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IN THE HIGH COURT OF GAUHATI
Biplab Kumar Sharma, J.
Nripendra Narayan Mahanta
Vs.
State of Assam and Ors.
WP(C) Nos. 7946 and 7981 of 2003
Decided On: 05.05.2004
Approval - Annual General Meeting - Section 19(iii) - Section 27(5) - The court discussed the refusal to accord approval to the proceedings of the Annual General Meeting (AGM) of a cooperative bank. The key legal provisions discussed were Section 19(iii) and Section 27(5) of the bye-laws, which were violated by the bank. The court upheld the refusal to grant approval based on the violations and the appointment of a one-man ad hoc committee to manage the bank's affairs.
Fact of the Case:
The writ petitions challenged the refusal to approve the proceedings of the AGM of a cooperative bank and the appointment of a one-man ad hoc committee to manage the bank's affairs. The petitioners argued that the refusal to accord approval was not sustainable in the eye of the law.
Finding of the Court:
The court found that the bank violated the provisions of Section 19(iii) of the bye-laws, the chairman of the bank was a defaulter on the date of the AGM, and a shareholder was illegally prevented from participating in the election to the Board of directors. The court upheld the refusal to grant approval based on these findings.
Issues: The issues included the refusal to approve the AGM proceedings, the appointment of the one-man ad hoc committee, and the alleged irregularities in managing the bank's affairs.
Ratio Decidendi: The court's decision was based on the violations of the bye-laws by the bank, including the chairman's default status and the illegal prevention of a shareholder from participating in the election.
Final Decision: The writ petitions were dismissed, and the one-man ad hoc committee was directed to convene and hold the AGM in accordance with the rules without delay.
B.K. Sharma, J.
1. Both the writ petitions have been filed assailing the legality and validity of the impugned order dated 17.9.2003 passed by the Registrar, Cooperative Societies, Assam refusing to accord approval to the proceedings of Annual General Meeting of Guwahati Co-operative Urban Bank held on 24.5.2003 and consequential appointment of the Assistant Registrar of Co-operative Societies, Guwahati as the One Man Ad hoc Committee to manage the affairs and to perform the function of the Managing Committee of the said Bank till such time a new Managing Committees is elected or formed. Further it has been prayed for issuance of the direction towards approval of the proceedings of the Annual General Meeting in question.
2. The first writ petition has been filed by the petitioner projecting himself to be the Chairman of the elected Board of directors of the bank which has since been dissolved by the impugned order. The writ petition has been filed allegedly on behalf of the writ petitioner himself and the other elected members of the Board of directors. However, neither particulars of such elected members have been furnished, nor any authorization letter authorizing the petitioner to initiate the writ proceeding has been annexed.
3. The WP(C) No. 7981/2003 has been filed by the 4 petitioners who are the shareholders of the Bank in question. Since the common question of facts and law are involved and the relief sought for are also same and as agreed to by the learned counsels for the parties, both the writ petitions were heard analogously for decision. Thus this common judgment and order in both the writ petitions.
4. Shortly stated, the facts leading to the filing of the writ petitions are that the 34th Annual General Meeting of the Bank was held on 24.5.2003 and the Managing Committee was elected and the writ petitioners in WP(C) No. 7946/2003 was unanimously elected as the Chairman. After such election of the New Managing Committee, the proceedings of the Annual General Meeting were sent to the Assistant Registrar of Co-operative Societies for his approval as required under the Rules. The Assistant Registrar refused to accord approval by his letter dated 5.6.2003. Altogether 4 grounds were indicated in the order dated 5.6.2003 towards refusal to accord approval which are as follows:
(a) That the Society violated the provisions of Bye-law No. 19(iii).
(b) Large numbers of members were debarred from participating in the Annual General Meeting for not bringing the notice of the Annual General Meeting, which is not in conformity with the Bye-laws.
(c) The Chairman who presided over the meeting is in default to the Bank and ceased to be the Chairman/director of the Bank as per Section 27(5) of the Bye-laws.
(d) The one Shareholder was debarred from contesting the election in an illegal manner.
5. Being aggrieved by such refusal to accord approval to the minutes of the Annual General Meeting, the petitioners in WP(C) No. 7946/2003 approached this court by filing WP(C) No. 4424/2003. The writ petitioners in WP(C) No. 7981/2003 filed another writ petition being WP(C) No. 4481/2003. This court by its common judgment and order dated 13.8.2003 exhaustively discussing the facts and the law interfered with the said order dated 5.6.2003 and the order dated 6.6.2003 disapproving the proceedings of the AGM, dissolving the Managing Committee elected therein and constituting the one man ad hoc committee and the notice of fresh AGM fixing 17.8.2003. Upon such interference, the Registrar, Co-operative Societies, Assam was ordered to take a fresh decision on the issuance of approval/disapproval of the proceedings of the AGM held on 24.5.2003 after affording reasonable opportunity of hearing. It was, however, made clear that the direction for fresh decision should not be construed to be a direction for approval of the proceeding of the AGM. The respondents were directed to take appropriate decision after considering the materials on record and fol
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