C V SUBRAHMANYAM SASTRY Vs. JOINT REGISTRAR OF CO OPERATIVE SOCIETIES STATE OF ANDHRA PRADESH HYDERABAD

JUDGEMENT

(1.) The Ongole Co-operative Bank Ltd., is one of the oldest Banks in the Guntur District working under the Madras Co-operative Societies Act, hereinafter called the Act. It seems to have a membership of about 900 with a working capital of about 61/2 lakhs. The Bank has also a paid Secretary who is of the grade of the Co-operative Sub Register. The financing Bank for the said Co-operative Bank is the Guntur District Co-operative Central Bank Ltd., Tenali. According to the bye-laws of the Bank the term of the office bearers is three years. The present Board of Directors were elected and started functioning from 1-2-1960.

(2.) It is also alleged that due to some political pressures the Registrar of the Co-operative Societies issued a notice under Section 43 (1) and (3) of the Act on 6-2-1963, on the ground that the Bank is not working satisfactory and is also mismanaged. The said notice was served on the President of the Bank on 12-12-1963 calling on the Board of Directors to submit their explanation on or before 25-2-1963. The Board of Directors thereafter submitted their explanation. The Registrar through his order dated 25-6-1963 superseded the Board. In this petition under Art. 226 of the Constitution it is this order of supersession of the Board of Directors which is challenged.

(3.) It is alleged that the order of supersession is illegal, unjust and suffers from an error apparent on the fact of the record. There was no data available under Section 38 of the Act to warrant supersession under Section 43. It is only when the working of the Bank was found unsatisfactory financially that the supersession order can be made. There were no irregularities committed by the Bank to warrant the supersession. The order of the Registrar therefore is without jurisdiction.