Kurien v. Registrar of Co-operative Societies — 1996 DIGILAW 131 (KER)

Judgment :- Sreedharan, J. Common issues arise in these Original Petitions. So, we consider it advantageous to dispose of them by a common judgment. Counsel appearing on either side also agreed to that course. Kerala State Co-operative Consumers' Federation Ltd. No. 4328, Ernakulam is an Apex Society. It was under the management of an elected body till 3.1.92. Administrator was appointed to the Apex Society and he took charge on 4.1.92. He passed a resolution to hold the election to the Managing Committee of the Apex Society on 18,3.92. While steps for the said purpose was in progress, Returning Officer postponed the election. While so, Administrator took steps to amend the bye-laws of the Apex Society. He convened the General Body of the Apex Society on 9.10.92. At that General Body, according to Administrator, 9 members were present representing the Apex Society and the District Societies. Two members representing the District Forums namely, Ernakulam and Trichur, voted against the proposed amendment. The others, it is averred, favoured the amendment. Thus the proposal for amendment moved by the Administrator of the Apex Society was carried by the General Body. It was forwarded to the Registrar and the Registrar registered the same in accordance with the provisions of the Co-operative Societies Act, hereinafter referred to as the Act, and the Rules framed thereunder. Petitioners in these original petitions challenge the amendment carried out to the bye laws of the Apex Society. 2. In O. P. 429/92 filed in January 1992, petitioners moved C. M. P. 23227/92 praying for restraining the Apex Society from convening the General Body meeting and discussing the amendment to the bye-laws. This court on 9.10.92 ordered mat any amendment made will be subject to the result of the O. P. Pursuant to the amended bye-laws, election to the Apex Society was sought to be held. To stop that election and for issuing a writ of mandamus directing the respondents to conduct the election with the voters' list as on 4.1.92, petitioners moved O. P. 7127/93. Along with that O. P. they moved C. M. P. 12379/93 praying for stay of operation of the amended bye-laws. This court did not stay the operation of the amendment. Thereafter election was held in terms of the amended bye-laws. Along with that O. P. they moved C. M. P. 12379/93 praying for stay of operation of the amended bye-laws. This court did not stay the operation of the amendment. Thereafter election was held in terms of the amended bye-laws. Thereupon petitioners moved C. M. P. 5221/96 praying for staying the further steps for election to the Managing Committee of the Apex Society namely, Kerala State Co-operative Consumers' Federation. On 20.2.96, this Court ordered that the election to the Managing Committee shall be subject to the result of the O. P, and referred the O. P. to a Bench. 3. From the above, it is clear that the Administrator, who took charge of the Apex Society, took steps to amend its bye-laws. For the said purpose, General Body of the Apex Society namely, the Federation was convened on 9.10.92. According to respondents, 9 members of the General Body attended the meeting. Two among them voted against the amendment. Thereby it is contended that 7 members of the General Body voted in favour of the amendment. Itis the common case of parties that for carrying out the amendment to the byelaws, there must be 2/3rd majority of persons present and voting. According to respondents, since 7 out of 9 voted in favour of the amendment, that being more than 2/3rd present and voting, the amendment was properly carried. Consequently, it is argued that election to the General Body of the Apex Society held in conformity with, the amended bye-laws is proper and this court-is not to interfere with the election to the General Body. Therefore, it was argued mat the election to the Managing Committee of the Apex Society by the members so elected to the General Body of the Apex Society is also not open to challenge. 4. On the basis of these averments and contentions raised by the parties, the short question that arises for consideration is whether General Body of the Federation which met on 9.10.92 was proper or not. If the total number of members i n the General Body of the Federation namely, 9 were competent to represent the General Body and 7 out of them voted in favour of the amendment, the amendment is beyond the pale of controversy. This court, in exercise of the powers under Art.226, is not to go into the propriety or otherwise of the amendment carried out. This court, in exercise of the powers under Art.226, is not to go into the propriety or otherwise of the amendment carried out. This court is only to see whether the procedure adopted by the Administrator of the Apex Society for getting the bye-laws amended was proper in accordance with law or not. 5. 14 District Co-operative Societies are attached to the Apex Society. The delegates representing the 14 District Co-operative Societies are members of the General Body of the Apex Society. Over and above those delegates sent up by the 14 District Co-operative Societies, two nominees of the Government and the Managing Director also are members of the General Body. District Co-operative Societies are having delegates from the primary societies attached to it as its General Body. The delegates so sent up by the primary societies constitute the General body of the District Forums and they are to elect the members of the Managing Committee from among them. The Managing Committee so elected by the delegates of the primary societies is managing the affairs of the District Forum. The Managing Committee can send one from among them as delegate to the Apex Society namely, the Federation. At. the time when the Administrator of the Apex Society convened the General Body of the Federation, the District Forums of Ernakulam & Trichur were alone under the management of elected Managing Committees. The District Forum of Palghat was defunct. The said Forum was not even having an Administrator. So, 13 delegates from the 13 District Forums, two nominees of Government and Managing Director of the Federation constituted its General body. According to respondents, from among the total members of the General Body of the Federation, 9 attended the meeting held on 9.10.92 for considering the amendment of the bye-laws. It is also the common case that the delegates representing the Managing Committee of the District Forums of Ernakulam and Trichur voted against the proposed amendment. Remaining members, it is alleged, voted in favour of the amendment and so the amendment was carried by more than 2/ 3rd majority of the members present and voting. Now the short question that arises for consideration is whether the delegates, who were sent up by the other District Forums, were entitled to exercise votes as members of the General Body of the Federation. 6. District Forums are affiliated to the Central Federation. Now the short question that arises for consideration is whether the delegates, who were sent up by the other District Forums, were entitled to exercise votes as members of the General Body of the Federation. 6. District Forums are affiliated to the Central Federation. Primary Co-operative Societies are affiliated to the District Forums. The General Body of-the District Forums comprised of delegate sent up by the primary societies. If the primary society is under the control of a Managing Committee, a member of the Managing Committee is to be a delegate of the District Forum. If the primary society is under the control of an Administrator, the Administrator may sent up a member of the primary society as a delegate to the District Forum. Persons so sent up as delegate to the District Forum constitute the General Body of the District Forum. From among those delegates, the Managing Committee of the District Forum be is to be elected. A member of such a Managing Committee of the District Forum can be the delegate to the Apex Society namely the Federation. In the case of the District Forums of Ernakulam and Trichur, members of the Managing Committee in force are the delegates sent up to the Federation. The other District Forums, which were under the administrator/administrative Committee, were to nominate members of the General Body as delegates to the Apex Society or Federation. If the administrators/ administrative Committee in charge of the other District Forums have not sent up members constituting its General Body, the delegates sent up by them will not be competent to represent that District Society. Such persons will not have the right to vote in the General Body of the Federation either. 7. As stated earlier, District Wholesale Co-operative Consumers Stones of Trivandrum, Alleppey, Wynad, Kannur and Quilon are under the control of administrators/administrative Committees. These District Forums have sent up their representative as delegate to the General Body of the Federation. Such District Wholesale Co-operative Consumers/ Administrative Committees could sent up only those who were properly nominated as delegates by the primary society. These District Forums have sent up their representative as delegate to the General Body of the Federation. Such District Wholesale Co-operative Consumers/ Administrative Committees could sent up only those who were properly nominated as delegates by the primary society. In other words, a member of the Managing Committee of a primary society, if it is under the management of a Managing Committee or a member of that Society if that society is under the control of an administrator/ administrative Committee can alone be a member of the General Body of the District Forum. No other person can be a member of the General Body of the District Forum. In other words, no person who is not a proper delegate to the General Body of the District Forum can be nominated by that Forum as its delegate to the Federation. 8. One Stanly Sathyanesan was sent up as a delegate of the Trivandrum District Wholesale Co-operative Consumers Stores to the Federation. He represented the Trivandrum District Wholesale Co-operative Consumers Stores in the General Body meeting of the Federation held on 9.10.92. Stanly Sathyanesan was a member of the Administrative Committee of the District Forum. According to respondents, as a member of the Administrative Committee, he was in charge of the administration of the Di strict Forum and so he was competent to represent the Trivandrum District Wholesale Co-operative Consumers Stores as a delegate to the Federation and consequently, can be a member of the General Body of the Federation. This argument is quite attractive. But we are finding it very difficult to accept the same. S.33(1)(b)(ii) of the Act inter alia states that the Registrar may appoint one or more administrator/ administrators who need not be member or members of the society to manage the affairs of the society, So a member of the Administrative Committee of a society need not be a member of that society. A stranger to the society can thus be a member of the Administrative Committee constituted by the Registrar. So, Stanly Sathyanesan who was sent up as a delegate to the Federation should have been a member of the General Body of the District Wholesale Co-operative Consumers Stores, for that Society was under the control of an Administrative Committee. 9. A stranger to the society can thus be a member of the Administrative Committee constituted by the Registrar. So, Stanly Sathyanesan who was sent up as a delegate to the Federation should have been a member of the General Body of the District Wholesale Co-operative Consumers Stores, for that Society was under the control of an Administrative Committee. 9. The Administrative Committee has no power to send one member from among them as a delegate to the Federation, Reference in this regard should be made to R.44A and proviso to it. Rule specifies that the person appointed to represent a society in any other society or vote shall be a member of Committee of the society, which he represents. If Stanly Sathyanesan is to be considered as a member of the General Body of the Trivandrum Wholesale Co-operative Consumers Store, he should have been a member of the Managing Committee of a primary society. Respondents have no case that Stanly Sathyanesan was such a member. So Stanly Sathyanesan could be a member of the General Body of the Trivandrum Wholesale Co-operative Consumers Store only if he was sent up as a delegate by the Administrator who was in control of the primary society of which Stanly Sathyanesan happened to be a member. Respondents have no case that the Administrator of the primary society of which Stanly Sathyanesan was a member sent him up as a delegate of that society to be a member of the General Body of the District Forum. 10 Proviso to R.44A makes it clear that neither the Administrator nor a member of the Administrative Committee can be a delegate in the other society. As per the proviso, the powers that are conferred on the administrator/ administrative Committee is only to nominate a member of the society to be its delegate in the other society. If Stanly Sathyanesan was a member of the Administrative Committee of the Trivandrum District Wholesale Co-operative Consumer Stores, he had the right alone with the other members of the Administrative Committee to nominate a member of the society as its delegate to the Federation. In other words, as a member of the Administrative Committee, Stanly Sathyanesan had obtained no other right than to nominate as a member of the General Body of the District Forum as a delegate to the Federation. In other words, as a member of the Administrative Committee, Stanly Sathyanesan had obtained no other right than to nominate as a member of the General Body of the District Forum as a delegate to the Federation. Viewed in this light, Stanly Sathyanesan could not represent the Trivandrum District Wholesale Co-operative Consumers Stores i n the General Body of the Federation. Same is the position as far as Sri. Parthasarathy who represented the Alleppy District Wholesale Co-operative Consumers Stores is concerned. Respondents have not advanced an argument on the basis that Sri. Parthasarathy was a delegate to the Alleppy District Forum. All the defects mat were found in the nomination of Stanly Sathyanesan as delegate to the Federation is applicable to Sri. Parlhasarathy who sought to represent the Alleppy District Forum. No argument was advanced before this Court by learned counsel representing the respondents to separate the case of Parthasarathy from that of Stanly Sathyanesan. This shows that Stanly Sathyanesan and Parthasarathy stand on the same footing or are having the same disqualifications to represent their respective District Forums in the General Body of the Federation. 11. As stated earlier, for carrying out the resolution to amend the byelaws, there must be 2/3rd majority of persons present and voting. When Stanly Sathyanesan representing the Trivandrum District wholesale Co-operative Consumers Stores and Parthasarathy representing the Alleppy District Wholesale Co-operative Consumers Stores were not eligible to represent those societies, their votes cannot be taken as those in favour of the resolution. Admittedly, the representatives of Ernakulam and Trichur District Wholesale Co-operative Consumers Stores voted against the resolution. Thus, out of 9 members present at the meeting, 4 were against the resolution. In other words, out of 9 members present, according to respondents, only five voted in favour. It is less than 2/3rd majority of members present and voting. At this juncture, we hasten to add that nomination of T.N. Velayudhan by the Wynad District Wholesale Co-operative Consumers Stores, Sri. P.K. Mohanan to represent the Kannur District Wholesale Cooperative Consumers Stores and C.K. Radhakrishnan to represent the Quilon District Wholesale Co-operative Consumers Stores are also under challenge on the same grounds as in the case of Stanly Sathyanesan and Parthasarathy. P.K. Mohanan to represent the Kannur District Wholesale Cooperative Consumers Stores and C.K. Radhakrishnan to represent the Quilon District Wholesale Co-operative Consumers Stores are also under challenge on the same grounds as in the case of Stanly Sathyanesan and Parthasarathy. But we are not examining their competence to represent their respective District Wholesale Cooperative Consumers Stores in the Federation because out of 9 present and voting, 4 votes are not to be taken in favour of the resolution which means less than a 2/3rd majority alone favoured the amendment. On this short ground, we hold that the resolution passed by the so-called General Body of the Federation which met on 9.10.92 is invalid. 12. Another argument was advanced by the learned counsel representing the petitioners that the Administrator of the Federation, who was ode among the 9 present, was disqualified to exercise vote in the General boxly, He relied on S.20 of the Act which states that every member of a society shall have no vote in the affairs of the society. According to learned counsel, Administrator s not a member of the society and he should not have exercised the vote. In the instant case we are not going into this issue, in detail because the person who was nominated by the Government to the General Body of the Federation was acting as Administrator. So, we leave the question as to whether a Government nominee to the general body, who becomes an Administrator can exercise vote as a member of the society, open. Without going into that question the petitioners are succeeding in these Original Petitions because of our finding that the resolution to amend the bye-laws was not carried by a majority of 2/3rd members present and voting. 13. In view of what has been stated above, we allow these original petitions and strike down the amendment carried out to the bye-laws of the Federation pursuant to the resolution passed by the so-called general body held on 9.10.92. The registration given to the amendment alleged to have been carried by the General Body held on 9.10.92 will also stand vacated. Elections held pursuant to the amended provision of the bye-laws will also stand set aside. The registration given to the amendment alleged to have been carried by the General Body held on 9.10.92 will also stand vacated. Elections held pursuant to the amended provision of the bye-laws will also stand set aside. Respondents are directed to take steps to hold the election to the Managing Committee of the Federation in accordance with the unamended bye-laws as expeditiously as possible, at any rate, within three months from the date of receipt of a copy of this judgment.