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2020 (3) TMI 1464 - SC - Indian LawsAppointment of the Chief Executive Officer (CEO) of the first Respondent bank and its subsequent ratification by the Registrar of Cooperative Societies - applicability of 2016 Amending Act which inserted Clauses (a) and (b) in Section 54(3) of the 1960 Act - HELD THAT:- Clause (a) of Sub-section (3) stipulates that the eligibility criteria for the post of CEO of a Cooperative Bank are those prescribed by the RBI in this regard. Clause (b) stipulates that if the concerned Cooperative Bank fails to appoint a CEO under the eligibility criteria within a specified period, the Registrar may appoint an eligible officer of the Bank. By the 2016 Amendment Act, Section 57-B was deleted and Clauses (a) and (b) were inserted in Section 54(3). Significantly, Sub-section (3) of Section 54 is not confined only to Cooperative Banks. Section 54(3) empowers the State Government to specify, by notification, the class of societies which shall employ officers from cadres maintained by Apex or Central Societies. The term 'class of societies' employed in Section 54(3) includes any type of society covered by the provisions of the 1960 Act, including Cooperative Banks (as resource societies). In Commercial Tax Officer, Rajasthan v. M/s. Binani Cements Ltd., [2014 (3) TMI 905 - SUPREME COURT] the question concerned whether the Respondent-Assessee was entitled for the grant of an eligibility certificate for exemption from payment of Central Sales Tax and Rajasthan Sales Tax under Entry 4 in Annexure 'C' of the Sales Tax New Incentive Scheme for Industries, 1989. Annexure 'C' to the Scheme was titled the 'Quantum of Sales Tax Exemption under the new Scheme'. Entry 4 of the Annexure stipulated that 'Prestigious Units' would be entitled to a 75% exemption from tax liability with 100% in terms of Fixed Capital Investment. This Court must ensure that neither provision - Section 49-E(2) nor Sections 54(3)(a) and (b) is reduced to a dead letter of law. It cannot be said that the carving out of Cooperative Banks for the appointment of their CEO from the enabling power conferred upon the State Government Under Section 54(3) applies in equal measure to those Cooperative Banks that are Central Societies within the ambit of Section 49-E(2). In the present case, it was not disputed that the first Respondent is a Central Society falling within the ambit of Section 49-E(2) of the 1960 Act. In exercise of the power conferred by Section 54(3) of the 1960 Act, the State Government issued a notification dated 12 January 1971 specifying that Central Cooperative Banks were obligated to employ officers, according to their availability, only from the cadres created by the State Cooperative Bank. A similar notification was issued on 26 June 1971 in terms of which, Central Cooperative Banks were permitted to maintain cadres of officers and, it was stipulated that Village Cooperative Societies including Large Sized Agricultural Credit Societies would have to employ officers drawn only from the cadres maintained by the Central Cooperative Bank. The seventh Respondent is not an officer from the cadre maintained by the Appellant. Consequently, the action of the first Respondent in seeking to appoint the seventh Respondent as the CEO is not sustainable in law. The appointment of the sixth Respondent as CEO was ratified by the Registrar of Societies by his reply dated 21 August 2017 and accepted by the BoD of the first Respondent on 25 August 2017. The impugned judgment and order of the High Court dated 7 August 2018 is set aside - appeal allowed.
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