Notes:- in This Appendix , the Cases Decided by the Registrar and Other Officers of Co

Appendix A

[Notes:- In this Appendix , the cases decided by the Registrar and other officers of Co- operative Societies, those reported in “Bihar Revenue & Labour Journal” , are being given.]

Case-law U/s 2 (f ) & 8

In a large sized Multipurpose Co-operative Society, there was party feeling, both sides enrolledmembers. Legality of enrolled members by one party was brought to the notice of Dy, Registrar, Co-operative Societies. On receipt of the reply 37members were expelled, on the ground that many are the members of the same family and they have not paid their share money and according to Circular No.25 of 1961, only karta of the family can be the member.

Held, that Registrar‘s circular is of the advisory nature and should be followed only when organising society or admitting members. When a member is admitted according toAct and bye–laws, he is a valid member and he cannot be ousted quoting the circular.

That members already admitted should be called upon to fulfill the conditions within one month on the pain of expulsion.

That loanees should not be expelled, but should be given one month time to observe the balance formalities.

That all individuals above 18 years of age, who fulfilled the condition of the bye-laws are legal members. No loan should be given except to kartas but to ask them to fulfill all conditions for membership.

That member having lands under two Societies can remain member of one Society. In case he wishes to be member of both Societies, Registrar’s permission must be sought.

That Asstt. Registrar should visit and find out if membership conditions are fulfilled.

That a fresh election should be held after fulfilling all the formalities.

That application fails, with the above observations. Members of Hassanpur Large Sized Multipurpose Co-op. Society v. H.L.M. Co-op. Society, 1963 BRLJ(Rev.) 69.

Case-law U/s. 20

The case related to holding of Annual General Meeting. The point raised was that as the accounts of the Vyapar Mandal has not been audited, the meeting cannot be held.

Held, that accounts are not ready. This cannot stand in the way of holding the A.G. meeting because there is a clear provision in Rules, that if Audit Report is not ready, it could be held over till an extraordinary General Meeting is convened or till the next A.G. Meeting.

(2) That Annual General Meeting be held as Scheduled. The 25 members should be allowed to take part in the election with full right to vote. Shyam Narain Singh v. The jagdishpur Vyapar Mandal, 1969 BRLJ (Rev.) 158.

Case-law U/s. 26

At a meeting held of Fisherman Co-operative Society the President (B. D.O.) turned out 32 enrolled members, some other members, walked out of the meeting. Another meeting was held. The member was taken to District Co-operative officer, who held that action of the President (B.D.O.) as also the first meeting held was illegal. The opposite party filed an appeal against this order. The appeal was heard ex-parte.

Held, that in the light of the fact discussed in issue No. 1 & 2 the Annual General Meeting held on 13-3-63, if held was illegal and its proceedings are inoperative. From the judgment of the Distt. Co-operative Officer it is evident that the authority or legality of the Annual General Meeting held on 12-4-1963 was not challenged by any body in the lower court in the circumstances it cannot be taken up in appeal. Shri Munsi Choudhary v. Sri. Ram Autar Choudhary, 1961 BRLJ (Rev.) 91.

Case-law U/s. 27

In a large-sized Multipurpose Co-operative Society, there was party feeling, both sides enrolled members. Legality of enrolled members by one party was brough to the notice of Dy. Registrar, Co-operative Societies. On receipt of the reply 37 members were expelled, on the ground that many are members of the same family and they have not paid their share money and according to Circular No. 25 of 1961, only karta of the family can be the members.

Held: that Registrar’s circular is of the advisory nature and should be followed only when organising a society a society or admitting members. When a member is admitted according to Act and bye-laws, he is a valid member and he cannot be ousted quoting the circular.

That members already admitted should be called upon to fulfil the conditions within one month on the pain of expulsion.

That loanees should not be expelled, but should be given one month’s time to observe the balance formalities.

That all individuals above 18 years of age, who fulfilled the conditions of the bye-laws are member. No loan should be given except to kartas but to ask them to fulfill conditions for memberships.

That a member having lands under two societies can remain member of one Society. In case he wishes to be member of both Societies, Registrar’s permission must be sought.

The Asstt. Registrar should visit and find out if membership conditions are fulfilled.

That a fresh election should be held after fulfilling all the formalities.

That application fails, with the observations. H.L.S. Co-op. S.v.H.L.M. Co-op. Society, 1963 BRLJ(Rev.) 69.

Case-law U/s. 35

The case related to a society which convened an extra-ordinary general meeting which passed a resolution permitting the members to withdraw their share money and deposit the cost of land individually. The provision for with-drawal of share money was already there in the bye-laws of the society and Board of Directors were empowered to order withdrawal on certain conditions.

Held, that the resolution was not required and society could have deposited the cost of land on behalf of all the members.

Held further, that the general body is no doubt the supreme body of the society but even a supreme body has to function within the ambit of law in accordance with the provisions of Act, Rules and bye-laws and even if it is accepted that bye-laws are not statutes, they are not mere pieces of papers either. A society has to function in accordance with the provisions of bye-laws. In re B.D. of P.S.M.O.C.H.S. Society Ltd., 1974 BRLJ (Rev.) 33.

A General Meeting was called by the Co-operative Extension Supervisor as director by the S.D.O. Election was held. Ex-secretary filed a petition before the Asstt. Registrar, who held the meeting invalid as it was not called property.

Held:(1) That although rule 0(4) provides 15 days notice for calling the Annual General Meeting, and the notice falls short of 5 days but Sec. 35 (2) (b) does not prescribe any period.

(2) The meeting was called U/s. 37. The Act will take precedence over the orders.

(3) That 53 members were enrolled a month after the A.G. Meeting, so notice was not necessary.

(4) That as 3 members of the Managing committee were not nominated by the Registrar so it amounts to irregularity.

(5)That the meeting held was a valid one, but the election of members of Managing Committee is held null and void.

(6) The provisions of Sec. 35 shall take precedence over the provisions of sec. 0.

(7) That the next meeting should be held before 30.04.1962 as the provisions was held 2 year befor. Bujhawan Sahni v. Fudi Sahni, 1963 BRLJ (Rev) 117.

Case-law U/s. 40

The service of notice is the essential requirement of this section. Where it is found that the surcharge order has been passed without serving the notice on the person concerned the order is not valid.

The Court of Registrar can exercise power under section 151 C.P.I. to do justice and to prevent abuse of the process of the Court. Although no such power has been mentioned in the section but then no express restriction or prohibition has been mentioned in the section but then no express restriction or prohibition has been laid down in the section imposing restriction on the trial court in making use of section 151 C.P.C. in case this section applies to the appellate Court. M.P.Singh v. Asstt. Regr., Co-op. Societies, 1972 BRLJ (Rev.) 170 [Overruled by Rev. Case no. 62/72 dt. 23.12.1975.]

The case related to the surcharge proceeding against Shri Sukhdeo Pandey, Secretary Barakatha Forest Coupe Co-operative Society Ltd. District Hazaribagh for putting the Society to loss making payments contrary to the Rules and Bye-laws.

Held:(1) That the secretary should have taken all reasonable steps to safeguard the bamboos. He has not taken steps, so he is responsible for loss of Rs. 2988/-.

(2) That he cannot have any plea to absolve himself of the charge and make good the sum fo Rs. 813-37 Paise to the society.

(3) That Rs. 20.14 Paise paid to labourers be made good to the society.

(4) That Rs. 693/- not credited in the books of the society is a clear case of misappropriation, he should make good this amount to the society.

(5) The fine imposed by the forest Deptt. Of Rs. 675/- be made good by him, as he is responsible for that.

(6) That each balance of Rs. 2499-68 Paise be immediately paid to the society.

(7) That a total sum of Rs. 7682.99/- Paise be contributed by the see-retary within 30 days, failing which interest at the rate of 7% per annum shall be payable by him Sukhdeo Pandey, Secretary v. Bankatha Forest Coupe Co-op.Society, 1953 BRLJ (Rev.) 9.

A Co-operative Society sanctioned Rs. 25 as car allowance to its President who had to run place to place. Auditors objected to this. The matter was referred to the Registrar, Co-operative Societies.

Held: (1) That it is good argument that since President of other Societies do not take any such remuneration, it was not proper for Mr. Mukharjee to accept this remuneration.

(2) That auditor’s contention that the payment was illegal, because Mukharjee has not submitted details of his tour, is tenable.

(3) The remuneration has been paid with the a pproval of the general body.

(4) The Surcharge proceeding be dropped. Auditors v. J.B. Mukharjee, 1964 BRLJ (Rev.) 24.

The case related to surcharge proceedings against members of the managing committee of the Adhar Gur Khandsari Development Co-operative Ltd. for the years 1959-60 and 1960-61 on various charge.

Held: that Sri. Ram Naresh, Advocate, Secretary and Sri. Sheonath Pathak cannot escape the charge that they have successfully defrauded the society to the value of one bigha of land.

Rule 31 makes it obligatory for such payment being approved by the Registrar.

That the secretary cannot be allowed to take shelter under his empty excuse carefully created by him and he must make good whole amount.

That no member of the Managing Committee can take contracts, it contravenes rule 24(2) read with rule 22(2) read with rule 22(2). Ex-sectetary cannot plead ignorance of law.

The loss should be made good by the persons against whom it is acted. Adhar Gur Khandsari Development Co-operative Society Ltd. v. Ex-member of the Managing Committee, 1966 BRLJ (Rev.) 35.

The case related to surcharge proceedings, for shortage. It was alleged that a letter was sent for writing off the surcharge.

Held:(1) That approval of shortage should have been approved departmentally, it is serious omission. As the amount is small it be condoned and surcharge proposal be droppe.

(2) That in the light of findings surcharge proceedings are dropped, Inre The Pathargama Large Sized Multipurpose Co-operative Society Ltd., 1963 BRLJ (Rev.) 59.

The case related to surcharge against the secretary of the society and 6 members.

Held: (1) That the items relate to normal expenditure of the Society and have been passed by the Annual General Meeting. Secretary is not to be surcharged for it.

(2) That all the 8 items of surcharge be dropped against the secretary. In re Budhan Sahu, Secy., Amarpur Tel Utpadak Sahyog Samiti Ltd., 1967 BRLJ(Rev.) 82.

Surcharge proceedings against the staff of the society or various charges to make good the loss to the society.

Held: that the persons named below should contribute the amount mentioned against their names to the society and the amounts be paid within a month. Sri. R.P.Thakur, Hony. Secretary vs. Pratapganj V.M.Sahyog Samiti, 1966 BRLJ (Rev.) 84.

A petition was field by the member that the Annual Meeting of the Bank has not been held for three years, be held immediately or otherwise his right and interest will be very much prejudiced.

Held: that member is not going to be prejudiced for want of meeting.

(2) That audit should be completed very quickly and then the General Meeting should be called Thakur Yugal Kishore Singh v. Bihar State Land Morigage Bank Ltd., 1962 BRLJ (Rev.) 91.

A president of the society distributed profit money among the shareholders, without being certified by the Auditors. The Asstt. Registrar ordered the amount to be recovered from him and in turn he should realize it from the share-holders. A petition was field against this order.

Held: that although it is irregular, but it will create difficulties, confusion, and as such it would serve no purpose.

(2) That appeal is dismissed with the above modification. Suraj Narain Sah v. Neora Multipurpose co-operative Society Ltd. Distt. Muzaffarpur, 1962 BRLJ (Rev.) 92.

10.

The executive and staff of Jamtara Vyapar Mandal Sahyog Samiti Ltd., was srucharges on some items.

Held: that as the matter still pending with Govt. surcharge proceedings are dropped. In re Executive Staff of Jamtara Vyapar Mandal S.S.Ltd., 1967 BRLJ (Rev.) 101.

11.

Surcharge proceedings were drawn against the Ex-manager and salesman of Sonochakai Vyapar Mandal Sahyog Samiti Chakai for putting the society to loss by reason of their culpable negligence and miscounduct.

Held: that ex-manager should make good the loss of Rs. 350/- and the salesman of 1900/- at the rate of Rs. 50/- and Rs. 100/- per month respectively. Sri. Gita Pd. Singh & Surya Narain Sah v. Sono Chakat Vyaa Mandal Sahyog Samiti Ltd., 1965 BRLJ (Rev.) 107.

12.

The case related to surcharge proceedings, against the secretary of the Co-operative Society, who was surcharged for increased expenses over honorarium and law cases.

Held: that expenses have been increased without adequate profit. This is against bye-laws. The Society’s resolution cannot be approved. The Secretary to make good the loss of Rs. 114.35 paise. In re Shri Suraj Sah, Secretary, Rohtas Tulsiahi Multipurpose Co-operative Society Ltd., 1966 BRLJ (Rev.) 108.

13.

The case related to surcharge proceedings against the Ex-secretary and Ex-Manager of the Society on 16 items.

Held: that the ex-manager is responsible for the sum of Rs. 2,807.81. The transactions have taken place before 3.6.1969, the Vyapar Mandal to take award about the persons mentioned above (para 15), In re Uma Kant, 1967 BRLJ (Rev.) 114.

14.

It was a case of surcharge proceedings and for realization of the amount. The point involved was whether the members are responsible for the loss, which was due to the goods being sold at Govt. rates.

Held: that members are not liable to make good the loss or Rs. 3,686.21of the goods sold on the Govt. fixed price.

That the sum of Rs. 1.561 should be recovered from the members as the same has not been realized from the dealers. In re Bengal Jharia Colliery Employees Co-operative Stores, 1968 BRLJ (Rev.) 114.

15.

Defalcation took place in the Hajipur Central Co-operative Bank Ltd., and a large sum was misappropriated by the Head clerk, against whom criminal cases were started.

The responsibility for loss was fixed against the office bearers and specially the Hony. Secretary. Under Sec. 44, proceedings were started against them. The persons proceeded against were held responsible for the loss under the above sections of the Act.

Held: (1) that there is absolutely no substance in the contention of the Honorary Secretary that he was non-office worker hardly conversant with the rules and procedure.

(2) That the cash book was not signed regularly, that the payments were not made within his knowledge.

(3) That the complicity is proved U/s. 40 (b), (c) and (d) and they are held responsible and to contribute the sums noted against their names, by way of compensation, in respect of losses sustained by the above bank. Hajipur Central Co-operative Bank v. Shri Kamlesh Rai, 1962 BRLJ (Rev.) 116.

16.

It was a surcharge case against the Treasurer and Secretary, on allegation that expenditure was not controlled properly.

Held: that expenditure was not controlled for which Secretary and Treasurer are held responsible. The sale price was not based on cost and overhead charges were not reduced. Shri R.Singh and P.Maharj are to make good loss of Rs. 422.81 Paise. In re Shri Rajeshwar Prasad Singh and others, and Secretary of Navhatta Tar Gur. Utpadak Sahyog Samiti Ltd., 1966 BRLJ (Rev.) 133.

17.

The case related to election. The point was whether the amount due against the members was paid before the annual General Meeting or not.

Held: that it is not clear, whether the dues were paid or not.

That the case is remanded back for necessary hearing and judgment. Sri. Jagannath Sah v. Ram Prasad Bhagat, 1968 BRLJ (Rev.) 148.

18.

Deputy Registrar Co-operative Societies recommended surcharge proceeding against members of the society. Some of the surcharge proceedings related to more than 6 years.

Held: (1) I regret that registered bye-laws have not been produced. The surcharge proceedings show utter lack of responsibility and gross negligence on the part of the ex-officio office bearers who were being paid from the public exchequer. Assistant Registrar should have exercised some controal over the affairs of the Society. In the minimum he should have proposed action against the Inspector an ex-officio office bearer. The Deputy Registrar should have given some consideration of the omission. The proceeding is defective to some extent. According to section 40 of the Act, a surcharge proceeding has to be decided within 6 years from the date of occurrence. There was no meaning recommending some of the item, those which have become time barred.