VASANTRAO DADA PATIL SAHAKARI SAKHAR KARKHANA LTD Vs. PANDITRAO NATHUJI PAWAR, DAULATRAO SONUJI AHER

JUDGEMENT

(1.) These two appeals arise out of two separate judgments given by the learned Judge of the Co-operative Court at Nasik in two different disputes mentioned above, but on the same point and on the same set of facts and the parties litigating against the disputants art sants in both the disputes. Therefore, these appeals have been now disposed off by common judgment. Dispute No. 1070/88 was a case filed by the respondent No. 1 in Appeal No. 432 of 1988 against the Appellant Sugar factory and 12 others and dispute No. 1071/88 was filed by the respondent no. 1 in appeal No. 431/88 against the same parties who are the opponents in the above dispute. Both the disputes are filed for declaration arid injunction. The learned trial Judge granted order of injunction restraining the appellants from obstructing and objecting these Disputants in performing their duties and work as elected Directors. The facts narrated in the dispute applications are as under : The Respondent No. 1 in both Appeals claimed that they were elected on the Board of Directors of the Appellant no. 1. Society for a tenure of 5 years in June, 1986. The Society in question is a specified Society as contemplated under Section 73-G of the M. C. S. Act, 1960. The Board of Directors passed a resolution oa 21-7-1988 that since the Respondent No. 1 in both appeal was absent for the meetings on 13-6-1988, 4-7-1988 and 6-7-1988 his Directorship was terminated. That resolution was passed relying on the Bye-law No. 37 (C) of the Society. It is contended therein that the Board of Directors have ao power to terminate the Directorship and that is the power of the Registrar of the Co-operative Societies. According to these disputants the meeting which was held on 13-6-1988, was for the purpose of adopting a resolution of no confidence in the Vice-Chairman and the Vice-Chairman had approached the high Court and filed a Writ Petition, which is pending. For these reasons the meeting was not legal and the disputants had informed the board of Directors his view about the said meeting. The meeting dated 4-7-1988 was for election of Vice-Chairman and, therefore, that meeting was also illegal. He further contended that, though there was the subject of termination of Directorship on the agenda of the meeting dated 21-7-1988, a notice to explain his absence or about the said termination was not given to "him. The resolution adopted therein, therefore, is contrary to law and against the principles of natural justice. It is further contended that, his tenure of 5 years as a Director cannot be curtailed on the basis of Bye-laws as the said period has been fixed under the provisions of Section 73-G (2) of the M. C. S. Act. It is also alleged further that, no subject was discussed in the said meeting against the disputant or any other Director and the proceedings have been fabricated. It is alleged that the Resolution was malafide. Therefore, it is claimed that the resolution adopted on 21-7-1988 be declared as illegal, void and consequently the Board of Directors should be restrained by an order of injunction not to cause obstruction the disputant from functioning as a Director. Ad-interim injunction was sought for on 1-8-1988 pending hearing and final disposal of the dispute. On that application the impugned order was passed.

(2.) In the second appeal dispute is filed by the Respondent No. 1 bearing Dispute No. 1071 of 1988 for declaration and permanent injunction restraining appellants from disturbing the Respondent No. 1 from participating in the management of the Board of Directors as the elected Director and for declaration that the resolution adopted on 21-7-1988 by the board of Directors of the Appellant Factory terminating his Directorship as illegal, void and inoperative. Facts of this case as stated in his dispute are as follows : He was also elected as a Director in June, 1986 for a tenure of 5 years. He was the Vice Chairman of the said factory upto 30-6-1988. The defendants Nos. 2 to 9 who are appellants in the appeal, adopted a resolution of no confidence against him and that was illegal. On 21-7-88 the Board also adopted the resolution that since the Respondent no. 1 was absent for the meeting dated 13-6-1988, 4-7-1988 and 6-7-1988 his Directorship was terminated according to the provisions of Bye-law no. 37 (c) of the appellant factory. The said resolution is challenged alleging that the Board has no power to reduce the tenure of 5 years of the elected Director and only Registrar of Co-operative Societies has power to terminate the Directorship. The first meeting out of three i. e. 13-6-1988 was illegal and it was for adopting no confidence resolution against him. He has filed writ petition in the Hon'ble High Court at Bombay and that is pending. Because of the Writ Petition the said meeting itself was illegal. There was no subject on the agenda for the meeting dated 21-7-88 regarding termination of his Directorship. He was not given an opportunity to explain by notice or otherwise before Resolution was adopted. The Bye-law No. 37 (c) is contrary to the Section 73-G (2) of the Act and, therefore, the Bye-laws ultra vires. Factually no subject was discussed on 21-7-1988 and his Directorship was not terminated. The proceedings were falsely prepared. Mala fides have been alleged. Hence, declaration and injunction were sought.

(3.) After hearing the parties the learned Judge passed an order dated 19-8-1988 restraining the Defendants 1 to 12 from obstructing and objecting the Disputant to perform his duties and work as elected Director. Hence, this appeal.