Section 145(B)(b) defines election as the election of the member or members of the committee of a specified society. Hence, on the conjoint reading of the said provision with Section 74(C)(2) of the Act, it is clear that upon completion of two and half years of the first term of the office bearers, irrespective of the fact whether they have performed their duties or not, the next election for the remaining term must take place. (v) The word “due” contained in Sub-section (2) of Section 145(Z) has to be read in consonance with Section 74(C)(2) and accordingly the next election for the office bearers of the managing committee is required to be held on the completion of two and half years from the date of election of the managing committee. 11. To recapitulate the facts, it may be stated that the Custodian was appointed in the respondent-Bank on 13.04.2015, on the amendment having been made in Section 74D of the said Act effective from 10.04.2015. Prior to the appointment of the Custodian, a petition being Special Civil Application No. 6065 of 2015 was preferred by some of the petitioners challenging the proposed action of the Registrar to appoint the Custodian in the respondent-Bank. As stated earlier the Single Bench having not granted any interim relief, the Letters Patent Appeal No. 831 of 2015 was preferred on 16.04.2015. The said Letters Patent Appeal came to be allowed by the Division Bench vide the order dated 23/24.04.2015 whereby the Custodian was restrained from functioning. However the State Government having preferred the Special Leave Petition before the Supreme Court, the appointment of Custodian was directed to be continued. Hence, the Custodian has remained in-charge of the respondent-Bank by virtue of the order passed by the Supreme Court till this date. It may further be noted that in the meantime, the election of the members of the Managing Committee of the respondent-Bank for twelve seats was held on 19.11.2015, and three members were declared elected uncontested on 27.11.2015.
Hence, the Custodian has remained in-charge of the respondent-Bank by virtue of the order passed by the Supreme Court till this date. It may further be noted that in the meantime, the election of the members of the Managing Committee of the respondent-Bank for twelve seats was held on 19.11.2015, and three members were declared elected uncontested on 27.11.2015. It appears that the petitioner nos. 1 to 6 of Special Civil Application No. 19715 of 2015 and of Special Civil Application No. 97 of 2016 were declared elected in the election held on 19.11.2015 and the petitioner Nos. 7 to 9 of the said petitions were declared elected uncontested on 27.11.2015. In the meantime, the election of the office bearers i.e. the Chairman and the Vice Chairman of the Bank was to be held, however the petitioners of Special Civil Application No. 19715 of 2015 apprehending that the Government shall appoint nominees on the Board of Directors, had filed the said petition on 26.11.2015. On the same day i.e. on 26.11.2015, the Custodian of the respondent Bank passed an order co-opting two Professional Directors Amitaben Vipulbhai Shah and Babaldas Nagjibhai Patel (respondent Nos. 6 and 7 in the said petitions) under Section 74(2) of the said Act. The petitioners of the Special Civil Application No. 19715 of 2015 further apprehending that the Government will subscribe to the share-capital of the respondent-Bank and shall nominate a Director under Section 80 of the said Act, filed Civil Application No. 13447 of 2015 in Special Civil Application No. 19715 of 2015. It appears that during the course of hearing the said Civil Application, the Government had already subscribed to the share capital of the respondent Bank and appointed a nominee Director, in exercise of powers conferred under sub-section (1) read with sub-section (3) of Section 80 of the said Act. The Court taking note of the same, passed the order on 28.12.2015, permitting to hold election for the post of Chairman and the Vice Chairman on 29.12.2015, however directed that the vote caste by the nominee of the State Government shall be kept in sealed cover and the result of the election shall not be declared until further orders. Thereafter, the election of the Chairman and the Vice Chairman of the respondent-Bank was held on 29.12.2015, but the results was not declared. 12.
Thereafter, the election of the Chairman and the Vice Chairman of the respondent-Bank was held on 29.12.2015, but the results was not declared. 12. The petitioners thereafter filed the petition being Special Civil Application No. 97 of 2016 on 04.01.2016 challenging the said election of the Chairman and the Vice Chairman held on 29.12.2015 and also challenging the resolution of the State Government to subscribe to the share-capital of the said Bank and consequentially the resolution to nominate a nominee Director. 13. In the backdrop of the aforestated facts, the first question that falls for consideration before this Court would be, has the Special Civil Application No. 19715 of 2015 become infructuous? 14. As stated earlier Special Civil Application No. 19715 of 2015 was filed by the petitioner with a limited prayer that the respondent State Authorities be restrained from nominating/appointing any Directors in the Board of Directors of the respondent-Bank. The said petition was filed on 26.11.2015, and on the same day the Custodian passed a resolution appointing two Professional Directors under Section 74(2) of the said Act. Thereafter, on 28.12.2015, the petitioners filed Civil Application No. 13447 of 2015 in the said Special Civil Application No. 19715 of 2015 apprehending that the government will subscribe to the share-capital of the respondent Bank and shall nominate a Director under Section 80 of the said Act. Now, the same petitioners had filed the substantive petition Special Civil Application No. 97 of 2016 challenging the order dated 26.11.2015 passed by the Custodian of the respondent Bank co-opting two Professional Directors i.e. respondent Nos. 6 and 7 and also the order passed by the State Authorities nominating the Director under Section 80 of the said Act in the Board of Directors of the respondent-Bank. The said petitioners have also challenged the election of the Chairman and the Vice Chairman held on 29.12.2015. Thus, the subsequent petition having been filed by the same petitioners seeking the prayers as sought for in the Civil Application filed in Special Civil Application No. 19715 of 2015, the said petition as such has become infructuous.
The said petitioners have also challenged the election of the Chairman and the Vice Chairman held on 29.12.2015. Thus, the subsequent petition having been filed by the same petitioners seeking the prayers as sought for in the Civil Application filed in Special Civil Application No. 19715 of 2015, the said petition as such has become infructuous. It may also be noted that the said petition having been filed under apprehension and thereafter subsequent events having taken place which are under challenge in Special Civil Application No. 97 of 2016, none of the prayers as such survive, and therefore could not be granted in Special Civil Application No. 19715 of 2015. It is true that there was an interim relief granted in the Civil Application filed in the said petition, by virtue of which the result of the election of the Chairman and the Vice Chairman has not been declared, nonetheless the said election is also challenged by the same petitioners in the Special Civil Application No. 97 of 2016. It is also pertinent to note that the Special Civil Application No. 224 of 2019 has been filed by the petitioner Navinchandra Jagjivandas Patel seeking direction against the respondent authorities to hold election of the Chairman and the Vice Chairman on the ground that their term of two and half years has already come to an end. The said issue whether the said term of the Chairman and the vice Chairman has come to an end or not shall be examined hereinafter, nonetheless the prayers sought in the Special Civil Application No. 19715 of 2015 have paled into insignificance in view of the subsequent petitions filed by the petitioners, and hence the same deserves to be dismissed as having become infrustuous. 15. Having said that, let us examine the issues involved in Special Civil Application No. 97 of 2016 as to whether the cooption made by the Custodian of two Professional Directors under Section 74 (2) of the said Act was legal and valid. As such, the two Professional Directors who were co-opted by the Custodian, have also filed Special Civil Application No. 10429 of 2018 as their appointments/ nominations have been cancelled by the respondent-Custodian of the Bank vide the order dated 14.06.2018.
As such, the two Professional Directors who were co-opted by the Custodian, have also filed Special Civil Application No. 10429 of 2018 as their appointments/ nominations have been cancelled by the respondent-Custodian of the Bank vide the order dated 14.06.2018. The other issue that falls for consideration before the Court is also as to whether the resolution of the State Government to subscribe to the share capital of the respondent Bank and the consequential resolution to nominate the respondent No. 8 as nominee director under Section 80(1) read with Section 80(3) of the said Act were legal and valid? 16. Before appreciating the rival contentions raised by the learned Advocates appearing for the parties, it would be beneficial to reproduce the relevant provisions contained in the said Act, necessary for the purpose of deciding the said issues. 17. Section 2(9) defines “federal society” as under: “Federal society” means society, not less than (ten members) of which are themselves societies. 18. Section 2(14) defines Officer as under: “officer” means a person elected or appointed by a society to any office of such society according to its bye-laws; and includes a chairman, vice-chairman, president, vice- president, managing director, manager, secretary, treasurer, member of the committee, and any other person elected or appointed under this Act, the rules or the bye-laws, to give directions in this regard to the business of such society.” 19. Section 74(1) of the said Act deals with the powers and functions of the Managing Committee of every society. Section 74(2) which pertains to the nomination/cooption of the Professional Directors being relevant is reproduced as under: “74(2) There shall be two professionals on the committee of the Central Cooperative Bank and the State Cooperative Bank having qualification prescribed by the Reserve Bank of India or, as the case may be, the National Bank. If such members are not elected on committee of the Central Cooperative Bank and the State Cooperative Bank, the Registrar shall direct the concerned Bank to co-opt such professional on the committee within the time limit specified in such direction of the Registrar. If the bank fails to comply with the aforesaid directions, the Registrar shall appoint such professional member on the committee of the concerned bank.
If the bank fails to comply with the aforesaid directions, the Registrar shall appoint such professional member on the committee of the concerned bank. The professional member shall have all the rights of members inclusive of voting right and the term of such member shall be coextensive with the term of other elected members.” 20. Section 74C deals with the provisions for conducting the election of the committee and the officers of the specified societies and the term of the Office of the members of the Committees of such societies. The respondent Bank being the District Central Cooperative Bank is a specified society within the meaning of Section 74 C(1) and is a federal society within the meaning of Section 2(9) of the said Act. Section 74C(1) states inter alia that the election of the members of the Committees and of the office bearers by the committee, of the specified societies mentioned therein shall be subject to the provisions of Chapter XI and shall be conducted in the manner laid down by or under Chapter VII. Section 74 C(2) inter alia states that the term of the elected members of the Managing Committee shall be five years from the date of election, and that the term of the office bearers of the Managing Committee shall be two and half years from the date of election. Clause (iv) of sub-section (2) of Section 74C provides that the elected members of the Managing Committee and its office bearers shall cease to hold the office on the date of expiry of their term. 21. So far as the Chapter XI is concerned, it pertains to the election of the committees and officers of the societies belonging to the categories specified in Section 74C i.e. specified societies. Section 145A of the said Chapter XI states that all sections of the said Chapter except Section 145Z shall apply to the elections of the said committees of the said societies. The word “Election” has been defined in Section 145B(b) for the purpose of said Chapter XI to mean election of the member or members of the committee of a specified society. Section 145Z reads as under: 145Z. Special provision for election of officers of specified societies: (1) This section shall apply only to election of officers by members of committees of societies belonging to the categories specified in Section 74C.
Section 145Z reads as under: 145Z. Special provision for election of officers of specified societies: (1) This section shall apply only to election of officers by members of committees of societies belonging to the categories specified in Section 74C. (2) After the election of the members of the committee or whenever such election is due, the election of the officer or officers of any such society shall be held as provided in sub-section (2) of Section 74C and any meeting of the committee for this purpose shall be presided over by the Collector or an officer nominated by him in this behalf. 22. Section 74D which was inserted by the Amendment Act, 2015 (Gujarat Act No. 12 of 2015), came into force with effect from 10.04.2015. It pertains to the appointment of the Custodian in certain circumstances. The said Section reads as under: “74D. Appointment of Custodian in certain circumstances: (1) Where in respect of any society including a society existing immediately before the commencement of the Gujarat Cooperative Societies (Amendment) Act, 2015 (Gujarat 12 of 2015) a new committee of management is, for any reason whatsoever, not elected before the expiry of the term of office of members of a committee of management of such society, or having been elected not functioning within a period of three months (not being a committee referred to in section 80A), except for the reason of order of the competent Court due to which such election could not be held or the managing committee could not start functioning, the registrar shall by an order in writing, appoint a person or a committee of persons to be the Custodian of the society for a period of one year or until a new committee of management is elected or, as the case may be, starts functioning. (2) The Custodian shall arrange to hold election of such society within a period of one year and the Committee shall be constituted before the expiration of that period. (3) The Custodian so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have powers to exercise all or any of the functions of the committee and take all such actions as may be required in the interest of the society.
(3) The Custodian so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have powers to exercise all or any of the functions of the committee and take all such actions as may be required in the interest of the society. (4) All acts done or purported to be done by the Custodian during the period when the affairs of the society are carried on by such Custodian, shall be binding on the new committee of management.” 23. Since the action of the State Government in appointing the nominee Director under Section 80(1) read with Section 80(3) has been challenged, it would be beneficial to reproduce the relevant part thereof, which reads as under: “80. Power to appoint Government nominee” (1) Where the State government has subscribed to the share capital of a society, directly or through another society, or has guaranteed the repayment of the principal of and payment of interest on debentures issued or loans raised by a society, the State Government shall, notwithstanding anything contained in the bye-laws of such society, have the right to nominate three representative on the committee of such society, in such manner as may be determined by the State Government from time to time. The members so nominated shall hold the office during the pleasure of the State Government, any such member on assuming office shall have all rights, duties, responsibilities and liabilities as if he were a member of the committee duly elected. (2)............ (3) Notwithstanding anything contained in this Act or rules or in the bye-laws, there shall be only one nominee of the State Government in the committee of the State Cooperative Bank or the Central Cooperative Banks where the State Government has subscribed to the share capital of such cooperative banks and no such nomination shall be made where the State Government has not subscribed to the share capital of such cooperative banks and no such nomination shall be made on the committee of a Primary Agricultural Credit Cooperative Society irrespective of whether the State Government has subscribed to the share capital of a society or not.” 24. It may be noted that Section 51 of the Act pertains to the direct partnership of the State Government in the societies and Section 52 pertains to the indirect partnership of the State Government in the societies. 25.
It may be noted that Section 51 of the Act pertains to the direct partnership of the State Government in the societies and Section 52 pertains to the indirect partnership of the State Government in the societies. 25. Now, so far as the question as regards the nomination/cooption of the Professional Directors is concerned, it transpires from the bare reading of Section 74(2) that there has to be two Professionals on the committee of the respondent Bank having qualification prescribed by the RBI or as the case may be by the National Bank, and if such members are not elected on the committee, the Registrar has to direct the concerned Bank to co-opt such professionals within the time limit as may be specified in such direction. If the Bank fails to comply with the said direction, the Registrar can appoint such professional members on the committee of the Bank. Thus, the language employed in the said Section 74(2) implies that the first and the foremost pride of place is accorded to election. If such professional members are not elected on the committee of the Bank, the chronology of the methodology provided in the said Section 74(2) is required to be followed. The words “if such members are not elected on the committee” incorporated in Section 74(2) would mean that the authority i.e. the Registrar had to first verify as to whether the two professionals as contemplated in Section 74(2) have been elected on the Managing Committee of the Bank or not, before issuing direction to the concerned Bank to co-opt the Professional Members within specified time. If that direction is not followed by the Bank, the Registrar can appoint such professional members on the committee of the Bank. It cannot be gainsaid that when a statute requires a certain thing to be done in a certain manner, it can be done in that manner alone, unless a contrary indication is found in the statute. 26. So far as the facts of the present case are concerned, it appears that there were no persons elected with qualifications as prescribed by the RBI for the Professional Directors/ members, on the Managing Committee of the respondent Bank when the general elections took place on 19.11.2015. The three members who were declared elected uncontested on 27.11.2015 were also not qualified to be the professional members.
The three members who were declared elected uncontested on 27.11.2015 were also not qualified to be the professional members. Hence, the Registrar had to give the direction to the Bank only after the election process of managing committee was complete on 27.11.2015. However, the Custodian of the respondent Bank under the guise of the letter of the District Registrar dated 24.11.2015, co-opted two Professional Directors as per the resolution passed by him on 26.11.2015. Now, if the said letter dated 24.11.2015 is seen, there was no such direction issued by the Registrar directing the Custodian of the respondent Bank to appoint the Professional Directors specifying the time limit. As such, till the constitution of the Managing Committee i.e. 27.11.2015, the occasion for the Registrar to issue any direction to the respondent Bank for appointment of the Professional Directors on the committee did not arise, and therefore the Custodian under the guise of the letter dated 24.11.2015 of the Registrar could not have co-opted two Professional Directors on 26.11.2015 under Section 74(2) of the said Act. Further, whether the Custodian could have exercised the powers of the Managing Committee under Section 74(2) of the said Act for appointing the Professional Directors is also a question of vital importance. 27. At this juncture, it may be noted that as per Section 74D(3), the Custodian subject to the control of the Registrar and subject to the instructions that may be given to him from time to time, has powers to exercise all or any of the functions of the committee and take such actions as may be required in the interest of society. Learned Senior Advocate Mr. Kavina had vehemently submitted that the said provisions contained in Section 74D(3) empowered the Custodian to discharge only the functions of the committee, and did not empower the Custodian to exercise the powers of the Managing Committee much less the powers to co-opt or nominate the Professional Directors on the Committee of the respondent Bank under Section 74(2) of the said Act. In this regard, he has placed heavy reliance on the decision of this Court in case Mahadevbhai Chaudhari vs. State of Gujarat and Others in Special Civil Application No. 8960 of 2015 decided on 30.09.2015, wherein the power of the very Custodian to enroll new members in the very respondent Bank was questioned.
In this regard, he has placed heavy reliance on the decision of this Court in case Mahadevbhai Chaudhari vs. State of Gujarat and Others in Special Civil Application No. 8960 of 2015 decided on 30.09.2015, wherein the power of the very Custodian to enroll new members in the very respondent Bank was questioned. The Single Bench in the said case after considering the decisions of the Supreme Court in case of K. Shantharaj vs. M.L. Nagraj, (1997) 6 SCC 37 and in case of Joint Registrar of Cooperative Societies Kerala vs. T.A. Kuttapan, (2000) 6 SCC 127 observed as under: “22.3. In the said subsequent decision in case of Joint Registrar of Cooperative Societies, Kerala (supra) Hon'ble Apex Court further observed that whether the authority is discharging “function” or exercising “power” will have to be ascertained with reference to the nature of the function or the power discharged or exercised and what is necessary to be kept in mind is nature of function or power exercised by the custodian and not the manner in which it is done. 22.4................. 22.5................. 22.6. In view of the facts of the case and rival submissions it would be appropriate to note from the above quoted observations by Apex Court, that in the said decision in case of Joint Registrar (supra) it is observed, inter alia that: “Even where the language of Section 30A of the Karnataka Act empowered a special officer to exercise and perform all the powers and functions of Committee of Management of a Cooperative Society fell for consideration, this Court having expressed that view, we do not think, there is any need to explore the difference in the meaning of the expressions "have power to exercise all or any of the functions of the Committee" in the Act and "exercise all or any of the functions of the Committee" in the Karnataka Act as they are not different and are in substance one and the same and difference in language will assume no importance.” 22.7. Having observed thus, Hon'ble Apex Court further clarified that the view taken in the decision in case of K. Shantharaj (supra) in light of the provisions under Karnataka Act, so far as question about the custodian's power to enroll new members is concerned, is relevant and applicable in case of provisions under Kerala Act as well.
Having observed thus, Hon'ble Apex Court further clarified that the view taken in the decision in case of K. Shantharaj (supra) in light of the provisions under Karnataka Act, so far as question about the custodian's power to enroll new members is concerned, is relevant and applicable in case of provisions under Kerala Act as well. On this count, Apex Court observed, inter alia, that: “8. Thus, we are of the view that this Court in K. Shantharaj's Case 1997 AIR SCW 2938 : AIR 1997 SC 2925 (supra) took the view that an administrator or a special officer in the Karnataka Act is not vested with the power to enrol new members of the Cooperative Society in this context. While reiterating that view in regard to the Kerala Act, we afford further reasons to support the said view and dismiss these appeals, though for reasons different from those expressed by the High Court. However, in the circumstances of the case, there shall be no orders as to costs.” 22.8 The view expressed by this Court in present decision with regard to the provisions under Section 74D(3) of the Act is supported and fortified by above quoted observations by Apex Court in case of K. Shantharaj (supra) which are further emphasized by Apex Court in subsequent decision in case of Jt. Registrar (supra). 23. In view of the foregoing discussion and in light of the observations by Apex Court it becomes clear that the power to decide applications seeking membership with a society has to be exercised in democratic manner by democratically elected body representing the members of the society and their views and the said power must be exercised in accordance with the bye-laws of the society and for the purpose of advancing object and interest of the society. It also becomes clear that the decision and action of enrolling new members alters the composition of a society, and that therefore it is always appropriate and just that the power to decide the application seeking enrollment of member is decided by the duly elected body/committee comprising representatives of members from all classes/categories and constituted in democratic manner and not by any outsider i.e. a person/committee of persons in name and style of “custodian” appointed by the Registrar.” 28.
Applying the said ratio to the facts of the instant petitions, the Court is of the opinion that the Custodian could not have exercised the powers of the Bank in the matter of nominating/co-opting the Professional Directors under Section 74(2) of the said Act more particularly when the election of the Chairman and the Vice Chairman of the Managing Committee was declared for being held on 29.12.2015. Such powers of cooption under Section 74(2) of the Act are vested with the Bank i.e. with the democratically elected body of the Bank and not with the outsider like the Custodian appointed by the Registrar. As rightly submitted by learned Advocate Mr. Kavina, the Custodian had to discharge the functions of the Committee and not to exercise the powers of the committee. Such action also could not be said to be in the interest of the Bank. 29. It is also pertinent to note that as per Section 74(2) of the Act, such professional members/directors would have all the rights of members including the right to vote, and that the term of such members would be coextensive with the other elected members. Thus such nomination or cooption of the Professional Directors on the committee would tantamount to enrolling new members in the Bank, and such powers could be exercised only by the duly elected body i.e. managing committee of the Bank. Such Directors clothed with the rights of the members including right to vote, could certainly alter the position in the election of the Chairman/Vice Chairman of the committee and turn majority into minority and vice a versa. The Court therefore finds much force in the submission of learned Advocate Mr. Kavina that the action of the respondent Custodian to co-opt the two Professional Directors was absolutely dehors the provisions contained in Section 74(2) as also 74D(3) of the said Act. In that view of the matter, the nomination/cooption made by the Custodian of two Professional Directors i.e. respondent Nos. 6 and 7 on 26.11.2015 was without any authority of law and therefore, could not be vindicated. As such the said appointments/nominations have already been cancelled by the Bank which order has been challenged by the said two professional directors by filing the Special Civil Application No. 10429 of 2018. 30.
6 and 7 on 26.11.2015 was without any authority of law and therefore, could not be vindicated. As such the said appointments/nominations have already been cancelled by the Bank which order has been challenged by the said two professional directors by filing the Special Civil Application No. 10429 of 2018. 30. So far as Special Civil Application No. 10429 of 2018 is concerned, the said two Professional Directors appointed under Section 74(2) of the said Act by the Custodian, have challenged the order dated 14.06.2018 passed by the Custodian removing them as the Professional Directors from the Managing Committee of the Bank. Learned Advocate Mr. Hriday Buch appearing for the said petitioners had vehemently sought to submit that the term of the two Professional Directors was coextensive with the term of the other elected members, and they being the “Officers” within the meaning of Section 2(14) of the said Act, could not have been removed without following the procedure prescribed for the removal of the Officers under Section 76B of the said Act. In the opinion of the Court, there is basic fallacy in the said submission made by learned Advocate Mr. Buch. If the definition of “officer” as contained in Section 2(14) of the said Act is read, it means a person elected or appointed by a Society or any officer of such society according to its bye-laws; and includes a Chairman, Vice Chairman, President, Vice President, Managing Director, Manager, Secretary, Treasurer, Member of the Committee and any other person elected or appointed under the Act, the Rules or bye-laws to give directions in regard to the business of the society. The said definition of “Officer” does not include the member nominated or co-opted by the managing committee of the society under Section 74(2) of the said Act. It is axiomatic to say that when both the expressions “means” and “includes” are used in the definition clause, the categories mentioned therein would exhaust themselves. When such expressions are used, they may afford an exhaustive explanation of the meaning which for the purpose of the Act, must invariably be attached to those words and expressions. A beneficial reference of the decisions in case of Thalappalam Service Cooperative Bank Ltd. vs. State of Kerala (supra) and in case of DDA vs. Bhola Nath Sharma, (2011) 2 SCC 54 be made in this regard.
A beneficial reference of the decisions in case of Thalappalam Service Cooperative Bank Ltd. vs. State of Kerala (supra) and in case of DDA vs. Bhola Nath Sharma, (2011) 2 SCC 54 be made in this regard. The definition “Officer” therefore would mean and include only those persons who are mentioned therein and none other. The definition of “Officer” being exhaustive would not include the persons co-opted or nominated by the Bank. The two Professionals in the instant case, having been co-opted by the Custodian, they cannot be said to be “officer” under Section 2(14) of the said Act and therefore the procedure under Section 76B applicable to the officers was not required to be followed by the Bank. Even otherwise, as held earlier, the very cooption of two professionals by the Custodian was illegal and dehors the provisions contained in Section 74(2) of the said Act. In that view of the matter, the Court does not find any merit in the Special Civil Application No. 10429 of 2018. 31. This takes the Court to the next question as to whether the resolution dated 28.12.2015 passed by the State Government to subscribe to the share capital of the Bank and its consequential resolution dated 28.12.2015 to nominate the Director i.e. respondent No. 8 as the nominee under Section 80(1) read with Section 80(3) are liable to be set aside? In this regard it may be noted that as per Section 51 of the said Act, the State government may subscribe directly to the share capital of the Society with limited liability, provided that in case of societies in the Cooperative Credit Structure, the State Government shall not subscribe to more than 25% of the total share capital, and that the State Government or the Society shall have the option to reduce the share capital contributed by the State Government. Section 80(1) empowers the State Government to nominate three representatives on the committee of the society where the State Government has subscribed to the share capital of the said society directly or through another society. However, sub-section (3) of Section 80 limits the powers of the State Government to nominate only one nominee in the committee of the State Cooperative Bank or Central Cooperative Bank where the State Government has subscribed to the share capital of such cooperative banks.
However, sub-section (3) of Section 80 limits the powers of the State Government to nominate only one nominee in the committee of the State Cooperative Bank or Central Cooperative Bank where the State Government has subscribed to the share capital of such cooperative banks. In view of the said provisions, the respondent State Authority in Agricultural and Cooperation Department, with a view to strengthen the financial position of the Cooperative Banks and in view of the guidelines issued by the RBI, as also taking into consideration the scheme for subscribing to the share capital of the cooperative banks, had passed the resolution dated 28.12.2015 deciding to subscribe Rs. 3 Crores as the share capital of the respondent Bank in the year 201516. The respondent State Government also nominated Shri Khodabhai Narsangbhai Patel the respondent No. 8 in Special Civil Application No. 97 of 2016 on the committee of the respondent Bank in exercise of the powers conferred under Section 80(3) of the said Act. In the opinion of the Court, the action of the State Government in exercise of powers to subscribe to the share capital of the respondent Bank under Section 51 and to nominate one nominee under Section 80(3) of the said Act of the State Government in the committee of the respondent Bank was absolutely within the scope and in consonance with the provisions contained in the said Act. 32. Though the learned Senior Advocate Mr. Kavina has placed reliance on the decision of this Court in case of Patel Kedarbhai Jeevabhai vs. State of Gujarat, 1983 (1) GLR 325 to submit that the powers of the State Government to nominate member under Section 80(1) or Section 80(2) has to be exercised in the public interest and in the instant case no such case of public interest was made out, the Court does not find any force in the said submission. In the said case relied upon by learned Senior Advocate Mr. Kavina, the powers were exercised by the State Government under sub-section (2) of Section 80 which requires that having regard to the public interest involved in the operation as a society, if it is found by the State Government that it is necessary or expedient so to do, it may nominate its representatives on the committee of such society.
Kavina, the powers were exercised by the State Government under sub-section (2) of Section 80 which requires that having regard to the public interest involved in the operation as a society, if it is found by the State Government that it is necessary or expedient so to do, it may nominate its representatives on the committee of such society. However in the instant case, the powers have been exercised by the respondent State under sub-section (3) of Section 80 and not under sub-section (2) of Section 80. When the statute permitted the State government to subscribe to the share capital of the respondent Bank to the extent specified in the Section 51, the respondent State Government was entitled to nominate one nominee in the committee of the respondent Bank under sub-section (3) of Section 80 of the said Act. The Court therefore is of the opinion that though the Custodian appointed in the respondent Bank was not empowered or authorized to co-opt two Professional Directors under Section 74(2) of the said Act, the respondent State Government was empowered to subscribe to the share capital as per Section 51 and to nominate one nominee in the committee of the respondent Bank under Section 80(3) of the said Act. 33. The next question that falls for consideration before the Court is as to whether the term of the office bearers of the Managing Committee i.e. the Chairman and the Vice Chairman of the managing committee whose results of the election held on 29.12.2015 have not been declared by virtue of the interim order passed by the Court on 28.12.2015 in Civil Application No. 13447 of 2015 in Special Civil Application No. 19715 of 2015, had come to an end by virtue of the provisions contained in sub-section (2) of Section 74C of the said Act and whether the fresh election as prayed for by the petitioners in Special Civil Application No. 224 of 2019 is required to be held. As stated earlier, the respondent Society is specified society within the meaning of Section 74C and therefore the election of the members of the committees and of the officers of the committee of the respondent Bank are subject to the provisions contained in Chapter XI and are required to be conducted in the manner laid down by the Chapter VII of the said Act.
Chapter VII deals with the management of the societies and Section 74C(2) which falls under Chapter VII states that the term of elected members of the managing committee shall be five years from the date of election, and that the term of the office bearers of the managing committee shall be two and half years from the date of election. Clause (vi) of sub-section (2) of Section 74 provides that the elected members of the Managing Committee and its Office bearers shall cease to hold the office on the date of expiry of their term. Chapter XI deals with the election of the committees and officers of the societies belonging to the categories specified in Section 74C. Section 145A to Section 145Z are incorporated in the said Chapter XI. Section 145A states that all the sections of Chapter XI except Section 145Z shall apply to the election of the committees of the societies belonging to the categories specified in Section 74C. Now, the Clause (b) of Section 145B provides that “Election means election of a member or members of committee of specified society.” Section 145Z provides that the said section shall apply only to the election of the officers by the members of the committees of the societies belonging to the categories specified in Section 74C. It further provides that after the election of the members of the committee or officers of such society shall be held as provided in sub-section (2) of Section 74C and any meeting of the committee for the said purpose shall be presided over by the Collector or an officer nominated by him in his behalf. From the conjoint reading of the said provision, it clearly transpires that term of the office bearers i.e. the Chairman and the Vice Chairman in this case shall be two and half years from the date of election, and that the date of election would be the date of election of the member or members of the managing committee of the specified society. Hence, the term of the office bearers of the managing committee shall come to an end on the completion of the two and half years from the date of election of the members of the managing committee.
Hence, the term of the office bearers of the managing committee shall come to an end on the completion of the two and half years from the date of election of the members of the managing committee. In the instant case, the general elections of the members of the managing committee of the respondent Bank had taken place on 19.11.2015, their term would come to an end on the completion of five years from the said date. However, the term of the office bearers of the said Managing Committee shall come to an end on completion of two and half years from the date of election i.e. 19.11.2015, and two and half years thereafter would be 18.05.2018. 34. It is true that though the election of the Chairman and the Vice Chairman which had taken place on 29.12.2015, its result has not been declared by virtue of the interim order passed by the Court, in the aforestated petition, nonetheless their term would be deemed to have come to an end on 18.05.2018, inasmuch as by virtue of sub Clause (iv) of Section 2 of Section 74C, the office bearers cease to hold the office on the date of expiry of the term. It would be immaterial whether they had assumed the charge of the office or not. Though it was sought to be submitted by learned Advocate Mr. Anshin Desai that the term of the Officers of the Managing Committee is required to be considered as of five years from the date of election as per Section 74 (1)C, the said submission cannot be accepted in view of Section 145Z which inter alia provides that the election of the officers of the specified societies shall be held as provided in sub-section (2) of Section 74C. The Court is therefore of the opinion that the term of the office bearers of the respondent Bank having come to an end on 18.05.2018, fresh election is required to be held for the remaining term. 35. In the aforestated premises, the Special Civil Application No. 19715 of 2015 is dismissed as having become infructuous. Interim relief granted earlier, if any, stands vacated.
35. In the aforestated premises, the Special Civil Application No. 19715 of 2015 is dismissed as having become infructuous. Interim relief granted earlier, if any, stands vacated. Special Civil Application No. 97 of 2016 stands partly allowed to the extent that the order dated 26.11.2015 passed by the respondent Custodian of the respondent Bank co-opting two Professional Directors in the Board of Directors of the respondent Bank under Section 74(2) of the said Act is quashed and set-aside. The resolution of the State Government dated 28.12.2015 to subscribe to the share capital of the respondent Bank and its consequential resolution to nominate the respondent No. 8 as its nominee under Section 80(3) of the said Act are upheld. The Special Civil Application No. 10429 of 2018 is dismissed and Special Civil Application No. 224 of 2019 is allowed to the extent that the respondent Authorities shall hold the election of the Chairman and the Vice Chairman of the respondent Bank at the earliest. 36. All the petitions stand disposed of accordingly. FURTHER ORDER: Learned Senior Advocate Mr. Anshin Desai appearing for the respondent Nos. 9 and 10 in Special Civil Application No. 97 of 2016 and Mr. Hriday Buch appearing for the petitioner Nos. 1 and 2 in Special Civil Application No. 10429 of 2018 have requested to stay the operation of the present in order to approach the higher forum. The request is rejected for the reasons stated in the order.