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2001 DIGILAW 194 (KAR)

Vidyodaya Vidya Peetha Education Society by its Secretary v. State of Karnataka

2001-02-27

H.N.TILHARI

body2001
ORDER Hari Nath Tilhari, J.—By this Writ Petition, the Petitioners have challenged the memo dated 25.11.1999 bearing No. Gee. Bem (Gra) Sangha Samsthe 10 of 1999-2000 annexure as Annexure-C to the Writ Petition No. 43275 of 1999. It has to be mentioned there in that this Annexure-C is the same document which is Annexure-G in Writ Petition Nos. 44754-55 of 1999. 2. According to the Petitioners, the society convened its General Body Meeting in July, 1999. But in view of the fact that the general elections were notified, the Petitioner's society has forced to postpone the elections and the same was intimated to the Respondent No. 2-Registrar. According to the allegations made at paragraph-4, after the completion of general election process, the society took a decision to convene the annual general body meeting in its office bearers meeting held on 8.11.1999 and one T. Srinivas was nominated to be the Returning Officer to convene the elections and the Calendar of Events as well as invitation/notice of Annual General Body Meeting letter was issued. The Petitioners' case is that after the declaration of results, a letter appears to have been issued on 24.11.1999 by the Hon'ble Minister for Department of Co-operation under reference as mentioned in Annexure-C and a memo was issued on 25.11.1999 in pursuance of the Minister's letter that the election of the general body which is scheduled to be held on 5.12.1999 and the process of which had commenced earlier be postponed and be not held and the memo directed that the said election had not to be held. In view of the two letters namely letter dated 24.11.1999 from the Co-operation Minister and the letter of reference dated 8.11.1999 issued by the District Registrar, Bangalore Rural Sangha Samste No. 10 of 1999-2000, as there was a proposal sent to the Government to appoint the Administrator to this Institution, the Registrar ordered that since it has come to the notice of the authorities that the President of the Institution and the Secretary thereof that process of election has been initiated and it was being directed that the said elections be not held until further orders. It is this notice that has been challenged in these petitions. The Petitioners have filed these petitions on the ground that they have got no alternative remedy but to file these petitions. These petitions were filed on 2.12.1999. It is this notice that has been challenged in these petitions. The Petitioners have filed these petitions on the ground that they have got no alternative remedy but to file these petitions. These petitions were filed on 2.12.1999. The order of this Court dated 3.12.1999 reads as under: Issue Rule and directed the Government Advocate to take notice for Respondents-1 and 2. Further, Interim stay of Annexure-C subject to the condition that the result of elections will be subject to the further orders in this petition. List for further orders on 11.1.2000. 3. In pursuance of this Interim order, the process of election which has started earlier was allowed to continue and culminate in the elections been held and as well as in voting and results being announced declaring the new governing body or executing body of the society. But, the result has been subject to final decision of the writ petition. In this context of facts it will also be proper to refer to the subsequent development which has come in the way of filing of writ petition Nos. 43275 of 1999 and 44754-55 of 1999. It appears that on 3.12.1999, the Government passed an order appointing the administrator and this order was published in Official Gazette on 4.12.1999. By Communication dated 6.12.1999, Respondent No. 4-Administrator had intimated the Manager, UCO Co-operative Bank, Doddalahalli and the Manager, State Bank of Mysore, Kanakapur about his appointment as Administrator and the Respondent No. 1 has also passed an order appointing Respondent No. 4 as an administrator vide Government Order dated 3.12.1999. 4. The Petitioner in the Writ Petition No. 43275 of 1999 has challenged the order dated 25.11.1999 and sought for its quashing and declaration of the said order, was illegal, null and void. While in the Writ Petition Nos. 44754-55 of 1999, Petitioners have sought for quashing of the proceedings and the order of the Government dated 3.12.1999 in No. Kam. Ee, 63.MU. No. SO.99, Bangalore at Annexure-L to the writ petition, where by the Administrator had been appointed. The Petitioners have also prayed for grant of such further and other orders as are deemed necessary in the circumstances of the case. The Petitioners have challenged the order of appointment of Administrator to be illegal and in-operative on the grounds that the administrator could not be appointed under Section 27-A of the Karnataka Societies Registration Act, 1960. The Petitioners have also prayed for grant of such further and other orders as are deemed necessary in the circumstances of the case. The Petitioners have challenged the order of appointment of Administrator to be illegal and in-operative on the grounds that the administrator could not be appointed under Section 27-A of the Karnataka Societies Registration Act, 1960. In the matter of appointment of an Administrator, according to law the State Government can, on the report of Registrar or otherwise under the provisions of law and in the requirements thereof is to hold an enquiry as to the affairs of Society concerned after giving opportunity of hearing to the party concerned, it (Government) can/may appoint an Administrator where it is necessary in the public interest to appoint an Administrator. The Government may appoint an Administrator for a period not exceeding six months. 5. The learned Counsel for the Petitioners urged with emphasis that as no enquiry was initiated or directed against the Petitioner's Society, it was not possible for any enquiry report being submitted. Until and unless enquiry into the affairs of Society was held and report by enquiry officer was submitted until mind was applied the question of public interest required the Administrator being appointed, no Administrator could be appointed, that on notice being issued to Respondents of the three writ petitions, on behalf of Respondent No. 1, counter affidavit i.e. Statement of objections has been filed in Writ Petition Nos. 44754-55 of 1999 only, but no counter affidavit has been filed on behalf Respondents in Writ Petition No. 43275 of 1999. 6. The learned Government Advocate invited my attention to the allegations at paragraphs-2 and 4 of the statement of objections. Paragraph 2 and 4 of the said statement of objections are being quoted in extenso: 2. While it is true that the 1st Petitioner society was registered over 3 decades ago and that it was functioning satisfactorily for the major part thereof it is denied that the society has been functioning satisfactorily or in accordance with law during the past few years. The 1st Petitioner society has not been conducting its affair either at the board of management level or at the general body level by duly complying with all statutory requirements. The 1st Petitioner society has not been conducting its affair either at the board of management level or at the general body level by duly complying with all statutory requirements. It had come to the knowledge of the 1st and 2nd Respondents that the affairs of the society were not being managed in a satisfactory or legal manner much to the dissatisfaction and disapproval of many knowledgeable members and by any objective assessment. It had also come to the light that there was considerable discard within the board of management mainly due to the attitude adopted by the present secretary who had been acting arbitrarily with the support of a minority number of board members who had been making it impossible for the other members to meaningfully participate in meeting deliberations. No proper proceedings of the board were being conducted. The earlier President and Secretary had also resigned as far back as 1996. Thereafter without issuing proper meeting notices and without having the requisite quorum, the affairs of the society were being run by the Secretary very much as a one man show. It was in this context that the 11.5.1999 Annexure-A notice was issued for the explanation of the society in respect of irregularities pointed out. It is submitted that the 20.5.1999 Annexure-B reply thereto was not found satisfactory as it also contained false and untenable material. It is denied that the show-cause notice under Section 27-A was expressly or impliedly withdrawn or dropped as sought to be made out inter alia in paras 4 and 15(b) of the petition. 4. Since no meeting of the Board and more particularly of the General Body were being held as required under the bye-laws of the 1st Petitioner society as well as under the law applicable thereto the 15.7.1999 Annexure-C notice was issued to the 1st Petitioner society. The 1st Petitioner society committed a default of the requirement specified in the said Annexure-C notice by failing to hold the Annual General Body Meeting within the 2 months time granted therefore. It was thus proved that the said default on the part of the present board of management of the 1st Petitioner society was due to either its in-competence or its wilful default. The 10.9.1999 Annexure-D reply of the 1st Petitioner society is clearly one sent by the Secretary acting unilaterally. It was thus proved that the said default on the part of the present board of management of the 1st Petitioner society was due to either its in-competence or its wilful default. The 10.9.1999 Annexure-D reply of the 1st Petitioner society is clearly one sent by the Secretary acting unilaterally. He had failed to take any steps to convene a proper meeting of the Board of Management. Also the Secretary and those in charge of the affairs of the 1st Petitioner society failed to take any steps as expected of therein pursuant to the direction contained in the Annexure-C notice. The request made in Annexure-D was untenable, unreasonable, false and even otherwise liable to be rejected. It was clearly an after thought to try to justify the defaults on the part of the management of the 1st Petitioner society. The Petitioner society was also issued a notice dated 25.10.1999 to show cause against the appointment of an administrator. A copy of that notice is the Annexure-R-1 hereto. No proper reply thereto was received. The letter dated 02.11.1999 did not make out any ground for not appointing an administrator. 7. From the perusal of paragraphs-2 and 4 of the statement of objections, it comes out that the case of the Respondents that the Petitioner's society was issued a notice on 25.10.1999 to show cause against the appointment of an Administrator and according to it no proper reply thereto was received. The Respondents has annexured the same as Annexure-R-1. Annexure-R-1 dated 25.10.1999 no doubt appears to have been issued by the District Registrar. The reference is alleged to have been made to the letter dated 8.11.1999. Annexure-R-1 cannot be read as a notice to the society or to its President either to the then existing President or Secretary of the society or to newly elected President or Secretary of the Society. It is noticed that Annexure-R1 could not be said to be notice sent by the Government after the receipt of the letter from the District Registrar. 8. The learned Counsel for the Petitioners contended that the order appointing the Administrator is in violation and in breach of requirements of law under Section 27-A and he further contended that Annexure-C to Writ Petition No. 43275 of 1999, which is Annexure-G in Writ Petition Nos. 8. The learned Counsel for the Petitioners contended that the order appointing the Administrator is in violation and in breach of requirements of law under Section 27-A and he further contended that Annexure-C to Writ Petition No. 43275 of 1999, which is Annexure-G in Writ Petition Nos. 44754-55 of 1999 is illegal as having been issued without any authority and the Petitioners were not called upon to show cause as to why the Administrator cannot be appointed. The learned Government Advocate in reply to those contentions of the learned Counsel for the Petitioner submits that in the order passed by the Government at Annexure-L in Writ Petition Nos. 44754-55 of 1999, it has mentioned that the President and Secretary of the Institution were notified regarding enquiry and in spite of that they were not present. 9. It has been stated in Annexure-L that there was a references to the 3rd Respondent-Head Quarter Assistant, who was alleged to have been appointed as an Enquiry Officer to investigate the truth of allegations against the Petitioner's society. But, in fact no enquiry notice was issued by the 3rd Respondent and therefore the Petitioners were not aware of such proceedings at all. There was also a reference in the impugned order that sufficient time was awarded to the Petitioner's society to submit annual account but in fact it is against the records. Petitioners have further stated that absolutely no enquiry proceedings was conducted by the Respondent No. 3 and no copy of enquiry report was served on the Petitioners' society and Petitioners were not aware of the nature of report atleast. The Petitioners' case is that the Government neither conducted any enquiry nor served any notice, and the order was passed under Section 27A(c) of the Karnataka Societies Registration Act, appointing the Administrator in violation of the requirement of the law. The learned Government Advocate placed an enquiry report of the Registrar which was admittedly made before reference order was passed, referring the matter to the Government. On the basis of the record produced by the learned Government Advocate, the learned Counsel for the Government has failed to point out that while taking action of under Section 27-A of the Act, any show-cause notice was issued by the Government to the Petitioners. It appears that the Government had also not conducted any enquiry at its level before appointing an Administrator. It appears that the Government had also not conducted any enquiry at its level before appointing an Administrator. Sub-section (1) of Section 27-A of the Karnataka Societies Registration Act, 1960 reads as under: Section 27A. Appointment of Administrator.- Notwithstanding anything in this Act, (1)(a) Where any society on account of the pendency of litigation or otherwise has not held or is unable to hold the annual general meeting; or (b) Where the term of office of the members of the governing body of a society has expired and a new governing body has not for any reason been constituted; or (c) Where on a report made by the Registrar or otherwise, on enquiry, the State Government considers it necessary in public interest so to do, the State Government may, by order published in the Official Gazette, appoint an Administrator for such society for such period, not exceeding six months, as may be specified in the order, to manage the affairs of the society: Provided that for reasons to be recorded in writing the State Government may, by like order, (extend either prospectively or retrospectively, the said period) by any further periods not exceeding six months at a time, so however subject to the provisions of Clause (5), the aggregate period shall not extend beyond (four years); 10. A perusal of Section 27-A(c) reveals that on the receipt of report from the Registrar or otherwise, if after the enquiry, the State Government considers it necessary in public interest so to do, the State Government may, by order published in the official Gazette, appoint an Administrator for such society for such period, not exceeding six months, as it deems fit and proper. That the conducting of an enquiry by the Government itself after receipt of reference is a requirement of law before the order for appointment of Receiver is passed. In the present case there appears to be no dispute that at the Governmental level, no enquiry was conducted by the Government after the receipt of reference from the Registrar. With regard to the law on the subject under Section 27-A Karnataka Societies Registration Act it has been clearly laid down in the case of People's Education Society, Belgaum Vs. State of Karnataka reported in AIR 1980 Kar 151 . With regard to the law on the subject under Section 27-A Karnataka Societies Registration Act it has been clearly laid down in the case of People's Education Society, Belgaum Vs. State of Karnataka reported in AIR 1980 Kar 151 . It has been laid down therein as under: Thus whether on report or otherwise, the State Government may appoint an Administrator only on enquiry and that too if the State Government considers it necessary in public interest to do so. The context in which expression enquiry' occurs in the Section 27-A means enquiry into the affairs of the concerned society. That being so no such enquiry can be made without affording an opportunity to the concerned society. In the instant case no enquiry whatsoever was held by the Government as such the impugned order passed by the State Government adversely affecting the society without affording an opportunity to the society and without holding an enquiry cannot be sustained. The impugned order has also resulted in the substantial failure of justice in as much as the impugned order puts a slur upon the management of the Society without affording an opportunity to the persons concerned with the management of society. 11. Similarly, it has been expressed in the case of Srinivasa Educational Society Vs. State reported in AIR 1980 Kar 165 at para-6 wherein it has been laid down as under: It is useful to notice that under the provisions of Section 27-A of the Act, the State Government is empowered to appoint an Administrator in certain circumstances mentioned in Sub-section (1) of Section 27-A of the Act. Even that power can be exercised only after there has been an enquiry. 12. Perusal of Annexure-C to the Writ Petition No. 43275 of 1999 and Annexure-G to the Writ Petition Nos. 44754-55 of 1999 also gives a picture of the action being taken at the instance of unauthorised persons on assumption of power at that time. As reference is mentioned to letter dated 24.11.1999, which is stated to be sent by Co-operation Minister and this gives a smell as if it culminated in passing of the order of appointment of Administrator without following the requisite requirements and conditions of law by the officers, on account of political interference, if that is so, such interference is one which has always been criticised by the Court. Any way it appears that Annexure-L which has been passed without serving notice on the Petitioners as well as without holding of any enquiry by the Government itself. The notice relied on Annexure R-1 and it is earlier to the date of reference by the Registrar. Therefore, no notice appears to have been served by the Government on the Society's President and Secretary. in the present case Petitioners happened to be the President and Secretary of society prior to elections which had been held on 12.9.1999 as it appears from the letter at Annexure-B dated 10.9.1999 which was issued by the President and Secretary of the Society to the Registrar. These Petitioners have asserted that no enquiry was held by the Government nor was any notice to show cause against the action sought to be taken was issued nor was any served. Thus, considered, I am of the considered view that no enquiry was held by the Government before appointing the administrator. 13. That no authority has been shown on behalf of the Respondents which may be said to provide a power to the Respondents to set aside or cancel the election process, by Annexure-C to Writ Petition No. 43275 of 1999. One of the grounds on which an Administrator is appointed is that elections of members of the society has not been held or to say in the words used under Section 27-A(b) wherein the very term of office of members of governing body of the society has expired and a new governing body has not for any reason been constituted. It means, failure to hold the elections, to elect new governing body. On the expiration of the term of earlier body, may be a ground for Government to exercise the power under Section 27-A and when this could be the ground in some case, it is not conceivable that the Government or the Registrar would be having power to direct the society not to hold elections to elect the new governing body. The order at Annexure-C to Writ Petition No. 43275 of 1999 appears to be without jurisdiction. The order appointing the Administrator has to be quashed as no enquiry has been held by the Government, after issuing the notice to the President and Secretary of the Society, before passing the order of appointing an Administrator. The order at Annexure-C to Writ Petition No. 43275 of 1999 appears to be without jurisdiction. The order appointing the Administrator has to be quashed as no enquiry has been held by the Government, after issuing the notice to the President and Secretary of the Society, before passing the order of appointing an Administrator. As such all the three writ petitions have to be and are hereby allowed. The order at Annexure-C dated 25.11.1999 in Writ Petition No. 43275 of 1999 is hereby held to be illegal, null, void and inoperative. The order appointing an Administrator dated 3.12.1999 contained in Annexure-L to the Writ Petition Nos. 44754-55 of 1999 is also quashed. The body elected on 5.12.1999 election no doubt may continue to administer the society. It is always open to the Government to give, on a proper reference, a notice to society to show cause about the conduct/default of the present society and to hold enquiry and thereafter if it is necessary in the interest of the public to appoint an Administrator, the Government may take action under Section 27-A of the Act. 14. With the above observations, these writ petitions are allowed. Parties to bear their costs.