-1- IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO. 43 OF 2006 1. Shri Laxman Ladu Raut, Major of age, Residing at H. No.181, Mahalwada, Sal, Bicholim Goa. 2. Shri Mangaldas K. Gawas, Chairman of Navelim, Vivid Karyakari, Shakari Seva Society Ltd., Bicholim, Goa. ... Petitioners V e r s u s 1. Union of India, through the Secretary, Ministry of Agriculture, Department of Agriculture and Co-operation, Krishi Bhawan, New Delhi. 2. Shri P. Sampath, Director of Co-operation, Ministry of Agriculture, Department of Agriculture and Co-operation, Krishi Bhawan, New Delhi. 3. The Central Registrar, Co-operative Societies, Krishi Bhawan, New Delhi. 4. The Goa State Co-operative Bank Ltd., through its Managing Director, Sahakar Sankul, Patto Plaza, EDC Complex, Panaji, Goa. 5. Shri Ramchandra G. N. Mule, -2- 6. Shri Avelino Marcos Sebastiao Silva, 7. Shri Prabhakar K. Gawas 8. Shri Vinayak K. Narvekar 9. Shri Shrikant P. Naik 10. Shri Umesh B. Shirodkar 11. Shri Mahesh Amonkar 12. Shri Prakash Velip 13. Shri Rajkumar S. Dessai 14. Shri Dadi G. Naik 15. Shri Narayan V. Mandrekar 16. Shri Ramkrishna K. Dangui 17. Smt. Vanita S. Khedekar 18. Shri Rameshbhai J. Bamania 19. Shri Mohanbhai P. Tandel 20. Shri Anand R. Naik Gaonkar (All Directors of the Board of Goa State Co-operative Bank Ltd., Panaji, Goa) ... Respondents Mr. A. N. S. Nadkarni and Mr. H. D. Naik, Advocates for the Petitioners. Mr. C. A. Ferreira, Assistant Solicitor General for the Respondent Nos.1 to 3. Mr. S. K. Kakodkar, Senior Advocate with Mr. Rama Rivankar, Advocate for the Respondent Nos.5, 6, 7, 9, 10 and 11. Mr. S. N. Joshi, Advocate for the Respondent No.4. -3- Mr. S. N. Sawaikar, Advocate for the Respondent Nos.12. 13 and 14. Mr. A. Kansar, Advocate for the Respondent No.15. CORAM : S. A. BOBDE & N. A. BRITTO, JJ. DATE : 25TH APRIL, 2007. JUDGMENT (PER N. A. BRITTO, J.) By this petition filed under Articles 226 and 227 of the Constitution of India, the petitioners assail the letter/communication dated 20-12-2005 issued by the Director(Co-operation) with the approval of the Central Registrar of Co-Operative Societies, by which it has been clarified that the term of Office of the present Board of Directors(Respondent Nos.5 to 20) will be 5 years from the date of election(25-1-2003). 2. The petitioners have assailed the said letter essentially on the ground that it is grossly illegal, arbitrary and unauthorized since the Certificate of Registration dated 1-3-2004 had fixed the tenure of the present Board of Directors to 3 years and the tenure of 5 years was for the Board of Directors to be elected in future. The petitioners have therefore sought, interalia, for a writ of certiorari or a writ in the nature of certiorari or any other writ or order and direction to quash and set aside the said clarification contained in the said letter dated 20-12-2005 and also for a further direction to Respondent No.3-Central Registrar to appoint an Administrator to administer the affairs of respondent -4- no.4-Bank and to direct respondent no.3 to forthwith hold the elections for the Board of Directors of respondent no.4-Bank as the term of the present Board of Directors(Respondent Nos.5 to 20) expired on 31-1-2006. 3. Although the petitioners' challenge is limited to the said letter dated 20-12-2005 in relation to the Certificate of Amendment of Registration dated 1-3-2004, there are two other such Certificates brought into controversy, on behalf of the respondents, namely the Certificate of Registration of Amendment dated 30-9-2002 by which the Central Registrar had registered the proposed Bye-Law No.31 setting out the term of Office of the elected members of the Board from 3 years to 5 years and the Certificate of Registration of Amendment dated 21-1-2003 by which the Registration Certificate of Amendment dated 30-9-2002 was cancelled and the earlier proposed enblock amendment fixing the tenure of the Board for 3 years and that of the Chairman and Vice-Chairman also for 3 years was again fixed for 3 years and that is to say by virtue of the Bye-Laws No.31 and 35(ii) of the Bye-Laws sent for registration, on behalf of the Respondent-Bank by letter dated 17-6-2002. 4. Some more facts are required to be stated to dispose of this petition. 5. On or about 30-5-1987 on the formation of a separate State of Goa and the Union Territory of Daman and Diu, the respondent no.4 became a deemed Multi-State Co-operative Society by virtue of Section 95 of the -5- Multi-State Co-operative Societies Act, 1984(old Act, for short). The tenure of the Board of Directors then was for a period of 3 years and that was in view of Section 35(3) of the old Act which provided that the term Office of the elected members of the Board would be such, not exceeding 3 years from the date of election, as may be specified in the Bye-Laws of the Multi-State Co-operative Society. On or about 17-6-2002, the Respondent-Bank addressed a letter to the Central Registrar seeking registration of amendments to the Bye-Laws and there is no dispute that as per the said letter what was proposed to be registered, inter alia, was Bye-Law No.31 which provided that the term of Office of the elected members of the Board would be 3 years from the date of election or as may be provided in the Act. It also provided that the elected members would continue to hold Office till their successors were elected or nominated under the provisions of the Act or the Rules framed thereunder. Likewise Bye-Law No.35(ii) provided that the term of Office of the Chairman and Vice-Chairman should be for a period of 3 years unless removed from Office by motion of no confidence as per procedure prescribed by Sub-Clause III i.e. by virtue of a motion of no confidence at a meeting of the Board of Directors by a simple majority. 6. While the registration of the amendment sent by letter dated 17-6-2002 was pending for consideration of Respondent No.3-the Central Registrar, on 19-8-2002 the old Act was repealed and the Multi-State Co-operative Societies Act, 2002(new Act, for short) came into force and the Central Registrar registered the Bye-laws sent for approval not for 3 years as proposed by the Respondent-Bank but for 5 years and this, the Central Registrar -6- did, as explained by him in the reply filed, to bring into line with the provisions of the new Act which by virtue of sub-section (5) of Section 45 provided that the term of Office of the elected members of the Board should be not exceeding 5 years from the date of election, as may be specified in the Bye-Laws of the Multi- State Co-operative Society. 7. By certificate of amendment dated 21-1-2003(at page 75 of the Paper Book) the Respondent-Central Registrar cancelled the registration certificate dated 30-9-2002(at pages 65/109 of the Paper Book) and registered the enblock amendments sent by the respondent-Bank by letter dated 17-6-2002 under Section 11 of the new Act thereby reverting to the tenure of the Board of Directors and that of the Chairman and Vice-Chairman to 3 years. The elections to the present Board of Directors(respondent nos.5 to 20) were held on 25-1-2003 and they took charge on 31-1-2003. In other words, the elections to the present Board of Directors were held at a time when the Certificate of Registration dated 21-1-2003(at page 75 of the paper book) was in full force and effect i.e. providing the tenure for the Board of Directors for 3 years. Needless to say the present Board of Directors(respondent nos.5 to 20) also took charge on 31-1-2003 when the said certificate of registration dated 21-1-2003 approving a tenure of 3 years for the Board of Directors was in force. As per the Respondent-Central Registrar, as explained by him in the affidavit-in-reply, under the old Act, the Chief Director(Co-operation) in the Department of Agriculture and Co-operation was exercising the delegated powers of the Central Registrar for the approval of the Bye-Laws and amendments thereto, and while -7- the matter of registration of amendment to the Bye-Laws was under examination, the new Act came into existence and the Chief Director(Co- operation) under the assumption that he still enjoyed the delegated powers of the Central Registrar had issued the said Certificate of Registration dated 30-9- 2002 with modification of 5 years to bring it in line with the provisions of the new Act but later it came to notice that no such powers of the Central Registrar of Co- operative Societies were delegated to the Chief Director(Co-operation) under the new Act and on reviewing all such registrations, and we are informed, by the learned Assistant Solicitor General appearing on behalf of the Central Registrar, that this was done throughout the country, issued the Certificate of Registration dated 21-1-2003 cancelling the registration to bring the situation back to the stage prevailing before 30-9-2002 i.e. providing a tenure of 3 years to the Board of Directors. 8. Faced with the said Registration Certificate dated 21-1-2003 by which the tenure particularly of the Board of Directors was reduced to 3 years the Respondent-Bank held a meeting on 28-9-2003 and framed a Bye-Law approving a tenure of 5 years for the Board of its Directors and sent the same for the approval of the Respondent-Central Registrar vide their letter dated 25-11-2003 and the same was approved by the Respondent-Central Registrar vide Certificate dated 1-3-2004(at page 76 of the Paper Book) under Section 11 of the new Act stating that the tenure of the present Board of Directors would be for a period of 3 years and that the extended tenure of 5 years would be applicable for future members of the Board of Directors as well as the Chairman -8- and Vice-Chairman of the Bank. 9. None of the respondents, namely Respondent No.4-Bank or Respondent Nos.5 to 20 members of the Board of Directors contested the validity of said Certificate of Registration dated 1-3-2004(at page 76 of the Paper Book) but several representations appear to have been made to the Respondent-Central Registrar and particularly a representation dated 20-10-2005 and thereafter the Central Registrar issued the impugned clarification dated 20-12-2005 by which the tenure of the present Board of Directors has been extended to 5 years. 10. The case of the petitioners is that the Certificate of Registration of Amendment dated 1-3-2004 was issued by the Respondent-Central Registrar in exercise of his statutory powers conferred under Section 11(7) of the new Act which had provided that the tenure of the present Board of Directors would be 3 years and that the tenure of 5 years would be applicable to future members of the Board of Directors and that the clarification by impugned letter dated 20-12-2005 (at page 38 of the Paper Book) is completely contrary to and against the registration of the Bye-Laws by virtue of the said Certificate of Registration dated 1-3-2004 and also the provisions of sub-section(5) of Section 45 of the new Act, in that the term of Office has to be as specified in the Bye-Laws of the Multi-State Co-operative Society. 11. Before we consider the said case of the petitioners and other rival -9- submissions, it is necessary to deal with three preliminary objections taken on behalf of the respondent nos.5 to 7 and 9 to 11. 12. The first is in relation to locus standi of the petitioners to maintain the present writ petition. As stated in the petition, the petitioner no.1 is a Member and share-holder of Respondent-Bank and the petitioner no.2 is a President of a Society which is also a member of the Respondent-Bank. The petitioner no.1 is also a member and a share-holder of petitioner no.2. As per the learned Senior Counsel appearing on behalf of the respondent nos.5 to 7 and 9 to 11 the Membership of the respondent-Bank consists of Co-operative Societies, Government and institutions eligible for “B” class shares as per Bye-Law No.4(ii) and individual members as per Bye-Law 7 of the Bye-Laws. As per the said respondents, there is no allegation in the petition that the petitioner no.1 is a delegate of individual members of the Bank nor there is allegation that petitioner no.2 is a representative of the Co-operative Society of which he is the Chairman. As per the said respondents, the Act and the Bye-Laws do not give the petitioners a right to voice their grievances in the General Body or to vote at the election of the Board of Directors and therefore they have no locus standi to agitate their present grievance by way of this writ petition. On behalf of the petitioners, it is contended that the petitioner no.1 is a member and share-holder of the Respondent-Bank and the petitioner no.2 is the Chairman of a Co-operative Society which is also a member of the Respondent-Bank and both have sufficient locus standi to maintain the present petition. As far as this objection is concerned, we are not inclined to agree with the learned Senior -10- Counsel. As per Bye-Law No.29 of the Respondent-Bank, the Board of Directors consists of not more than 21 Directors and all individual members can elect one Director and likewise Seva Societies from the Goa State are entitled to elect 4 Directors. In other words, Bye-Law No.21 relates to the composition of the Board of Directors and the constituencies for election to the Board of Directors. As seen, individual share-holders are also entitled to elect one Director to be their representative on the Board of Directors. Even if it is held that such a Director is elected by a delegate of the individual members, an individual member and share-holder though not directly but indirectly has an opportunity to express his say or cast his vote to select a delegate who in turn would elect a Director to represent them on the Board of Directors and in case such a Director was elected for a tenure of 3 years, such a member or share- holder will have certainly a right to question his continuance beyond the period of 3 years and that too by invoking the writ jurisdiction of this Court. The petitioner no.2 is the Chairman of a Co-operative Seva Society who is also a member of the respondent-Bank and being so they have necessary interest to maintain this petition. In other words, both the petitioners have locus standi to file the present petition. We must note that over the years the law in respect of locus standi in filing writ petitions has considerably advanced in this country and in view of this matter also it cannot be said that the petitioners have no locus standi to challenge the tenure of present Board of Directors beyond 3 years. 13. The next submission of the learned Senior Counsel, appearing on behalf of the said respondents, is that the petitioners have efficacious alternative -11- remedy under Section 84 of the new Act. As per the said respondents, the dispute raised by the petitioners is in substance a dispute touching the constitution and management of the Respondent-Bank and/or in connection with the election of the Officers of the Bank and therefore the said dispute is required to be referred to and decided by an Arbitrator to be appointed by the Central Registrar in terms of sub-section(4) of Section 84 of the new Act. Referring to the definition of Section 3(t) of the new Act, it is contended that a Member of the Board of Directors is also included in the expression of Officer, as defined by Section 3(t) of the Act. Referring to Section 3(b) it is submitted that the Board means the Board of Directors or the governing body of a Multi-State Co-operative Society to which the management of the Society is entrusted. It is submitted that there are no restrictions on the powers of the Arbitrator, appointed in terms of sub-section(4) of Section 84 of the new Act to grant relief and all that he is required to follow are the provisions of the Arbitration and Conciliation Act, 1986 as provided by sub-section(5) of Section 84 of the Act. It is further submitted that acting quasi judicially the Arbitrator will not and ought not to be, influenced by the impugned letter of the Central Registrar which is purely an administrative order. It is also submitted that the period of limitation for referring such dispute of arbitration is also not over. On the other hand, it is submitted on behalf of the petitioners that the impugned order/letter dated 20-12-2005 cannot be challenged nor can it be made the subject matter of a dispute under Section 84 of the said Act. It is also submitted that a Co-operative Society is required to be managed and its affairs conducted in accordance with the provisions of the new Act and that by the impugned letter dated 20-12-2005 the Director(Co- -12- operation) has defied the provisions of sub-section(5) of Section 45 of the Act and therefore the petitioners are before this Court seeking for an appropriate writ and consequently and order directing the holding of elections in terms of the provisions of the new Act. Reliance has been placed on behalf of the petitioners on K. Venkatachalam v. A. Swamickan and another (1999 4 SCC 526), particularly para 20 thereof which we have perused and which in our view has no relevance to the facts of this petition. Although, we are inclined to agree with the contention of the learned Senior Counsel that the present dispute is a dispute touching the constitution and management of the Respondent-Bank which would be required to be settled by an Arbitrator in terms of sub-sections (3) and (4) of Section 84 of the new Act we are unable to entertain this objection for reasons more than one. Firstly, this objection was not raised before the petition was admitted by Order dated 22-2-2006 and is otherwise not taken in the return filed on behalf of the said respondents. As stated by the Apex Court in the case of S. S. Sharma and others v. Union of India and others (AIR 1981 SCC 588) in a Writ Petition, the Courts should ordinarily insist on the parties being confined to their specific written pleadings and should not be permitted to deviate from them by way of modification or supplementation except through the well-known process of formally applying for amendment. It is not that justice should be available to only those who approach the Court confined in a strait-jacket. But there is a procedure known to the law, and long established by codified practice and good reason, for seeking amendment of the pleadings. Besides this, oral submissions raising new points for the first time tend to do grave injury to a contesting party by depriving it of the opportunity, to which the -13- principles of natural justice hold it entitled, of adequately preparing its response. Nevertheless since the petition was admitted and Rule issued, we are inclined to dispose off the same on merits. Moreover, referring the parties to arbitration at this stage, will give respondent Nos.5 to 20 an added advantage to complete their tenure of 5 years which they are not entitled to. In this context reference could be made to the decision reported in K. Venkatachalam v. A. Swamickan and another(supra) wherein the Apex Court has observed that Article 226 of the Constitution is couched in the widest possible terms and unless there is a clear bar to jurisdiction of the High Court its powers under Article 226 of the Constitution can be exercised when there is any act which is against any provision of law or violative of constitutional provisions and when recourse cannot be had to the provisions of the Act for the appropriate relief. Moreover, in our view, the Arbitrator to be appointed by the Central Registrar in terms of sub- section(4) of Section 84 of the new Act may not be the right person to decide a dispute of the present nature particularly when it relates to the very clarification given by the said Central Registrar that the tenure of the present Board of Directors would be for a period of 5 years. Further, having regard to the scope of the jurisdiction of the Arbitrator which is restricted to the nature of disputes delineated in sub-sections(1) and (2) of Section 84 we are of the view that the Arbitrator would not have the power to quash and set aside the impugned order of the Central Registrar which is in the nature of a clarification. We are therefore not inclined to entertain this objection as well. -14- 14. The third objection taken by the learned Senior Counsel appearing on behalf of the said Respondents is that the petition is liable to be dismissed for suppression of vital facts and making false statements. It is their contention that the petitioners have not exhibited the Bye-Laws registered by the Certificate of Registration dated 30-9-2002 and that the petition contains false statements that the said Bye-Laws provided for a term of 3 years for the Board of Directors when actually it was for 5 years. Reliance has been placed on Bharat Singh and others v. State of Haryana and others((1988) 4 SCC 534). In this case, in para 13, on which reliance has been placed on behalf of the said respondents by the learned Senior Counsel it is stated that there is a distinction between a pleading under the Code of Civil Procedure and a writ petition or a counter- affidavit. While in a pleading, that is, a plaint or a written statement, the facts and not evidence are required to be pleaded, in a writ petition or in the counter- affidavit not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it. This decision is hardly of any relevance to the point sought to be canvassed on behalf of the said respondents. Nevertheless, it is an admitted position that the Bye-Laws which were sent for registration had proposed a tenure of 3 years to the Board of Directors of the respondent-Bank and it is the Central Registrar who registered the said Bye-Laws by Certificate of Registration dated 30-9-2002 thereby giving a tenure of 5 years. This position can be seen from para 8 of the affidavit-in-reply dated 20-2-2006(at page 42 of the Paper Book) wherein it is stated that though the respondent-Bank had sought Registration of the Certificate with Bye-Laws providing for a term of 3 years, the Chief Director(Co-operation) granted the certificate dated 30-9-2002 -15- providing for 5 years term to the Board of Directors and also to a Chairman or Vice-Chairman of the said Board. 15. As observed earlier the Certificate dated 30-9-2002 was itself revoked by the Certificate dated 21-1-2003, thus providing for a term of 3 years. 16. In this view of the matter, we do not find that the petitioners had made such false statements or suppressed such vital facts which would entail the dismissal of the writ petition. This objection also needs to be rejected. 17. Before reverting to the merits of the petition and the rival submissions made, it may be stated that Section 9 of the old Act provided and Section 11 of the new Act now provides for amendment of the Bye-Laws of a Multi-State Co-operative Society and sub-section(1) of both the aforesaid Sections states that no amendment of any Bye-Law of a Multi-State Co-operative Society shall be valid unless such amendment has been registered under the Act. Sub-Section(3) of Section 9 of the old Act provided that the Central Registrar shall forward to the Multi-State Co-operative Society a copy of the registered amendment together with a certificate signed by him and such certificate shall be conclusive evidence that the amendment has been duly registered. Sub-Section (8) of Section 11 of the new Act provides that the Central Registrar shall forward to the Multi-State Co-operative Society a copy of the registered amendment together with a certificate