P. Mohammed v. The Joint Registrar Of Co Operative Societiescannanore
1985-03-14
K.SUKUMARAN
body1985
DigiLaw.ai
JUDGMENT K. Sukumaran, J. 1.These writ petitions concern a Cooperative Society, Iriveli Service Cooperative Bank, Cannanore. 2. An election to the Board of Directors to the Society took place on 1-2-1981. The term of the Board (according to Para.2 of O. P. 6409 of 1983) is upto September, 1983. The Board consisted of 9 members. Shri P. Balan was the President of the Board. 3. On 5-8-1982, the Joint Registrar purporting to act on the basis of the report dated 13-7-1982 submitted by the Asst. Registrar issued a notice indicating that the 4 persons named therein were defaulters to the Society in respect of payments due to it. There was a proposal therefore to disqualify them. The persons affected by the proposal were directed to submit their explanation within five days from the date of the notice. Three of them, of which one is an elected member and two nominators, approached this Court by filling O. P. No. 6125 of 1982. They had a conviction that the "notice was issued with a malafide intention." The change of Government at State level was indicated as a motivating force behind a seemingly innocuous issue of a notice like Ext. P1. It was averred in Para.7: "The petitioners belong to opposite political groups and hence the ruling parties are trying to remove the petitioners from the membership of the Committee without any valid reason. The newly elected Government was taking illegal and perverse steps to topple the elected Committees in power in various Societies in Cannanore District." This court admitted the writ petition on 16-8-1982 itself. There was an application for stay of further proceedings pursuant to the notice (Ext. P1 in O. P. 6125 of 1982). An interim order was passed on that day. It was to the effect that orders to be passed the proceedings started by Ext. P1 notice need be implemented only after direction from this court. 4. Para.2 of O. P. No. 6409 of 1982 which remains, uncontradicted reads as follows: - "The order was pronounced on 16-8-1982 afternoon. The Government Pleader for the State appeared for the first respondent and took notice." 5. Brisk activity, however, was going on in the office of the 1st respondent Joint Registrar and the Asst. Registrar. Though Ext.
4. Para.2 of O. P. No. 6409 of 1982 which remains, uncontradicted reads as follows: - "The order was pronounced on 16-8-1982 afternoon. The Government Pleader for the State appeared for the first respondent and took notice." 5. Brisk activity, however, was going on in the office of the 1st respondent Joint Registrar and the Asst. Registrar. Though Ext. P1 B was served on 12-8-1982, and the petitioners submitted their explanation (which were dated 15th and 16th of August, 1982 and had been received in the office of the 1st respondent on 17-8-1682), almost within 24 hours, the draft of an order disqualifying them is seen put up. The order was approved on that day itself and the proceedings were issued on 19-8-1982. 6. A meeting of the Board had been fixed on 12-8-1982 in the meanwhile. (Vide Ext. P2 in O. P. 6409 of 1982). According to the petitioners in O. P. 5409 of 1982, they went to the Bank to participate in the meeting. They were, however, informed that the meeting could not be held in view of the disqualification of the 4 Directors of the Board. The meeting was accordingly postponed It is stated that there was a further request to the president for convening an emergent meeting of the Board, after the filing of O P. 6125 of 1982. The request so made on 17-8-1982 was not respondent to by the President. Intimation about the same to the 1st respondent had been given on 17-8-1982. The 1st respondent did not however, take any action pursuant to the complaint of the petitioners. 7. The reason for these events, are gatherable from the files made available in the case. On 18-8-1982, the Asst. Registrar reports about the tendering of resignation of the President. The communication appears to have a speedy travel in early disposal by the 1st respondent. The Asst. Registrar was worried about there being no quorum for the Society. No sooner was the report received, the action was hotly pursued. A draft was put up suggesting the appointment of a part time Administrator and the 1st respondent ordered "yes". Proceedings dated 19-8-1982 were thereupon issued. That is the subject matter of challenge in O. P. 6409 of 1982. 8. Though the notice dated 5-8-1982 is assailed on various grounds regarding which elaborate arguments were advanced on all sides.
A draft was put up suggesting the appointment of a part time Administrator and the 1st respondent ordered "yes". Proceedings dated 19-8-1982 were thereupon issued. That is the subject matter of challenge in O. P. 6409 of 1982. 8. Though the notice dated 5-8-1982 is assailed on various grounds regarding which elaborate arguments were advanced on all sides. I decline to consider that question in detail in view of the subsequent developments, and the ultimate direction that I propose to give by way of relief to the petitioners. It must be remembered that even according to the petitioners, the term of the Board expired in September, 1983. The findings in the order of disqualification which was passed at the time when even the validity of the notice had been the subject matter of consideration by this court, the unreasonably short notice given for the submission of the explanation, and the hurried manner in which the order of disqualification was passed, would have arisen for detailed consideration, had it not been for the fact that even by the time the writ petition came up for final hearing, the term of office of the petitioners, even according to them, had expired. 9. In a sense, for the above reason, a detailed discussion oh the validity of Ext P1 is unnecessary. However, T feel that the arbitrariness with which Ext. P1 in O. P. 6409 of 1982 has been passed should not go without serious scrutiny and the pronouncement, even in the larger interest in the working of the Cooperative Department 10. As noted earlier, this court had passed an interim order on 16-8-1982 whereunder any order of disqualification passed pursuant to the notice dated 5-8-1982 could not be implemented without further orders of this court. An averment that the order was passed in the presence of Government Pleader remains uncontradicted. Lack of personal knowledge of the order of the court may be a good ground in a petition for action for disobedience of the orders of this court. The Proceedings of the 1st respondent passed in total disregard and violation of the orders of this court pronounced in the presence of the Government Pleader, who appears on behalf of the 1st respondent Joint Registrar, cannot claim any legal validity whatever.
The Proceedings of the 1st respondent passed in total disregard and violation of the orders of this court pronounced in the presence of the Government Pleader, who appears on behalf of the 1st respondent Joint Registrar, cannot claim any legal validity whatever. For that single reason, the Proceedings by which the petitioners were sought to be disqualified and the further proceedings purporting to appoint a part time Administrator under Ext. P1 in O. P. 6409 of 1982, have to be declared as invalid. 11. The appointment of a part time Administrator in exercise of the power under S.33(1) of the Cooperative Societies Act is liable to be struck down for another serious reason as well. A supersession of a committee is a serious matter. It is not a matter of routine. It has great impact in the working and Administration of a Society. It has impact on a basic issue, namely the entitlement, of those duly and properly elected to continue in office, until removed or superseded in accordance with law. If it could be assumed that such elected persons, could be deposed even without observing a statutory safeguard in the form of a notice to them, that will be cutting at the root of a democratic functioning. It will be totally alien to a correct concept of the rule of law. The requirement of a notice to the Board of Directors before supersession as visualised in proviso to S.33(1) had not been satisfied. The proviso reads: "Provided that before making such order, the Registrar shall publish a notice on the notice board of the head office of the society inviting objections to the making of the order within a period specified in the notice and consider such objections." That proviso itself is subjected to a further proviso which dispenses with such notice "in cases where the Registrar is satisfied that it is not reasonably practicable to do so." There is absolutely no indication either in the files or in the counter affidavit as to how the Registrar got satisfied about the impracticability in - complying with the requirement of issuing a notice to the Board. A mere extract of the wording in the second proviso will not salvage an order suffering from a fatal and fundamental defect of non compliance with a statutory provision requiring notice.
A mere extract of the wording in the second proviso will not salvage an order suffering from a fatal and fundamental defect of non compliance with a statutory provision requiring notice. The background in which the various actions have been conceived and developed, as discernible from the files, also would clearly indicate that the 1st respondent was only too anxious to bring about an administrator's regime in the Society. If only a notice had been issued, many aspects which are relevant for the determination such as whether there was a lack of quorum at all in the Society, could have been presented before the 1st respondent Such a presentation of a rival view, is essential and in way, indispensable before a drastic action like supersession of an elected committee is taken. The petitioners have serious and substantial contentions that the correct facts would have revealed that there was no lack of quorum as assumed by the 1st respondent. Though the invalidity of the order has been challenged as violative of S.33, without particularly highlighting the requirements of the proviso to sub-s.(1) of that section, arguments had been heard elaborately on that aspect. In the light of the contentions, I have no doubt whatever that a failure to conform to the first proviso of S.33(1) invalidates the proceedings dated 19-8-1982 by which a part time Administrator had been appointed by the Society. 12. While considering the question whether there was a quorum or not for the Society even on the assumption that the disqualification pursuant to the notice dated 5-8-1982 was valid, the correct legal position with reference to the resignation of the President would have to be considered. Under R.38(6) of the Cooperative Societies Rules the resignation of the President has to be submitted to the committee. That Rule reads: "Where the President desires to tender resignation the letter of resignation shall be placed before the committee for consideration" The uncontradicted averments in the case make out that the letter of resignation of the President had not been placed before the Committee for consideration. A consideration by a committee is not an empty formality.
That Rule reads: "Where the President desires to tender resignation the letter of resignation shall be placed before the committee for consideration" The uncontradicted averments in the case make out that the letter of resignation of the President had not been placed before the Committee for consideration. A consideration by a committee is not an empty formality. In a sense, whenever a matter comes before a committee, various view points are expressed by the members constituting the committee A final decision is taken on the basis of the interaction of the views so expressed in the committee, which has considerable effect in swaying the views of that collective body, one way of other. Unless there is a proper acceptance of the resignation, the resignation will not be effective, (Vide: Union of India v. Gopal Chandra Misra, 1978 (2) SCC 301 , Ram Swarun v. Hari Ram, 1983 (3) SCC 373 , and Y. Krishna Rao v. Sreeramulu, AIR 1903 AP 191). The Government Pleader submitted that under Explanation (2), S.33, a resignation becomes effective by a mere tender of resignation. That Explanation reads: "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." It was contended on behalf of the petitioners that this Explanation refers only to the member of the committee and not of the President. There is force in that contention, particularly having regard to the peculiar and pivotal position occupied by a President of the Committee. It is not necessary to express any final opinion on that question, for, even assuming that the section is applicable to the case of a president the manner in which resignation is to be rendered, has to be understood in the light of the rules or bye laws of the Society. It is not enough that a resignation letter is submitted to some person or sent to some place. There must be a tender of the resignation. When the rules provide for the manner in which the resignation has to be tendered, that has necessarily to be complied with. Otherwise strange and unintended anomalies would arise. If it is posited that despatching a letter of resignation to a person not directly or immediately connected with the Society, how could the servants or members of the Society, modulate their dealing with such a person?
Otherwise strange and unintended anomalies would arise. If it is posited that despatching a letter of resignation to a person not directly or immediately connected with the Society, how could the servants or members of the Society, modulate their dealing with such a person? They will be completely in the dark as to whether he has ceased to hold the position of a member. More would be the problems created by such a nebulous state of affairs, if the member who tenders his resignation is the President of the Board, who has got various statutory and other duties under the Act. A meticulous satisfaction of the requirement of a valid tender of resignation has therefore to be insisted upon, in the larger interest of the Society and from the point of view of the objectives of the Act. Inasmuch as there has not been any compliance with R.38(6) referred to above, there has not been a proper tender of resignation by the President. In that view, even the requirements of the liberal provision under the Explanation (2), S.33(1)(b) (regarding the resignation by a member) are not satisfied. There being no termination of the membership of the President, the basic assumption about there being no quorum for the committee contained in the proceedings dated 19-8-1982, reveals itself to be non existent. The Proceedings are vitiated by a non compliance with the jurisdictional conditions justifying the issue of the same, on that ground as well. 13. The manner in which the Asst. Registrar reports to the Joint Registrar about the lack of quorum, and how the Joint Registrar the 1st respondent passes Ext. P1 proceedings, as disclosed from the files, give a good commentary on the pattern of functioning of the two offices and of the two officers. It is seen from the file that the order of disqualification was made on 18-8-1982, and had been endorsed to have been despatched on 19-8-1982. The actual despatch as seen from one of the postal covers returned by the Postal Department, is seen to be 20-8-1982. In other words, the despatching of the order of the 1st respondent disqualifying the 4 Directors including the copy to the Asst. Registrar was only on or after 19-8-1982 However, in the connected file K. Dis. No. 11076/82 relating to the proceedings leading to Ext.
In other words, the despatching of the order of the 1st respondent disqualifying the 4 Directors including the copy to the Asst. Registrar was only on or after 19-8-1982 However, in the connected file K. Dis. No. 11076/82 relating to the proceedings leading to Ext. P1 in O. P. No. 6409 of 1983, it is seen that the Asst. Registrar prepared a report on 18-8-1982. It is interesting to note that the report makes mention of the proceedings of the Joint Registrar disqualifying the 4 Directors. How could the Asst. Registrar at the earliest only on 19-8-1982? It is fairly clear that the report of the Asst. Registrar is an arranged one. to give effect to a pre planned idea to supersede the Board of the Society. In the hurry in which the Asst. Registrar prepared the report, he refers to the Joint Registrar's proceedings disqualifying the 4 Directors as one dated 5-8-1982. It is also interesting to note that a copy of the resignation letter dated 15-8-1982 of the President addressed to the Secretary, is purported to be forwarded through the Asst. Registrar to the Joint Registrar on 18-8-1982. There is no seal of the office of the Asst. Registrar on that Communication. There is no initial of the Asst. Registrar or any person in the office of the Asst. Registrar of having received such a letter and of there having been a normal or routine despatch of that letter to the Joint Registrar. Even the report of the Asst. Registrar is not seen to have any endorsement regarding the despatch. The Asst. Registrar had not bothered even to check up the provisions in the rule such as R.38(6) of the Rules before he forwarding the report which is purported to be done on 19-6-1982, and on the basis of which quick action was pursued by the 1st respondent resulting in proceedings Ext. P1 in O. P. 6409 of 1982. T have no doubt whatever that the orders have not been passed in the normal manner, or in the usual course of transaction of business of these offices. Such pattern of functioning in a Department like the Cooperative Department, will not at all be conducive to the proper working of such a useful Department. The materials in the files may not justify a clear finding about the allegation of malafides as the basis for the impugned order.
Such pattern of functioning in a Department like the Cooperative Department, will not at all be conducive to the proper working of such a useful Department. The materials in the files may not justify a clear finding about the allegation of malafides as the basis for the impugned order. That the order was passed out of extraneous considerations, however, appears to be fairly clear. 14. In these circumstances, I have no hesitation whatever to declare that Ext. P1 in O. P. 6409 of 1982 is vitiated by a violation of the statutory provisions, and an arbitrary unreasonable approach to the question. 15. Normally the above conclusion should have resulted in the reconstitution of the old Board. In my view of the matter, the Board without the 4 Directors whose disqualifications is a matter of contention, would have been entitled to function as such, when the supersession of the Board is found to be unjustified. According to R.44(2), the Registrar is competent to extend the term of the committee, with a view to facilitate the conduct of elections. The various steps to be taken by the committee and by the Registrar for such arrangements relating to election are provided in R.35. Notwithstanding the fact that the term of the committee had expired, it would have been permissible for this court to allow the committee to continue, and to direct the Registrar to consider the extension of its term in exercise of his power under R.44(2) above referred to. However, having regard to various circumstances, T feel that an exercise by which the old committee is reinstalled for the limited purpose of conducting an election, need not be resorted to in the circumstances. It is desirable from the point of view of the Society that the elections are conducted without any further delay. The prospect of the old committee coming again, is likely to create further controversies and further litigative exercises, which may not promote the welfare of the Society as such, whatever may be the shifting fortunes of the contending parties. Viewed from that larger perspective of a better and effective functioning of the Society, I feel that the proper course to be adopted would be to ensure a fresh election at the earliest possible point of time.
Viewed from that larger perspective of a better and effective functioning of the Society, I feel that the proper course to be adopted would be to ensure a fresh election at the earliest possible point of time. The Society which has suffered an administrator's regime (unjustifiably though, in the light of my finding) for all this period, can perhaps continue under the present administrative set up for a further period, of, say 3 months. The steps necessary for the conduct of the elections can be taken in the mean while. I direct that the respondents shall conduct fresh elections to the Society positively within a period of 3 months from today. I decline other reliefs to the petitioners, barring the declarations made above. The writ petitions are allowed in those terms. The petitioners will have their costs in the two writ petitions.