Narender Kr.Jain & Ors v. Government of NCT & Ors

SANJIV KHANNA, J kapil/dk

* IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment Reserved on: 15th February, 2011 % Judgment Pronounced on: May 09, 2011 + W.P.(C) No. 421/2010 NARENDER KR. JAIN & ORS. ..... Petitioners Through: Mr. Amit Gupta, Adv. Versus GOVT. OF NCT OF DELHI AND ORS. ..... Respondents Through: Mr.Abhinav Tandon, Adv. for Mr.V.K. Tandon, Adv. R-1&2 Mr.S.K. Kaushik, Adv. for R-4 CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether reporters of the local papers be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes DIPAK MISRA, CJ Invoking the jurisdiction of this Court under Article 226 of the Constitution of India, the petitioners have prayed for declaring Section 2(t) and Section 35(7)(d) of the Delhi Cooperative Societies Act, 2003 (for brevity "the 2003 Act") ultra vires Articles 14, 19 and 21 of the Constitution of India and for issue of a writ of certiorari for quashment of the order dated 18th January, 2010 passed by the Returning Officer, the third respondent herein, who has declared the petitioners as disqualified from contesting the elections to the Board of Directors of the Jain Cooperative Bank Ltd., the fourth respondent herein. 2. The facts which are essential to be stated for adjudication of this writ petition are that the petitioners were elected to the Board of Directors of the fourth respondent in the elections held on 3rd December, 2006. The petitioner No.1 was elected as the Vice-Chairman and the rest of the petitioners were elected as the Directors of the Board. The statutory audit for the year 2006-2007 for the respondent No.4 was completed on 23rd July, 2007. The bank was approached by one M/s. M.L. Puri & Co., Chartered Accountants, for getting empanelled as statutory auditors of the bank. The Board of Directors, which consisted of 12 members including the petitioners herein, appointed M/s. M.L. Puri & Co. as the statutory auditors to carry out the statutory audit for the financial year ending 31st March, 2008. M/s. M.L. Puri & Co. wrote a letter for getting no-objection certificate from the earlier statutory auditors, M/s. Shiromani Tyagi & Co., Chartered Accountants, on 14th May, 2008. M/s. M.L. Puri & Co. submitted the option-cum-appointment letter for conducting the audit of the office of the Registrar, Cooperative Societies, the respondent No.2 herein, on 27th May, 2008, the approval for which was given by the said respondent on 9th June, 2008. The said M/s. M.L. Puri & Co., vide letter dated 20th August, 2008, informed the bank that they were not in a position to commence the audit immediately and complete the same before 27th August, 2008. It was stated that the audit could only be completed by the first week of September, 2008. The fourth respondent, by communication dated 21st August, 2008, informed the said Chartered Accountants firm that the accounts were required to be audited immediately and, therefore, the audit should be taken up and completed by 27th August, 2008. The said firm expressed its inability and stated that they had no objection if some other auditor was appointed and also mentioned that their letter may be treated as a letter of resignation. In the meantime, M/s. Shiromani Tyagi and Co., vide letter dated 22nd August, 2008, wrote to the fourth respondent expressing their willingness to be empanelled for conducting the statutory audit. On 23rd August, 2008, the resignation of M/s. M.L. Puri & Co. was accepted by the Board of Directors. M/s. Shiromani Tyagi and Co., Chartered Accountants firm was appointed as the statutory auditor on 25th August, 2008. The said fact was intimated to the respondent No.2 who, by communication dated 9th September, 2008, did not accede to the request of the Board of Directors for changing the statutory auditor and informed that the earlier appointed auditor had agreed to complete the audit by 15th September, 2008. Thereafter, M/s. M.L. Puri & Co., by