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2008 Supreme(Gau) 344
IN THE HIGH COURT OF GAUHATI
Biplab Kumar Sharma, J.
Anil Kumar Kalita and Ors. - Appellants
Vs.
State of Assam and Ors. - Respondent
Decided On : 09.05.2008
Substantial compliance with the procedure laid down in Rule 22 of the Bye-laws is crucial for the validity of the adjourned meeting and election.
Headnote:
Constitution of Board of Directors - Co-operative Bank - Assam Co-operative Societies Act, 1949, Rule 22 - The court discussed the violation of Rule 22 of the Bye-laws in the election for constitution of the Board of Directors of the Co-operative Bank. The key legal provisions discussed were Rule 22 of the Bye-laws and Rule 23(iv) of the Assam Co-operative Societies Rules, 1953. The court emphasized substantial compliance with the procedure laid down in Rule 22 and the interpretation of 'forwarding of notice' to all members of the General Assembly.
Fact of the Case:
The petitioners challenged the constitution of the Board of Directors of a Co-operative Bank and the approval conveyed by the authority, citing violation of Rule 22 of the Bye-laws.
Finding of the Court:
The court found that the adjourned meeting for the election of the new Board of Directors was held in compliance with the Bye-laws and Rules, and there was substantial compliance with the procedure laid down in Rule 22.
Issues: Violation of Rule 22 of the Bye-laws, compliance with the procedure for adjourned meeting, and the validity of the election for the Board of Directors.
Ratio Decidendi: The court emphasized substantial compliance with the procedure laid down in Rule 22 and the interpretation of 'forwarding of notice' to all members of the General Assembly.
Final Decision: The writ petition was dismissed, and the parties were left to bear their own costs.
B.K. Sharma, J.
1. The challenge made in this writ petition is the Constitution of the Board of Directors of the particular Co-operative Bank and the approval thereof conveyed by the authority.
2. The petitioners numbering 3 are the share holders of Guwahati Co-operative Urban Bank Ltd. The Bank is a Co-operative Society constituted under Assam Co-operative Societies Act, 1949 and the Rules framed thereunder. The Bank has its own set of Bye-laws, known as Bye-laws of Guwahati Cooperative Urban Bank Ltd. According to the petitioner the election for constitution of the Board of Directors of the Bank held on 8.6.2007 and the approval thereof accorded by the Assistant Registrar of the Co-operative Societies vide his letter dated 22.6.2007 are in violation of Rule 22 of the Bye-laws.
3. On 30.4.2007 the respondent No. 6, i.e. the Managing Director/General Manager of the Bank, issued notice intimating all the share holders of the Bank that 38th Annual General Meeting (AGM) would be held on 25.6.2007 at 10.30 a.m. in the premises of the Institute of Engineers, Panbazar, Guwahati. The notice also contained the subjects/agenda which were to be discussed in the meeting. One of the agenda was constitution of new Board of Directors. Be it stated, here that the Bank, in its own entity is not party to this proceeding.
4. Pursuant to the aforesaid notice, the 38th AGM of the Bank was held on 26.5.2007, but after discussion of few items, the proceeding/meeting had to be adjourned with the consent of all the share holders present at the meeting. According to the petitioners, the meeting had to be adjourned due to sudden bomb blast at Athgaon area on that day. It is the further case of the petitioners that the meeting was attended by about 400 share holders.
5. Upon a reference to Rule 22 of the Bye-laws of the Bank, the petitioners have asserted that in case of any adjourned meeting, same is required to be held not less than 7 days and not more than 14 days of such adjournment and the Chairman has to notify the next date of adjourned meeting within 7 days specifying the date, hour and place of the meeting and such notice shall be forwarded to all the members of the General Assembly. According to the petitioners there was violation of the procedure laid down in Rule 22 of the Bye-laws in not forwarding the notice to all the members of the General Assembly and consequently there was no sanctity of law in holding the adjourned meeting on 8.7.2007. It is in the adjourned meeting item No. 6 was considered and the Board of Directors was elected. The AGM was approved by the Assistant Registrar of the Co-operative Societies by his letter dated 22.6.2007. Being aggrieved, the petitioners have approached this Court by filing the instant writ petition.
6. The Assistant Registrar of the Co-operative Societies, i.e. the respondent No. 3, has filed affidavit in opposition and so also by the respondent Nos. 5, 6 and 7 who are the Board of Directors, Managing Director and the Chairman of the Bank. Respondent Nos. 10, 11 and 12 have also filed affidavit in opposition. In the affidavits, the plea of the petitioners that there has been violation of Rule 22 of the Bye-laws, has been denied. According to the respondents due enquiry was carried out in respect of the manner and method of conducting the AGM and on the basis of such enquiry it was found that the AGM/election was held according to the Rules and consequently necessary approval thereto was accorded. According to the respondents in the first meeting held on 26.5.2007 all the agenda except the election agenda were completed peacefully, but the item No. 6, i.e. election of new Board of Directors, had to be adjourned due to unexpected circumstances. It is their stand that notice relating to adjourned meeting scheduled to be held on 8.6.2007 was forwarded to all the members of the Bank by publishing in three leading news papers, namely Assam Tribune, Dainik Assam and Asamia Pratidin. Same was also telecaste
