P. v. BALACHANDRAN CHANDRA ESTATE VS REGISTRAR OF CO-OPERATIVE SOCIETIES
2017-04-10
DEVAN RAMACHANDRAN
body2017
DigiLaw.ai
JUDGMENT : The prescription of a quorum is the best assurance against totally heteroclite action in the name of a deliberative body by an unduly small number of persons. 2. The semantic definition of quorum is the minimum number of members required for a group to officially conduct business and to cast votes, often but not necessarily a majority or super majority. 3. Each cogitative body determines the number of members that constitutes a quorum in its governing documents such as its constitution, charter, bye-laws, etc. The quorum may also be set by law. 4. These two writ petitions are being considered together since the common issue involved is as to the availability of quorum for a meeting of the members of the Board of Directors of Wayanad District Co-operative Bank Ltd. ('the Society' for brevity). 5. The proper resolution of this question is acme in these proceedings because the statutory regulatory authorities have concluded that the number of members of the Board of Directors of the Society is so low that no meeting of its can be now conducted, thus leading to a stalemate in its management. 6. I see that W.P.(C)No.3258/2017 has been filed by the petitioner, who claims to be the President of the aforementioned Society and W.P.(C)No.4734/2017 is filed by nine others, who claim to be the members of the Board of Directors of the same Society. 7. The principal assertion in these writ petitions is that the petitioners, being ten in number totally, will be enough to constitute the minimum quorum required for the meetings of the Board of Directors for functioning of the Society. The context in which these assertions have been made is that the Government has issued an order, which has been appended as Exhibit P9 in both these writ petitions, holding that the Society does not have enough quorum so as to constitute a legally valid meeting of the committee and that therefore, the elected committee requires to be removed and an Administrative Committee appointed in its place. The petitioners are challenging Exhibit P9 on various grounds but primarily on the avouchment that even going by the statements contained in Exhibit P9 order, the Society would obtain enough quorum to have a valid meeting of the Board of Directors. 8. I have heard Sri. B.S. Swathikumar, the learned counsel for the petitioners, Sri.
The petitioners are challenging Exhibit P9 on various grounds but primarily on the avouchment that even going by the statements contained in Exhibit P9 order, the Society would obtain enough quorum to have a valid meeting of the Board of Directors. 8. I have heard Sri. B.S. Swathikumar, the learned counsel for the petitioners, Sri. P.P. Jacob, the learned counsel for respondents 2 to 5 and 8 in W.P.(C)No. 4734/2017 and the learned Special Government Pleader for the official respondents. 9. I have examined the order impugned in these writ petitions, namely Exhibit P9. I do not propose to speak anything contrary to the statements contained in Exhibit P9 because I am of the view that even taking the statements contained in the said order as being true, the conclusions reached therein perhaps would not be sustainable. This is the assertion of the petitioners also, who have virtually given up all other contests against the facts recorded in the said order and they say that even if the facts and the statements contained therein are taken to be true, subject, of course, to their challenge in appropriate proceedings, the conclusion arrived therein that the Society will not obtain a quorum for the meeting of the Board of Directors would not be sustainable or worthy in law. 10. I notice that Exhibit P9 order says that there are only ten members in the Board of Directors as of now in the Society. It records that, as per the bye-laws of the Society, the maximum strength of membership is eighteen elected members and three nominated members by the Government. Of course, after the amendment to Section 31 of the Kerala Co-operative Societies Act, 1969 the maximum nomination by the Government can only be two. For such event, notwithstanding what the bye-laws say, the total membership of the Society can be only twenty and nothing more. The question is whether with the ten available members, as is recorded in Exhibit P9 order, the Society can be seen to obtain a validly constituted Board with a minimum quorum for its meetings.
For such event, notwithstanding what the bye-laws say, the total membership of the Society can be only twenty and nothing more. The question is whether with the ten available members, as is recorded in Exhibit P9 order, the Society can be seen to obtain a validly constituted Board with a minimum quorum for its meetings. I see that in Exhibit P9, the Registrar of Co-operative Societies has held that at least eight of the members face disqualification one way or the other, and taking these alleged disqualifications to be correct and credible, subject of course to the remedies as are available to such members, the further statements in Exhibit P9 would concede that there are ten members now available in the Board. The question is whether ten members would be sufficient to constitute a minimum quorum. 11. The law relating to quorum in the Act is governed by Section 28(5), which reads as under: "The quorum for a meeting of a committee shall be such number of members just above fifty percent of the total number of members of that committee." The question as to how a quorum has to be recognised and how a quorum has to be reckoned has been dealt with by this Court in several decisions. In the judgment of a Division Bench of this Court reported in Subair Kunju v. Trivandrum Taluk M & P. Co-op. Society ( 1990 (2) KLT 548 ), the declaration of law is as under: "As per the above Cause, the upper limit of the strength of the committee has been fixed. Fixation of the upper limit does not mean that the strength of the committee shall always be of that number. It can be of any number below the upper limit in the same way as it can be of its maximum strength. Fixing the upper limit is to ensure that it shall not, in any contingency, exceed the number. The 2nd respondent has no case that the Society has at any time decided that the strength of the committee of the Society shall be nine. As a matter of fact, the committee had only seven members. That means the strength of the committee has never gone upto the maximum provided by Clause 5.1 of the Bye-laws.
The 2nd respondent has no case that the Society has at any time decided that the strength of the committee of the Society shall be nine. As a matter of fact, the committee had only seven members. That means the strength of the committee has never gone upto the maximum provided by Clause 5.1 of the Bye-laws. In that view of the matter, absence of three members either by resignation or otherwise would not reduce the quorum, since four members will be sufficient to constitute quorum." Similarly, a Full Bench of this Court in Registrar of Co op. Societies v. Ahamed Ali (2007 (2) KLT 320), considered these issues quite in extenso and declared the law as under: "We have gone through the unamended bye-laws and the amended bye-laws extensively. The main point that has to be considered in this case is what is the number of members of the Board of Directors of the society on the date of their removal, whether it is 25 or 20 as submitted by respondents? Bye-laws of the society states that the number of Board of Directors shall not be more than 25, which would only show that the bye-laws prescribe only the upper limit of the number of Board of Directors and the total number of the Board of Directors can always be fixed by the committee and election be conducted to fill up the strength. Board of Directors have no power to fill up the total strength beyond 25 which is fixed by the bye-laws. A reading of R.35(3)(h) of the Rules also reveal that the mere maximum limit of the Board of Directors stated in the bye-laws do not ipso facto constitute that number of the committee members. Bye-laws of the society at its inception was that the management of the affairs of the society shall vest in a Board of Directors. Later an amendment was recommended by the general body and the same was registered on 10-5-2005 in which, the affairs of the society is vested in Board of Directors consisting of not more than 25 members. The Board of Directors are constituted from different categories. The details of the Board of Directors after the election on 11.7.2002 under various constituencies reveal the total number as 20. This in our view has to be taken as the strength of the Board of Directors so as to calculate the quorum.
The Board of Directors are constituted from different categories. The details of the Board of Directors after the election on 11.7.2002 under various constituencies reveal the total number as 20. This in our view has to be taken as the strength of the Board of Directors so as to calculate the quorum. If so calculated, the Board of Directors have got quorum since they have 11 members out of 20." By a subsequent judgment of a learned Single Judge in Moideen v. Registrar of Co operative Societies ( 2008 (2) KLT 184 ), it was concluded that the legal prescription is that the quorum shall be such number of members just above 50% of the total number of members of the committee, the committee thereby meaning one of which a meeting is being held. The opinion of the learned Single Judge is available in paragraph 7, which makes very interesting reading and is, therefore, extracted as under: "S.28 of the Act provides that the quorum for a meeting of a committee shall be such number of members, just above fifty percent of the total number of members of that committee. The quorum rule provided by S.28(5) applies 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 percent 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 percent 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." 12. Therefore, it is ineluctable, from a combined reading of the ratio of the judgments above and the imperative statutory prescription, that a meeting of a committee shall obtain a minimum quorum if it has in attendance more than half of the total number of members of the committee.
Therefore, it is ineluctable, from a combined reading of the ratio of the judgments above and the imperative statutory prescription, that a meeting of a committee shall obtain a minimum quorum if it has in attendance more than half of the total number of members of the committee. The quorum for the purpose of a meeting shall be such members just above 50% of the total number of members of that committee. In the case at hand it is virtually conceded that as per the bye-laws of the Society and because of the amendment to Section 31 as noticed above, the maximum number of members of the Board of Directors of the Society can be not more than twenty, out of which eighteen is elected. It is unequivocally admitted in Exhibit P9 order itself that the Government have not nominated two of the members that it ought to have done. In such view of the matter, the maximum number of members of the committee cannot exceed eighteen since it is only after the nomination by the Government can the Committee reach its maximum strength. In any event, the law being as declared in the precedents supra, the determination of quorum is not dependent on the maximum number of members prescribed by the bye-laws, but on the actual number of members elected/nominated to the committee. 13. Thus, taking eighteen to be the maximum number of members of the committee as of now, half of it can only be nine and more than one half would make it ten. In such view of the matter, even going by the statements in Exhibit P9 that the Society has a minimum of ten members in its Board as of today, the findings and the conclusions contained therein, that such number will be insufficient to constitute a valid quorum for the meeting of the Board of Directors, cannot be factually accurate, credible or sustainable. My opinion is underpinned purely on a basic mathematical calculation and I am not going into the merits or quality of the allegations contained against the members who are alleged to be facing disqualification. Even assuming it to be true that eight members are facing disqualification, the Registrar of Co-operative Societies records that ten members are still available.
My opinion is underpinned purely on a basic mathematical calculation and I am not going into the merits or quality of the allegations contained against the members who are alleged to be facing disqualification. Even assuming it to be true that eight members are facing disqualification, the Registrar of Co-operative Societies records that ten members are still available. If that be so, it is perspicuous and indisputable that a minimum quorum can be obtained for a meeting of the Board of Directors even as of now. That being said, the directions in Exhibit P9 to constitute an Administrative Committee to take office by removing the elected committee of the Society does not appear to be cogent or justifiable at all. 14. In such view of the matter and without going into the merits of any of the other allegations or imputations contained in these proceedings, I quash Exhibit P9 because I see that concededly there are ten elected members in the Board of the Society, as has been recorded by the Registrar of Co-operative Societies itself, and that, therefore, it will be sufficient to constitute a minimum quorum. 15. Exhibit P9 thus being quashed, the sixth respondent - Joint Registrar of Co-operative Societies will be obligated to re-instate the petitioners into the management of the Society, being the elected members, subject to the procedure as may be requisite under the laws. This shall be done by the Joint Registrar forthwith. 16. At this point of time, the learned counsel for some of the respondents pointed out that one of the petitioners, who is a member of the Board of Directors of the Society, also faces an automatic disqualification. He refers to Mr. C.M. Babu, who is the ninth petitioner in W.P. (C)No. 4734/2017. I do not propose to go into these allegations in detail at all because what is before me in these proceedings is an adjudication as to whether Exhibit P9 is valid in law and whether it concludes rightly.
He refers to Mr. C.M. Babu, who is the ninth petitioner in W.P. (C)No. 4734/2017. I do not propose to go into these allegations in detail at all because what is before me in these proceedings is an adjudication as to whether Exhibit P9 is valid in law and whether it concludes rightly. I have found that Exhibit P9 cannot be sustained for the reasons that I have already recorded above and hence, any question as to the disqualification or otherwise of any of the petitioners are issues that the respondents can always take up with the competent authorities and which the said authorities will be obligated, in terms of the various Statutes and Regulations, to consider and to conclude upon by following the mandatory procedure. The writ petition is ordered as above. In the facts and circumstances of the case, I make no order as to costs and the parties are directed to suffer their respective costs.