1957 (11) TMI 27 - HC - Indian Laws

Summary

Issues Involved:
1. Legality of the meeting held on 27th March, 1955.
2. Validity of the order of the Registrar dated 24th March, 1956.
3. Validity of the General Meeting held on 30th March, 1956.
4. Validity of the election of the Chairman on 8th May, 1956.
5. Interpretation of Rule 6 of the statutory rules framed under Section 66 (2) (vii) of the Bihar and Orissa Co-operative Societies Act, 1935.
6. Allegation of mala fide conduct in the election of the Chairman.
7. Legality of the re-election of some Directors.

Issue-wise Detailed Analysis:

1. Legality of the meeting held on 27th March, 1955:
The petitioner challenged the meeting on three grounds: (1) it was not legally called or held as per Section 35 (2) of the Act, (2) the venue was in contravention of Section 35 (2) (a) and bye-law 26, and (3) the Additional District Magistrate could not preside over the meeting in the presence of more than one Director, violating bye-law 24 (2). The court held that the validity of this meeting was already the subject of an appeal before the Supreme Court, which was compromised. Hence, the petitioner, who participated in the subsequent meeting on 30th March 1956, was estopped from challenging the validity of the earlier meeting.

2. Validity of the order of the Registrar dated 24th March, 1956:
The petitioner argued that the Registrar was an interested party and thus should not have disposed of the reference under Section 48 (1) (c) of the Act. The court found that the petitioner had participated in the subsequent proceedings and meetings, thereby estopping him from challenging the order.

3. Validity of the General Meeting held on 30th March, 1956:
The petitioner did not challenge this meeting but contended that the subsequent election of the Chairman on 8th May, 1956, was illegal. The court found no irregularities in the General Meeting itself and noted the petitioner's active participation.

4. Validity of the election of the Chairman on 8th May, 1956:
The petitioner argued that the Chairman should have been elected at the General Meeting on 30th March, 1956, as per Rule 6. The court interpreted Rule 6 to mean that the Chairman should be elected by the elected Directors, which necessitates a subsequent meeting. Thus, the election on 8th May, 1956, was valid.

5. Interpretation of Rule 6 of the statutory rules framed under Section 66 (2) (vii) of the Act:
The court held that the rule requiring the Chairman to be elected by the elected Directors implies that the Chairman cannot be elected at the General Meeting but must be elected at a subsequent meeting. The court emphasized the need for harmonious construction of the rule to avoid absurd results and practical inconvenience.

6. Allegation of mala fide conduct in the election of the Chairman:
The petitioner claimed that the Registrar's approval for a non-official Chairman was suppressed. The court found that there was a compromise agreement, part of which was that the Sub-Divisional Officer would be elected as Chairman. The court also noted that the petitioner was aware of the Registrar's approval and did not object on this ground at the meeting. Hence, the allegation of mala fide conduct was rejected.

7. Legality of the re-election of some Directors:
The petitioner contended that the re-election of some Directors was illegal. The court referred to bye-law 29, which allows for the re-election of Directors with the previous approval of the Registrar. Since the petitioner himself proposed the re-election of three Directors, he was estopped from challenging their re-election.

Conclusion:
The court dismissed the application, holding that the petitioner was estopped from challenging the validity of the meetings and elections due to his participation and the compromise agreement. The election of the official Chairman on 8th May, 1956, was held to be valid and legal. The petitioner was ordered to pay Rs. 200 as costs to the opposite party.