PUNJAB & HARYANA HIGH COURT
P.C.Jain and A.S.Bains JJ.
Joginder Singh, President, Rupar Central Cooperative Bank Ltd., Rupar
Versus
Registrar Cooperative Societies, Punjab
Civil Writ No. 4150 of 1975,
Decided On : APRIL 1, 1977
CO-OPERATIVE SOCIETY - BYE-LAWS - NO-CONFIDENCE MOTION AGAINST PRESIDENT - MAINTAINABILITY OF WRIT PETITION - ARBITRATION - SECTION 23(1) OF THE PUNJAB CO-OPERATIVE SOCIETIES ACT, 1961 - SECTION 55 OF THE PUNJAB CO-OPERATIVE SOCIETIES ACT, 1961
Fact of the Case:
Petitioner, the President of a Co-operative Bank, challenged a resolution passed by the Board of Directors expressing no-confidence in him, arguing that it violated bye-law 33, which provided a fixed tenure for the President and prohibited removal by no-confidence motion.
Finding of the Court:
The Court held that the bye-law in question did not have the force of law and could not be challenged as violative of Section 23(1) of the Punjab Co-operative Societies Act, 1961, which vested final authority in the general body of members.
Issues: 1. Whether a bye-law of a co-operative society has the force of law? 2. Whether a no-confidence motion against the President of a co-operative bank is permissible under Section 23(1) of the Punjab Co-operative Societies Act, 1961? 3. Whether the petitioner should have sought arbitration under Section 55 of the Act instead of filing a writ petition?
Ratio Decidendi: 1. Bye-laws of a co-operative society do not have the force of law and are not binding on the courts. 2. Section 23(1) of the Punjab Co-operative Societies Act, 1961, which vests final authority in the general body of members, does not prohibit a no-confidence motion against the President. 3. The petitioner should have sought arbitration under Section 55 of the Act, which provides for the resolution of disputes between the society and its officers, before approaching the court.
Final Decision: The petition was dismissed as the bye-law in question did not have the force of law, the no-confidence motion was not prohibited by Section 23(1) of the Act, and the petitioner had not exhausted the alternative remedy of arbitration.
P.C.Jain, J.
1. Joginder Singh has filed this petitioner under Articles 226 and 227 of the Constitution of India praying that a writ in the nature of mandamus be issued directing respondents 1 to 4 not to give effect to the resolution passed by respondents 5 to 11 dated June 14, 1975, and to remove the petitioner from the office of the President of the Rupar Central Co- operative Bank Ltd., Rupar (hereinafter referred to as the Bank). The facts of this case, as given in the petition, may briefly be stated thus :-
Elections to the Board of Directors of the Bank, which is a society registered under the Punjab Co-operative Societies Act, 1961 (hereinafter called the Act) was held on November 10, 1974, and the petitioner, one Santokh Singh and respondents 5 to 11 were declared elected as directors of the Bank. A meeting of the Board of Directors was held on December 6, 1974, and the petitioner was elected as the President of the Bank. Apart from the petitioner, Jaswant Singh respondent was elected as Vice-President and Shadi Singh respondent as Managing Director. An executive committee consisting of five directors was also constituted.
It is further stated that the Deputy Registrar, Co-operative Societies, vide his order dated December 13, 1974, set aside the proceedings of the meeting which was held on December 6, 1974, and also set aside the election of the petitioner as President of the Bank. The petitioner challenged the order of the Deputy Registrar by filling Civil Writ Petition No. 170 of 1975 which was admitted by a Division Bench of this Court and stay was granted to the petitioner, who under that stay order is still continuing as the President of the Bank.
It is further averred that under bye-law 33 of the Bye-laws of the Bank, the President of the Bank holds office for three years when once he is elected by the Board of Directors and that there is no provision in the Act, rules and the bye-laws which may provide for the moving of a `no-confidence motion against the President. Under bye-law 33, a fixed tenure has been provided and the President once elected cannot be removed by way of a `no-confidence motion.
It is further stated that respondent Nos. 2, 3 and 4 were extremely annoyed with the petitioner as he had filed a writ petition challenging the legality of the order of the Deputy Registrar and that under the influence of these officers, some of the directors have been won over and a meeting was called for June 14, 1975, wherein a `no-confidence motion was passed against the petitioner. A copy of the resolution passed by the Society has been attached to the petition as Annexure P.1. As earlier observed, it is the legality of this resolution which has been challenged by way of this petition.
2. Separate written statements have been filed on behalf of respondent No. 3, respondent No. 4, respondents Nos. 5 to 11 and respondent No. 12, in which the material allegations made in the petition have been controverted.
3. It is conceded at the outset by the learned counsel for the respondent that the `no-confidence motion could not be moved against the petitioner in view of the provisions of bye-law 33, but it was sought to be argued by Mr. Khoji, learned counsel for respondent No. 12, that the present petition is not maintainable in view of the decision of their Lordships of the Supreme Court in Co-operative Central Bank Ltd. and others v. Additional Industrial, Tribunal Andhra Pradesh, Hyderabad and others, A.I.R. 1970 S.C. 245. It was also contended by the learned counsel that the appropriate remedy available to the petitioner was to get the dispute settled through arbitration as provided under section 55 of the Act.
4. After hearing the learned counsel for the parties, we are of the view that there is considerable force in the contention of the learned counsel for the respondents. In view of the authoritative pronouncement of their Lordships of the Supreme Court, bye-law of a co-operative society is not law, nor d
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