Holding

The Registrar was not justified to assume charge; the Board of Directors and Managing Committee remain in office until successors are elected, and the writ petition was dismissed as infructuous.

Summary

The appellants, members of the Apex Bank of Madhya Pradesh, challenged the Registrar's assumption of control over the Bank after the term of its Board of Directors and Managing Committee expired without elections. The High Court had held that the Registrar was justified under Section 49(8)(ii) of the Madhya Pradesh Co‑operative Societies Act, 1960, and dismissed the writ petition. The Supreme Court examined whether the Registrar could lawfully take over when elections to the primary and central societies were pending, and whether a writ of quo warranto could override an earlier mandamus directing the officers to continue until elections were held. The Court held that the Registrar could not assume charge while the mandamus remained operative, that the Board and Managing Committee continue in office until successors are elected, and that, since the elections had subsequently been completed, the writ petition was infructuous. Consequently, the appeal was dismissed.

Issues considered

Whether the Registrar is authorized under Section 49(8)(ii) of the Madhya Pradesh Co‑operative Societies Act, 1960 to assume charge of the Apex Bank when elections to the Board of Directors and Managing Committee have not been held.
Whether the expiry of the statutory term vacates the offices of the President, Vice‑Presidents and Managing Committee members of the Apex Bank.
Whether a writ of quo warranto can be issued to set aside a mandamus that remains in force.
Whether the writ petition becomes infructuous after the completion of the required elections.

Legislation cited

Constitution of Indias. Article 226
Madhya Pradesh Co-operative Societies Act, 1960s. 2, s. 47-A, s. 48, s. 49(8), s. 7-A

Subjects

Co-operative societiesElection of BoardRegistrar's powersStatutory vacancyMandamusQuo warrantoSection 49(8)Bye‑lawsApex society

Judgment

A RAJENDRA PRASAD YADAV AND ORS.
v.
STATE OF MADHYA PRADESH AND ORS.

JULY 9, 1997
B
[K. RAMASWAMY AND D.P. WADHWA, JJ.]

Cooperative Societies-M.P. Cooperative Societies Act, 1960-Section
49(8)(ii)-'Board of Directors and Managing Committee of the Apex
Society-Election to-Failure to hold election to Board of Directors and
C Management Committee within time-Election to Managing Committee rep-
resentatives of Central Societies, primary societies-Condition precedent for
completion of election process of the Apex Society-Obligation, to conduct
such elections on request of the respective committees of the Central Societies
lies on Registrar and not on Apex Society-Held, the liability of statutory
D vacation of office under Section 49(8)(ii) on expiry of term cannot be saddled
on Board of Directors, President, Vice-President and Members of Manage-
ment Committee of the Apex Society when Registrar has failed to hold election
to Central Bank and P1imary Societies-However, whole process of election
having since been completed and election to the board of the Apex Society
E having also been over, writ petition filed by the appellants became infructuous
and hence liable to be dismissed.

Constitution of India, 1950-Article 226-Writ of Quo Wa"anto-ls-
susance of-Court issued Writ of Mandamus-Held, Writ of Quo Wa"ants
cannot be issued to disobey writ of Mandamus already used and allowed to
F become final.

District Co-operative Central Bank sent delegates to the M.P. State
Co-operative Bank Ltd., the 'Apex Bank'. On August 24, 1984 when the first
meeting of the Board of Directors of the Apex Bank was held the term of
office of three years started running. The President and Vice-President,
G and other office bearers from the Board of Directors were elected, resulting
in constitution of the Board of Directors and the Managing Committee of
the Apex Bank. The term of the representatives of the Central Bank, Board
of Directors and of their office bearers was co-terminus with the term 'or
--
the Managing Committee of the Central Bank. Equally, the term of the
H Board of Directors and of the Managing Committee of the Apex Bank was
716
R.P. YADAVv. STATE 717

co-terminus, which was three years, later amended as five years as per M.P. A
Cooperative bye-laws 41(1). The three-tier system of Co-operative Society
existed therein.

By Resolution dated April 26, 1990, the Apex Bank applied to the
Registrar to hold elections. On failure to do so matter was filed in High B
Court which gave a direction that election he conducted in accordance with
the procedure prescribed under law. On the same date, Ordinance No. 2
of 1990 replaced by Act (14 of 1990) was passed by the State Legislature
terminating the term of the Committees; the Registrar was directed to take
over management of all the Primary Societies, Central Banks and of the
Apex Bank. As a consequence, the Committees of all the Societies were C
superseded by proceedings dated April 26, 1990. The Board again filed writ
petition. The High Court by its judgment dated June 21, 1993 reported as
•. A.P. Sastri case declared the Amendment Act (14 of 1990) amending
Section 49(8) of the M.P. Co- operative Societies Act, 1960 as ultra vires the
legislative power. As a necessary consequence, it held that the officers of D
the earlier Managing Committee would continue to function, till election
were held in accordance with law. Subsequently, Writ Petition was filed
seeking writ of quo wa"anto to show cause under which authority the
appellants were functioning. In the meanwhile Section 49(8) was amended
by Act 12 of 1994. The High Court disposed of the writ petition on finding
that the appellants deliberately delayed the conduct of election and that E
they had no right to continue in office after the expiry of the term.

In appeal to this court the appellants contended that ifthe Registrar
fails to conduct timely elections to the primary societies and district
societies, existing Board of Directors, President, Vice-President and F
members of Managing Committee of the Apex Society cannot be deemed
to have vacated their office on .expiry of the statutory term and the
Registrar cannot assume office of the Board of Directors or Managing
Committee of Apex Society.

The respondents contended that on expiry of the term of the G
President, two Vice-Presidents of the Board of Directors and the term of
the Managing Committee which being co-terminus with the Board of
' ' Directors must be deemed to have vacated their officers. Thereby, the
Registrar is not entitled to assume office of the Board of the Directors and
the Managing Committee. H
718 SUPREME COURT REPORTS [1997] SUPP.1 S.C.R.

A HELD : Per K. Ramaswamy, J.

1.1. For completion of the electoral process of Apex Bank, election
to the Primary Societies and in turn election to the managing committee
of each of the District Central Banks and election of one representative
from each of the 45 Central Banks as members of the Apex Bank, as the
B
two steps are condition precedent and are necessary. Until then,
constitution of the Board of Directors and the Managing Committee of the
Apex Bank cannot be done. As a pre-condition for completion of these two
sequential steps, i.e., (i) election of the President and two Vke-Presidents
and (ii) election of 5 elected member-Directors to the Management
C Committee, the election of a representative by the General Body of the
Managing Committee alongwith members of its Managing Committee is
mandatory and are necessary concomitant. For the latter election, the
elections to the Primary Societies, which in turn simultaneously elect the
Managing Committee and representatives to Central Bank, is also
J) necessary. [741-B-E]

1.2. The term of the representatives is co-terminus with the term of the
Managing Committee of the Central Bank or the Apex Co-operative
Societies. They shall, however, be entitled to remain in office alongwith
other nominated members of the Board of Directors of the Apex Bank under
E the bye-laws of the Apex Bank until the respective successors assume office.
The constitution of the Board Directors and also constitution of the Manag·
ing Committee of the Apex Bank is not complete without the election of the
representatives by the concerned Central Banks or President of Apex
Cooperative Societies. The President and Vice-President of the Apex Bank
F cannot be elected. The Managing Committee cannot be constituted without
electing the members of the Managing Committee from among the Board of
Directors, as per the bye-laws. That is how the three-tier system of election
bas got interlinked and become inseparable and in view of the unbreakable
interlink, the Board cannot be saddled with the liability of statutory vaca-
tion of the office on expiry of the term, unless the Registrar had the election
G conducted to the Central Banks or Apex Cooperative Societies, as the case
may be. Preceding there to, election to the Managing Committee of Primary
Society is mandatory. [741-F-H; 742-A-B]
...
13. Under the bye-laws of the apex bank there is no obligation or duty
H cast on it to have the elections to the Managing Committee or repre·
RP. YADAVv. STATE 719

sentation to the Central Bank or Apex Cooperative Society conducted. It is A
the power, the function and duty under the Act of the Registrar, on a
request made by· the respective committees of the Central B1mks or Apex
Cooperat.ive Society concerned to conduct elections. Thus, it is difficult to
accept that on expiry of the term of President, two Vice· Presidents of the
Board of Directors and the term of the Managing Committee which being B
co-terminus with the Board of Directors must be deemed to have vacated
their offices. Thereby, the Registrar is not entitled to assume office of Board
of the Directors and Managing Committee. Thus, the ftegistrar was unjus·
tified to assume charge of the Board of Directors and Managing Committee
of the Apex Bank. (742-H)

2. This Court in A.P. Sastri's case issued mandamus with the decla·
c
ration that the Officers of the Managing Committee of the Petitioner
Society would continue to function till elections are held in accordance with
the law. In view of the above mandamus, without conducting the elections
in accordance with the provisions of the Act, Rules and bye-laws, the
Registrar cannot assume suo motu power to terminate the term of the D
Board of Directors and the Managing Committee by statutory declaration
and assume charge of the management of the Apex Bank. Therefore, as long
as the writ of mandamus is not complied with and remains in operation a
court cannot issue writ of quo wa"anto to disobey the writ of mandamus
already issued by the High Court and allowed it to become final. [743-A·E)
E
A.P. Sastri & Others v. State of Madhya Pradesh, (1993) 2 M.P.J.R. 33,
referred to.

3. The new Board of Directors elected the President, two Vice-Presi·
dents and five members of the Managing Committee of the Apex Bank must F
have, by now, been elected and assumed the office; therefore, it is futile to
issue the writ as prayed for. [743-G-H)

HELD: Per D.P. WADHWA, J. (Supplementing)

1.1. The term of the Board would be five years from the date of its G
first meeting when it also elects one President and two Vice-Presidents. The
Board being continuous body, the five years term would, therefore, apply
.I>
only to the election of President and two Vice-Presidents and Section 49(8)
of the M.P. Cooperative Society Act puts an obligation on the outgoing
committee of the society to hold elections prior to the expiration of its term
would apply, in the case of the apex society only to the election of President H
720 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A and two Vice-Presidents as per its byelaws. [747-F-H; 748-A-C]
1.2. The interpretation that the election of the new board is
dependent on the elections first to be held of the primary society and then
' -
of the Central Society is a misconception. If the election to the Board of
the apex body is to be dependent on the election first to be held by the
B primary and then by the district bodies, possibly with different byelaws, it
can be anybody's guess as to when the election to the Board of the apex
body would be held. [749-A-B]

1.3. lfthe Board failed to take steps to hold elections of the President
C and two Vice-Presidents in terms of sub-section (8) of Section 49 of the
Act, the Registrar would be competent to assume charge. [748-F]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4318 of
1997.

D From the Judgment and Order dated 22.1.97 of the Madhya Pradesh
High Court in W.P. No. 5143 of 1996.

G.L. Sanghi, Ashok Kr. Gupta, A.R. Siddiqui and Mr. Vivek Tanka ·
for the Appellants.

E S.S. Ray, S.K. Agnihotri, Biswajit Meitei, Madhur Dadlani and P.K.
Manohar for the Respondents.

The Judgments of the Court was delivered by

K. RAMASWAMY, J. Leave granted.
F We have heard learned counsel on both sides.

This appeal by special leave arises from the judgment of the Division

G
Bench of the Madhya Pradesh High Court, Jabalpur Bench passed on
January 22, 1997 in Writ Petition No. 5143/96.

Section 2(a-i) of the Madhya Pradesh Co-operative Societies Act,
-
1960 (Act 17 of 1961) (for short, 'the Act') defines 'Apex Society' to mean
a society whose principal object is to provide facilities for the operation of
other societies affiliated to it and whose area of operation extends to the
whole State of Madhya Pradesh. Section 2( c-i) defines 'Central Society' to
H mean a Co-operative Land Development Bank or any other society whose
R.P. YADAVv. STATE[K. RAMASWAMY,J.) 721
area of operation is cm1fined to a part to the State and which has as its A
principal object the promotion of the principal object and the provision of
facilities for the operation of same type of societies and for other societies
affiliated to it and not less than five members of which are societies. Section
2( c-ii) defines 'Central Cooperative Bank' to mean a resource society
registered or deemed to be registered under this Act. Section 2( d) defines B
'Committee' to mean the Board of a management by whatever name called
constituted under Section 48. Section 2G) defines 'Farming Society' to
mean a society formed with the object of promoting development of land
and better methods of cultivation, and includes a better farming society,
tenant farming society, collective farming society, joint farming society,
irrigation society and a crop protection society. Section 2( r) defines C
'Member' to mean a person joining in the application for the registration
of a society or a person admitted to membership after registration in
accordance with this Act, the rules and the bye-laws applicable to such
society and includes the State Government when it subscribes to the share
capital of a society. Section 2(t-i) defines 'Officer' to mean a person elected D
or appointed by a society according to its bye-laws to any office of such
society and includes Chairman, Vice-Chairman, President, Vice-President,
Managing Director etc., Member of the Committee and any other person
elected or appointed under this Act, the rules or the bye-laws to give
directions in regard to the business of such society. Section 2(u-i) defines
'Primary Society' to mean a society which is neither an Apex Society nor a E
Central Society. Section 2(x-i) defines 'Representative' to mean a member
of the society to represent the society in other societies. Section 2(z- i) (aa)
defines 'State Co-operative Bank' to mean the Madhya Pradesh State
Cooperative Bank, Limited.
F
Section 4 of the Act obligates the registration of a society and
envisages that subject to the provisions of this Act, a society which has as
its objects the promotion of the economic interest of its members or their
general welfare in accordance with co-operative principles or a society
established with the object of facilitating the operations of such a society, G
may be registered under this Act. The registration has been envisaged
under Section 9 and the societies have been classified into 11 categories in
sub-section (1) of Section 10. The details of which are not material for the
purpose of this case. Sub-section (1-a) of Section 10 further empowers the
Registrar to classify the societies enumerated in clauses (i) to (xi) of
sub-section (1-a) which again makes three heads, namely : (a) Apex H
722 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A Society; (b) Central Society; and (c) Primary Society. Right to membership
has been conferred by Section 19 envisaging in sub-section (1) thereof that
...
no person shall be admitted as a member of a society except the
enumerated categories, namely : (a) an individual; (b) any other society;
(c) to (e) are omitted as being not relevant for the purpose of this case;
and (f) the State Government. Under sub-section (2), notwithstanding
B
anything contained in this Act or rules or in the bye-laws of a society, where
the State Government has contributed to the share capital of a society, the
liability of the State Government shall be limited to the face value of the
shares held by it.

C Section 22 gives right to vote. Sub-section (1) says that every member
of the society shall have one vote in the affairs of the society. The other
details in sub-section (2) to (8) are not material for the purpose of this
case, hence omitted. Section 23 prescribes the manner of exercising vote.
Sub-section (1) thereof postulates that every member of a society shall
D exercist;.. his vote in person and no member shall be permitted to vote by
proxy. Provided that subject to any rules made under this Act - (i)(a) a
society which is a member of another society may appoint one of its
members as a representative to vote on its behalf; and (b) not necessary
for the purpose of this case. Section 23(ii) says that the State Government
may nominate one of its officers as its representative, to vote or otherwise
E participate in its behalf in tne affairs of the society of which such society

-
or the State Government is a member. Other details are not necessary for
the purpose of this case, hence omitted. Section 47-A prescribes the
functions of Apex society. Sub-section (1) thereof says that the Apex
society may, for servicing its constituents and in accordance with its
F byelaws, perform the functions enumerated therein. Sub-section l(k)
enjoins to ensure timel} conduct of elections in member societies.

Chapter V deals with "Management of Societies" and sub-section (1)
of Section 48 says that the final authority in a society shall vest in the
general body of members. The proviso is not relevant, hence omitted.
G Sub-section (2) of section 48 says that subject to sub-section (1), the
management of every society shall vest in a committee constituted in
accordance with this Act or rules made thereunder or byelaws of the
Society and it shall exercise such powers and perform such duties as may
be conferred or imposed respectively by the Act or rules made thereunder
H or byelaws of the society. Sub-section (3) if not relevant for the purpose of
R.P. YADAVv. STAIB[K.RAMASWAMY,J.) 1'13

this case, hence omitted. Sub-section (5) of Section 48 says that there shall A
be a President/Chairman and two Vice-Presidents. The details of
representation of the Vice-Chairman are not relevant for the purpose of
· this case, hence omitted. Section 48-B gives power to the Representatives
and delegates to represent their society or group of members.

Sub-section (1) says that every committee of society shall at the time B
of election of Chairman or Vice-Chairman, also elect representative who
shall represent it in other society and che representative so elected shall
not be withdrawn by the Committee till the next election of the committee.

'. Sub-sections (2) and (3) are not relevant for the purpose of this case, hence
omitted. Section 48-C provides Powers of the Committee as under : C

The Board or the Committee of a society shall in accordance with
the byelaws, have power to -

(a) admit and terminate membership; (b) elect the Chairman and
other office bearers; clauses (c) to (h) are not relevant for the purpose of D
this case, hence omitted. •

Section 7-A(i) provides that the term of the committee shall be five
years from the date on which first meeting of the committee is held. Section
7-A(ii) provides that the term of the representative elected by the E
committee of the society shall be co-terminus with the term of the
committee of the society for which representative is elected. The other
details are not material for the purpose of this case, hence omitted.

The survey of the aforesaid provisions of the Act provides formation
and registration of the co-operative society. The membership of the society, F
the general body, the committees to manage the affairs of the society, their
tenure and qualifications have been provided for and the management of
the society shall vest with the committee and the committee is empowered
to elect the officers, namely, the President, two Vice-Presidents etc. etc.
and the representatives to represent its membership in other societies.
G
The undisputed facts are that on June 5, 1984, the District Co-
'" operative Central bank (for short the "Central Bank") had sent their 45
delegates to the M.P. State Co-operative Bank Ltd. (for short, the 'Apex
Bank'). On August 24, 1984, the first meeting of the Board of Directors of
the Apex Rank was held and from that date its term of office of three years H
724 SUPREME COURT REPORTS [1997] SUPP.1 S.C.R.

A started running. The President and Vice-President, and other office
bearers from the Board of Directors came to be elected, resulting in
constitution of the Board of Directors and the Managing Committee of the
Apex Bank. The term of the representatives of the Central Bank (Board
of Directors) and of their office bearers was co-terminus with the term of
B the Managing Committee of the Central Bank. Equally, the term of the
Board of Directors and of the Managing Committee of the Apex Bank was
co-terminus, i.e., three years which was later amended as five years as per
bye-law 41(1). Admittediy, three-tier system of Co-operative Societies
exists in the State of Madhya Pradesh with the village level Primary
Co-operative Credit Societies (for short "Primary Societies"); the District
C Co- operative Central Banks (for short, the 'Central Banks'); and the Apex
Bank. The term of all the Societies, Central Banks and Apex Bank was
extended for period ranging from one year to the maximum of 1-1/2 years,
by operation of the amendment brought to the M.P. Co-orierative Societies
Act, 1960 (for short, "the Act"), till April 30, 1990. By Resolution dated
D April 26, 1990, the Apex Bank applied to the Registrar to hold elections.
Since that was not being done, Offic:ers and Managing Committees filed
M.P. No. 908/90 in the High Court which directed that elections be
conducted in accordance with the procedure prescribed under the law. On
the even date, the Ordinance No. 2 of 1990 replaced by Act (14 of 1990)
was passed by the State Legislature terminating the term of the
E Committees; the Registrar was directed to take over management of all the
Primary Societies, Central Banks and of the Apex Bank. As a consequence,
the Committees of all the Societies were superseded by proceedings dated
April 26, 1990. Consequently, they again filed writ petition bearing M.P.
No. 1111/90. The High Court by its judgment date June 2 1, 1993 reported
F as A.P. Sastri & Others v. State of Madhya Pradesh, (1993) 2 M.P.J.R. 33,
declared the Amendment Act (14 of 1990) amending Section 49(8) of the
M.P. Co-operative Societies Act, 1960 (for short, the 'Act') as ultra vires
the legislative power. The Division Bench declared as under :

"Indeed the factual situation is that the petitioner Societies had
G passed resolution and requested the respondent Registrar to
appoint the Returning Officer for holding new elections. In a
situation like this, the real question is whether the Registrar by not
performing his obligations under the Act and not holding election
before the expiry of the term of the existing committee, can be
H permitted to be benefited by his own default. If the matter is
R.P. YADAVv. STATE[K.RAMASWAMY,J.) 725

considered in the context of default of the Registrar on the A
Returning Officer appointed by him, and the decision is required
to be taken in the context of democratic destiny and the rights of
the members to manage the Society, the provision would appear,
prima facie, unreasonable and arbitrary.

In view of the discussions aforesaid, these petitions succeed B
and are allowed by quashing Section 48(4) and Section 49(8) of
the Act, as amended by M.P. Act No. 14/90. As a necessary
consequence, provisions in these sections existing immediately
before the aforesaid amendment would be deemed to be continu-
" ing legally and validly. As a necessary consequence, the officers of C
the earlier Managing Committee of the petitioners Societies will
continue to function, till elections are heid, in accordance with
law."

While the writ petitioners were pending, the office bearers continued
to hold office. Subsequently, the present writ petition come to be filed D
seeking writ of quo wa"anto to show cause under which authority the
appellants were functioning. In the meanwhile, Section 49(8) was amended
which reads as under;

"49(8)(i) It shall be obligatory on the outgoing committee of the E
Society to hold .elections prior to the expiration of the term
under sub-section (7-A) or extended term under sub-section
(7-AA). The outgoing committee shall apply to the Registrar

.. for holding election within a reasonable time which shall not be
in any case less than ninety days before expiration of the term
of the committee : F
•
Provided that if the outgoing committee has resolved and
requested the Registrar to hold election at least ninety days in
advance and the Registrar has failed to conduct elections on its
request, the Registrar shall not assume charge of the committee G
and the members of the committee shall continue to holci the
offices :

·• Provided further, that if the Registrar fails to conduct elections
of the committee within ninety days from the date of expiry of the
term of the committee, the committee of the Society shall appoint H
726 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A returning officer who shall conduct the election of the committee
within 180 days from the date of the expiry of the term.

(ii) If the committee fails to hold election and has not handed over
the charge on expiration of the term, under sub- section (7-A) or
extended term under sub-section (7-AA) to the Registrar or any
-
'
B
officer authorised by him on his behalf, all the members of the
committee shall be deemed to have vacated their seats and the
Registrar shall assume charge and hold election as early as pos-
sible."

C The amendment Act (12 of 1994) came into effect from May 8 1994.
The High Court disposed of the writ petition on the findings that the
appellants deliberately delayed conduct of the elections and that they had
no right to continue in office after the expiry of the term. The Writ Petition
Nos. 4126/96, 4473/96, 60/97 and 83/97 were disposed of in the light of these
D directions. The interim orders and by orders Writ Petition Nos. 2924 and ,
3342/96 were disposed of as having become infructuous; other writ
petitions also have been disposed of with the same observations. Thus, this
appeal.

In the counter-affidavit filed in this Court, it has been admitted as
E under:

"Before the term of the elected body of the respondents Society
could expire a notification was issued by the state Government
under Section 49(7)(AA) of the M.P. Co-operative Societies Act
F 1960 for short the 'Act', extending the term of the society till
31.12.1989. A copy of this notification: is filed herewith as Annexure
R-1.

A second notification was issued by the state Government on
30.12.1989 extending the term till 30.4.1990. Annexure R-2.
G
The State Government issued an ordinance dated 26.4.90 &
also issued a notification to the effect that the term of all the
Societies shall expire on 28.4.90. The notification relating to the
answering respondents is filed herewith and marked as Annexure
H R-3.
R.P. YADAVv. STATE[K.RAMASWAMY,J.) 727

That consequent to the notification dated 26.4 the Registrar A
took over the charge of the Respondent No. 3 Society on 28.4.90
itself.

On 4.5.90 this Hon'ble Court vide interim orders directed that
the old committees which were incharge of the Societies as on
28.4.90 shall continue to remain incharge. B
On 5.5.90 the elected committees again took over charge as
per the interim orders of the Hon'ble High Court.

That the state Government enacted M.P. Act No. 14 of 1990
by way of which the previously notified ordinance was duty incor- C
porated in the Act vide notification dated 31.7.90.

That in view of the Act No. 14 of 1990 charge was again taken
over by the Registrar w.e.f. 1.8.90.

However, it is pertinent to note that the Co-operative set up in D
the state of M.P. is three tier set up i.e. Primary Society at the village
level, Central Society at the district level and apex Society at the state
level. The representatives elected by the Primary Society from the
electoral college for the central Societies along with some other
representatives and the representatives elected by the central Societies E
.from electoral college for apex Societies. Thus, in view of the
aforesaid set up until and unless the elections of representatives at
the Primary Society level are not complete the electoral college for
the central Society is not complete and therefore elections of the
' . central Society level can only be held after the elections for repre-
sentatives of the Primary Society I which are complete. Similar is F
the position as regard the apex Society i.e. elections in apex Society
cannot take place until unless the elections of representatives at the
central Society level is not complete, and the electoral college so
fom1ed is not complete."

(emphasis supplied) G
In para 4 of the judgment, the learned Judges have noted as under :

"The election Process which had started in 1988 came to halt till
1993 when the general elections were ordered. In December 1993,
new Government took over and the elections for Panchayats were H
728 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A held in May-June, 1994. It is alleged that by Act No. 12/94, which
came into effect from 8.5.1994, certain provisions of the Act of
1960 were amended and sub-section (7-A) and sub-section (8) of
Section 49 were also amended. It is then alleged that elections to
the Municipal Corporations were ordered in 1994-95. It is further
alleged that on 22nd July, 1995 rules were amended and they were
B notified. Then on 16th August, 1995, elections for 24 thousand
Primary Societies were conducted. Thereafter, elections for other
than agricultural societies, about 6000 in number, were conducted
in March 1996. It is alleged that elections to other societies were
postponed because of the monsoon. Then ii is pointed out that on
16th September 1996, election process for Marketing Societies started
c and was completed on 16th Oct. 1996. It is further pointed out that
on 13th September 1996, elections for District Co-operative Central
Banks started. The elections at the district level are likely to be over
by 5th Febmary 1997."

D (emphasis supplied)

There is no doubt that in our democratic policy, all democratic
institutions including the Co-operative Societies governed by the provisions
of the Act, are required to be organised on the principles of democratic
governance. In fact, Part IX of the Constitution, brought by Constitution
E (Sixty-third Amendment) Act 1992, provides for the Panchayat system
within the democratic governance by requiring holding of periodical elec-
tions right from the bottom-most democratic set up of the village panchayat
upto the District Board. The elections, therefore, to the Co-operative
Societies are also required to be conducted periodically before the expiry
of the term of the Managing Committee of the Societies so that the elected
F body would remain in office and organise the management of the Society
and disburse loans to the agriculturists for their. economic and social
empowerment and to augment their economic resources for self-sufficiency
and to give a boost to the national productivity in agricultural produce. The
conduct of the periodical elections is required to be organised in accord-
G ance with the provisions of the Act, Rules and bye-laws of each Society.

The question, therefore, is : whether the Registrar was justified under
Section 49(8)(ii) of the Act to assume charge of the Apex Bank? Section
2( d) of the Act defines 'Committee' to mean the Board of a management,
by whatever name called, constituted under Section 48. The 'Registrar'
H defined under Section 2(x) of the Act shall be the Registrar of
R.P. YADAVv. STATE[K.RAMASWAMY,J.] 7'19

Co-operative Societies and under Section 3, the State Government is A
empowered to appoint a person to be the Registrar and may appoint one
or more officers of the enumerated categories to assist him, for the
performance of all the functions and duties under the Act. Section 48 in
Chapter V deals with management of the Societies. It provides that the
final authority in a Society shall vest in the general body of the members. B
The management of every Society, by operation of sub-section (2), shall
vest in a committee constituted in accordance with the Act or Rules made
· thereunder or bye-laws of the Society. It shall exercise such powers and
perform such duties as may be conferred or imposed respectively by the
Act or Rules made thereunder or bye-laws of the Society. Sub-section (1)
of Section 48-B posits that "every committee of Society shall, at the time of C
election of Chainnan or Vice-Chainnan, also elect representative who shall
represent it in other Societies and the representative so elected shall not be
withdrawn by the Committee till the next election of the Committee."
(emphasis supplied) Section 48-C prescribes the powers of the Committee
and under clause (b) thereof, the Board of the Committee of a Society D
shall, in accordance with the bye-laws, have power to elect the Chairman
and other office bearers. Sub-section (1) of Section 49 envisages "Annual
General Meeting" and provides that every Society shall, within a period of
twelve months from the date of last annual general meeting, call a general
meeting of its members for the purposes specified in clauses (a) to (f) of
sub-section (1) thereof. Section 49(b) says that the purpose of annual E
general meeting is "electiOn, if f alien due of the members of the Committee."
Explanation to Section 49(1)(b) envisages that "Election of the Committee
shall be deemed to have fallen due, if the term of the Committee comes
to an end within a period of three months from the date of the annual
general meeting". Sub- section (6) of Section 49 envisages that "(I)f the F
bye-laws of the Society provide for election of all or some members of the
Committee on territorial basis under sub-section (7) thereof, such members
of the Committee shall be elected from the area in a meeting of the members
of that area in accordance with the provisions of the bye-laws on a date prior
to that general meeting." Sub-section (7-A) provides that "the term of the
committee shall be five years from the date on which first meeting of the G
Committee is held." The proviso is not relevant; hence omitted. Clause (ii)
of sub-section (7-A) envisages that "the tenn of the representative elected by
the Committee of the Society shall be co-tenninus with the tenn of the
Committee of the Society for which representative is elected." However, the
proviso thereto provides that "the representative of a Committee shall continue H
730 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.
·A to hold his office till the expiry of the tenn of the Committee of which he is
a member." (emphasis supplied) Sub-section (7-AA) of Section 49 provides
that the State Government may, by notification, for reasons to be stated
therein, extend the term of the Committee of a Society or a class of
Societies from time to time for a total period not exceeding twelve months.
B Sub-section (7-AAA) of Section 49 envisages that" notwithstanding the
expiry of the maximum period of eighteen months specified in sub-section
(7-AA), in respect of the committees between the period commencing on
the 7th May, 1988 (hereinafter referred to as the said date) and ending on
the date of publication of the Madhya Pradesh Co- operative Societies
(Amendment) Ordinance, 1988, in Gazette the period in respect of such
C Committees shall be deemed to have been extended for a period of six
months with effect from the said date as if the notification for the extension
of the period were issued under sub-section (7-AA) on the said date".
Sub-section (8) has already been extracted and needs no repetition.

D A conjoint reading of the above-referred provisions would manifest
the legislative intention that it shall be obligatory on the outgoing
Committee of the Society to hold elections prior to the expiry of the term
under sub-section (7-A) or before the expiry of the extended time under
sub-section (7-AA). The outgoing committee shall apply to the Registrar
to hold elections within a reasonable time "which shall not be in any case
E less than ninety days before the expiry of the tenn of the Committee."
(emphasis supplied) Thus, it could be seen that it is the duty of the
outgoing Managing Committee of the Society to have its elections held
prior to the expiration of the term of the Committee not less than ninety
days before expiry of the term of the Committee.
F
Under the first proviso, if the outgoing committee had resolved and
requested the Registrar to hold elections and the Registrar had failed to
conduct elections on its request, there is a legislative injunction issued
against the Registrar that "he shall not assume charge of the Committee
and the members of the Committee shall continue to hold the office".
G U oder the second proviso, if the Registrar fails to conduct elections of the
committee within ninety days from the date of the expiry of the term of the
committee the committee of the Society shall appoint returning officer who
shall conduct the election of the committee within 180 days from the date
of expiry of the term. The combined operation of sub-section (8)(i) and
H the second proviso is that though the members of the committee are
R.P. YADAVv. STATE [K. RAMASWAMY,J.) 731

entitled, by operation of the first proviso, to continue to hold the office, it A
~. is equally obligatory on the part of the committee that, if the Registrar fails
to conduct elections as envisaged hereinbefore, the returning officer should
be appointed whose duty shall be to conduct elections of the committee
within 180 days before the date of the expiry of the term. By operation of
sub-section .(8)(ii) if the members of the Committee having continued to
B
hold office by operation of the first proviso to sub-section (8)(i), fails to
appoint a returning officer under the second proviso and, if the committee
thereby, commits default to hold elections and does not hand over the
charge, on expiry of the term under sub-section (7-A) or extended term
under sub-section (7-AA) to the Registrar or any officer authorised by him
on his behalf, they all shall be deemed to have vacated their seats and the c
Registrar shall assume charge and hold elections as early as possible. Thus
-> the combined reading of the sections envisages that elections to the
Managing Committee shall be held by the Registrar, at the request by the
Committee, before expiry of the term of the outgoing committee within the
time schedule prescribed therein. If the Registrar fails to perform the said
D
duty, the Managing Committee, while remaining in office, is enjoined to
have the elections conducted within 180 days or at least not less than 90
days before the expiry of the term of the Managing Committee. But if the
committee commits default in conducting the elections, the members of the
committee are deemed to have vacated their seats. Thereby, by statutory
operation, no Managing committee remains in office. The Registrar, E
therefore, should assume charge of the Society. On assumption thereof,
while conducting the business of the Society simultaneously he should hold
elections as expeditiously as possible so that the Managing Committee
......__,.
elected on democratic principle immediately assumes office and conducts
the business of the Society in the manner laid down under the Act, Rules F
and the bye-laws of the Society and achieves the object of the Society and
realises the collective aspiration of the members of the Society.

In response to our request, the learned counsel for the State of
Madhya Pradesh, has supplied to us the Hindi as well as the relevant
translated English version of the bye-laws of the Apex bank as amended G
till 5th May, 1997. Initially, we were provided with a copy of the
unamended bye-laws. On comparative consideration, we find that major
·~
changes have been made in the amended bye-laws supplied by learned
counsel for the Government.

H
732 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A Bye-law 2(c) defines "Bank" to mean "The Madhya Pradesh State Co-
operative Bank Limited'', as already stated (the "Apex Bank" for short).

Bye-law 2(d) defines "Board" to mean the Board of Directors duly
constituted under these bye-laws for the management of the functioning of
the Bank.
B
Bye-law 2(e) defines "Member" to mean District Co-operative
Societies of the Apex ltvel or any such Co-operative Society without an
Apex Institution or the Apex Institution of which is not a member of the (
Bank but which has been given membership under these bye-laws or is
C likely to be given membership and shall exclude the nominal members. This
definition comprises Central Bank.

Clause (2) of bye-laws defines "person" to mean private ownership
or registered or unregistered partnership firm or joint Hindu family or a
registered 'Pramandal'.
D
Bye-law 8 deals with Membership.

The membership of the Apex Bank shall be open to :

"(Ka) Distt. Co-operative Central Bank.
E
(Kha) Co-operative Societies at the Apex level.

(Ga) Other Co-operative Societies which do not have a
separate Apex Institution or the Apex Institution of
which are not members of the Bank.
F
(Gha) Registrar Co-operative Societies or the Officers
nominated by them, not below the rank of Joint
Registrar.

(Da) State Government.
G
Any such person or Co-operative Society which is not eligible for
membership of the Bank according to these bye-laws or is excluded, shall c
not be member of the Bank, such share shall be returned to the person or _
Co-operative Society concerned by the Bank after registration of these
H bye-laws.
R.P. YADAVv. STATE[K.RAMASWAMY,J.] 733

Clause (2) of bye-law 8 is not relevant, hence omitted. A
f.
Bye-law 23 deals with meetings of the General Assembly of the
members of the Bank. It postulates as under :
.o,
"All the general meetings of the members of the Bank shall be held
in the Registered Office of the Bank. At least one assembly known B
as the Annual Meeting must be held in accordance with the
provisions prescribed under the Co-operative Societies Act and
Rules for the following purposes :

xxx xxx xxx
c
(3) Election of Directors according to the bye-laws and
·> xxx xxx xxx"

Bye-law 24 envisages that the Board is free to call the general
meeting, whenever required and can be compelled to call one on a written D
requisition by the prescribed members, the details of which are not
material for the purpose of this case.

Bye-laws 25 to 28 deals with the manner of requisition, the service
of notice of the meeting on members, etc. The details thereof are not
material. Hence omitted. E
Bye-law 32 postulates that a general meeting shall be presided over
by the President or the Board or in his absence by any one of the two
Vice-President. In the absence of the President and both the
Vice-President or when the Chairman or both the Vice-President seek F
re-election the members present shall elect one of their members to be the
Chairman of the meeting for the time being.

Bye-laws 33 to 35 deal with the procedure relating to transactions of
the business with which we are not concerned.
G
Bye-law 36 envisages voting. It says that every member shall have one
vote irrespective of the number of shares held by him.

Bye-law 37 deals with the procedure for voting. Bye-law 37(1)
prescribed procedure for voting by the Registrar and the State Government
to cast their votes by authorised representatives and the member institutions H
734 SUPREME COURT REPORTS (1997] SUPP. 1 S.C.R.

A through the representatives elected by them for the general assembly of the
Bank (Central Bank), Apex Co-operative Society. Each member shall have
only one vote, but the nominated person shall be precluded from casting vote
for election of "office bearer" of the Committee. (emphasis supplied)

Clause (2) of bye-law 37 is material for the purpose of this case which
B says "A representative of any Central Bank or other Co-operative
Organisation who is a member of the Board/Management of another
Society shall not be eligible to cast his vote if a matter related to that
organization or organisations of which he is a representative, is pending
before the Board or any Committee for consideration. This disqualification (
C is not material for the purpose of this case. It is noted for continuity that
a member of the Central Bank gets disqualified to vote or to election of
the Board of Directors or Officer of the Committee, if their matter relating
to the Officers of the Central Bank are pending consideration before the
Apex Bank. Clause (2) of Bye-lavr 37 is not material and hence omitted.

D Bye-law 38 deals with the constitution of the Board of Directors. It
postulates thus :

"(1) Registrar-Co-operative Societies, Madhya Pradesh or his
representative who is not below the rank of Joint Registrar.

E (2) Person nominated by the State Government as Director
provided that the number of such Directors, nominated by the
State Government in the Elected Board of Directors of the Bank
"Shall not exceed two". In other words the State Government shall
not nominate more than two Directors.
F (3) One representative of each concerned Central Bank, who is
elected by the Managing Committee of the concerned Central
Bank .......... We are informed and the High Court found that for
the entire 45 Districts, each Central Bank sent its elected
representative as member of the Apex Bank as well as also as a
G member of the Board of Directors.·

(4) Omitted.

(5) "President of such Apex Co-operative Societies or his nominee,
where there is a provis10n under the bye-laws of the said Society
H for the President to become the ex-officio Director, such Banks are
,

R.P. YADAVv. STATE [K. RAMASWAMY,J.] 735

required to have minimum share for a value of Rs. 10 thousand A
for this purpose". The details of miniµrnm share holding for a value
of Rs. 10 thousand is not necessary, hence omitted.

"(6) Managing Director-Ex-Officio.

(7) Incharge Regional Office, National Agricultural and Rural B
Development Bank (Nabard), Bhopal or an officer nominated by
him who is not below the rank of Deputy General Manager."

It would thus be seen that the Board of Directors consist of
Registrar, or his nominee, Government nominees not exceeding to two,
nominee of Nabard Branch, Bhopal as official Board of Directors : 45 C
Board of Directors one each representing each respective Central Bank
elected by its general body along with its office bearer of the Managing
Committee; and the President of the Apex Co-operative Societies as ex
officio Directors and Managing Director. The Board of Directors of the
Apex Bank manages the officers of the Apex Bank and its administration D
as in bye-law No. 46.

By-law 38(a) also deals with the suspension of the Office Bearer of
the Board of Directors of the Apex Bank after giving him full opportunity
for presenting his case. It provides thus :

"(1) If the District Co-operative Central Bank falls within the
E
category of a Sick Bank according to the yardsticks prescribed by the
Reserve Bank of India/Nabard, the Registrar may grant relaxations in the
above requirements of provisions on the basis of the recommendations of
the Board or for any valid and sufficient reason.
F
(2) If the District Co-operative Central Bank disapproves of the
posting of an officer in the District Co-operative Central Bank in the Cadre
constituted under Section 52(2) of the Bank or prohibits him from taking
charge or relieves a cadre officer without prior appeal of the Bank.

(1) Not relevant. Hence it is omitted." G

. By-law 39 declares that the election of the Board of Directors shall
be in accordance with the rules approved by the Board of the Apex Bank
and the Registrar. It would mean that after the constitution of the Board
of Directors of the Apex Bank, it in turn elect its office bearers in
accordance with the approved rules. We are not concerned with its present H
'
736 SUPREME COURT REPORTS [1997] SUPP.1 S.C.R.

A relevance after the amendments to the bye-laws.
By-law 40 declares that one President and two Vice-Presidents shall
be elected by the Board of Directors from among the Directors. The other
details contained therein are not material for the purpose of this case,
hence omitted. It is important to note that for the election of the office
B bearers the Government nominees are ineligible to vote as per bye-law No.
37.

By-law 41(1) states that the term of the Board shall be five years from
the date of the first general meeting. The other details are not necessary
for the purpose of this case, hence omitted.
c
Clause (2) of bye-law 41 postulates that which is material for the
purpose of this case thus :

"Notwithstanding anything contained, in regard to the expiry of the
term of the President, Vice-President and the Directors, they shall
D continue to function till their successors takeover charge under the
provisions of these bye-laws."

(emphasis supplied)

The shortfall in the composition of the Board of Directors due to
E demise or interim vacancy arising for any other reason can be filled in
accordance with the provisions of the bye-laws of the Board. The vacant
post may be filled up by Registrar or the State Government from the
Directors nominated by the Registrar or the State Government. The other
details are not necessary for the purpose of this case, hence omitted.
F Bye-law 43 deals with disqualification to remain as a Director of the
Board of Directors or ceases to be a Member and the details thereof are
not material for the purpose of this case, hence omitted.

Bye-law 44, describes about the meeting of the Board of Directors.
G It says that the meeting of the Board of Directors shall be called as per
requirement at least twice a year. The other details are not necessary for the
purpose of this case, hence omitted.

Bye-Jaw 46 empowers the Board of Directors to carry on and manage
the business of the Apex Bank and exercises the powers enumerated
H thereunder.
RP. Yt.DAVv. STATE[K. RAMASWAMY,.I.) 737

Bye-law 47 deals with the powers and functions of the Board of A
Directors. It says thus :

All the powers of the Bank shall vest in the Board of Directors and
Managing Committee appointed by the Board of Directors. Without
prejudice to the General powers provided in the Act, the Board of Direc-
tors will have the following rights and duties :- B
~ Clause (23) postulates :

"Constitution of a Committee by the name of Managing Committee
·' comprising the following members :
c
'Ka' President of the Board.

'Kha' Vice President of the Board.

'Ga' Rcgi~trar Co-operative Societies or a person nominated
by him who is not below the rank of Joint Registrar, D
'Gha" One Director nominated by the State Government to
be appointed by the State Government.

'Da' Two Directors from the Directors representing the
Central Banks, Apex Societies in the Board of Direc- E
tors.

- 'Ca' The Directors shall be elected by the Board in the ratio
of one from the representatives of the Central Co-
operative Banks by each Divisional Commissioner. For
this purpose, the Divisional Commissioner (Hoshan- F
gabad) Tawa, Chambal & Bastar will be treated as a
part of Bhopal, Gwalior, and Raipur Divisions respec-
tively.

'Cha' Managing Director-Ex-Officio."
G
Bye-law 47(23) makes the matter clear that there would be a Managing
Committee of the Apex Bank consisting of Ex-officio as well as elected
members. For the purpose of clause (Da) of bye-law 47(23), the 45
delegates of Central Banks and Apex Societies is one constituency which
elects two Directors of the Board from among themselves. Similarly for H
738 SUPREME COURT REPORTS (1997) SUPP .1 S.C.R.

A 'Ca' 45 delegates representing Central Banks are divided into three
Divisions. Those Directors representing the Central Co-operative Bank are
divided into Bhopal, Gwalior and Raipur divisions. The Directors hailing
from each division should elect one member of the Committee to each
Division. This is to be done only after the constitution of the Board of
Directors al its first annual meeting. From the Government nominates, one
B will be a member of the Managing Committee for the reason that bye-law
37 prohibits them from exercising franchise which includes right to contest
as a member of the Managing Committee.

The term of the Managing Committee appointed by the Board of
C Directors will be co-terminus with Board of Directors and continues to
function till their successors assume charge. In case there is a vacancy of
any elected Director, the same may be g0 t filled up by appointing some
other person from the same cadre as per bye-laws.

D Bye-law 48 envisages that the President of the Board of Directors
shall also be the President of the Managing Committee. The meetings of
the Managing Committee shall be presided over by the President, in his
absence by any one of the two Vice-Presidents. In the event of the
President and both the Vice-Presidents being absent, the Meeting of the
Managing Committee shall be presided over by a member elected by the
E Members present. By operation of this bye-law, the President and the
Vice-Presidents elected by the Board of Directors, by virtue of membership
of the Managing Committee would become President and Vice-Presidents
of the Managing Committee without further getting elected to the
Managing Committee.
F
Meetings and transactions of business and the convening the meeting
by the Managing Committee are dealt with in Bye-law 49 which is not
relevant for the purpose of this case, hence omitted.

Bye-law 52 deals with powers and duties of the President with which
G we are not concerned and which are not relevant for the purpose of this
case, hence omitted.

Bye-law 54(1) deals with the appointment of a Manager who shall be
appointed by the Managing Committee with the previous approval of the
H Registrar, Co-operative Societies.
R.P. YADAVv. STATE[K.RAMASWAMY,J.] 739

Bye-law 54(2) deals with the appointment of Managing Director and A
clause (3) of bye-law 54 deals with powers and duties of the Managing
Director, the details thereof are not material for the purpose of this case,
hence omitted.

A resume of these bye-laws would contemplate that the members of B
the Apex Bank as well as the elected Board of Directors are the same.
They and the nominated members manage the affairs of the Apex Bank.
The Registrar of Co-operative Societies or his nominee; one nominated
member of the State Government; Board cif Directors and the elected
representatives of the Central Banks or Apex level Co-operative Societies,
•
if any, etc. are the members of the Managing Committee. The elected C
Board of .Directors alone is entitled to elect among themselves the Presi-
dent and two Vice- Presidents. The Board of Directors is also entitled to
constitute Managing Committee. The Board of Directors, elected from two
sources, el~.:;t 5 Members of the Committee. As discussed supra, the
Managing Committee is headed and presided over by the President. In his D
absence, one of the Vice-Presidents and in the absence of both, one elected
,member of the Committee would preside over meeting of the Committee.
The term of the Board of Directors and the Managing Committee is
co-terminus with the expiry of the term of five years. However, they shall
be entitled to remain in office until their successor of the Board of
Directors, the President and two Vice-Presidents and Managing Commit- E
tee respectively assume the offices. The relevant provisions of the Act
extracted hereinbefore and the byelaws of the Apex Bank should be read
together. The Act and the rules made thereunder and the byelaws of the
society constitute an integral scheme for the purpose of management of the
society registered or deemed to be registered under the Act. It is settled F
principle of interpretation that all the provisions should be harmoniously
interpreted to give effect to all the· provisions and no part thereof rendered
surplusage or otiose.

It would, therefore, be clear that the Board of Directors headed by
the President and two Vice-Presidents elected by the Board of Directors G
itself has statutory duty to ensure conduct of elections to the Committee
of the Board of Directors (Managing Committee) and the management of
the Apex Bank. The Managing Committee again is headed by the President
of the Apex Bank contemplated in bye-law 47(3), for the purpose of
internal management on behalf of the Board of Directors. The ultimate H
740 SUPREME COURT REPORTS [1997) SUPP. 1 S.C.R.

A power and responsibility in managing the affairs of the Apex Bank by the
Committee of the Apex Bank is that of the Board of Directors. So the
Managing Committee discharges the functions and performs the duties for
and on behalf of the Board of Directors. Therefore, the Managing Com-
mittee shall ensure passing of a resolution by the Board of Directors
B requesting the Registrar to conduct elections to the Board of Directors
within the specified period as per the Act, rules or bye-laws enumerated
hereinbefore. The term of the Board of Directors is 5 years from the date
of the first General Meeting of the members of the Apex Bank. Each
Central Bank is represented by its elected representative. For the purpose
of the Apex Bank, they are designated as Directors. Under sub-section(7A)
C or (7AA) of Section 49, within the period or the extended period, the
Managing Committee should pass a Resolution within 90 days before the
expiry of the term of the Board of Directors and request the Registrar, Co-
operative Societies to conduct elections to the posts of President and two
Vice-Presidents of the Board of Directors and immediately thereafter the
D Board of Directors would constitute the Managing Committee as elected
by the Board of Directors in the manner detailed above. If the Registrar
fails to do so, the Managing Committee shall also ensure that the Board
of Directors appoints an Election Officer to conduct elections, as per the
bye- laws, to the posts of President, two Vice-Presidents and members of
the Managing Committee immediately thereafter.
E
The question immediately, therefore, arises : whether due to failure
to conduct elections to the President, two Vice- Presidents for among the
elected Board of Directors and continuation of the managing committee
of the Apex Bank, on expiry of the period of 5 years from the date' of
F election of the Board, whether the Board of Directors, President and two
Vice-Presidents and the members of the Managing Committ~e shall be
deemed to have vacated their office? It is already seen that apart from the
Registrar and not more than two Directors nominated by the Government
and one nominee of NABARD, Bhopal Branch, other members of the
Board of Directors shall be elected as Directors by the 45 Central Banks,
G i.e., respective representatives and the elected President of the Apex Co-
operative Societies, if any. They represent as members of the Apex Bank
for and on behalf of the respective Central Banks and also as Board of
Directors for the purpose of the Act. The representatives of the concerned (
Central Bank or the President of the Apex Co-operative Societies or any
H other Apex societies shall constitute Board of Directors for composition of
R.P. YADAVv. STATE[K. RAMASWAMY,J.] 741
membership of the Apex Bank. They would elect and get from among A .
themselves, elected one President and two Vice-Presidents. For the elec-
tion of 5 members of the Managing Committee, two members. from the
total elected constituency and one member each of the three Divisions, i.e.,
Bhopal, Gwalior and Raipur, representing the Central Banks of the respec-
tive Divisions, are necessary to constitute the Managing Committee. For B
completion of the electoral process of Apex Bank, election to the Primary
Societies and in turn election to the managing Committee of each of the
District Central Banks and election of one representative from each of the
45 Central Banks as members of the Apex Bank, as two steps are condition
, president and is necessary. Until then, constitution of the Board of Direc-
tors and the Managing Committee of the Apex Bank cannot be done. As C
a pre-condition for completion of these two sequential steps, i.e., (i)
election of the President and two Vice-Presidents; and (ii) election of 5
elected member-Directors to the Management Committee, the election of
a representative by the General Body of the Managing Committee along
with members of its Managing Committee is mandatory and are necessary
concomitant. For the latter election, the elections to the Primary Societies, · D
which in turn simultaneously elect the Managing Committee and repre-
sentatives to Central Bank, is also necessary. That is how the three-tier
system of election has got inter- linked and become inseparable. That is
also the admission of the State Government as extracted earlier from the
counter-affidavit. E
It would, therefore, be mandatory that by operation of Sections 48
and 49, elections to the Managing Committee of the Central Banks or Apex
Co-operative Societies as per their bye-laws, as representative of Central
Bank or President of the Apex Co-operative Societies to represent the
Apex Bank who are called, under the bye-laws of the Apex Bank, Direc- F
tors, shall be necessary. The term of the representatives is co-terminus with
the term of the Managing Committee of the Central Bank or the Apex
Co-operative Societies. They shall, however, be entitled to remain in office

- along with other nominated members of the Board of Directors of the
Apex Bank under the bye-laws of the Apex Bank until the respective
successors assume office. The constitution of the Board of Directors and G
· also constitution of the Board of Directors and also constitution of the
Managing Committee of the Apex Bank is not complete without the
' . election of the representatives by the concerned Central Banks or Presi-
dent of Apex Cooperative Societies. The President and Vice-President of
the Apex Bank cannot be elected. The Managing Committee cannot be H
742 SUPREME COURT REPORTS [1997] SUPP.1 S.C.R.

A constituted without electing the members of the Managing Committee from
among the Board of Directors, as per the bye-laws. In view of the unbreak-
able inter-link, the Board cannot be saddled with the liability of statutory
vacation of the office on expiry of the term, unless the Registrar had the
elections conducted to the Central Banks or Apex Co-operative Societies,
as the case may be. Preceding thereto, the election to the Managing
B Committee of Primary Societies is m'andatory.

Moreover, under the bye-laws of the Apex Bank, there is no
obligation or duty cast on it to have the elections to the Managing
Committee or representation of the Central Bank or Apex Co-operative
Society conducted. It is the power, the function and duty under the Act of
c the Registrar, on a request made by the respective Committees of the
Central Banks or Apex Co-operative Society concerned to conduct
elections. Under these circumstances, it is difficult to give acceptance to
the contention of the respondents that on expiry of the term of the
President, two Vice-Presidents of the Board of Directors and the term of
D the Managing Committee which being co-terminus with the Board of
Directors must be deemed to have vacated their office~. Thereby the
Registrar is not entitled to assume office of the Board of the Directors and
the Managing Committee. It is also difficult to visualise that President, two
Vice-Presidents, the Board of Directors and the Managing Committee of
E Apex Bank should be saddled with the liability to vacate the office, on
expiry of the term for non- conducting elections thereof, when they have
no statutory obligation to ensure conduct of elections to Primary Societies
and Central Banks. The Registrar does not in the above situation get the
power to assume office as per the statutory obligation. One important fact
to be noted is that the bye-laws of the Apex Bank ensure that the Board
F
of Directors and the Members of the Managing Committee elect the
President and Vice-President and remain in office till their respective
successors assume office. Thereby there would be no hiatus created in the
management of the affairs of the Apex Bank in accordance with law, nor
their actions in the management of the Apex Bank would be illegal. The
G admission of the State Government in the counter affidavit that elections
were not conducted to the Central Banks by or before the date of the expiry
of the term of the office of the Board of Directors and the Managing
Committee of the Apex Bank, pre-empts the Registrar to resume
management of the Board of Director of the Apex Bank and its Managing
H Committee.
R.P. YADAVv. STATE [K. RAMASWAMY,J.) 743

Moreover, the Division Bench of the High Court in A.P. Sastri & A
Others v. State of Madhya Pradesh, {1993) 2 M.P.J.R. 33 issued mandamus
with the declaration that the Officers of the Managing Committee of the
petitioner Society would continue to function till elections are held in
accmdance with the law. "They would be entitled to get the charge of the
Society where charge had been taken from them by the Registrar or his B
nominee pursuant to this amendments." In view of the above mandamus,
without conducting the elections in accordance with the provisions of the
Act, Rules and bye-laws, the Registrar cannot assume suo motu power to
terminate the term of the Board of Directors and the Managing Committee
by statutory declaration and assume charge of the management of the Apex
Bank. C

So the power of the Board of Directors, the President, two Vice-
Presidents, the Managing Committee of the Apex Bank to remain in office
and to manage the affairs of the Society is founded on the mandamus
issued by the High Court and is not derived merely by operation of the D
· statute. Can a Court issued writ of quo warranto to disobey the writ of
mandamus already issue by the High Court and allowed it to become final.
In our view, it cannot be issued as long as the writ of mandamus is not
complied with and remains in operation. We were informed at the time of
hearing that elections were conducted to the Central Banks and conse- E
quently the Board of Directors (representatives of Central Bank) as rep-
resentating the Central Banks and the President of the Apex Co-operative
Societies, were elected. The elections to the President and two Vice-Presi-
dents of the Board of Directors and Managing Committee of Apex Bank
were to be held on April 11, 1997 as per the bye-laws referred to herein-
before to constitute Board of Directors and the Managing Committee. F

In view of the above legal and factual situation expressed in the
judgment, it would be obvious that the Registrar was unjustified to assume
charge of the Board of Director and Managing Committee of the Apex
Bank. However, the new Board of Directors elected the President, two G
Vice-Presidents and five members of the Managing Committee of the Apex
Bank must have, by now, been elected and assumed the office. It is futile
to issue the writ as prayed for. No futile writ would be issued. Suffice it is
to state that we have given declaration of the true legal position so as to
be followed in future cases. H
744 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R.

A The appeal is accordingly dismissed with no order as to costs.

D.P. WADHWA, J. I agree that the appeal be dismissed. However,
I do not entirely agree with my learned Brother on the interpretation put
by him to some of the provisions of the M.P. Co-operative Societies Act,
1960 (for short 'the Act') and the byelaws of the M.P. State Co-operative
B Bank Ltd. (Madhya Pradesh Rajya Sahkari Bank Maryadit). The M.P.
State Co-operative Bank Ltd. has been varyingly referred to in this judg-
ment as the apex society or apex body or even the apex bank. This is how
I look at the things.

C It will be advantageous to refer to some of the definitions as men-
tioned in Section 2 of the Act, "Apex Society" means a society whose
principle object is to provide facilities for the operation of other societies
affiliated to it and whose area of operation extends to the whole State of
Madhya Pradesh. "Central Society" means a Co-operative Land Develop-
ment Bank or any other society whose area of operation is confined to a
D part of the State and which has as its principle object the promotion of the
principle objects and the provisions of facilities for the operation of same
type of societies and for other societies affiliated to it and not less than five
members of which are societies. "Primary Agricultural Credit Cooperative
Society" means a society organised with the main objective of making credit
available for agriculture production and includes a Primary Service
E Cooperative Society and Adimjati Sewa Sahkari Samiti. "Co-operative
Bank" means a State Co-operative Bank, a Central Co-operative Bank, and
a Primary Co-operative Bank, registered or deemed to be registered under
this Act. "Primary Society" means a society which is neither an Apex Society
nor a Central Society. "Committee" means the Board of a management by
F whatever name called constituted under Section 48. "Representative"
means a member of the society to represent the society in other societies.

Under sub-section (1) of Section 48 final authority in a society vests
in the general body of members. Subject to this the management of every
society vests in the committee constituted in accordance with the Act or
G ~ules made thereunder or byelaws of society and it exercises such powers
and performs such duties as may be conferred or imposed by the Act or
Rules of society.

Under byelaws of the apex body it is the Board which means the
Board of Direttors duly constituted under the byelaws for the management
H of the functioning of the bank bye-law 2(d). Under byelaw 47 powers and
R.P. YADAVv. STATE[D.P. WADHWA,J.] 745

functions of the Board have been described. One of such functions of the A
Board is to constitute the Managing Committee. This power is vested in
the Board under clause (23) of byelaw 47. The Managing Committee is
comprising :

(1) President of the Board.
B
(2) Vice Pre,sident of the Board.
!

(3) Registrar Cooperative Societies or a person nominated by him
who is not below the rank of Joint Registrar.

(4) One Director nominated by the State Govt. to be appointed by C
the State Govt.

(5) Two Directors from the Directors representing the Apex
Societies in the Board of Directors. ;

(6) The Directors shall be elected by the Board in the ratio of one D
from the representatives of the Central Co-operative Bank by each
Divisional Commissioner. For this purpose, the Divisional Commissioner
(Hoshangabad) Tawa, Chambal & Bastar will be treated as a part of
Bhopal, Gwalior and Raipur Divisions respectively.
E
(7) Managing Director - Ex-officio

Under clause (24) of byelaw 47 the Board can delegate some or all
of its functions to the Managing Committee. It will thus be seen that the
Managing Committee is not the same thing as the Board and it is also not
the committee as defined in clause (d) of Section 2 of the Act. Any F
reference to Managing Committee therefore in these proceedings, in my
view, would not be relevant as when sub-section (8) of Section 49 talks of
election of the Committee, it is of the Board.

"Member" under the byelaws of the apex body means District
Cooperative Societies Central Bank or the Co-operative Societies of the G
Apex level or any such co-operative Society without an Apex Institution or
the Apex Institution of which is not a member of the Bank but which has
been given membership under these byelaws or is likely to be given
membership and shall exclude the nominal members (clause (c) of Byelaw
2). Under byelaw 8 "Membership" to the apex body is open to: H
746 SUPREME COURT REPORTS [1997] SUPP. 1 S.C.R. ,

A "(1) Distt. Co-operative Central Bank.

(2) Co-operative Societies at the Apex level.

(3) Other Co-operative Societies which do not have a separate Apex
Institution or the Apex Institution of which are not members of the Bank.
B
(4) Registered Co-operative Societies or the officers nominated by
them, not below the rank of Joint Registrar.

(5) State Government, -

C Any such person or Co-operative Society which is not eligible for
membership of the Bank according to these byelaws or is excluded, shall
not be member of the Bank, such shall be returned to the person or
co-operative society concerned by the Bank after registration of these
byelaws."

D Byelaw 23 provides that all the general meetings of the members of
the Bank shall be held in the Registered Office of the Bank and it
postulates at least one meeting to be known as annual meeting and one of
the functions of the annual meeting is the election of Directors according
to byelaws. The management of the Bank which vests in the Board is
E constituted under byelaw 38 and is as follows.

"38 Constitution of Board :- The Management of the Bank shall
vest in the Board of Directors constituted as follows :

1. Registrar, Co-operative Societies, Madhya Pradesh or his
F representative, who is not below the rank of Joint Registrar.

2. Person nominated by the State Govt. as Director provided that
the number of such Directors nominated by the State Govt. in the
Elected Board of Directors of the Bank shall not exceed two.

G 3. One representative of each concerned Central Bank, who is
elected by the Board of Directors of. the concerned Central
Bank..... .

4. Omitted

H 5. President of such Apex Co-operative Societies or his nominee,
R.P. YADAVv. STATE(D.P. WADHWA,J.] 747

where there is a provision under the Byelaws of the said society A
for the President to become the ex-officio director, such banks are
required to have minimum share for a value of Rs. 10 thousand
for this purpose.

6. Managing Director, Ex-Officio.
B
7. Incharge Regional Office, National Agricultural and Rural
Development Bank (NABARD), Bhopal or an officer nominated,
by him who is not below the rank of Deputy General Manager."

Now the Board to my mind becomes a continuous body and the C
general body of the apex bank has no role to play in the constitution of the
Board. It may also be noted that the words "Board and Board of Directors"
are synonymous.

Under Section 47-A of the Act the apex society for servicing its
constituents and in accordance with byelaws can perform various functions D
mentioned therein and one of such function is to ensure timely conduct of
elections in member societies. This is clause (k). Under byelaw 3(2)(ta)
one of the duties of the apex body is to ensure that election process of
member societies is held on time. Primary society is not a member society
of the apex body. Any duty cast on the apex body to hold election of E
primary society is therefore not there and the whole edifies on which the
case of the appellants is based that unless elections of the Committees of
the primary and central society are not complete election to the Board of
the apex body cannot be held, falls to the ground.

There are apparent contradictions in some of the byelaws of the apex F
body. It says the term of the Board would be five years from the date of
its first meeting when it also elects one President and two Vice-Presidents.
I have already taken the view that the Board is a continuous body. The five
years term would therefore apply only to the election of President and two
Vice-Presidents. When sub-section (1-A) of Section 49 provides that the G
election of the members of the society, President, Vice-President and
representative, if any, shall be conducted by the Returning Officer in the
prescribed manner, it refers to elections of all the societies whether
primary, central or apex and this provision is general in nature. The apex
society is not to send any representative to any society and since the
members of the Board automaticaily take their place in the Board under H
748 SUPREME COURT REPORTS (1997] SUPP. 1 S.C.R.

A clauses (3) and (5) of byelaw 38 election to the members of committee can
also not be there. The election can only be of President and two Vice-Presi-
dents. If the· apex society commits default in not ensuring the timely
conduct of elections of the committees of the member central societies as
per the Act and the byelaws it can be proceeded against under Section. 53
of the Act which provides that if in the opinion of the Registrar, the
B committee of any society is negligent on the performance of its duties etc .
the committee can be removed by Registrar after following the procedure
prescribed. That is however not the case here. Here the action of the
Registrar which has been challenged is under clause (ii) of sub-section (8)
of Section 49 of the Act. Clause (i) of sub-section (8) which puts obligations
C on the outgoing committee of the society to hold elections prior to the
expiration of its term would apply, in the case of the apex society only to
the election qf President and two Vice-Presidents as per its byelaws.

Provisions of the Act apply to all cooperative societies whether
primary, central or apex and each society may have different byelaws. It is
D not necessary that all the provisions of the Act would apply to all the
societies whatever their nature. For example under Selection 48-B every
committee of society shall at the time of election of Chairman or Vice-
Chairman also elect two representatives who shall represent it in other
society and representatives so elected shall not be withdrawn by the
committee till the next election of the committee. This provision cannot
E have any application to the apex body which, as noted above, has not to
send any representative to any of the societies. This provision may be
applicable to primary and central societies.

Since the Board failed to take steps to hold elections of the Presi.dent
F and two Vice-Presidents in terms of sub-section (8) of Section 49 of the
Act, the impugned action of the Registrar would therefore appear to be
right and in accordance with law.

The respondents in· their counter affidavit have taken a stand that
elections of primary and district bodies have taken place and now election
G of the board of the apex body would be held by April 11, 97, meaning,
perhaps, thereby that the election of the new board is dependent on the
elections first to be held of the primary society and then of the central
society. This interpretation to my mind is not correct and the Court is not
bound by the interpretation put by any of the parties. The parties can be
H under some misconception or some bona fide mistake. If the election to
RP. YADAVv. STATE[D.P. WADHWA,J.] 749

the Board of the apex body is to be dependent on the election first to be A
f>· • held by the primary and then by the district bodies, possibly with different
byelaws, it can be anybody's guess as to when the election to the Board of
the apex body would be held. There are numerous primary bodies and also
district bodies. There can be intervention by the court in the election
process of any of the societies and as a matter of fact it has been mentioned B
in the counter affidavit that the courts have stayed the elections of primary
bodies of three places. All this is apart from the fact that the byelaws of
the apex body do not contemplate any election to the Board by the
members of the apex body.

I have gone through the judgments in M.P. No. 908/90 and M.P. No. C
·1111 of 1990 and to my mind these do not touch upon conclusion which I
have reached and are not quite relevant.

In any case since it is stated that the whole process of election to
primary and central societies is complete and that election to the Board of
the apex body was 'lo be held on April 11, 1997, the writ petition filed by D
the appellants, therefore becomes infructuous and it would be futile to
issue any writ at this stage. The appeal is, therefore, dismissed. No costs.

N.J. Appeal dismissed.

'