N. P. PAULOSE v. REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM
2017-04-04
P.B.SURESH KUMAR
body2017
DigiLaw.ai
JUDGMENT : Ext.P1 order, by which the first respondent, the Registrar of Co-operative Societies, has removed the committee of the second respondent, a central society registered under the Kerala Co-operative Societies Act ('the Act'), is under challenge in this writ petition. 2. The bye-laws of the second respondent ('the Bank') provides that its committee shall consist of maximum 21 members including 19 elected members. 19 members were accordingly, elected to the committee of the Bank in the last election. Thereupon, the Registrar of Co-operative Societies has appointed 2 persons to the committee of the Bank as Government nominees. The strength of the committee of the Bank was, therefore, 21. The petitioners were 4 among the elected members of the committee of the Bank. One among the elected members in the committee lost his membership on account of disqualification. The strength of the Committee of the Society thus got reduced to 20. Out of the 20 members in the committee, 8 elected members and the 2 nominees of the Government resigned on 18/02/2017. Ext.P1 order was passed by the Registrar, in the circumstances, exercising the power under Section 33 of the Act, stating that the remaining members in the committee cannot constitute the quorum for the meeting of the committee. As per the said order, the Registrar has constituted an Administrative Committee consisting of respondents 4 to 6 from among the persons resigned from the committee and entrusted the administration of the Bank to that Administrative Committee. The petitioners are aggrieved by the said decision of the first respondent. 3. A statement has been filed by the Registrar of Co-operative Societies reiterating the contents of Ext.P1 order. The resignations submitted by the 10 members in the committee as referred to in Ext.P1 order, have also been produced along with the statement. 4. Heard the learned counsel for the petitioners, the learned Special Government Pleader as also the learned Senior Counsel for the Bank. 5. Relying on Rule 37(5) of the Kerala Co-operative Societies Rules ('the Rules'), the learned counsel for the petitioners submitted that it is for the Registrar of Co-operative Societies to appoint nominees of the Government in central societies. According to the learned counsel, when persons appointed by the Registrar in the committees of central societies as Government nominees resign, it is obligatory for the Registrar to appoint other persons in their place.
According to the learned counsel, when persons appointed by the Registrar in the committees of central societies as Government nominees resign, it is obligatory for the Registrar to appoint other persons in their place. It is contended by the learned counsel that had the Registrar appointed other nominees in the place of resigned nominees in the committee, the situation which necessitated the passing of Ext.P1 order would not have arisen. It was also pointed out by the learned counsel for the petitioners that respondents 4 to 6 were among the persons who have resigned from the committee on 18/02/2017. According to the learned counsel, at any rate, such persons should not have been appointed as members of the Administrative Committee. The learned counsel for the petitioners elaborated the said submission by pointing out that though there is no disqualification for respondents 4 to 6 to be appointed as the members of the Administrative Committee, such appointments are contrary to the scheme of the Act that societies shall be governed by democratically elected committees. It was pointed out by the learned counsel that elections are held to the committee on political lines and the elected members who have resigned from the committee are the representatives of one political alliance and the remaining members including the petitioners are the representatives of another political alliance. According to the learned counsel, the mandate of the members of the Bank in the last election was in favour of the petitioners and by the impugned decision, the Registrar has divested the management of the Bank to respondents 4 to 6 who failed to secure the mandate of the members of the Bank in the election. 6. The learned Senior Counsel for the Bank, per contra, contended that since the committee of the Bank consists of 21 members and since there were only 10 members after the resignation of the remaining members as on 18.02.2017, the first respondent cannot be found fault with for having removed its committee. In other words, according to the learned Senior Counsel, Ext.P1 order is passed strictly in accordance with the provisions contained in Section 33 of the Act.
In other words, according to the learned Senior Counsel, Ext.P1 order is passed strictly in accordance with the provisions contained in Section 33 of the Act. It was also contended by the learned Senior Counsel, relying on the provisions contained in Section 31 of the Act, that the power conferred on the Government under the said provision is to nominate persons into the committees of the societies and if there is no committee, the power cannot be exercised. In other words, according to the learned Senior Counsel, the power under Section 31 to nominate persons into the committees of Apex and central societies can be exercised only when the committees in such societies has the quorum for its meetings. It was further contended by the learned Senior Counsel that there is no disqualification for the resigned members to be appointed in the Administrative Committee. It was also pointed out by the learned Senior Counsel that in the light of the provisions contained in Rule 38 of the Rules, even a person who is not a member of the society can be appointed as a member of its Administrative Committee. 7. The contention of the learned Senior Counsel for the Bank that the Registrar could not have appointed nominees of the Government to the committee of the Bank for want of quorum for its committee was met by the learned counsel for the petitioners contending that there is no automatic cessation of the committee in terms of the provisions contained in the Act and the Rules, even when it ceases to have quorum. According to the learned counsel, even such committees would cease to exist only when it is removed by virtue of an order passed under Section 33 of the Act. The decision rendered by this Court in Sadasivan v. Joint Regostrar ( 1994 (2) KLT 238 ) was relied on by the learned counsel in support of the said proposition.
According to the learned counsel, even such committees would cease to exist only when it is removed by virtue of an order passed under Section 33 of the Act. The decision rendered by this Court in Sadasivan v. Joint Regostrar ( 1994 (2) KLT 238 ) was relied on by the learned counsel in support of the said proposition. Placing reliance on the provisions contained in Rule 38(5) of the Rules, the learned counsel for the petitioners also contended that if vacancies arise on account of the resignation as in the instant case, the scheme of the statute is that the committee shall fill up those vacancies by nomination, if the term of the office of the committee is less than half of its ordinary term in the case of elected members and by fresh nominations by the competent authority, in the case of nominated members. 8. I have considered the contentions raised by the learned counsel on either side. As noted above, the bye-laws of the Bank provide that its committee shall consist of maximum 21 members including 19 elected members. In other words, the bye-laws of the Bank only prescribe the upper limit of the number of members of the committee. Section 31(1) of the Act provides that where the Government have subscribed to the share capital of an apex or a central society, the Government have the right to nominate not more than two persons to the committee of that society. If the provision in the bye-law is understood in the light of Section 31(1) of the Act, it is evident that if the Government nominates one person as its nominee in the committee, the strength would be 20 and if the Government nominates two persons as its nominees in the committee, its strength would be 21. Rule 37(1) of the Rules provides that appointment of nominees of Government under Section 31 of the Act to the Central societies shall be made by the Registrar. The Government have subscribed to the share capital of the Bank. It is, therefore, a society, to which Section 31(1) of the Act applies. The Registrar has, therefore, appointed two nominees to the committee of the Bank. As noted above, both of them have resigned. Rule 38 (5) of the Rules provides that casual vacancies arising in the committees on account of resignation etc.
It is, therefore, a society, to which Section 31(1) of the Act applies. The Registrar has, therefore, appointed two nominees to the committee of the Bank. As noted above, both of them have resigned. Rule 38 (5) of the Rules provides that casual vacancies arising in the committees on account of resignation etc. shall be filled up by fresh nominations in the case of nominated members. Section 31(1) only provides that the Government or any competent authority shall have the right to nominate not more than two persons to the committees of the societies to which the said provision applies. Going by the plain words used in Section 31(1) of the Act, it is evident that the Registrar may or may not exercise that power. The provision also enables the Registrar to appoint one nominee if he chooses to do so. The Registrar has admittedly not appointed Government nominees in the committee of the Bank in the casual vacancies arose on account of the resignation of the two Government nominees earlier appointed. The impugned order is passed on the basis that the existing members in the committee of the Bank do not constitute the quorum for its meeting. 'Quorum' denotes the number of members of a body of persons whose presence at a meeting is requisite for the business to be validly transacted. The relevant statutory provision is Section 28(5) of the Act, which reads thus: "The quorum for a meeting of a Committee shall be such member or members just above fifty per cent of the total number of members of that Committee." Going by the said provision, the quorum for the meeting of a society has to be decided with reference to the total number of members in the committee of that society. It is beyond dispute that the committee had 10 members on the date of the impugned order. If the number of the Government nominees are not reckoned for the purpose of determining the total number of members of the committee, the committee had quorum since the total number of members remaining after the disqualification of one member was only 19. On the other hand, if the number of the Government nominees are also reckoned for the purpose of determining the total number of members of the committee, the remaining members in the committee would not constitute the quorum.
On the other hand, if the number of the Government nominees are also reckoned for the purpose of determining the total number of members of the committee, the remaining members in the committee would not constitute the quorum. The question, therefore, is whether the number of Government nominees resigned from the committee of the Bank is liable to be reckoned for arriving at the total number of members in the committee for the purpose of determining the quorum. 9. In Moideen v. Registrar of Co-operative Societies ( 2008(2) KLT 184 ), in the context of a central society where the Government have subscribed to the share capital, this Court took the view that the Government nominees are members of the committee in the fullest sense and therefore, if they are members of the committee on the date of the meeting, its quorum shall be such number of persons just above 50 per cent of the total number of members of the committee consisting of its elected members in terms of Section 28(1), and the nominated members in terms of Section 31(1) of the Act. Paragraphs 6 and 7 of the said judgment read thus: 6. The term "committee" is defined in S.2(e) of the Act, to mean the governing body of a cooperative society, by whatever name called, to which the management of the affairs of the society is entrusted. S.28(1) obliges the general body of a society to constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee. S.31(1) provides a right with the Government to nominate persons to be members of the committee. As noticed in N. Sudarsanan (supra), the only restriction on the nominated member is abstinence from participation in the discussion of any no-confidence motion and voting thereon. Subject to such restriction, the Government nominees are members of the committee, in the fullest sense. Their nomination is envisaged in S.31 to protect the interest of the Government, as is apparent from a plain reading of S.31(1) of the Act. Their participation is legislatively sanctioned to the fullest extent, except for the abstinence ordered in sub-s.(3) of S.31. The result of nomination in terms of S.31(1) is that the nominated person becomes a member of the committee.
Their participation is legislatively sanctioned to the fullest extent, except for the abstinence ordered in sub-s.(3) of S.31. The result of nomination in terms of S.31(1) is that the nominated person becomes a member of the committee. There can be no further classification between the nominated members and the elected members unless the Legislature has prescribed it. This is also the reason for R.37(2) of the Rules. 7. S.28(5) of the Act provides that the quorum for a meeting of a committee shall be such number of members, just above fifty per cent of the total number of members of that committee. The quorum rule provided by S.28(5) applied for a meeting. The time and place for determining the quorum for a meeting is the meeting itself. The prescription is that the quorum shall be such number of members, just above fifty per cent of the total number of members of that committee, thereby meaning the committee of which a meeting is being held. As on the date of meeting, the nominees of the Government are members of the committee in terms of S.31(1). The quorum for a meeting has to be above fifty per cent of the total number of members of that committee which is to meet, meaning thereby, the committee in office as on that day. This, indisputably, is the committee comprising of those in the committee in terms of S.28(1) and those in the committee by virtue of their nomination in terms of S.31(1) of the Act. (underline supplied). It is explicit from the said judgment that the view aforesaid has been taken by this Court as the nominees of the Government were members of the society involved in that case at the relevant time. 10. As noted above, the bye-laws of the Bank only provide for an upper limit of the number of the members of its committee. It is now settled that the upper limit of the number of the members of the committee do not ipso facto constitute the number of members of the committee. In such cases, the number of members of the committee will be the number of members of the committee which were occupied by election or otherwise as per the terms of the bye-laws. [See Registrar of Co-op Societies v. Ahamed Ali (2007 (2) KLT 320)].
In such cases, the number of members of the committee will be the number of members of the committee which were occupied by election or otherwise as per the terms of the bye-laws. [See Registrar of Co-op Societies v. Ahamed Ali (2007 (2) KLT 320)]. In the light of the provisions contained in Section 31(1) of the Act, it is not disputed before me that had the Registrar not appointed any Government nominees in the committee of the bank, the total number of members in the committee can be reckoned only as 19. If that be so, according to me, the resignation of Government nominees cannot bring about a different consequence as regards the quorum, if the competent authority does not appoint fresh nominees in the place of resigned nominees. Further, Section 31(3) of the Act prohibits the Government nominees from taking part in the discussion of any no confidence motion or vote on any such motion. Section 31(3) of the Act reads thus: Section 31: [Nominees of Government on committee of an apex or a Central society. x x x x x x (3) A person nominated to the committee of an apex or a Central society under sub-section (1) shall not take part in the discussion of any no-confidence motion or vote on any such motion. It is evident from the said provision that the intention of the legislature is that Government nominees shall not decide the fate of the elected committee. If the total number of the members of the committee is reckoned as number of members including the Government nominees even when they resign, it is beyond dispute that in a case of this nature, the Government nominees would decide the fate of the elected committee in societies to which Section 31(1) of the Act would apply. Such an interpretation would not only go against the scheme of the statute but also against the scheme of the Constitution, especially in the light of Article 43B of the Constitution. The scheme of the statute and the scheme of the Constitution is that the societies shall be administered by democratically elected committees.
Such an interpretation would not only go against the scheme of the statute but also against the scheme of the Constitution, especially in the light of Article 43B of the Constitution. The scheme of the statute and the scheme of the Constitution is that the societies shall be administered by democratically elected committees. In the circumstances, I am of the view that in cases where the competent authority does not appoint Government nominees in the committees of the societies to which Section 31(1) apply either at the time when it is formed or later when casual vacancies arise on account of their resignation etc., the total number of members of the committee shall be reckoned excluding the Government nominees for the purpose of determining the quorum. It is beyond dispute that if the number of the Government nominees are not reckoned for the purpose of determining the total number of members in the committee, the remaining members in the Committee, viz, 10, would constitute the quorum. The petitioners, in the circumstances, are entitled to succeed. In the result, the writ petition is allowed, Ext.P1 order is quashed and the first respondent is directed to put back the removed committee in office, forthwith.