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Dinesh Prasad Yadav v. State of Bihar .

Supreme Court of India · 13 January 1995 · [1995] 1 S.C.R. 220

Court
Supreme Court of India
Decided
13 January 1995
Case no.
C.A. No. 7423 of 1994
Reported as
[1995] 1 S.C.R. 220
Result
Appeal(s) allowed
Bench
Kuldip Singh (J)
Length
6 pages
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PETITIONER:
DINESH PRASAD YADAV
Vs.
RESPONDENT:
THE STATE OF BIHAR & ORS.
DATE OF JUDGMENT13/01/1995
BENCH:
KULDIP SINGH (J)
HANSARIA B.L. (J)
CITATION:
1995 SCC Supl. (1) 340 JT 1995 (2) 45
1995 SCALE (1)153

ACT

HEADNOTE

JUDGMENT

1. The term of office of the members ,of the Managing Committee of a society registered under the Bihar Cooperative Societies Act, 1935 (the ’Act’) and the Bihar Cooperative Societies Rules, 1959 (the Rules) is three "cooperative years". The State Government, under the Act, has a right to nominate - depending upon its share in the sharecapital of the society certain number of members to the Managing Committee of a society. The question for consideration is whether the three-year term of the Managing Committee is to be counted from the beginning of the cooperative year’ in which the elections by ballot are held or from the ’co-operative year’ when the nominations are made by the State Government? 2. Before stating the necessary facts, it would be useful to examine the relevant provisions of the Act and the Rules. These are Sections 2(bb), 2(e), 14(2), 14(4), 14(9) and the first proviso to Section 14(10) reading as under:-

"2(bb) "Cooperative year’ means a year

beginning with the 1st April and ending on the

3 1st March/

2(1) ’Managing Committee’ means the committee

of management or other body to whom the

management of the affairs of a registered

society is entrusted.

14(2) The management of registered society

shall be vested in a managing committee

constituted in accordance with the rules:

14(4) Notwithstanding anything contained in

any provision of this Act, the rules framed

thereunder or the bye-laws of any registered

society where the State Government has --

(a) subscribed directly to the share capital

of a registered,.society; or

(b) assisted indirectly in the formation or

augmentation of the share capital of a

registered society; or

(c) given loans or made advances to a

registered society or guaranteed the repayment

of principal and payment of interest on

debentures issued by a registered society for

or guaranteed the repayment of principal and

payment of interest on loan or advances to a

registered society;

in that case the State Government shall have

the right to nominate on the Managing

Committee of such registered society not more

than two persons one of whom shall be a

Government servant, but the said Government

servant shall have no right to vote in the

election of the office bearers of the

registered society;

Provided that notwithstanding the

47

foregoing provisions contained in Sub-sections

4(a),(b) and (c)

(i) Where the share of the State Government in

the share capital of such registered society

exceeds thirty per cent but does not exceed

fifty per cent, the State Government shall

have the right to nominate upto one third of

the total number of the members of the

Managing Committee including the Chairman; and

such right once accrued shall continue until

the share of the State Government in the share

capital of the registered society goes down to

less than twenty five per cent;

ii) Where the share of the State Government

in the share capital of such registered

society exceeds fifty per cent, but does not

exceed sixty per cent of the total share

capital of the registered society, the State

Government shall have the right to nominate

such number of members of the Managing

Committee including the Chairman, as is

nearest upto one-half of the total, and such

right once accrued shall continue until the

share of the State Government in the share

capital of the registered society goes down to

less than forty five per cent;

iii)Where the share of the State Government in

the share capital of such registered society

exceeds sixty per cent, the State Government

shall have the right. to nominate upto two-

thirds of total number of members of the

Managing Committee including the Chairman, and

such right once accrued shall continue until

the share of the State Government in the share

capital of the registered society goes down to

less than fifty five per cent;

Provided that notwithstanding anything

contained in proviso (i), (ii) and (iii) of

sub-section (4), the State Government shall

not nominate Chairman and other members of the

Managing Committee if the share capital

subscribed to by the State Government in a

registered society is less than fifteen lakhs

of rupees;

Provided further that where the bye-laws of a

registered society so provide the State

Government or the Registrar, as the case may

be, may nominate more than two third members

including office bearers of the Managing

Committee on such terms and conditions as may

be prescribed in the bye-laws;

14(9) Notwithstanding anything contained in

the rules or bye-laws of a registered society,

the term of the members and the office-bearers

of the Managing Committee of a registered

society shall be three co-operative years, and

they shall continue to hold office after

expiry of their term till the elections are

held or for nine months from the close of the

co-operative year, whichever is earlier;

14(10).................

Provided that irrespective of the date when

the election is so held the term of the

members and the office-bearers of the Managing

Committee shall be deemed to have commenced

from the beginning of the co-operative year in

which the elections are held:

.................................................... Rules 2(xvi), 21A, 22(1) and 22(2) of the Rules which are relevant are reproduced hereunder: "2(xvi) ’Election’ means election, in accordance with these Co-operative Society;

21 -A Notwithstanding any rule and bye laws

of any society the election of the members of

the Managing Committee,

48

office-bearers thereof and the delegates of

the society shall be held in a Special General

Meeting according to rule 20(2)(a) to (c).

22. Managing Committee --

(1) Subject to nominations by the State

Government and/or the Registrar of such number

of members to the Managing Committee as

prescribed in the Act, Rules and bye-laws of a

registered society, the Managing Committee of

the society shall be constituted:

Provided that the election of the members of

the Managing Committee and office-bearers

thereof shall be held in accordance with the

procedure laid down in Rule 21 -B to 21 -X.

(2) The members of the Managing Committee

and the Office-bearers shall be deemed to have

taken over charge immediately after the

constitution of the Managing Committee:

Provided that the constitution of the Managing

Committee shall not be treated as complete

unless and until the members thereof have been

duty elected and/or nominated by the authority

empowered to do so under the Act, Rules and

the Byelaws of the Society.

48

3. Dinesh Prasad Yadav, the appellant, was

a member of the Managing Committee of the

Kaithar District Central Co-operative bank

(the ’Bank’) along with respondents 5 to 12.

They were elected as such by votes on January

20, 1991 under Rule 21A of the Rules. The

State Government being a major shareholder in

the share capital of the Bank it has the right

to nominate upto one-third of the total member

of the Managing Committee of the Bank,

including the Chairman. Though the elections

by way of ballot were held on January 20,

1991, the State Government made the

nominations to the Managing Committee of the

Bank as late as March 2, 1993. It is not

disputed that the Managing Committee was not

permitted to function till March 2, 1993 on

the ground that it got constituted under Rule

22 of the Rules only after the nominations

were made by the State Government.

4. The Managing Committee of the Bank

had hardly started functioning when by the

Order dated March 5, 1993, the State

Government informed the Committee that itsterm

was to expire on March 31, 1993. The State

Government, on the basis of the opinion

obtained from the law department and the

Advocate General of the State, came to the

conclusion that the elections having been held

on January 20, 1991, the term of office of the

Managing Committee under the first proviso to

Section 14(10) of the Act would be deemed to

have commenced from April 1, 1990 (beginning

of the co-operative year) and would come to an

end on March 31, 1993 (end of the third co-

operative year).

5. The appellant and respondents 5 to 12

challenged the order of the State Government

dated March 5, 1993 by way of a writ petition

before the Patna High Court. A Division Bench

of the High Court following its earlier

judgment in Bihar State Handloon Weavers Union

& Ors. v. State of Bihar & Ors., CWJC No. 6543

of 1993 and connected matters decided on

February 10, 1994, dismissed the writ petition

by the impugned order dated March 2, 1994. In

Bihar State Handloom Weavers case the High

Court proceeded on the following reasoning:-

"No doubt, in some of the cases, due to

49

laches and inaction of the executive, certain

members who are so nominated by the State

Government under the provisions of subsection

(4) of Section 14 are deprived to hold office

for full term or three co-operative years, but

due to such inaction and laches of the

executive, the mandate of legislature, fixing

a tenure of three cooperative years,

commencing from the beginning of the

cooperative year, in which election was held,

cannot be extended. On the other hand, there

is no provision under the Act and Rules to

show that the term of the elected members and

office bearers, which is three co-operative

years, can be extended, except in the member

prescribed under subsections (9) and (10) of

Section 14." This appeal, by way of special leave, is against the impugned order of the High Court. The appellant has also challenged the correctness of the High Court judgment in Bihar State Handloom Weavers case. 6. Sri Sunil Gupta, learned counsel appearing for the appellant, has vehemently contended that the Managing Committee constituted under the Act and the Rules has threeyear term in office and the same cannot be reduced by giving an isolated meaning to the first proviso to Section 14(10) of the Act thereby rendering the provisions of Rule 22(2) of the Rules as otiose. He further contended that various provisions of the Act and the Rules are to be harmoniously interpreted to give purposeful meaning to the said provisions. In the alternative the learned counsel contended that the provisions of the Act which permit the State Government to reduce the office term of the Managing Committee from three years to three weeks, as happened here, are wholly arbitrary and cannot be sustained in the eyes of law. 7. The provisions of the Act and the Rules, quoted above, clearly indicate that the scheme of the Act gives wide powers to the State Government to control those societies in which it has considerably contributed towards the share capital. The State Government can nominate even upto twothird of the total members of the Managing Committee including the Chairman. It would, therefore, be in tune with the scheme of the Act to hold that the Managing Committee cannot assume office till the time the nominations are made by the State Government. Proviso to Rule 22(2) of the Rules rightly provides that the Managing Committee shall not be treated as complete unless the members thereof have been duly elected and/or nominated by the authority empowered to do so under the Act, Rules and bye-laws of the Society. 8. The expression ’election’ has not been defined under the Act. In the absence of any definition by the legislature we have to follow the ordinary meaning given to the said expression. Collins English Dictionary defines ’election’ as under:

"The selection by vote of a person or persons

from among candidates for a position, esp. a

political office. The act or an instance of

choosing. Webester Comprehensive Dictionary, International Edn., gives the following meaning to the expression ’election’:

"The selection of a person or persons for

office as by ballot. A choice, as between

alternatives, choice in general." 9. The expression ’election’, therefore, means selection of a person by vote or even otherwise. When a person is nomi- 50 nated by way of selection on the basis of a given criteria from amongst several persons, then in the broader sense he is elected to the office. We are of the view that the expression ’elections’, in the first proviso to Section 14(10) of the Act, has been used in the broader sense. It includes election by ballot as well as the choice by nomination. This interpretation would make Rule 22(2) of the Rules workable. Section 14(2) of the Act vests the management of a registered society in a Managing Committee constituted in accordance with the Rules. Section 14(4) further provides that even upto two-third members of the Managing Committee can be nominated. Sub-section (8) of Section 14 further imposes bar on the members of the Managing Committee for re-election after they have held two consecutive terms. Rule 22(2) read with Section 14(2) of the Act makes it abundantly clear that constitution of the Managing Committee is to be treated as complete only when the elections by ballot as well as the nominations are finalised. Even otherwise, to fulfill the avowed object of the Act and to encourage and promote the co-operative movement in the State, it is necessary that the Managing Committee as constituted under Rule 22(2) of the Rules should be given its full tenure of three co-operative years. Having-provided for three years’ term in office to the Managing Committee of a Society, it could not be the intention of the legislature to leave it to the State Government to reduce the same to as short a period as three weeks, which would be a mockery. We, therefore, hold that in the first proviso to Section 14(10) the expression ’the co-operative year in which elections are held’ means not only the elections by way of ballot, but also the nominations under the Act. The net result is that the term of the Managing Committee under the Act and the Rules is to commence from the beginning of the co-operative year in which the nominations by the State Government are completed and the Managing Committee is constituted in terms of Rules 22(2) of the Rules. 10. Although the expression ’election’ has been defined under the Rules, but the said definition has been specifically confined to the election in accordance with the Rules. The election under Rules 21B21X is only by way of ballot. There is no provision for nominations under the Rules. therefore, the definition of ’election’ under Rule 2(xvi) read with Rules 21B to 21X only means the election as provided under the Rules by way of ballot. The expression ’election’ as defined under the Rules has to be interpreted in the context of the Rules and would not, therefore, go contrary to the interpretation given by us to the said expression in the context of the provisions of the Act. 11. Ordinarily, in view of the interpretation given by us to the relevant provisions of the Act and the Rules, we should have directed that the Managing Committee of the Bank whose election was completed in March, 1993 be put back in office and given a three year term from April 1, 1992, but on the facts and circumstances of this case, we are not inclined to do so. After the impugned order of the High Court, fresh elections to the Managing Committee of the Bank have taken place on July 5, 1994. The General Body of the Bank having elected fresh members to the Managing Committee of the Bank, it would not be in the interest of justice to set aside the same. Even if we give relief to the appellant, the old Committee gets tenure 51 only upto March 31, 1995. We do not wish to reverse the process to give benefit to the appellant only for a short period. 12. We allow the appeal in the above terms and set aside the impugned order of the High Court. We further hold that the judgment of the Patna High Court in CWJC No. 2297 of 1993 (R) does not lay down the correct law. The appellant shall be entitled to costs which we quantify as Rs. 15,000/- to be paid by the State Government. 52

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