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Garbari Union Co-Operative Agricultural Credit Society Limited & Anr. v. Swapan Kumar Jana & Ors.

Calcutta High Court
Jun 21, 1996
Smart Summary (Beta)

Structured Summary of the Court Opinion

Factual and Procedural Background

The dispute concerns members of the Garbari Union Co-operative Agricultural Credit Society Limited (the "Society"). Directors of the Society were elected on 23.2.92. The writ-petitioners contended that the Board's term expired on 22.2.95 and that an Annual General Meeting (AGM) was required to be held on 13.2.95. The Board fixed 12.2.95 for the AGM, but due to an increase in the membership beyond 1,500 delegates had to be elected under Rule 27 of the West Bengal Co-operative Societies Rules, 1987, and the delegates could not be elected in time; consequently the AGM scheduled for 12.2.95 could not be held.

The Board later resolved to hold delegate elections and, following communications with the Assistant Registrar and directions, a notice was issued (impugned order dated 24.10.95) that delegate elections would be held on 19.11.95. The writ-petitioner challenged that notice by filing a writ petition, leading to a Single Judge's order dated 10.5.96 quashing the notice in annexure 'B'. The Assistant Registrar's directions, the holding of delegate elections (result published 15.12.95) and subsequent election of the Board (17.3.96) form part of the factual matrix.

The learned Single Judge rejected the writ-petitioners' contention that the Society fell within s.31 of the West Bengal Co-operative Societies Act (the "Act"), and held that on expiry of the three-year period the Secretary had no jurisdiction to issue the impugned order because the Registrar had no jurisdiction as the Board had become functus officio. A cross-objection was filed but not pressed by the writ-petitioner for certain findings.

Legal Issues Presented

  1. Whether the Board of Directors of the Society becomes functus officio (i.e., incapable of acting) upon expiry of three years from the date of their election.
  2. Whether the provisions of s.25(3) and s.25(4) of the West Bengal Co-operative Societies Act permit the Registrar (or State in special circumstances) to call meetings after the expiry of the usual period, and thus whether the Board's term ending automatically creates a vacuum incompatible with the statutory scheme.
  3. Whether provisions in ss.25 and 27 (including the meaning of "hold" in s.27(8) and the relevant Rules) are mandatory (with penal consequence) or directory in character.
  4. Whether s.31 (and the Fifth Schedule) of the Act applies to the Society in the facts of this case.

Arguments of the Parties

Appellants' Arguments (on behalf of respondents below / appellants here)

  • Mr. Chattopadhyay (for appellants) submitted that the Society falls within s.2(33) (Primary Co-operative Bank) and not within s.2(35) (Primary Co-operative Agricultural Credit Society), so s.31 is inapplicable.
  • He argued that because the Society is a body corporate under s.23 of the Act the life of the Board does not automatically expire at the end of three years.
  • He relied upon Ambari Tea Company Limited v. Nabjushree Saha (1998 (1) CLT (HC) 61) in support of the submission that the Board's life does not automatically expire on the three-year mark.

Writ-petitioner-respondents' Arguments

  • Mr. De (for writ-petitioner-respondents) submitted that under s.5 of the Act the Companies Act has no application because the Co-operative Societies Act is a self-contained code; hence decisions like Ambari Tea Company Ltd. are inapplicable.
  • He relied on Chittaranjan Chakrabarty v. State of West Bengal (1989 (1) CLJ 268) for the proposition that the Board "died a natural death" at the end of three years.
  • He relied on cases concerning school managing committees (Saktipada Karmakar; Indira Gandhi Inter College; Adwaitya Kumar Maity) to support the proposition that bodies appointed for fixed three-year terms become functus officio on expiry.
  • He argued that the word "hold" in s.27(8) should be read as "to possess" or "to be in occupation" (citing Black's Law Dictionary and Words & Phrases), supporting his submission that directors cease to "hold" office after three years.
  • He contended that the Registrar ought to have exercised jurisdiction under the proviso to s.25(1)(a); although the provision uses 'may', it should be treated as mandatory in the circumstances because the enabling provision casts a duty on the Registrar (citing Craies on Statute Law).
  • He further submitted that ss.25(1), 25(3), 27(1)(A) and the proviso must be read together as a whole; and finally argued that the Assistant Registrar had no jurisdiction to issue the impugned order in view of sub-s. (4) of s.25.

State's Arguments

  • Mr. Bhattacharjee (for the State) contended that the writ-petition suffered suppression of material facts because it did not disclose that writ-petitioner No.1 had earlier filed an application under s.95 of the Act; on that basis the writ should be dismissed and a penalty imposed.
  • He relied on authorities (Suraj Kumari; Krishna Utensils; The Chancellor v. Dr. Bijayananda Kar) to support penal or dismissive consequences for suppression of material facts.
  • He argued that under sub-s. (3) read with sub-s. (4) of s.25 the Registrar does not lose power after fifteen months and relied on Bhagirathi Joint Farming Society v. Howrah Zilla Parishad (87 CWN 981).

Reply / Additional Arguments

  • Mr. Chatterjee (in reply) relied on Jagan Nath v. Jaswant Singh & Others (AIR 1954 SC 210) and Craies on Statute Law to argue that a statutory provision should not be held mandatory unless penal consequences are prescribed for non-compliance.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ambari Tea Company Limited v. Nabjushree Saha, 1998 (1) CLT (HC) 61 Relied upon by appellants to support the submission that the Board's life does not automatically expire at the end of three years. Court noted reliance but held decision inapplicable to the statute under consideration (Act is a self-contained code and not in pari materia).
Chittaranjan Chakrabarty v. State of West Bengal, 1989 (1) CLJ 268 Relied upon to support the proposition that a Board "dies a natural death" on expiry of a three-year term. Court observed that no law was laid down in that case applicable here and that it concerned a society within s.31; therefore it was not applicable to present facts.
Saktipada Karmakar v. West Bengal Board of Secondary Education, 1972 CLJ 148 Authority for the proposition that on expiry of terms, a managing committee becomes functus officio. Cited by Mr. De; Court distinguished these education-statute cases as not being in pari materia with the Co-operative Societies Act and therefore not directly applicable.
Indira Gandhi Inter College, Allahabad v. District Inspector of Schools, 3 All India Educational Cases 442 Similar educational-law authority that managing committees become functus officio on expiry. Cited by Mr. De; Court treated it as a decision under different statutory scheme and not applicable here.
Adwaitya Kumar Maity v. President, West Bengal Board of Secondary Education, 71 CWN 396 Used to show that managing committees under certain education Acts cannot remain after expiry of their term. Court discussed it when distinguishing the statutory schemes and concluded it did not govern interpretation of the Co-operative Societies Act.
Suraj Kumari v. District Judge, Mirzapur, AIR 1991 All 75 Authority cited concerning non-disclosure / suppression of material facts in court proceedings. Court relied on this and similar authorities to hold that suppression of the fact of a prior s.95 application was material and justified refusing relief.
Krishna Utensils, Rampur v. State Financial Corporation, AIR 1989 All 226 Cited in relation to consequences of suppression of material facts. Used by Court as supporting precedent for denying relief where material facts were suppressed.
The Chancellor v. Dr. Bijayananda Kar, AIR 1994 SC 579 Cited in relation to suppression of material facts and court's power to refuse jurisdiction or impose consequences. Court treated it as supporting authority for the proposition that suppression may preclude exercise of writ jurisdiction and justify dismissal.
Bhagirathi Joint Farming Society v. Howrah Zilla Parishad, 87 CWN 981 Cited on whether statutory time prescriptions are directory or mandatory and on the Registrar's continuing power. Court relied upon its reasoning about directory vs. mandatory provisions to hold that ss.25(3) and (4) must be given effect to and that Registrar's powers do not lapse automatically so as to render the Board functus officio on expiry of three years.
Jagan Nath v. Jaswant Singh & Others, AIR 1954 SC 210 Cited for the proposition that a provision should not be held mandatory unless penal action is prescribed for non-compliance. Court considered the principle in its analysis of whether ss.25 and 27 are mandatory or directory and applied the reasoning when construing legislative intent.
Montreal Street Rly. Co. v. Normandin, 1917 AC 170 (Privy Council) Authoritative decision relied upon in discussions about directory vs. mandatory statutory provisions. Court cited it as part of the body of authority supporting the view that absence of a penal consequence may indicate a provision is directory.
State of U.P. v. Manbodhan Lal Srivastava, AIR 1957 SC 912 Referenced in context of interpreting mandatory/directory provisions. Included among authorities the Court used to explain the directory/mandatory distinction and to justify its interpretative approach.
Collector of Monghyr v. Keshav Prasad Goenka, AIR 1962 SC 1694 Referenced on the directory/mandatory issue. Court relied on it as part of established authorities demonstrating when statutory requirements should be treated as directory.
Shiveshwar Prasad Singh v. The District Magistrate of Monghyr, AIR 1966 Pat 144 Full Bench decision treating a notice provision as directory despite the use of 'shall'. Court cited it in support of the proposition that statutory time limits may be directory depending on the scheme and context.
Pearse v. Morrice (cited via Craies on Statute Law) Cited for the distinction between clauses which are directory and those which render acts null and void if not complied with. Used as part of the textual authorities establishing the principle distinguishing directory provisions from mandatory ones; Court applied the distinction when construing ss.25 and 27.
R. v. Loxdale (Lord Mansfield) (cited via Craies on Statute Law) Quoted for the distinction between circumstances of essence and mere matters of direction. Incorporated into Court's statutory construction analysis on whether the relevant provisions were directory or mandatory.

Court's Reasoning and Analysis

The Court's analysis proceeded by close statutory construction of ss.25 and 27 of the West Bengal Co-operative Societies Act and relevant Rules, applying established canons of interpretation and the directory/mandatory distinction:

  1. Construction of proviso to s.25(1)(a): The Court read the proviso ejusdem generis with the main provision. It held the phrase "or for any other reason" must be read in the same class as "order of any court" — that is, circumstances beyond the control of the Board — and not so broadly as to nullify the statutory scheme which supplies mechanisms for continuity.
  2. Interaction of ss.25(3) and (4) with s.27(8): Sub-s. (3) authorizes the Registrar to call a general meeting within three months after the twelve-month period, with penal measures for directors for failure; sub-s. (4) permits the State Government, in special circumstances, to allow the Registrar to call a general meeting even after fifteen months. The Court emphasized these powers show the legislature contemplated continuity and remedial steps rather than an automatic vacancy or vacuum in management.
  3. Avoiding otiose construction: The Court rejected an interpretation (advanced by Mr. De) that would render ss.25(3) and (4) meaningless (otiose) if directors automatically became functus officio at the three-year mark. The Court applied the maxim that statutes should not be construed to make a provision redundant.
  4. Directory vs mandatory analysis: Noting the absence of specific penal consequences for non-compliance with sub-s. (1) of s.25, and relying on authorities (including Craies and cases cited), the Court held that provisions prescribing time and manner for public duties may be directory rather than mandatory where no penal consequence is attached and the statutory scheme contemplates remedial measures. Therefore, a strict, automatic cessation of authority on expiry of three years was not compelled by the text.
  5. Contextual construction of "hold" in s.27(8): The Court declined to give decisive weight to dictionary meanings (e.g., "to possess" or "to be in occupation") without considering the context of the statute. The Court emphasized that words may have different meanings in different statutory contexts and that the meaning must be derived from the statute's scheme.
  6. Distinguishing other statutory schemes/cases: The Court distinguished cases concerning education Acts and other statutes where a different scheme exists (e.g., appointment of administrators once terms expire), noting those statutes are not in pari materia with the Co-operative Societies Act; hence decisions under such Acts could not be imported to control interpretation here.
  7. Effect of facts and compliance: The Court noted that in the present case there was no allegation of misconduct by the Board; the failure to hold the AGM resulted from subsequent events (increase in membership requiring election of delegates under Rule 27). Delegates were elected and a new Board was constituted on 17.3.96. Consequently, interference was unnecessary on that ground.
  8. Suppression of material facts: The Court found the writ-petition failed to disclose a prior application under s.95 of the Act and held that the suppression of that material fact was serious; the Court cited authorities that suppression can preclude exercise of jurisdiction.

Holding and Implications

Holding:

APPEAL ALLOWED. The judgment and order of the learned Single Judge (which had quashed the notice dated 24.10.95) is set aside, and the writ application of the writ-petitioner is dismissed. The cross-objection (not pressed) is dismissed.

Implications:

  • Direct effect on parties: The writ-petitioners are denied relief; the trial judge's order quashing the impugned notice is set aside; the elections and subsequent constitution of a Board (held on 17.3.96) are not disturbed by this decision.
  • On statutory interpretation: The Court's reasoning affirms that ss.25(3) and (4) of the Act empower the Registrar (and, in special circumstances, the State) to call meetings beyond the ordinary period and that the provisions in question should not be construed to create an automatic vacuum in administration on expiry of three years. The Court treated the relevant time prescriptions as directory in context rather than automatically mandating cessation of authority.
  • No broader precedent declaration beyond the statutory interpretation applied to the facts of this case is explicitly stated by the Court. The Court distinguished other decisions under different statutory schemes and applied established principles of construction to the Act's particular scheme.

Disposition: Appeal allowed; cross-objection dismissed; no order as to costs.

Show all summary ...

S.B Sinha, J.:—This is an appeal against an order dated 10.5.96 passed by a learned Single Judge of this Court in Civil Order No. 19939(W) of 1995 whereby and whereunder the said learned Judge disposed of a writ application filed by the writ-petitioner-respondent No. 1 quashing a notice dated 24th October, 1995 as contained in annexure ‘B’ to the writ application.

2. The fact of the matter lies in a very short compass.

3. The parties are the members of a co-operative society known as Garbari Union Co-operative Agricultural Credit Society Limited (hereinafter referred Page: 191to as the ‘Society’). On 23.2.92, the directors of the said Society were elected. According to the writ-petitioners life of the said Board of Directors expired on 22nd February, 1995 and Annual General Meeting was held on 13.2.94 and thus in terms of the provisions of the West Bengal Co-operative Societies Act, 1983 (hereinafter referred to as the ‘said Act’) the next annual general meeting was to be held on 13.2.95 The Board of Directors held a meeting on 4.12.94 fixing 12.2.95 for holding the Annual General Meeting. However, although in the year 1992 the number of the members of the Society was less than 1500, by 31.12.94, the number of members increased to 1714, which shot up by 8.1.95 to 2065. Admittedly, in view of the provision of Rule 27 of the Rules framed under the said Act known as West Bengal Co-operative Societies Rules, 1987 (hereinafter referred to as the ‘said Rules’), in the event number of members exceeds 1500, the delegates are to be elected. As delegates could not be elected, the Annual General Meeting dated 12.2.95 could not be held. Again the Board of Directors met on 19.2.95 and passed a resolution for holding election of the delegates. On 11.7.95, the Assistant Registrar of the Co-operative Societies in reply to a letter of the Society stated that since the period of implementing the course of action under s. 25(3) of the said Act has been over, a fresh proposal for taking recourse to s. 25(4) of the said Act should be submitted, pursuant whereto a proposal was submitted by the Chairman of the Board on 7.8.95 However, by reason of the order dated 24.9.95, the Assistant Registrar, Co-operative Societies directed the Board to complete election of the delegates of the Societies before expiry of two months from the date of proposed Annual General Meeting, whereafter 19.11.95 was the date fixed for holding the election of the delegates by a resolution adopted in a meeting dated 15.10.95 By reason of the impugned order dated 24.10.95, the erstwhile Secretary issued a notice under the direction of the Assistant Registrar of Co-operative Societies that election will be held on 19.11.95 Questioning the said order the writ-petition was filed. Admittedly, the election of the delegates was held on the date scheduled therefor and result thereof has been published on 15.12.95 On 17.3.96, the election of Board of Directors was held. By reason of the impugned judgment the learned Trial Judge, inter alia, rejected the contention of the writ petitioners that the Society is a Society within the moaning of s. 31 of the said Act. A cross-objection as against the said findings has been filed by the writ-petitioner-respondent No. 1. The learned Trial Judge however, held that on the expiry of the period of three years, the Secretary had no jurisdiction to issue the impugned order in view of the fact that the Registrar Co-operative Societies had no jurisdiction in the matter as the Board of Directors became functus officio.

4. Mr. Chattopadhyay, learned Counsel appearing on behalf of the appellants has raised a short question in support of this appeal. The learned Counsel submits that from a perusal of the provisions of s. 2(35) and s. 2(33) of the said Act, it would apear that the appellant Society would come within the purview of s. 2(33) and not within the purview of s. 2(35) of the said Act and thus s. 31 of the said Act cannot be said to have any application whatsoever. The learned Counsel submits that keeping in view the fact that a society is a body corporate in terms of S. 23 of the said Act, the life of Page: 192the Board of Directors does not automatically expire on expiry of three years from the date of their election. In support of his aforementioned submission, reliance has been placed on a Division Bench decision of this Court in Ambari Tea Company Limited v. Nabjushree Saha reported in 1998 (1) CLT (HC) 61.

5. Mr. De, learned Counsel appearing on behalf of the writ-petitioner-respondents however, submits that in view of the provisions contained in s. 5 of the West Bengal Co-operative Societies Act, the provision of the Companies Act would have no application as the said Act is a self-contained code and thus decision of this Court in Ambari Tea Company Limited's case (supra) cannot have any application whatsoever in the facts and circumstances of this case. The learned Counsel on the other hand, relying on or on the basis of a decision of a learned Single Judge of this Court in Chittaranjan Chakrabarty v. State of West Bengal reported 1989 (1) CLJ 268, submitted that the Board of Directors died a natural death on the expiry of a period of three years. The learned Counsel further submits that in view of the absence of necessary pleadings it cannot be contended that the said Society is a Society within the meaning of s. 31 of the said Act. Mr. De has also drawn our attention to decisions in Saktipada Karmakar v. West Bengal Board of Secondary Education reported in 1972 CLJ 148 and The Committee of Management, Indira Gandhi Inter College, Allahabad v. District Inspector of Schools, Allahabad reported in 3 All India Educational Cases 442, wherein it was held on the expiry of the terms, the managing committee of a school becomes functus officio. The learned Counsel has also relied upon a decision of this Court in Adwaitya Kumar Maity v. President, West Bengal Board of Secondary Education reported in 71 CWN 396. Mr. De, would urge that as the word, ‘hold’ has been used in s. 27(8) the same would mean ‘to possess’ or ‘to be in occupation’. In support of his aforementioned contention, our attention has been drawn to the meaning of the word, ‘Hold’ in Black's Law Dictionary, Sixth Edition at page 766 and Words and Phases, Permanent Edition, Vol. 19A page 186 at page 188. The learned Counsel further submits that in any event, in this case the Registrar ought to have exercised his jurisdiction under the proviso appended to s. 25(1)(a) of the said Act. According to the learned Counsel although in the said provision the word, ‘may’ has been used, as the enabling provision casts duty upon the Registrar to act thereunder, the same should be held to be mandatory in nature. Reliance in this connection, has been placed on a passage from Craies on Statute Law, Seventh Edition Pages 229 and 285. It was further submitted that s. 25(1), 25(3) and 27(1)(A) and the proviso appended thereto as also s. 27(8) should be read as a whole. Lastly, it was submitted that in any event, the Assistant Registrar, Co-operative Societies had no jurisdiction to issue the impugned order dated 14th September, 1994 in view of the provisions contained in sub-s. (4) of s. 25 of the said Act.

6. Mr. Bhattacharjee, learned Counsel appearing on behalf of the State, submits that the writ-petition suffers from suppression of fact inasmuch as it had not been stated therein that the writ-petitioner had earlier filed an application under s. 95 of the Co-operative Societies Act. The learned Page: 193Counsel contends that on that ground alone, the writ application should be dismissed and a penalty should be imposed upon the writ-petitions. Reliance in this connection, has been placed on Suraj Kumari v. District Judge, Mirzapur, reported in AIR 1991 All 75; Krishna Utensils, Rampur v. State Financial Corporation reported in AIR 1989 All 226 and The Chancellor v. Dr. Bijayananda Kar reported in AIR 1994 SC 579. It was further submitted that keeping in view the provisions contained in sub-s. (3) of s. 25 of the said Act read with sub-s. (4) thereof, it cannot be said that the Registrar, Co-operative Societies loses his power on the expiry of fifteen months. Reliance in this connection, has been placed on Bhagirathi Joint Farming Society v. Howrah Zilla Parishad reported in 87 CWN 981.

7. Mr. Chatterjee in reply has relied on a decision of the Supreme Court of India in Jagan Nath v. Jaswant Singh & Others reported in AIR 1954 SC 210 as also a passage from Craies on Statute Law, Seventh Edition, Page 267 for the proposition that a provision should not be held to be mandatory unless penal action is prescribed for non-compliance thereof.

8. The Society is an Agricultural Credit Society and prima facie it is not a Bank.

Section 2(33) and s. 2(35) reads thus:—

“(33) ‘Primary Co-operative Bank’ has the same meaning as in the Reserve Bank of India Act, 1934 (2 of 1934).

(35) ‘Primary Co-operative Agricultural Credit Society’ means a Co-operative Society, the primary object of which is to create fund for lending short-term crop loan (medium term loan) and other agricultural inputs to its members.”

Explanation.—In this clause,—

(a) ‘short-term’ shall mean a term not exceeding one year, and

(b) ‘medium term’ shall mean a term not less than three years and not more than five years;”

Section 31(1) of the said Act postulates that the Board of Directors of any of the co-operative societies mentioned in Fifth Schedule shall, if the election of its directors is not held within a period, of thirty-six months from the date of the election under sub-s. (1) of s. 25, stands dissolved on and from the date immediately following the date of expiry of the said period. Various consequences have been laid down as regards non-constitution of a Board of Directors within a period of thirty-six months from the date of their election under sub-s. (1) of s. 25 of the said Act. As has been held by the learned Trial Judge and in view of the fact that the learned Counsel appearing on behalf of the writ-petitioner does not press the cross objection, it has to be held that s. 31 read with Fifth Schedule of the said Act has no application in the facts of the case. The only question which, therefore, arises for consideration in this appeal is as to whether the Board of Directors becomes functus officio upon expiry of three years from the date of their election or not. Sub-s. (1) of s. 25(1)(A) of the said Act states that every co-operative society shall hold at least once in every co-operative year, a general meeting to be called Annual General Meeting for election if any, in the Page: 194prescribed manner of the Directors of the Board. The proviso appended thereto postulates that in case such election cannot be held owing to an order of any Court or owing to any circumstances mentioned therein, the Registrar, Co-operative Societies is empowered to constitute a Board of Directors from amongst the members of the co-operative society in conformity of sub-s. (1) and sub-s. (2) of s. 27 of the said Act and may appoint office bearers of the Board. Section 25(3) and s. 25(4) of the said Act which are material for the purpose of this appeal read thus:—

“25(3) On the failure of the board to call the general meeting (within twelve months from the date of the last preceding general meeting) the Registrar shall call, or authorise any of his officers to call, a general meeting within a period of three months from the date of expiry of (the aforesaid twelve months) without prejudice to the penal measures that may be taken under this Act against the directors of the board for not holding the general meeting within such period as required under sub-s. (2).

(4) Notwithstanding anything contained in sub-s. (1), sub-s. (2) and sub-s. (3), the State Government may, in special circumstances, permit the Registrar to call the general meeting even after the expiry of (fifteen months) from the date of the last preceding meeting held under sub-s. (1).”

Section 27 of the said Act provides for management of co-operative societies. Sub-s. (1) of s. 27 and sub-s. (8) thereof read thus:—

“(1) There shall be a board for every co-operative society to manage its affairs and the board shall consist of such number of directors as may by specified in the by-laws of the co-operative society. The directors shall be elected by the members of the co-operative society in a general meeting:

Provided that the number of directors to be elected by the members of a co-operative society shall not be less than six or more than fifteen, but where any co-operative society has less than twelve members, the number of such directors shall not be (less than three or more than six as may be specified in the by-laws of the co-operative society).

(8) A director elected under sub-s. (1) or sub-s. (3) (or nominated under sub-s. (5) or sub-s. (5A) shall hold office for a period of three years from the date of his election or nomination, as the case may be:

Provided that a director elected under sub-s. (3) or nominated under sub-s. (5) shall not be eligible for re-election or re-nomination, as the case may be, within a period of three years from the date of expiry of his terms of office.

(Provided further that a director elected under sub-s. (3) shall not be entitled to attend any meeting of the board, if he incurs any disqualification as may be prescribed.)”

However, the said provisions have to be read along with sub-rule (4) of rule 32 of the said Rules which provide that the out-going Board shall stand dissolved when the new office bearer is elected under the sub-rules or Registrar takes steps under the proviso (1) of clause (2) of s. 25. It is also Page: 195necessary to take notice of the provisions of Rules 18, 19(2)(ii) and the proviso appended thereto which read thus:

“Rule 18. Notice of annual general meeting and special general meeting. (1) An annual general meeting or a special general meeting shall be convened by the Secretary or any other officer authorised by the board in accordance with the direction of the board.

(2) Unless otherwise provided in the by-laws, a notice of the meeting stating the place, date and hour of the meeting together with a statement of business to be transacted at it, shall be sent to every member not less than twenty-one days before the date of the meeting.

(3) Any accidental omission to give notice to any member or the non-receipt of the notice by any member shall not invalidate the proceeding of any meeting.

(4) When the Registrar or the officer or the person as the case may be authorised by him calls an annual general meeting under sub-s. (3) of s. 25 or a special general meeting under sub-s. (3) of s. 26 or when the Registrar calls an annual general meeting under sub-s. (4) of s. 25, the Secretary or any other officer authorised under these rules to call annual general meetings and special general meetings shall arrange to issue and despatch the notices of the meetings as may be required by the Registrar or the officer or the person authorised by him.

19(2)(ii). Where an annual general meeting is required to be held by convoking representatives, the election of delegates shall be completed before the period of two months referred to in the clause (i):

Provided that in case of failure of the board to take steps or to give directions well in advance towards the holding of such election within the prescribed period the Chairman or in his absence the Vice-Chairman or in the absence of both, the Chief Executive Officer or the Managing Director shall perform such duties on behalf of the board:

Provided further that where an annual general meeting is called by the Registrar he shall hold or authorise any of his officers to hold election of delegates in case the board fails to hold such election of delegates within the time specified by the Registrar or by the officer or person authorised by him.”

9. The question as to whether the board of directors become functus officio on the expiry of the three years, i.e, on the expiry of 28.2.95, is the main question which is required to be considered in this appeal.

10. Section 25(1) of the said Act provides for an annual general meeting, in terms whereof every co-operative society shall hold a general meeting to be called annual general meeting for election if any in the prescribed manner of the directors of the board. The proviso appended to the said provision upon which strong reliance has been placed by Mr. De, in our opinion, has no relevance inasmuch as a bare perusal thereof would show that in terms thereof the Registrar may constitute a Board of Directors in the manner as laid down therein provided that in a general meeting, the election cannot be held owing to an order of court or for any other reason or if the directors of board elected in such general meeting cannot function owing to an order Page: 196of any court. The words, ‘or for any other reason’, in our opinion, have to be read ejusdem generis. While construing a proviso which is in the nature of an exception the Court has to consider that the said provision should not be read apart from the main provisions. The proviso appended to clause (a) of sub-s. (1) of s. 25 provides for a situation where an election cannot be held owing to an order of any court or where despite election the directors of the board election in such general meeting cannot function on such ground and thus the words, ‘or for other reasons’ must be construed in the same fashion meaning thereby for the reason over which the board of directors had no control. In our opinion, the doctrine of Noscitur a Sociis would be applicable in such a case. We have arrived at the aforementioned conclusion keeping in view the fact that in terms of the principle of interpretation of statutes the relevant provision of a statute should be read as a whole and then by section to section and then by word to word. Sub-sections (3) and (4) of s. 25 of the said Act, in no uncertain terms, allow the Registrar and in certain special circumstances the State Government to permit the Registrar to issue a direction upon the Board of Directors to hold a meeting either within a period of three months from the date of expiry thereof or even thereafter. Had the intention of the law makers been that the Board of Directors would become functus officio, a vacuum would be created and such a vacuum in the management of the affairs of the co-operative society is not contemplated under the said Act. Furthermore, if the Board of Directors becomes functus officio only on the expiry of three years in terms of clause (a) of sub-s. (1) of s. 25 of the said Act or the directors are required to vacate their offices in view of the provision of sub-s. (8) of s. 27 of the said Act. Sub-sections (3) and (4) of s. 25 of the said Act shall become absolutely otiose and meaningless. The Registrar and for that matter the State cannot direct holding of a meeting of the Board of Directors for the purpose of holding an election in the prescribed manner if the Board of Directors had already become functus officio. It is now a well settled cannon of interpretation of statute that no provision of the statute should be read as otiose or surplus. If the submission of Mr. De is to be accepted, sub-s. (3) and sub-s. (4) of s. 25 of the said Act cannot be given effect to and become wholly otiose. The decisions cited by Mr. De, in our opinion, have no application whatsoever in the instant case inasmuch as it is also well known that the decisions construing the provision of one statute cannot be taken in aid of for the purpose of interpretation of the provision of another statute unless both the statutes are in pari materia. It has not been and could not be contended by Mr. De that the provisions of the West Bengal Board of Secondary Education Act or the Intermediate Education Act, 1921 prevailing in the State of Uttar Pradesh are in pari materia with the said Act. In terms of the provisions of the West Bengal Board of Secondary Education Act, the Managing Committee is appointed for a period of three years. On the expiry of the said period the Board has to appoint an administrator or ad-hoc committee unless within the aforementioned period, fresh managing committee is elected. Thus in such cases, the question of there being any vaccum in the management of the school committee would not arise. In Adwaitya Kumar Maity v. The President, West Bengal Board of Secondary Page: 197Education and Others reported in 71 CWN 396, a learned single Judge of this Court again was dealing with the provisions of the West Bengal Board of Secondary Education Act. The learned single Judge of this Court was considering a matter where appointment of administrator by the West Bengal Secondary Education was questioned by filing a writ application and an interim order was passed by this Court. In that context the learned Judge observed that the managing committee under the Rules in force cannot continue to remain in charge of the school on expiry of their term and by virtue of an interim injunction granted by this Court as the administrator could not take charge, the petitioners have already enjoyed more than their “normal” (underlining is mine) term of three years. There cannot be any doubt whatsoever that when a public functionary in terms of the provisions of a statute is asked to perform a public duty within a particular time the same in absence of any penal provision or the consequence ensuing therefor must be held to be a directory and not mandatory. In Chittaranjan Chakrabarty v. State of West Bengal reported in 1989 (1) CLJ 268, no law has been laid down. Furthermore, in that case the court was considering a matter in respect of a co-operative society which comes within the purview of s. 31 of the said Act. Thus the said decision has no application to the facts and circumstances of the present case. In Shiveshwar Prasad Singh v. The District Magistrate of Monghyr reported in AIR 1966 Pat 144, a Full Bench of Patna High Court upon taking into consideration Maxwell on Interpretation of Statutes and Southernland's Statutory Construction, Third Edition, held that s. 11 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947, whereby and whereunder fifteen days' notice had not been given by the public servant expressing his intention to vacate the premises to the District Magistrate or the landlord would be directory. The Full Bench of the Patna High Court in the aforementioned case noticed that s. 11(2)(a) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 uses the word, ‘shall’ but despite the same, keeping in view the aforementioned authorities as also the decisions of the Privy Council in Montreal Street Rly. Co. v. Normandin reported in 1917 AC 170, State Of U.P v. Manbodhan Lal Srivastava reported in AIR 1957 SC 912, Collector of Monghyr v. Keshav Prasad Goenka reported in AIR 1962 SC 1694, held that the said provision is directory and not mandatory. In Bhagirathi Joint Firming Society v. Howrah Zilla Parishad reported in 87 CWN 981, a Division Bench of this Court also took the same view stating; “In our considered opinion, a statutory provision which prescribed a particular manner or time for the performance of any act and goes on further to provide that the breach thereof would render the performance void or without jurisdiction must necessarily be held to be absolute. But absence of any provision providing for such a penal consequence need not necessarily lead to the contrary conclusion. Whether such a provision would be directory or not would depend upon the nature and effect of the prescription and intention of the legislature as would appear from the scheme of the Act.” It may be noted that sub-s. (3) of s. 25 enjoins a duty upon the Registrar to call a general meeting within a period of three months from the date of expiry of the aforementioned twelve months without prejudice to the penal measures that may be taken under this Act against Page: 198the directors of the board for not holding the general meeting within such period as is required under sub-s. (2).

11. Sub-section (2) of s. 25 of the said Act refers to holding of a special meeting for considering an audit report. Sub-section (3) of s. 25 of the said Act as noticed hereinbefore, contemplates penal measures against the directors of the board for not holding the general meeting within such period as required under sub-s. (2) only. No penal provision is contained for non-compliance of the provision of sub-s. (1) of s. 25. In Craies on Statute Law, Seventh Edition, at page 266, the law is stated thus:—

“Where a statute does not consist merely of one enactment, but contains a number of different provisions regulating the manner in which something is to be done, it often happens that some of these provisions are to be treated as being directory only, while others are to be considered absolute and essential; that is to say, some of the provisions may be disregarded without rendering invalid the thing to be done, but others not. For “there is a known distinction” as Lord Mansfield said in R. v. Loxdale, between circumstances which are of the essence of a thing required to be done by an Act of Parliament and clauses merely directory”. In Pearse v. Morrice, Taunton, J. said that he understood ‘the distinction to be, that a clause is directory where the provisions contain mere matter of direction and nothing more, but not so where they are followed by such words as ‘that anything done contrary to these provisions shall be null and void to all intents.”

At page 229 of the said book, upon which Mr. De has placed reliance, the learned Author states:—

“This distinction is reflected in the use of the words, “shall” or “may” in a statute. The meaning of these words in statutes conferring a power is the subject of constant and conflicting interpretation. ‘May’ does not moan ‘Must’; ‘May’ always means ‘may’. ‘May’ is a permissive or enabling expression but there are cases in which for various reasons as soon as the person who is within the statute is entrusted with the power, it becomes his duty to exercise it.”

The said passage does not militate against the findings of ours referred to hereinbefore. At page 285 of the said book the learned Author again states that ‘may’ sometimes becomes equivalent to ‘shall’. Where a power is deposited with the public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied by the legislature of the conditions upon which they are entitled to call for its exercise, that power ought to be exercised and the court will require it to be exercised. Under the aforementioned provision of the Co-operative Societies Act, the object of the power is not to effectuate as a legal right nor such power is to be exercised for the sake of justice or the public good. In terms of the provision of the said Act, the co-operative societies have been brought under the control of the Registrar of the Co-operative Societies and the State Government and both the Registrar and the State Government are statutory functionaries. They are required to carry out their functions in terms of the provisions of the said Act and not Page: 199otherwise. Keeping in view the fact that sub-s. (3) and sub-s. (4) of s. 25 of the said Act clearly empowers the Registrar and the State Government to direct holding of a meeting upto a period of fifteen months, i.e after the expiry of twelve months and even thereafter it cannot be said that the Board of Directors become automatically functus officio. Furthermore, had the intention of the legislature been to make such a drastic provision, there was no necessity of enacting a separate provision like s. 31 in the said Act which provides for the consequences as also the measures to be adopted by the Registrar on the expiry of the life of the terms of the Board of Directors. Keeping in view the fact that ss. 25 and 27 of the said Act do not lay down any consequence nor have provided for any penal measures, in our opinion, the Board of Directors did not become functus officio on the expiry of 28.2.95 In view of our findings aforementioned, in our opinion, the dictionary meaning of the word, ‘hold’ i.e ‘to possess’ or ‘to be in occupation’ as has been stated in Black's Law Dictionary, 360 and Words and Phrases, Permanent Edition vol. 19A at Page 188 would not be relevant inasmuch as it is now well settled that a word has to be construed in the context of a statute. The same word may have different meaning in different context. If the Board of Directors does not become functus officio on the expiry of three years, as a necessary corollary it must be held that the directors cannot cease to hold the office only because their term for holding office as has been fixed under sub-s. (8) of s. 27 of the said Act has expired. Furthermore, in this case a peculiar situation has arisen. It is not the case of the writ-petitioner that the Board of Directors were guilty of any acts of omission or commission. Admittedly, the meeting could not be held as it was found that in view of the subsequent events namely increase in the number of the members of the co-operative society above 1500, in terms of Rule 27 of the West Bengal Co-operative Societies Rules, the delegates had to be elected. Such delegates have been elected and in fact Board of Directors have also been constituted on 17th March, 1996. Although we agree with Mr. De's submission to the effect that upon expiry of the fifteen months it is only the State Government who can permit the Registrar to cause a meeting to be held, but such direction must be issued in special circumstances. However, in a situation of this nature, in our opinion, keeping in view the subsequent events, the impugned order need not be interfered on that ground alone inasmuch as even sometimes mandatory provisions are not interfered with. In section 271 at page 539 of Statutory Construction by Crawford, the law has been laid down in the following terms:

“Even where a statute is clearly mandatory or prohibitory, yet, in many instances, the courts will regard certain conduct beyond the prohibition of the statute through the use of various devices or principles. Most, if not all of these devices find their justification in considerations of justice. It is well known fact that often to enforce the law to its letter produces manifest injustice, for frequently equitable and humane considerations, and other considerations of a closely related nature, would seem to be of a sufficient calibre to excuse or justify a technical violation of the law.”

Moreover, in this case, admittedly the writ-petitioners are guilty of suppression of material facts to the effect that an application under s. 95 of the West Bengal Co-operative Societies Act was taken out by the writ-petitioner Page: 200No. 1. But the said fact has not been disclosed in the writ-application. It was obligatory on the part of the writ-petitioners to disclose such fact before this Court. It may be true as was submitted by Mr. De that such an application has been filed only by the writ-petitioner No. 1, but as the writ-petition has been filed also on behalf of the writ-petitioner No. 1, and he has affirmed the affidavit in support of the writ-petition, in our opinion, it was obligatory on his part to disclose all the material facts. The Court, it is well known, may not exercise its jurisdiction if the writ application suffers from suppression of material facts. Reference in this connection, may be placed in Suraj Kumari v. District Judge, Mirzapur reported in AIR 1991 All 75; Krishna Utensils, Rampur v. State Financial Corporation reported in AIR 1989 All 226 and The Chancellor v. Dr. Bijayananda Kar reported in AIR 1994 SC 579.

12. For the reasons aforementioned, we are of the opinion that the writ-petitioners were not entitled to any relief. The appeal is allowed. The judgment and order passed by the learned Trial Judge is set aside and the writ application of the writ-petitioner is dismissed. As the cross objection had not been pressed by Mr. De, the said cross objection is also dismissed.

13. However, in the facts and circumstances of this case, there will be no order as to costs.

S.N Chakrabarty, J.:—I agree.

Appeal allowed. Cross objection dismissed.
K.G