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2020 DIGILAW 382 (GAU)

Jagat Ch. Bora v. State of Assam

2020-03-12

MANISH CHOUDHURY

body2020
JUDGMENT : Manish Choudhury, J. 1. Heard Mr. K. Gogoi, learned counsel for the writ petitioners. Also heard Ms. D.S. Neog, learned Standing Counsel; Co-operation Department, Government of Assam for respondent Nos. 1 to 6 and Mr. S. Chauhan, learned counsel appearing for the respondent Nos. 8 & 9 as well as for the applicants in I.A.(Civil) No. 244/2020, where the writ petitioners are impleaded as opposite party Nos. 1 to 9. Despite service of notice, none has appeared for respondent No. 7. 2. The present writ petition, under Article 226 of the Constitution of India, has been preferred assailing the legality and validity of an order dated 17.05.2018 passed by the respondent No. 3 i.e. the Registrar In-Charge of Co-operative Societies, Assam where it is observed that the Annual General Meeting (AGM) of Dhula Samabai Samity Limited held on 05.10.2016, which was earlier adjourned, was held in accordance with the provisions of Assam Co-operative Societies Act, 2007, thereby, upholding an order dated 9.5.2017 passed earlier by the respondent No. 2 i.e. the Registrar of Co-operative Societies, Assam. By the said impugned order, the respondent No. 6 has been asked to take necessary steps to ensure management of the Dhula Samabai Samity Limited (the Society, for short) by the elected Board of Directors headed by the respondent No. 8 as its Chairman. In the present proceedings, an interim order was passed, on 25.05.2018, to the effect that the status quo, as on that date, in respect of management of the Society shall be maintained until further orders. The interlocutory application, I.A. (Civil) No. 244/2020, has been preferred by the respondent Nos. 8 & 9 as the applicants, seeking vacation/alteration/modification of the said interim order dated 25.05.2018, passed ex-parte against them, under Article 226 (3) of the Constitution of India. Objecting to the said prayer, the writ petitioners have filed an objection to the said application. As agreed to by the learned counsel for the parties, the writ petition itself has been taken up for disposal. 3. The necessary facts, in brief, leading to the institution of the writ petition may be exposited as follows:- The writ petitioners, 9 (nine) in Nos., are members of Dhula Samabai Samity Limited, District-Darrang, a co-operative society registered under the provisions of Assam Co-operative Societies Act, 2007 (the Act, 2007 and/or the 2007 Act, for short) with 13.09.1973 as its date of registration. A Board of Directors for management of the affairs of the Society was elected in an Annual General Meeting (AGM) held on 26.09.2011. The said Board of Directors of the Society had called for an AGM of the Society on 28.09.2016. On 28.09.2016, the AGM was adjourned to be held on 05.10.2016 as there was lack of quorum on that day. On the date of adjourned AGM held on 05.10.2016, a new Board of Directors was elected. The said new Board of Directors elected its Chairman and Vice-Chairman in a meeting held on 14.10.2016. The respondent No. 8 and the respondent No. 9 are the Chairman and Vice-Chairman respectively of the said new Board of Directors. 4. Aggrieved by the election of a new Board of Directors in an adjourned AGM held on 05.10.2016, the present petitioners along with 47 other members, had preferred a representation before the respondent No. 4 on 31.10.2016 on the grounds, inter-alia, that (i) the adjourned AGM held on 05.10.2016 was in violation of the provisions of Section 39 of the Act, 2007; (ii) the voters list of the Society was not corrected and submitted in accordance with the provisions of the Act, 2007; (iii) the voters list of the Society contained names of some deceased persons on its roll; (iv) some 10/15 outsiders participated in the proceedings in the adjourned AGM; etc. It is stated that the respondent No. 6 had accorded his approval to the proceedings of the adjourned AGM and the election of the new Board of Directors. 5. The respondent No. 4 had held a hearing in respect of the representation submitted by the 56 Nos. of members of the Society on 31.10.2016 under Section 111 of the Act, 2007 where he heard the side of the said members and the officials of the Co-operation Department and perused the records relating to the Society, as produced by the Secretary of the Society and the respondent No. 6. Finding the proceedings of the adjourned AGM to be in violation of the provisions of Section 39, Section 41 and Section 42 of the Act, 2007 the respondent No. 4 by his order dated 15.11.2016, had set aside the approval accorded by the respondent No. 6 to the proceedings of the adjourned AGM of the Society held on 05.10.2016 as well as the election to the new Board of Directors. One Junior Inspector/Auditor of Cooperative Societies, Mangaldoi was appointed under Section 41(6) of the 2017 Act, for constitution of the Board within 90 days at the cost of the Society. 6. Aggrieved by the said order dated 15.11.2016, the respondent Nos. 8 & 9 herein, along with few others had preferred an appeal before the respondent No. 2 on 22.11.2016 under Section 111 of the Act, 2007. It was at that stage, the respondent Nos. 8 & 9 herein along with 6 (six) others, preferred a writ petition, W.P.(C) No. 484/2017. It was stated that though the appeal was fixed for hearing on 21.12.2016, the respondent No. 2 did not hold any hearing on that date. The said writ petition came to be disposed of by an order dated 30.01.2017 directing the respondent No. 2 to decide the appeal within a period of 4 (four) weeks from the date of receipt of a certified copy of that order. 7. In compliance of the said direction contained in the order dated 30.01.2017, the respondent No. 2 had considered the appeal preferred under Section 111 of the Act, 2007, by holding a hearing and thereafter, disposed of the said appeal by an order dated 09.05.2017. In the said order, it was noticed that the AGM was originally fixed on 28.09.2016. As there was no quorum to hold on 28.09.2019, the AGM was adjourned to be held on 05.10.2016. The provisions of Section 39 of the Act, 2007 was found to have been satisfied and the AGM held on 05.10.2016 had been considered to be valid. Accordingly, the election of the Board of Directors and the subsequent election of the Chairman and the Vice Chairman on 14.10.2016 were also considered valid. It was held that there was no violation of the provisions of Section 41 and Section 42 of the Act, 2007. The respondent No. 2 did not find any irregularity in respect of the voters list of the Society. Observing as above, the order dated 15.11.2016 passed by the respondent No. 4 was set aside and the approval of the respondent No. 6 accorded to the proceedings of the AGM and the election to the Board of Directors was upheld. The respondent No. 6 was directed to take necessary action to allow the newly elected Board of Directors of the Society to function. 8. The respondent No. 6 was directed to take necessary action to allow the newly elected Board of Directors of the Society to function. 8. Assailing the said order dated 9.5.2017, the present writ petitioners along with 6 (six) others, had preferred a writ petition, W.P.(C) No. 3201/2017, and one of the primary grounds urged therein was that before passing the order dated 09.05.2017 by the respondent No. 2, no opportunity of hearing was afforded to them. As they were not afforded an opportunity of hearing prior to the passing of the order dated 09.05.2017, it was contended that there was violation of the principles of natural justice. It was urged on behalf of the respondent Nos. 8 & 9 herein that they were also not afforded any opportunity of hearing by the respondent No. 4 prior to the passing of the order dated 15.11.2016. Taking into account all the aforesaid facts both the orders - order dated 15.11.2016 and order dated 09.05.2017-were found to have passed by the said respondent authorities apparently without giving proper opportunities of being heard to the parties and this Court by its order dated 30.01.2018 passed in W.P.(C) No. 3201/2017, had set aside the order dated 15.11.2016 passed by the respondent No. 4 and the order dated 09.05.2017 passed by the respondent No. 2. As it was submitted on behalf of the parties that they would have no objection if the entire matter was decided afresh by the respondent No. 2 after hearing interested parties, the respondent No. 2 was directed to take a fresh decision on the question of validity of the AGM of the Society held on 05.10.2016 after giving opportunities of personal hearing to the writ petitioners therein and the present respondent Nos. 8 & 9, within a period of 6 (six) weeks from the date of receipt of the copy of the said order. 9. In compliance of the said direction contained in the order dated 30.01.2018, the respondent No. 3 had held hearings on 20.03.2018 and 02.05.2018. After hearing the parties, the respondent No. 3 had disposed of the matter by the impugned order dated 17.05.2018. In the order dated 17.05.2018, the respondent No. 3 took note of the previous events since 28.09.2016, as have been delineated above. After hearing the parties, the respondent No. 3 had disposed of the matter by the impugned order dated 17.05.2018. In the order dated 17.05.2018, the respondent No. 3 took note of the previous events since 28.09.2016, as have been delineated above. After taking note of the same, the respondent No. 3 had passed the order as under:- "Order :- In view of the facts stated above, it is opined that the AGM/Election of the Dhula SS Ltd. held on 05.10.2019 (adjourned meeting) was held in accordance with the provision of Assam Cooperative Societies Act'2017 and it is valid. Therefore, the order passed by the Registrar of Cooperative Societies, Assam vide GPSS.52/2008/187, dated 09.052017 is upheld. The Assistant Registrar of Cooperative Societies, Mangaldoi is hereby asked to take necessary steps to ensure democratic management of the Dhula S.S. Ltd. by the elected Board of Directors headed by Md. Altaf Hussain as Chairman. This order comes into force with immediate effect." 10. It is in the above facts and circumstances, the present writ petition has been preferred assailing the said order dated 17.05.2018. The challenge is primarily on 3 (three) grounds, firstly, there was violation of the provisions of Section 41 and Section 42 of the Act, 2007; secondly, there was violation of the Section 39 of the Act; and thirdly, the impugned order is not sustainable in law as the same was in violation of the direction of this Court contained in the order dated 30.01.2018 passed in W.P.(C) No. 3201/2017. 11. In view of the challenges made, it is apt to refer to the relevant provisions of the Act, 2007. As per sub-section (2) of Section 41, the election of the Directors to a Board of a Cooperative Society shall be conducted before the expiry of the term of the Board so as to ensure that the newly elected members of the Board assume office immediately on the expiry of the office of the members of outgoing Board. As per sub-section (1) of Section 42, the tenure of office of elected members of the Board and its office bearers shall be 5 (five) years from the date of election and it has been provided that the tenure of office bearers shall be co-terminus of the tenure of the Board. As per sub-section (1) of Section 42, the tenure of office of elected members of the Board and its office bearers shall be 5 (five) years from the date of election and it has been provided that the tenure of office bearers shall be co-terminus of the tenure of the Board. The mandate of sub-section (4) of Section 41 is that where a Board fails to arrange for holding the election of the Directors or delegates, as the case may be, before the expiry of the term of their office in accordance with the Act, 2007 and by-laws, all Directors shall cease to the Directors on the expiry of the period, as specified in the Section 42 (1) of the Act, 2007. As per Section 41(5), the election of Directors and delegates shall take place at the General Meeting to be called for the purpose. As sub-section (6) of Section 41 is also of relevance with regard to the issue involved in the present writ petition, the same is quoted hereunder in extenso:- "(6) Where a Board fails to arrange for holding election before the expiry of the term of the Board or delegates or where there are no Directors remaining on the Board, the Registrar shall convene a General Meeting by appointing an Officer of the Co-operative Department for constitution of the Board within ninety days from the date of such appointment and the Officer so appointed shall perform all functions of the Board during the said period of ninety days at the cost of the Society." Section 39 of the Act, 2007 has provided for the holding of Annual General Meeting and reads as under:- "39. Annual General Meeting.-A general meeting to be termed as Annual General Assembly of a registered Co-operative Society shall be held at least once in every Co-operative year within a period of six months of close of the financial year to transact the business as provided in this Act. The Board shall automatically stand dissolved for not holding Annual General Meeting in accordance with the provisions of the Act and bye-laws within six months from the expiry of every Financial year." 12. The financial year is from the 1st of April of a particular year to the 31st March of the succeeding year. The Board shall automatically stand dissolved for not holding Annual General Meeting in accordance with the provisions of the Act and bye-laws within six months from the expiry of every Financial year." 12. The financial year is from the 1st of April of a particular year to the 31st March of the succeeding year. As has been mentioned earlier, the Board of Directors for the management of the affairs of the Society was elected on 26.09.2011 in an AGM of the Society held on that date. As the tenure of the said Board of Directors was for a period of 5 (five) years, as per the Section 42 (1) of the Act, 2007, the members of the Board of Directors had ceased to be Directors on the expiry of the period of 5 (five) years with effect from 26.09.2011. In such view of the matter, the earlier Board of Directors cannot be held to be functional on 26.09.2016. As has been found that the said Board of Directors had called for the AGM on 28.09.2016, the same was in violation of the provisions of sub-section (4) of Section 41 of the Act, 2007 as such AGM ought to have been held before the expiry of its term of 5 (five) years. Thus, on 28.09.2016, the earlier Board of Directors of the Society ceased to be in office and was non-functional. 13. In so far as the validity of the adjourned AGM held on 05.10.2016 is concerned, it is apt to refer to a judgment and order dated 12.10.2018 passed by a Division Bench of this Court in the writ petition, W.P.(C) No. 6918/2017 (Shahirul Islam & Ors. Vs. State of Assam & Ors.), rendered on a reference to provide interpretation of the provision of Section 39 of the Act, 2007. One of the questions formulated by the Division Bench for decision has been that whether the time limit prescribed under Section 39 of the Act, 2007 is inflexible and no time can be granted beyond the said prescribed period for holding the adjourned Annual General Meeting of a Co-operative Society. 14. One of the questions formulated by the Division Bench for decision has been that whether the time limit prescribed under Section 39 of the Act, 2007 is inflexible and no time can be granted beyond the said prescribed period for holding the adjourned Annual General Meeting of a Co-operative Society. 14. Upon a detail analysis of the provision of Section 39 of the Act, 2007, the Division Bench has held that the AGM by a registered Co-operative Society is required to be held at least once in a co-operative year and such AGM is to be held within a period of 6 (six) months of closing of the financial year which ends on 31st of March. As the period of 6 (six) months from the closing of the financial year ends on 30th of September, the AGM of a Co-operative Society for a particular co-operative year must be held before 30th of September of the succeeding co-operative year. Failure to hold such AGM would lead automatic dissolution of the Board of Directors of the Co-operative Society. It is held that the language in Section 39 of the Act, 2007 is precise and clear leaving no room for any ambiguity. Thus, there is no scope for granting extension of time beyond prescribed time limit on any ground whatsoever. In such situation, the question of the Board of Directors being at fault or not being at fault or whether the Board of Directors was prevented by circumstances beyond their control for holding the AGM within the prescribed period are not at all relevant. The Division Bench has, thus, authoritatively held that the AGM of a Co-operative Society for a co-operative year must be held on or before 30th September of the succeeding co-operative year and there cannot be any extension of time, whether it is a regular AGM or an adjourned AGM. 15. The Division Bench has, thus, authoritatively held that the AGM of a Co-operative Society for a co-operative year must be held on or before 30th September of the succeeding co-operative year and there cannot be any extension of time, whether it is a regular AGM or an adjourned AGM. 15. In view of the such authoritative pronouncement with regard to the provision of Section 39 of the Act, 2007, it is found that the proceedings of the AGM that was called by earlier Board of Directors of the Society on 28.09.2016 or the proceedings of the adjourned AGM held on 05.10.2016, scheduled after the earlier AGM was adjourned due to lack of quorum, cannot be held to be valid and as such, the election held for the Board of Directors held in the adjourned AGM on 05.10.2016 cannot be sustained. As a result, the subsequent elections of the respondent Nos. 8 & 9 herein as the Chairman and the Vice-Chairman of the said newly elected Board of Directors are also not sustainable. 16. A perusal of the impugned order dated 17.05.2018 passed by the respondent No. 3 reflects that he had merely upheld the order dated 09.05.2017 passed by the respondent No. 2 without recording his reasons therein. The order dated 15.11.2016 passed by the respondent No. 4 and the order dated 09.05.2017 passed by the respondent No. 2 earlier, had been set aside by this Court by the order dated 30.01.2017. If an order is set aside by the Court, the effect of such setting aside is to make the order so set aside, non-existent in such situation, neither the order dated 15.11.2018 passed by the respondent No. 4 nor the order dated 09.05.2017 passed by the respondent No. 2 earlier, was not in existence on 17.05.2018. As such, the respondent No. 3 could not have upheld the order dated 09.05.2017 as it was not open for respondent No. 3 to uphold an order which was no more in existence since 30.01.2017. In the order dated 30.01.2018 passed in the writ petition, W.P.(C) No. 3201/2017, the direction was made to the respondent No. 2 to take a fresh decision on the question of validity of the AGM of the Society held on 05.10.2016 after granting opportunities of personal hearing to the stake-holders, indicated therein. The impugned order was not passed by the respondent No. 2. The impugned order was not passed by the respondent No. 2. At the same time, it cannot be held to be a fresh decision. It is settled that an order must disclose that the order has been passed after due application of mind. That there is application of mind in passing the order is demonstrated when reasons are recorded. A decision must reflect on the basis of which the decision has been arrived at. The impugned dated 17.05.2018 suffers on that count. For all the afore-mentioned reasons, the impugned order dated 17.05.2018 is found not sustainable and the same is set aside and quashed. Resultantly, this writ petition is allowed. 17. In the light of the observations made above; the obtaining fact situation of the case; and in view of the authoritative pronouncement of the Division Bench, stated above, it is found not expedient to relegate the matter once again to the respondent No. 2 to take a fresh decision in respect of the legality and validity of the adjourned AGM held on 05.10.2016. As it is found that the election of the Board of Directors in the adjourned AGM held on 05.10.2016, is not valid and sustainable, as a natural corollary, the respondent No. 2 has to act in accordance with the provision of sub-section (6) of Section 41 of the Act, 2007. Accordingly, it is directed that the respondent No. 2 shall take necessary steps to convene the AGM of the Society in compliance with the procedure prescribed in sub-section (6) of Section 41 of the Act, 2007 by appointing an officer of the Co-operative Department within a period of 10 (ten) days of submission of a certified copy of this order by the writ petitioners. 18. In view of the disposal of the writ petition in the aforesaid terms, no order is required to be passed in respect of I.A.(Civil) No. 244/2020 and, accordingly, the said application stands closed. No cost.