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1988 Supreme(Online)(Kar) 7

KARNATAKA HIGH COURT
R. G. Desai, J.
Shankar Alva H. and Another v. Central Arecanut and Cocoa Marketing and Processing Co-op. Ltd. Mangalore and Others
W. P. No. 10149, 10150 of 1985



1. In these writ petitions, the petitioners who are 'C' class members of the Central Arecanut and Cocoa Marketing and Processing Co - operative Society Ltd., (hereinafter referred to as the 'Society') have challenged the validity of Resolution No. 10 of the General Body Meeting of the said Society held on 31-1-85 effecting certain amendments to bye - law No. 15 of the Society as per Annexure - A and the order dt/- 1-3-1985 of the Registrar of Co - operative Societies in Karnataka (Respondent No. 18) approving and registering the said amendments as per Annexure - B.

2. The Society is registered under S.7 of Karnataka Co - operative Societies Act 1959 (for short the Act') read with S.4(2) of the Multi Unit Co - operative Societies Act, 1942. The Society is governed by the Act and the Rules framed thereunder and with its bye - laws. The area of its operation extends to the States of Karnataka and Kerala and its Headquarters is at Mangalore. The object of the Society is to procure arecanut and cocoa, undertake the processing thereof and market the same. The members of the Society consists of five classes as mentioned below :

3. Bye - law No. 15 of the said Society before the impugned amendment read as follows :
"BYE - LAW 15, Board of Directors :
(i) The Management of the Co - operative shall vest in a Board of Directors consisting of the following :
(a) Eight from 'A' Class members of whom at least six shall be representatives of Cooperative Marketing Societies, handling Areca;
(b) Two from 'B' class members.
(c) Two from 'C' class members.
(d) Four members to be nominated by the State Governments of Karnataka and Kerala at the rate of two each.
(e) Managing Director.
Except representatives of 'D' class members and the Managing Directors, all other Directors shall be elected on the basis of equal representation on the Board from each State. The entire General Body shall elect the Directors representing different classes of memberships indicated above.
 (Underlining supplied).

4. As on 1-11-1984 the number of members of Class 'A' and 'B' was 405 and 6 respectively. The number of members under 'C' class was 20541 and the number of Members of 'D' class was 2.

5. After the impugned amendment of the bye - law effected by the Resolution dt/- 31-1-1985 passed at the Annual General Body Meeting of the first respondent Society as per Annexure - A, the Board consists of 10 members from Class 'A' and 'B', 2 from 'C' class 2 to be nominated by the Term Loan Lending Institutions and 4 to be nominated by the State Governments of Karnataka and Kerala at the rate of 2 each and one Managing Director. So far as 10 members of Classes 'A' and 'B' are concerned, the change effected is that the Directors drawn from these two classes are to be elected by the members in Class 'A' and 'B' instead of by the entire body of members of the Society. Similarly, two members from class 'C' are to be elected by the 'C' class members only instead of by the entire body of the members of the Society.

6. By a notice d/-9-1-1985 as per Annexure - C, the 11th Annual General Body Meeting of the Society was convened on 31-1-85 with a view to transact the items of business specified in it. One of the items of business as specified in item No. 10 in the notice was to consider amendments to bye - laws. At pages 38-40 of the Agenda, the proposed amendments were mentioned and the reasons for the amendments were also furnished. Item No. 2 therein pertains to amendment to Bye - law No. 15. A true extract of the same has been produced by the petitioners as per Annexure - D. According to it, two amendments were proposed to the said bye - law No. 15. The first amendment was for incorporating the words 'and Cocoa' after the word 'Areca' in Cl.(a) of Bye - law No. 15. The second amendment proposed provided for nomination of two members in the Board by All India Term loan lending institutions by adding new cl. (d) together with note after Cl.(c) in bye - law No. 15. On 31-1-1985, the 11th A































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