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Judgment
Per S.N. Murthy, M.:-This appeal is filed against the ignorant order passed by the learned Assistant Registrar of Co-operative Societies, Madikere in the so called dispute No. 1073/81-82, under S. 70 of the Karnataka Co-operative Societies Act, 1959 (hereinafter called as the ''Act'')
The learned counsel for the appellant has argued before us on 21-7-1982 that the respondent was a Director of the Appellant Society and that he was removed as Director by the Board of Directors of the Appellant Society on the ground that he did not attend the Board Meetings held on 27-7-1982 and on 17-8-1981 and on 24-8-1981 and that the Board of Directors removed him in accordance with Bye-law No. 19 of the Appellant Society according to which if a Director does not attend three Board Meetings consecutively he ceases to be a Director.
In accordance with Bye-law No. 19 of the Appellant Society, the learned counsel for the appellant argued, the Board of Directors passed a resolution removing the appellant as Director of the Society on 12-12-1981 and the said resolution was in the first place stayed and later on quashed without jurisdiction by the learned Assistant Registrar of Co-operative Societies, Madikere after entertaining and hearing the dispute filed by the Respondent under S. 70 of the Karnataka Co-operative Societies Act, 1959.
The learned counsel for the appellant society in his arguments before us on 21-7-1982 argued that the Board of Management of the appellant society have powers under Bye-law No. 19 to remove the respondent as he did not attend three Board Meetings consecutively. And also he argued that the order passed under S. 70 of the Act by the learned Asst. Registrar of Co-operative Societies, Madikere is without jurisdiction.
The learned counsel for the respondent argued that the dispute under S. 70 of the Act was maintainable by the Assistant Registrar of Co-operative Societies, Madikere and that the order passed by him is perfectly legal.
We regret to record that the learned Assistant Registrar of Co-operative Societies has not only displayed his ignorance of the provisions of the Act, but also has passed an arbitrary order in this case.
According to S. 126-A(b) of the Karnataka Co-operative Societies Act, 1959, "if any member of a Co-operative Society during the term of his office has acted or has been acting fraudulently or with gross negligence or in contravention of the provisions of this Act, the rules or the bye-laws of the co-operative society........" "the Registrar may, either on a report made to him or otherwise, by order, remove such member and in cases falling under clauses (b), (c) and (d) disqualify him from serving on the committee of the Co-operative Society........" "Provided that no such order shall be made except after giving such member an opportunity of making representation." The section quoted above makes it abundantly clear that the resolution passed by the appellant society referred to above is illegal and incompetent and that when it found that the respondent did not attend three Board Meetings consecutively in accordance with its Bye-law No. 19, all that it could have done was to report the matter to the concerned authority who is empowered to take action under S. 126-A(b). But the appellant society chose to arbitrarily remove the respondent by means of an illegal resolution.
At least the learned Assistant Registrar of Co-operative Societies, Madikere could have drawn the atten- tion of both the appellant and the respondent, when the respondent filed before him a dispute under S. 70 of the Act, to S. 126-A(b). But thanks to his amazing ignorance, he not only entertained the dispute under S. 70 but he also illegaly passed an arbitrary order after correctly staying the illegal resolution. If he had just stayed the resolution and then proceeded to take action under S. 126-A(b), his proceedings would have been in accordance with law. But entertaining and hearing the dispute under S. 70 renders his proceedings illegal.
For the reasons mentioned above, we have no alternative but to allow the appeal and set aside the order passed by the learned Assistant Registrar of Co-operative Societies, Madikere.
It is open to the appellant Society to initiate separate proceedings against the respondent under S. 126-A(b).
In the result, we allow this appeal and set aside the orders passed by the learned Asst. Registrar of Co-operative Societies, Madikere. No costs.
Let a copy of the Judgment be marked to the Registrar of Co-operative Societies in Karnataka, Bangalore.