Case Note & Summary
Background: The dispute concerned the procedure for conducting elections to a cooperative society, the Goa State Cooperative Bank Ltd., after amendments to its bye-laws. The Bombay High Court, Panaji Bench, had directed the respondent society to conduct elections, prompting the bank to appeal by special leave to the Supreme Court. Facts: The Supreme Court, in an earlier order dated 20 September 1996, recorded the admitted position that the appellant bank was neither a National Cooperative Society nor a Statewide notified Cooperative Society under Section 35 of the Multi-State Cooperative Societies Act, 1984. Consequently, the procedure for conducting elections to other societies was to be as per Paragraph 8 of the Schedule, which envisages conducting elections in accordance with the procedure prescribed. The General Body of the society had resolved to adopt paragraphs 2 to 7 of the Schedule, and bye-laws were amended. The controversy centred on whether the amended bye-laws had been approved by the Registrar. The High Court had proceeded on the premise that the Registrar must have approved the bye-laws and directed the respondent to conduct the election. The Supreme Court ordered the Registrar to file an affidavit on this point. Legal Issues: The core questions were whether the amended bye-laws had been effectively approved and which rules and bye-laws would govern the impending election. Arguments: The appellant contended that election should be conducted as per Rule 104 and Schedule II of the Multi-State Cooperative Societies (Registration, Membership, Direction and Amendment, Settlement of disputes, Appeal and Revision) Rules, 1985. The respondent submitted that after the amendment of bye-laws, a controversy had arisen as to the relevant rule applicable. Court's Analysis: The Supreme Court declined to enter into the controversy as to which specific rule applied because the election had yet to be conducted. It reiterated the axiomatic principle that elections must be conducted by the Registrar in accordance with the relevant rules and bye-laws of the society applicable as on the date of the election. The Court noted the Registrar's affidavit confirming that amendment to bye-law No.36 was approved on 6 September 1994 and a further amendment to bye-law No.1(a) was registered under Section 9 of the Act on 8 February 1996. Decision: The appeal was allowed. The judgment and operative portion of the High Court were set aside. The Registrar was directed to conduct the elections in accordance with the relevant rules applicable to the society, bank, and bye-laws of the society, the Act, and the Rules as applicable on the date of conducting the elections. No costs were awarded.
Headnote
A) Cooperative Society Elections - Applicable Procedure - Multi-State Cooperative Societies Act, 1984, Section 35; Multi-State Cooperative Societies (Registration, Membership, Direction and Amendment, Settlement of disputes, Appeal and Revision) Rules, 1985, Schedule - Appellant bank admitted to be neither National Cooperative Society nor Statewide notified Cooperative Society under Section 35; hence elections to other societies must follow Paragraph 8 of the Schedule. Court held that since the society had yet to conduct elections, it was for the Registrar to conduct them according to relevant rules and bye-laws applicable on the date of election. B) Bye-law Approval - Effectiveness of Amended Bye-laws - Multi-State Cooperative Societies Act, 1984, Section 9 - The High Court presumed the Registrar must have approved the bye-laws, but the Supreme Court emphasized that unless bye-laws are approved by the Registrar, they do not become effective. Registrar's affidavit confirmed amendment to bye-law No.36 approved on 6 September 1994 and further amendment to bye-law No.1(a) registered under Section 9 on 8 February 1996. Held that the exact approved text must govern the election. C) Direction to Registrar - Conduct of Election - Multi-State Cooperative Societies Act, 1984; Multi-State Cooperative Societies Rules, 1985 - The Supreme Court declined to decide the controversy as to which specific rule applied because the election had yet to be conducted. It directed the Registrar (seventh respondent) to conduct elections in accordance with the relevant rules, bye-laws, Act and Rules as applicable on the date of conducting elections. Held that the High Court order was set aside and the appeal allowed with no costs.
Issue of Consideration
Which rules and bye-laws govern the election to the appellant cooperative society; whether the amended bye-laws of the society were approved by the Registrar.
Final Decision
Appeal allowed; judgment and order of the High Court set aside; Registrar directed to conduct elections in accordance with the relevant rules applicable to the Society, Bank and bye-laws of the Society, the Act and the Rules applicable as on the date of conducting of the elections; no costs.
Law Points
- Cooperative society elections must be conducted according to the rules and bye-laws applicable on the date of election
- amended bye-laws require approval by the Registrar to become effective
- elections conducted in transgression of statutory rules are invalid
- for societies not falling under Section 35 of the Multi-State Cooperative Societies Act
- 1984
- elections are governed by Paragraph 8 of the Schedule.
