BHOGILAL JETHALAL PATEL Vs. YUSUFBHAI RAMANBHAI GAJIAWALA

JUDGEMENT

(1.) A short question arises in this petition whether the first respondent who was nominated by the Government of Gujarat as its nominee on the Board of Directors of the second respondent-and under sec. 80 of the Gujarat Co-operative Societies Act 1961 entitled to act as a director and attend the meeting or to vote or participate in the discussion of the Board of Directors. The said question arises in the following Circumstance :-

(2.) The second respondent herein is a Co-operative Bank registered under the Gujarat Co-operative Societies Act and the petitioner is a member of the said Bank Respondent No. 1 was appointed as a State nominee by the State of Gujarat on the Board of second respondent-Bank on September 26 1973 The first respondent herein had taken a loan from Baroda Peoples Co-operative Bank on September 22 1970 The Baroda Peoples Co-operative Bank is a Co-operative society carrying its activities within the area of operation of the second respondent-Bank. The loan in question was repayable on September 15 1972 But as it was not repaid upto the date of nomination of the first respondent by the State Government on the Board of the second respondent-Bank the petitioner herein filed a Lavadi case being Case No. 1335 of 1973 before the Board of Nominees of the Registrar Co-operative Societies Baroda for a declaration that the first respondent who was nominated by the Government of Gujarat was not entitled to act as a director and for a permanent injunction restraining him from acting as such. The Board of Nominees dismissed the suit by its order of January 3 1974 The petitioner being aggrieved by the judgment and award of the Board of Nominees took the matter in appeal before the Co-operative Tribunal of the State of Gujarat at Ahmedabad by his appeal No. 3 of 1974. The Tribunal by its order of April 10 1974 dismissed the appeal and confirmed the judgment and award of the Board of Nominees. The petitioner therefore has come to this Court for appropriate writ order or direction to quash and set aside the order of the Board of Nominees as confirmed in appeal by the Cooperative Tribunal and for a declaration that the second respondent herein was not entitled to act as a director and therefore he should be permanently restrained from acting as such.

(3.) The answer to the question raised in this petition depends on what should be the meaning ascribed to the term liabilities of the director nominated by the State Government on the Board of Directors of a Co-operative society. In Chapter VII of the Gujarat Co-operative Societies Act 1961 under sec. 73 the final authority of every society is vested in the general Board of the members in the general meeting. Under sec. 74 the management of every society vests in a Committee constituted in accordance with the Act the Rules and bye-laws which is to exercise such powers and perform such duties as may be conferred or imposed on it respectively by the Act the Rules and Bye-laws. Sec. 80 which empowers the Government to appoint nominee on the Board of Directors and which is relevant for purposes of this petition reads as under:-