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1992 DIGILAW 323 (KER)

Sasi v. Registrar of Co-operative Societies

1992-08-26

BALANARAYANA MARAR

body1992
Judgment :- The Registrar of Co-operative Societies by order dt. 24-7-1992 appointed the Joint Registrar of Co-operative Societies, Kannur as part-time administrator of Regional Agro-Industrial Development Co-operative Ltd. (RAIDCO for short) for a period of six months of till an elected Board" take charge, whichever is earlier. The administrator was directed to take charge immediately and take further urgent steps to constitute a new elected committee at the earliest. The reason for appointing a new administrator is stated to be that the strength of the members of the managing committee has been reduced to 3 and that cannot constitute the required quorum. The Registrar has therefore acted under S.33 of the Co-operative Societies Act .to remove the administrative stalemate in the society. Challenging this order the managing committee filed the O.P. seeking to quash the order and a direction permitting them and other elected members to continue in office. Along with the O.P. this C.M.P. was also filed-requesting stay of operation of the order of the Registrar. Notice was given to the Government Pleader. He rep resented that the administrator has taken charge. This was disputed by counsel for the petitioner who submitted that the administrator had not so far taken charge of the administrator. In the circumstances interim stay was granted on condition that the order will take effect only if the administrator has not taken charge by then. 2. A counter affidavit was filed by the administrator, the Joint Registrar of Cooperative Societies, Kannur wherein it is inter alia stated that he had been appointed as administrator to manage the affairs of RAIDCO. He had been to Thiruvananthapuram on the 23rd and 24th of July. Copies of the proceedings of the Registrar addressed to him and the General Manager of RAIDCO were handed over to him. He had proceeded to the office of RAIDCO on25-7-1992. At 10.30 a.m. the copies of the order were handed over to the General Manager. Since the General Manager refused to handover the minutes book of the society, he opened a new minutes book and the fact of taking charge as administrator on the fore-noon of 25-7-92 was recorded therein, The Registrar of Cooperative Societies was informed of taking charge. Various newspapers had also reported this fact. He attended the office on 27-7-92 and verified the daybook and vouchers and attested the daybook. Various newspapers had also reported this fact. He attended the office on 27-7-92 and verified the daybook and vouchers and attested the daybook. The General Manager was not in the office at that time. The administrator is alleged to have been threatened over telephone. Accompanied by a team of policemen led by the Circle Inspector of Police he went to the office on 28-7-1992 at 4 p.m. A large crowd had gathered and they started threatening him. He proceeded to Ernakulam during the night of 28-7-1992 and gave instructions for preparing the counter affidavit. 3. The 4th respondent in the O.P., the General Manager of RAIDCO, is not a party to this civil miscellaneous petition. A counter affidavit was filed by him supporting the petitioners and denying the averments in the counter affidavit of the Joint Registrar regarding the taking charge of office on 25-7-1992. It is stated that he was away on 25-7-1992 and that none of the officers of the Department had gone to the office or handed over any order to him. He was present in the office during office hours on 27-7-1992. No order was served on him, nor did the administrator go to the society's office on that day. The Joint Registrar had gone there with the assistance of policemen at 4.30 p.m. on 28-7-92. He did not verify any records. He checked certain records and left the place. The minutes book and other relevant records were in the office. The Joint Registrar who was appointed as the administrator had not taken charge of the affairs of the society. The 4th respondent claims to be in management of the affairs of the society. Though the 4th respondent is not made a party to this C.M.P., the counter affidavit filed by him was received and Sri. T.P. Kelu Nambiar, learned counsel for the 4th respondent, was also heard since 4th respondent is a party to the O.P. and he is the proper person in charge of the day-to-day affairs of the society. 4. Heard counsel for the petitioner and the Government Pleader. 5. The short point that arises for consideration is whether the administrator has taken charge of the management of the society on 25-7-1992. He claims to have assumed charge whereas petitioners assert that the management continued with the managing committee and that they had not handed over charge to the administrator. Sri. 5. The short point that arises for consideration is whether the administrator has taken charge of the management of the society on 25-7-1992. He claims to have assumed charge whereas petitioners assert that the management continued with the managing committee and that they had not handed over charge to the administrator. Sri. V.K. Beeran, learned Additional Advocate General, appearing for the respondent would contend that the administrator has assumed charge, the General Manager having refused to handover charge of the office. The fact of taking charge was recorded in a minutes books opened for that purpose since the General Manager refused to hand over the minutes book of the society. On the other hand, it is the stand of petitioners and the 4th respondent in the O.P. that the administrator had not taken charge and that he had gone to the office of the society only on the evening of 28-7-1992 by which time this court had already stayed the operation of the Registrar's order. According to Sri Kelu Nambiar the charge has to be handed over by the outgoing managing committee and taken by the administrator whereas the Addl. Advocate General would say that it is sufficient if the charge is assumed by the administrator. 6. That leads us to the question as to whether the charge can be assumed by the administrator and if so under what circumstances. That there is dispute between the managing committee and the administrator regarding taking of charge or assumption of charge does not admit of any dispute. 6. That leads us to the question as to whether the charge can be assumed by the administrator and if so under what circumstances. That there is dispute between the managing committee and the administrator regarding taking of charge or assumption of charge does not admit of any dispute. The only provision contained in the Co-operative Societies Act regarding the procedure to be followed in the case of the managing committee refusing to handover charge is contained in S.34 which reads: "(1) if the committee of a society is reconstituted at a general meeting of the society or the committee of a society is removed by the Registrar under S.32 or a new committee or administrator or administrators is or are appointed under S.33 or if the society is ordered to be wound up under S.71 and the outgoing members of the committee refuse to hand over charge ofthe records and property of the society to the new committee or administrator or administrators or the liquidator, and the case may be, or if an outgoing president or secretary who is the custodian of the records and property of a society refuses to hand over charge of the records and property of the society to his successor, the new committee or administrator or administrators or the liquidator or the President or Secretary may with the previous sanction of the Registrar apply to the Magistrate with in whose jurisdiction the society functions, for securing the records and properties of the society. (2) On receipt of an application under sub-section (1), the Magistrate may, by a warrant, authorise any Police Officer, not below the rank of Sub Inspector, to enter and search any place where the records and the property of the society are kept or are believed to be kept and to seize such records and property, and the records and property so seized shall be handed over to the new committee or administrator Qr administrators or the liquidator or the President or Secretary, rs the case may be. (3) Where the Registrar or any other officer not below the rank of Assistant Registrar of Co-operative Societies authorised by him in this behalf in the course of audit, inspection, inquiry or supervision is of opinion that there is room to suspect gross negligence of duties, misappropriation or misuse of funds of the society or irregularity in recording proceedings or keeping accounts or books or is satisfied that the records, registers or the account books of a society are likely to be tampered with or destroyed and the funds and property of a society are likely to be misappropriated or misapplied, he shall have power to take possession of any or all of the books, registers, securities or documents, cash in hand or account books of the society and remove such seized records and property and to deal with them in any manner as may be directed by the Registrar. (4) The Registrar or other officer seizing the records and property of a society under subsection (3) shall prepare an inventory of the records and property seized in -duplicate with his signature and require the officer, employee or members of the society from whose custody the records and property are seized to affix his signature in witness thereof and, if such officer or employee or member refuses to sign, then the Registrar or other officer seizing the records and property shall cause two or more persons to sign the inventory as witnesses to the correctness thereof. A copy of the inventory prepared under this section shall be delivered to the officer, employee or member of tlifi society from whose custody the records and property were seized." What is contemplated is refusal to hand over charge of the records and property of the society to the new managing committee or the administrator or administrators or the liquidator, as the case may be. On such refusal the new committee or the administrator has to apply to the Magistrate for securing the records and properties of the society and that can be done only with the previous sanction of the Registrar. On receipt of such an application the Magistrate may by a warrant authorise any police officer not below the rank of a Sub Inspector to enter and search any place where the records and the property of the society are kept or are believed to be kept. On receipt of such an application the Magistrate may by a warrant authorise any police officer not below the rank of a Sub Inspector to enter and search any place where the records and the property of the society are kept or are believed to be kept. The police officer can seize such records and property, which are to be handed over to the new committee or the administrator, as the case may be. It is admitted that the administrator has not invoked the aid of S.34 in order to get possession of the records by applying to the Magistrate after obtaining the sanction of the Registrar. Admittedly no steps had been taken before 28-7-92, the date on which this court granted the conditional order of stay. It is therefore the contention of learned counsel for petitioners that the handing over and taking over of the charge had not taken place and the managing committee continues in office. On the other hand, the learned Addl. Advocate General would point out that the request to the Magistrate could be made only by the administrator who has already taken charge. According to him only a person who had either taken charge or assumed charge can secure the records and properties on the refusal of the managing committee to hand over charge. It is pointed out that S.34 only mentions about the refusal to handover charge of records and property and not the refusal to hand over charge of the office of the society. That according to the Addl. Advocate General can be assumed when the previous managing committee refuses to hand over charge. That was what happened in this case according to him and the records and the property can be secured later by moving the Magistrate after obtaining the sanction of the Registrar. 7. On the other hand learned counsel for the 4th respondent would point out that S.34 does not mention of an assumption of charge whereas it speaks of handing over charge of records and property which, according to counsel, implies handing over charge of the office. There cannot be an assumption of charge, according to the counsel, and what is contemplated is a request to the Magistrate after obtaining the sanction of the Registrar in axes the managing committee refuses to hand over charge of the office which includes handing over charge of the records and property. There cannot be an assumption of charge, according to the counsel, and what is contemplated is a request to the Magistrate after obtaining the sanction of the Registrar in axes the managing committee refuses to hand over charge of the office which includes handing over charge of the records and property. Counsel relies on the decision of this court in Ramavarma Thirumulpad v. State of Kerala (ILR 1985 (2) Ker. 355). That was a case of a gazetted officer assuming charge. After referring to the relevant rules in the Kerala Service Rules it was held that the transfer of charge has to take place as indicated in Part I of Appendix III of the Kerala Service Rules and the procedure following transfer of charge has to be governed by the provisions of the Kerala Financial Code. The report of transfer of charge has to be signed conjointly by the relieved and the relieving officers unless there be administrative difficulties which prevent both the officers from signing. According to the petitioners there was no administrative difficulty preventing the managing committee to hand over charge so as to enable the administrator to assume charge. Any way, the principles enunciated in the above mentioned decision are not applicable to the present case since there is specific provision in S.34 regarding the procedure to be followed in case of refusal to hand over charge. One has only to see whether that includes refusal to hand over charge of the office. 8.The assumption of charge without the outgoing managing committee handing over charge of records and property may create administrative difficulties and problems. On assumption of charge the duties and responsibilities are those of the new managing committee or the administrator, as the case may be. They will be held responsible for the day-to-day affairs and the entire administration of the society, which cannot be done without securing possession of records and properties. That may be the reason why provision is made in S.34 to apply to the magistrate and obtain a warrant authorising a police officer to enter and search the place and to seize the records. The records might have been removed by the outgoing managing committee. There may be cases where the outgoing managing committee closes down the establishment and leaving the place either after removing the records or otherwise. The records might have been removed by the outgoing managing committee. There may be cases where the outgoing managing committee closes down the establishment and leaving the place either after removing the records or otherwise. In all such cases the police officer is competent to search and seize the records and hand over the same to the new managing committee or the administrator, as the case may be. In such a case the police officer has to prepare a seizure list or mahazar of the records and properties and when they are handed over to the managing committee or the administrator, he will have to get the necessary acknowledgment from the persons concerned. Then alone it will be possible to know what all records and properties were seized and handed over to the new committee or the administrator. Thereafter the responsibility will be that of the managing committee or the administrator in respect of those records and properties. If any of the records or properties are found missing, necessary action can be taken by the committee or the administrator. The procedure contemplated in S.34 of the Act has therefore to be followed when the outgoing managing committee refuses to hand over charge of the office which includes charge of records and properties. The question of assumption of the charge of the office does not arise. Assumption means taking charge of the office inclusive of the records. That can be done only after following the procedure contemplated in S.34 of the Act. 9. Even according to the 1st respondent the administrator had not requested the Magistrate for issue of a warrant to seize the records. The sanction of the Registrar was also not obtained before the filing of this original petition. The managing committee had not handed over charge to the administrator, nor had he taken charge from them. Under the circumstances the management continued with the managing committee and the administrator cannot be said to have taken charge of the society and its management by a mere assumption of charge, 10. That the managing committee had refused to hand over the records is-revealed from the averment in the counter affidavit of 1st respondent that the general manager refused to hand over the minutes book of the society which necessitated the opening of a new minutes book. The fact of taking charge as part-time administrator was recorded in that minutes book. That the managing committee had refused to hand over the records is-revealed from the averment in the counter affidavit of 1st respondent that the general manager refused to hand over the minutes book of the society which necessitated the opening of a new minutes book. The fact of taking charge as part-time administrator was recorded in that minutes book. That also is an indication that the entire records and the properties continued in possession of the managing committee of which the executive head is the, general manager. In his affidavit he would even say that the administrator had not gone to the office on 25-7-1992 as averred in the counter affidavit of 1st respondent. According to him the Joint Registrar of Co-operative Societies had gone to the office at 4.30 p.m. on 28-7-1992 along with a posse of policemen and wanted to verify certain records. By that time this court had granted interim stay of operation of Ext.P1 order on condition that the order will take effect only if the administrator had not taken charge. The Joint Registrar having been informed of this fact, he left the place without verifying any records though he checked certain records of the society. The Joint Registrar, Kannur is the part-time administrator. He has thus a dual capacity, one as the administrator designate and the other as the Joint Registrar. He might ha*e gone to the society on 28-7-1992 in his capacity as the Joint Registrar. The general manager was bound to produce the records before the Joint Registrar who has got supervisory powers. That cannot be taken as a visit by the administrators in the fact of assumption of charge is in duplicate between the parties. The materials available on record would therefore show that the managing committee has refused to hand over charge of the records and the property of the society meaning thereby that they had refused to hand over charge of the office of the society. The administrator has only recorded the fact of assumption in a new minutes book opened for that purpose. The entry in that book will not amount to taking charge of the office or assumption of charge. The inaction on the part of the administrator to move the Magistrate after obtaining the sanction of the Registrar is strongly relied on by the petitioners. The entry in that book will not amount to taking charge of the office or assumption of charge. The inaction on the part of the administrator to move the Magistrate after obtaining the sanction of the Registrar is strongly relied on by the petitioners. It has been held by this court that the executive magistrate is competent to entertain and deal with an application made under sub-section (1) of S.34. The requisite warrant could have been obtained from the executive magistrate of Kannur. It would also appear that the Joint Registrar, Kannur is competent to accord sanction, the powers of the Registrar under the Act having been conferred on the Additional Registrar and the Joint Registrars. The person who had to apply to the magistrate and the person to accord sanction is therefore the same in the present case. Whatever that be, there would not have been any difficulty in obtaining the sanction of the Registrar even if the same has to be obtained from him. Paragraph ll of the counter affidavit of the 1st respondent mentions the circumstances in which the order of supersession was passed and the same was taken to the general manager of the society. The Joint Registrar, Kannur who is appointed as the administrator had been at Thiruvananthapuram on the 23rd and 24th of July, 1992. The copies of the proceedings addressed to him as the administrator and to the chairman and the general manager of the society and the copy to the general manager of the District Co-operative Bank were handed over to the Joint Registrar from the office of the Registrar of Co-operative Societies. He returned to Kannur with those copies and proceeded to the office of the society on 25-7-1992 itself. If the order of supersession could have been obtained in such a manner, sanction under S.34 of the Act could also have been obtained immediately after 25-7-1992, the date on which the administrator had gone to the office of the society and the managing committee refused to hand over the records. The inaction of the administrator assumes considerable importance in this case. ll. From the observations made above the only conclusion possible is that the charge of the office of the society including the records and the properties had not been handed over to the administrator and the same continued with the managing committee. The inaction of the administrator assumes considerable importance in this case. ll. From the observations made above the only conclusion possible is that the charge of the office of the society including the records and the properties had not been handed over to the administrator and the same continued with the managing committee. The administrator is not competent to assume charge ofthe office without any order from the Magistrate obtained under S.34 (1) of the Act. The so-called assumption of charge is illegal and inoperative. This court had stayed the operation of Ext.P1 order on 28-7-1992. Having found that the administrator has not taken charge, the stay order will be in operation till the disposal of the original petition. The C.M.P. is disposed of as above.