### Board is Not Disqualified Under Section 40(4) if Election Arrangements Were Made But Failed Due to Quorum

The Petitioners, shareholders of Sonabarighat GPSS Ltd. (the Society), challenged an order dated 03.10.2023 passed by the Assistant Registrar of Cooperative Societies (Respondent No. 4)

The Board of Directors had resolved on 20.08.2023 to hold an Annual General Meeting (AGM) and elections on 24.09.2023

On the scheduled date, the meeting could not proceed due to a lack of a 10% quorum required under Section 34(1) of the Assam Cooperative Societies Act, 2007

Because Section 34(2) mandates an adjournment of at least 7 days, the election could not be completed by the statutory deadline of 30.09.2023

Consequently, Respondent No. 4 dissolved the Board and appointed a One Man Committee but observed that the Board was not disqualified from future elections

The Petitioners contended that the Board suffered an automatic five-year disqualification under Section 40(4)(a) for failing to hold the AGM

1. Whether the Board of Directors incurred a five-year disqualification under Section 40(4) of the Act of 2007 despite making active arrangements to conduct the AGM/elections

2. Whether the lack of quorum resulting in the failure to hold an election constitutes "not conducting or wrongly conducting" an AGM under the statutory disqualification provisions

The court primarily interpreted the Assam Cooperative Societies Act, 2007, specifically Section 40(4)(a), which mandates a five-year disqualification for failing to conduct an AGM

It applied Section 41(4), which dictates cessation of directorship if a Board fails to arrange elections, and Section 40(4)(e), which links disqualification specifically to such failure

The court relied on the legal maxim Generalia Specialibus Non Derogant (special provisions override general ones) to prioritize specific election-failure rules over general AGM rules

It further followed the precedent in Uttar Bajani Akhanda Bahumukhi Samabai Samity Limited v. State of Assam (2020), which held that if a Board takes all necessary steps to hold a meeting but is prevented by external factors, it cannot be said to have "failed" to arrange the meeting

The court reasoned that while Section 40(4)(a) is a general provision regarding the failure to conduct AGMs, the 2019 amendment inserting Section 40(4)(e) specifically addresses disqualification stemming from the failure to hold elections under Section 41(4)

Applying the maxim Generalia Specialibus Non Derogant, the court found that since the Board had passed a resolution on 20.08.2023 and the Assistant Registrar had appointed returning officers on 08.09.2023, the Board had indeed "arranged" for the election

The failure to hold the meeting was due to a lack of quorum—a factor outside the Board's absolute control—and the procedural constraints of Section 34(2) regarding adjournments

Therefore, the Board's conduct did not fall under the penal categories of "not conducting" or "failing to arrange" the meeting that would trigger a five-year bar

It directed the Registrar of Cooperative Societies to ensure the Executive Officer holds the AGM and elections within 90 days of the judgment

The writ petition was disposed of without costs