P. Soundarajan and Others v. The Government of Tamil Nadu and Others
1998-03-11
S.S.SUBRAMANI
body1998
DigiLaw.ai
Judgment :- All these writ petitions are on the same facts, i.e., they want to declare that P.K.Kanagarajan, is disqualified to stand for election for the reasons stated in the various writ petitions and consequently they want to hold fresh election to the Board of Directors of S.44, Panamarathupatti Primary Agricultural Cooperative Bank Limited, Panamarathupatti, Salem. I need only extract the averments in W.P.No.7195 of ] 997, wherein the relief sought for is to issue a writ of certiorarified mandamus, calling for the records of the 1st respondent in G.O.(1D) No.78, dated 2. 1997, and quash the same and direct the respondents to hold fresh election to Board of Directors in the 5th respondent society. 2. In the affidavit filed in support of that writ petition, it is stated that the petitioner is a member of Panamarathupatti Primary Agricultural Co-operative Bank Ltd. It is his case that under Sec.34 of the Tamil Nadu Co-operative Societies Act, 1983 (in short Act’), the persons who have been disqualified are not eligible to contest the election and Sub-sec.(ii) of Sec.34 of the Act deals with the disqualification of the member of the Board. It is further stated that as against the 6th respondent who was formerly the President of the 5th respondent/Bank, proceedings have been initiated and he was found guilty of misappropriation, resulting in loss to the society, and the Deputy Registrar of Cooperative Societies, by his proceedings dated 30.5.1986 issued orders of surcharge, directing the 6th respondent and others to make good the loss. The appeal filed against the surcharge was also dismissed and the orders against the 6th respondent and others was confirmed, even by the Special Tribunal for Co-operative Societies. It is therefore, contended that the 6th respondent is a disqualified person and that he has discharged the debt only recently i.e., on 20.3.1997, and as such his disqualification continues. It is said that the 6th respondent has been elected to the Board of Directors and is about to contest for the Presidentship. In view of the disqualification referred to above, the election of the 6th respondent itself is non est and therefore, they wanted a fresh election to be held to the Board of Directors. .3. For all these writ petitions, on behalf of the State Government as well as the Registrar of Co-operative Societies, a separate counter-affidavit has been filed.
In view of the disqualification referred to above, the election of the 6th respondent itself is non est and therefore, they wanted a fresh election to be held to the Board of Directors. .3. For all these writ petitions, on behalf of the State Government as well as the Registrar of Co-operative Societies, a separate counter-affidavit has been filed. The 6th Respondent P.K.Kanagarajan also filed a separate counter-affidavit. In the counter-affidavit filed by the Government, it is stated that Panamarathupatti Primary Agricultural Co-operative Bank is a Co-operative Society, and as per the bylaws of the Bank its management shall vest with a Board consisting of seven members elected in accordance with the Rules. Elections were held to the various Boards pursuant to the direction of this Court. Originally the election was to be held in April 1997, but there was some disturbance by riot and violence and thereby the election could not be held. Subsequently the election was conducted on 5. 1997, and seven persons who have obtained maximum number of votes were declared as Members of the Board of the said Bank. The first named person is P.K.Kanagarajan, the 6th respondent herein. On 15. 1997, election to the President and Vice-President of the Board was held and in that election P.K.Kanagarajan, was elected as President and one M.Raja was elected as Vice-President. It is further stated that instead of coming to this Court by filing the writ petition, the petitioner has an effective alter-native remedy under Sec.90 of the Act, by raising an election dispute, and the writ petitions filed without availing the alternative remedy are liable to be dismissed. It is also said that G.O. (1D) No.78, Co-operation, Food and Consumer Protection Department, dated 2. 1997 is not arbitrary and illegal.
It is also said that G.O. (1D) No.78, Co-operation, Food and Consumer Protection Department, dated 2. 1997 is not arbitrary and illegal. It is contended by the State, that the writ petitions are based on a wrong assumption, and they misunderstood the exemption given in the said G.O. Election to Primary Cooperative Societies were ordered to be held in 1996, and the 2nd respondent had sent a proposal to the Government to give exemption to all Primary Cooperative Societies from the provisions of Rule 38 of the Rules, and Sec.34(l)(b)(ii) and (iii) of the Act, so as to enable The defaulting members to participate and vote at the election, in view of the fact that majority members were overdue members, and that it would not be conducive if they were deprived of their participation in the election because of overdues. Similar exemption was granted in the year 1990, when election to Primary Co-operative Societies was held. It is said that Kanagarajan was not disqualified from standing for election, since on the date of filing the nomination the surcharge order was not subsisting, and he has discharged the entire debt long before he filed his nomination. .4. In the counter-affidavit filed by the 6th respondent, it is contended that none of the petitioners could be aggrieved, as they also stood for election on the basis of the very same G.O., but got defeated. Apart from the same, it is said that even if the impugned Government Order is quashed, the election will stand the remedy of the petitioners is only to raise election dispute. It is also said that the Government Order has no relevance insofar as the writ petitioners are concerned, because the 6th respondent is not getting any exemption or benefit on the basis of the said G.O., and he is not allowed to stand for election only on the basis of the impugned G.O. According to him, an interpretation of the impugned Government Order is not necessary, for the purpose of this case, and even without considering the validity of the same, the writ petitions could be disposed of. It is also said that the writ petitions are filed without any bona fides and only because the writ petitioners got defeated in the election, they have filed these writ petitions, so that, a fresh election could be held for the Board.
It is also said that the writ petitions are filed without any bona fides and only because the writ petitioners got defeated in the election, they have filed these writ petitions, so that, a fresh election could be held for the Board. He prayed for the dismissal of the writ petitions. 5. Before going into the rival contentions of the parties, it is better to consider the scope of Sec.34 of the Act. Sec. 34 of the Act, deals with disqualifications for membership of Board. Sub-sec.(l) reads thus: "No person shall be eligible for being elected or nominated as a member of a board of any registered society if he- .(a) is such near relation, as may be prescribed, of a paid employee of such registered society: or (b) (i) is in default to such registered society or any other registered society, in respect of any loan or advance taken by him or dues under credit purchases made by him for a period exceeding three months; or (ii) is a representative of a registered society which is in default to the financing bank or to any other registered society, in respect of any sum due by the registered society for a continuous period of one year: Provided that the disqualification in sub-clause .(ii) shall operate only when the default of the registered society exceeds thirty percent of the sum due by that registered society; or (iii) is a person against whom any decree, decision, award, order or certificate referred to in Sec. 143 has been obtained; or a representative of the registered society against which such decree, decision, award, order or certificate has been ob-tained; or... " Sub-sec.(2) reads thus: "A member of the board shall cease to hold his office as such if he- .(a) becomes subject to any of the disqualification mentioned in Sub-sec.(1): .Provided that a member of the board who ceases to hold office by reason of his having incurred the disqualification mentioned in-, .(i) sub-clause (i) of clause (b) of Sub-sec.
" Sub-sec.(2) reads thus: "A member of the board shall cease to hold his office as such if he- .(a) becomes subject to any of the disqualification mentioned in Sub-sec.(1): .Provided that a member of the board who ceases to hold office by reason of his having incurred the disqualification mentioned in-, .(i) sub-clause (i) of clause (b) of Sub-sec. (1) shall not be eligible for re-election or renomination as a member of the board of the registered society of which he was a member or for election or nomination to the board of any other registered society; .(ii) sub-clause (iii) or (iv) of the said clause (b), shall not be eligible for re-election or renomination as a member of that board or for election or nomination to the board of any other registered society, for a period of three years which shall be reck-oned,- .(A) in the case of the disqualification mentioned in sub-clause (i) of the said clause (b), from the date on which the dues referred to therein have been fully cleared; and..." Sec. 170 of the Act runs as follows: .‘770. Power to exempt registered societies: Without prejudice to the power conferred by Sec. 169, the Government may, in the public interest, by general or special order, whether prospectively or retrospectively,- .(a) exempt any registered society, from any of the provisions other than clause (b) of Sub-sec.(1) of Sec.88 and Sub-sec.(1) of Sec.89 of this Act, or of the rules, subject to such conditions as may be specified; or .(b) direct that such provisions of the rules shall apply to such society with such modifications as may be specified in the order." .6. Basing its power under Sec. 170 of the Act, G.O.(1D) No.78, dated 2.
Basing its power under Sec. 170 of the Act, G.O.(1D) No.78, dated 2. 1997, was issued by the State Government, which reads thus; ."In exercise of the powers conferred by clause (a) of Sec. 170 of the Tamil Nadu Cooperative Societies Act; 1983 (Tamil Nadu Act 30 of 1983) the Governor of Tamil Nadu hereby exempted all the Primary Co-operative Societies from the provisions of Subclauses (ii) and (iii) of clause (b) of Sub-sec.(1) of Sec.34 of the said Act and Rule 38 of the Tamil Nadu Co-operative Societies Rules, 1988 so as to enable the defaulting members of the respective societies to vote at any election in the registered society or to represent the society in any other registered society and to stand for or to vote at the election of that other society subject to the condition that this exemption shall apply for the ensuing election to be held under the said Act during 1997." 7. It may be stated that similar Government orders were issued in 1992 and 1996 as G.O.Ms.No.252, dated 25. 11992 and G.O.Ms.No.61, dated 13. 1996. It is the case of the petitioners that the 6th respondent Kanagarajan has got himself elected only on the basis of the impugned G.O. (1D) No.78, dated 2. 1997. It is their case that the said Government Order is arbitrary, illegal and has been issued under colourable exercise of power. It is said that the Government Order is ultra vires of the Act. The Act and the Sections thereon have been framed with the object of filtering the culprits or defaulters from intermiddling in the administration of the society. The grant of total exemption, particularly for the election is arbitrary exercise of power and liable to be set aside. It is said that the power of granting exemption has to be used sparingly, and only in extraordinary circumstances and it must be in public interest. In this case, there is neither public interest nor any extraordinary circumstance, it is their further grievance that the 6th respondent Kanagarajan, who has eaten away the Societies’ money was allowed to participate in the election and the same is not in public interest. The order is also bad, since it has not been issued in public interest. 8.
In this case, there is neither public interest nor any extraordinary circumstance, it is their further grievance that the 6th respondent Kanagarajan, who has eaten away the Societies’ money was allowed to participate in the election and the same is not in public interest. The order is also bad, since it has not been issued in public interest. 8. As against the said contentions by the petitioners, learned Senior Counsel for the 6th respondent contended that the validity of the Government order need not be considered in this case, for the simple reason that the 6th respondent is not claiming any benefit thereunder. He stood for election not on the basis of exemption given in that G.O., but having found that he was fully qualified. Even without the impugned G.O., he was qualified to stand for the election, and these writ petitioners should not have invoked the extra-ordinary original jurisdiction of this court under Art.226 of the Constitution. They should have sought the remedy before the Registrar of Co-operative Societies, by raising the election dispute. .9. After having heard the counsel on both sides, I feel that none of the writ petitioners is entitled to the relief sought for. I will first consider the question, whether there is any disqualification for the 6th re-spondent-Kanagarajan-for being elected as a member of the Board. That disqualification is to be considered with reference to Sec.34(1) of the Act. In that case, we have to consider clause (iii), wherein it is said that ‘no person shall be eligible for being elected or nominated as a member of a board of any registered society if he is a person against whom any decree, decision, award, order or certificate referred to in Sec. 143 has been obtained; or a representative of the registered society against which such decree, decision, award, order or certificate has been obtained. " 10. The case of the petitioners is that as against the 6th respondent there had been surcharge proceedings and it was found that he is liable to be proceeded with and an award was passed against him, and finally it was found that huge amount is due from him. The matter was taken in appeal without success and also before the Special Tribunal, he met the same fate. The amount under the surcharge proceedings was discharged by the 6th respondent on 13. 1997.
The matter was taken in appeal without success and also before the Special Tribunal, he met the same fate. The amount under the surcharge proceedings was discharged by the 6th respondent on 13. 1997. It is not disputed by either of the parties that the last date for filing the nomination was fixed on 4. 1997. It on that date, the 6th respondent was disqualified for filing the nomination, it has to be held that his election is also invalid. If he is not disqualified for standing for election, the other contention viz., whether the Government Order is valid or not really may not arise for consideration. I will state the reasons at a later part of this order. 11. In clause (iii) of Sub-sec.(1) of the Sec.34 of the Act, the word used ‘has been obtained’ naturally follows that this clause will have to be read altogether with the word "for being elected or nominated as a member of a board" referred to in the main Sub-sec.(1) of Sec.34 of the Act. If so read, it is clear that there is a live decree at the time when he is being elected or being nominated. The section also makes a reference about a certificate obtained under Sec.! 43 of the Act. Under Sec. 143 of the Act, if any decree or award is passed and for recovery’ of the amount, the Registrar can issue a certificate that the decree is alive and the same is liable to be executed. It must be a live decree on the date of nomination. It can also be inferred from the later portion of Sub-sec.(2) of Sec.34 of the Act, where the disqualification is for a period of three years from the date on which the dues referred to have been fully cleared. Clauses (a) and (b) also pre-suppose that on the date of nomination the candidate must be in default. If the debt has already been cleared before the nomination, I do not think the disqualification under Sec34(1) of the Act will apply. 12. A similar question came up for consideration in a case reported in T.T.Sivashanmugham v. The Registrar of Co-operative Societies, Madras-5 and another, (1986)2 M.L.J. 418 , wherein Justice Nainar Sundaram (as he then was) considered the scope of Sec.28(1)(b)(i) and Sec.28(2) of the Act.
12. A similar question came up for consideration in a case reported in T.T.Sivashanmugham v. The Registrar of Co-operative Societies, Madras-5 and another, (1986)2 M.L.J. 418 , wherein Justice Nainar Sundaram (as he then was) considered the scope of Sec.28(1)(b)(i) and Sec.28(2) of the Act. In that decision, it has been held thus: "28 (1): No person shall be eligible for being elected or appointed as a member of a Committee if he- (b) (i) is in default to the Society or to any other registered Society in respect of any loan or loans taken by him for such period as is prescribed in the by-laws of the Society concerned or in any case for a period exceeding three months;" The rule invoked by the second respondent to exercise the power of removal is Rule 40 of the Rules framed under the Act. The show cause was issued on 8th April, 1985. The default relates to February, 1980. Admittedly, the dues have been collected in December, 1980. Hence either on the date of the show cause or on the date of the passing of the order by the second respondent, the petitioner could not be held to be in default to the society in question within the meaning of the said provision. The set of expressions used in the provision extracted above is "is in default to the Society." Sec.28(2)(a) merely says that a member of the Committee shall cease to hold office, if he becomes subject to any of the disqualifications mentioned in Sub-sec.(1). If a member of the Committee "is in default to the Society," within the meaning of Sec.28(1) (b)(i) of the Act, on the date of the initiation of the action under Rule 40, the exercise of the power of removal may be held to be competent. We can take it that if on the date of the show cause, namely, on 8th April, 1985, the petitioner was in default within the meaning of Sec.28(l)(b)(i) and if there was a clearance of the dues only after the show cause and before the passing of the order, that may not bring him any amelioration with regard to the default. Such view has been expressed by Kailasam, J. (as he then was) in Ramakrishna Reddiar v. The Deputy Registrar, (1970)1 M.L.J. 197 .
Such view has been expressed by Kailasam, J. (as he then was) in Ramakrishna Reddiar v. The Deputy Registrar, (1970)1 M.L.J. 197 . But here long before the date of the show cause, namely 8th April, 1985, the petitioner had cleared the dues, and he could not be held to have been in default to the society in question, on the date of initiation of action. Hence, it is not possible to bring the matter within the ambit of Secs.28(l)(b)(i) and 28(2) .(a) of the Act. The facts being what they are, the proceedings of the second respondent dated 7th August, 1985 against the petitioner cannot be sustained at all. The petitioner did prefer an appeal against the proceedings of the second respondent to the first respondent, and sought for stay. The first respondent has neither granted the stay nor has he fixed a date for the disposal of the appeal. The result, from the view point of the petitioner, is really oppressive and prejudicial. The proceedings of the second respondent are contrary to the terms of the provisions themselves. Under these extraordinary circumstances, the petitioner has rushed to this Court seeking to quash the proceedings of the second respondent as well as impeaching the order of the fust respondent declining stay. It is true that the prayer is not happily worded, but that does not alter the substance of the grievance of the petitioner and the real remedy he is after." The liability under the decree must subsist on the date of filing the nomination. In this case, there cannot be any disqualification for standing for an election. 13. It is clear from Sec.34(2) of the Act that a Member of the Board shall cease to hold his office as such, only if the conditions mentioned therein are satisfied. In this case, the Board was dissolved and a Special Officer was appointed and he was in charge of the office till 1996. The surcharge proceedings were initiated at the time when the 6th respondent was not a member of the Board, and therefore, Sub-sec.(2) may not have any application. He is also not standing for re-election or filed re-nomination as a Member of the Board.
The surcharge proceedings were initiated at the time when the 6th respondent was not a member of the Board, and therefore, Sub-sec.(2) may not have any application. He is also not standing for re-election or filed re-nomination as a Member of the Board. The question of disqualification will arise, only in a case when the 6th respondent or a Member of the Board acquires disqualification and thereafter pays the amount, and three years having elapsed from the date of payment, and the disqualification is also only for the re-election or re-nomination, as a member of that Board. Sub-sec,(2) of Sec.34 of the Act will have no application to the 6th respondent in this case. 14. Now I will come to the scope of the impugned Government Order, which is also challenged in these writ petitions. According to me, the same is unnecessary to be considered, because the validity of a Government Order should not be considered, when it really does not arise for consideration. But in spite of the fact, since counsel for the petitioners argued the same, 1 should express my view. I have already extracted the contents of the impugned G.O. The said Government Order only enables the member to vote at any election in the registered society/or to represent the society in any other registered society and to stand for the election of that other society. Sub-clauses (ii) and (iii) of clause (b) of Sub-sec.(1) of Sec.34 of the Act, also will have to be read along with the G.O., for the disqualification refers to are matters connecting with sub-clauses (ii) and (iii) of clause (b). In sub-clause (ii) the disqualification is the defaulting member is a representative of a registered society which is in default to the financing bank. Admittedly the 6th respondent has no disqualification. The 6th respondent is not taking advantage of the impugned G.O., for any purpose. The question whether it has constitutional validity or it violates Sec. 171 of the Act, does not arise for consideration in this case, since even without considering the same, I hold that the 6th respondent cannot be disqualified on the allegations made in the writ petitions. 15. The 6th respondent along with some of the petitioners filed the nomination, and the same was accepted. He was also duly elected and now he is the President of the Board of Directors.
15. The 6th respondent along with some of the petitioners filed the nomination, and the same was accepted. He was also duly elected and now he is the President of the Board of Directors. Under the above circumstances, I do not think that writ petitions could be maintained against him, and the proper remedy of the petitioners is only to raise a dispute under Sec.90 of the Act. Sub-sec.(3) of Sec.34 of the Act reads thus: “(3) The Board of a registered society may suo motu,. and shall on an application made by any person consider whether any member of the board was or has become disqualified to hold office as such under this section and take a decision. Such a decision shall be communicated to the member and the applicant concerned, if any: Provided that no decision shall be taken unless the member of the board is given an opportunity of making his representation: Provided further that pending such decision, the member of the board shall be entitled to continue as such as if he is qualified or is not disqualified.” 16. Sec.90 of the Act provides for settlement of election disputes also. If a nomination is filed and accepted, the question whether he was eligible to be elected or whether his election has to be set aside are all matters to be considered under Sec.90 of the Act. When a machinery is provided under the Co-operative Societies Act. the provisions of Art.226 of the Constitution, under normal circumstances should not be invoked. The Cooperative Societies Act is self-contained Code by itself. 17. In the result, I do not find any merit in the writ petitions and consequently, they are dismissed. No costs. The connected W.M.Ps., are closed.