Satna Central Co-operative And Land Mortgage Bank Ltd v. Puranlal Agrawal

A.P. SEN J.

(1.) By this application under Articles 226 and 227 of the Constitution, the petitioner Satna Central Co-operative and Land Mortgage Bank Ltd. (hereinafter referred to as "the petitioner-Bank"), seeks the issue of a writ in the nature of certiorari for quashing an order of the Board of Revenue, Madhya Pradesh, dated 2nd April 1968, and for an appropriate writ or direction in the nature of mandamus to restrain the authorities from giving effect to the impugned order, in the manner threatened.

(2.) The relevant facts leading to this application are these. By the order impugned, the Board of Revenue, Madhya Pradesh has, in a second appeal under section 77 (2) of the Madhya Pradesh Co-operative Societies Act, 1960 (Act No. XVII of 1961), (hereinafter referred to as "the Act"), reversed an order passed in first appeal by the Joint Registrar of the Co-operative Societies, confirming the acceptance of resignation of the respondent No. 1, Puranlal Agrawal, against whom the petitioner-Bank had instituted an inquiry into certain charges, by a resolution of the Board of Directors passed at its meeting held on 13th July 1965 and instead, set aside the resolution on the grounds that: (i) the Board of Directors of the petitioner-Bank was not during the material time, duly constituted, and (ii) there was no quorum for its meeting held on 13th July 1965 at which the said resolution was passed. Upon these findings, the Board of Revenue has set aside the resolution of the Board of Directors accepting the resignation of the said Puranlal as being legally invalid and, accordingly directed his reinstatement to his post forthwith, with a direction for payment of all the back wages and other allowances for the period during which he was "illegally kept out of office", and held that his resignation had still so far not been "legally accepted".

(3.) The operative part of the impugned order of the Board of Revenue proceeds on these lines. According to Bye-law No. 30 of the byelaws, there has to be constituted a Board of Directors consising of 18 persons. Of these, the Registrar, Co-operative Societies or his nominee not below the rank of the Assistant Registrar is one. It appears that at the time when the meeting of the Board was held on 13-7-1965, the Board consisted only of 11 members and was not fully constituted for some reason or the other, as prescribed in byelaw No. 30. Bye-law No. 35 prescribes that 2 /5ths of members of the Board of Directors shall form a quorum. If the total strength of the Board of Directors is taken as the basis, then 7 members will constitute the quorum. On behalf of the Bank it was urged that number of members required for the quorum should be determined with reference to the actual number of Directors and not with reference to the prescribed strength of 18. Thus, as against the strength of 11 members, the number of members required to be present for the quorum was 5. According to the Board of Revenue, the number of persons required to be present to form a proper quorum had to be determined "with reference to the total number of members of the Board", as prescribed under byelaw No. 30, and not the number of the Directors actually working in the Board. The Board of Revenue further held that any other view will lead to impossible situation as according to its view, a quorum for proper functioning of any representative body was prescribed to ensure that some mini mum number of persons take part in deliberations and take decisions on behalf of the Board they represent. Thereafter, the Board proceeded to deal with the question, whether Bank Inspector P. M. Gore who was in-current-charge of the duties of the Assistant Registrar, and held that he was not entitled to participate in the meeting as a nominee of the Registrar under Bye-law No. 30 (vi). Eventually, the Board of Revenue came to the conclusion that Resolution No. 8 of the Board of Directors, accepting the resignation of the respondent No. 1 was not legally and validly passed and that in the absence of a proper quorum the resolution was a nullity and not binding.

(4.) The decision of the Board of Revenue has been assailed before us, on the following three grounds, namely-

(i) No second appeal lay to the Board under section 77(2) of the Madhya Pradesh Co-operative Societies Act, 1960 against an order passed by the Joint Registrar in proceedings under section 55(2), inasmuch as the decision rendered therein was binding on the parties, and hence its assumption of jurisdiction was wholly illegal; (ii) Upon a misconstruction of Bye-laws 30 and 35, the Board of Revenue has wrongly held that the Board of Directors of the petitioner-Bank must always consist of 18 members, and that for want of a quorum its proceedings held on 13th July 1965 were entirely vitiated; and (iii) The Board of Revenue had no jurisdiction either to direct a re-in- statement of the employee concerned or to make a direction for payment of the back-wages and other allowances.

(5.) As to the first, it is urged that the words "his decision shall be binding" appearing in section 55 (2) of the Act, renders a finality to the decision of the Registrar on a dispute falling within the purview of that section. It reads:

"55(2). Where a dispute including a dispute regarding terms of employment, working conditions and disciplinary action by a society, arises between a society and its employees, the Registrar or any officer appointed by him, not below the rank of Assistant Registrar, shall decide the dispute and his decision shall be binding on the society and its employees."

In view of that finality, it is asserted that the decision of the Registrar under the section, cannot be assailed in an appeal under sub-section (1) of section 77, much less in second appeal under sub-section (2) thereof, having regard to the opening words of sub-section (1) : "Save where it has been otherwise provided". The argument is that section 55 (2) of the Act, is a provision which prescribes for a reference to the Registrar on such a dispute arising and it attaches a finality to the decision rendered therein. In other words, section 55 (2) prescribes for a particular forum for adjudication which excludes other normal remedies and, therefore, no appeal lies in such matters. It is urged that section 55 (2) is an "otherwise provision", within the meaning of section 77 (1) of the Act, and no appeal, therefore, lies. Now the relevant provisions of section 77 are in these terms:

"(1) Save where it has been otherwise provided, an appeal shall lie from every original order under this Act or the rules thereunder- (a) if such order is passed by any officer subordinate to the Registrar, other than Additional Registrar or Joint Registrar, whether or not the officer passing the order is invested with the powers of the Registrar - to the Registrar; (b) if such order passed by the Registrar, Additional Registrar or Joint Registrar-to the State Government. (2) A second appeal shall lie against any order passed in first appeal by the Registrar, Additional Registrar or Joint Registrar to the State Government on any of the following grounds and no other, namely- (i) that the order is contrary to law; or (ii) that the order has failed to determine some material issue of law; or (iii) that there has been a substantial error or defect in the decision of the case upon merits."

I am of the view that there is no merit in this contention.

(6.) The words "his decision shall be binding", which appears in section 55 (2) of the Act are susceptible of no other construction than this, that a decision of the Registrar under the section is binding so long as it exists and it pre-supposes the existence of a decision. There can be no finality attached to a decision of the Registrar under section 55 (2), as its binding effect is always subject to the result of an appeal taken from the decision. That it must be so, is manifest if we contrast the language of this section with that of section 64 (3). It is significant that an adjudication by an Award of the Registrar upon a reference of any of the disputes falling under section 64 (1), read with sub-section (2) to that section, is not final, but a finality attaches to his decision under sub-section (3) thereof upon the question whether a particular dispute referred to him is a dispute. To illustrate the distinction the provisions of section 64 (3) may profitably be set out- "64(3). If any question arises whether a dispute referred to the Registrar is a dispute, the decision thereon of the Registrar shall be final and not be called in question in any Court." The fallacy underlying the submission that there is a finality to the decision of the Registrar under section 55 (2) is, that the learned counsel for the petitioner- Bank wants me to read shall be final for the words shall be binding appearing therein. It is a cardinal rule of construction of statutes that a Court must interpret a provision as it exists, and it is not permissible to add to or alter its terms, in any manner whatever. In my view, an appeal lies against the decision of the Registrar under section 55 (2) and I am fortified in my conclusion by the decision of this Court in Ramcharan v. M. P. State Tad-Gud Co-operative Federation Ltd., 1966 MPLJ 421. [LQ/MPHC/1965/25] I may with advantage refer to the following observations made by Dixit C. J., in that case :

"It is no doubt true that section 77(1) precludes an appeal in cases where there is an otherwise provision. But the provision contained in section 55(2) that the decision of the Registrar or any officer appointed by him shall be binding on the society and its employees is not an otherwise provision taking away the right of appeal in cases determined under section 55 (2). The expression decision shall be binding on the society and its employees as used in section 55(2) does not mean that the decision of the Registrar or any officer appointed by him determining a dispute shall be final and conclusive and not subject to appeal. The expression decision shall be binding only denotes that the decision shall affect the society and the employees concerned in a constraining or compulsory manner. ******** A decision may or may not be subject to any appeal according to the provision contained in the statute dealing with appeals against that decision. In our judgment, the expression decision shall be binding on the society and its employees occurring in section 55(2) cannot, therefore, be treated as an otherwise provision prohibiting an appeal under section 77(1) against a decision of the Registrar, or any officer appointed by him, deciding the dispute under that provision."

For these reasons the first contention must fail and stands rejected.

(7.) That brings me to the main question that has been debated before us at some length, namely, whether the Board of Directors Resolution No. 8 dated 13 July 1965 was illegal or invalid, because the proceedings of the meeting at which it was passed were entirely vitiated for want of quorum. The answer to this question depends on a right construction of Bye-law No. 35, which reads as follows-

"35. Two-fifths of the members of the Board of Directors shall form a quorum. For adjourned meeting, no quorum shall be necessary but the notice prescribed for a meeting of the Board shall be necessary."

Under Bye-law No. 30, the total number of Directors on the Board is eighteen. The composition of the Board is based on proportional representation of various interests as under- Elected

(i) Shareholders. .. 4 (ii) Representative of Primary Agricultural Societies, .. 8 (iii) Non-credit Societies. ,. 1 (iv) Weavers Societies. .. 1 (v) Borrowers of Land Mortgage Loans. .. 1 Nominated (vi) The Registrar, Co-operative Societies or his nominee not below the rank of an Assistant Registrar. .. 1 (vii) The Collector or his nominee not below the rank of a Deputy Collector. ., 1 (viii) The District Agriculture Officer of the district. .. 1 18

(8.) In the year 1965, there were 11 members in the Board, i. e., the Board of Directors was not fully constituted in accordance with Bye-law 30. According to the petitioner-Bank itself, there was no representative of the borrowers of land mortgage loans, because no loans were advanced during that year and there was no separate Land Mortgage Bank. There was also no representative from Weavers Societies. One of the members Lalji Agrawal, who was representing the Large Scale Societies, had also ceased to be a member. Another, Ramgopal Gupta, has also ceased to be a member. There was also no representee of the Non-credit Societies. It is further accepted that 2 other members, Guru Shashi Shekhar and Vijai Shankar Mishra, had also ceased to be members. The respondent No. 1 in his return, while alleging that the Board of Directors was not properly constituted, stated that the shareholders of the petitioner-Bank were represented only by 2 Directors and the remaining two places were vacant. Similarly, there were only 6 Directors elected by the Primary Agricultural Societies, leaving 2 vacancies. There was also no Director representing the Non-credit Societies. Similarly, no Director was elected or co-opted as a representative of the Weavers Co-operative Societies ; and there was also no representative of the borrowers in the Board of Directors. This allegation is borne out by the show-cause notice dated 16th February 1966 issued by the Registrar, Co-operative Societies, Madhya Pradesh, for the supersession of the Board of Directors under section 53 (1) of the Act and the order of the State Government dated 29th January 1968 rejecting the appeal preferred by it. The Board of Directors was, therefore, not fully constituted as required under Byelaw No. 30.

(9.) As already stated, Byelaw No. 35 makes provision as to the number of Directors which constitutes a quorum for a meeting of the Board of Directors. The parties are not agreed as regards the real meaning of the words 2 /5ths of the members of the Board appearing therein. According to the petitioner- Bank, these words should be interpreted as 2/5ths of the Directors constituting the Board for the time being. The words for the time being are, of course, not there in the byelaw. On the other hand, the respondent No. 1 contends that the provision should be literally construed as meaning 2/5ths of the total number of the members of the Board of Directors, as constituted under Byelaw No. 30. Admittedly, in the year 1965, the Board of Directors consisted of 11 members and, therefore, if the quorum was to be reckoned at 2/5ths of eighteen, i. e., if the basic figure to be taken is the total number of Directors constituting the Board under Byelaw No. 30, then the necessary quorum would be of eight (and not seven as wrongly stated by the Board of Revenue) and the meeting of 13th July 1965 at which the impugned resolution was passed would per se be invalid, because only seven members were present in that meeting. That would be so irrespective of the fact whether Co-operative Inspector P. M. Gore in-current-charge of duties of Assistant Registrar, had any right of vote or not. However if the word members in the byelaw could be read as members "for the time being", as suggested by the petitioner-Bank, then in that event, the validity of the meeting or the resolution would be unassailable. We shall now see which construction should be preferred.

(10.) The decision of Bose J., in Model Industries, Dayalbag v. Rambhau and another, 1946 NLJ 227=AIR 1946 Nag 152=ILR 1946 Nag 73, is worth mentioning, although the rule which the learned Judge was interpreting was somewhat differently worded, namely- "The quorum necessary to form an ordinary meeting of the Municipal Committee shall be 1/3rd of the members on the Committee." It was argued that the words on the Committee meant only those actually serving on the Committee at the time of the meeting and not those who would happen to constitute the Committee if and when all vacancies were filled. Bose J., while dealing with the rale as worded, stated :

"The rule says one-third of the members on the Committee. Does this mean one-third of those actually on the Committee at the time of the meeting, or does it mean one-third of those who ought to be on it when the Committee is fully constituted In my opinion, it means those actually serving on the Committee at the time of the meeting. A person not in existence cannot be said to be a member, still less can he be said to be on a Committee or on anything else. Only those actually in existence can be said to be members of a body who are on that body. ******* Had the word of been used instead of on that would have been another matter though ordinarily I would have construed even of in the same sense. But the context can of course change the meaning and seeing that sub-section (2) of section 32 speaks of members of the Committee actually serving at the time while sub-section (1) only uses the words of the Committee I think the Act does draw a distinction between the two phrases."

The learned Judge then goes on to state : "At best it can be said that the words on and of are ambiguous and that they can be used in two senses. They can mean either members actually on or of the Committee at the time, or they can be construed to mean members who would be on the Committee, or who would be of the Committee, if and when it is fully constituted. If the words can mean either, and whether or not, standing by themselves, they can mean the latter, (have no doubt that the former is the more ordinary sense in which they are used), then either construction would be permissible, and therefore a byelaw which uses the words in their normal sense would not be ultra vires."

In that view, Bose J. held that whereas the word of can be construed to mean two things, it, or rather the companion preposition on, cannot be so construed, and taking the primary meaning of the words on the Committee, held that it meant that the quorum ought to be reckoned at two-thirds of the members actually serving on the Committee at the time of the meeting, i. e., from amongst the continuing members. It is true, there must have been some object in using the word on in that rule instead of the word of when the Act also uses the word of elsewhere. Bose J., however, observed that even if the word of had been used instead of on, he would still have construed the word of in the same sense. I would respectfully adopt the same construction of the words 2 /5ths of the members of the Board appearing in Byelaw No. 35 as meaning 2 /5ths of the Directors constituting the Board for the time being.

(11.) This construction of mine of Byelaw No. 35 is clearly borne out if we compare its language with that of Rule 37 of the Madhya Pradesh Co-operative Societies Rules, which provides for a quorum for the general meeting of share-holders. That provision reads- "37 (1). Unless otherwise provided in the byelaws of a society, the quorum for general meeting shall be one-fifth of the total number of members on the date of notice of the meeting." (Italics is mine). Both Byelaw No. 35 and Rule 37 are provisions dealing with the same object, viz., the quorum for a meeting. It would appear that there is a marked difference in language of the byelaw from that employed in the rule which uses the words "total number of members", meaning that the quorum for a general meeting must be 1 /5th of the whole body of share-holders. The addition of these words "total number of" in Rule 37 and their omission from Byelaw No. 35 are somewhat significant. In framing the byelaw, the petitioner-Bank appears to have deliberately departed from the words used in the rule, and this "variation of language" raises an inference of a change of intention on their part that the requirements for a quorum at a Board Meeting were intended and meant to be different. I am of the view that the alteration in the language used was intentional. It is a cardinal rule in the construction of statutes that assistance in Ascertaining the meaning of an enactment may be obtained by comparing its language with that used in earlier statutes relating to the same subject [See, Craies on Statute Law, 6th Ed., pp. 140-3]. There is no reason why a construction which would render words in the statute otiose must be accepted. The Legislature is deemed not to waste its words or to say anything invain [See, Quebec Railway, Light, Heat and Power Co. v. Vandry, LR (1920) App. Cas. 662, 667. and Cargo Ex. Argos Gaudet v. Brown, (1872-73) LR 5 PC 134, 149-50. In my view, the same rule of interpretation should be adopted in construing rules and byelaws framed under an enactment.

(12.) I have reason to think that the framers of Byelaw No. 35 had before them, or, were aware of the provision contained in Rule 37, and with this knowledge, altered the language of the byelaw they framed, by deleting the words the total number of. There is clearly a distinction between the two expressions used in Rule 37 and Byelaw No. 35. Now, the normal canon of construction of a statute or a rule or byelaw is, that when different expressions are used, they are intended by the draftsman to connote different things or ideas. In Dickenson v. Fletcher, (1873) LR 9 CP 1, at p. 8, Brett J., stated the rule thus :

"Where two statutes dealing with the same subject-matter use different language it is generally a fair presumption that the alteration in the language used in the subsequent statute was intentional."

[See, Craies on Statute Law, 6th Ed., pp. 141-2]. The underlying principle upon which this rule is based is, that no part of a statutory provision should be deemed as redundant or unnecessary. I am inclined to think that the addition of the words "the total number of" in Rule 37 which are not there in Byelaw No. 35 was not a superfluity or mere surplusage nor had they been added to make clear a meaning which was already implied. The alteration in the language used in Byelaw No. 35 was intentional, and it bears the meaning that I have indicated.

(13.) Even if there were two different interpretations possible of Byelaw No. 35, the Court would adopt that which is just, reasonable and fair rather than one which may lead to general inconvenience. A too literal construction of that Byelaw as meaning that quorum for a meeting of the Board of Directors should be 2/5ths of its total number of members would lead to manifest inconvenience. I would rather give to the words their ordinary natural meaning, while keeping in view the object for which it had been framed, viz., the quorum at a meeting. It is the first principle of Company Law that Directors can only validly act when assembled at a Board meeting. [Re. Haycraft Gold Reduction and Mining Co., (1900) 2 Ch 230]. The Board while so acting must also possess the proper quorum because any business done by a smaller number than the quorum prescribed will have no effect. [In Re. Sly Spink and Co., (1911) 2 Ch. 430]. Thus, a quorum is only the minimum number of members of a body or society whose presence is necessary for the transaction of business. [See, Halsburys Laws of England, Vol.6, 3rd Ed., paras 117 and 630, (at pp. 60-1 and 317-8); American Jurisprudence, 2nd Ed., Vol. 19, paras 1126-7 (pp. 560-62) ; Regulation 88 contained in Table A of the Indian Companies Act, 1913; Section 287 of the Companies Act, 1956, Palmars Company Law, 20th Ed., pp. 545-6; Palmars Company Precedents, Part I, 17th Ed., pp. 579-80; Crews Conduct and Procedure of Meetings, 19th Ed., pp. 39-41, 116-21,162-5; Blackwells Public and Company Meetings, 8th Ed., pp. 57, 185-6, Heads Meetings, 6th Ed., pp. 10, 15, 144-5; and Davars Law and Procedure of Meeting in India, pp. 15-18 and 25-6 .

(14.) The law appears to be that the continuing Directors may act though there are vacancies provided the articles incorporate a clause to that effect. In Heads Meetings, 6th Ed., p. 15, it is stated thus :

"If through death or resignation or other reason the directors fall below the quorum, it was held in the case of a statutory company: Channel Collieries Trust v. Dover Rly. Co., (1914) 2 Ch 506, that the continuing director could act. The regulations of registered companies usually provide that the continuing director or directors shall meet and appoint directors to fill up any such casual vacancy, but only for that particular purpose. [(See Scottish Petroleum Co., (1883) 23 ChD 431.]

The byelaws of the petitioner-Bank do provide for such a contingency. In the event of a vacancy in the Board due to death, resignation, etc., of a Director, it does not cease to exist but functions as constituted. Notwithstanding such vacancy, the remaining Directors of the class to which the old Director belonged could under Byelaw No. 31, appoint a duly qualified member belonging to that class to take his place on the Board of Directors for the remainder of the term, such appointment being made at the next meeting of the Board. Similarly, in the event of a nominated Director ceasing to hold his office, the authority nominating him could nominate another person within two months from the date on which the vacancy occurs. It may be that the Board of Directors of the petitioner-Bank had persistently made defaults in filling up the vacancies, which furnished a sufficient ground to the State Government for its supersession under section 53(1) of the Act, but such failure to perform the duties imposed upon it under Byelaw No. 31 would not per se invalidate either the proceedings at the Boards meeting held on 13th July 1965 or the impugned Resolution No. 8 passed therein, nor would the Board of Directors for that reason cease to exist.

(15.) Even otherwise, neither the meeting of 13th July 1965 would be invalidated nor could Resolution No. 8 in question be struck down for an alleged defect in the due constitution of the Board of Directors because of section 51 of the Act which reads as follows-

"51. Validation of Acts-No act of a society or of any committee or of any officer shall be deemed to be invalid by reason only of the existence of any defect in procedure or in the constitution of the society or of the committee or in the appointment or election of an officer or on the ground that such officer was disqualified for his appointment."

This provision has been introduced as a matter of policy and necessity to protect the interests of the public. In dealing with the validity of acts of de facto officers or directors, in American Jurisprudence, 2nd Ed., Vol. 19, para. 1130, at p. 544, it is stated :

"The de facto doctrine is one of those legal make-shifts by which unlawful or irregular corporate and public acts are legalized for certain purposes on the score of necessity. It was introduced into the laws as a matter of policy and necessity to protect the interests of the public and individuals where those interests were involved in the official acts of persons exercising the duties of an office without being lawful officers. It is, accordingly, well settled that the acts of de facto officers of a private corporation are binding as to a third person who deals with them in ignorance of their want of legal right to the office. It is likewise the rule that the acts of directors de facto of a corporation are valid as to third persons. The acts of de facto officers are not, however, binding upon the corporation as regards the third person dealing with them with knowledge of their want of legal power."

(16.) In somewhat similar circumstances, the Court of Appeal in Newhaven Local Board v. Newhaven School Board, LR (1885) 30 Ch.D 350, interpreting the 9th rule of the first schedule of the Public Health Act, 1875 (38 and 39 Vict. c. 55) which provided:

"The proceedings of a local board shall not be invalidated by any vacancy or vacancies among their members, or by any defect in the election of such board, or in the election or selection or qualification of any members thereof",

refused to strike down a resolution of the Board directing the issue of a notice of demolition of an unauthorised construction issued under section 155 of the Act on the ground that the 9th rule cured the defect in its constitution. The facts were these. In April, 1884, there was a local board properly constituted consisting of nine members. That being the full number, three are a quorum under rule 2 of the first schedule. It seems that in May, 1884, the Board being properly constituted, seven resigned, leaving only two. These two, on 29th of May, appointed three others, and those three others, with the two, who appointed them, appointed four others, making a total of nine. It was held that inasmuch as two were less than a quorum under rule 2, the appointment by them of three additional members was wrong and invalid and good for nothing, that the appointment by those five of additional four was equally invalid.

(17.) Nevertheless, this being a "defect in the construction of the board due to vacancies amongst its members", the Court of Appeal held that the defect would not invalidate the proceedings of the local board, although the number of members was reduced below the defined or required number. That was by reason of the validating provision in Rule 9 of Schedule I of the Act. In dealing with that rule, the learned Lord Justices agreed in stating- per Cotton L. J.:

"We talk of the board in two senses. The Local board is a corporation; it is incorporated under the Act, but from the imperfection of language we used the word board, not only to describe the corporation, but to describe the persons, the corporators, who are acting in the exercise of the powers given to the board, and, in my opinion, board here must mean the corporation. Although the number of the members of the corporation was reduced to two, yet the corporation had not come to an end; it still existed, though it existed in such a state that, having regard to rule 2, there were not sufficient members duly appointed to deal with the matters which might have to be dealt with. In my opinion, therefore, as regards the validity of the acts done by the board, rule 9 cures the defect arising from the fact that the persona elected or selected to fill up the vacancies were chosen by two persons who, not being a quorum, were not competent to fill up the vacancies. Therefore, in my opinion, we cannot consider what had been done by the board, although irregularly constituted, as being ineffectual. Let us consider what is the object of the 9th rule. At first one is inclined to think that it was only intended for the protection of those who deal with the board, but, in my opinion, if we look carefully at it, we shall see that it goes much further, and that there is good reason for its doing so. When these local boards are once constituted they have to regulate various things in the districts for which they are appointed, and it appears to me that the rule was intended to prevent the consequences which would arise, if the proceedings of a board regulating and giving directions as to what is to be done in the district as to various important matters, could be impeached as done without authority because the board was irregularly constituted. It would throw a district into confusion if, when steps had been taken by a quorum of the persons acting as a board, the objection could afterwards be taken that the election of certain members was wrong, and that there was not in fact a duly qualified board. We may take this case as an example of the results. I do not like to construe Acts of Parliament by the result of one construction or the other, but we cannot wholly disregard the consideration in what a state this place would be, if all the acts which have been done for a year by the persons who were acting as the board, were to be held in-corporative because there was this defect in the filling up the vacancies. I do not at all think that if two members purported to pass resolutions in exercise of the powers given to the board the defect would be cured by rule 9, for only the statutory quorum can do business, but, in my opinion, where a proper quorum of the persons acting de facto as members of the board passes resolutions, rule 9 does prevent any objection being taken to those resolutions, or to the action which they take in consequence of them, on the ground that if the matter was investigated it would turn out that the election of some of the members of the board was not in law a good election. In my opinion, therefore, the acts of the board, though irregularly constituted, must be taken as good acts, for the board here are not appearing as individuals, but as a corporation acting for the benefit of all the inhabitants in the district of Newhaven."

per Lindley L. J.:

"It appears to me that rule 9 in schedule I applies to a case of this kind. The words are very wide:The proceedings of a local board shall not be invalidated by any vacancy or vacancies among their members, or by any defect in the election of such board, or in the election or selection or qualification of any members thereof. Now what is the object of such a rule as this It is obviously to prevent such objections as are raised in this case. It only becomes useful in cases where there are defects in the election or selection or qualification of any members of the board, and it appears to me to render valid the proceedings of the local board in all dealings between the local board on the one side, and persons dealing with them on the other, subject to this, that I doubt whether it applies as between the local board and the members who are improperly appointed, I mean to say that though it is worded widely, I doubt whether it would be an answer to a quo warranto. But in all dealings between the board and other people, it appears to me that the proceedings of the board are rendered valid."

per Bowen L. J.:

"Supposing that there was a local board still existing, and that the whole board had been re-elected by the rate-payers, they would be a duly constituted board, and the invalidity of their proceeding in fixing a building line could only arise from the two having selected members when they had no power to do it, so that the members selected were not properly selected. If that is so, I think that sub-section (9) cures the defect, assuming, as I do, that the statute does not make it clear that there is a dissolution of the corporate body and a vanishing into space of the local Board."

I would also come to the same conclusion on the construction of section 51 of the Madhya Pradesh Co-operative Societies Act, 1960, which had the effect of validating the proceedings of the Board of Directors at its meeting of 13th July 1965, including the Resolution No. 8 passed therein.

(18.) In the view that I have taken, it is really not necessary for me to determine whether the Bank Inspector P. M. Gore placed in-current-charge of duties of the Assistant Registrar, had any right to participate at the Board Meeting held on 13th July 1965 or to record a vote on the Resolution No. 8 passed therein, or to deal with the contention, namely, that the Board of Revenue had no jurisdiction to direct re-instatement of the respondent No. 1 with payment of back wages, nor whether the resignation submitted by a servant takes effect from the moment it is made. I, however, think it desirable to deal with these questions since they have been canvassed and in particular because doubts have been expressed as to whether a Government servant appointed to hold current charge of the duties of another post can exercise all the powers of that post.

(19.) As regards the position of a person placed in-current-charge of duties of a higher post, the law enunciated in Ramratan v. The State of Madhya Pradesh and others, 1964 MPLJ 86=ILR 1964 MP 242 [LQ/MPHC/1962/257] , is that there is a difference between a person who is appointed to officiate on a higher post and a person who is merely appointed to be in-charge of the current duties of that post in addition to his own. It was held that such a person without being clothed with that rank as in the case of an officiating appointment can only exercise administrative or financial powers vested in the incumbent but not any statutory powers of that post. This was directly in conflict with the Government of Madhya Pradesh G. A. D.s Memorandum No. 1707-CR-175-I(iii)/61 dated 5th July 1961 deciding that an officer placed in-current-charge of the duties of another should, in the absence of any specific directions to the contrary, be deemed to be clothed with all the powers, even though he may not hold the rank of that post or get full pay thereof. After the decision in Ramratans case, 1964 MPLJ 86=ILR 1964 MP 242 [LQ/MPHC/1962/257] , the Government of Madhya Pradesh issued fresh instruction in its G. A. D. Memorandum No. 213/2475/I(iii)/63 dated 1st February 1964, to the following effect:

"The State Government has since been advised that the statutory functions attached to any designated post can be performed only by a person holding a post so designated and not by one appointed to hold current charge of the duties of that post. An officer appointed to hold current charge of the duties of a post can exercise administrative or financial powers vested in the full-fledged incumbent such as are granted by administrative orders, office memoranda and the like. He cannot, however, exercise statutory powers, whether those powers are derived direct from an Act or the Legislature or Rule, Regulations or Bye-laws made under any article of the Constitution (e. g. Fundamental Rules, Civil Services (Classification, Control and Appeal) Rules, Civil Services Regulations, Rules regarding delegation of Financial Powers, etc.)."

The above legal position has to be borne in mind while dealing with the question whether the Bank Inspector P. M. Gore could exercise the powers of the Assistant Registrar of being on the Board of Directors. The answer to that question must be in the negative in view of the fact, firstly, that such power is derived from Byelaw No. 30(vi), i. e., in terms of the aforesaid direction of the Government, not exercisable by him being only in-charge of duties, and secondly, the Bank Inspector P. M. Gore was not and could not be a nominee of the Registrar under that byelaw because it inhibits him fram nominating any person below the rank of an Assistant Registrar. However on the construction that I have placed on Byelaw No. 35 which fixes the quorum at 2/5th of the members of the Board of Directors for the time being, the participation of the Bank Inspector Gore at the meeting was wholly immaterial, because even if he were excluded, it would still be a valid meeting as there were more than five Directors present which was the minimum number required under that byelaw.

(20.) I am, however, not impressed with the last contention urged. If a second appeal to the Board of Revenue be competent under section 77 (2), as I have already stated, then it undoubtedly had the jurisdiction to affirm, reverse or alter the decision of the Joint Registrar under section 55 (2) who had upheld the action of the petitioner-Bank; it also necessarily had, the power to make a direction in terms of section 55 (2), including the one made for re-instatement of the respondent No. 1 and the consequential direction for payment of back wages upon his re-instatement. These are all matters which fall within the ambit of "a dispute regarding terms of employment", as envisaged by section 55 (2) for the adjudication of which a reference is made to the Registrar. However interference with the decision of the Joint Registrar was uncalled for, in this particular case for reasons already stated.

(21.) I am equally unimpressed that a resignation takes effect the moment it is made to the proper authority. The word "resignation" is not a Term of Art. Resignation by a servant docs not operate as discharging the contract by bringing it lawfully to an end, unless such resignation be accepted by the Master [See, Barwell and Kars Master and Servant, pp. 353-4]. As the learned authors put it:

"But if the resignation be not accepted, the servant remains bound, and should he choose to withhold his services, his conduct will be a breach of the contract entitling the master to damages, unless, though speaking of his action as one of resignation, the servant is in fact mentioning a date for it to take effect which would bring his conduct within what the contract requires as a proper Notice to determine it."

A resignation is invalid unless it (a) amounts to notice or (b) is acceded to by the employer. In Ramchandra v. G.I.P. Rly. Co., (1900) 2 Bom.L.R. 790, Sir Lawrence Jenkins G. J., stated-

"Now a contract of service is continuing in its nature, and its continuance and the obligations under it can only be terminated in certain defined modes. Mere resignation obviously is not enough unless it be assented to, or unless it comply with those terms which the law implies or the prior agreement of the parties may permit."

(22.) In the present case, I have, however, held the Resolution No. 8 of the Board of Directors dated 13th July 1965 accepting the resignation submitted by the respondent No. 1 to be valid. In that view, the Board of Revenue certainly had exceeded its jurisdiction in either quashing the proceedings of that day or in directing the re-instatement of the respondent No. 1 to his post w. e. f. 13th July 1965 and to pay him back wages from that day, and its decision must, accordingly be quashed.

(23.) The result is that the petition succeeds and is allowed with costs. The impugned order of the Board of Revenue is, accordingly, quashed, and the Registrar, Co-operative Societies, Madhya Pradesh, is hereby directed not to give effect to the same, in the manner threatened. The petitioner-Bank will have its costs of the proceedings and also be entitled to a refund of the security amount. Counsels fee Rs. 100, if certified. Singh J.-The respondent to this petition Puranlal Agrawal was an employee of the petitioner, the Satna Central Co-operative and Land Mortgage Bank Limited. The respondent submitted his resignation from service, which was accepted by the Board of Directors of the petitioner-Bank in its meeting held on 13th July, 1965. The respondent later on wanted to withdraw the resignation and he challenged the resolution of the Board of Directors accepting the resignation before the Joint Registrar, Co-operative Societies on the ground that there was inadequate quorum in the meeting held on 13th July, 1965 and therefore, the resolution was invalid. The Joint Registrar rejected the contention of the respondent but the Board of Revenue, in appeal, accepted the same and set aside the resolution of the Board of Directors of the Bank. The Bank by this petition under Article 226 of the Constitution calls into question the order of the Board of Revenue. 2. The total strength of the Board of Directors if all vacancies are full is of 18 members as prescribed by Byelaw No. 30. The quorum is prescribed by Byelaw No. 35, which reads as follows :

"Twofifth of the members of the Board of Directors shall form a quorum. For adjourned meeting, no quorum shall be necessary but the notice prescribed for a meeting of the Board shall be necessary."

On 13th July, 1965 when the meeting of the Board was held only seven members were present in the meeting. At that time, the Board consisted of eleven members and there were seven vacancies. If the words "two fifth of the members of the Board of Directors" in Byelaw No. 35 refer to two fifth of the total strength of the Board including the vacancies then (after rounding off any fraction contained in that two fifth) eight members will constitute a quorum, whereas if these words refer to two fifth of the members for the time being thus excluding the vacancies, five members will constitute a quorum. According to the Board of Revenue the Byelaw in fixing the quorum referred to two fifth of the total strength including the vacancies and there was inadequate quorum in the meeting and the resolution accepting the resignation was invalid. On the other hand, if the Byelaw in fixing the quorum referred to two fifth of the existing members, as is contended by the petitioner, it will have to be held that there was requisite quorum in the meeting and the resolution was validly passed. The main question in this petition, therefore, is as to the meaning of the words "two fifth of the members of the Board of Directors" as they occur in Byelaw No. 35. 3. It must be noticed that we are dealing with a Byelaw which is applicable to the petitioner-Bank alone. The total strength of the Board of Directors of the Bank including the vacancies is a fixed figure of eighteen. If the Byelaw prescribes the quorum with reference to two fifth of the total strength of the Board including the vacancies, the quorum will always be a fixed number of eight whatever may be the number of vacancies. If that was the idea, it could have been very easily conveyed by saying that eight members shall constitute a quorum. The very fact that the Byelaw does not state that the quorum shall be a fixed numerical figure and instead prescribes the same with reference to "two- fifth of the members" is a strong indication that the prescribed quorum is a fluctuating figure. The inference, therefore, is that "two fifth of the members" refer to two fifth of the members for the time being thereby excluding the vacancies. This inference is supported by another consideration. When it is desired to convey the idea of total strength of the members of a body including the vacancies, the expressions normally used are "Full number of members", "Whole number of members", or Total number of members. If a provision uses these expressions, prima facie it will mean a reference to the total strength of members including the vacancies ; even these expressions may be accompanied by appropriate words suggesting that the reference is to the members for the time being. Now the words used in the Byelaw are simply "members of the Board" unaccompanied by any qualifying word such as "Full", "Whole" or "Total" and there are no other words showing that the vacancies are to be included. It, therefore, follows that the idea is to refer to the members for the time being and to exclude the vacancies. It is true that this meaning could have been made clear by using expressions such as "existing members", "members serving at the time" or "members for the time being", but even in the absence of such expressions the meaning is the same for the word "members" in itself, unless there is a contrary context, signifies existing members and not past members or members who may be elected in future. It is also true that on this interpretation, as no minimum is fixed by the byelaw, the quorum will be reduced to one if the membership falls below three and no steps are taken to fill in the vacancies. This objection, however, proceeds on hypothetical considerations ; moreover there is nothing illegal in a quorum consisting of a single member. These considerations, therefore, do not militate against the view that the byelaw fixes the quorum with reference to the existing members. 4. I hope my conclusion is in accord with "the intention of the makers" of the Byelaw. But in all probability, the makers had no intention and the problem facing us never occurred to them, for had they been alive to it they would have used clear words to indicate the solution and not left for us an exercise in interpretation. The fact is that we are here faced with an ambiguity arising from careless drafting and in making a choice out of the two rival meanings suggested at the Bar we have to select one which is nearer to the words used in the Byelaw. 5. On the interpretation that the Byelaw prescribes the quorum with reference to the existing members, there is no dispute that there was adequate quorum in the meeting even if we exclude the presence of one member Mr. Gore, about whose qualification there is some doubt. The resignation was thus validly accepted. On this conclusion other points, which were argued at the Bar, need not be decided and I decline to express any opinion on them. 6. I agree that the petition be allowed as propose by my learned brother Sen. Petition allowed.