Power of Members in a Society (Reg. under Society Reg. Act)
Jibanananda Goswami
(Querist) 20 February 2010
This query is : Resolved
A registered Society (Jan Shikshan Sansthan) has a Board of management that was formed on 26-02-09 for 3 years. The society is sponsored by Ministry of HRD, GOI.
On 04-05-09, the Chairman placed a freeze order on the Bank account of the society without specifying any cause. He also ordered that "....trainings will continue as usual" He did not asked any other members for approval.
I asked about it from Bank (UBI) through RTI and the Bank said that "As per Indian Contact Act, any member can place a stop payment/freeze order to the account"
I sent another RTI to the M/HRD and they answered "No such power is vested in the Chairman of JSS"
Now the questions are
1. Is the Contact Act applicable to a registered society?
2. If the majority of Members support the normal operation of Bank account then can any one member stop the operation?
3. The fund was allotted by M/HRD for literacy and vocational trainings. Can I file a PLI against the Chairman?
4. If the employees (are not getting salaries from May-09 due to the stop order) want to claim their salaries they will send notice to the Chairman. But the Chairman is not found in his official address. So if nobody receive the notice, how to start a case?
5. Under which court the matter is to be placed?
6. Some employee's contract term is going to end very soon, but their salaries are due. Is their any process to extend the period until the matter is solved?
B K Raghavendra Rao
(Expert) 20 February 2010
Contract Act is applicable to the society in the sense it is a contract between the account holder and the bank.
As it is a government body under Article 26 of the Constitution of India, you may file a writ petition in the High Court and seek (1)stay the stop payment order, (2)direction for payment of salary.
Salary of the members would be safe even if their term ends before the orders being passed by the High Court.
If Chairman is not traceable, members are at liberty to bring the matter to the knowledge of Ministry of HRD, GOI and seek their permission to elect a new chairman in the general body meeting. Also, the Ministry may be requested to nominate a chairman for the interim period.
Writ petition may be filed against the Chairman by designation and he need not be present personally to receive the notice of the court.
If the Chairman
Parveen Kr. Aggarwal
(Expert) 20 February 2010
The contract is between society on the one hand and the bank on the other hand. The society is mananged by the Board of Management and not by the Chairman alone. The Board of Management might have passed resolution authorising the office bearers of the society to operate the bank account. If the Chairman is not authorised to operate the bank account of the society, the letter given by him to the bank is unauthorised and the bank is not bound by it. Otherwise also, the decisions are taken the BoM and not by the Chairman alone. The society may convene meeting and terminate the Chairmanship of the person acting against the interests of the society.
Only the members/office bearers of the society who are authorised vide resolution are authorised to deal with the bank and instruct bank with regard to the bank account and none else, whoever he may be.
As Public Interest is not involved in the matter PIL (Public Interest Litigation) cannot be filed. However, writ may be filed. The employees may avail their remedies as receiving of remuneration against the services rendered by them is their legal right.
Besides Courts, application may be made to the Registrar of Societies.
