PANCHANAN SHARMA Vs. STATE

JUDGEMENT

(1.) The petitioner is an "A" Class member of Bihar State Land Development Bank Limited, hereinafter called the Bank and is an aspirant to be elected as one of the Directors of the Bank. The bye-laws of the Bank appeared to be stumbling blocks in the fulfilment of his aspirations. The present application has therefore, been filed for striking down bye-law No. 29(vi) as ultra vires the Bihar and Orissa Co-operative, Societies Act.

(2.) The land Development Bank in this State had its origin as a wing of the Cooperative department of the State Government. It was then functioning as Land Mortgage Bank. Subsequently a Co-operative Society was formed with the blessings of the State Government with the name Bihar State Land Mortgage Bank. The Land Mortgage Bank got converted itself into Land Development Bank. In 1982 Chapter 6(a) was added to the Bihar and Orissa Co-operative Societies Act. The whole Chapter is in relation to Land Development Bank. The expression "Land Development Bank" in terms of S.44(a)(b) includes State Co-operative Land Development Bank and primary Co-operative Land Development Bank. A primary Cooperative Land Development Bank means a registered society of that name and State Cooperative Land Development Bank means a registered Society of that name and State Cooperative Land Development Bank means a Registered Society of that name registered under S.11 of the Act and includes Bihar State Co-operative Land Mortgage Bank, registered as such under S.11. For this, provisions have been made in Chapter VI-A in the Bihar and Orissa Co-operative Societies Act in regard to functions of the land development banks.

(3.) The purposes of the banks are varied and are set out in S.44(b) of the Act. The Bank provides long term loans for owning and promoting agricultural activities. S.44(a)(I) clothes the State Government with power to frame rules for carrying into effect the purposes of Chapter Vl(A) i.e. in relation to functioning of Land Development Bank. S.66 of the Act empowers the State Government to frame rules to carry out all or any of the purposes of the Act. In exercise of that power Bihar Co-operative Societies Rules 1959 have been framed. Rule 15 lays down that a registered Society shall subject to the provisions of the Act and the rules, make bye-laws in respect of matters enumerated therein. Rule 15(I) relates to qualifications for admission to membership, the continuance thereof and the conditions of cessation's or expulsion from membership. R.1(f) relates to the mode of holding general meeting of Managing Committee or any other committee of the Society and the powers and conditions which may be exercised and performed by such committee. In terms of R.15 the Bihar Co-operative Land Development Bank has framed bye-laws. The frame of the bank is of a two tier system. At the base is the primary Co-operative Land Development Bank At the appex is the Bihar State Co-operative Land Development Bank. The authorised capital of the bank is rupees 20,00,00,000 (twenty crore) split up as follows:- (i) 48,0000/- A class shares of rupees 25/- each. (ii) 50,000/- B Class shares of rupees 1,000/- each. (iii) 25,000/- C Class shares of rupees 1,000/- each. Bye-law 4 also lays down that apart from the existing C Class shareholders no new shareholder would be admitted. In fact at the time the bank came into being there was only one C Class shareholder, who also has never attended any meeting of the bank nor has taken any interest in the functioning of the bank and even now there is only one 'C' Class shareholder. (iv) 2,99,97,500 E Class shares of rupee 1 each.