Prem Chand Jain, J. - (1.) RAGHBIR Singh has filed this petition under Articles 226 and 227 of the Constitution of India for the issuance of an appropriate writ, order or direction quashing the order of the Government dated February 25, 1976 (Copy Annexure P. 1 to the writ petition).
(2.) IN order to appreciate the controversy, certain admitted facts may be noticed: - The Petitioner was elected as a member of the Committee (Dire -tor) of the Ludhiana Central Co -operative Bank Ltd., Ludhiana (hereinafter called the Bank) on April 7, 1974. The Committee, i.e. the Board of Directors consists of nine elected members besides three members to be nominated by the Government. The Government nominated three members on June, 12, 1974. The Petitioner was elected as Managing Director of the Bank on May 1, 1974 and continued to function as such till February 25, 1976 when by the appointment of the Deputy Registrar as Managing Director, he ceased to be the Managing Director. By way of this petition, the action appointing the Deputy Registrar (Respondent No 3) as Managing Director, has been challenged. The first contention raised before me by Mr. Kang, Learned Counsel for the Petitioner, was that in exercise of powers under Section 26(2)(a) proviso (b) of the Punjab Co -operative Societies Act 1961 (hereinafter referred to as the Act) the Deputy Registrar, Co operative Societies, Ludhiana could not be appointed as Managing Director of the Bank. According to the Learned Counsel the power of appointing a Managing Director under the provisions of Section 26(2)(a), proviso (b) of the Act vests with the Government only at the initial stage i.e., when the election to the committee has taken place and not thereafter. It was also submitted by the Learned Counsel that the Petitioner could be removed from the post of Managing Director only under the provisions of Section 27 and not under Section 26(2)(a) proviso (b). On the other hand, Mr. Mital, Learned Counsel for the official Respondents, submitted the power of appointing a Managing Director could be exercised by the Government under Section 26(2)(a), Proviso (b) at any time and the only condition necessary to be satisfied was that the Government's subscription to the share capital of a Co operative society should have been to the extent of twenty lakhs of rupees or more. According to the Learned Counsel, in the instant case, admittedly, the Government bad subscribed to the share capital of the Society to the extent of twenty lakhs of rupees and hence the power of appointing a Managing Director could be exercised at any time. It was also submitted by Mr. Mital that the moment this power is exercised, the result would be that the elected Managing Director would automatically cease to be the Managing Director.
(3.) AFTER giving my thoughtful consideration to the entire matter, I am of the view that there is considerable force in the contention of the Learned Counsel for the official Respondents. The relevant provisions of Section 26, to which reference was made by the Learned Counsel for the parties, read as under: 26 Elections and nominations of members of Committee: (1) The members of the Committee of a Co -operative society -shall be elected in the manner prescribed manner and no person shall be elected so unless he is a share holder of the society. (1A) - - - - - - - - - - - - (1B) - - - - - - - - - - - - (1C) - - - - - - - - - - - - (1D) - - - - - - - - - - - - (1E) - - - - - - - - - - - - (1F) - - - - - - - - - - - - (2) Notwithstanding anything contained in Sub -section (1): - (a) Where the Government have subscribed to the share capital of a Co -operative Society or has guaranteed the repayment of the principal and the payment of interest on debentures issued for loans raised by a co -operative society, the Government or any person authorised by it in this behalf shall have the right to nominate on the committee such number of persons, not exceeding three or one third of the total number of members thereof, whichever is less, as the Government may determine ; Provided that where the Government have subscribed to the share capital of co -operative society to the extent of twenty lacs of rupees or more, the Government may, notwithstanding anything contained in the bye laws of the society: - (a) Appoint one of the members nominated in the aforesaid manner as Chairman of the committee of such society ; or (b) nominate another member in addition to those nominated in the aforesaid manner and appoint him as Managing Director ; Provided further that no person shall be appointed to act as Managing Director unless be is a member of the Indian Administrative Service. Punjab Civil Service (Executive Branch) or a Deputy Registrar, a joint Registrar or an Additional Registrar, Co -operative Societies (C) - - - - - - - - - - - - (2A) Where the Government appoints a Chairman or Managing Director under the proviso to Clause (a) of Sub -section (2), the Chairman or Managing Director, if any, as the case may be, holding office immediately before such appointment shall cease to hold office on such appointment. (2B) - - - - - - - - - - - - (3) - - - - - - - - - - - - (4) - - - - - - - - - - - - In my view, the provisions of Sub -Section 2 -A are a complete answer to the aforesaid contention of Mr. Kang. Under the provisions of Sub -Section 2 -A, the Chairman or the Managing Director ceases to hold an office, the moment another Chairman or Managing Director is appointed by the Government. The cessation of office can take place only if there is already in existence a Managing Director or Chairman. When the members are elected to the Committee at the initial stage there is no elected Chairman or Managing Director in the existence and if it is at that stage only that the power of appointment could be exercised, then on the exercise of that power, the question of any Managing Director ceasing to hold office thereafter, could not possibly arise. Therefore, when the statute provides that on the appointment of a Managing Director, the Managing Director, if any holding office immediately before such appointment ceases to hold office, then clearly the Legislature intended to vest the authority with a power to make an appointment at any time and not at the initial stage only, as contended by Mr. S. S. Kang. In this view of the matter, the contention of the Learned Counsel is repelled.;