Bye-Laws Of The Co-Operative Society Constitutes A Contract Between The Society And Its Constituents: Madras High Court

The appellants were challenging a common order dated 24.01.2020 passed by Single judge, whereby the Single judge held that the decisions taken by the Executive Committee of the petitioner Association in the meetings after the expiry of their tenure and the actions taken pursuant to the same are invalid in law and not binding on the members of the Association and thus also held that the appointment of the Election Officer and the election conducted are null and void, and consequently appointed a retired Judge as the new Election Officer to conduct fresh election.

The single judge also ordered that a fresh voters' list be prepared and fresh election notification shall be issued and that the entire process be completed within three months.

It was the case of the petitioners that the single judge heard appeals only on counter-affidavits and no written statements and in the guise of passing orders on interim applications, granted main relief itself. It was also contended that the plaintiffs in the suit were estopped from questioning the resolution as the decisions were taken in the general body meeting which was attended by the plaintiffs also. The decision to postpone election was taken within the period of office and therefore there is no illegality in the action of the electoral process.

The election notification was also never questioned. The appellants also submitted that the change in categorisation of certain members was made following due process of law. The appellants submitted that when the elections were postponed, the status of the Executive Committee is in the nature of "Care Taker Committee" to handover management to newly elected office-bearers.

The AG contended that since the writ petition has been filed by the general secretary of the association ad since the general secretary ceased to be so, he has no authority to file the writ and hence, the appeals may be dismissed in limine. He drew attention to Section 15(4) of the Tamil Nadu Societies Registration Act, 1975 which specifies that the term of office of the members of the committee should not be in excess to three years from the date of appointment. Thus, there was no office-bearers in the eye of law.

The counsel for plaintiffs mainly submits that extension of tenure of the Executive Committee was not in tune with the bye-laws of the Associations and the resolution to conduct elections is in contravention of the bye-laws. The plaintiffs also claimed that the signatures obtained in the AGM was for attendance purpose only and not with respect to passing resolution and therefore there is no estoppel. They also contended that the voter's list was modifies illegally and therefore conducting elections without resolving disputes relating to the same in not proper.

Holding the elections to be valid and the Executive Committee to be within power, the court drew attention to Section 15(5) of Tamil Nadu Societies Registration Act, 1975 which provides that the Executive Committee is eligible for reappointment. The act also provides in Section 86 that when the AGM has specifically allowed the existing committee members to continue, it would amount to reappointment in terms of Section 15(5), as there were no fresh elections on the date of convening of the AGM. The AGM attended by more than 1500 members consented for extension of the term which would therefore come under the definition of reappointment. The association had treated the elected committee members as "Care-taker Committee" and therefore the actions taken by them cannot be deemed to be a nullity.

The court relying on the decisions of the Supreme Court and this court and held that:

"...the bye-laws of the Co-operative Society constitutes a contract between the Society represented by its managing body and its constituents. If the bye-laws are in the nature of contract, the resolution by the Committee may have the same character." 

As the plaintiffs had participated in the AGM and had not resisted, opposed or objected to the resolution, they are estopped from challenging the same now, the court added.

The court refrained from going into the issues regarding irregularity in postal ballots and appointment of Special Officer under the government order. The court orders that the sealed boxes containing ballot papers be handed over to the Election Officer who shall fix a date and time for counting process along with his remuneration and complete the exercise within 4 weeks. On request of the counsel for plaintiff the court directed the Election Officer to not declare the results before three weeks from the date of receipt of a copy of the judgment.