Karnataka High Court
M.L.Nagaraj - Appellant
Versus
State of Karnataka - Respondent
Decided On : 04-03-94
W.P. : 16378 of 1992
Nurserymen Co-operative Society Limited - Challenge to Order of Supersession, Election to the Board of Directors, and Inclusion of New Members - Karnataka Co-operative Societies Act, Section 26, Bye-law 15, Bye-law 16, Bye-law 45, Bye-law 53 - The court found that the order of supersession was unsustainable due to non-consideration of explanations and non-application of mind. It declared the new members enrolled by the Administrator as without authority of law and ineligible to participate in the election. The court ordered the election to be conducted from the stage it was intercepted, excluding the new members, and directed the General Body to consider the applications of the new members in accordance with the Bye-laws.
Fact of the Case:
The case pertains to the challenge of the order of supersession, election to the Board of Directors, and inclusion of new members to the Nurserymen Co-operative Society Limited. The petitioners contended that the order of supersession was arbitrary, illegal, and politically motivated, and that the new members enrolled by the Administrator were ineligible to participate in the election.
Finding of the Court:
The court found the order of supersession unsustainable due to non-consideration of explanations and non-application of mind. It declared the new members enrolled by the Administrator as without authority of law and ineligible to participate in the election. The court ordered the election to be conducted from the stage it was intercepted, excluding the new members, and directed the General Body to consider the applications of the new members in accordance with the Bye-laws.
Issues: The issues included the validity of the order of supersession, the eligibility of the new members enrolled by the Administrator, and the conduct of the election.
Ratio Decidendi: The court held that the order of supersession was unsustainable due to non-consideration of explanations and non-application of mind. It declared the new members enrolled by the Administrator as without authority of law and ineligible to participate in the election. The court ordered the election to be conducted from the stage it was intercepted, excluding the new members, and directed the General Body to consider the applications of the new members in accordance with the Bye-laws.
Final Decision: The court set aside the order of supersession, declared the new members enrolled by the Administrator as without authority of law and ineligible to participate in the election, and ordered the election to be conducted from the stage it was intercepted, excluding the new members. The General Body was directed to consider the applications of the new members in accordance with the Bye-laws.
( 1 ) THESE three matters pertain to the Nurserymen Co-operativc society Limited. Lalbagh, Bangalore. In these petitions the order of superession, election to the Board of Directors and inclusion of new members to the Society are under challenge.
( 2 ) SINCE common questions of law and facts rise in these petitions they are clubbed and heard together and common order is passed,
( 3 ) THE facts in brief are : the Nurseryman Co- operative Society Limited, Lalbagh, Bangalore (hereinafter referred to in short as 'society') has got State-wide jurisdiction to promote nursery to safeguard the interest of nureserymen and seedsmen and also to promote and encourage development of Horticulture and nursery business in the State. The society had only 57 members initally who were all professional men who fulfilled the conditions of Bye-law whicb reads as under :"the membership of the society shall be open only to those who are by profession nurseryman and seedsman iu the State and such a person has to file an application for membership in the prescribed form recommended and approved by the Board of directors. "
( 4 ) THE number of Board of Directors who were initially eight was enhanced to 12. The election to the Board of Directors who scheduled to held on 24-12-1991 in the general body meeting When the general body meeting was in progress, respondent No. 3 informed the members that the committee of Management has been superseded and in its place the Joint registrar has been appointed as Administrator and consequently the election was postponed. The notification issued by the Returning Officer is produced as Annexure 'b'.
( 5 ) A show-cause notice was issued by 2nd respondent pointing out certain commissions and commissions. as per Anaexure 'c'. The Board of management answered all the averments as per Annexure 'd', In spire of their reply, respondents have taken action, superseding the Board of Management on the date of election. That action of supersession has been questioned on the grounds that the action is arbitrary, illegal and politically motivated. It is also contended that the order is not a speaking order and that it suffers from non-application of mind, ft is further contended that one of the Board of Dirrctors of the society is the Deputy Registrar of Co-operative Societies as a Government nominee on the Board and at no point of time he raised dissent note regarding commissions and omissions. In every meeting accounts were placed and it was approved and the Government representative was a party to each and every act. It is their specific case that the Board has not committed any act warranting interference of the Government and contended that the order of supersession on the date of election amounts to circumventing the democratic proscess in motion. A revisions was filed before the first respondent The first respondent confirmed the order of supersession. It is also contend nd that in view of the impugned order of supersession, they are prevented from discharging their duties and they have made allegations that the Administrator is likely to admit persons who do not qualify the requirements and have sought for restraining the Administrator from admitting any new members and also for quashing the order, annexure 'e' dt. 23-12-91 passed by the 2nd respondent and the order, annexure 'f' dt. 20-4-1992 passed by the first respondent and a mandamus to hold the General Body Meeting and election from the stage it was intercepted.
( 6 ) THIS Court on 1-7-1992 observed that the impugned order is prima facie not one passed with due application of mind and suffers from non- consideration of the explanation offered by the petitioners and further observed that there is a total lack of reasonable reason evidencing the application of mind as to why the explanation is not accepted, and suspended the operation and execution of the order passed by respondent No 2 vide annexure 'e' superseding the Committee of Management of the socie
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