Petitioner challenging four-year disqualification for missing AGM deadline. Court held disqualification automatic but reduced penalty to one year given brief delay and lack of mala fide intent.
Disqualification maintained but period reduced from four years to one year.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
WP-607-2023.DOC
Meena
IN THE HIGH COURT OF BOMBAY AT GOA
WRIT PETITION NO.607 OF 2023
WITH
CIVIL APPLICATION NO.111 OF 2023
IN
WRIT PETITION NO.607 OF 2023
Mrs. Noella Fernandes Aged 50 years, Resident of 101-A Block, Infinity Enclave Street-I, Lane – 2, Nagalli Hills Colony, Dona Poula, Goa
… Petitioner
Versus
(Amendment carried out as per order dated 13/09/2023)
...Respondents
Page 1 of 21 5th February,2024
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Mr. Nigel Da Costa Frias with Ms. Barbara Andrade, Advocates for the Petitioner.
Mr. Deep Shirodkar, Additional Government Advocate for Respondent No.1.
Mr. Rajendra L. Kamat, Respondent No.3- Present.
Mr. Antonio Costa, Respondent No.4 – Present.
CORAM: BHARAT P. DESHPANDE, J RESERVED ON: 25th January, 2024 PRONOUNCED 5th February, 2024 ON:
JUDGMENT:
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respondent No.2- Society. The respondent No.1 vide separate order dated 06/07/2023 appointed an Administrator to look after the day to day affairs of the society.
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there was no such time left from the date of receipt of letter from respondent No.1, the meeting could not be convened on or before 22/09/2022. He submits that such Annual General Meeting was held on 06/11/2022 and audited statements of account were placed and proved. The intimation was given to respondent No.1. However, after such intimation was received by respondent No.1 along with the minutes of the Annual General Meeting, suddenly a Show Cause Notice was issued to the petitioner as to why she should not be disqualified from the post of Director. The petitioner filed a detailed reply objecting to such Show Cause Notice and convening to the Registrar about the grounds for delay of such meeting. However, respondent No.1 failed to consider such grounds and passed the impugned order.
the impugned order show arbitrariness on the part of the officer who
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failed to consider reasons disclosed in the reply to the Show Cause Notice.
10. Mr. Costa Frias would submit that the Chairman of the Board is empowered to summon the Annual General Board Meeting and in absence of the chairman, it was the duty of the Registrar himself either to elect the Chairman or to convene the meeting. He would submit that there was no deliberate or malafide intention on the part of the petitioner not to convene such a meeting. He submits that the discretion available for respondent No.1 has not been judiciously exercised.
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14. Rival contentions fall for determination.
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The said respondent No.2 society is in fact a co-operative housing maintenance society consisting of 16 members. Bye-laws of the society provides a board of Directors comprising of three members i.e. Chairperson, Secretary and Treasurer. Term of the Board of Directors is for five years. The elections of the board of Directors of the society were held on 23/03/2019 during which the petitioner along with two others were elected as Directors. The other Director who was designated as Treasurer by name Anil Nair resigned w.e.f. 12/07/2020. Accordingly one Mr.Fedrick Pinto was co-opted as Treasurer on 16/07/2020 as provided under Bye-laws 106.
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letter dated 22/09/2022 intimated the society that the meeting has to be convened within a period of six months from the date of closure of co-operative year and thus the request for grant of additional time was rejected. Since there was no further time to give notice of 14 days to the members for convening Annual General Body Meeting, the same was held on 06/11/2022 and in the said meeting even the audit report along with the statements of accounts were placed and approved.
19. Section 72 of the Goa Co-operative Societies Act 2001 in Chapter VII dealing with Management of Societies provides as to how the meetings and minutes of the society shall be conducted. Section 72 reads thus :
“72. Meetings and minutes. — (1) The bye-laws of the society shall specify the frequency of and the manner in which the meetings of the board shall be held, so however that the board shall meet at least once in every three months.
[(2) Every society shall hold the annual general body meeting of its members within six months from the close of the co-operative year. At every annual general meeting of a society, the board shall lay before the society an audited
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balance sheet and profit and loss account for the year in the manner specified by the Registrar by general or special order in this behalf.
Explanation:— In the case of a society not carrying on business for profit, an income and expenditure account shall be placed before the society at the annual general meeting instead of profit and loss account; and all the references to “profit and loss account”, “profit” and “loss” in this Act, shall be construed in relation to such society as references, respectively, to the “income and expenditure account”, “income over expenditure” and “excess of expenditure over income.];
(3) The board shall convene a general meeting within thirty days of receipt of requisition for convening a general meeting signed by at least one-tenth of the members of the society 102[***]and any such requisition shall contain the proposed agenda and the reasons why the meeting is felt necessary.
(4) Where the board fails to convene the annual or requisitioned general meeting within due time, it shall be competent for the Registrar to convene the requisitioned or annual general meeting, as the case may be.
(5) Every society shall record in separate minute books, minutes of all proceedings of every general meeting, every meeting of its board of directors and every committee meeting.
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(6)[***]
(7) The minutes of the board meetings so recorded shall be signed by the person who chaired the said meeting, or by the chairman of the succeeding meeting, and minutes of the general meeting shall be signed by the person who chaired the meeting within thirty days from the date of the meeting or in the event of his unwillingness or inability, by a director duly authorised by the board for the purpose.
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close of co-operative year i.e. on thirty-first day of March, the society shall hold Annual General Body Meeting within a period of six months from the close of such co-operative year.
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24. In the present matter Section 61 of the Act of 2001 is relevant which reads thus:
“61. [Disqualification of all directors of the board— Notwithstanding anything contained in the foregoing section, all the Directors of the Board shall incur disqualification not exceeding six years as may be decided by the Registrar after giving an opportunity of being heard, if during their term as Directors of the Society—
(a) they did not conduct the annual general meeting within six months of closure of the society’s accounting year;
(b) they did not conduct a requisitioned general meeting within the specified time;
(c) they did not place the audited accounts for the preceding co-operative year before the general body at its annual general meeting;
(d) they willfully allow any of the disqualified directors to continue on the board;
(e) they did not file the returns within stipulated time as provided under section 81;
(f) they are held responsible for not providing the information as required under section 32 of the Act:
Provided that if it is proved that the aforesaid omission or commission was with the consent or connivance of or is attributed to any gross negligence on the part of any Auditor, Director, Chief Executive, Managing Director or any other officer of the society, such Auditor, Director, Chief Executive, Managing
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Director or any other officer of the society shall be guilty and shall be liable for disqualification or misconduct, as the case may be and for penalty which shall not be less than rupees one hundred but not exceeding rupees twenty-five thousand.]”
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could exercise his discretion by accepting such reasons and refusing to disqualify the Directors.
29. In this regard Mr. Shirodkar placed reliance in the case of Inland Water Transport Employees Coop. Credit Society Ltd. v/s. State of Goa [2016 SCC OnLine Bom 5232]. In that matter, the Registrar while exercising powers under Sections 61(a) and 72(2) declared the board of Directors of the petitioner society, having incurred disqualification for a period of five years, was challenged by the society on the ground that there were sufficient reasons for not holding the Annual General Meeting within a stipulated time of six months and that it was beyond the control of the board for getting the accounts audited and file the reports. The learned Single Judge (C.V. Bhadang,J) after
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considering the provisions of Sections 61 and 71 of the said Act observed in paragraph 13 as under:
“13. It can, thus, be seen that sub-section (5) of Section 75 of the Maharashtra Act provides that if a default is made, in calling a General Meeting within a period or as the case may be ‘extended period’ prescribed under subsection (1) or not complying with sub-sections (2), (3) and (4), the Registrar may, by an order, declare any officer or member of the Committee, whose duty it was to call such a meeting or comply with subsections (2), (3) and (4) and who “without any reasonable excuse failed to comply with any of the aforesaid sub-sections” disqualified for being elected and for being any officer and member of the Committee for such a period not exceeding three years as he may specify. It can, thus, be seen that Section 61 of the Act does not provide for such default being without a reasonable cause as a basis for disqualification. The provisions of Section 61 are clear and mandatory in nature, whereunder once there is a default in holding AGM or placing the accounts of the preceding cooperative year before the AGM, the disqualification is automatic.”
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meeting within the time frame. Resignation of the Chairman or ill health of the Treasurer cannot be considered as grounds for not calling the Annual General Meeting within the stipulated time. The purpose of Section 61 of the said Act is to regulate the procedure and conduct meetings and more specifically the Annual General Meeting in order to inform the members about the audited statement and the activities carried out by the board. Section 58 of the Act deals with the general body and its powers. Sub section 3 deals with the matter which shall be dealt with by the general body in its meeting. Various powers are given to the general body which include annual audited financial statement of the society, auditors report and audit rectification report, annual operational plan and budget etc. if these procedures are not followed scrupulously, the mandatory provision of Section 61 comes into operation. The power under Section 72(4) of the Registrar to convening meetings is only in an eventuality of the board failing to convene the general body meeting within due time. Thus it cannot be said that if the board fails to have the meeting within stipulated time the Registrar is duty bound to do it and that too within six months as provided under Section 72(2). Thus the contention of Mr. Costa Frias that the Registrar failed to convene the meeting when he found that the board committed default and therefore the blame cannot be put only on the board of Directors, cannot be accepted. The powers under Section 71(4) can be exercised by the Registrar only on failure of the board to convene
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Annual General Body Meeting within the stipulated period of six months. Such power of the Registrar cannot be considered as diluting the duty of the board of Directors to convene the General Body Meeting within a period of six months from the closure of the co-operative year.
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and agenda of all meetings of the general body. Similarly at Sr. Nos. 11 and 12 further provides for the issue of notices of all the meetings of the board. Thus, the petitioner being the Secretary of the said society was very much competent and entitled to summon/convene a General Body Meeting within a period of six months from the close of the co-operative year. This fact has been observed by the learned Registrar in the impugned order. Admittedly and as observed in the case of Inland Water Transport Employees Co-Op Credit Society Ltd (supra), once it is found that there is a default on any of the clauses found in Section 61(1), disqualification is automatic. In this case, the default is found at clause (a) and clause (c) of Section 61 i.e. the board did not conduct the Annual General Body Meeting within six months of the closure of the society’s accounting year and did not placed the accounts of the preceding co-operative year before the general body.
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Page 19 of 21 5th February,2024
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Page 20 of 21 5th February,2024
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B. P. DESHPANDE, J
MEENA Digitally signed by MEENA VISHAL VISHAL BHOIR BHOIR Date: 2024.02.06 10:22:01 +05'30'
Page 21 of 21 5th February,2024
3 issues framed by the court
Whether the Registrar can consider reasons for default under mandatory disqualification provisions in Section 61.
Whether the petitioner's delay was excused by the absence of the Chairman and illness of the Treasurer.
What period of disqualification is appropriate when AGM was convened shortly after the due date.
Colour shows how this judgement treated each authority
Inland Water Transport Employees Coop. Credit Society Ltd. v/s. State of GoaRelied on¶109
Inland Water Transport Employees Coop. Credit Society Ltd. v/s. State of Goa [2016 SCC OnLine Bom 5232] · Who else cites this
3 provisions across 1 enactments
Meena
Assistant Registrar of Co-operative Societies, Central Zone
Infinity Enclave Co-operative Housing Maintenance Society Ltd.
Shri Rajendra L. Kamat
Shri Antonio Sergio Costa
Shri Gautam G. Talaulikar
Bharat P. Deshpande
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
