Resolution passed by General Body of Society is binding on its members: SC

Bengal Secretariat Cooperative Land Mortgage Bank and Housing Society Ltd Vs Aloke Kumar (Supreme Court of India)

Conclusion: Hon’ble Supreme Court while allowing the appeal observed that Resolutions passed by General Body of the Society is supreme and the member of a Society has no independent right qua the Society and it is the Society that is entitled to represent as the corporate aggregate. The stream cannot rise higher than the source.

Facts: The appeal was filed at the instance of a Co-operative Society registered under the West Bengal Co-operative Societies Act, 1940 and was directed against the judgment and order passed by the High Court at Calcutta wherein the High Court rejected the civil revision filed by the Appellant Society herein thereby affirming the order passed by the Civil Judge (Senior Division), 9th Court at Alipore, District South 24 Paraganas in the Arbitration Execution Case No. 19 of 2009 dated 17.04.2014.

In the present case, the Appellant Society was formed for the purpose of providing housing to the employees of the West Bengal Secretariat and others in accordance with the bye-laws of the society. The Appellant Society invited tenders through an advertisement published in the local dailies for the development of an administrative building through a joint venture with the developer. After declaration of the successful bidder, the the Appellant Society issued the work order pursuant to the decision taken in the Annual General Meeting.

The Respondent No. 1 in this case, in his capacity as one of the members of the Appellant Society starting creating various hindrances in the way of the Appellant Society and somehow or the other did not allow the Appellant Society to go ahead with the project. It also appears from the materials on record that the Board of the Appellant Society decided to remove the Respondent No. 1 from the primary membership of the society on the ground of having been found acting in a manner prejudicial to the interest of the Appellant Society. Pursuant to the resolution passed by the Board dated 22.10.2002, the Appellant Society sought approval from the Registrar of the Co-operative Societies to remove the Respondent No. 1 from the primary membership of the society. The Respondent No. 1, being aggrieved with the action taken by the Board of the Appellant Society, filed an appeal before the Registrar of the Co-operative Societies under Rule 137(3) of the Rules 1987. The Arbitrator passed Award on 21.12.2004 that the society shall restrain itself from taking any step towards demolishing the existing constructions of the Administrative Building of the society as part of a joint venture.

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