The High Court of Karnataka has answered in the affirmative to the question "whether upon the resignation of a few members of the Board of a Society, elections are required to be held to the posts of all directors, including the posts of directors who have not tendered their resignations?”
The affirmative answer was arrived at by Justice C M Poonacha in a batch of petitions which were disposed of in a common order on January 5. Some elected directors of the Sakkaregollahalli Vyavasaya Seva Sahakara Sangha Niyamita, Halaganahalli Primary Agricultural Credit Co-operative Society and the Primary Agricultural Credit Co-operative Society, Kudhuvalli had approached the HC in this regard.
Some of the directors of these societies had resigned, rendering the board without the requisite quorum. This necessitated new elections to the societies.
Special officers were appointed by the Registrar of Societies to run these societies. The directors who had not resigned approached the HC challenging this and contending that since their tenure is not over, they should be allowed to continue.
The HC, pointing to the rules under the Karnataka Co-operative Societies Act, said “It is relevant to note that in Section 31(1) of the Act there is a specific non-obstinate clause which specifically stipulates that the registrar may ‘notwithstanding anything contained in this act, rules or bye-laws’ by order appoint a special officer.”
When such a special officer is appointed, the elected directors automatically lose their posts, the HC noted.
“Section 31(3) of the Act stipulates on the issue of the order under sub Section (1) the members of the Board ‘shall vacate’ and 'shall be deemed to have vacated offices’ and special officer shall be deemed to have assumed the charge of the affairs of the cooperative society,” the HC said.
The counsel for the petitioners contend that the situation that is arising in the present cases are a deliberate attempt by a few persons to hold elections to the entire board although the petitioners have already been elected, and an interpretation is to be adopted which does not create an anomalous situation of holding of repeated elections merely due to exigencies created out of political or other compulsions.
The HC however noted that Section 31(1) and (3) of the Act has to be applied to the facts of this case.
Dismissing the petitions, the HC said, “It is clear that consequent to a situation occurring as contemplated in Section 31(1) of the Act and a special officer being appointed, having regard to the specific wordings contained in Section 31(3) of the Act, the said situation would automatically occur and the question of exercising any discretion as sought to be contended by the petitioners does not arise.”
