Holding

The term of the Managing Committee commences from the beginning of the co‑operative year in which the State Government’s nominations are completed, and the expression ‘election’ in the Act includes both ballot elections and nominations.

Summary

Dinesh Prasad Yadav, a member of the Managing Committee of the Katihar District Central Co‑operative Bank, was elected on 20 January 1991, but the State Government, a major shareholder, made its statutory nominations only on 2 March 1993. The State Government then ordered that the Committee's three‑year term would end on 31 March 1993, interpreting the term as starting from the co‑operative year in which the ballot election was held. The appellant challenged this order; the Patna High Court dismissed the petition, holding that the legislature’s mandate of a three‑year term could not be extended due to executive laches. The Supreme Court held that the expression “the co‑operative year in which elections are held” includes both ballot elections and State nominations, so the term must commence from the beginning of the co‑operative year in which the nominations were completed, giving the Committee a full three‑year tenure. However, because fresh elections had been held on 5 July 1994, the Court did not restore the old Committee but set aside the High Court order and allowed the appeal.

Issues considered

The three‑year term of a Managing Committee under the Bihar Co‑operative Societies Act, 1935, is to be counted from the co‑operative year of the ballot election or from the co‑operative year when State Government nominations are completed.

Subjects

co‑operative societiesmanaging committeeterm of officeelectionnominationco‑operative yearstatutory interpretationstate government nominationlaches

Judgment

A DINESH PRASAD YADAV
v. ..,.\...,.·--
STATE OF BIHAR AND ORS.

JANUARY 13, 1995
B
[KULDIP SINGH AND B.L. HANSARIA, JJ.]

+ ..
Bihar Co-operative Societies Act, 1935-Section 14(10}--Bihar Co-
operative Societies Rules, 1959-Expression 'the co-operative year in which
elections are held'-Means not only elections by way of ballot, but also
c nominations under the Act-Te1m of Managing Committee to commence
from beginning of co-operative year in which nominations by State Govern-
ment are completed and Managing Committee constituted-Expression
'election' as defined under Rules-To be interpreted in the context of Rules.

D The appellant was a member of the Managing Committee of a
Co-operative Bank alongwith respondents. They were elected as such by "JI:--

votes on January 20, 1991 under Rule 21 A of the Bihar Cooperative
Societies Rules. The State Government made the nominations to the
Managing Committee of the Bank of March 2, 1993. The Managing Com-
mittee was not permitted to function till March 2, 1993 on the ground that
E it got constituted under Rule 22 only after the nomination were made by
the State Government.

By an order dated March 5, 1993, the State Government informed
the Committee that its term was to expire on March 31, 1993. It was stated y-·
F that the elections having been held on January 20, 1991, the term of office
of the Managing Committee under the first proviso to Section 14 (10) of
the Bihar Cooperative Societies Act, would be deemed to have commenced
from April 1, 1990 (beginning of the co-operative year) and would come to
an end on March 31, 1993 (end of the third co-operative year).

G The appellant and respondents challenged the order of the State
Government. The High Court dismissed the writ petition holding that due .;..
.
to inaction and laches of the executive, the mandate of legislature, fixing
a tenure of three co-operative years, commencing from the beginning of
the co-operative year, in which election was held, could not be extended.
H This appeal was filed against the impugned order of the High Court.
220
D.P. YADAVv. STATE 221

The appellant contended that the Managing Committee constituted A
under the Act and the Rules had three year term iJ,l office and the same
could not be reduced by giving !m isolated meaning to the first proviso to
Section 14(10), thereby rendering the provisions of Rule 22(2) of the Rules
as otiose. It was alleged that the provisions of the Act which permitted the
State Government to reduce the office term of the Managing Committee
were arbitrary and not-legally sustainable.
B

The question raised for consideration was whether the three-year
term of the Managing Committee was to be counted from the beginning of
the 'co-operative year' in which the elections by ballot were held or from
the 'co-operative year' when the nominations were made by the State C
Government?

Allowing the appeal, this Court

HELD 1.1. Rule 22(2) read with Section 14(2) of the Bihar Co-opera-
tive Societies Act makes it abundantly clear that constitution of the D

-· Managing Committee is to be treated as complete only when the elections
by ballot as well as the nominations are finalised. Even otherwise, to fulfil
the avowed object of the Act and to encourage and promote the co-opera-
tive movement in the State. It is necessary that the Managing Committee
as constituted under Rule 22(2) of the Bihar Co-operative Societies Rules
should be given its full tenure of three cooperative years. Having provided
E
for three years term in office to the Managing Committee of a Society, it
could not be the intention of the legislature to leave it to the State
Government to reduce the same to as short a period as three weeks, which
would be a mockery. In the first proviso to Section 14(10) the expression
'the co-operative year in which elections are held' means not only the F
elections by way of ballot. but also the nominations under the Act. The
term of the Managing Committee under the Act and the Rules is to
commence from the beginning of the co-operative year in which the
nominations by the State Government are completed and the Managing
Committee is constitutedin terms of Rule 22(2) of Rules. (228-H, 229-A-C]
G
1.2. Although the expression 'election' has been defined under the
Rules, the said definition has been specifically confined to the election in
accordance with the Rules. The election under Rules 21B-21X is only by
way of ballot. There is no provision for nominations under the Rules.
Therefore, the definition of 'election' under Rule 2(xvi) read with Rules H
222 SUPREME COURT REPORTS (1995] 1 S.C.R.

A 218 to 21X only means the election as provided under the Rules by way of
ballot. The expression "election" as defined under the Rules has to be ""--,..
interpreted in the context of the Rules and would not, therefore, go \

·~
contrary to the interpretation given to the said expression in the context
of the provisions of the Act. (229-D-E]
B CIVIL APPELLATE JURISDICTION : Civil Appeal No 7423 of
1994.
... .
From the Judgment and Order dated 2.3.94 of the Patna High Court
in C.W.J.C. No. 6601 of 1993.
c Sunil Gupta, Arvind Verma and Pramod Dayal for the Appellant.

Dr. Shankar Ghosh and B.B. Singh for the State.

S.B. Sanyal, Mrs. Alka Jha and Anil Kr. Jha for the Respondents.
D The Judgment of the Court was delivered by -.,r·,-

KULDIP SINGH, J. The term of office of the members of the
Managing Committee of a society registered under the Bihar Co-operative
Societies Act, 1935 (the 'Act') and the Bihar Co-operative Societies Rules,
E 1959 (the Rules) is three "co-operative years". The State Government,
under the Act, has a right to nominate - depending upon its share in the
share-capital of the society - certain number of members to the Managing
Committee of a society. The question for consideration is whether the
three-year term of the Managing Committee is to be counted from the
beginning of the 'cooperative year' in which the elections by ballot are held
F or from the 'co-operative year' when the nominations are made by the State
Government ?

Before stating the necessary facts, it would be useful to examine the
relevant provisions of the Act and the Rules. These are Sections 2(bb),
G 2(e), 14(2), 14(4), 14(9) and the first proviso to Section 14(10) reading as
under:-

2(bb) 'Cooperative year' means a year beginning with the 1st April
and ending on the 31st March.

H 2(e) 'Managing Committee' means the committee of management
D.P. YADAVv. STATE[KULDIPSINGH,J.] 223

or other body to whom the management of the affairs of a A
registered society is entrusted.

14(2) The management of registered society shall be vested in a
managing committee constituted in accordance with the rules :

B
14(4) Notwithstanding anything contained in any provision of this
Act, the rules framed thereunder or the bye- laws of any registered
society where the State Government has --

(a) subscribed directly to the share captial of a registered C
society; or

(b) assisted indirectly in the formation or augmentation of the
share captial of a registered society; or

(c) given loans or made advances to a registered society or D
guaranteed the repayment of principal and payment of interest on
debentures issued by a registered society for or guaranteed the
repayment of principal and payment of interest on loans or advan-
ces to a registered society;
E
in that case the State Government shall have the right to nominate
on the Managing Committee of such registered society not more
than two persons one of whom shall be a Government servant, but
the said Government servant shall have no right to vote in the
election of the office-bearers of the registered society :
F
Provided that notwithstanding the foregoing provision con-
tained in sub-sections 4(a), (b) and (c)

(i) where the share of the State Government in the share capital
of such registered so.ciety ·exceeds thirty per cent but does not
exceed fifty per cent, the State Government shall have the right to G
nominate upto one-third of the total number of the members of
the Managing Committee including the Chairman; and such right
once accrued shall continue until the share of the State Govern-
ment in the share capital of the registered society goes down to
less than twenty five per cent; H
224 SUPREME COURT REPORTS (1995] l S.C.R.

A (ii) Where the share of the State Government in the share
capital of such registered society exceeds fifty per cent, but does
not exceed sixty per cent in the total share capital of the registered
society, the State Government shall have the right to nominate such
number of members of the Managing Committee including the
Chairman, as is nearest upto one-half of the total, and such right
B once accrued shall continue until the share of the State Govern-
ment in the share captial of the registered society goes down to
less than forty per cent; -T ,.\

(iii) Where the share of the .State Governm,ent in the share
c capital of such registered society exceeds sixty per cent, the State
Government shall have the right to nominate upto two-thirds of
the total number of members of the Managing Committee includ-
ing the Chairman, and such right once accrued shall continue until
the share of the State Government in the share capital of the
registered society goes down to less than fifty five per cent:
D
Provided that notwithstanding anything contained in proviso (i),
(ii) and (iii) of sub-section ( 4), the State Government shall not
nominate Chairman and other members of the Managing Commit-
tee if the share capital subscribed to by the State Government in
E a registered society is less then fifteen lakhs of rupees;

Provided further that wh.!!re the bye-laws of a registered society so
provide the State Government or the Registrar, as the case may
be, may nominate more than two third members including office
F bearers of the Managing Committee on such terms and conditions
as may be prescribed in the bye-laws;

14(9) Notwithstan&u: anything contained in the rules or bye-laws
G of a registered society, the term of the members and the office-
bearers of the Managing Committee of a registered society shall
be three co-operative years, and they shall continue to hold office
after expiry of their term till the elections are held or for nine ,
months from the close of the co-operative year, whichever is
H earlier.
D.P. YADAV v. STATE [KULDIP SINGH,J.] 225

14(10) .............................................. . A
Provided that irrespective of the date when the election is so
held the term of the members and the office-bearers of the Manag-
ing Committee shall be deemed to have commenced from the
beginning of the co-operative year in which the elections are held:
B

• ,,. Rules 2(xvi), 21A, 22(1) and 22(2) of the Rules which are relevant are
reproduced hereunder :-

"2(xvi) 'Election' means election, in accordance with these Rules, C
of -

(a) Delegate,

(b) Members of the Managing Committee; and/or
D
(c) Office-bearers of a Co-operative Society;

21-A. Notwithstanding any rnlc and bye-laws of any society the
election of the members of the Managing Committee, office-
bearers thereof and the delegates of the society shall be held in a
Special General Meeting in accordance with Rules 21-B to 21-X: E
Provided that the election of a newly registered society shall be
held in the Preliminary General Meeting according to rule
20(2)(a)to(e).

22. Managing Committee -
F

(1) Subject to nominations by the State Government and/or the
Registrar of such number of members to the Managing Committee
as prescribed in the Act, Rules and bye-laws of a registered society,
the Managing Committee of the society shall be constituted: G
Provided that the election of the members of the Managing
Committee and office-bearers thqeof shall be held in accordance
with the procedure laid down in Rule 21-B to 21-X.

(2) The members of the Managing Committee and the Office- H
226 SUPREME COURT REPORTS [1995] 1 S.C.R.

A bearers shall be deemed to have taken over charge immediately
after the constitution of the Managing Committee:

Provided that the constitution of the Managing Committee shall ·
not be treated as complete unless and until the members thereof
have been duly elected and/or nominated by the authority em-
B powered to do so under the Act, Rules and the Bye-laws of the
Society.

Dinesh Prasad Yadav, the appellant, was a member of the Managing
Committee of the Katihar pistrict Central Co-operative Bank (the 'Bank')
C along with respondents 5 to 12. They were elected as such by votes on
January 20, 1991 under Rule 21A of the Rules. The State Government
being a major shareholder in the share capital of the Bank it has the right
to nominate upto one-third of the total members of the Managing Com-
mittee of the Bank, including the Chairman. Though the elections by way
of ballot were held on January 20, 1991, the State Government made the
D nominations to the Managing Committee of the Bank as late as March 2,
1993. It is not disputed that the Managing Committee was not permitted
to function till March 2, 1993 on the ground that it got constituted under
Rule 22 of the Rules only after the nominations were made by the State
Government.
E
The Managing Committee of the Bank had hardly started function-
ing, when by the Order dated March 5, 1993, the State Government
informed the Committee that its term was to expire on March 31, 1993.
The State Government, on the basis of the opinion obtained from the law
F department and the Advocate General of the State, came to the conclusion yv
that the elections having been held on January 20, 1991, the terms of office
of the Managing Committee under the first proviso to Section 14(10) of
the Act would be deemed to have commenced from April 1, 1990 (begin-
ning of the co-operative year) and would come to an end on March 31,
G 1993 (end of the third co-operative year).
The appellant and respondents 5 to 12 challenged the order of the
State Government dated March 5, 1993 by way of a writ petition before
the Patna High Court. A Division Bench of the High Court following its
earlier judgment in Bihar State Handloom Weavers Union & Ors. v. State
H of Bihar & Ors., CWJC No. 6543 of 1993 and connected matters decided
D.P. YADAVv. STATE[KULDIPSINGH,J.] 227

on February 10, 1994, dismissed the writ petition by the impugned order A
dated March 2, 1994. In B'ilzar State Handloom Weave1~ case the High
Court proceeded on the following reasoning :-

"No doubt, in some of the cases, due to laches and inaction of the
executive, certain members who are so nominated by the State
B
Government under the provisions of sub-section (4) of Section 14
are deprived to hold office for full term or three co-operative years,
..... but due to such inaction and laches of the executive, the mandate
of legislature, fixing a tenure of three co-operative.years, commenc-
ing from the beginning of the co-operative year, in which election
was held, cannot be extended. On the other hand, there is no C
provision under the Act and Rules to show that the term of the
elected members and office bearers, which is three co-operative
years, can be extended, except in the m.anner prescribed under
sub-sections (9) and (10) of Section 14."
D
This appeal, by way of special leave, is against the impugned order of the
High Court. The appellant has also challenged the correctness of the High
Court judgment in Bihar State Handloom Weavers case.

Sri Sunil Gupta, learned counsel appearing for the appellant, has E
vehemently contended that the Managing Committee constituted under the
Act and the Rules has three-year term in office and the some cannot be
reduced by giving an isolated meaning to the first proviso to Section 14(10)
of the Act thereby rendering the provisions of Rule 22(2) of the Rules as
otiose. He further contended that various provisions of the Act and the
Rules are to be harmoniously interpreted to give purposeful meaning to
F
the said provisions. In the alternative the learned counsel contended that
the provisions of the Act which permit the State Government to reduce the
office term of the Managing Committee from three years to three weeks,
as happened here, ~re wholly arbitrary and cannot be sustained in the eyes
~~ G

• The proVIsmns of the Act and the Rules, quoted above, clearly
~ indicate that the scheme of the Act gives wide powers to the State Govern-
, ment to control those societies in which it has considerably contributed
towards the share capital. The State Government can nominate even upto H
228 SUPREME COURT REPORTS [1995] 1 S.C.R.

A two-third of the total members of the Managing Committee including the
Chairman. It would, therefore, be in tune with the scheme of the Act to
hold that the Managing Committee cannot assume office till the time the
nominations are made by the State Government. Proviso to Rule 22(2) of
the Rules rightly provides that the Managing Committee shall not be
,B treated as complete unless the members thereof have been duly elected
and/or nominated by the authority empowered to do so under the Act,
Rules and bye-laws of the Society.

The expression 'election' has not been defined under the Act. In the
absence of any definition by the legislature we have to follow the ordinary
C meaning given to the said expression. Collins English Dictionary defines
'election' as under :

"The selection by vote of a person or persons from among can-
didates for a position, esp. a political office. The act or an instance
of choosing."
D
Webester Comprehensive Dictionary, International Edn., gives the folowing
meaning to the expression 'election':

"The selection of a person or persons for office as by ballot. A
E choice, as between alternatives, choice in general."

The expression 'election', therefore, means selection of a person by
vote or even otherwise. When a person is nominated by way of selection
on the basis of a given criteria from amongst several persons, then in the
broader sense he is elected to the office. We are of the view that the
F expression 'elections', in the first proviso to Section 14(10) of the Act, has
been used in the broader sense. It includes election by ballot as well as the
choice by nomination. This interpretation would make Rule 22(2) of the
Rules workable. Section 14(2) of the Act vests the management of a
registered society in a Managing Committee constituted in accordance with
G the Rules. Section 14(4) further provides that even upto two-third members
of the Managing Committee can be terminated. Sub-section (8) of Section
14 further imposes bar on the members of the Managing Committee for
re-election after they have held two consecutive terms. Rule 22(2) read
with Section 14(2) of the Act makes it abundantly clear that constitution
H of the Managing Committee is to be treated as complete only when the
D.P. YADAVv. STATE[KULDIPSINGH,J.] 229

elections by ballot as well as the nominations are finalised. Even otherwise, A
to fulfil the avowed object of the Act and to encourage and promote the
co-operative movement in the State, it is necessary that th~ Managing
Committee as constituted under Rule 22(2) of the Rules should be given
its full tenure of three co-operative years. Having provided for three years'
term in office to the Managing Committee of a Society, it could not be the B
intention of the legislature to leave it to the State Government to reduce
the same to as short a period as three weeks, which would be a mockery.
We, therefore, hold that in the first proviso to Section 14(10) the expression
'the co-operative year in which elections are held' means not only the
elections by way of ballot, but also the nominations under the Act. The net C
result is that the term of the Managing Committee under the Act and the
Rules is to commence from the beginning of the co-operative year in which
the nominations by the State Government are completed and the Managing
Committee is constituted in terms of Rules 22(2) of the Rules.

Although the expression 'election' has been defined under the Rules, D
but the said definition has been specifically confined to the election in
accordance with the Rules. The election under Rules 21B-21X is only by
way of ballot. There is no provision for nominations under the Rules.
Therefore, the definition of 'election' under Rule 2(xvi) read with Rules
21B to 21X only means the election as provided under the Rules by way E
of ballot. The expression "election" as defmed under the Rules has to be
interpreted in the context of the Rules and would not, therefore, go
contrary to the interpretation given by us to the said expression in the
context of the provisions of the Act.

Ordinarily, in view of the interpretation given by u& to the relevant F
provisions of the Act and the Rules, we should have directed that the
Managing Committee of the Bank whose election was completed in March,
1993 be put back in office and given a three year term from April 1, 1992,
but on the facts and circumstances of this case, we are not inclined to do
so. After the impugned order of the High Court, fresh elections to the G
Managing Committee of the Bank have taken place on July 5, 1994. The
General Body of the Bank having elected fresh members to the Managing
Committee of the Bank, it would not be in the interest of justice to set
aside the same. Even if we give relief to the appellant, the old Committee
gets tenure only upto March 31, 1995. We do not wish to reverse the H
230 SUPREME COURT REPORTS [1995] 1 S.C.R.

A process .to give benefit to the appellant only for a short period.

We allow the appeal in the above terms and set aside the impugned
order of the High Court. We further hold that the judgment of the Patna
High Court in CWJC No. 2297 of 1993(R) does not lay down the correct
law. The appellant shall be entitled to costs which we quantify as Rs. 15,000
B to be paid by the State Government .

A.G. Appeal allowed.