SITARAM SINGHANIA Vs. STATE OF ORISSA

JUDGEMENT

(1.) THIS application under Articles 226 and 227 of the Constitution of India asks for a writ of certiorari to quash the order made by opposite party No. 4, the referee under Regulation 37 (2) of the Orissa State Financial Corporation, General regulations in an election dispute.

(2.) THE material facts may be given in brief. The Orissa State Financial Corporation (opposite party No. 2) has been established under the State Financial Corporation act (63 of 19511 (hereinafter referred to as the Act ). Section 4 (3) of the Act provides that the shares of the Corporation are to be distributed among; (a) the State Government; (b) the Reserve Bank; (c) Scheduled banks. Insurance Companies; investment trusts, cooperative banks or other financial institutions; and (d) parties other than those referred to in clauses (a), (b) and (c)as the State Government with the approval of the Central Government would direct. The petitioner who is an individual and opposite party No. 5 which is a company incorporated under the Companies Act are admittedly share-holders of the category under Clause (d ). The corporation (opposite party No. 2) has a Board of Directors as envisaged under Section 10 of the Act. It has a total strength of ten members. The directors are of three categories. The Managing Director is appointed by the State Government in consultation with the Reserve Bank. There are three classes of nominated directors, (i) three to be nominated by the state Government; (ii) one to be nominated by the Reserve Bank; and (iii) one by the Industrial Financial Corporation of India. The remaining four directors are of elected category. Of them three are elected in the prescribed manner by the parties referred to in Clause (c) of Sub-section (3) of S. 4 and one is elected in the prescribed manner from among themselves by the parties referred to in Clause (d) of Sub-section (3) of section 4 of the Act. The last category is in terms of Section 10 (e) of the Act.

(3.) WHEN a vacancy arose in the Board of Directors for the category under Section 10 (e) of the Act election took place. Opposite Party No. 3 is admittedly not a share-holder in his personal capacity representing opposite party No. 5, the company, a share-bolder, stood as a candidate and got elected. The petitioner disputed the eligibility of opposite party No. 3 to represent in the Board the category of share-holders within the meaning of Section 4 (3) (d) of the Act. Under the provisions of the Act a set of rules have been made by the State government known as the Orissa State Financial Corporation (Voting Rights)Rules. 1956 incorporating exercise of powers vested under Section 47 of the Act. The Board of Directors of the Corporation in exercise of powers vested under section 48 of the Act have framed a set of Regulations. When the election dispute was raised, the State Government in terms of Regulation 37 appointed as referee opposite party No. 4 and the said referee by his decision, now impugned by this petition, held that the election dispute was liable to be dismissed. The present writ petition challenges the decision of the referee and asks us to quash it. We are also required to Pass consequential directions and orders.