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2018 DIGILAW 80 (KER)

K. M. Manojkumar, Vice President, Kannur District Police Co-Operative Society Ltd. No. C. 1384 v. Joint Registrar of Co. Operative Societies (General)

2018-01-22

P.N.RAVINDRAN, R.NARAYANA PISHARADI

body2018
JUDGMENT : P.N. Ravindran, J. 1. This writ appeal arises from the interim order passed by the learned single Judge on 10.1.2018 in W.P.(C)No.35 of 2018. The appellants are the petitioners therein. The brief facts of the case are as follows: 2. The writ petitioners, 11 in number, are members of the Board of Directors of the Kannur District Police Co-operative Society Ltd. No. 1384, Kannur (hereinafter referred to as “the society” for short). The first petitioner is its Vice President. As per the bye-laws of the society, the District Police Chief is ex-officio the President of the society. The petitioners were elected to the managing committee of the society in the elections held on 5.10.2013. They assumed charge only on 28.11.2013 in view of the interim orders passed by this court in certain writ petitions which were then pending in this court regarding the validity of the voters list. The term of office of the managing committee which was elected on 5.10.2013 would have in the normal course come to an end only on 4.10.2018. 3. Long after the managing committee of the society assumed office, the Joint Registrar of Co-operative Societies, Kannur issued a notice dated 15.12.2016 under section 32(1) of the Kerala Cooperative Societies Act, 1969 (hereinafter referred to as “the Act” for short) calling upon the members of the managing committee to show cause why they shall not be superseded. The society thereupon filed W.P.(C)No.40410 of 2016 in this court, challenging that notice inter alia on the ground that section 32 of the Act cannot be invoked as the Government does not hold shares in the society and the society has not availed any loan or financial assistance or any guarantee from the Government or any Board or institution constituted by the Government, as stated in the third proviso to section 32(1) of the Act. Accepting that contention, a learned single Judge of this court passed an interim order on 21.12.2016 in W.P.(C)No.40410 of 2016 whereby further proceedings pursuant to the notice dated 15.12.2016 issued under section 32(1) of the Act was stayed. 4. Accepting that contention, a learned single Judge of this court passed an interim order on 21.12.2016 in W.P.(C)No.40410 of 2016 whereby further proceedings pursuant to the notice dated 15.12.2016 issued under section 32(1) of the Act was stayed. 4. When W.P.(C)No.40410 of 2016 was taken up for consideration on 12.10.2017, the learned Special Government Pleader appearing for the official respondents submitted that Ext.P2 notice in W.P.(C)No.40410 of 2016, which was impugned therein, will be withdrawn and that the writ petition may be disposed of reserving liberty with the respondents to issue a fresh notice in accordance with law. In that view of the matter, the learned single Judge closed W.P. (C) No. 40410 of 2016 by Ext.P3 judgment delivered on 12.10.2017 reserving liberty with the respondents namely the Joint Registrar of Cooperative Societies and the State of Kerala to issue a fresh notice in accordance with law. The learned single Judge also left open the contentions raised in the writ petition. Later, to be exact on 7.12.2017, the Joint Registrar of Co-operative Societies, Kannur issued a fresh show cause notice under section 32(1) of the Act. 5. The petitioners herein thereupon filed W.P.(C)No.40225 of 2017 in this court reiterating the same contentions as were raised in W.P.(C)No.40410 of 2016. The show cause notice dated 7.12.2017 was produced and marked as Ext-P6 therein. When W.P.(C) No.40225 of 2017 came up for consideration before the learned single Judge on 14.12.2017, the learned single Judge passed Ext.P4 interim order to the effect that the Joint Registrar of Co-operative Societies shall pass orders pursuant to the impugned notice only after affording the petitioners a reasonable opportunity of being heard. Such an order was passed having regard to the request made by the learned Special Government Pleader for time to file counter affidavit. The learned single Judge also permitted the writ petitioners to file a reply to the impugned show cause notice without prejudice to their contentions in the writ petition. Ext.P4, the interim order passed by this court on 14.12.2017 in W.P.(C)No.40225 of 2017 is extracted below for easy reference: “The learned Government Pleader takes notice before admission for the respondent and seeks time to file counter affidavit. List on 20.12.2017. It would be open to the petitioners to submit their reply to Ext.P6 show cause notice, without prejudice to their contentions raised in this writ petition. List on 20.12.2017. It would be open to the petitioners to submit their reply to Ext.P6 show cause notice, without prejudice to their contentions raised in this writ petition. The respondent shall pass orders only after affording the petitioners a reasonable opportunity of being heard.” 6. Notwithstanding the fact that this court had permitted the writ petitioners to file a reply to Ext.P6 show cause notice dated 7.12.2017 produced in W.P.(C) No.40225 of 2017, the Joint Registrar of Cooperative Societies declined to grant them further time to file objections on the ground that adequate time had already been granted. Ext.P5 letter dated 16.12.2017 discloses the said fact. The petitioners brought this development to the notice of the learned single Judge when W.P.(C)No.40225 of 2017 thereafter came up for consideration on 20.12.2017. The learned single Judge thereupon passed Ext.P6 interim order, which reads as follows: “It is submitted by the learned counsel for the petitioners that most of the members of the managing committee could not appear in terms of the notice issued by the Joint Registrar in the personal hearing scheduled on this day. Therefore, the learned counsel would submit that reasonable opportunity may be granted for personal hearing. 2. Heard the learned counsel for the petitioners and also the learned Senior Government Pleader appearing for the respondent. 3. After considering the rival submissions, there will be an order directing the respondent to conduct the personal hearing on 01.01.2018. The learned counsel for the petitioners would undertake that all the petitioners shall be personally present before the respondent on that date at 10.15 A.M. The said submission is recorded.” 7. On the terms of Ext.P6 interim order, the Joint Registrar of Co-operative Societies was bound to hear the writ petitioners in person on 1.1.2018. The Honorary Secretary of the society had in the meanwhile convened a general body meeting of the A class members of the society on 30.12.2017 by Ext.P7 notice dated 14.12.2017. The said notice is extracted below in full: “MALAYALAM” 8. After Ext.P7 notice was issued, Sri. K.J. Prakash Kumar, a member of the society submitted Ext.R1(a) motion of no confidence against the managing committee of the society to the Secretary of the society. The said motion was supported by two other members; Sri. Prajeesh T.V. and Sri. Rajesh P.V. The Secretary of the society acknowledged receipt thereof on 22.12.2017. After Ext.P7 notice was issued, Sri. K.J. Prakash Kumar, a member of the society submitted Ext.R1(a) motion of no confidence against the managing committee of the society to the Secretary of the society. The said motion was supported by two other members; Sri. Prajeesh T.V. and Sri. Rajesh P.V. The Secretary of the society acknowledged receipt thereof on 22.12.2017. Notice of the motion was admittedly not given to the other members of the society. At the general body meeting held on 30.12.2017, pursuant to Ext.P7 notice, 447 members of the society including 7 among the 11 members of the managing committee of the society were present. Towards the end of the meeting, the motion of no confidence moved by Sri. K.J. Prakash Kumar and supported by Sri. Prajeesh T.V. and Sri. Rajesh P.V. was taken up. On the ground that all the members present at the meeting except Sri. Mathew, Member No.1232, supported it, subject to legal validity, the meeting was declared as closed by the President of the society who incidentally is the District Police Chief, Kannur. Besides moving the motion of no confidence, Sri. K.J. Prakash Kumar had submitted Ext.R1(b) representation dated 22.12.2017 before the Joint Registrar of Co-operative Societies requesting him to appoint an observer. Pursuant thereto, 02 Unit Inspectors were appointed as observers and they submitted Ext.R1(d) report dated 30.12.2017 to the Joint Registrar of Co-operative Societies, Kannur. They have in Ext.R1(d) report stated that a motion of no confidence was passed against the managing committee. The observers also reported that at the general body meeting held on 30.12.2017, 386 members had participated. 9. At the outset it is to be stated that the said statement does not tally with Ext.R1(c) which contains the names of 447 participants. The events that transpired at the general body meeting held on 30.12.2017 led to Ext.P1 order dated 30.12.2017, whereby, in exercise of the power conferred on him under section 33(1) of the Act, the Joint Registrar of Co-operative Societies, Kannur, appointed a Part-time Administrator to manage the affairs of the society. Challenging that order, the writ petitioners filed W.P.(C)No.35 of 2018 in this court praying for the following relief’s : “i. Issue a writ of certiorari calling for the records leading to Ext-P1 and quash the same; ii. Challenging that order, the writ petitioners filed W.P.(C)No.35 of 2018 in this court praying for the following relief’s : “i. Issue a writ of certiorari calling for the records leading to Ext-P1 and quash the same; ii. Issue a writ declaring that Ext-P1 order passed by the 1st respondent is based on a course which is impermissible under the scheme of the Act and Rules and therefore the entire action which lead to the issuance of Ext-P1 is a nullity in the eye of law; iii. Issue a writ in the nature of mandamus, directing the restoration of the Committee back to office with all consequential directions that are required to meet the ends of justice. Interim Relief Wherefore for the reasons and averments made above it is most respectfully prayed to this Hon'ble Court to stay all proceedings pursuant to Ext.P1 with further directions to restore the committee back to office with immediate effect, pending disposal of the writ petition.” 10. One of the grounds raised in the writ petition is that the motion of no confidence was not an item on the agenda of the general body meeting held on 30.12.2017 and therefore, the motion of no confidence could not have been considered by the general body. It is the petitioners' contention that the course adopted by the Joint Registrar of Co-operative Societies to supersede the managing committee is impermissible in law. Though the learned single Judge admitted the writ petition, after considering the contentions on both sides, the learned single Judge declined an interim order as prayed for. The learned single Judge held that as the Part-time Administrator has already taken charge and as the question whether the general body can remove the existing managing committee by way of a no confidence motion requires detailed consideration and cannot be decided at the interlocutory stage, a direction to restore the committee back to office cannot be granted. The writ petitioners have, aggrieved thereby, filed this writ appeal. 11. We heard Sri. George Poonthottam, learned counsel appearing for the appellant, Sri. K.S. Mohammed Hashim, learned Special Government Pleader appearing for the first respondent and Sri. M. Sasindran, learned counsel appearing for the second respondent. We have also gone through the pleadings and the materials on record. The writ petitioners have, aggrieved thereby, filed this writ appeal. 11. We heard Sri. George Poonthottam, learned counsel appearing for the appellant, Sri. K.S. Mohammed Hashim, learned Special Government Pleader appearing for the first respondent and Sri. M. Sasindran, learned counsel appearing for the second respondent. We have also gone through the pleadings and the materials on record. Though Section 33(1) of the Act stipulates that an Administrator or Administrators, as the case may be, can be appointed in societies where a no confidence motion has been passed by the general body against the existing committee, the State of Kerala has not till date framed rules governing the manner in which the motion of no confidence has to be moved. Even in respect of office bearers of the managing committee, though section 28AB was incorporated in the Act with effect from 04-05-2002 to provide for removal of the President, the Vice President or the Treasurer or any other officer of the committee in the event of a motion of no confidence against them being carried, the procedure for moving a motion of no confidence was prescribed only when Rule 43A was introduced in the Kerala Cooperative Societies Rules, 1969 with effect from 23-12-2003 as per SRO 1185 of 2003. In the matter of a no confidence motion against the President or the Vice President or the Treasurer or any other officer of the committee, the procedure for moving a no confidence motion is prescribed in Rule 43A. It is stipulated therein that the motion of no confidence shall be signed by such number of members as shall constitute not less than one third of the total strength of the committee. The said rule further stipulates that the notice of motion has to be delivered to the Registrar by any two members signing the notice. It is for the officer duly authorised by the Registrar to arrange for consideration of the motion, in a meeting of the committee to be held at the office of the society on a date appointed by him, which shall not be later than thirty days from the date on which the copy of the motion is delivered to the Registrar. The rules also stipulate that the said officer shall give to the members, not less than fifteen clear days of notice of such meeting and of the time appointed therefore. The rules also stipulate that the said officer shall give to the members, not less than fifteen clear days of notice of such meeting and of the time appointed therefore. Such a meeting is to be presided over by the officer authorised by the Registrar. It is inter alia stipulated that a meeting convened for the purpose of considering a motion under this rule shall not for any reason, be adjourned. The quorum for such a meeting is also prescribed. However, notwithstanding the fact that Section 33(1) of the Act which provides for the appointment of an Administrator or Administrators in cases where a no confidence motion is passed by the general body against the existing committee was introduced in the Act way back in 1971, the State of Kerala has not so far framed rules governing the manner in which the no confidence motion is to be brought before the general body. The main limb of Section 33(1) of the Act as amended in the year 1971 reads as follows: “33. Appointment of new committee or administrator on failure to constitute committee, etc.- (1) Where the term of office of a committee has expired and a new committee has not been constituted, or where a no-confidence motion is passed by the general body against the existing committee or where the existing committee resigns enbloc or where vacancies occur in the committee either by resignation or otherwise and the number of remaining members cannot constitute the quorum for the meeting of the committee, or where the committee fails to hold its regular meeting consecutively for six months or where the Registrar is satisfied.” 12. The various clauses of section 33(1) of the Act have undergone subsequent amendments. Though more than 46 years have passed after section 33(1) of the Act was amended, the rule making authority has not so far framed rules governing the manner and method in which the motion of no confidence has to be moved. It is not in dispute that the motion of no confidence was not an item on the agenda of the general body meeting held on 30-12-2007. It was however contended before us by the learned Government Pleader as well as the learned counsel appearing for the Part Time Administrator that the President could have permitted items outside the agenda to be taken up for consideration by the general body. It was however contended before us by the learned Government Pleader as well as the learned counsel appearing for the Part Time Administrator that the President could have permitted items outside the agenda to be taken up for consideration by the general body. Relying on Notes 1 and 2 in Ext.P7 notice, they contend that the President of the meeting was well within his powers to permit the motion of no confidence evidenced by Annexure R1(a) submitted by three members of the society being considered by the general body at the meeting held on 30.12.2017. They also contended that the motion of no confidence was passed as only one member of the society had objected to it. 13. We are afraid, on the materials available, the said contentions cannot be accepted. A Division Bench of this court has, in Kodiyathur Panchayat v. District Panchayat Officer, Calicut [ 1977 KLT 80 ] held that a resolution passed on a subject not included in the agenda of a meeting would be good only if all the members of the committee are present at the meeting and if all of them waive the formality of notice. Such a conclusion was arrived at relying on the decision of the Apex Court in Vice Chancellor, Utkal University & Others v. S.K. Ghosh & Others [ AIR 1954 SC 217 ] wherein it was held as follows: “The reason for the stricter rule laid down in the cases cited before us is that though an incorporated body like a University is a legal entity it has neither a living mind nor voice. It can only express its will in a formal way by a formal resolution and so can only act in its corporate capacity by resolutions properly considered, carried and duly recorded in the manner laid down by its constitution. If its rules require such resolutions to be moved and passed in a meeting called for the purpose, then every member of the body entitled to take part in the meeting must be given notice so that he can attend and express his views. Individual assents given separately cannot be regarded as equivalent to the assent of a meeting because the incorporated body is different from the persons of which it is composed. Individual assents given separately cannot be regarded as equivalent to the assent of a meeting because the incorporated body is different from the persons of which it is composed. Hence, an omission to give proper notice even to a single member 'in these circumstances' would invalidate the meeting and that in turn would invalidate resolutions which purport to have been passed as it. But this is only when such inflexible rigidity is imposed by the incorporated constitution.” The Division Bench has in Kodiyathur Panchayat (supra) held that: “Under the general law relating to meetings, no business of an important nature is to be taken up at a meeting of a council or a committee unless notice is given in respect of it to all the concerned members. In other words, notice of meetings should specify the business to be transacted.” The Division Bench has also referred to the following passage from Halsbury's Laws of England, 4th Edition, Vol.9, Para. 1296 : “When notice is given that particular business will be transacted at a meeting, no other business can be embarked upon at that meeting unless the whole body corporate is present and consents.” 14. The very same view was reiterated by a learned single Judge of this court in N.Sudarsanan v. State of Kerala & Ors. [ 1996 (2) KLT 942 ] wherein the learned single Judge has referred to the following observations in Shackleton on the Law and Practice of Meetings, 17th Edition, Page 42: “If members are summoned to appear for a particular purpose, they cannot proceed to any other matter without the unanimous consent of the whole body, but if they are all present and waive the formality of notice a resolution passed at such meeting will be good even though the meeting was not assembled for that particular purpose.” 15. In N. Sudarsanan (supra) the learned single Judge, thereafter, proceed to hold that in the meeting which was the subject matter of the dispute, as all the members were not given notice, the aforesaid principle of law can have no application. In the instant case also, the same is the situation. The society has more than 6000 members. Going by the report submitted by the observers, only 386 members had attended the meeting. Even going by Ext.R1(c) minutes, only 447 members had participated. In the instant case also, the same is the situation. The society has more than 6000 members. Going by the report submitted by the observers, only 386 members had attended the meeting. Even going by Ext.R1(c) minutes, only 447 members had participated. If notice had been given that the motion of no confidence against the members of the managing committee will also be considered at the general body meeting held on 30.12.2007, many among the members who had not chosen to be present would have been present or might have been present. The purpose of giving notice is to enable the members to have advance information about the subjects to be discussed. It is quite possible that a member may not attend the meeting under the impression that no subject in which he is interested is likely to be taken up in the meeting. As Ext.P7 notice dealt with only routine matters like approval of the minutes of the previous meeting, acceptance of the profit and loss account and approval of the budget estimates for the next financial year etc., majority of the members would not have chosen to be present. But if the members had been put on notice that a motion touching upon the conduct of office bearers will be taken up, many among the members who had not been present, would have chosen to participate in the meeting. The persons against whom the motion of no confidence is brought, would have been in a position to persuade the members to attend the meeting and have the issues raised discussed and put to vote. In the instant case, nothing like that happened. The members were admittedly not given notice of the no confidence motion. The learned Special Government Pleader as well as the learned counsel appearing for the Part-time Administrator cast the blame on the Secretary of the society for not giving notice of the no confidence motion to the members. 16. From the materials before us, we are of the opinion that the Secretary or the office bearers of the society cannot be faulted. The procedure for moving a motion of no confidence against the managing committee of a society, is not stipulated in the Act or the Rules. 16. From the materials before us, we are of the opinion that the Secretary or the office bearers of the society cannot be faulted. The procedure for moving a motion of no confidence against the managing committee of a society, is not stipulated in the Act or the Rules. In the case of President or the Vice President or other officers of the managing committee, the notice of the motion of no confidence is to be given to the Joint Registrar of Co-operative Societies. In the instant case, there is no such stipulation. How many persons should join in the motion of no confidence is also not prescribed. Whether a single member can move is also not stated. When it comes to a motion of no confidence against the President or Vice President or other officers of the managing committee, it is stipulated in Rule 43A that it should be moved by not less than one third of the members of the managing committee. If that be so, we are left wondering as to whether a single member of a society can bring a motion of no confidence against the entire set of office bearers of the society. It is not stipulated anywhere in the Act or Rules that the Secretary who receives a no confidence motion against the office bearers should give notice to the members. What is the length of the notice to be given is also not prescribed. As stated earlier, in the case of a no confidence motion against the officers of the managing committee, the length of the notice is fifteen days. Even if such a standard is adopted in the instant case, as the no confidence motion was submitted only on 22.12.2007, eight days ahead of the general body meeting, the motion could not have been tabled at that meeting. That apart, the fact that such a motion has been moved was not communicated to the entirety of the members of the society. It is also not a case where the entirety of the members were present and therefore the notice could have been dispensed with. 17. As stated earlier, even in the matter of a motion of no confidence against the officers of the managing committee, viz, the President, the Vice President, the Treasurer, etc, the meeting is to be presided over by the Registrar. 17. As stated earlier, even in the matter of a motion of no confidence against the officers of the managing committee, viz, the President, the Vice President, the Treasurer, etc, the meeting is to be presided over by the Registrar. In the instant case, the meeting was presided over by the President of the society. There is a laudable object behind the stipulation in Rule 43A that the motion of no confidence shall be considered at a meeting presided over by an officer nominated by the Registrar and not by the President or any other officer of the managing committee. In the absence of any stipulation regarding the manner and method in which the motion is to be moved and the length of the notice, we are not persuaded to accept the submission of the learned Government Pleader and the learned counsel appearing for the Part-time Administrator that in view of Ext.P7 notice, the no confidence motion against the managing committee could have been taken up for consideration on 30.12.2017. In our opinion, the questions contemplated in item 10 of Ext.P7 and the 'prameyangal' contemplated in Note 1 of Ext.P7 can only relate to the matters referred to in Ext.P7 notice and not to matters which have not been referred to therein. As regards queries and resolutions, it is stated in Note 1 of Ext.P7 that such queries and resolutions should be given on or before 12 PM on 23.12.2017. The purpose is to enable the office bearers to get ready with the answers to the queries and apply their mind to the matters referred to in the resolutions. By no stretch of imagination can it be held that motion of no confidence can be moved in a general body of the society without it being an item on the agenda of the meeting and without notice to the members of the society. In a given case, where the entirety of the general body is present, even without notice in that regard, a motion of no confidence against the office bearers of any organisation can be validly moved and passed. As stated earlier, in the instant case, notice of the motion was not given to any one of the members. The entirety of the members were not present at the meeting. As stated earlier, in the instant case, notice of the motion was not given to any one of the members. The entirety of the members were not present at the meeting. That apart, as stated earlier, there is no prescription as regards the person to whom the no confidence motion is to be given, the person who should convene the meeting or the length of the notice or the minimum numbers of persons who, should give such a notice. No one has a case that a copy of Ext.R1(a) resolution was given to the members. What is the ground on which the no confidence motion is based was not known to the members who were present at the meeting except the three members who had subscribed their signatures to Ext.R1(a). In short, we are of the considered opinion that the motion of no confidence against the office bearers was not validly moved and passed at the general body meeting held on 30- 12-2017. We are persuaded to take such a view also for the reason that even in Ext.R1(c), the District Police Chief has stated that motion is subject to legal validity. The endorsement made by him in that regard is extracted below: A No-Confidence Motion was presented by Member No. 696 K.J. Prakash Kumar, the same was support Member No. 4275 Rajesh. P.V and member No. 2445 Prajeesh. All the members present in the meeting except Member No. 1232 Mathew supported the same. Subject to legal validity. Meeting Closed. (sd/-) 30/12/17. G. SIVA VIKRAM, IPS PRESIDENT 18. The endorsement made by the President of the society itself is in our opinion a pointer to the fact that he was not sure whether the motion of no confidence could have been taken up in the general body meeting. We are, therefore, of the considered opinion that the petitioners have made out a prima facie case warranting the grant of an interim order staying the operation of Ext.P1 order and a consequential direction to the Joint Registrar of Co-operative Societies to restore the committee back to office. We are persuaded to pass such an order for the reason that no financial irregularity has been levelled or alleged against the petitioners in the impugned order or in the counter affidavit. It is relevant in this context to note that the President of the society is none other than the District Police Chief. We are persuaded to pass such an order for the reason that no financial irregularity has been levelled or alleged against the petitioners in the impugned order or in the counter affidavit. It is relevant in this context to note that the President of the society is none other than the District Police Chief. If the allegations against the petitioners who are members of the managing committee of which the President is the District Police Chief are true, he will also have to be accused of having committed the very same irregularities. The Joint Registrar of Co-operative Societies has not pleaded such a case. Apart from merely stating that in the enquiry held under Section 65 of the Act, various irregularities and mismanagement of funds were noticed, nothing tangible has been placed on record. We are therefore satisfied that no circumstance which would justify the denial of an interim order exists in the case on hand. We accordingly allow the writ appeal, set aside the impugned order, stay the operation and implementation of Ext.P1 order issued by the Joint Registrar of Co-operative Societies, Kannur, under Section 33 of the Act pending disposal of the writ petition and direct the Joint Registrar of Co-operative Societies, Kannur, to forthwith permit the managing committee elected on 05-10-2013 to assume office. Having regard to the fact that the writ petition is pending, we however, deem it appropriate to direct that the managing committee shall not, until the disposal of the writ petition, make appointments or take major policy decisions and shall only attend to the day to day affairs of the society.