Ambikapur College Society’s Bank Account Stays on Hold Until Registrar Decides Who Runs It: Chhattisgarh HC Sets 60-Day Deadline

Margdarshan Sansthan, a registered society operating an agricultural college, challenged the State Bank of India’s decision to place its current account on “Hold” amid rival claims to the society’s management and the office of Secretary.

The petitioner relied on the approval of its Secretary’s appointment and a resolution providing for joint operation of the account by the Secretary and Principal.

In the connected petition, the society challenged the Registrar’s appellate order, which set aside an Assistant Registrar’s order, directed an inquiry by a three-member committee, and assigned day-to-day affairs to the trustees/founder members pending resolution of the dispute.

The petitions were heard together.

The dispute was considered in the context of the Chhattisgarh Societies Registration Act, 1973, particularly Sections 32 and 40, which the petitioner invoked in challenging the Registrar’s authority to direct an inquiry and interim arrangements.

The Court did not finally interpret those provisions or decide the validity of the Registrar’s directions on their merits.

It applied the principle that competing claims to manage a society must be determined by the competent authority under the applicable statute and the society’s bye-laws, after hearing the persons concerned; a bank cannot itself adjudicate those claims and should permit operation of the account in accordance with the resulting determination.

The Court found that the bank-account dispute was inseparable from the competing claims to manage the society, and that the bank could not decide which claimant was authorised to operate the account.

It also recognised that continued restriction of the account could impair the educational institution’s day-to-day functioning, including salary payments and student facilities.

Rather than decide the rival claims or the merits of the challenge to the Registrar’s order, the Court directed the competent Registrar to establish whether the contemplated inquiry had been completed and, after considering the report, society records, bye-laws and parties’ claims, make a reasoned determination following a hearing.

Once that determination is made, the bank must permit the account to be operated by the person or persons found entitled, in accordance with law.

The Court expressed no opinion on the merits of the rival claims; no order as to costs was made.