Board of Directors of The Decent Junction Service Co-Operative Bank Ltd. v. Registrar of Co-Operative Societies, Thiruvananthapuram
2017-10-04
SHAJI P.CHALY
body2017
DigiLaw.ai
JUDGMENT : 1. These writ petitions are filed by the Board of Directors of the Decent Junction Service Co-operative Bank Ltd., Kollam, and the members of the said bank respectively. The basic reliefs sought for in the writ petition are in respect of conduct of election to the aforesaid bank. Since the writ petitions have common feature, I have heard them together and propose to deliver a common judgment. Facts discernible from W.P.(C) No.24376 of 2017 are described in order to dispose of both the writ petitions. 2. Petitioner is the Board of Directors of the Bank specified above. The main activities of the bank is disbursing agricultural and non-agricultural loans to its members, and receiving deposits from members and non-members etc. etc. The area of operation of the society is within Thazhuthala Village of Thrikovilvattom Grama Panchayat. The total number of members is 11374 and the total deposit is Rs.128 Crores. The total loan amount is Rs.21 Crores, and the bank is running on profit from the year 2000 onwards. The bank is also classified as Class-I Special Grade. 3. The bye-law of the society was approved by the 2nd respondent, in which the area of operation of the society is clearly mentioned in clause 5, evident from Ext.P1. Initially, the area of operation of the society was in one ward of the Thrikovilvattom Panchayat, when the total number of wards were only 7. At present there are 23 wards in Thrikovilvattom Panchayat after several bifurcations. Thus the area of operation is now in three wards of Thrikovilvattom Panchayat, and the area of operation of Thrikovilvattom Service Cooperative Bank, which was established prior to the petitioner society is extended to 20 wards. 4. As per the bye-law of the society, petitioner is entitled to enroll members who acquired the qualification as per clause 5(a) of the bye-law. The existing Board of Directors of the bank were elected in the election conducted on 07.10.2012. The 3rd respondent vide proceedings dated 07.10.2012 approved the voters list prepared by the then managing committee, who are qualified to exercise their franchise in the election to the managing committee. The members who are included in the voters list are members of the bank for the past several years and they have voted in several elections conducted during the past.
The members who are included in the voters list are members of the bank for the past several years and they have voted in several elections conducted during the past. The 5th respondent filed a complaint against Mohanan Pillai, a member of the managing committee of the society, alleging that the said Mohanan Pillai is not residing within the area of operation of the society. On the basis of the complaint, the 3rd respondent issued a notice dated 15.05.2017, to show cause as to why his membership shall not be cancelled. Mohanan Pillai filed W.P.(C) No.17004 of 2017 before this Court and obtained a stay, evident from Ext.P2, and the said writ petition is still pending consideration. 5. The managing committee of the society took resolution No.7 dated 08.07.2017 resolving to conduct election to the managing committee of the society on 17.09.2017, and forwarded the resolution along with supporting documents to the 4th respondent through the 3rd respondent on 13.07.2017, evident from Ext.P3. The power to conduct election is vested with the 4th respondent and the resolution shall be forwarded only through the Assistant Registrar as per the Rules, which thus means, the Assistant Registrar shall forward the resolution immediately to the Election Commission to take a decision regarding the conduct of election. 6. However, the society received a notice from the 3rd respondent on 12.07.2017, stating that the 3rd respondent received a complaint from the 5th respondent alleging that more than 3200 ineligible members are enrolled from outside the area of operation of the society. It is also stipulated thereunder that the managing committee shall remove those persons who are enrolled as members and who are residing outside the area of operation of the society, and report within 15 days to the 3rd respondent, evident from Ext.P4. A list of members who are allegedly become members of the society is also attached with Ext.P4 notice. According to the petitioner, the proceedings initiated by the 3rd respondent are not legal and are not in compliance with any provisions of Kerala Cooperative Societies Act and Rules. 7. As per Rule 16(3), power is vested with the managing committee of the society to remove ineligible members from the membership of the committee after giving them opportunity of making representation, if any.
7. As per Rule 16(3), power is vested with the managing committee of the society to remove ineligible members from the membership of the committee after giving them opportunity of making representation, if any. However, as per Rule 16(4), the Registrar may of his own motion or on a representation made to him by any members of the society or by the financing bank, can remove a member after giving him an opportunity to state his objection, if any, to the proposed action. According to the petitioner, Ext.P4 proceeding is not in accordance with the provisions of the Act. It is also submitted that the action of the 3rd respondent after submitting resolution for conducting the election to the managing committee of the society cannot be justified at all. The society again received another communication dated 17.07.2017, stating that more than 3208 members obtained membership in fake address and another 500 members are also ineligible members, on the basis of the complaint filed by the 5th respondent. In order to remove persons from the membership, notices were issued to 164 persons for personal hearing, and only 5 persons were present in person. 8. It is also stated in the said communication that in order to proceed further in the application filed before the 3rd respondent, as per Circular No.4/2013, it shall be the duty of the 3rd respondent to see that the society has complied with the formalities to conduct the election and for that purpose, the authority wants to conduct an inspection and verify Form 6B register, and hence it is directed to remove all ineligible members and prepare a voters list, evident from Ext.P5. It is thus challenging Exts.P4 and P5 and also seeking direction to the 3rd respondent to forward Ext.P3 to the 1 st respondent immediately, and further seeking direction to the 1 st respondent to take all steps in compliance with Rule 35A of the Kerala Co-operative Societies Rules to conduct the election to the managing committee, this writ petition is filed. 9. During the pendency of the writ petition, the petitioner again adopted a resolution dated 16.09.2017, whereby the election is sought to be conducted on 29.10.2017.
9. During the pendency of the writ petition, the petitioner again adopted a resolution dated 16.09.2017, whereby the election is sought to be conducted on 29.10.2017. According to the petitioner, whatever defects pointed out by the 3rd respondent are all rectified by the petitioner and since Ext.P3 resolution has already become obsolete, Ext.P10 resolution is adopted by the managing committee, in order to conduct the election on 29.10.2017. Fact remains, even Ext.P10 resolution has become obsolete, since there is no sufficient time for conducting election as provided under Rule 35A of the KCS Rules. 10. A counter affidavit is filed by the 3rd respondent, disputing the allegations, claims and demands raised by the petitioner. It is also submitted thereunder that the action initiated by the 3rd respondent by issuing Exts.P4 and P5 are in accordance with law, since the same are based on complaints received by the 3rd respondent from the 5th respondent. It is also submitted that in order to take further action in the resolution of the Board of Directors to conduct election to the Board of Directors of the society, the 3rd respondent has to ensure that 6(B) Register of the petitioner society is complete. It is further contended that the resolution was not forwarded in accordance with the format prescribed for the purpose. However, the same is stoutly refuted by the petitioners in both the writ petitions, and has pointed out that the such a contention cannot be advanced in view of the acceptance of the resolution. Other contentions are also raised justifying the action of the 3rd respondent. A similar counter affidavit is filed in the other writ petition also. In view of the common nature of the pleadings, I am not venturing to describe the pleadings contained in W.P.(C) No.27980 of 2017. 11. Heard learned counsel for the petitioners, learned Government Pleader, and the learned counsel appearing for the party respondents in both the writ petitions. Perused the documents on record and the pleadings put forth by the respective parties. 12. The sole question to be resolved now is whether a direction is to be issued to conduct the election to the Board of Directors of the society in question. It is an admitted fact that Ext.P3 resolution was forwarded by the petitioner requesting to conduct the election on 17.09.2017.
12. The sole question to be resolved now is whether a direction is to be issued to conduct the election to the Board of Directors of the society in question. It is an admitted fact that Ext.P3 resolution was forwarded by the petitioner requesting to conduct the election on 17.09.2017. However, on the basis of the complaint submitted by the 5th respondent, Ext.P4 was issued along with a list of ineligible members and issuing directions accordingly to remove them from the list of membership. Now the period of the society is due to expire on 07.10.2017. The Board of Directors of the society is operated by a democratically elected body, and as per the prescriptions contained in the Kerala Co-operative Societies Act and the Rules, election to the society shall be conducted sufficiently earlier to the expiry of Board of Directors in order to ensure that a democratic body is always available in the management of the society. The members can be removed from the membership if they are ineligible after issuing notice and hearing them by the managing committee of the society. However, Rule 35A of the Kerala Co-operative Societies Act Rules enable the electoral authorities to remove ineligible members from the voters list. So, when the draft voters list is published, every opportunity is available to the members to object to the draft voters list and the Electoral Officer is vested with powers after considering objections, to remove the members from the voters list. 13. That being the situation, I am of the considered opinion that the issue can be given a quietus by issuing direction to the respondents to conduct the election within a time frame. However, the question remains to be considered is, what is the nature of administrative committee to take over the management of the society since the period is expiring on 07.10.2017. Learned Government Pleader as well as the learned counsel appearing for the 5th respondent submitted that the society should be controlled and managed by an administrative committee appointed by the State Government. It is also submitted that there are allegations against the members of the managing committee, and therefore, none of the members of the managing committee shall be appointed to manage the affairs of the society. 14. I have considered the rival submissions made across the Bar.
It is also submitted that there are allegations against the members of the managing committee, and therefore, none of the members of the managing committee shall be appointed to manage the affairs of the society. 14. I have considered the rival submissions made across the Bar. From the pleadings, what I could gather is that one managing committee member viz., Mohanan Pillai is issued with notice by the statutory authority. However, the same is stayed by this Court in a writ proceeding. Therefore, in my considered opinion, since I propose to issue a direction to conduct the election, the term of the administrative committee can only be for a short period. Accordingly, any three members of the managing committee other than Sri. Mohanan Pillai can be appointed as the administrative committee. 15. Therefore, there will be a direction to the respondents to appoint any three members of the managing committee as administrative committee to manage the affairs of the society, on the expiry of the term of the managing committee on 07.10.2017. Steps shall be taken by the competent among the respondents to appoint the administrative committee. The administrative committee so appointed shall take immediate action and forward a resolution to the 3rd respondent so as to conduct the election, within two weeks from the date of receipt of a copy of this judgment to conduct the election within a period of two months from the date of receipt of a copy of this judgment. On receipt of the resolution from the administrative committee, the 3rd respondent shall take immediate steps in accordance with law to conduct the election within the time frame prescribed above. Resultantly, the writ petitions are allowed to the above extent.