GOKUL PRASAD MOUJILAL BHARAT Vs. LAXMANSINGH MAHASINGH

JUDGEMENT

(1.) This matter comes up on a reference by a Division Bench of this Court and the question that has been referred to the Full Bench for decision is:- "Whether a challenge to the validity of the election of the Chairman of the Board of Directors of the, respondent, the Co-operative Central and Land Mortgage Bank Ltd., is a dispute falling under bye-law 52 of the bye-laws framed by the Bank?''

(2.) At a meeting of the Board of Directors of the Bilaspur Co-operative, Central and Land Mortgage Bank Ltd., held on 19th May 1951, the respondent No. 2 Kesheorao Goverdhan was elected as Chairman of the Board. Thereupon the respondent No. 1. Laxmansingh, who was defeated at the election, filed an application under Rule 26 of the Rules made by the Local Government under the Co-operative Societies Act, 1912, challenging the validity of the election of Keshorao as the Chairman and claiming a declaration about his own election as chairman. The Registrar acting under Rule 27 referred the election dispute to three arbitrators for decision. The arbitrators made an award on 18th September, 1961, holding that the election of Kesheorao as the Chairman was invalid and declaring Laxmansing as the duly elected Chairman. Thereafter the petitioner Gokul Prasad who is a share-holder and a member of the Board of Directors, filed a petition under Articles 226 and 227 of the Constitution challenging the validity of the award given by the arbitrators inter alia on the ground that the Dispute about the validity of the election of Kesheorao not being "any dispute touching the business" of the Bank, the Registrar had no jurisdiction to decide the dispute himself or refer it to arbitration for decision under Rules 26 and 27 and the bye-laws of the Bank.

(3.) The Co-operative, Central and Land Mortgage Bank Ltd., Bilaspur, is constituted under the Co-operative Societies Act, 1912. The object of the Act, as set out in the preamble, is to facilitate the formation of Co-operative Societies for the promotion Of thrift and self-help among agriculturists artisans and persons of limited means. Sections 3 to 11-A of the Act deal with the formation and registration of Co-operative Societies. The rights and liabilities of members and the duties of registered societies are dealt with by Sections 12 to 17. Sections 18 to 38-A contain provisions, about the privileges of registered societies, their property and funds and the inspection of their affairs. Then after dealing with the matter of dissolution of the registered societies, the Act proceeds to give to the Government the power to make rules to carry out the purposes of the Act. Section 43 provides that the Government "may for the whole or any part of the State and for any registered society or class of such societies, make rules to carry out the purposes of the Act" and says that in particular and without prejudice to the generality of this foregoing power, such rules may provide for matters specified in Clauses (a) to (t) of Sub-section (2) of Section 43. The rules framed by the Government may, according to Clause (c), "prescribe the matters in respect of which a society may or shall make byelaws ......." Clause (1), which is material here, says that the rules may- "provide that any dispute touching the business of a society between members or past members of the society or persons claiming through a member or past member or between a member Or past member or persons so claiming and the committee or any officer shall be referred to the Registrar for decision, Or, if he so directs, to arbitration, and prescribed the mode of appointing an arbitrator or arbitrators and the procedure to be followed in proceedings before the Registrar or such arbitrator or arbitrators, and provide for the making of interlocutory orders including grant of temporary injunctions for preventing the ends of justice being defeated and provide for the mode of the enforcement of the decision of the Registrar any interlocutory order or the awards of arbitrators."