High Court
Case Details
WP(C) 5087/2012 BEFORE HON’BLE MR JUSTICE BK SHARMA The petitioners are the shareholders of the Sontoli Gaon Panchayat Samab 1. ay Samity Ltd, Boko in the district of Kamrup. They are aggrieved by the order d ated 21.9.2012 (Annexure-VII) of the Registrar of Co-operative Societies exercis ing his power under Section 41(5) of the Assam Co-operative Societies Act, 2007 appointing the Junior Inspector of Co-operative Societies as the One Man Adhoc C ommittee for convening a general meeting for constitution of a newly elected/sel ected Board within 90 days from the date of issuance of this order. Although the re is no stay order operating in this proceeding the said One Man Adhoc Committe e is yet to hold the AGM/Election and the stipulated period of 90 days has alrea dy expired. 2. The aforesaid order dated 21.9.2012 was passed upon the alleged failure to hold the election in a regular manner for election of a new Managing Committe e. While it is the case of the petitioners that the new Managing Committee was u nanimously selected there was no need for election. 3. Referring to the Annexure-IV report dated 13.5.2012 of the Returning Off icer-cum-Senior Inspector of the Co-operative Societies, it is the case of the p etitioners that since the new Managing Committee was selected there is no justif ication in passing the impugned order invoking the power under Section 41(5) of the Assam Co-operative Societies Act, 2007. 4. In the counter affidavit filed by the respondents, it has been stated th at the Assam Co-operative Societies Act, 2007 came into force w.e.f. 10.3.2012. The term of the last elected body of the Society expired on 29.6.2011 after gett ing an extension period of 30 days vide Order dated 24.5.2011. It has been state d in the said affidavit that upon failure to hold the AGM/Election within the st ipulated period of time the Senior Inspector of Co-operative Societies was appoi nted as One Man Adhoc Committee vide Order dated 15.7.2011. When the said One Ma n Adhoc Committee replaced by another One Man Adhoc Committee could not hold the AGM/Election another One Man Adhoc Committee was appointed vide Order dated 6.2 .2012. The said Committee issued Notification on 14.4.2012 fixing 29.4.2012 as t he date of AGM/Election in which the Senior Inspector of Co-operative Societies was ordered to act as the Returning Officer. 5. According to the counter affidavit, in the meeting held on 13.5.2012 alt ogether 97 shareholders were present and 34 non-shareholders were also present. Resolutions were passed for formation of a Board of Directors/Managing Committee . On the basis of the complaint received, the Asstt. Registrar of the Co-operati ve Societies appointed the Sub Registrar to hear the same. Hearing took place on 21.5.2012, 30.5.2012 and 25.6.2012. The report furnished by the Sub Registrar w as forwarded to the Registrar of the Co-operative Societies. The said authority being not satisfied with the report appointed the Deputy Registrar of the Co-ope rative Societies to enquire into the whole matter. 6. It has been stated in the counter affidavit that as per report of the De puty Registrar of Co-operative Societies the decision for selection of the Manag ing Committee was not unanimous and accordingly he suggested for holding of a fr esh election entitling the shareholders to exercise their body rights. 7. Mr SK Goswami, learned counsel for the petitioners referring to the prov isions of Section 87 and 125 of the Act 2007, submits that in case of an enquiry the report thereon is required to be submitted before the AGM to discuss the sa me but in the instant case, the Registrar of Co-operative Societies passed the i mpugned order on the basis of the 2nd enquiry conducted by the DRCS. According t o him there having been an unanimous elected body the impugned order could not h ave been passed for holding another AGM/Election by the One Man Adhoc Committee. 8. Dr B Ahmed, learned standing counsel, Co-operative Societies, on the oth er hand, has submitted that in view of the illegality committed in holding the A GM/Election there is nothing wrong in passing the impugned order. Referring to the provisions of Section 41 of the said Act, he submits th 9. at there being failure to conduct elections in accordance with the provisions of the Act amounts to non-holding of the election resulting in passing of the imp ugned order enabling to hold the AGM afresh in accordance with law and the laid down procedure. 10. As per the 1st report of the Returning Officer dated 14.5.2012 the adjou rned meeting of the AGM was held on 13.5.2012 in presence of 131 shareholders an d the new Executive Directors were selected by procedure of selection unanimousl y instead of election. However, the 2nd enquiry report of the DRCS forwarded to the Registrar of Co-operative Societies on 23.8.2012 has revealed the following irregularities in the meeting :- (cid:28)After careful examination of facts and circumstances it reveals that , 1) 2) The decision for selection of BOD was not unanimous No proper publicity was given for the AGM held on 29.4.2012 as stated by the Secretary of the Society, 3) The Board of Directors (BOD) of Sontoli GPSS Ltd selected on 15.5.2012 h as no legal entity, because 4(four) non-shareholders took part in the election p rocess. (cid:29) 10. i.e. DRCS scrut inized the statement recorded during the enquiry, the proceedings of the meeting s, facts and figures and arrived at the following findings:- Before recording the same finding the Enquiry Officer On 19.4.2012, the day of (cid:28)I have scrutinized the various statements, proceedings of meetings, s tatement of different parties, facts and figures carefully and recorded followin g findings:- 1) As per the One Man Adhoc Committee meeting held on 11.4.2012 a resolutio n was taken that AGM of Sontoli GPSS Ltd scheduled to be held on 29.4.2012 as per the provision of Assam Coop. Societies Act 2007 (Act No. IV of 2012) vide Go vt Notification No. Coop 82/2012/66, dtd 5.3.2012. 2) filing nomination paper, some shareholde rs willing to file nomination papers and some were not willing to file nominati on papers, as they have no knowledge about the New Assam Coop Societies Act, 2 007. There were two petitions on the date of filing nomination papers. One petit ion was submitted by Shahjahan Ali and others in which they prayed to hold the e lection on the basis of old bye-laws and the other petition was submitted by M ister Ali and others by which they prayed to hold the election as per provisio n of the new Act of 2007. Later on all shareholders decided not to submit nomin ation papers. 3) in the o ffice of the Sontoli GPSS Ltd. A resolution was taken in the meeting requesting ARCS, Guwahati to extend time for holding AGM and Election till publication of On 19.4.2012, at 2.00 P.M. an Executive meeting was held the new bye-law. 4) After this meeting on 19.4.2012 shareholders were unaware that the AGM w ill be held on 29.4.2012. Therefore only 22 members were present in the AGM on 2 9.4.2012. No publicity was made for the meeting. Hence the AGM was adjourned due to lack of quorum till 13.5.2012. The adjourned AGM held on 13.5.2012, where 131 nos. of persons were pres 5) ent out of which 34 persons were not shareholders of the Sontoli GPSS Ltd. 6) In the adjourned AGM a resolution was taken for selection of Board of Di rectors (BOD). Some members were against the resolution. No hand raising or any other measures were taken to accept the resolution. 7) 8) In the selection process 12 (twelve) nos. of Directors were selected. 4 (four) numbers of non-shareholders took part in the selection process. The following Directors were proposed/supported by non-shareholders of the soci ety in the selection process. i) Abdul Rashid ii)Md Kutubuddin Ahmed iii) Md Hasen Ali iv) Md Abdul Hakim 9) The names of the supporters and proposers were not verified in the voter list during the time of selection of BOD. 10) f the Assam Coop. Societies Act, 2007. (cid:29) The bye-laws of Sontoli GPSS Ltd are not amended as per the provision o 11. At this stage Dr B Ahmed, learned standing counsel, Cooperation Departme nt has produced the documents pertaining to the 1st enquiry that was conducted b y the Sub Registrar. The findings of the said enquiry are as follows :- (cid:28) On careful examination of facts and circumstances and after hearing both the p arties the findings are recorded below:- 1) The Managing Committee of Sontali GPSS Ltd had served notice on 14.4.201 2 to hold the AGM on 29.4.2012. By the same notice the date of nomination was fi xed on 19.4.2012. 2) On the date of filing of Nomination Paper shareholders willing to partic ipate in the election assembled at society’s office. But they refused to file no mination paper as per provision of New Cooperative Societies Act, 2007, as there was no provision of direct election of the President and Vice President under t he new Act and they had no knowledge about the new Act. 3) The Returning Officer had shown them the copy of the Assam Cooperative S ocieties Act, 2007 published in the Assam Gazette on 4th February, 2012. But the shareholders and aspirant candidates of the election refused to accept the new process of election on the basis of the new Act. 4) The shareholders assembled there filed petitions before the Returning O fficer stating that they could not file nomination paper as there was no bye-law s under the new Assam Cooperative Societies Act, 2007. There were two petitions on the date of filing nomination papers. One petition was submitted by Shahjaha n Ali and others in which they prayed to hold the election on the basis of old b ye-laws and the other petition was submitted by Mister Ali and others by which they prayed to hold the election as per provision of the new Act of 2007. 5) As per the notice of the AGM, the AGM was held on 29.4.2012 at Mahtoli B azar LP School. But only 22 shareholders were present on that day. The meeting was adjourned due to lack of quorum. The adjourned AGM was held on 13.5.2012 at the same place and venue. In 6) that meeting 131 persons were present out of which 34 persons were not sharehold ers. Out of 3554 shareholders of the society 97 shareholders were present in the meeting. In the adjourned General Meeting of 13.5.2012, 12 (twelve) nos of Board 7) of Directors were elected, but some non-shareholders participated in the process of selection. Relevant provisions of Assam Cooperative Societies Act,2007, effective f The following Directors were proposed/supported by non-shareholders (NSH). i) Abdul Rashid ii)Md Kutubuddin Ahmed iii) Md Hasen Ali iv) Md Abdul Hakim 8) rom 10.3.2012 speaks as follows:- i) Sec. 34(2): If within one hour from the time fixed for meeting of the Ge neral Assembly a quorum is not present the meeting shall stand adjourned ordina rily to the same day in the next week at the same time and place. But the Chairm an of the meeting may, however, decide to adjourn the meeting to a later date no t later than fifteen days or as may be specified in the bye-laws of the society. ii) Sec.35(1)says that there shall be a Board for the management of every C ooperative Society registered under this Act. The Directors shall be elected in accordance with the provisions of the bye-laws. iii) Sec.9(1) speaks that A Cooperative Society shall frame their own bye-law s and the affairs of the Cooperative Society shall be managed in accordance wit h the terms, conditions and procedure specified in the bye-laws. Sec.9(3) speaks that the bye-laws may contain such matters as decided by the Ge neral Assembly and shall be specified and confined only to the matters provided in Schedule -B. However, the bye-laws of a society shall in no case supersede t he provisions of the Act. iv) Schedule-B-No.6(a) : The size and composition of the Board of Directors and other matters relating to the election of Board of Directors and eligibilit y of Directors should be famed in the Bye-laws. 9) The bye-laws of Sontali GPSS Ltd are not amended as per the provision of the Assam Cooperative Societies Act, 2007. Under the circumstances the legality of the Board of Directors constituted in th e AGM of Sontali GPSS Ltd held on 13.5.2012 cannot be ascertained as there is co nfusion about the size and composition of Board of Directors as per existing Act and Bye-laws. Comment : the matter is placed before the competent authority to decide. It was in the aforesaid circumstances a direction was issued to conduct 12. a fresh enquiry by the DRCS . As to what are the findings in the said enquiry ha s been noted above. 13. As per Section 41(5) of the Assam Cooperative Societies Act, 2007, in ca se of failure to conduct elections before the expiry of term period the Registra r shall convene a general meeting by appointing an officer of the Cooperative De partment for constitution of the Board within 90 days. 14. On perusal of the findings recorded by the Sub Registrar, it appears tha t in the adjourned meeting held on 13.5.2012, 12 nos. Board of Directors were se lected, but some non-shareholders participated in the process of selection. 15. Referring to the relevant provisions of the Cooperative Societies Act, 2 007, the Sub Registrar in his report observed that the bye-laws of the Cooperati ve Societies was not amended as per the provisions of the Act, 2007. He in his r eport submitted that illegality or otherwise of the constitution of the Board of Directors could not be ascertained because of the confusion about the size an
Legal Reasoning
d composition of the Board of Directors. 16. It was in the above circumstances the 2nd enquiry was ordered in which t he findings relating to decision for selection of BOD was recorded which accordi ng to the said report was not unanimous. As per the said report no proper public ity was given for the AGM and that 4 non-shareholders also took part in the elec tion process. It was in the above circumstances the Registrar of Cooperative Soc iety was to take a decision as to whether fresh AGM/Election was to be held by a ppointing a One Man Adhoc Committee. Although it was submitted that if there was any irregularity (not illegality) in holding the AGM/Election, the same cannot led to invocation of Section 41(5) of the Act but having regard to object and pu rpose of AGM/Election even if the same was held but in gross irregularity, the R egistrar of Cooperative Societies was within his competence and jurisdiction to invoke the provision of Section 41(5) of the Act. 17. Accordingly, I see no infirmity in the impugned order dated 21.9.2012. T his now leads us to the submission made by Mr Goswami, learned counsel for the p etitioners that even after expiry of 90 days the One Man Adhoc Committee appoint ed by the impugned order has not held the AGM/Election. In absence of any stay o rder it was incumbent on the part of the One Man Adhoc Committee to hold the AGM /Election and the Registrar of Cooperative Societies, Assam was duly bound to en sure the same. Accordingly, while disposing of the writ petition, it is hereby d irected that the Registrar of Cooperative Societies shall ensure holding of AGM/ Election of the Society on or before 7th September, 2013 following the required procedure. It will bear in mind that already 10 months have gone by.