Excelsior Correspondent
JAMMU, Nov 17: State High Court today stayed the order of removal of Board of Directors of the Citizen Cooperative Bank.
The order was passed in a petition filed by Board of Directors, Citizens Cooperative Bank and its Chairman Dinesh Gupta challenging the Order No.29-B&F of 2015 dated 17-09-2015 passed by Registrar Cooperative Societies by virtue of which Inder Jeet, Joint Registrar (Banking and Finance) Cooperative Societies J&K has been appointed as the Administrator to manage the affairs of the Citizens Cooperative Bank Ltd in absence of elected Board of Directors with direction to make arrangements for constitution of new Committee/Board of Directors through the process of elections.
After hearing Advocate Abhinav Sharma for the petitioner, Justice Bansi Lal Bhat observed, “J&K Cooperative Societies Act, 1989 consolidates and amends the law relating to cooperative societies in the State”, adding “Cooperative Society is only a body corporate governed in accordance with the provisions of the Act”.
“Section 26 of the Act is loud and clear in stating that the final authority in a Cooperative Society shall vest in the general body of its members. Section 29 of the Act provides for election and nomination of members of Committees. It provides that the members of the committee of a Cooperative Society shall be elected in such manner as may be prescribed and no person shall be elected unless he is a shareholder of the society”, the Court said, adding “it is further provided that each committee shall within 90 days before expiry of its term make arrangements for the constitution of a new committee in accordance with the provisions of the Act and rules and bye-laws”
“The Government or the Registrar may pass an order appointing a Board of Management or Administrator for such period as may be specified therein and such Board of Management or Administrator shall, before expiry of its period of appointment, arrange for the constitution of a new committee. The Board of Management or Administrator may be appointed for a period not exceeding three months and in circumstances beyond its control, six months and the elections shall be held within such period for re-constitution of the Committee or the Board”, Justice Bhat said.
“On a plain reading of these provisions, it emerges that the final authority in a Cooperative Society vests in the general body of its members and not the Registrar of Cooperative Societies or the State Government”, High Court said, adding “no doubt cooperative societies including the petitioner Bank are subject to the control of statutory authorities like the Registrar and the Government but it cannot be said that the State exercises direct or indirect control over the affairs of the society which is all pervading”.
“In the instant case, it is not disputed that the previous election was conducted and result was declared by Returning Officer on 18.09.2012 and since the election result is said to have been received by the Managing Director of the Bank only on 19.09.2012, the elected committee was to continue till 19.09.2015”, the court said, adding “it was under statutory obligation to set in motion the electoral process for constitution of a new committee within 90 days before expiry of its term i.e. on or before 19th of June, 2015”.
“Petitioner claims to have held a board meeting on 16.06.2015 before expiry of its term and resolved to approach the Registrar for holding of elections. Communication dated 16.06.2015 is said to have been addressed to Registrar in this regard. According to petitioner, it was on 25.08.2015 that the Registrar addressed a communication to petitioner conveying that SRO 236 of 2013 had been stayed and steps were being taken for vacation of interim orders”, the court said, adding “petitioner claims to have addressed yet another communication dated 26.08.2015 to Registrar Cooperatives requesting for fixing the time schedule for holding of elections. Since there was no response, petitioner wrote to Registrar Cooperatives to either permit the petitioner to hold election or extend the term of the management of the Bank to continue till elections were conducted”.
“On 16.09.2015, Registrar Cooperatives appears to have addressed a communication to petitioner informing that the management of Bank cannot conduct the elections itself. Thus, Registrar Cooperatives neither permitted the management of Bank to hold elections in terms of mandate of Section 29 of the Act nor did he himself set the electoral process in motion. Instead he passed the impugned order dated 17.09.2015 invoking provision engrafted in Section 29(4) of the Act appointing Administrator of Board of Directors”, the court said.
Accordingly, Justice BL Bhat issued notice to the respondents and in the meanwhile ordered that the operation of impugned order No.29-B&F of 2015 dated 17.09.2015 passed by Registrar Cooperatives shall remain stayed.
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