Jaidur Rahman and 2 Ors. Vs the State of Assam and 6 Ors.

Heard Mr. JMA Choudhury, the learned counsel appearing on behalf of the Petitioners. Also heard Mr. G Bordoloi, the learned Standing Counsel for the Cooperation Department, who appears on behalf of Respondent Nos.1 to 5 and Mr. N Zaman, the learned counsel, who appears on behalf of the Respondent Nos.6 and 7.

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The present writ petition has been filed by the Petitioners

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challenging the order dated 03.11.2023 insofar as it relates to the Respondent Nos. 6 and 7 and further, seek for a writ in the nature of certiorari to set aside and quash the election of the Respondent Nos. 6 and 7 as the Board of Directors of the Tengaguri Samabay Samiti Morigaon.

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CONSPECTUS OF FACT :

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The Tengaguri Samabay Samiti, Morigaon (hereinafter to be referred to as the Cooperative Society) is a Cooperative Society registered under the provisions of the Assam Co-operative Societies Act, 2007 (for short, ‘the Act of 2007’). An election was held to the Board of Directors of the said Society on 27.08.2023, whereby the Petitioner Nos.1 and 3 along with the Respondent Nos.6 and 7 were elected as Directors of the said Cooperative Society. Taking into account the issue involved, it is relevant to take note of the term of the Board of the said Cooperative Society prior to the elections which were held on 27.08.2023 was w.e.f. 2016-17 to 202021, in terms with Section 31 of the Act of 2007.

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It is an admitted case of both the parties that though it is the requirement of law in terms with Section 39 of the Act of 2007 that there has to be a General Meeting at least once in every Cooperative

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year within a period of 6(six) months of the close of the financial year, but the General Meetings for the Cooperative years 2016-17, 2017-18 and 2018-19 were only held on 20.07.2017, 30.09.2018 and 19.09.2019 respectively, and there was no General Meetings held for the Cooperative years 2019-20 and 2020-21.

¶46

The materials on record further show that the Respondent Nos.6, out of the 3(three) General Meetings which were held, i.e. for the Cooperative years 2016-17, 2017-18, 2018-19, only attended in the meeting held for the Cooperative year 2016-17, i.e. on 20.07.2017. However, insofar as, the Respondent No.7 is concerned, it is claimed that he attended on 20.07.2017 and 19.09.2019.

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In the backdrop of the above, an issue, therefore, arises as to whether the respondent Nos.6 and 7 were disqualified in terms with Section 40(2) of the Act of 2007 to be chosen as Directors in the election which was held on 27.08.2023.

¶48

The records further reveal that pursuant to the declaration of the results of the Directors on 29.08.2023, various complaint petitions were filed in the form of election petitions on 05.09.2023, 12.09.2023, and 13.09.2023, which have been enclosed as Annexure-4 to the writ

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petition. It may not be out of place to mention that the Petitioners herein filed an Election Petition on 05.09.2023. The Election Petitions so filed were disposed of vide the impugned order dated 03.11.2023, whereby the nomination papers of Respondent Nos.6 and 7 were upheld by the Respondent No.2 on the ground that Section 40(2) of the Act of 2007 could not have been applied, taking into account that for 2(two) consecutive years, i.e. for 2019-20 and 2020-21, General meetings were not called by the Board of Directors of the Cooperative Society. It is under such circumstances, the present writ petition has been filed.

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The records reveal that pursuant to the filing of the instant writ petition, the learned Coordinate Bench of this Court vide an order dated 22.11.2023, issued notice, and further observed that any actions taken by the new Board of Directors shall be subject to the outcome of the writ petition.

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The records further show that the Respondent Nos.6 and 7 have jointly filed an Affidavit-in-Opposition on 08.02.2024, as well as an additional Affidavit-in-Opposition on 03.05.2024.

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The Respondent No. 2, who is the Registrar of the Cooperative Societies, had also filed an Affidavit-in-Opposition on 01.05.2024.

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Taking into account the impugned order which was passed on 03.11.2023 by the Respondent No. 2, it is relevant to take note of the contents of the Affidavit-in-Opposition filed by the Respondent No.2.

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From a perusal of the said affidavit-in-opposition filed by the Respondent No.2, it is averred that Respondent No. 6 was present in the AGMs held on 16.09.2016 and 22.07.2017, whereas the Respondent No.7 was present on 16.09.2016 and 19.09.2019. It was further mentioned that AGMs were not held for 2020-21 and 2021-22 on account of the COVID pandemic, and as such the disqualification under Section 40 (2) of the Act of 2007 could not have been applied. The Respondent No. 2 had stated various details as regards the participation of the Respondent Nos. 6 and 7 in the General Meetings, inasmuch as it could be seen from a perusal of paragraph Nos.16 and 17 that it is averred by the Respondent No. 2 that the Respondent Nos.6 and 7 had attended more than 2(two) AGMs in the previous 5(five) years , i.e. 2015-16 to 2018-19.

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Before further proceeding, this Court finds it very pertinent to take note of that the perusal of the impugned order dated 03.11.2023 do not mention about the participation of the Respondent Nos.6 and 7 in the Annual General Meetings, rather, the said order is based upon the non-necessity to comply with Section 40(2) of the Act of 2007 in

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the circumstance when AGMs were not held on account of the fault of the Board of Directors. Applying the law laid down by the Supreme Court in the case of Mohinder Singh Gill and Anr. Vs. the Chief Election Commissioner, New Delhi , reported in (1978) 1 SCC 405 , the averments made by Respondent No.2 as regards the participation of the Respondent Nos.6 and 7 in the various meetings, therefore, would have no relevance for deciding as regards the legality of the order dated 03.11.2023.

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This Court also takes note of that no affidavit-in-reply has been filed by the Petitioners in the meantime.

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SUBMISSIONS MADE ON BEHALF OF THE LEARNED COUNSELS FOR THE PARTIES :

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Mr. JMA Choudhury, the learned counsel appearing on behalf of the Petitioners submitted that Section 40 of the Act of 2007 stipulates the various criteria, when a shareholder could be eligible to become a Director of a Cooperative Society. He further submitted that a perusal of Section 40 (2) of the Act of 2007 mandates that for a shareholder to be elected as a Director, the shareholder has to attend at least 2(two) Annual General Meetings in the previous five years, and in the instant case, as the Respondent No.6 and 7 have only attended one

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General Meeting in the last five years of the term of the Board, the Respondent Nos.6 and 7 could not have contested the election to the Directorship of the Cooperative Society. The learned counsel further referring to the impugned order dated 03.11.2023 submitted that this aspect was not taken into consideration in the proper perspective. The learned counsel further referring to Section 130A of the Act of 2007 further submitted that the exemption which can be granted by the State only is in respect to Section 39 and Section 41(2) of the Act of 2007, and no exemption can be granted by the State, thereby entitling a shareholder who had not participated in 2(two) Annual General Meetings in the last 5(five) years to contest the election.

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Per contra, Mr. G. Bordoloi, the learned Standing Counsel of the Cooperation Department submitted that in the instant case, the Cooperative Society in question did not hold 2(two) General Meetings, out of the 5(five) General Meetings which were required to be held during the term of the Board. He, therefore, submitted that there was no illegality committed by the Respondent No. 2 in exempting the Respondent Nos. 6 and 7, from the clutches of Section 40(2) of the Act of 2007, inasmuch as, the shareholders cannot be blamed for not holding the AGM by the Board of Directors of the Cooperative Society.

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Mr. N Zaman, the learned counsel appearing on behalf of the

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Respondent Nos.6 and 7 submitted that the Respondent No.6 was present in the General Meetings which were held on 20.07.2017, and Respondent No.7 was present in the General Meetings held on 20.07.2017 and 19.09.2019 as would be apparent from the Attendance Register of the General Meetings held on 20.07.2017 and 19.09.2019. He further submitted that as regards the Respondent No.6, he had attended the General Meeting which was held on 20.07.2017 and 16.09.2016. The learned counsel for the Respondent Nos.6 and 7 further submitted that Section 40(2) of the Act of 2007 would only come into play, if a shareholder had not attended at least 2(two) Annual General Meetings in the previous 5(five) years. He, therefore, submitted that there is a requirement of holding of the Annual General Meetings and there is no reference in Section 40(2) of the Act of 2007 that the General Meeting has to be specific to a particular term of the Board. He, therefore, submitted that there is no quarrel with the fact that the Respondent Nos.6 and 7 had participated in the meeting held on 16.09.2016 and on 20.07.2017, and therefore, as amongst the last 5(five) General Meetings, the Respondent Nos. 6 and 7 had duly participated. As such, the said Respondent Nos.6 and 7 cannot be said to be disqualified, in terms with Section 40 (2) of the Act of 2007.

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In addition to that, the learned counsel appearing on behalf of

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Respondent Nos. 6 and 7 submitted that the instant writ petition is not maintainable inasmuch as, the Petitioners have challenged the election of the Respondent Nos.6 and 7 beyond the period of 3(three) days as mandated in Rule 27 of the Assam Cooperative Societies' Election Rules, 2019 (for short, ‘the Rules of 2019’). He submitted that Rule 27 of the Rules of 2019 does not empower the Registrar to condone the delay. The learned counsel hence submitted that as the result of the election can only be challenged by way of an Election Petition and the Election Petition was belated, the election of the Respondent Nos.6 and 7 cannot be put to challenge in the present proceedings.

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Mr. JMA Choudhury, the learned counsel for the Petitioners rejoining to his submissions submitted that a perusal of Rule 27 of the Rules of 2019 would show that the word ‘may’ has been used by the Rule Making Authority thereby meaning that filing of the application under Rule 27, within a period of 3(three) days is discretionary and not mandatory. The learned counsel further submitted that the issue as to whether the Respondents No.2 had the jurisdiction to condone the delay or even entertain the Election Petition filed after 3 days from the date of declaration of the result was never objected to by the Respondent Nos.6 and 7 before the Respondent No.2.

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ANALYSIS AND DETERMINATION:

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The issue involved in the instant proceedings primarily relates to the interpretation of Section 40(2) of the Act of 2007. Under such circumstances, Section 40(2) of the Act of 2007 being relevant is reproduced hereinunder:

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“40. Eligibility for a Director in cooperative society — Subject to such other conditions as may be specified in the bye-laws a member of a cooperative society shall be eligible for being chosen as a Director of the cooperative society, if-

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(1) …………………………

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(2) such member has patronised the services of the cooperative society during the previous financial year to the extent and in the manner specified in the bye-laws and has attended at least two Annual General Meetings in the previous five years…”

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A perusal of the above-quoted provisions would show that a member of a Cooperative Society shall be eligible for being chosen to be a Director of the Cooperative Society, if amongst others, had attended at least 2(two) Annual General Meetings in the previous 5(five) years.

¶80

This Court finds it very relevant to take note of Section 31 of the Act of 2007 which stipulates that the term of the Board shall be 5(five) Cooperative years from the date of election of the Director. Section 2(h) of the Act of 2007 defines the term ‘Cooperative Year’ to mean the period beginning and ending on such date as may be fixed

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by the Registrar for the purpose of drawing up the balance sheet of the registered Society and for all other purposes under the Act of 2007.

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It is relevant to take note of that though the term of the Board has been stipulated under Section 31 of the Act of 2007 as 5(five) Cooperative years from the date of election of the Directors, but a perusal of Section 40(2) does not refer to the Cooperative years. It specifically refers to 2(two) Annual General Meetings in the previous 5(five) years. Under such circumstances, it is the opinion of this Court that Section 40(2) of the Act of 2007 cannot be specifically limited to the term of the Board in question, which is specifically mentioned in Section 31 of the Act of 2007.

¶84

This Court finds it relevant to take note of Section 39 of the Act of 2007. The said provision being relevant is reproduced hereinunder:

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“39. Annual General Meeting.— A general meeting to be termed as Annual General Assembly of a registered Cooperative Society shall be held at least once in every Cooperative year within a period of six months of close of the financial year to transact the business as provided in this Act. The Board shall automatically stand dissolved for not holding Annual General Meeting in accordance with the provisions of the Act and bye-laws within six months from the expiry of every Financial year.”

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From a perusal of the above-quoted provision, it stipulates that it

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is the duty of the Board of Directors to hold atleast once in every Cooperative year within a period of six months of the close of the financial year to transact the business as provided in the Act of 2007. In other words, it is the mandate imposed upon the Board of Directors by the Legislature to hold one General Meeting once in every Cooperative year within a period of 6(six) months of the close of financial year to transact the business as provided in the Act of 2007. It is further stipulated in Section 39 of the Act of 2007 itself that by operation of law, the Board shall automatically stand dissolved for not holding the Annual General Meeting in accordance with the provisions of the Act of 2007 and the bye-laws within 6(six) months from the date of expiry of every financial year. It is to be noted that the financial year has to be counted from 1^st of April to 31^st of March.

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In the instant case, as the Board in question was constituted pursuant to the elections, which was held on 16.09.2016, 5(five) General Meetings of the Cooperative years were required to be held as tabulated hereinunder:

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Year	On or Before
2016-17	30.09.2017
2017-18	30.09.2018

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2018-19	30.09.2019
2019-20	31.03.2021 *
2020-21	31.03.2022 *

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*This period stood extended in view of Section 130A of the Act of 2007.

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It is seen that there was no General Meeting held for the Cooperative year 2019-20, and, therefore, by operation of law, the Board of Directors of the Cooperative Society ought to have been dissolved. However, strangely enough, the Board of Directors of the Cooperative Society were allowed to continue, and it was dissolved much later upon orders being passed by the Officers of the Cooperation Department. However, by operation of law, the term of the Board dissolved as on 31.03.2021.

¶95

In the backdrop of the above, if this Court now takes note of Section 40(2), it would be seen that insofar as the Attendance of the General Meeting is concerned, the last 5(five) years ought to have been taken prior to 31.03.2021, and if that period is being taken, it would also show that the Respondent Nos.6 and 7 were present on 16.09.2016 and 20.07.2017, and, therefore, they could not have been

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disqualified to be chosen as Directors by virtue of Section 40 (2) of the Act of 2007.

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In view of the above, it is, therefore, the opinion of this Court that the elections of the Respondent Nos. 6 and 7 cannot be disturbed on the basis that they were disqualified in terms with Section 40(2) of the Act of 2007.

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Considering the above opinion, this Court is not entering into the arena as regards whether filing of the Election Petition within the period of 3(three) days is mandatory or directory, and this aspect would be decided if so need be, in a separate proceedings, as and when it arises. The question is kept open.

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With the above observations and directions as this Court does not find any merit in the instant writ petition, the writ petition stands dismissed. No costs.

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JUDGE

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Shivani Gautam Digitally signed by Shivani Gautam Date: 2026.07.18 16:35:38 +05'30' Comparing Assistant

Jaidur Rahman and 2 Ors. v. the State of Assam and 6 Ors.

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Jaidur Rahman and 2 Ors. v. the State of Assam and 6 Ors.

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