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1995 Supreme(Raj) 142

High Court Of Rajasthan
Judgename : P.P. Naolekar,R.R. Yadav
Nirmal Nahar - Appellant
Versus
State of Rajasthan - Respondent
Civil Special Appeal No. 160 of 1995
Decided On : 03/02/1995

Advocates Appeared:
K.N. Joshi, for the Appellant
M.R. Singhvi and Sangeet Lodha, for the Respondents

The Board of Directors of a co-operative society does not have the jurisdiction to revoke and rescind a resolution inducting members into the society, once the members have been inducted. Such a decision can only be made by the Registrar under the relevant provisions of the Rajasthan Co-operative Societies Act, 1965.

Headnote:

CO-OPERATIVE SOCIETY - MEMBERSHIP - INDUCTION - REVOCATION - JURISDICTION - BOARD OF DIRECTORS - POWER TO REVOKE - STATUTORY PROVISIONS - INTERPRETATION - RAJASTHAN CO-OPERATIVE SOCIETIES ACT, 1965 - SECTIONS 19(2), 19(3)(I), 19(3)(II), 32 - BYE-LAWS - RULE 14(2), RULE 16 - RAJASTHAN CO-OPERATIVE SOCIETIES RULES, 1966.

Fact of the Case:

The appellant, along with 475 other individuals, applied for membership in the Jodhpur Nagrik Sahkari Bank Ltd. (the Bank). The Board of Directors of the Bank held a meeting on February 5, 1994, and unanimously accepted all the applications, inducting the appellant and the other applicants as members. However, in a subsequent meeting held on March 2, 1994, the Board of Directors resolved to set aside the resolution passed on February 5, 1994, and directed that the membership forms be scrutinized and placed before the Executive Committee. The appellant challenged the legality of this decision and sought a direction from the court to allow the members inducted on February 5, 1994, to participate in the upcoming election.

Finding of the Court:

The court held that the Board of Directors did not have the jurisdiction to revoke and rescind the resolution inducting the members in the meeting held on February 5, 1994. The court interpreted the relevant provisions of the Rajasthan Co-operative Societies Act, 1965, and the bye-laws of the Bank and concluded that once a member is inducted into the society, the decision is final and cannot be revoked or rescinded by the Board of Directors itself. The court also held that the meeting held on February 5, 1994, was not properly convened and the business transacted in that meeting was invalid due to lack of quorum.

Issues: 1. Whether the Board of Directors has the jurisdiction to revoke and rescind the resolution inducting the members in the meeting held on February 5, 1994? 2. Whether the meeting held on February 5, 1994, was legally convened and the business transacted in that meeting was valid?

Ratio Decidendi: 1. The court interpreted the relevant provisions of the Rajasthan Co-operative Societies Act, 1965, and the bye-laws of the Bank and concluded that once a member is inducted into the society, the decision is final and cannot be revoked or rescinded by the Board of Directors itself. The court relied on Section 19(2) and the second proviso to Sub-section (2) of Section 19, as well as Sub-section (3)(i) and (ii) of the Act, which provide for the procedure for admission to membership and the powers of the Registrar to remove members. 2. The court held that the meeting held on February 5, 1994, was not properly convened because it was postponed by the Managing Director and could only have been called with at least eight days' prior notice to the members of the Board of Directors, as per the bye-laws of the Society. The court also held that the meeting was invalid due to lack of quorum, as three of the members who attended the meeting were co-opted Directors whose terms had expired and they were not eligible to attend and vote in the meeting.

Final Decision: The court dismissed the appeal filed by the appellant and upheld the decision of the lower court. The court also vacated the stay granted by it earlier, which had stayed the counting and declaration of the result of the election.

Judgment

P.P. Naolekar, J.-This special appeal is filed against the order of learned single Judge passed in S.B. Civil Writ Petition No. 538 1/94 on 7-2-1995. Brief facts necessary for adjudication of the question involved in this appeal are that the appellant along with 475 persons applied for membership of Jodhpur Nagrik Sahkari Bank Ltd. (for short ‘the Bank’). According to the appellant, he along with 475 members after completing all the necessary formalities and depositing the requisite fees and share money, applied for the membership complying the rules prescribed, for membership. On 5-2-1994, the Board of Directors of the Bank held its meeting, considered the applications and by unanimous decision, accepted all the applications and made them members. In the list of the members, which are newly added to the membership, the appellant’s name is at S. No. 448.

2. Respondent No. 4 was appointed as Election Officer for conducting the elections of the Bank, has published the election programme for the election of Board of Directors and other office bearers. The programme was published in the newspaper Rajasthan Patrika. Names of 475 members inducted vide meeting dated 5-2-1994 was not included in the voters’ list. Number 6f objections were filed for non-inclusion of 475 voters. The objections of the appellant for non-inclusion of his name along with 475 members were rejected by the Election Officer. One of the member, who was inducted in the meeting dated 5-2-1994 had initiated proceedings before the Deputy Registrar, Cooperative Department, Jodhpur, under Section 19 of the Rajasthan Co-operative Societies Act, 1965 (for short ‘the Act’) for non-inclusion of his name in the voters list published by the Election Officer, Respondent No. 4, and prayed that he be permitted to participate in the election. Directions were issued for inclusion of his name as a member by the Deputy Registrar. Thus, in nutshell, the appellant’s case is that in the meeting held on 5-2-1994 of the Executive Committee, he was inducted along with 475 persons as a member of the Bank and the names could not have been deleted from

the voters list. They have a right to vote and to participate in the election. It is further alleged that in the meeting held, of the Executive Committee on 2-3-1994 the resolution accepting the persons as members dated 5-2-1994, was set aside. It is directed that the membership forms be scrutinised and placed before the Executive Committee. Although it was resolved in the meeting dated 2-3-1994, that enquiry be made of the membership forms, but nothing was done and thus, the resolution passed in the meeting dated 5-2-J994 automatically comes into operation. The members inducted in the meeting dated 5-2-1994 are entitled to participate in the election and inclusion of their names as members. On these allegations, a direction was sought from the Court that the respondents be directed to allow the members referred in Annex. 1 to participate in the election, scheduled to be held on 26-11-1994 or on any other date.

3. Respondent No. 2 the Jodhpur Nagrik Sahkari Bank and Respondent No. 1 filed their separate returns. The points raised in them are more or less similar. According to the respondents, the writ seeking the relief that the persons whose names appear in the list Annex. I with the writ petition, be declared as members of the respondent-Bank and they be allowed to participate in the election, are the disputed questions of fact. Preparation of voters list for election of the members of the Board of Directors of Co-operative Society is a part of election process, the dispute relating to the legality of the voters list is a dispute relating to and connected with the election and such a dispute can only be properly adjudicated by competent authority under Section 75 of the Act. Therefore, the appellants have adequate, efficacious alternative remedy and the Court should not exercise its extraordinary jurisdiction under Article 226 of
































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