BALJIT SINGH Vs. STATE OF PUNJAB

JUDGEMENT

(1.) The Jalandhar Central Co-operative Bank Ltd., Jalandhar City (hereinafter referred to as 'the Co-operative Bank') is a Society registered under the Punjab Co-operative Societies Act, 1961 (for short 'the Act'). Election to its Board of Directors was held on 5-8-1982. 13 Directors were elected including the petitioners and 3 Directors were nominated by the Government. Its Manager summoned a meeting of the Board of Directors among other things for election of office-bearers for 25th August, 1982. All the 16 Directors were present in the meeting so convened. The office-bearers elected in that meeting were Baljit Singh, petitioner No. 1, as President, Vishwa Mittar, petitioner No. 2 as Vice-President and Vijay Sethi, petitioner No. 3 as Managing Director. The Executive Committee was also elected in this meeting. An objection to the validity of convening the said meeting by the Manager of the Co-operative Bank was raised on the ground that the meeting could only bj summoned by the Chief Executive Officer of the Co-operative Bank. The objection was, however, over-ruled by a majority vote. Two Govt. nominated Directors i. e. the Deputy Registrar Co-operative Societies and Assistant Registrar, Co-operative Societies Jalandhar gave their dissenting note. Since the Cooperative Bank is a Society in which shares have been subscribed for liability by way of guarantee for borrowing exceeding fifty percentum of its working capital has been undertaken by the Government, the difference of opinion between the nominated Directors and the elected Directors which had thus arisen was referred to the Government for its dicision, in view of the provisions of Section 26 (4) of the Act. In spite of the fact that the nominated Directors including the Deputy Registrar have no power to stay operation of any resolution to which they give a dissenting note, the Deputy Registrar, respondent No. 4 by letter dated 9-9-1982 Annexure P. 1 issued orders to the Manager of the Co-operative Bank to ensure that none of the Directors who had been elected as office-bearer acted as such office-bearer till the dicision of the Govt. under Section 26 (4) of the Act. A categoric direction was contained in Annexure P. 1 that till the dicision of the Govt. no Director could function as office-bearer. Since, in the meantime a meeting of the Executive Committee which had been dule elected on 25-8-1982 had been summoned for 10-9-1982 by the Manager vide his Memo, dated 31-8-1982, respondent No. 4 further mentioned in the letter Annexure P. 1 that the meeting of the Executive Committee so summoned was invalid. The position so taken by respondent No. 4 was reiterated by him in his letter dated 17-9-1982 Annexure P. 2. As a result, neither the Executive Committee nor the officebearers including the President, Vice President and the Managing Director out of the Board of Directors so elected could function in office. The State Govt. vide its Memo, dated 24-4-1983 agreed with the dissenting note given by the nominated Directors in the meeting held on 25-8-1982 and asked the Registrar to take further necessary action in the matter. 7 elected Directors of the Cooperative Bank impugned the order Annexure P. 3 of the State Govt. through Civil Writ Petition No. 2294 of 1983 (Lashkar Singh etc. v. Pb. State etc.) which came up before a Division Bench of this Court and vide order dated 9-5-1983 fresh election of the office-bearears was stayed till further orders. The Writ Petition was later on admitted to hearing and the ad interim stay order was directed to continue. This Writ Petition was ultimately allowed by D. S. Tewatia, J. vide judgment dated December 21, 1984 (1985 PLJ 503), and the impugned order of the Government Annexure P. 3 was quashed. It was ruled therein, interalia, as under: "Rule 23 of the Punjab Co-operative Societies Rules, 1963 (hereinafter referred to as the Rules) provides for the election of the Committee of a Co-operative Society in accordance with the rules given in Appendix 'C'. In Appendix 'C 'election' is defined as election to the Committee and 'voter' is defined to mean a person entitled to vote under these rules. Expression 'committee' is defined by Section 2 (b) of the Act as meaning the governing body of a Co-operative Society by whatever name called, to which the management of the affairs of the Society is entrusted. The governing body of a Society like the present one comprises of the Board of Directors and its office bearers including the executive committee. The election of the governing body is not complete unless its office bearers and the members of the executive committee are also elected. That means election of the office bearers and the members of the executive committee also form part of the election of the governing body which in view of the definition of the expression 'committee' means the committee and they are to be elected in the manner provided in Appendix 'C'." Thus in view of the judgment of D. S. Tewatia, J. the election of the Committee including the Board of Directors, the Executive Committee and the office bearers was complete only on December 21, 1984 when judgment was delivered, the election held in the meeting of the Board of Directors dated 25-8-1982 was upheld and the impugned order dated 24-4-1983 of the State Government was quashed, In accordance with the provisions of Section 26-B of the Act, the term of the office of a Committee shall be three years. The term of the office of the Committee of the Co-operative Bank taken from 21-12-1984 would, therefore, expire on 20-12-1987. The petitioners through the present writ-petition have sought awrit in the nature of mandamus directing the respondents to permit them and other members of the Board of Directors of the Co-operative Bank to complete their statutory term of three years starting from 21-12-1984 when the election of the governing body including the Executive Committee and the office bearers was completed by virtue of the judgment of this Court in Lashkar Singh's case (supra).

(2.) The petitioners submit that they moved the State Government by way of a petition under Section 69 of the Act as early as April, 1985 to pass specific orders that the term of the Committee of the Co-operative Bank is three years from 21-12-1984, but no orders in this regard have been passed so far. They moved an application under Section 70 of the Act on 16-7-1985 Annexure P. 5 seeking an interim order that by wrongly construing the term of office of the Committee from 5-8-1982 it should not be taken that it expires on 4-8-1985 and that appointment of an Administrator of the Co-operative Bank be stayed during the pendency of the petition under Section 69 of the Act. No order on this application had been passed. The petitioners apprehended that on or after 25-8-1985 the respondents would not allow them to function as the Committee of the Co-operative Bank and would instead appoint an Administrator. When the present writ petition came up for motion hearing before the Division Bench on 31-7-1985, an order of status quo regarding functioning of the Board of Directors as obtaining on that day was passed. The writ petition was ultimately admitted to hearing on 11-9-1985. It is thus admitted on both sides that the Committee of the Co-operative Bank is functioning by virtue of the order dated 31-7-1985 passed by the Division Bench.

(3.) Since the judgment in Lashkar Singh's case adjudicates upon the election of the Committee of the Co-operative Bank constituted by the petitioners and other elected and nominated Directors, the verdict therein as I have stated above is binding on both the parties. It shall thus necessarily have to be construed that the Committee stands elected only on 21-12-1984 when the aforesaid judgment was delivered and the impugned order of the Government was quashed. But this position was not acquiesced in by the respondents and their counsel Shri B. S. Khoji referred to the statutory provisions and the case law on the point and, by relying on some factual aspects which were obtaining during the pendency of the matter with the State Government resulting in the Order Annexure P. 3 as also during the pendency of C. W. P. No. 2294 of 1983, strenuously contended that the Board of Directors of the Co-operative Bank, which BO doubt included the petitioners as its members could have its tenure of three years only from 5-8-1982 which expired on 4-8-1985. Firstly, he stated by referring to the averments in the written statement filed by the Deputy Registrar, Banking that the meetings of the Board of Directors of the Co-operative Bank were being held from time to time and it was transacting its business by electing a Chairman for every specific meeting. As many as 10 meetings were so held on 25-8-1982, 9-1-1983, 12-1-1983, 16-2-83, 3-10-1983, 12-5-1984, 6-8-1984, 21-8-1984, 13-10-1984 and 3-12-1984. Thus according to him, the Board of Directors was functioning throughout and its term expired on 4-8-1985 and it cannot be given a new lease of life beyond that date upto 20-12-1987 as is claimed by the petitioners. He also stated that the Board of Directors itself aonstituted a working committee and elected Vijay Sethi, petitioner No. 3 as an authorised Director who exercised powers of the Managing Director. The working committee so constituted discharged the powers and functions of the Executive Committee and held as many as 16 meetings from 12-10-1983 to 23-10-1984. The normal functioning of the Co-operative Bank was thus never hampered. It is no doubt admitted by the respondents i0 the written statement dated 30-8-1985 that the election of the office bearers held on 25-8-1982 remained in jeopardy till Lashkar Singh's case was allowed and that the office bearers including the President, Vice-President and the Managing Director and the Executive Committee did not function till 21-12-1984 but it is contended that the Board of Directors had been functioning throughout its tenure and as such its term expired on 4-8-1985, To support his contention, Mr. Khoji relied on a Division Bench judgment of this Court reported as The Punjab State Co-operative Supply and Marketing Federaiod Ltd. Sector 17, Chandigarh v. The Additional Registrar (Industrial) Co-operative Societies, Punjab, Chandigarh and others, [1984 (2) SLR 217] wherein it has been held in the context of the facts of that case that the elected members of the Committee under Section 26 (1) had positioned themselves in office on 23-5-1980 when the result of the election to the Committee was declared and their tenure would start from that date. He also relied on a judgment of D. S. Tewatia, J. in Harbans Singh Romana and others v. The State of Punjab and others, [1982 PLR. 208 : 1982 PLJ 151], wherein it has been held that if after election of the Committee, for some reason the election of the office bearers is delayed, then the term of the office bearers would be co-extensive with the term of the Committee and their term by virtue of any bye- law would not go beyond that term because neither the bye-law nor the statute envisages that the Board of Directors is to function only from the date it has elected its office bearers. It was observed that the position would have been otherwise if the Board of Directors could not function without electing its President and Vice-President. He, therefore, submits that even if the office bearers as also the Executive Committee is deemed to have been elected on December 21, 1984, when Lashkar Singh's case was allowed, the term of their office being co-terminus with that of the Committee is also to be taken to have come to an end on August 4, 1985,