Shri Vanthali Vibhagiya Nagarik Sahkari Bank Ltd. Vs. State of Gujarat and anr. - Court Judgment

SooperKanoon Citationsooperkanoon.com/741774
SubjectTrusts and Societies
CourtGujarat High Court
Decided OnOct-03-1991
Judge S.D. Shah, J.
Reported in(1993)1GLR340
AppellantShri Vanthali Vibhagiya Nagarik Sahkari Bank Ltd.
RespondentState of Gujarat and anr.
Cases ReferredSale & Purchase Union Ltd. and Ors. v. State of Gujarat and Ors.
Excerpt:
- - 3 can very well be investigated into and if it is found that he was not eligible for being appointed as director or that he was in any way disqualified his appointment shall be set aside. 7. in order to make good the submissions, mr. it is expected that the state government has to exercise such a wide power in a manner which does not infringe or violate the bye-laws prescribing the qualifications and/or disqualification for being members of the society in question since otherwise this power would be arbitrary as it can be exercised for appointing those persons who might have been defeated at the elections or who would not have been entitled to be members or to continue as members of a given society in the ordinary course under the bye-laws such as persons who have committed defaults in the refund of the advances by the society or who may be occupying offices in the society, or partners in the firm or appropriators of business having conflicting interests with that of the society it is therefore, expected of the state government that it will prescribe a proper guideline in the matter of exercise of this power and see to it that the power is not exercised contrary to such guidelines.s.d. shah, j.1. rule. mr. b. m. mangukia, learned a.g.p. waives service of rule on behalf of respondent nos. 1, 2 & 5. with the consent of learned advocate for petitioner and a.g.p. for respondent nos. 1, 2 & 5 matter is heard finally.2. by this petition under article 227 of the constitution of india petitioner, a duly registered co-operative society challenges the action of the registrar, co-operative societies respondent no. 2 herein of appointing three members in the board of directors of the petitioner-bank under bye-law no. 28 of vanthali vibhagiya nagarik sahakari bank ltd. the said order appointing respondent nos. 3 & 4 and also the officer of the co-operation department as members of the board of directors of the petitioner-bank is issued vide order dated 23-2-1991 which is at annexure 'a' to the petition. this order is the subject-matter of challenge in this petition,3. short facts giving rise to the present petition are as under:(i) the petitioner is a duly registered co-operative society carrying on the business of banking at vanthali village, district junagadh. as a co-operative bank it has its own bye-laws. as per bye-law no. 28 there is a provision that three members on the board of directors can be appointed by the officer of the co-operative department of the state of gujarat. it may be stated that exact language of bye-law no. 28 is not available to this court nor was it made available at the time of hearing of this petition. however, mr. n. d. nanavaty, learned counsel for petitioner-bank has made it clear that bye-law no. 28 is authorising the state of gujarat to appoint three members on the board of directors. such power given to the state of gujarat is not in any way restricted by the language of said bye-law. said bye-law does not prescribe any limitations on the power of the state of gujarat nor does it expressly stipulate consultation with the petitioner-bank before making such appointment.(ii) it is the case of the petitioner-bank that it does not receive any financial assistance from the state of gujarat. the state govt. has also not invested any amount by way of its share capital or otherwise in the funds of the petitioner-bank. however, while framing its bye-laws the petitioner-bank has framed bye-law no. 28 enabling the state to make appointment of three members on the board of directors of the petitioner-bank.(iii) it is in exercise of powers conferred by this bye-law no. 28 that the state government has passed order, dated 27-2-1991 appointing respondent nos. 3 & 4 and co-operation officer as directors on the board of directors of the petitioner-bank.4. mr. n. d. nanavaty, learned advocate for petitioner-bank has challenged this action of the respondent no. 2 mainly by making following submissions:(a) power to appoint directors on the board of directors of the petitioner-bank is, though conferred by bye-law no. 28 of the petitioner-bank, a power coupled with duty and therefore before appointing any person as director on the board of directors the petitioner-bank should be heard or at least it should be consulted and since before passing the impugned order the petitioner-bank is not consulted, the order is in violation of rules of natural justice.(b) in the alternative, if no requirement of hearing the petitioner-bank before appointing directors on the board of directors can be inferred, at least a limited hearing to the extent of disclosing the names of the directors to the petitioner-bank and inviting objections of the petitioner-bank to such names should be followed.(c) the respondent no. 3 ought not to have been appointed as a member of the board of directors since he was a defaulter and not qualified to be appointed as such. even a criminal case for offences punishable under sections 324, 504, 506 of i.p.c. was pending against the respondent no. 3, and therefore, also it was not permissible to appoint respondent no. 3 on the board of directors.5. mr. mangukia, learned a.g.p. for respondent nos. 1, 2 & 5 has, on the other hand, submitted that the language of bye-law no. 28 is very clear and unambiguous. it confers absolute power on the state govt. to appoint three directors on the board of directors. when language of bye-law no. 28 does not contemplate any restriction on the powers of state govt. it will not be permissible to impose any condition because it would be re-writing the bye-law and it would be unnecessarily fettering or restricting the powers of the state government. he further submitted that the appointment of three persons as directors on the board of directors by the state govt. does not result into any evil or adverse consequences on the petitioner-bank, and in fact, the petitioner-bank has made such provision with its open eyes and with full awareness of the fact that the govt. can appoint at any time three persons as directors on the board of directors. he, therefore, submitted that the impugned action is absolutely within the four corners of the bye-law and same is not required to be interfered with.6. mr. mangukia further submits that objections against respondent no. 3 can very well be investigated into and if it is found that he was not eligible for being appointed as director or that he was in any way disqualified his appointment shall be set aside. he says that, in fact, the govt. has started investigation and but for pendency of this petition its decision would have been taken by the government.7. in order to make good the submissions, mr. nanavaty has referred to and relied upon section 80 of the gujarat co-operative societies act, 1961. section 80 confers powers on the state govt. to appoint government nominees. section 80(1) & section 80(2) are reproduced hereinbelow:80(1) where the state government has subscribed to the share capital of the society, directly or through another society, or has guaranteed the repayment of the principal of and payment of interest on, debentures issued or loans raised by society, the state government shall have the right to nominate (not more than three) representatives on the committee of such society, in such manner as may be determined by the state government from time to time. the members so nominated shall hold office during the pleasure of the state government, or such period as may be specified in the order by which they are appointed, and any such member on assuming office shall have all rights, duties, responsibilities and liabilities as if he were a member of the committee duly elected.80(2) where the government is of the opinion that having regard to the public interest involved in the operation of a society it is necessary or expedient so to do it may nominate its representatives on the committee of such society as if the state government had subscribed to the share capital of the society and the provisions sub-section (1) shall, so far as may be applied to such nomination.he further submits that this provision came to be interpreted by the division bench of this court in the case of amreli dist. co-operative sale & purchase union ltd. and ors. v. state of gujarat and ors. reported in 1984 (2) xxv (2) glr 1244. relevant observations are to be found on page 1314. while dealing with the challenge to section 80(2) of the said act, the division bench found that section 80 empowers the government to nominate its representatives not exceeding three on the committee of a society, share capital of which the state govt. has directly subscribed or has undertaken the repayment of the principal and interest on the debentures issued or loans raised by such society. in such provision two-fold amendments were made by the legislature. the first amendment was empowering the state govt. to nominate its representatives notwithstanding anything contained in the bye-laws of such society. by second amendment it was by way of inserting sub-section (2) the state govt was empowered to nominate the representatives on the committee of society having regard to public interest involved in the operation of such society. challenge to the validity of sub-section (2) of section 80 was negatived by this court. however, while rejecting the challenge the division bench made following observations (at page no. 1315 para 79 of glr):before we part with the discussion pertaining to section 80(2) we must clarify since the petitioners apprehend abuse of this power that the state government cannot...exercise the power conferred by this section by appointing such persons who are disqualified to be the members or who have incurred the disqualification as prescribed in the bye-laws. it is expected that the state government has to exercise such a wide power in a manner which does not infringe or violate the bye-laws prescribing the qualifications and/or disqualification for being members of the society in question since otherwise this power would be arbitrary as it can be exercised for appointing those persons who might have been defeated at the elections or who would not have been entitled to be members or to continue as members of a given society in the ordinary course under the bye-laws such as persons who have committed defaults in the refund of the advances by the society or who may be occupying offices in the society, or partners in the firm or appropriators of business having conflicting interests with that of the society it is therefore, expected of the state government that it will prescribe a proper guideline in the matter of exercise of this power and see to it that the power is not exercised contrary to such guidelines.8. based on the aforesaid observations mr. nanavaty submits that power to appoint any person on the board of directors of the society is a very wide power. such a power shall have to be exercised consistent with the bye-laws which prescribe the qualifications and/or disqualifications for being members of the society. therefore, the division bench found that while exercising such power for appointing outsiders on the board of directors it is necessary that the state govt. should prescribe proper guidelines in the matter of exercise of such power. beyond the said observations, in my opinion, the division bench has not found that an opportunity of being heard is required to be given to the concerned society nor is it necessary to infer prior consultation of concerned society. it is more so especially when the power in the present case is conferred on the government by bye-laws framed by the petitioner-bank. while framing such bye-law petitioner-bank has conferred very wide power on the govt. to appoint three members on the board of directors. such power is not, in any way, restricted. power is conferred in absolute terms. therefore, when the power is conferred by the petitioner society itself in a very wide terms i do not see any justification in limiting such power by reading the requirement of prior consultation of petitioner-bank or the requirements of giving limited hearing to the petitioner-bank at least by suggesting the names and inviting objections to such names. in my opinion the power being absolute there is no need to read any limitation on such power to appoint directors on the board of directors accepting the restriction which flows from the requirements of bye-laws. a person who has to be appointed on the board of directors must fulfil the qualifications prescribed by the bye-laws. in other words, he should not be one who is disqualified under the bye-laws. he should be a person who is eligible for being appointed as director on the board of directors. i am, therefore, of the opinion that except this inbuilt restriction which flows from the provisions of bye-laws no further restriction or limitation can be read and order, dated 27-2-1991 cannot be struck down on the ground that it is in violation of rules of natural justice or that is passed without hearing the petitioner-bank or passed without consulting the petitioner-bank.9. it is to be noted that even while dealing with the very wide power conferred by section 80(2) on the state govt. to appoint its representatives on the committee of a society having regard to the public interest involved in the operation of said society the division bench of this court has not found anything objectionable' in such a provision. said provision is not found to be unreasonably restricting the power of the society. such provision i', also not found to be' violative of articles 14 of 19 (1)(c) and (g) of the constitution of india. in the present case it is the petitioner-society itself which has by bye-law no. 28 in a very wide term given power to the state govt, to appoint three members on the board of directors. when the power is given by the society itself, calling upon the state govt. to frame any guideline is also not permissible. in fact, the only guideline or policy which could be and should be followed by the state govt. is that such appointment to be made by the state govt. shall be consistent with the provisions of bye-laws of the society. shortly stated, persons sought to be appointed by the state govt. in exercise of power conferred upon it by bye-law no. 28 should not be ineligible or disqualified to be the members of the board of directors of the petitioner-bank.10. this brings me to the last submission of mr. nanavaty. mr. nanavaty has pointed out that the respondent no. 3 is not qualified to be appointed as member of the board of directors of the petitioner-bank. he has pointed out that the respondent no. 3 is a defaulter and he has not paid the amount which was due to the petitioner-bank. he was therefore disqualified to be the member of the board of directors under rule 32. he further pointed out that against respondent no. 3 criminal proceedings were pending for offences punishable under sections 324, 504 and 506 i. p. code. he, therefore, submits that such a person cannot be appointed on the board of directors of the petitioner-bank. this submission is countered by joint registrar, mr. b. c. patel by filing affidavit-in-reply. in the affidavit-in-reply it is the case of the respondent no. 2 that the allegations made against respondent no. 3 were being investigated into and if after the investigation it is found that the objections raised against the respondent no. 3 were sustainable and that the respondent no. 3 was not fit for being appointed as director of the petitioner-bank, his appointment shall be cancelled. mr. mangukia, learned agp also submitted that the respondent no. 3 shall not be permitted to assume charge till the investigation is conducted and is over. in my opinion, the state should not be permitted to appoint such a person. in fact, the state govt. ought to have made enquiry and proper investigation before appointing respondent no. 3 on the board of directors. the appointment of respondent no. 3 therefore cannot be permitted to be made and he cannot be permitted to assume charges of the post. since it is admitted position in the affidavit-in-reply that all the charges levelled against respondent no. 3 are yet to be investigated into i am of the opinion that his appointment cannot be upheld at this stage and the same shall have to be quashed and set aside. the state may make necessary investigation and may subsequently pass appropriate orders. at this stage appointment of respondent no. 3 is required to be quashed and set aside in view of the fact that his appointment is made admittedly without proper enquiry and investigation. i would, therefore, quash and set aside the appointment of respondent no. 3 as member of the board of directors of the petitioner-bank. however, with respect to other two appointments the impugned order, dated 27-2-1991 shall stand and the petition shall have to be dismissed.11. in the result, petition partly succeeds. the order, dated 27-2-1991, annexure 'a' to the petition, in so far as it appoints vrajlal valajibhai vamaja-respondent no. 3 herein as a member of board of directors of petitioner-bank is concerned, same is hereby quashed and set aside and the appointment of respondent no. 4-narsinhbhai ramjibhai vadalias and the co-operation office is hereby confirmed.rule is made absolute to the aforesaid extent with no order as to costs.
Judgment:

S.D. Shah, J.

1. Rule. Mr. B. M. Mangukia, learned A.G.P. waives service of rule on behalf of respondent Nos. 1, 2 & 5. With the consent of learned Advocate for petitioner and A.G.P. for respondent Nos. 1, 2 & 5 matter is heard finally.

2. By this petition under Article 227 of the Constitution of India petitioner, a duly registered Co-operative Society challenges the action of the Registrar, Co-operative Societies respondent No. 2 herein of appointing three members in the Board of Directors of the petitioner-Bank under bye-law No. 28 of Vanthali Vibhagiya Nagarik Sahakari Bank Ltd. The said order appointing respondent Nos. 3 & 4 and also the officer of the Co-operation Department as members of the Board of Directors of the petitioner-Bank is issued vide order dated 23-2-1991 which is at Annexure 'A' to the petition. This order is the subject-matter of challenge in this petition,

3. Short facts giving rise to the present petition are as under:

(i) The petitioner is a duly registered Co-operative Society carrying on the business of banking at Vanthali village, District Junagadh. As a Co-operative Bank it has its own bye-laws. As per bye-law No. 28 there is a provision that three members on the Board of Directors can be appointed by the officer of the Co-operative Department of the State of Gujarat. It may be stated that exact language of bye-law No. 28 is not available to this Court nor was it made available at the time of hearing of this petition. However, Mr. N. D. Nanavaty, learned Counsel for petitioner-Bank has made it clear that bye-law No. 28 is authorising the State of Gujarat to appoint three members on the Board of Directors. Such power given to the State of Gujarat is not in any way restricted by the language of said bye-law. Said bye-law does not prescribe any limitations on the power of the State of Gujarat nor does it expressly stipulate consultation with the petitioner-Bank before making such appointment.

(ii) It is the case of the petitioner-Bank that it does not receive any financial assistance from the State of Gujarat. The State Govt. has also not invested any amount by way of its share capital or otherwise in the funds of the petitioner-Bank. However, while framing its bye-laws the petitioner-Bank has framed bye-law No. 28 enabling the State to make appointment of three members on the Board of Directors of the petitioner-Bank.

(iii) It is in exercise of powers conferred by this bye-law No. 28 that the State Government has passed order, dated 27-2-1991 appointing respondent Nos. 3 & 4 and Co-operation Officer as Directors on the Board of Directors of the petitioner-Bank.

4. Mr. N. D. Nanavaty, learned Advocate for petitioner-Bank has challenged this action of the respondent No. 2 mainly by making following submissions:

(a) Power to appoint Directors on the Board of Directors of the petitioner-Bank is, though conferred by bye-law No. 28 of the petitioner-Bank, a power coupled with duty and therefore before appointing any person as Director on the Board of Directors the petitioner-Bank should be heard or at least it should be consulted and since before passing the impugned order the petitioner-Bank is not consulted, the order is in violation of rules of natural justice.

(b) In the alternative, if no requirement of hearing the petitioner-Bank before appointing Directors on the Board of Directors can be inferred, at least a limited hearing to the extent of disclosing the names of the Directors to the petitioner-Bank and inviting objections of the petitioner-Bank to such names should be followed.

(c) The respondent No. 3 ought not to have been appointed as a member of the Board of Directors since he was a defaulter and not qualified to be appointed as such. Even a criminal case for offences punishable under Sections 324, 504, 506 of I.P.C. was pending against the respondent No. 3, and therefore, also it was not permissible to appoint respondent No. 3 on the Board of Directors.

5. Mr. Mangukia, learned A.G.P. for respondent Nos. 1, 2 & 5 has, on the other hand, submitted that the language of bye-law No. 28 is very clear and unambiguous. It confers absolute power on the State Govt. to appoint three Directors on the Board of Directors. When language of bye-law No. 28 does not contemplate any restriction on the powers of State Govt. it will not be permissible to impose any condition because it would be re-writing the bye-law and it would be unnecessarily fettering or restricting the powers of the State Government. He further submitted that the appointment of three persons as Directors on the Board of Directors by the State Govt. does not result into any evil or adverse consequences on the petitioner-Bank, and in fact, the petitioner-Bank has made such provision with its open eyes and with full awareness of the fact that the Govt. can appoint at any time three persons as Directors on the Board of Directors. He, therefore, submitted that the impugned action is absolutely within the four corners of the bye-law and same is not required to be interfered with.

6. Mr. Mangukia further submits that objections against respondent No. 3 can very well be investigated into and if it is found that he was not eligible for being appointed as Director or that he was in any way disqualified his appointment shall be set aside. He says that, in fact, the Govt. has started investigation and but for pendency of this petition its decision would have been taken by the Government.

7. In order to make good the submissions, Mr. Nanavaty has referred to and relied upon Section 80 of the Gujarat Co-operative Societies Act, 1961. Section 80 confers powers on the State Govt. to appoint Government nominees. Section 80(1) & Section 80(2) are reproduced hereinbelow:

80(1) Where the State Government has subscribed to the share capital of the society, directly or through another society, or has guaranteed the repayment of the principal of and payment of interest on, debentures issued or loans raised by society, the State Government shall have the right to nominate (not more than three) representatives on the committee of such society, in such manner as may be determined by the State Government from time to time. The members so nominated shall hold office during the pleasure of the State Government, or such period as may be specified in the order by which they are appointed, and any such member on assuming office shall have all rights, duties, responsibilities and liabilities as if he were a member of the committee duly elected.

80(2) Where the Government is of the opinion that having regard to the public interest involved in the operation of a society it is necessary or expedient so to do it may nominate its representatives on the committee of such society as if the State Government had subscribed to the share capital of the society and the provisions Sub-section (1) shall, so far as may be applied to such nomination.

He further submits that this provision came to be interpreted by the Division Bench of this Court in the case of Amreli Dist. Co-operative Sale & Purchase Union Ltd. and Ors. v. State of Gujarat and Ors. reported in 1984 (2) XXV (2) GLR 1244. Relevant observations are to be found on page 1314. While dealing with the challenge to Section 80(2) of the said Act, the Division Bench found that Section 80 empowers the Government to nominate its representatives not exceeding three on the committee of a society, share capital of which the State Govt. has directly subscribed or has undertaken the repayment of the principal and interest on the debentures issued or loans raised by such society. In such provision two-fold amendments were made by the legislature. The first amendment was empowering the State Govt. to nominate its representatives notwithstanding anything contained in the bye-laws of such society. By second amendment it was by way of inserting Sub-section (2) the State Govt was empowered to nominate the representatives on the committee of society having regard to public interest involved in the operation of such society. Challenge to the validity of Sub-section (2) of Section 80 was negatived by this Court. However, while rejecting the challenge the Division Bench made following observations (at page No. 1315 Para 79 of GLR):

Before we part with the discussion pertaining to Section 80(2) we must clarify since the petitioners apprehend abuse of this power that the State Government cannot...exercise the power conferred by this section by appointing such persons who are disqualified to be the members or who have incurred the disqualification as prescribed in the Bye-laws. It is expected that the State Government has to exercise such a wide power in a manner which does not infringe or violate the Bye-laws prescribing the qualifications and/or disqualification for being members of the society in question since otherwise this power would be arbitrary as it can be exercised for appointing those persons who might have been defeated at the elections or who would not have been entitled to be members or to continue as members of a given society in the ordinary course under the Bye-laws such as persons who have committed defaults in the refund of the advances by the Society or who may be occupying offices in the society, or partners in the firm or appropriators of business having conflicting interests with that of the society it is therefore, expected of the State Government that it will prescribe a proper guideline in the matter of exercise of this power and see to it that the power is not exercised contrary to such guidelines.

8. Based on the aforesaid observations Mr. Nanavaty submits that power to appoint any person on the Board of Directors of the society is a very wide power. Such a power shall have to be exercised consistent with the bye-laws which prescribe the qualifications and/or disqualifications for being members of the society. Therefore, the Division Bench found that while exercising such power for appointing outsiders on the Board of Directors it is necessary that the State Govt. should prescribe proper guidelines in the matter of exercise of such power. Beyond the said observations, in my opinion, the Division Bench has not found that an opportunity of being heard is required to be given to the concerned society nor is it necessary to infer prior consultation of concerned society. It is more so especially when the power in the present case is conferred on the Government by bye-laws framed by the petitioner-Bank. While framing such bye-law petitioner-Bank has conferred very wide power on the Govt. to appoint three members on the Board of Directors. Such power is not, in any way, restricted. Power is conferred in absolute terms. Therefore, when the power is conferred by the petitioner society itself in a very wide terms I do not see any justification in limiting such power by reading the requirement of prior consultation of petitioner-Bank or the requirements of giving limited hearing to the petitioner-Bank at least by suggesting the names and inviting objections to such names. In my opinion the power being absolute there is no need to read any limitation on such power to appoint Directors on the Board of Directors accepting the restriction which flows from the requirements of bye-laws. A person who has to be appointed on the Board of Directors must fulfil the qualifications prescribed by the bye-laws. In other words, he should not be one who is disqualified under the bye-laws. He should be a person who is eligible for being appointed as Director on the Board of Directors. I am, therefore, of the opinion that except this inbuilt restriction which flows from the provisions of bye-laws no further restriction or limitation can be read and order, dated 27-2-1991 cannot be struck down on the ground that it is in violation of rules of natural justice or that is passed without hearing the petitioner-Bank or passed without consulting the petitioner-Bank.

9. It is to be noted that even while dealing with the very wide power conferred by Section 80(2) on the State Govt. to appoint its representatives on the committee of a society having regard to the public interest involved in the operation of said society the Division Bench of this Court has not found anything objectionable' in such a provision. Said provision is not found to be unreasonably restricting the power of the society. Such provision i', also not found to be' violative of Articles 14 of 19 (1)(c) and (g) of the Constitution of India. In the present case it is the petitioner-society itself which has by bye-law No. 28 in a very wide term given power to the State Govt, to appoint three members on the Board of Directors. When the power is given by the society itself, calling upon the State Govt. to frame any guideline is also not permissible. In fact, the only guideline or policy which could be and should be followed by the State Govt. is that such appointment to be made by the State Govt. shall be consistent with the provisions of bye-laws of the society. Shortly stated, persons sought to be appointed by the State Govt. in exercise of power conferred upon it by bye-law No. 28 should not be ineligible or disqualified to be the members of the Board of Directors of the petitioner-Bank.

10. This brings me to the last submission of Mr. Nanavaty. Mr. Nanavaty has pointed out that the respondent No. 3 is not qualified to be appointed as member of the Board of Directors of the petitioner-Bank. He has pointed out that the respondent No. 3 is a defaulter and he has not paid the amount which was due to the petitioner-Bank. He was therefore disqualified to be the member of the Board of Directors under Rule 32. He further pointed out that against respondent No. 3 criminal proceedings were pending for offences punishable under Sections 324, 504 and 506 I. P. Code. He, therefore, submits that such a person cannot be appointed on the Board of Directors of the petitioner-Bank. This submission is countered by Joint Registrar, Mr. B. C. Patel by filing affidavit-in-reply. In the affidavit-in-reply it is the case of the respondent No. 2 that the allegations made against respondent No. 3 were being investigated into and if after the investigation it is found that the objections raised against the respondent No. 3 were sustainable and that the respondent No. 3 was not fit for being appointed as Director of the petitioner-Bank, his appointment shall be cancelled. Mr. Mangukia, learned AGP also submitted that the respondent No. 3 shall not be permitted to assume charge till the investigation is conducted and is over. In my opinion, the State should not be permitted to appoint such a person. In fact, the State Govt. ought to have made enquiry and proper investigation before appointing respondent No. 3 on the Board of Directors. The appointment of respondent No. 3 therefore cannot be permitted to be made and he cannot be permitted to assume charges of the post. Since it is admitted position in the affidavit-in-reply that all the charges levelled against respondent No. 3 are yet to be investigated into I am of the opinion that his appointment cannot be upheld at this stage and the same shall have to be quashed and set aside. The State may make necessary investigation and may subsequently pass appropriate orders. At this stage appointment of respondent No. 3 is required to be quashed and set aside in view of the fact that his appointment is made admittedly without proper enquiry and investigation. I would, therefore, quash and set aside the appointment of respondent No. 3 as member of the Board of Directors of the petitioner-Bank. However, with respect to other two appointments the impugned order, dated 27-2-1991 shall stand and the petition shall have to be dismissed.

11. In the result, petition partly succeeds. The order, dated 27-2-1991, Annexure 'A' to the petition, in so far as it appoints Vrajlal Valajibhai Vamaja-respondent No. 3 herein as a member of Board of Directors of petitioner-Bank is concerned, same is hereby quashed and set aside and the appointment of respondent No. 4-Narsinhbhai Ramjibhai Vadalias and the Co-operation office is hereby confirmed.

Rule is made absolute to the aforesaid extent with no order as to costs.