IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CWP No.12643 of 2025 Decided on: 30.06.2026 ------------------------------------------------------------------------------------- Karam Chand Chauhan and Ors …..Petitioners Versus State of HP and Ors. ....Respondents ------------------------------------------------------------------------------------- Coram Ms. Justice Jyotsna Rewal Dua Whether approved for reporting?1 For the Petitioners: Mr. Kameshwer Singh Dhaulta Advocate. For the Respondents: Mr. Anup Rattan, Advocate General with Ms. Menka Raj Chauhan, Deputy Advocate General for respondents No. 1 to 3. Mr. H.C.Sharma, Advocate, for respondents No. 4 and 5. ------------------------------------------------------------------------------------ Jyotsna Rewal Dua, Judge Heard and considered the case file. Respondent No.5 is a Society registered under the Himachal Pradesh Cooperative Societies Act, 1968, (the Act in short). Elections for the Board of Directors of respondent No.5 were held on 31.07.2023 for five zones. Petitioners, five in number, were elected as Directors from 1Whether reporters of print and electronic media may be allowed to see the order? Yes. 2 these zones. Their such election was duly notified in accordance with law. Petitioners’ grievance relates to failure of the respondent-State to nominate two Directors on the Managing Committee/Board of Directors of respondent No.5 as required under law for constitution of the Managing Committee of respondent No.5. 2. In view of the grievance of the petitioner, it will be apt to notice Section 34 of the Act, more particularly sub section (2-A) whereof that provides for constitution of Managing Committee. Section 34 (1), 2 and 2-A read as under: - “34 Constitution of the Managing Committee - (1) The management of every society shall vest in a managing committee constituted in accordance with this Act, rules and bye- laws, which shall exercise such powers and perform such duties as may be conferred or imposed respectively, by this Act, rules and bye-laws. (2) The managing committee of a co-operative society shall be constituted by:- (a) election from amongst the members of the society at the annual or special general meeting; (b) nominees of other co-operative societies or institutions, if any, provided in the bye- laws; (c) Government nominees, if any, nominated under section 35; and (d) appointment made by the Registrar under section 34-A. 3 2-A). The managing committee shall, as soon as may be, elect from amongst its elected or nominated members a Chairman, Vice- Chairman; or a President, Vice-President, as the case may be, of the managing committee.” As per Section 34, management of the Society is to vest in its Management Committee. Such Committee is to exercise powers and perform duties as conferred or imposed upon it by the Statute/Rules/bye-laws etc. The Managing Committee of a cooperative society is to be composed of (a) elected members from within the society; (b) nominees of the other cooperative societies/institutions, if any, provided in the bye-laws; (c) Government nominees; and (d) appointments made by the Registrar under Section 34-A of the Act. It will also be in place to extract here provisions of Section 35 of the Act:- “35. Nominees of the Government and other nominees on the committee of co-operative societies.- (1) (a) Where the State Government- (i) has subscribed to the share capital of a co- operative society; or (ii) has assisted indirectly in the formation or augmentation of the share capital of a co- operative society as provided under section 48; or (iii) has guaranteed the repayment of a principal and payment of interest on loans and advances to a society; the State Government or any authority specified by the State Government in this 4 behalf shall have the right to nominate, having such qualifications and experience and in the manner as may be prescribed, not more than three members or one-third of the total number of the members of the committee of the society whichever is less (b) Where the employer has contributed to the share capital of a cooperative society of his employees to the extent of rupees five thousand or more, the employer shall have right to nominate two members or one-third of the total members whichever is less, on the committee of such society. (c) Where any financing institution notified in this behalf by the Government has provided finance to a co-operative society, such financing institutions shall have the right to nominate one member on the committee. (2) A member nominated on the committee of a co- operative society under sub-section (1) shall hold office during the pleasure of the State Government or the specified authority or the employer or the financing institution, as the case may be. (3) Where in a co-operative society in which shares have been subscribed or liability by way of guarantee for borrowing has been undertaken by the Government, exceeding fifty per centum of the working capital of the society, a difference of opinion in respect of any matter arises between any member of the committee nominated under sub-section (1) (a) and other members thereof, the matter shall be referred by the committee to the Government whose decision thereon shall be final and will operate as if same were a decision taken by the committee.” It is the pleaded case of respondents No. 1 to 3 5 that the State Government holds significant interest in respondent No. 5 with financial contribution of Rs. 72.11 lacs to the total share capital of Rs. 73.04 lacs; The State Government is entitled to nominate two members to the Board of respondent No.5-Society out of seven Directors. It is also not in dispute that petitioners have been elected as five Directors representing five different zones. Respondents have not disputed having not nominated two Directors to the Managing Committee of the Board of respondent No.5. Their defence is that for nominating two Directors to the Board of respondent No.5 the matter is as yet pending approval of the Competent Authority of the State Government. 4. The elections to the Board of Directors of respondent No.5 were held on 31.07.2023. Petitioners were elected as Directors of respondent No.5 on 31.07.2023. This writ petition seeking directions to the respondents-State to nominate the official Directors on Board of respondent No.5 was instituted on 31.07.2025. Almost three years have gone by from the date of elections of the petitioners as Directors of respondent No.5, there is still no nomination of Directors by the respondents-State to the Board of Directors of respondent No.5-Society. 6 Section 34 (2-A) provides that Managing Committee shall as soon as the case may, elect from amongst its elected or nominated members a Chairman, Vice-Chairman or a President, Vice President as the case may of the Managing Committee. For want of nomination of the Directors by the respondents-State, the above provision has also not been given effect to as no meeting of the Board of Directors of respondents No.5 has been convened. Learned counsel for the petitioner has relied upon Deviner Negi & Ors Vs. State of HP & Ors.2 which, inter-alia, holds that ‘whenever the law provides for nomination of the Director to the Board, it should be done at the earliest to avoid vacuum in office’. Reference was also made to Sh. Virender Singh Khurana and others Vs. The Secretary (Cooperation) and others3 where, in almost similar circumstances, by granting a fixed timeline to the respondent-State, it was ordered that in case the respondent-State fails to nominate any Director by exercising powers under Section 35 of the Act, the Managing Committee of the Society, therein, shall be taken to be comprised of the members, who already stood 2 CWP No. 3831 o 2019 decided on 07.07.2020 3 CWP No. 12214 of 2025, decided on 22.04.2025 7 elected/nominated. The operative part of the order reads as under: - “11. This Court is of the considered view that in light of the said statement made by learned Advocate General, nothing further is required to be adjudicated in this case, save and except that if the Government fails to nominate any Director by exercising prerogative vested in it under Section 35 of the Act, by 30.06.2025, then Managing Committee of respondent No.3 shall be taken to be comprised of the Members, who already stand elected/nominated, in terms of the provisions of Section 34(2) of the Act and respondent No.3-Committee shall be at liberty to carry out its functions, as it stands today, and thereafter, respondent-State shall forfeit its right to nominate any Director, at least for the remaining tenure of the present Managing Committee. After 30.06.2025, whatsoever the situation is, the Managing Director shall forthwith convene the meeting of the Committee, so as to elect the Chairman and Vice Chairman etc., as per the Statute.” 5. In view of the statutory provisions, the grievance of the petitioner and the stand taken by the respondents in their reply as also the time period that has elapsed since the election of the petitioners as Directors of respondent No.5-Society, this writ petition is disposed of with the order that it shall be open for the respondents-State to nominate the Directors of respondent No.5 in accordance with Sections 34 and 35 of the H.P. Co-operative Societies Act, 1968 by 22.07.2026, failing which, the Managing Committee of respondent No.5 shall be taken to be that of 8 members who already stand elected/nominated in accordance with the provisions of the Act. The said Managing Committee would be entitled to carry out its functions in accordance with law and in that eventuality, respondent-State shall forfeit its right to nominate any Director for the remaining tenure of the Managing Committee. With the above observations, the present writ petition to stand disposed of. Pending application(s), if any, also to stand disposed of. Jyotsna Rewal Dua June 30, 2026 Judge R.Atal