Full Judgment
Rama Jois, J.
1. The petitioners in these two Writ Petitions have questioned the legality of the direction issued by the Registrar of the Co-operative Society under Sub-section 5 of Section 12 of the Karnataka Co-operative Societies Act, 1959 (the Act for short), directing the District Central Co-operative Banks specified in the direction, to introduce a bye-law to the effect that the Managing Director of each of the Banks shall be appointed by the Government.
2. The petition is in the orders list. By consent of both the Counsel it is taken up for final hearing.
3. The facts of the case in brief are as follows :
The petitioner in W.P. 9153/1985 is a General Manager of the Belgaum District Central Co-operative Bank Limited (the bank for short). The Bank is a Co-operative institution registered under the provisions of the Act. The petitioner in W.P. 9154/1985 is the Co-operative Banks' Employees Cooperative Credit Society which is a member of the Belgaum District Central Co-operative Bank. The Registrar in exercise of his power under Sub-section (5) of Section 12 has called upon the District Central Co-operative Banks of Belgaum, Bijapur, Dharwad and North Canara, to effect suitable amendment to the bye-laws of each of the banks in the matter of appointment of Managing Director, to the effect that there shall be a Managing Director for each of the Banks who shall be appointed by the State Government who shall be the Chief Executive and incharge of overall management of the bank concerned. The petitioners have presented this petition questioning the authority of the Registrar to issue such a direction.
4. The plea of the petitioner is as follows: Under Section 111A of the Act it is for the bank concerned to appoint its chief executive, whatever be the designation. Therefore, it is the bank which is competent to appoint the Managing Director or Secretary or General Manager as the case may be. Section 12 confers power on the registrar to issue direction to a co-operative institution calling upon it to amend its bye-laws or to insert a new bye-law which he considers necessary in the interest of the society concerned but that power has got to be exercised subject to the other provisions of the Act. Therefore, the Registrar could not direct these banks to frame a bye-law which would be in contravention of Section 111A of the Act.
4. There can be no doubt that a bye-law framed under the. provisions of the Act cannot be inconsistent either with the rules framed under the Act or the provisions of the Act itself Section 111A of the Act which is relevant for this case reads:
'111A. Secretary-(1) (The Chief Administrative Officer and Executive Officer of a co-operative society by whatever name called shall be the secretary of such Society). Subject to the provisions of the regulations made under Section 128A, the Secretary shall be (either a whole time or part time salaried officer and shall be) appointed and be removable by the co-operative society.
(2) The Secretary shall be the custodian of all records of a co-operative society and shall be responsible for the correct maintenance of the accounts of the co-operative society. He shall exercise such powers and perform such other duties as may be prescribed )'
According to the above provision the power to appoint the Chief Executive of a bank except of those falling under Section 128A of the Act, as conferred on the bank concerned and the person so appointed becomes the custodian of all records of the society and would be responsible for the maintenance of the accounts of the society. That being the position no direction could have been issued by the Registrar calling upon the banks to frame a bye-law by which the society concerned stands deprived of the power to appoint its Chief Executive under Section 111A of the Act, The direction impinges upon the provisions of the Act itself, and therefore it is without authority of law.
In the result, I make the following ;