RAJBALHAT UNION WEAVERS CO-OPERATIVE SOCIETY TLD Vs. STATE
LAWS(CAL)-1983-5-12
HIGH COURT OF CALCUTTA
Decided on May 03,1983

RAJBALHAT UNION WEAVERS CO-OPERATIVE SOCIETY TLD Appellant
VERSUS
STATE Respondents

JUDGEMENT

- (1.) FOR giving nomination of three members to the Board of directors of Rajbalhat Union Weaver's co-operative Society Ltd. by the State government the instant writ petition has been moved with notice to the State and the learned Counsel for the State respondents has appeared. It is contended by the petitioners namely the said co-operative society and a Director of the said society that for the purpose of reconstitution of the board of Directors, an election was held and twelve persons as set out in paragraph 6 of the writ petition were elected. Thereafter, without any reference to the co-operative society, the State Government in the purported exercise of its powers under section 28 of the West bengal Co-operative Societies Act, 1970 has nominated three persons as Directors of the said co-operative society and in selecting its nominees, the State Government has given nomination to the persons who contested the said election but were unsuccessful by securing lesser votes than the elected persons. It is contended by the petitioners that in the facts and circumstances of the case, section 28 of the Act is not attracted and as such the purported nomination under section 28 is invalid It appears that the said nomination has been made by the State Government on the ground that the State Government had assisted inhardly in the formation of share capital of the said co-operative society. It has been categorically stated in the writ petition by the petitioners that the state Government has neither subscribed to the share capital nor it has assisted in the formation of augmentation of the share capital either directly or indirectly. Accordingly, the exercise of the power for the aforesaid ground is non-est on the face of it and the order is therefore illegal.
(2.) MR. Pal, the learned Counsel appearing for the petitioners has contended that the co-operative society consists of twelve members in the Board of Directors and all the said twelve members are to be elected according to the rules of the society. In such circumstances, no nomination of any other members in addition to the said twelve members in the Board of Directors can be made by the State Government in, exercise of the powers under section 28 of the Act. Mr. Pal has also contended that the members of the Society have a right to get the, said Society Administered by the Board of Directors elected by the members of the Society but by the aforesaid nomination made under section 28, the right of the members of the society to get the society administered by the Directors of their choice has been interfered with and as such even assuming that in the facts of the case, such power under section 28 could have been exercised. by the State Government, such nomination could not have been made exparte and if nomination was at all to be made, the same should have been made after giving the society an opportunity of being heard. He has contended that it is not obligatory for the State Government to nominate members in the Board of Directors simply because conditions referred to in clauses (a) to (e) of section 28 (1) have been fulfilled. As there is a question of option to be exercised by the State Government, in giving nomination to the Board of Directors, an opportunity of hearing to the co-operative society before exercise of discretion is implicit and denial of such opportunity to the society has rendered the nomination invalid.
(3.) THE learned Counsel for the State respondents has, however, produced a statement furnished by the Registrar of co-operative Societies at the hearing of this petition and it appears that the state Government had advanced loans to the said co-operative Society from time to time amounting to about Rs 4. lakhs and the Co-operative Society has also repaid such loans and interest from time to time and at the present moment, the outstanding loan together with interest comes to about Rs. 29,806/ -. Mr. Majumdar, the learned Counsel appearing for the State has contended that the State Government has a power to nominate not more than three members or one third of total number of elected members if the State Government has assisted such society with loans and grants from out of its own fund as referred to in clause (e) of section 28 (1 ). Mr. Majumdar has submitted that in the order for appointment of the nominees, instead, of referring to clause (e), clause (b) has been referred to. Clause (b) relates to giving pf assistance directly or indirectly in the formation or augmentation of the share capital of the society. Mr. Majumdar has, however, submitted that for referring the ground concerning clause (b) of section 28 (1) in the impugned order of nomination of three members in the Board of Directors, the writ Court should not interfere because in the facts of the case, the nomination is otherwise valid and such nomination could have been validly made under section 28 (1) (e) and it was a sheer mistake in referring to a different clause mr. Majumdar has also contended that when under section 28 (1) the State Government has a power to appoint nominees, the co-operative society cannot object to the appointment of the nominees in the Board of Directors and it is not necessary to give any hearing before such nomination is made by the State Government. He has also contended that Section 28 makes it quite clear that in addition to the elected members in the Board of Directors, the State Government is entitled to give nomination of three members or one third of the total numbers of the elected members. In the circumstances, Mr. Majumdar contends that no interference is called for and the writ petition should, therefore, fail.;


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