AKAL RAJ MEHTA Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) IN this writ petition the petitioner has challenged the order passed by the State Government on 3 -12 -1979. The circumstances, which have led to the filing on the present writ petition may be briefly narrated.

(2.) JODHPUR Nagrik Sahakari Bank Ltd, Jodhpur (hereinafter called) 'the Bask') is a co -operative society duly registered under the provisions of the Rajasthan Co -operative Societies Act, 1965 (hereinafter referred to as the Act'). A Board of Directors of the Bank was elected on December 21, 1975 which consisted of 9 Directors and the petitioner Shri Akal Raj Mehta was elected as the Vice -Chairman of the Board of Directors of the Bank Later on a suit was filed by the petitioner in the court of Munsiff, Jodhpur City for the removal of the Chairman of the Board of Directors of the Back and in that such, an interim injunction was issued by the learned Munsiff on June 12, 1979 restraining the Chairman of the Bank from performing the functions and duties of such Chairman. Subsequently, a general meeting of the members of the Bank took puce on July 22, 1979 by which the Board of Directors was superseded and it was decided that the election of new Board of Directors should take place on August 26, 1979 and until the election of the new Board of Directors took place, the petitioner, Shri Akal Raj Mehta was authorised to perform the functions of Directors, as an ad -hoc Chairman.

(3.) SO far as the taking of proceedings under Section 36 of the Act are concerned, the finding of the State Government is that the procedure laid down under Section 36 was not followed by the Joint Registrar The State Government did not give any finding as to whether any one of the conditions specified in Sub -section (1) of Section 36 existed, which alone could have necessitated the appointment of an Administrator under the provisions of Section 36. The State Government, having taken notice of the fact that the Board of Directors of the Bank bad already been superseded by the general body, and the management of the Bank was vested for the time being in an ad -hoc Chairman, felt that proper arrangement should be made for carrying on the work of Bank and as such the State Government thought it fit to appoint an Administrator. Learned Deputy Government Advocate frankly stated at the Bar that the appointment of an Administrator by the State Government in these circumstance cannot be considered to have been made under provisions of Section 36 of the Act. Although the Joint Registrar purported to act under Section 36, but when the State Government cams to the conclusion that the procedure laid down in Section 36 was not followed, then any action under Section 36 (1) could not have been taken. Consequently, there could be no valid order removing the Board of Directors or appointing an Administrator to manage the affairs of the Bank, within the meaning of Section 36 of the Act. As I have already pointed out above, the Board of Directors was not functioning at the time when the Joint Registrar passed his order, purported to be under Section 36 of the Act, because the Board of Directors had already been superseded by the general body of the Bank. As such the question of removal of the Board of Directors, therefore, by passing an order under Section 36 did not arise. Moreover, when the State Government did not find that any one of the conditions specified in Section 36 exited at the time when the Joint Registrar passed his order, no action under Section 36 could possibly or lawfully be taken either by the Joint Registrar or the State Government. Learned Deputy Government Advocate candidly accepted the contention of the learned Counsel for the petitioner that there was no order of removal of the Board of Directors within the meaning of Section 36 The impugned order passed by the State Government at is rather confusing because while on the one hand the State Government observed that the provisions of Section 36(b) were not followed and the order passed by the Joint Registrar was defective, yet on the other hand it proceeded to confirm the action taken by the Joint Registrar. The S ate Government having held that the procedure prescribed in Section 36 was not complied with, as such the Joint Registrar could not have passed a valid order under Sub -section 1(1) of Section either removing the Board of Directors or appointing an Administrator under that Sub -section.