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HIGH COURT OF JUDICATURE AT MADRAS
C.S. KARNAN, J.
The Tamil Nadu Circle Postal Co-operative Bank Ltd., Chennai rep. by its President C. Janakiraman – Appellant
Versus
The Central Registrar of Co-operative Societies, New Delhi & Another – Respondent
W.P. No. 30469 of 2014 & M.P. Nos. 1 & 2 of 2014
Decided On : 02-02-2015
Co-operative Bank - Disqualification Proceedings - Multi-State Co-operative Societies Act, 2002, Section 43(1)(m), Section 84(4) - The court dismissed the writ petition challenging the appointment of an arbitrator and the subsequent communication nullifying disqualification proceedings against 9 directors. The court found that the proposal for disqualification lacked natural justice and was initiated by a minority group of directors. The court also noted that the same dispute had been challenged in previous writ petitions and decided by the arbitrator, making the current writ petition not maintainable. The writ petition was dismissed, and the impugned order was confirmed.
Fact of the Case:
The petitioner, President of a Co-operative Bank, sought disqualification proceedings against 9 directors for continuous absence from board meetings. The directors alleged that the petitioner had prevented them from attending meetings and initiated disqualification without giving them an opportunity to explain.
Finding of the Court:
The court found that the proposal for disqualification lacked natural justice and was initiated by a minority group of directors. The court also noted that the same dispute had been challenged in previous writ petitions and decided by the arbitrator, making the current writ petition not maintainable.
Issues: The main issues were the lack of natural justice in the disqualification proposal and the maintainability of the writ petition due to previous challenges and arbitration proceedings.
Ratio Decidendi: The court held that the disqualification proposal lacked natural justice and was initiated by a minority group of directors. The court also found that the same dispute had been challenged in previous writ petitions and decided by the arbitrator, making the current writ petition not maintainable.
Final Decision: The writ petition was dismissed, and the impugned order was confirmed.
1. The petitioner submit that he is the President of the Elected Board of Directors of the Tamil Nadu Circle Postal Co-operative Bank Limited. The petitioner Bank namely Tamil Nadu Circle Postal Co-operative Bank Limited is a Co-operative Society registered under the Multi-State Co-operative Societies Act, 2002 and the first respondent is the Registrar of Co-operative Societies appointed under the said Act. The petitioner additionally added that the area of operation of the said bank extends to whole state of Tamil Nadu and Puducherry consisting of members who are employed under the Department of Posts, Government of India. The said Bank was registered and started working from 1913 and completed its Centenary year in 2013.
2. He states that the said Bank is managed by the Elected Board of Directors in accordance with the provisions of the said Act, Rules and Bye-laws framed there under the Elections are held once in Five years. He states that the last elections to the Board of Directors of the said Bank was held on 08.02.2013 and total of 12 Directors were elected by the General Body and the Board has been duly constituted in accordance with the provisions of the said Act and all the 12 Elected Directors assumed office on and from 11.02.2013 for a period of five years. He states that the Elected Board of Directors have elected him as President and one Mr.M.B.Sukumar as the Vice President of the said Bank from among the Board of Directors in the elections held on 08.02.2013 conducted by the Returning Officer appointed for that purpose by the first respondent and the petitioner, the President and the above Vice President have assumed office on and from 11.02.2013 as Office bearers. Therefore, the Elected Board of Management of the Bank is duly constituted and functioning in accordance with the said Act, Rules, Bye-laws of the said Bank. He states that the elected Board of Directors with whom the management of the said Bank has been entrusted functioned smoothly until 07.05.2013 and all the Directors had extended full cooperation in attending 14 Board meetings and approved all the transactions. He states that 9 out of 12 Directors, who have attended 17 Board meetings out of 21 meetings convened and conducted, except the meetings held on 07.06.2013, 08.07.2013, 08.08.2013 and 19.08.2013 and approved all the subjects and transactions placed before the Board of management, unanimously without any dissent.
3. He states that one of the Directors Mrs.Ezhil Rosaline along with the above Vice President by getting support of other 7 Directors have started to non-Co-operate with him in the proper management of the said Bank besides acting detrimental to the interest of the said Bank and its members and customers. Further two other Directors viz., P.Kamaraj and M.Pugalendhi, are fully cooperating with him in the Management of the said Bank. It is pertinent to state that the above mentioned 9 Directors by mobilizing the strength among themselves started to non Co-operate with the existing 3 Board Members including him as President by absenting themselves in attending and transacting the business of the Board of the said Bank by failing to perform duties cast on them by the statute and bye-laws of the Bank consecutively for more than 4 meetings and thereby they are acting detrimental to the interest of the bank and its members, violating the provisions of the said Act and bye-laws besides they attracted disqualification and ceased to hold the post of Board of Directors as per Section 43(1)(m) of the Multi-State Co-operative Societies Act, 2002. Therefore, in the interest of the said Bank and to run the smooth administration and management of the said Bank, the said Bank submitted a Proposal dated 23.08.2013 to the first respondent Registrar as per Section 43(1)(m) of the said Act R/w Bye-law No.33 of the said Bank, requesting the first respondent Registrar to initiate disqualification proceedings against the 9 disqualified Director
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