Holding

Elections to the society must be conducted in accordance with the relevant rules, the Act and the approved bye‑laws, and the High Court order directing otherwise is set aside.

Summary

The dispute concerned the conduct of elections to the Goa State Co-operative Bank Ltd., a society whose status under the Multi-State Cooperative Societies Act, 1984 was contested. The High Court had directed the Registrar to hold elections based on the assumption that the society's amended bye‑laws were approved, but the Supreme Court examined whether the bank fell within Section 35 of the Act and whether the bye‑law amendments were duly registered. The Court found that the bank is not a multi‑state cooperative society under Section 35 and that the amended bye‑laws had indeed been approved by the Central Registrar under Section 9. Consequently, the election must be conducted in accordance with Rule 104 and Schedule II of the Multi‑State Cooperative Societies (Registration, Membership, Direction and Amendment, Settlement of Disputes, Appeal and Revision) Rules, 1985, together with the Act and the approved bye‑laws. The Supreme Court set aside the High Court’s order and directed the Registrar to conduct the elections as per the applicable rules. The appeal was allowed and no costs were awarded.

Issues considered

Whether Goa State Co‑operative Bank Ltd. qualifies as a multi‑state cooperative society under Section 35 of the Multi‑State Cooperative Societies Act, 1984.
Whether the amended bye‑laws of the society were approved by the Registrar and thus became effective.
Which procedural provisions (Rule 104 and Schedule II of the 1985 Rules) govern the conduct of elections to the society.
Whether the High Court erred in directing the Registrar to conduct elections without proper application of the statutory rules.

Subjects

cooperative societyelectionbye‑lawsregistrationMulti‑State Cooperative Societies ActRule 104Schedule IIRegistrar approvalvalidity of election

Judgment

A THE GOA STATE CO-OPERATIVE BANK LTD.
v.
PEDNE TALUKA PRATHAMIK SHIKSHAK
PAT SAUNSTHA LTD AND ORS.

NOVEMBER l, 1996
B
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

Multi State Co-operative Societies (Registration, Membership,
Direction and Amendment, Settlement of Disputes, Appeal and Revision)
Rules, 1985:
c
Rule 104 and Schedule JI-Election to Society-Applicability of the
Rules with reference to which election is to be conducted-Respondent-
Registrar directed to conduct the elections in accordance with the relevant
rules applicable to the Society, Bank and bye-laws of the Society, the Act
D as also the Rules applicable as on the date of conducting elections.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 14783 of
1996.

E From the Judgment and Order dated 26.4.96 of the Bombay High
Court in W.P. No. 145of1996.

Anil B. Divan, Ms. Sunita Sharma and P.H. Parekh for the Appellant.

A.M. Khanwilkar and Mukul Mudgal for the Respodents.
F
The following Order of the Court was delivered :

Leave granted.

G We have heard the counsel on both sides.

This appeal by special leave arises from the judgment and order of
the Bombay High Court, Panaji Bench, dated April 26, 1996 made in W.P.
No. 145 of 1996. It is not necessary to dilate upon the entire controversy
H that has arisen between the parties. Suffice it to state that on September
352
GOA STATE CO OP. BANK LTD. v. PENDETALUKA PRATHAMIK SHIKSHAKPATSAUNSTHALTD. 35 3

20, 1996, this Court, after hearing all the counsel, passed the following as: A
"It is now an admitted position that the appellant Bank is
neither National Co-operative Society, nor statewide notified
Co-op. Society falling under Section 35 of Multi-State Co-
op. Socities Act, 1984. In that perspective the only procedure
for conducting the election to other Societies is as per B
Paragraph 8 of the Schedule which envisages conducting of
elections in accordance with the procedure prescribed therein.
It is not in dispute that the General Body of the Society
resolved to adopt paragraphs 2 to 7 of the Schedule for
conducting elections to the society and resolution to that effect
was passed and also the Bye-laws were amended. The area C
of controversy is whether the amended Bye-laws have been
approved by the Registrar. The High Court has proceeded on
the premise that the Registrar must have approved the Bye-
laws and on that premise directed the respondent to conduct
the election. Unless the Bye-laws are approved by the
Registrar, they do not become effective. Resultantly any D
election conducted in transgression of the statutory rules would
admittedly become invalid. Shri Mukul Mudgal, the learned
counsel for the Registrar, is directed to file an affidavit
whether the Bye-laws have been approved by the Registrar,
or not." E
Pursuant thereto, the Registrar, Cooperative Societies, Sambhaj i
Dattajirao Desai has filed his affidavit in which he stated that an amendment
to bye-law No. 36 was approved by the Central Registrar of the Cooperative
Societies on September 6, 1994. The amended bye-law was appended as
Annexure R-1 which would show that: F

"The Board of Directors shall consist of 13 Directors of which
3 Directors or 1/3 of the number of Directors whichever is
less shall be nominated by the Government or any authority
specified by it, in this behalf, ifthe Government has purchased G
share of the Bank. The Managing Director shall be the Ex-
Office member of the Board of Directors. The other members
of the Board of Directors shall be elected as per the Multi
State Cooperative Societies Act 1984 and Rules as prescribed
under para 2 of the Schedule to the Multi State Cooperative
Societites Rules 1985. The Constituency and the Units of the H
354 SUPREME COURT REPORTS [1996] SUPP. 8 S.C.R.

A affiliated Societies to the Bank shall be as under.

The voters in respective constituencies and units shall elect
their own Directors. The representative of service and other
Societies affiliated to the Bank shall be qualified to contest
election through the respective units and constituency."
B
It is not in dispute that it was further amended and the bye-law, as
amended for the second time, was certified by the Registrar on February
8, 1996 which reads as under:-

"In pursuance of the provisions of the Multi-state Cooperative
c Societies Act, 1984, the amendments to bye-law No.l{a) of
the Goa State Cooperative Bank. Ltd., Panaji, Goa is hereby
registered under Section 9 of the Multi-State Cooperative
Societies Act, 1984 (51 of 1984).

Given under my hand and seal this the 8th day of Febraury,
D 1996."

Shri Anil C. Divan, the learned senior counsel appearing for the
appellant, has brought to our notice ihe procedure applicable to the conduct
of elections to the societies as envisaged in Rule 104 and Schedule II, of
E the Multi-State Cooperative Societies (Registration, Membership, Direction
and Amendment, Settlement of disputes, Appeal and Revision), 1985 (for
short, 'the rules'). He contended that election to the Society should be
conducted as per rules. Shri Khanwilkar, learned counsel appearing for
the respondent, contended that after the amendment of the bye-laws a
controversy has arisen as to what is the relevant rule with reference to
F which election is to be conducted. We desist to go into the controversy for
the re~on that the election to the Society has yet to be conducted. It is
axiomatic that the election requires to be conducted by the 7th respondent
in accordance with the relevant rules and the bye-laws of the Societies
applicable as on the date of the election. Therefore, it is for the 7th
G respondent to conduct the elections in accordance with the relevant rules
as applicable to the Society in tune with the bye-laws of the appellant-
Society as applicable to the society.

The appeal is accordingly allowed. The judgment and order of the
High Court stands set aside. The operative portion of the judgment also
H stands set aside. The Registrar is directed to conduct the elections in
GOA STATE CO.OP_ BANK LTD. v. PENDETALUKAPRATHAMIK SHIKSHAKPATSAUNSTHALTD 355

accordance with the relevant rules applicable to the Society, Bank and A
bye-laws of the Society, the Act as also the Rules applicable as on the date
of conducting of the elections, No costs.

G.N. Appeal allowed.