1997 Supreme(SC) 931

1997(7) Supreme 99
SUPREME COURT OF INDIA
(From Madhya Pradesh High Court)
K. Ramaswamy and D.P. Wadhwa, JJ.
Rajendra Prasad Yadav & Ors. —Appellants
versus
State of Madhya Pradesh & Ors. —Respondents
Civil Appeal No. 4318 of 1997
(Arising out of S.L.P. (C) No. 3101 of 1997)
Decided on 9-7-1997
Counsel for the Parties :
For the Appellants : Mr. G.L. Sanghi, Sr. Advocate. Mr. Ashok Kr. Gupta, Mr. A.R. Siddiqui and Mr. Vivek Tanka, Advocates.
For the Respondent : Mr. S.S. Ray, Sr. Advocate, Mr. S.K. Agnihotri, Mr. Biswajit Meitei, Ms. Madhur Dadlani and Mr. P.K. Manohar, Advocates.             

Headnote:(i) Madhya Pradesh Co-operative Societies Act, 1960—Sections 2 and 48, 49—Bye-laws of M.P. State Co-operative Bank Ltd.—Management of Societies—Three tier system of Co-operative Societies—Conduct of elections—It shall be obligatory on outgoing Committee of Society to hold elections prior to expiry of term—If Registrar fails to conduct elections on its request—Returning officer should be appointed—If Committee commits default in conducting elections—Members of Committee are deemed to have vacated their seats—Registrar to assume charge of Society—Obligatory to hold elections as expeditiously as possible.

       As per K. Ramaswamy, J.

       Held that by operation of Sections 48 and 49, elections to the Managing Committee of the Central Banks or Apex Co-operative Societies as per their bye-laws, as representative of Central Bank or President of the Apex Co-operative Societies to represent the Apex Bank who are called, under the bye-laws of the Apex Bank, Directors, shall be necessary. The term of the representatives is co-terminus with the term of the Managing Committee of the Central Bank or the Apex Co-operative Societies. They shall, however, be entitled to remain in office along with other nominated members of the Board of Directors of the Apex Bank under the bye-laws of the Apex Bank until the respective successors assume office. The constitution of the Board of Directors and also constitution of the Managing Committee of the Apex Bank is not complete without the election of the representatives by the concerned Central Banks or President of Apex Co-operative Societies. The President and Vice-President of the Apex Bank cannot be elected. The Managing Committee cannot be constituted without electing the members of the Managing Committee from among the Board of Directors, as per the bye-laws In view of the unbreakable inter-link, the Board cannot be saddled with the liability of statutory vacation of the office on expiry of the term, unless the Registrar had the elections conducted to the Central Banks or Apex Co-operative Societies, as the case may be. Preceding thereto, the election to the Managing Committee of Primary Societies is mandatory. (Para 20)

       Moreover, under the bye-laws of the Apex Bank, there is no obligation or duty cast on it to have the elections to the Managing Committee or representation of the Central Bank or Apex Co-operative Society conducted. It is the power, the function and duty under the Act of the Registrar, on a request made by the respective Committees of the Central Banks or Apex Co-operative Society concerned to conduct elections. Under these circumstances, it is difficult to give acceptance to the contention of the respondents that on expiry of the term of the President, two Vice-President of the Board of Directors and the term of the Managing Committee which being co-terminus with the Board of Directors must be deemed to have vacated their offices. Thereby the Registrar is not entitled to assume office of the Board of the Directors and the Managing Committee. It is also difficult to visualise that President, two Vice-Presidents, the Board or Directors and the Managing Committee of Apex Bank should be saddled with the liability to vacate the office, on expiry of the term for non-conducting elections thereof, when have no statutory obligation to ensure conduct of elections to Primary Societies and Central Banks. The Registrar does not in the above situation get the power to assume office as per the statutory obligation. One important fact to be noted is that the bye-laws of the Apex Bank ensure that the Board of Directors and the Members of the Managing Committee elect the President and Vice-President and remain in office till their respective successors assume office. Thereby there would be no hiatus created in the management of the affairs of the Apex Bank in accordance with law, nor their actions in the management of the Apex Bank would be illegal. The admission of the State Government in the counter affidavit that elections were not conducted to the Central Banks by or before the date of the expiry of the term of the office of the Board of Directors and the Managing Committee of the Apex Bank, pre-empts the Registrar to resume management of the Board of Director of the Apex Bank and its Managing Committee. (Para 21)

       As per D.P. wadhwa, J. (Partly dissenting)

       Under Clause (24) of byelaw 47 the Board can delegate some or all of its functions to the Managing Committee. It will thus be seen that the Managing Committee is no the said thing as the Board and it is also not the Committee as defined in clause (d) of Section 2 of the Act. Any reference to Managing Committee therefore in these proceedings, in my view, would not be relevant as when sub-section (8) of Section 49 talks of election of the Committee, it is of the Board. (Para 30)

       Under Section 47-A of the Act the apex society for servicing its constituents and in accordance with byelaws can perform various functions mentioned therein and one of such function is to ensure timely conduct of elections in member societies. This is clause (k). Under byelaw 3(2) (ta) one of the duties of the apex body is to ensure that election process of member societies is held on time. Primary society is not a member society of the apex body. Any duty cast on the apex body to hold election of primary society is therefore not there and the whole edifice on which the case of the appellants is based that unless elections of the Committees of the primary and central society are not complete election to the Board of the apex body cannot be held, falls to the ground, (Para 34)

       There are apparent contradictions in some of the byelaws of the apex body. It says the term of the Board would be five years from the date of its first meeting when it also elects one President and two Vice-Presidents. I have already taken the view that the Board is a continuous body. The five year term would therefore apply only to the election President and two Vice-Presidents. When sub-section (1-A) of Section 49 provides that the election of the members of the society. President, Vice-President and representative, if any, shall be conducted by the Returning Officer is the prescribed manner, it refers to elections of all the societies whether primary, central or apex and this provision is general in nature. The apex society is not to send any representative to any society and since the members of the Board automatically take their place in the Board under clauses (3) and (5) of byelaw 38 election to the members of committee can also not be there. The election can only be of President and two Vice-Presidents. If the apex society commits default in not ensuring the timely conduct of elections of the committees of the member central societies as per the Act and the byelaws it can be proceeded against under Section 53 of the Act which provides that if in the opinion of the Registrar, the committee of any society is negligent in the performance of its duties etc. the committee can be removed by Registrar after following the procedure prescribed. That is however not the case here. Here the action of the Registrar which has been challenged is under clause (ii) of sub-section (8) of Section 49 of the Act. Clause (i) of sub-section (8) which puts obligations on the outgoing committee of the society to hold elections prior to the expiration of its term would apply, in the case of the apex society only to the election of President and two Vice-Presidents as per its byelaws. (Para 35)

       Provisions of the Act apply to all cooperative societies whether primary, central or apex and each society may have different byelaws. It is not necessary that all the provisions of the Act would apply to all the societies whatever their nature. (Para 36)

       The respondents in their counter affidavit have taken a stand that elections of primary and district bodies have taken place and now election of the board of the apex body would be held by April 11, 97, meaning, perhaps, thereby that the election of the new board is dependent on the elections first to be held of the primary society and then of the central society. This interpretation to my mind is not correct and the Court is not bound by the interpretation put by any of the parties. (Para 38)

       (ii) Constitution of India—Arts. 226 & 227—Madhya Pradesh Co-operative Societies Act, 1960—Sections 2, 48, 49—Constitution of Board of Directors and Managing Committee of Apex Bank—Terms of Societies extended—Apex Bank applied to Registrar to hold elections—Elections not held—High Court directed that elections be conducted in accordance with procedure prescribed—Act 14 of 1990 was passed terminating term of Committees—Registrar was directed to take over management—Writ Petition—High Court declared Amendment Act of 1990 amending Section 49(8) as ultra vires —Office bearers continued to hold office during pendency of writ petitions—Writ petition seeking writ of quo warranto—Amendment Act 12 of 1994 amending Section 49(8)—Can a court issue writ of quo warranto to disobey writ of mandamus already issued?—(No)—Whether Registrar was justified under Section 49(8)(ii) to assume charge of Apex Bank?

       Held; the power of the Board or Directors, the President, two Vice-Presidents, the Managing Committee of the Apex Bank to remain in office and to manage the affairs of the Society is founded on the mandamus issued by the High Court and is not derived merely by operation of the statute. Can a Court issue writ of quo warranto to disobey the writ of mandamus already issued by the High Court and allowed it to become final. In our view, it cannot be issued as long as the writ of mandamus is not complied with and remains in operation. We were informed at the time of hearing that elections were conducted to the Central Banks and consequently the Board of Directors (representatives of Central Bank) as representating the Central Banks and the President of the Apex Co-operative Societies, were elected. The elections to the President and two Vice-Presidents of the Board of Directors and Managing Committee of Apex Bank were to be held on April 11, 1997 as per the bye-laws referred to hereinbefore to constitute Board of Directors and the Managing Committee. (Para 23)