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Chhotelal Pannalal Nagar Vs. D.M., Indore and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 248 of 1976
Judge
Reported inAIR1978MP191; 1978MPLJ207
ActsConstitution of India - Articles 12 and 226; Madhya Pradesh Co-operative Societies Act, 1961 - Sections 2 and 22(2); ;Madhya Pradesh Co-operative Societies Rules - Rules 15, 39, 43 and 44; Maintenance of Internal Security Act
AppellantChhotelal Pannalal Nagar
RespondentD.M., Indore and ors.
Appellant AdvocateP.K. Vijayvargia, Adv.
Respondent AdvocateG.M. Chaphekar and ;R.R. Waghmare, Advs.
DispositionPetition allowed
Cases ReferredBasantilal v. District Magistrate
Excerpt:
- - 2 to 7 and 12 to 15 who were then the members of the board of directors of the bank resisted the claim made by the petitioner on the ground that leave of absence from july 8, 1975 to march 12, 1976 was granted to the petitioner, that further leave of absence was not thought proper in the interest of the management of the bank and it was refused, that under the bye-laws of the bank continuous absence for more than five meetings without leave of absence automatically led to the consequence of the termination of membership of the absent member, that considering the interest of the management of the bank leave of absence though applied for by the petitioner was refused, that between march 12, 1976 and april 16, 1976 the petitioner remained absent without leave for five consecutive..........for issue of a writ against the society (the bank in this case) would be that there must be a legal right to the performance of a legal duty. it is not necessary that the person or authority on whom the statutory duty is imposed must be a public official or official body. it is only in a case where a breach of statutory provisions or existence of a legal right is made out and obligation on the part of the society to do something in accordance with the provisions of a statute requiring the society to act under the declared manner that it would be permissible for the aggrieved person to approach the high court for seeking writ commanding compliance of the statutory requirements. a co-operative society would, therefore, be amenable to a writ jurisdiction only in cases relating to.....
Judgment:

S.R. Vyas, J.

1. This is a petition which purports to be under Article 226/227 of the Constitution of India by the above named petitioner for an appropriate writ or order to be issued against the respondents regarding the termination of his membership from the Board of Directors of the respondent No. 16 the Indore Paraspar Sahakari Bank Ltd., Indore.

2. Briefly stated the facts alleged by the petitioner in the petition are these:

The petitioner is an elected member of the Board of Directors of the respondent-Bank (The Indore Paraspar Sahakari Bank Ltd.), a bank constituted under the M. P. Co-operative Societies Act (hereinafter referred to as the Act). The petitioner was detained under the Maintenance of Internal Security Act by the District Magistrate, Indore, the respondent No. 1. The remaining respondents Nos. 2 to 15 were aware of this detention while under detention, the petitioner could not attend any meeting of the Board of Directors unless permitted by the District Magistrate. In these circumstances, the petitioner while under detention forwarded applications to the Board of Directors for leave of absence, These applications were allowed but subsequently on 5-4-1976 (?) the respondents informed vide Bank Manager's letter that leave of absence from the Board's meeting could not be granted. The respondents, in these circumstances, illegally terminated the membership of the petitioner under the Bank's bye-law No. 43 (1) vide the Manager's letter dated 20-4-1976. The petitioner's membership from the Board of Directors, in these circumstances, was brought to an end illegally. The petitioner, therefore, prays that any appropriate writ or order may be issued against the members of the Board of Directors to the effect that the termination of the membership is illegal and that he may be treated as continuing as Member of the Board.

3. In the return filed by the District Magistrate it is stated that the petitioner's detention under the Maintenance of Internal Security Act was legal and that the District Magistrate has no information regarding the other allegations made in the petition relating to the termination of his membership from the Board of Directors. Respondents Nos. 2 to 7 and 12 to 15 who were then the members of the Board of Directors of the Bank resisted the claim made by the petitioner on the ground that leave of absence from July 8, 1975 to March 12, 1976 was granted to the petitioner, that further leave of absence was not thought proper in the interest of the management of the bank and it was refused, that under the bye-laws of the bank continuous absence for more than five meetings without leave of absence automatically led to the consequence of the termination of membership of the absent member, that considering the interest of the management of the bank leave of absence though applied for by the petitioner was refused, that between March 12, 1976 and April 16, 1976 the petitioner remained absent without leave for five consecutive meetings, 'hence under bye-law 43 (1) the petitioner's membership from the Board automatically came to an end, that these respondents did not take any undue advantage of the petitioner's detention under the provisions of the Maintenance of Internal Security Act, that these respondents acted in accordance with the bye-laws and in the interest of the better management of the bank, that the office of the Board of Directors is not a statutory office and the Board cannot be said to be performing any statutory function, that no writ of mandamus or any other appropriate writ could be issued against a bank, a private body, that even for the prayer for a writ of mandamus, the petitioner has not, be fore filing the present petition, made any demand of justice, that the petitioner could not prosecute the present petition without joining the bank as one of the respondents and that the petition filed against the Directors in their individual capacity was not maintainable.

4. During the course of the hearing, it was stated that after the petitioner's membership had automatically come to an end, there was one more vacancy and for both the vacancies, two other Directors were elected. On an application being made by the petitioner, the petition was allowed to be amended and the bank was impleaded as respondent No, 16 and respondent No. 17 N. K. Mahajan who was elected in one of the vacancies, was also impleaded as respondent No. 17. The other member elected in the other vacancy was already impleaded as respondent No. 5.

5. After service of the amended petition, return was filed by respondent No. 17. In his return he has also raised the same grounds as were raised by the other respondents. It was further stated in his return that this respondent cannot be said to have been elected in the vacancy caused by the termination of the petitioner's membership as there were two vacancies and in the event of the petitioner succeeding in this petition, the continuance of his membership could not be adversely affected.

6. In the light of the contentions raised by the petitioner in the petition, the grounds raised in the return filed by the respondents and the arguments of the learned counsel for both the parties, the following questions arise for consideration in this petition :--

(a) Whether in view of the fact that the bank which is constituted as a Cooperative Society under the provisions of the M. P. Co-operative Societies Act any writ or direction or order can or cannot be issued against it or against the member of the Board in exercise of the powers of this Court under Articles 226 and 227 of the Constitution of India ?

(b) Whether the Bank and its Board of Directors acted illegally in discharging their duties under the Act in refusing leave of absence to the petitioner and further in treating the petitioner's membership as having come to an end ?

(c) To what relief the petitioner is entitled?

7. Having considered the various allegations raised by both the parties, we have reached the conclusion that the petition of the petitioner should succeed

8. The first contention raised by the learned counsel for the respondents was that the bank being a private body functioning under the Act, cannot be said to be a statutory body constituted under the provisions of the statute and is therefore not amenable to a writ jurisdiction of this Court under Articles 226 and 227 of the Constitution. Reliance for this contention was placed on Vaish Degree College v. Lakshmi Narain, (AIR 1976 SC 888); Arya Vidya Sabha, Kashi v. K. K, Shrivastava (AIR 1976 SC 1073); Nayagarh Co-operative Central Bank v. Narayan (AIR 1977 SC 112) & Ramswarup Ramcharan Gupta v. Madh. Prad. Cooperative Marketing Federation Limited, (1976) MPLJ 376 : (AIR 1976 Madh Pra 152) (FB). It is not disputed that bank has not been created by a statute and does not owe its existence to a statute. A co-operative society registered under the Act is also not a public authority for the purposes of the Article 12 of the Constitution and normally will not be amenable to a writ jurisdiction of the High Court except in cases where according to provisions of the statute or Rules or regulations framed under the Act by which the society is governed there is a statutory or public duty imposed upon it and enforcement of which is sought. It has been held in the cases cited above that the conditions precedent for issue of a writ against the society (the bank in this case) would be that there must be a legal right to the performance of a legal duty. It is not necessary that the person or authority on whom the statutory duty is imposed must be a public official or official body. It is only in a case where a breach of statutory provisions or existence of a legal right is made out and obligation on the part of the society to do something in accordance with the provisions of a statute requiring the society to act under the declared manner that it would be permissible for the aggrieved person to approach the High Court for seeking writ commanding compliance of the statutory requirements. A co-operative Society would, therefore, be amenable to a writ jurisdiction only in cases relating to performance of legal duties imposed by statute creating a corresponding legal right in favour of some person (Vide the Full Bench Decision of this Court in Ramswarup v. M. P, Co-operative Marketing Federation Limited, 1976 MPLJ 376 : (AIR 1976 Madh Pra 152). It would, therefore, be necessary to examine as to whether there was any legal right and a corresponding legal duty on the bank or its Board of Directors with regard to which performance is sought by the petitioner in this case,

9. In order to determine the aforesaid questions, it would be necessary to examine the scheme of the Act which admittedly imposes certain duties and confers corresponding rights on the members of the society viz. the bank in the present case.

10. Section 2(d) of the Act defines the 'Committee' as the Board of Management by whatever name it may be called and constituted under Section 48 of the Act. There is no dispute that the Board of Directors of the bank is a committee for the purposes of Section 2 (d) of the Act in this case. Section 6 of the Act prescribes condition for the registration of the society. Section 9 empowers the Registrar of Co-operative Societies to register a society if he feels satisfied that the society has complied with the provisions of the Act and the Rules and that the proposed by-laws are not contrary to the provisions of the Act or the rules made thereunder. Sections 11 and 12 deal with the question of amendment of the bye-laws and empowers the Registrar to direct amendment. Section 19 (a) of the Act specifies the grounds which disqualify a person from being a member of the society.

The aforesaid provisions, therefore, relate to the power of the Registrar to register a society and control the framing of the bye-laws. They also provide that the Registrar may refuse the registration if it is found that the proposed bye-laws are either contrary to the Act or rules made thereunder.

11. The provisions more relevant for the decision of this petition are contained in Sections 22, 23 and 48 of the Act and Rules 15, 39, 43 and 44 of the Rules made under the Act. Section 22 confers a right of vote on every member of the society and in Sub-section (2) of Section 22 of the Act, it is provided as to how this right of vote is to be exercised. Similar are the provisions in Rules 39, 43 and 44 which relate to the right of a member to exercise his right of vote in the meeting of the society. These provisions, therefore, make it evident that once any person is elected as a member of the society or its committee, he has a legal right to participate in the meetings of the society or its committee and exercise his right of vote in matters within the jurisdiction of either the society or its committee. Conferal of this right creates a corresponding obligation on the bank and its committee to permit a member to exercise his right in accordance with the provisions of this Act. The petitioner, in this case, was admittedly a member of the committee of the bank (the- Board of Directors) and was, therefore entitled as of right to continue his membership unless it could be terminated in accordance with either the provisions of the Act or the rules made thereunder. No doubt, the bank is not a body constituted under the provisions of the Act but is only a private body functioning in accordance with the provisions of the Act. There can, therefore, be no dispute with the proposition that not being a statutory body and also not being an authority for the purposes of Article 12 of the Constitution, it could not be amenable to the writ jurisdiction of this Court under Articles 226 and 227 of the Constitution but the question is whether the members of the Committee were under legal obligation to permit the petitioner to exercise his legal rights. If that is so, despite the fact that the Bank is a private body, the petitioner can approach this Court for the exercise of the writ jurisdiction under Articles 226 and 227 of the Constitution of India.

12. Learned counsel for the respondents relied upon the decisions referred to in para 8 of this order and contended that since the Bank was a private body functioning under the Act, it could not be treated as statutory body or an authority. In this connection we may state that in the present case we proceed on the assumption that the Bank is not a statutory body or an authority for the purposes of Article 12 of the Constitution of India. The question, as already stated above, still is as to whether the members of the Committee of the Bank were under a legal duty with regard to the rights of the petitioner. If they had a legal duty and the petitioner had a right to enforce the performance of their duty, then certainly the petitioner could come to this Court under Article 226 of the Constitution of India

13. Article 226 of the Constitution authorises this Court to issue to any person or authority, directions, orders or writs either for the enforcement of any of the rights conferred by the provisions of Part III of the Constitution, or for the redress of any injury of a substantial nature by reason of the contravention of any other provision of this Constitution or any provision of any enactment OF Ordinance or any order, rule, regulation, bye-law or other instrument made thereunder, or for the redress of any injury by reason of any illegality in any proceedings by or before any authority under any provision referred to above where such illegality has resulted in substantial failure of justice. In the case of Praga Tools Corporation v. C. V. Imanual (AIR 1969 SC 1306), it was held that 'the condition precedent for the issue of mandamus is that there is in one claiming it a legal right to the performance of a legal duty by one against whom it is sought.' In the case of Vaish Degree College v. Lakshmi Narain, (AIR 1976 SC 888) the question was as to what constitutes a statutory body. In Arya Vidya Sabha, Kashi v. K. K. Shrivastaya, (AIR 1976 SC 1073), the question was that an institution affiliated to the Banaras Hindu University is not a creature of statute but an entity like a company or a co-operative society or other body which has been created under the operation of a statute. In that case the question was whether the Court could order reinstatement of a servant, who has been dismissed by the college authorities.

In the case of Nayagarh Co-operative Central Bank v. Narayan (AIR 1977 SC 112), it was held that as the Registrar of the co-operative societies was acting as a statutory authority in the purported exercise of powers conferred on him by the Co-operative Societies Act, the writ petition was maintainable. In the case of Rohtas Industries Ltd. v. Rohtas Industries Staff Union (AIR 1976 SC 425) it was held in Para 9 that extraordinary power of the High Court under Article 226 of the Constitution is as wide as the amplitude of the language used indicates, end so can affect any person--even a private individual--and be available for any (other) purpose, even one for which another remedy may exist. In none of these cases, it was held that even if there be a legal duty imposed upon any person and if that duty is not performed in accordance with law, then the person seeking the performance of the duty in the exercise of his rights cannot approach this court under Article 226 of the Constitution of India. We have already referred to above that this question has been dealt with by this Court in the case of Ram-swarup v. M. P. Co-operative Marketing Federation Ltd., 1976 MPL'J 376 : (AIR 1976 Madh Pra 152) (FB) where it has been held that a co-operative society would be amenable to a writ jurisdiction only in case relating to performance of legal obligations and duties imposed by statute creating a corresponding legal right in the person seeking the performance of the legal obligation.

14. We have referred above to the scheme of the Act in para. 11 of this order. We have indicated therein that by virtue of the provisions contained in Sections22 and 23 and 48 of the Act and Rules 15, 39, 43 and 44 of the Rules made under the Act, the petitioner had a right to participate in the management of the Bank as a member of the Committee and exercise this right of vote. The committee was thus under a legal obligation to permit the petitioner to exercise this right conferred upon him and if by any decision taken by the committee the exercise of this right is denied to the petitioner, then certainly the petitioner is within his right to come to this Court and enforce his rights by calling upon the respondents for the discharge of their legal obligation.

15. On behalf of the respondents, too much reliance was placed on bye-law No. 43 (1) of the Bank, the original of which is in Marathi language and the same has been reproduced in para 12 of respondent No. 17's return. The other respondents have translated the same in para 4 of the return. In our opinion, the translation of that bye-law would be as under:--

'If any member of the Board of Directors remains absent in five consecutive meetings of the Board without the written permission of the Board, his membership in the Board will stand destroyed.'

The contention of the petitioner is that being a detenu detained by the District Magistrate under the provisions of the Maintenance of Internal Security Act (hereinafter referred to as the MISA), he both sought permission to permit him to attend the meeting of the Board and also forwarded applications through the detaining authority for leave of absence from attending the Board's meeting and that though permission for leave of absence for some of the meetings was granted by the Board but it was refused for the meetings held between March 12 to April 16, 1976 and thus treating him as absent without leave of the Board. It was then intimated to him that he no longer continues to be a member of the Board.

16. The question is as to what is the real meaning of the words remaining absent for five consecutive meetings. According to the petitioner, he was not voluntarily absent but was in fact prevented by process of law issued against him from attending the meetings. The respondents also do not contend that the petitioner though otherwise in a position to attend the meetings voluntarily remained absent. Their contention, however, is that since the petitioner's detention was for an indefinite period the Board of Directors in the interest of the Bank management deemed it fit and proper to refuse leave of absence and elect new members so that the Bank's management and working was not to suffer. In our opinion the decision taken by the Board of Directors was illegal and not warranted by law.

17. A similar question was considered by this Court in Basantilal v. District Magistrate, Mandsaur, 1977 MPLJ 299 : (AIR 1977 NOC 293). There also the question under consideration was as to what is the meaning of the expression absents himself in Section 38 (1) of the M. P. Municipalities Act. It was held that the person, who is said to be absenting himself must be physically and mentally in a 'position to attend and his absence must be on account of free-will, negligence, or act of commission or omission and where a person is prevented either by law or by force and threat from attending the meeting, it cannot be said that he absented himself from attending the meeting.

18. Learned counsel for the respondents tried to distinguish this decision on the ground that the words used in Section 38 (1) of the M. P. Municipalities Act were different from the words used in bye-law No. 43 (1) of the Bank's Bye-laws and the interpretation given to the words 'absents himself cannot be given to the words used in the aforesaid bye-law. In our opinion, the distinction sought to be made by the learned counsel cannot be accepted. In the bye law referred to above, the words used are, in case the member remains absent for five consecutive meetings. These words, in our opinion, have the same meaning as the words absents himself which were considered in Basantilal's case (supra). The respondents were, when they treated the petitioner's membership as having come to an end, aware of the fact that the petitioner was detained under the MISA and his absence was neither voluntary nor wilful. On the contrary, they entertained the petitioner's application through the detaining authorities for some dates and granted him leave of absence. It is not contended that when they treated his membership as having come to an end, the petitioner had been released from detention and thereafter had voluntarily remained absent. In these circumstances, we cannot agree with the learned counsel for the respondent that under bye-law No. 43 (1), the respondents could treat the petitioner as remaining absent for the purpose of treating his membership as having come to an end or as having been destroyed. The question raised by the respondents is fully covered by the decision of this court in Basantilal's case (supra) and cannot admit of any further argument on this point.

19. Thus by illegally applying the provisions of bye-law No. 43 (1), the respondents deprived the petitioner of the rights conferred on him by the aforesaid provisions of the Act and the Rules made thereunder. These provisions imposed a legal obligation on the respondents to permit the petitioner to exercise his rights conferred thereunder. Thus, the respondents failed to discharge their legal obligation and if they did so the petitioner was within his rights to come to this court and complain of injury suffered by him.

20. It was then contended that the injury complained of by the petitioner and the alleged illegality attributed to the respondents was not of a substantial nature, inasmuch as fresh elections to the Board are scheduled for the next month and in case the petition is allowed the membership of those directors, who were elected in place of the petitioner, would be very much disturbed. We are not at all inclined to accept this argument. If the action taken by the respondents was in contravention of the specific provisions of the Act and further if the membership has been treated as having come to an end not in accordance with the provisions of the Act but in contravention of it then certainly what would be the effect of this petition being allowed on the election of those members who were elected in the petitioner's vacancy, is not a matter to be considered by us. That is a matter with which the Bank or its Committee has to concern itself. The fact that fresh elections are in contemplation in the next month, does not in any way affect the petitioner's rights, inasmuch as he had filed this petition on 26-4-1976 from jail soon after he was intimated by the Bank Manager that this membership has been treated as destroyed by his letter dated 20-4-1976. If for reasons, for which the petitioner is not responsible, the petition could not be decided earlier, he certainly cannot be made to suffer for the delay.

21. It was lastly contended that a writ of mandamus would not lie against the Bank or members of its committee because before filing the present petition the petitioner did not make demand for justice. It is true that no formal demand was made either against the Bank as a whole or against the members of the Board of Directors but in this case it is not necessary that only a writ of mandamus should be issued against the respondents because Article 226 of the Constitution permits the issue of directions, orders or writs, including the writs in the nature of habeas corpus, mandamus, etc. It is, therefore, competent for this court to issue an appropriate direction or order calling upon the respondents to treat the petitioner as continuing his membership of the Board of Directors despite the decision taken by them for treating his membership as having come to an end because of his involuntary absence for five consecutive meetings of the Committee.

22. We, accordingly, allow this petition and hold that the decision of the Board treating the petitioner's membership as having come to an end is illegal, that the petitioner continues to be a member of the Board of Directors of the Bank, viz. respondent No. 16, the Indore Parasper Sahakari Bank Ltd. Indore and that he will continue as the member of the Board of Directors for the unexpired period of his term of membership. The petitioner shall have his costs from the contesting respondents Nos. 2 to 17. Counsel's fee Rs. 200/-, if certified.


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