GEORGE v. JOINT REGISTRAR — 1985 DIGILAW 262 (KER)

Judgment :- 1. Whenever elections to the committees of Cooperative Societies are to be held, several writ petitions are usually filed in this court challenging the election processes as violating the Co-operative Societies Rules. Very often the interpretation of these rules arises for determination and we have therefore thought it fit to clear at least some ground and some doubts, to settle the legal position. 2. The two questions that arise for determination in this appeal are: (1) Whether an administrator has the power to admit new members? (2) Who are the members entitled to participate in the election to the committee of a Co-operative Society? 3. Now to the facts of this case. 4. The term of the committee of the Koodaranhi Rural Housing Society expired in 1983. Fresh elections bad to be held. No steps were taken by the committee in office to conduct elections. There was internecine dispute between the members of the committee; and some nominated members had even tendered their resignation. In this state of affairs, in an earlier writ petition disposed of on 16th January, 1985, this Court directed that election to be Board of Directors would be held within a period of three months from that date and that the Registrar of Co-operative Societies was at liberty to appoint an administrator to manage the affairs of the society for this period. The Registrar promptly took action, appointed an administrator under S.33 of the Kerala Co-operative Societies Act, the Act and directed him to conduct the election not later than 17-4-1985. A returning officer was also appointed. 5. What the administrator did is of some consequence. Exercising his right of management, he inducted several persons as new members to the society. The question arose whether these persons could vote at the election to be held on 17-4-1985 and the present writ petition was filed. A learned judge of this Court observed that it cannot be assumed that the returning officer would act in contravention of the statutory provisions and thus dismissed the writ petition. The learned judge did not decide whether these persons could vote at the election or not. 6. Against this decision, this appeal was filed. A learned judge of this Court observed that it cannot be assumed that the returning officer would act in contravention of the statutory provisions and thus dismissed the writ petition. The learned judge did not decide whether these persons could vote at the election or not. 6. Against this decision, this appeal was filed. After issuing notice in the appeal, this court directed that the election to be conducted on 17-4-1985 should proceed, but subject to the following conditions: (a) votes cast by the members enrolled after 16-1-1985 will be kept sealed in a separate box. (b) the votes cast by the other members will be: kept sealed in a different box. (c) the results of the election will be announced only after the disposal of the writ appeal. 7. This interim order is thus subject to the decision in the writ appeal. The election was held on 17-4-1985 and the returning officer has complied with the directions of this court. The question now is whether the votes cast by the members enrolled after 16-1-1985 can be counted. The results of the election have to be announced and the appeal has to decide the points in controversy, Can the administrator admit new members ? 8. The administrator in this case was appointed under S.33 of the Act when the term of the committee had expired and a new committee has not been constituted, The functions of the administrator are clearly defined in clause (2) of S.33 which reads thus: "The committee or administrator or administrators appointed under sub-section (I) 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 maybe required in the interests of the society." 9. The administrator functions as the managing committee of the society, in its absence. The administrator is the dejure committee in power when there is no elected committee. He has thus all the powers of the committee. It is admitted that the committee was entitled to enrol new members. If so, S.33(2) statutorily clarifies that the administrator also has the same powers. In fact, the Chief Justice (Bhaskaran, J. as His Lordship then was) in Sudhakaran v. Dy. Registrar of Co-op Societies (1980 KLT. He has thus all the powers of the committee. It is admitted that the committee was entitled to enrol new members. If so, S.33(2) statutorily clarifies that the administrator also has the same powers. In fact, the Chief Justice (Bhaskaran, J. as His Lordship then was) in Sudhakaran v. Dy. Registrar of Co-op Societies (1980 KLT. 658) held thus: "On a careful consideration of the scheme of the Act and the Rules it could be found that admitting members to the rolls of the society, which in the normal course is the routine function of the Committee, is not anything extraordinary in character so as to take it out of the purview of what is described in S.33(2) of the Act as day-to-day administration of the society". 10. We endorse this view as correct. We however hasten to add that the power of the administrator can be curtailed in appropriate cases by the Registrar who appoints him or by the court exercising powers under Art.226 of the Constitution. 11. Mr. Justice Sukumaran has in the decision in Gopalan v. Joint Registrar of Co-op. Societies (1985 KLT. 446) observed that certain important aspects arising out "of the statutory scheme and the concept of the power of management of a Administrator" had not been projected before the learned judge in 1980 KLT. 658. Mr. Justice Sukumaran drew an analogy under the Companies Act and observed thus: "It will be open for the Board of Directors in whom the management of a company vests to appoint a Manager (Vide Chapter IV of the Companies Act, 1956). The powers of such a General Manager are, however not as wide as those of the Board of Directors. Powers such as the enrolment of the new members in the company which could be exercised by the Board of Directors in accordance with the Articles of Association, would be totally out of reach for the General Manager, though be has necessarily the authority to manage the affairs of the company". 12. After referring to the qualifications insisted and the disqualifications prescribed for membership, the learned judge proceeded to state thus:-"These provisions do indicate that membership of a society is something more important and more fundamental than a matter relating to the routine management of a society. xx x x It is not to be treated as a routine act. 12. After referring to the qualifications insisted and the disqualifications prescribed for membership, the learned judge proceeded to state thus:-"These provisions do indicate that membership of a society is something more important and more fundamental than a matter relating to the routine management of a society. xx x x It is not to be treated as a routine act. In any event it is not to be treated as a matter of management. If it is not a matter of management, the Administrator, who is after all only a passing phase and a stop-gap arrangement, cannot, tinker with the constitution and membership of the society" The width of the power of the administrator is outlined in S.33 (2) of the Act. It is not necessary to curtail the ambit of that power by any judicial interpretation of the scope of the expression "manage" occurring in S 33(1) of the Act, for, the statute does not insist that the administrator should be given all the powers provided for under S.33 (2). These powers can be controlled, curtailed, defined and limited in appropriate cases by the appointment order itself. The administrator is not a body subordinate to the committee or Board of Directors. He is the committee or the Board itself. If he is to perform only "routine acts" or day to day management and if he is appointed only for a specific purpose, he cannot attempt to admit new members, as it will be plainly outside the powers expressly conferred on him under the appointment order. In such cases, he cannot rely on S.33(2) and assume power of admission of new members, when expressly or by necessary implication in the order of appointment, he has been denuded of these powers. 13. In the present case, the appointment of the administrator shows that he functioned as a Committee (the Board of Directors) and not under a committee. The appointment order did not deny to him the powers statutorily conferred under S, 33(2). He could exercise all the powers conferred on the committee of this society under the Act, the rules and the bye-laws of the society. It has also to be noted that the administrator was functioning from January, 1985. We are now in August, seven months later. He could exercise all the powers conferred on the committee of this society under the Act, the rules and the bye-laws of the society. It has also to be noted that the administrator was functioning from January, 1985. We are now in August, seven months later. To say that he should not have admitted members all these months, would not only amount to an unnecessary deprivation of his rights as an administrator but would affect the efficient and proper functioning of the Society itself. Even in the matter of admission of new members, however, the administrator is bound to follow the Act, the rules and the bye-laws. 14. S.16 of the Act provides generally the qualifications required for a person to be admitted as a member of the Society and the conditions under which be can be so admitted. R.16 to 28 and R.44 and 45 prescribe the various matters to be taken into consideration for admitting new members; for removing them from the register of membership and for allowing them to be elected to the Committee of Management. The Act insists that a decision on an application for membership shall be taken within two months of the receipt of application and it is for the authorities charged with the enforcement of the Act to see that the applications for admission of new members are processed and decided within the period fixed by law and to take the necessary action in case of any default in the discharge of this statutory duty. When the administrator is appointed, and it is brought to his notice that applications for admission of new members have not been disposed of within the prescribed time, it will be his duty provided the term of his appointment have not curtailed this power to dispose of those pending applications for admission. 15. We, therefore, hold that the administrator of the Society appointed to manage the society has the necessary power to admit new members. 16. 'The next question is whether these new members were entitled to participate in the election held on 17-4-1985. For this purpose it is necessary to refer to some rules. R.26 of the Co-operative Societies Rules reads: "26. We, therefore, hold that the administrator of the Society appointed to manage the society has the necessary power to admit new members. 16. 'The next question is whether these new members were entitled to participate in the election held on 17-4-1985. For this purpose it is necessary to refer to some rules. R.26 of the Co-operative Societies Rules reads: "26. Prohibition on admission of members and transfers of shares on the eve of general meeting (1) No registered society shall admit members or approve the transfer of shares within 30 days prior to the date of issue of notice for the general body meeting. (2) Any person admitted as member and any person in whose favour the transfer of shares have been approved in contravention of this rule shall not have the right to membership or the right to vote at the said general meeting held subsequent thereto for the purpose of election." Rule 28 of the said Rules provides: "28. Restriction on the right to vote at the election No member of a society shall be eligible to vote at the meeting fixed for any election to the committee of that society, unless thirty days prior to the date of such meeting he acquires the number of shares for membership as may be provided in the bye-laws of the society of which he is a member". Rule 35 provides: "35. Procedure regarding conduct of Election to the Committee of Societies The election of the members of the committee of a society shall be conducted in the following manner (1) The committee shall meet at least 60 days in advance of the date of expiration of its term and pass a resolution fixing the date, time and place for the conduct of the election of the new committee. A copy of the resolution shall be sent to the Registrar by registered post within a week. x xx (2) xxxxxX (3) (a) The Returning Officer shall send intimation regarding the details of the election of the members of the committee to all members included in the final list of the voters to vote at the election of the committee either in person and obtain their full signature in token of having received the same or by post under certificate of posting. A copy of the intimation shall also be affixed on the notice board of the Head Office and the branches, if any, of the society. The intimation shall contain the following particulars: (i) the number of vacancies to be filled up by election; (ii) any area or constituency that is specified in the bye-laws from which members are to be elected; (iii) The date on which, the place at which and the hours between which nomination paper shall be filed by the contesting candidate or by his proposer or seconder such dates not being less than seven clear days before the dates fixed for the election; (iv) the date and hour when the nomination papers will be scrutinised; (v) the date on which, the place at which and the hours between which, polling will take place. xxx x (b) The committee in office shall prepare a list of members qualified to vote at the election in accordance with the provision of the Act, these Rules and Byelaws as stood on a date 30 days prior to the date fixed for the poll and supply the same, to the Returning Officer. The Returning Officer shall publish copies of the list by affixing them to the Notice Board at the Head Office of the society and its branches, if any. not less than fifteen days prior to the date fixed for election inviting objections, if any, in the matter, within three days of publication. The list shall specify the admission number, name of the member, name of the Father or Husband and the address of such member. After considering the objections, if any, the Returning Officer shall publish a final, list of eligible voters on the Notice Board of the Society and in its branches, if any, not less than ten days prior to the date fixed for the poll. A copy of such list shall be supplied by the society to any member on payment of such fees as may be prescribed by the committee." 17. The scheme of the Act and the Rules and the detailed provisions for the conduct of elections to the committee of a Co-operative society are intended to ensure free and fair election and to uphold the democratic principles underlying the Co-operative movement. 18. The scheme of the Act and the Rules and the detailed provisions for the conduct of elections to the committee of a Co-operative society are intended to ensure free and fair election and to uphold the democratic principles underlying the Co-operative movement. 18. S.29 of the Act directs that a general body meeting of the society shall be held once in a year for the purpose of election of the members of the committee other than nominated members. The procedure for the conduct of elections is contained in R.35 thus: (a) Under R.35(1), the committee has to meet 60 days in advance of the date of expiration of its term and pass a resolution fixing the date, time and place of election. A copy of the resolution is to be sent to the Registrar. (b) The Registrar on receipt of the resolution appoints the returning officer. (c) The committee in office prepares a voters list of persons qualified, to vote as on 30 days prior to the date of the poll and supplies the list to the Returning Officer. (d) The Returning Officer invites objections to this preliminary list and after considering the objections prepares a final list of voters. (e) The final voters' list is published-Rule 35(3) (a). (f) The Returning Officer sends an intimation regarding the details of the election to all members included in the final voter's list. The intimation shall contain the particulars mentioned in R.35(3) (a). (g) The Returning Officer receives the nomination papers and follows the procedure in R.35(3) (c), (d) and (e) and publishes the list of valid nominations. (h) The Returning Officer arranges for the conduct of the poll on the date fixed for the purpose. (i) The results of the election are recorded in the minutes book, attested by the returning officer and notified immediately. 19. It is also relevant to note that if at any stage of polling, the proceedings are interrupted or obstructed as mentioned in R.35(p), the Returning Officer shall have the power to stop the polling recording his reasons. The election can continue thereafter from the stage when it was stopped and there is no necessity to start de novo the election process. 20. The election can continue thereafter from the stage when it was stopped and there is no necessity to start de novo the election process. 20. If the voters' list has to be prepared as on the 30th day before the date of poll, it is clear (1) that the list cannot be prepared after that date, for it will be very near to the poll necessitating an extension of the date of poll, an eventuality which has to be avoided, (2) that therefore the list has to be prepared before the 30th day of the poll. If so, there has to be a period of "stillness" when no new membership is allowed, when enrolment has to be suspended. 21. It is this "status quo" regarding membership that is provided in R.26 When it directs that no person shall be admitted to the membership of the society within 30 days prior to the date of issue of notice for the general body meeting. 22. The question is, which is the notice referred to in this rule, Is it the date when committee is bound under R.35(1) to decide about the election date? Is it the date when the committee actually takes the decision to hold election on a particular date? Is it the date when the decision of the committee is communicated to the Registrar? Or is it the date of intimation by the Returning Officer under R.35(3)(a). 23. The intimation by the Returning Officer under R.35(3) (a) marks practically the last stage of election when, after this intimation, nomination follows. No purpose is achieved by any prohibition regarding new membership at that stage, for whether they are admitted or not, they are not entitled to vote for that election. R.26 does not, therefore, refer to the notice, (intimation) by the Returning Officer under R.35(3)(a). This takes us to R.35(1). The resolution sent to the Registrar by the Committee under this provision is only the communication of the decision of the committee made earlier. It is, therefore, the date of that decision of the committee that should have relevance and meaning to understand the content of the prohibition contained in R.26. The committee is enjoined to take a decision at least 60 days in advance of the date of expiration of its terms. This is a statutory obligation. It is, therefore, the date of that decision of the committee that should have relevance and meaning to understand the content of the prohibition contained in R.26. The committee is enjoined to take a decision at least 60 days in advance of the date of expiration of its terms. This is a statutory obligation. We have to proceed on the footing that the societies are bound to follow this directive in R.35 (1), and cannot take any benefit or advantage by ignoring the outer limit prescribed therein. If so, on a reading of R.26 (1) with R.35 (I), it has to be held that no registered society shall admit members or approve the transfer of shares within 90 days of the date of expiration of the term of the committee. The date of expiration is 30th June of the year in which the term expires (see R.39). This is the case practically in almost all the registered co-operative societies in this State except the very few ones excluded under R.39 itself. Thus no new member can be admitted on or after 1st of April of the year in which the term expires. 24. The next question that arises relates to the extent of, disability incurred by members admitted in contravention of R.26(1). 25. R.26(2) states that a member so admitted in contravention of R.26(1) "shall not have the right to membership or the right to vote at the said general meeting or at any meeting held subsequent thereto for the purpose of ejection". One interpretation that was advanced for our acceptance was that the member so admitted in the teeth of the statutory prohibition did not acquire any right, his admission itself was non est and therefore "did not have any right as a member". The other view, also forcibly advanced,at the bar, was that the disability was only regarding the right to participate and vote in the next election meeting or any subsequent meeting held for the same purpose. It was even argued that we have to read down the provision for this purpose We do not think that the rule should be read down. It is sufficient if it is read properly. 26. It was even argued that we have to read down the provision for this purpose We do not think that the rule should be read down. It is sufficient if it is read properly. 26. A close and careful reading of R.26 (2), keeping in view the object sought to be achieved, namely the purity of election, admits of only one interpretation, in favour of a limited disqualification for members admitted in contravention of R.26(1). R.26 (2) has to be read and understood thus. Any person admitted in contravention of R.26 (1) shall not have (a) the right to membership (b) the right to vote at the said general meeting (or) at any meeting held subsequent thereto for the purpose of election. Thus the right of membership and the right to vote cannot be exercised at the next election meeting or at any meeting held subsequent thereto for the same purpose. The membership itself is not effaced. It continues; but some rights alone are suspended. These members cannot participate in the next election meeting or any meeting held subsequent thereto for the purpose of the same election or vote at any of those meetings. Thereafter, the membership continues in all its vigour and strength. 27. Some decisions of this Court have been cited before us and it was faintly contended that the decisions are not uniform and there is some difference of opinion among the judges. We have gone through those decisions and we find that none of those decisions run counter to what we have said so far. 28. In Bhaskaran v. Returning Officer (1984 KLT. 488) the Chief Justice (Bhaskaran, J. as His Lordship then was) held thus: "In my view the legal position in regard to the rights of persons admitted to membership within 30 days prior to the date of issue of notice for the general meeting does not admit of any doubt, as in terms of R.26 no person could be admitted to membership during the prohibited period, and any person who is purported to have been so admitted shall not have the right to claim membership or the right to vote at the general meeting". 29. 29. This paragraph does not suggest that a member inducted in contravention of R.26(1) forfeits all his rights as a member for ever His right to claim membership or the right to vote at the general meeting alone is affected. This is made clear in another page in the same judgment. "It is significant to note that the requirement under R.3S(3)(b) is the preparation of a list of members qualified to vote at the election; and there could be no doubt that those persons who are excluded by the operation of the provisions contained in R.26 from claiming right to vote at the election, could not claim the right to get themselves included in the list of members to be sent by the committee in office to the Returning Officer" 30. Valsaraj v. Joint Registrar (1984 KLT. 628) is a decision of Sivaraman Nair, J. It is contended that this decision holds that the notice referred to in R.26 is a notice to be issued by the committee and that there is no such notice contemplated under the said rule. We do not understand the decision holding that a notice not contemplated under R.35(1) should be issued for the purpose of R.26 His Lordship held that the decision to hold election is the notice for the purpose of the general body meeting and then went on to conclude that 90 days prior to the date of election can be fixed as the notice period for the purpose of R.26(1). In fact the learned judge took pains to drive home the point that in the interest of a uniform application of the rules for all societies and to avoid an arbitrary date being fixed for each society depending on the date when a particular managing committee takes a decision, one fixed date as per the rules with reference to the date of the expiry of the term, namely the 30th June, would serve better the interests of the State and all the co-operative societies formed by the same Act. "The intention behind the prohibition contained in R.26 of the Co-operative Societies Rules can only be that there must be some amount of certainty about the voters who constitute the electorate for the election, once it is contemplated. "The intention behind the prohibition contained in R.26 of the Co-operative Societies Rules can only be that there must be some amount of certainty about the voters who constitute the electorate for the election, once it is contemplated. The date of issue of the notice is prescribed as a date for ensuring such certainty so that the prohibition will be operative for a period of 30, days prior to the issue of the notice. But in a case where the notice as contemplated in S.29 of the Act read with R.35(1) of the Rules is not issued, or the issue thereof is deliberately and unduly delayed, the certainty relating to the electorate which is the very basis of R.26 of the Rules itself will be completely frustrated. Particularly in a case where even this date can be manipulated, we have to adopt a more certain date for the purpose of ensuring that the electorate which is called to the polls is beyond manipulation. That can be ensured only by understanding the prohibition contained in R.26 of the Co-operative Societies Rules to mean that the electorate must be as on a date reasonably prior to the date on which the election was decided upon by passing a resolution under R.35(1) of the Co-operative Societies Rules. This has got the merit of avoiding manipulation one way or the other of the size of the electorate by enrolment of members after the meeting of the Board of Directors is convened to decide upon election and before the notice in consequence thereof is issued". 31. Justice Paripoornan in Govindan v. Dy Registrar of Co-operative Societies (1983 KLT. 1038) was only considering the effect of participation of members in the general election, in spite of the injunction contained in R.26 (1). His Lordship held thus: "It is idle for the society or any person who has been elected in violation of the mandatory provisions of R.26, to contend that notwithstanding the fact that the voters list included members who were not entitled to vote, nonetheless, the election of persons, by voters inclusive of the ineligible voters taking part in the election, should not be interfered with, by this Court in exercise of the powers under Art.226 of the Constitution. As I stated earlier, R.26 is in the nature of an injunction or command and in spite of the prohibition or injunction specified in R.26 ineligible persons were included in the voters list and they also participated in the election, the consequent election held in breach of the rules, should be held to be totally infirm and illegal". 32. We shall, however, guard ourselves by stating that an error in the preparation of the voters' list shall not give rise to a proceedings under Art.226 of the Constitution; but the parties should be left to seek their remedy under S 69 of the Act after the election is over. The inclusion of a member admitted in violation of R.26 in the voters' list can be objected before the final voters' list is prepared. It is for the Returning Officer then to decide on those objections and delete the name of those persons from the list. Now that the interpretation of these rules is being settled, there may be no scope for complaint hereafter, especially in proceedings under Art.226 of the Constitution that such members are included in the final voters' list., 33. There is an unreported decision W.A. No. 294/ 75 by Govindan Nair, C. J, and Viswanatha Iyer, J. In that case, a notice dated 1-5-1975 signed by the Secretary was issued stating that the annual general body meeting would be held on 30th May, 1975. Some new members were enrolled on 24-5-1975. "We are in entire agreement with the learned judge that the relevant date from which 30 days will have to be reckoned backwards for the purpose of determining whether transfers affected during that period should be ignored or not, is the date of issue of the notice for the general body meeting. This is very clear from, the specific provision in R.26 of the Rules. If there have been transfers or admissions of members on any day within 30 days prior to the date of issue of the notice for the general body meeting, such persons who have been admitted and the persons in whose favour the transfer of shares have been approved shall not have the right to membership or the right to vote at the said general body meeting or at any meeting held subsequent thereto for the purpose of election. The date of the issue of the notice of the general body meeting which has been fixed on the 30th May 1975 is therefore the crucial date. The notice, as we said, was dated the 1st May 1975." 34. We are also in agreement with this principle; and applying the same with reference to R.35(1), we have decided that the 30 days under R.26(1) will have to be reckoned backwards from the date when R.35(1) decision has to be taken, namely 60 days before the expiry of the term. Their Lordships did not lay down any genera! law applicable to all societies and were concerned only with the case of the society before them. 35. In the present case, the committee failed in their statutory duty under R.35(1). This court had to intervene and issue direction on 16-1-1985. As the term of the previous committee expired in 1983, any person admitted after April 1983 could not have participated in the election to be held that year. But no election took place. The controversy is only regarding the members admitted after 16-1-1985 being allowed to vote. Their votes are kept separately as directed by this Court. So for the election to be held in 1983, but actually held only on 17-4-1985, those persons enrolled after 16-1-1985 could not participate. Their votes cannot be counted. Their votes shall be excluded. The election results will be declared counting the votes of only the other voters kept in the other separate box. This will be done within two weeks from today and the results notified immediately. The new committee will assume office within a week thereafter. The Administrator shall cease to function from the date of assumption of office by the new elected committee. It persons have to be nominated to the committee, that also will be done as expeditiously as possible, at least within two weeks from the date of notification of the results. The terra of this committee will be deemed to commence from the 1st of July, 1985. 36. Ordered accordingly. Before closing, we record our satisfaction and appreciation of the learned and exhaustive arguments advanced by Sri. T. R. G. Warrier, counsel appearing for the appellant and the useful assistance rendered by Sri. K. P. Dandapani, Advocate appearing for the respondents.