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1988 DIGILAW 396 (KER)

MALANADU SERVICE CO-OPERATIVE BANK LTD. v. STATE OF KERALA

1988-08-18

G.VISWANATHA.IYER

body1988
Judgment :- The first Petitioner is a Society registered under the Kerala Co-operative Societies Act, 1969 (the Act) and the second petitioner is the President of its managing committee. The managing committee was elected on 18-12-1983 and it assumed office on January 1, 1984. There is no dispute on these facts. As per bye-law 33 of the amended bye-laws of the society, a copy of which is Ext. P-1, the term of the managing committee is five years from the date of election. The term is to commence in January and end in December of the fifth year. Since the managing committee took charge on January 1, 1984, it could according to the petitioners, continue in office tiJl December 31, 1988. But the term was cut short by the proceedings Ext. P-3 of the third respondent dated July 6, 1988. The third respondent was of the view that, as per the decision of this court in Mohammed Basheer v. State of Kerala 1987 (2) K.L.T. 791, the term of the managing committee expired On June 30,1988. They had not taken any action to elect a new managing committee. The third respondent therefore invoked the provisions of S.33 of the Act, and appointed an administrator, namely the 4th respondent. 2. Petitioners challenge Ext. P-3 on the ground that the third respondent has grossly misunderstood the decision in Mohammed Basheer's case and that Ext. P-3 has been passed on wrong premises. 3. The ratio in Mohammed Basheer's case is that when the bye-laws of a society do riot fix the same definite date for the expiry of the term of the managing commit tee, Rule 39 (1) of the Kerala Co-operative Societies Rules will operate, and the late of expiry will be the 30th of June of that year in which the term expires. Ext. P-3 does not disclose how the third respondent applied this decision to the facts of this case. Apparently, he has proceeded on the basis that the bye-laws of the first petitioner society do not fix any definite date for the expiry of the term of its managing committee, and therefore, the term of the committee should expire on June 30, 1988 under rule 39 (1). 4. I am afraid Ext. P-3 proceeds on a total misreading and misunderstanding of bye-law 33 of the first petitioner society. 5. 4. I am afraid Ext. P-3 proceeds on a total misreading and misunderstanding of bye-law 33 of the first petitioner society. 5. S.28 of the Act provides that the general body of a society should constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee. Rule 39 requires the bye-laws of such a society to provide that the term of its committee shall expire on the same date as may be specified. But, if no such date is specified in the bye-laws, the date of expiry shall be 30th of June of that year in which the terfli expires. Thus if the same date is fixed in the bye-laws, the term of the managing committee shall expire only on that date, and not on arty-other. Bye-law 33 of the first petitioner society reads as under: It provides that the term of the managing committee shall commence in January and end in December. Though the actual date is not mentioned, when it provides that the term shall expire in December, it means that it shall be 31st of December of the fifth year. This is so because the term is fixed as five years, and from January to December, and it can be fulfilled only by treating the 31st December as the date on which the committee will lay down office. If such a definite date is provided by the bye-laws, Rule 39(1) does not operate. The Committee is therefore entitled to continue in office till the date fixed by the bye laws and is not bound to lay down office on the 30th of June. 6. The Government Pleader appearing for the respondents has however a different look at the matter. He agrees that there is a definite date fixed in the bye-laws for the expiry of the term, i.e. 31st December. His contention however is that the term of five years commences from December 18, 1983 when the election took place, and the results were announced and not from January 1, 1984 when the committee assumed office. Bye-law 33 is definite that the term commences from the date of election, and not from the date of assumption of office. His contention however is that the term of five years commences from December 18, 1983 when the election took place, and the results were announced and not from January 1, 1984 when the committee assumed office. Bye-law 33 is definite that the term commences from the date of election, and not from the date of assumption of office. If so, and since the year of the society is January to December, the first year of the committee's term expired on December 31, 1983 and the fifth year,- on December 31, 1987. The committee should therefore have laid down office on December 31, 1987. It has actually over-stayed upto the date of Ext. P-3. The Government Pleader does not even accept the third respondent's ratio in Ext. P-3 that the committee had right to function till June 30,1988. He places reliance on the decision of the Supreme Court in Sri Ram Pyare Chaudhary v. State of U.P. AIR 1982 Supreme Court 831 to contend that what is relevent in the determination of the date of expiry of 'the term, is the date of election, and not the date of assumption of office. 7. The question as to which of these dates is relevant has been incidentally considered by this court in Mohammed Basheer's case. This court noted the anomaly that would result if the date of expiry of the period of the committee were to be reckoned from the date of election, even without an opportunity to the newly elected committee to assume office. It was observed in paragraph 7: "The bye-laws provided that the term of office shall be three years from the date of election. It also stated that the election has to be held in advance before the expiry of the term and the new elected body shall assume charge of ofticeas and when the term of office expires. Thus the date of election cannot be the commencement of the term of the elected body, for in that case, the term of the second elected committee will commence from a date when the previous committee was in office. On a harmonious construction of bye-law 35, it has to be held that under the bye-laws of this society, the term of three years shall be from the date of assumption of office". 8. On a harmonious construction of bye-law 35, it has to be held that under the bye-laws of this society, the term of three years shall be from the date of assumption of office". 8. This caja only be so in as much as a managing committee's right to assume office must arise before its term could start running. The period cannot commence at a time when the previous committee is validly in office with its term yet to expire. There cannot be two managing committees in office at the same time. It has also to be noted that bye-law 33 requires election to be held before the expiry of the term of the managing committee, i.e. before December 31. In every election therefore, there will necessarily be a gap between the date of election and the date of expiry (namely December 3i) of the term of the existing managing committee. If the Government Pleader's contention be correct, that truncated period will be the first year of the newly elected committee, even though they cannot assume office and cannot function during this period. In consequence, the effective lite of a managing committee will be reduced to four years (as against five years for which it is elected). This will be the case with every managing late which distorts the very basic of bye-law 33 and S.28. 9. I therefore hold that the term of office commences not on the date of election but on the date of assumption of office. 10. The decision in Sri Ram Pyare Chaiidhary's case is distinguishable. The question which was in issue and which was decided was different. The question which arises in this case did not arise there. Since however great stress and reliance was placed by the Government Pleader on this decision, I shall deal with the same in detail. 11. In Chaudhary's case, the polling took place on September 11, 1978. However the results could not be declared in view of a suit and an injunction. The results were actually declared only on January 28, 1980. The term of office of the committee was three co-operative years, including the year of election. A co-operative year was defined as the period from 1st July to 30th June. However the results could not be declared in view of a suit and an injunction. The results were actually declared only on January 28, 1980. The term of office of the committee was three co-operative years, including the year of election. A co-operative year was defined as the period from 1st July to 30th June. The Registrar of Co-operative Societies took the view that since the polling took place on September 11, 1978, and the term was three co-operative years, including the year of election, the tenure of the committee expired on 30th June, 1981. In other words he took the three years as the three co-operative years 1978-79,1979-80 and 1980-81. An Administrator was appointed on July 1, 1981. This was questioned by filing a writ petition. The Allahabad High Court upheld the view of the Registrar holding that once poll was held, the period commenced from that date, even though the results were not announced. 2Q appeal, the Supreme Court reversed the decision of the Allahabad High Court. The Supreme Court posed the questions for consideration as whether the mere holding of the poll constitutes election of the members-of the committee, or whether it was the result being declared after the counting that constituted the starting point or the terminus aquo for the term of office. After discussing the relevant rules it was observed: "It is therefore, not possible to accept the submission that there is nothing like a stage of announcement of the result of election when election is held for electing members of the committee of management of a co-operative society. In fact, the various stages of election are clearly demarcated in the rules. If the poll has" become necessary and is held, the unavoidable and inescapable, stage of counting of votes and the next stage of announcement of result and subsequently publicising the result are part and parcel and necessary adjuncts of conducting poll. If the rules provide for all three stages it is difficult to accept the submission that by merely holding of the poll, the processor elect ion can be said to have been completed and the term of members who had contested would commence from the time of holding the election". 12. If the rules provide for all three stages it is difficult to accept the submission that by merely holding of the poll, the processor elect ion can be said to have been completed and the term of members who had contested would commence from the time of holding the election". 12. It was held that the candidates did not acquire the status of members of the committee by the polling taking place, and that they acquired that status only when the results were declared. The order of the Registrar holding otherwise was set aside and the committee was directed to be reinstated in office. 13. The point thus decided In Chaudhary's case was whether the date of the poll or the date of declaration of results constituted the terminus aquo for the term of the committee. In fact, on the facts of that case, it was clear that the term of the members of the former committee had expired by the time the poll took place on September 11, 1978. If the declaration of the results had been made on that day, certainly the newly elected committee could have taken charge forthwith. The Supreme Court was therefore not concerned with the problem that arises here, of the term of the existing committee not expiring on the date of the poll or the declaration of results, and the elected committee not taking charge till the previous committee's term expired under the bye-laws. Thus the further ramification as to whether it should be the date of erection or the date of assumption of office that should constitute the relevant date was not in issue before the Supreme Court, as it is before me in this case. The Division Bench in Mohammed Basheer's case held that the period commences from the date of assumption of office and not from the date of election. The decision of the Supreme Court does not apply to the facts of this case. In the circumstances, the contention of the Government Pleader that the decision in Mohammed Basheer goes against the decision of the Supreme Court in Chaudhafy does not appeal to me. 14. The learned Government Pleader had a further contention that the managing committee of the society had met on December 29,1983 and elected the President. In the circumstances, the contention of the Government Pleader that the decision in Mohammed Basheer goes against the decision of the Supreme Court in Chaudhafy does not appeal to me. 14. The learned Government Pleader had a further contention that the managing committee of the society had met on December 29,1983 and elected the President. The minutes book of the society was produced before me to show that the managing committee had met on December 29,1983. But the fact remains, and it is not disputed, that the managing committee actually assumed office only on January 1, 1984. In fact it is seen from the minutes book that the managing committee assumed office only on January 1, 1984 and even the decision taken by them on December 29,1983 was only to assume office on January ,1984. It is also not disputed that the term of the previous managing committee enured till and inclusive of December 31, 1983. In the circumstances, the fact that the managing committee held, what I would term, an informal meeting on December 29,1983 is not sufficient to sustain the Government Pleader's' submission that they had started functioning prior to December 31, 1983. I must also state here that many of the members of the erstwhile managing committee were members of the newly elected managing committee as well. Nothing therefore turns on this fact of a meeting on December 29, 1983. 15. Ext. P-3 is therefore unsustainable. It has to be; quashed. The managing committee of the first petitioner society could continue in office till December 31, 1988 on which date the fifth year of its term will expire. If the committee could so continue, the third respondent was not entitled to appoint an Administrator and the said appointment has to be declared illegal. The committee of management has to be reinstated in office forthwith. 16. The Supreme Court has observed in paragraph 12 of the judgment in Chaudhary's case: "Further, the elections, to penchayats, co-operative societies and smaller local bodies provide an apotheosis or a training ground for success of our large experiment of parliamentary democracy. Election process is sacrosanct. Members elected must be permitted to discharge their functions as chosen representatives of the electorate for the statutory terms. Election process is sacrosanct. Members elected must be permitted to discharge their functions as chosen representatives of the electorate for the statutory terms. Such a drastic power of removing elected representatives before the expiry of term and substituting non-elected persons must receive strict and narrow interpretation at the hands of the Courts. If allowed to foster it would be negation of the democratic process and would engulf the whole fabric of democratic institutions which we are trying to build up. Therefore, even though the term would expire roughly after four months, we would be perfectly justified in removing the administrator and reinstating the elected representatives." The dictum must apply to this case. The elected managing committee should be allowed to reassume office and continue till the expiry of its term. 17. The Original Petition is therefore allowed. Ext. P-3 is quashed. The respondents are directed to reinstate the managing committee in off ice forthwith. There will be no order as to costs.