MADAN MOHAN SHARMA Vs. STATE OF M.P.

JUDGEMENT

(1.) THIS petition under Articles 226 and 227 of the Constitution of India has been filed by the Katni Co -operative Central Bank and the Chairman of the Board of Directors and is directed against the order passed by the Registrar, Co -operative Societies, Madhya Pradesh, Respondent No. 2, under Section 38 -A (1) of the Co -operative Societies Act, 1912, dissolving the Board of Directors for a period of two years.

(2.) IF , in the opinion of the Registrar, the committee of any Registered Society persistently makes default or is negligent in the performance of the duties imposed on it by or under this Act or by the rules framed thereunder or by the bye -laws of the Society or by any lawful order passed by the Registrar or commits acts which are prejudicial to the interests of the Society or share -holders, he may, after giving an opportunity to the committee to state its objections, if any, by order in writing, dissolve the committee and appoint a suitable person or persons to manage the affairs of the Society for a specified period not exceeding two years. The period specified in such order may at the discretion of the Registrar, be extended from time to time, provided that no such order shall remain in force for more than four years in the aggregate.

(3.) IN the present case, the Registrar, Co -operative Societies, initially served a notice on the Secretary, Katni Co -operative Central Bank on 24 January 1958 complaining of the neglect of duties by the employees of the Bank and requiring the removal of certain numbers of the staff. Subsequently, on 15/17 February 1958 he served a notice on him under Section 38 -A (1) of the Co -operative Societies Act to show cause why the present Board of Directors should not be dissolved on the ground that they were not functioning properly and were committing acts prejudicial to the interests of the Bank. The Secretary of the Bank, while complaining of the short time that was given in the notice, stated a full case of the Bank in writing. The requirements of Section 38 -A (1) of the Co -operative Societies Act for dissolving the Board of Directors were, therefore, dulyc omplied with.