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TMI Blog2004 (10) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... nments as per the bye-laws. The Central Arecanut and Coco Marketing and Processing Cooperative Ltd., properly known as CAMPCO Ltd. is a Multi-State Co-operative Society. The bye-laws of the society were framed in conformity with the provisions of the Multi-State Co-operative Societies Act, 1984 (Act 51 of 1984) (hereinafter referred to as the 1984 Act ). The State Governments of Kerala and Karnataka have subscribed to the share capital of the second respondent society. Clause 16 of bye-laws of the society provides the constitution of the Board of Directors of the society. The total members of the Board is 19. As per clause 16(1)( c ) of the bye-laws, Kerala and Karnataka Governments are entitled to nominate two members each on the Board. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perative Society may provide for the nomination of persons in excess of the limits prescribed under sub-section (1). (3) A person nominated under this section shall hold office during the pleasure of the Government by which he has been so nominated." The section clearly provides that in spite of the provisions under section 41, bye-laws can provide for the nomination of persons in excess of the limits prescribed under sub-section (1). 4. R.31 of the Multi-State Co-operative Societies (Registration, Membership, etc.) Rules, 1985 framed under the 1984 Act reads as follows: "31. Central Government or State Government nominees on the board. (1) Where the Central Government or the State Government has subscribed to the share capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State and serving the interests of members in more than one State, to facilitate the voluntary formation and democratic functioning of co-operatives as people s institutions based on self-help and mutual aid and to enable them to promote their economic and social betterment and to provide functional autonomy and for matters connected therewith or incidental thereto." 5 . Section 48 of the 2002 Act reads as follows : "48. Nominee of Central Government or State Government on Board. (1) Where the Central Government or a State Government has subscribed to the share capital of a Multi-State Co-operative Society, the Central Government or the State Government, as the case may be, or any person authorised by the Central Government or the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have the right to nominate person on the board of such a society in the manner as may be prescribed. (2) A person nominated under this section shall hold office during the pleasure of the Government by which he has been so nominated." Since the share capital is less than twenty-six per cent of the total issued equity share capital, as per the Act, the State Government has power to nominate only one Director in the normal circumstances. Section 126 of the Act, 2002 protects the provisions of the bye-laws unless they are inconsistent with the provisions of the earlier Act. Under the earlier Act and bye-laws two persons were already nominated as per Ext. P2 by the State Government. When the new Act came into force, by Ext. P4, the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have been very clearly stated in the statute. As stated in the preamble of the new Act, Act was amended so that the society is more autonomous. It is for the members of the society to govern the Board. Of course, the Government is entitled to nominate more Directors as per the proviso to section 48 of the 2002 Act. Here, the one additional Director nominated in Ext. P4 is not in accordance with the proviso to section 48, but only under sub-section (1)( a ) of section 48 of the 2002 Act. Already there were two Directors nominated by the State Government, i.e., more than the minimum required under section 48(1) of the 2002 Act. It is true that if the Government has given power under the statute to nominate three members despite the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnataka 1994 (3) Kar. L.J. 5 the Division Bench held that power of nomination under section 48 is independent of nomination made under the bye-laws and therefore in addition to the members that can be nominated under the bye-laws, further nominees can be made. We are unable to accept the above proposition. The bye-laws are framed as per the requirements of the statute and also it should be in conformity with the statute. It is true that the provisions of the Act and bye-laws should not be inconsistent. Here, there are no inconsistent provisions. The Act gives State Government to nominate minimum one person. The bye-laws provides that two nominees can be made by the State Government and already two persons were nominated. In fact under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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