- (1.) The term of office of the members of the Managing Committee of a society registered under the Bihar co-operative Societies Act, 1935 (the 'act') and the Bihar co-operative Societies Rules, 1959 (the Rules) is three "co-operative years". The State government, under the Act, has a right to nominate - depending upon its share in the share capital of the society - certain number of members to the Managing Committee of a society. The question for consideration is whether the three-year term of the Managing Committee is to be counted from the beginning of the "co-operative year" in which the elections by ballot are held or from the "co-operative year" when the nominations are made by the State government
(2.) 2. Before stating the necessary facts, it would be useful to examine the relevant provisions of the Act and the Rules. These are Sections 2 (bb) , 2 (e) , 14 (2) , 14 (4) , 14 (9) and the first proviso to Section 14 (10) reading as under: "2. (bb) 'cooperative year' means a year beginning with the 1 st April and ending on the 31st March. 2. (e) 'managing Committee' means the committee of management or other body to whom the management of the affairs of a registered society is entrusted. 14. (2) The management of registered society shall be vested in a managing committee constituted in accordance with the rules: * * * 14. (4) Notwithstanding anything contained in any provision of this Act, the rules framed thereunder or the bye-laws of any registered society where the State Government has (a) subscribed directly to the share capital of a registered society; or (b) assisted indirectly in the formation or augmentation of the share capital of a registered society; or (c) given loans or made advances to a registered society or guaranteed the repayment of principal and payment of interest on debentures issued by a registered society for or guaranteed the repayment of principal and payment of interest on loans or advances to a registered society; in that case the State Government shall have the right to nominate on the Managing Committee of such registered society not more than two persons one of whom shall be a government servant, but the said government/ servant shall have no right to vote in the election of the office-bearers of the registered society: provided that notwithstanding the foregoing provisions contained in sub-sections 4 (a) , (b) and (c) (I) Where the share of the State government in the share capital of such registered society exceeds thirty per cent but does not exceed fifty per cent, the State government shall have the right to nominate up to one-third of the total number of the members of the Managing 342 Committee including the Chairman; and such right once accrued shall continue until the share of the State government in the share capital of the registered society goes down to less than twenty-five per cent; (Ii) Where the share of the State government in the share capital of such registered society exceeds fifty per cent, but does not exceed sixty per cent of the total share capital of the registered society, the State government shall have the right to nominate such number of members of the Managing Committee including the Chairman, as is nearest up to one-half of the total, and such right once accrued shall continue until the share of the State government in the share capital of the registered society goes down to less than forty per cent; (Iii) Where the share of the State government in the share capital of such registered society exceeds sixty per cent, the State government shall have the right to nominate up to two-thirds of the total number of members of the Managing Committee including the Chairman, and such right once accrued shall continue until the share of the State c Government in the share capital of the registered society goes down to less than fifty-five per cent: Provided that notwithstanding anything contained in proviso (i) , (ii) and (iii) of Ss. (4, the State government shall not nominate Chairman and other members of the Managing Committee if the share capital subscribed to by the State government in a registered society is less than fifteen lakhs of rupees: Provided further that where the bye-laws of a registered society so provide the State government or the Registrar, as the case may be, may nominate more than two-third members including office-bearers of the Managing Committee on such terms and conditions as may be prescribed in the bye-laws; * * * 14. (9 Notwithstanding anything contained in the rules or bye-laws of a registered society, the term of the members and the office-bearers of the Managing Committee of a registered society shall be three co-operative years, and they shall continue to hold office after expiry of their term till the elections are held or for nine months from the close of the perative year, whichever is earlier, 14. (10 * * * Provided that irrespective of the date when the election is so held the term of the members and the office-bearers of the Managing Committee shall be deemed to have commenced from the beginning of the perative year in which the elections are held: * * *" Rules 2 (xvi) , 21-A, 22 (1 and 22 (2 of the Rules which are relevant are reproduced hereunder: "2.(Xvi) 'election' means election, in accordance with these Rules, of- (a) Delegate, (B) Members of the Managing Committee; and/or (C) Office-bearers of a perative Society; 21-A. Notwithstanding any rule and bye-laws of any society the election of the members of the Managing Committee, office-bearers thereof and the delegates of the society shall be held in a Special General Meeting in accordance with Rules 21-B to 21-X: Provided that the election of a newly-registered society shall be held in the Preliminary General Meeting according to Rule 20 (2 (a) to (e). 22. Managing Committee. (1 Subject to nominations by the State government and/or the Registrar of such number of members to the Managing Committee as prescribed in the Act, Rules and bye-laws of a registered society, the Managing Committee of the society shall be constituted: Provided that the election of the members of the Managing Committee and office-bearers thereof shall be held in accordance with the procedure laid down in Rule 21-B to 21-X. (2 The members of the Managing Committee and the office-bearers shall be deemed to have taken over charge immediately after the constitution of the Managing Committee: Provided that the constitution of the Managing Committee shall not be treated as complete unless and until the members thereof have been duly elected and/or nominated by the authority empowered to do so under the Act, Rules and the Bye-laws of the society.
(3.) Dinesh Prasad Yadav, the appellant, was a member of the Managing Committee of the Katihar District central perative Bank (the 'bank') along with Respondents 5 to 12. They were elected as such by votes on 20/1/1991 under Rule 21-A of the Rules. The State government being a major shareholder in the share capital of the Bank it has the right to nominate up to one-third of the total members of the Managing Committee of the Bank, including the Chairman. Though the elections by way of ballot were held on 20/1/1991, the State government made the nominations to the Managing Committee of the Bank as late as 2/3/1993. It is not disputed that the Managing Committee was not permitted to function till 2/3/1993 on the ground that it got constituted under Rule 22 of the Rules only after the nominations were made by the State government.;