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1973 DIGILAW 298 (KER)

DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETY v. P. K. GEORGE

1973-11-21

GEORGE VADAKKEL, V.P.GOPALAN NAMBIYAR

body1973
Judgment :- 1. This appeal is against the judgment of a learned judge of this Court holding that Ext. P11 order of the Deputy Registrar of Co-operative Societies, appointing an Administrator to manage the affairs of the Koodaranhi Service Co-operative Bank Ltd., was illegal. The learned judge was also inclined to think that the petitioner's allegations that the order was passed without proper care and caution and was vitiated by mala fides, was correct. 2. The Society (Bank) involved in this appeal had a Managing Committee of nine members, of which seven were elected, and two nominated. In or about July 1973, complaints appear to have been received against the conduct of three of the Directors in figuring as sureties in a number of chitties, and becoming "defaulters", under R.44 of the Co-operative Societies Rules. Notices were issued by the Deputy Registrar against these three Directors and they were removed from membership. Two of the nominated members one of them a Government Official followed with their resignations. The result was, that the strength of the Managing Committee was reduced from nine to four. This was less than the quorum required for the transaction of business, fixed by the byelaws at not less than fifty percent of the total strength of the Committee. It was in these circumstances that the Deputy Registrar took action under S.33 of the Co-operative Societies Act and appointed a Unit Inspector as Administrator by Ext. P11 order dated 20 9 1973. 3. The learned judge held in Para.4 of the judgment under appeal, that the question as to whether the three elected members had been validly disqualified or not, cannot be canvassed in these proceedings as it was for the disqualified persons to attack the order, if so advised. But he was of the view that there had not been a valid and proper acceptance of the resignation of the two nominated members, tendered by the one, by his letter dated 10 81973 to the Block Development Officer, which was forwarded to the Respondent; and by the other, by his letter direct to the Respondent on 20 91973. But he was of the view that there had not been a valid and proper acceptance of the resignation of the two nominated members, tendered by the one, by his letter dated 10 81973 to the Block Development Officer, which was forwarded to the Respondent; and by the other, by his letter direct to the Respondent on 20 91973. The learned judge held that the provisions of the first proviso to S.33(1) of the Act, requiring publication of notice of the action had not been complied with and that the Respondent had omitted to exercise his power to dispense with the requirement of notice enjoined by the second proviso to the Section. From the sequence and the dates of the events the learned judge was prepared to bold that the respondent had made up his mind to take over the Management of the Society from the Committee even prior to Ex. P11 order, and that the order was only an expression of his already made up mind. It was on these grounds that the learned judge allowed the writ petition. 4. S.33 of the Co-operative Societies Act as amended, reads as follows; "33. Appointment of new committee or administrator on failure to constitute committee, etc. P11 order, and that the order was only an expression of his already made up mind. It was on these grounds that the learned judge allowed the writ petition. 4. S.33 of the Co-operative Societies Act as amended, reads as follows; "33. Appointment of new committee or administrator on failure to constitute committee, etc. (1) Where the term of office of a Committee has expired and a new committee has not been constituted, or where a no confidence motion is passed by the general body against the existing committee or where the existing committee resigns enbloc or where vacancies occur in the committee either by resignation or otherwise and the number of remaining members cannot constitute the quorum for the meeting of the committee, or where the committee fails to hold its regular meeting consecutively for six months or where the Registrar is satisfied, (a) that a new committee cannot be constituted before the expiry of the term of office of the existing committee, (b) that a new committee is prevented from entering upon office, or a new committee fails to enter upon office, an the date on which the term of office of the existing committee expires, the Registrar may, either suo motu or on the application of any member of the society after intimating the Circle Co operative Union, appoint (i) a new committee consisting of not more than three members of the society; or (ii) one or more administrator or administrators who need not be a member or members of the society, to manage the affairs of the society till a new committee enters upon office, Provided that before making such order, the Registrar shall publish a notice on the notice board of the bead office of the society inviting objections to the making of the order within a period specified in the notice and consider such objections: Provided further that it shall not be necessary to publish such notice in cases where the Registrar is satisfied that it is not reasonably practicable to do so. Explanation. For the purposes of this sub section, a tender of resignation by a member of the committee shall have the effect of terminating his membership from the committee. Explanation. For the purposes of this sub section, a tender of resignation by a member of the committee shall have the effect of terminating his membership from the committee. (2) The committee or administrator or administrators appointed under sub s. (1) shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have power to exercise all or any of the functions of the committee or of any officer of the society and take all such action as may be required in the interests of the society. (3) The committee or administrator or administrators shall arrange for the constitution of a new committee or for the entering upon office of the new committee, as the case may be." The Section itself contains no provision as to the modus operandi for resigning from the membership of the Committee. The Explanation only enacts that a tender of resignation shall have the effect of terminating the membership for the limited purpose of S.33(1). R.38 of the Co-operative Societies Rules provides for the mode and manner of tendering resignation. The relevant clauses are as follows: "38.(3) Any member of a Committee, whether elected or nominated may tender his resignation to the President of the Committee. (4) The President, on receipt of a resignation, shall within seven days from the date of receipt thereof, place it before the Committee of the society for consideration if the member is an elected person or send it to the authority who nominated the member, if he is a nominee. The resignation shall have effect only from the date of its acceptance by the committee or the authority who nominated the member concerned as the case may be. The fact of its acceptance or otherwise shall also be communicated to the member concerned. In the case of nominees the fact of acceptance or otherwise shall be communicated to the society also. (5) Vacancies arising due to the resignation of any elected member of the committee shall be filled up by election in the manner provided in the rules. In the case of nominated members the vacancies will be filled up by fresh nomination subject to the provisions in R.34. (6) Where the President desires to tender resignation the letter of resignation shall be placed before the committee for consideration. In the case of nominated members the vacancies will be filled up by fresh nomination subject to the provisions in R.34. (6) Where the President desires to tender resignation the letter of resignation shall be placed before the committee for consideration. " The learned judge was of the view that neither of the two nominated members had tendered their resignations to the President as enjoined by clause (3) of R.38; and, had this been done, the President would have had seven days' time to persuade the members to withdraw the resignations if possible, and as that opportunity was denied, the acceptance of the resignation by the respondent was a nullity and the two nominated members continued as Members of the Committee. We regret our inability to accept this reasoning. True, that R.38(3) ordains a tender of resignation to the President of the Committee. The right of accepting the resignation, in the case of a nominated member, is in the authority who nominated him; and clause (4) of R.38 provides that the resignation shall be placed before that authority and shall be effective only from the date of acceptance by such authority. It is clear therefore that the President to whom (be resignation is to be tendered is a mere conduit pipe for transmitting the same to the authority who is to accept the resignation, and on whose acceptance alone the resignation is to become effective. We are not prepared to bold that nonconformity with sub rule (3) of R.38, would invalidate the resignation. 5. Counsel for the Respondent stressed the well-known principle that when the law has ordained that a certain act shall be done in a certain manner, it shall be dons only in that particular manner, or, not at all. He pointed out that under the Explanation to S.33. a tender of resignation shall have the effect of terminating the membership of the Committee, and that a tender of resignation is contemplated only by sub-rule (3) of R.38 and therefore must be done as enjoined by that sub-rule; and if not, cannot be regarded as valid. Sub-rules 3 and 4 between them provide for the whole process of resignation, from tender, to acceptance. Non-compliance with every step does not invalidate the resignation. We are unable to read sub rule (3) as anything more than a procedural provision. Sub-rules 3 and 4 between them provide for the whole process of resignation, from tender, to acceptance. Non-compliance with every step does not invalidate the resignation. We are unable to read sub rule (3) as anything more than a procedural provision. The same is only directory, and non-compliance with it, does not, in our opinion, invalidate the resignation, as the same is to be accepted by the appointing authority, and is to become effective only on such acceptance. The explanation to S.33 is for the limited purpose of action under the said Section. The ordinary mode of resignation and its acceptance is contained in R.38, and despite the Explanation, nothing precludes the Registrar from acting under S.33 after a resignation has taken effect in the usual way. 6. We are equally unable to share the learned judge's view that the proceedings are invalid for want of publication of a notice on the notice-board of the Head-office, inviting objections to the proposed action, as required by the first proviso to S.33(1) of the Act. The second proviso to the Section indicates that the publication of the notice Is unnecessary, where the Registrar is satisfied that it is not reasonably practicable to do so. It is quite unnecessary that Ext. P11 order should expressly recite that the requirement of the notice has been dispensed with. (See Swadeshi Cotton Mills Co. Ltd. v. State Industrial Tribunal, U.P.-AIR. 1961 SC. 1381 at 1387). In Para.4 of the counter-affidavit, the Deputy Registrar has stated that be was satisfied that it was not practicable to issue notice to the members. We think this satisfies the requirements of the Section and that Ext. P11 order is not open to attack on the ground that the publication of the notice had not been dispensed with. 7. That takes us to the finding of the learned judge regarding mala fides. In Para.6 of the judgment, the learned judge discussed the disqualification of the three elected members on the ground that they are "defaulters" and also the acceptance of the letters of resignation of the two nominated members, one on 10 81973 and the other on 20 91973. That takes us to the finding of the learned judge regarding mala fides. In Para.6 of the judgment, the learned judge discussed the disqualification of the three elected members on the ground that they are "defaulters" and also the acceptance of the letters of resignation of the two nominated members, one on 10 81973 and the other on 20 91973. As noticed by the learned judge himself earlier in Para.4 of the judgment, the disqualification of the three elected members was not open to attack in collateral proceedings at the instance of the writ petitioner, and should have been kept out from consideration. The Deputy Registrar's action in entertaining an appeal from the Secretary against his order of suspension and staying the said order on 19-9-1973, a day prior to Ext. P11 order, the acceptance of the letter of resignation from one of the nominated members on 20 91973, the failure to make Dominations under R.38 (5) and avoid action under S.33, the fact that an order for investigation into the affairs of the Society under S.65 of the Act had been passed a few days earlier, and of a letter from the MLA. to the Minister (seen in the files) on the basis of which an inspection of the society was ordered, are the other circumstances relied on by the judge to indicate either a closed mind or mala fides. We are afraid they are inadequate to infer either of these. It was for the Registrar to decide whether the impasse in the Society should be remedied by a speedy nomination under R.38 (5) or by action under S.33. At any rate, if he chose to follow the one course rather than the other, we are not prepared to read from it a closed mind or mala fides. The other circumstances, individually or cumulatively. fall short of establishing these. 8. A preliminary objection was raised by Counsel for the appellant and argued at some length that the writ petitioner has no locus standi to maintain the writ petition. It is enough for us to say that having regard to the liberal view that has been taken on the question of the "interests" required to sustain a petition under Art.226 of the Constitution, we think that the petitioner President of the Society has sufficient locus standi to maintain this writ petition. We have no hesitation to overrule the preliminary objection. We have no hesitation to overrule the preliminary objection. 9. We allow this appeal, set aside the order of the learned judge and direct that O.P. No. 3171 of 1973 would stand dismissed. We make no order no as to costs, either before us or before the learned single judge.