Vypin Rural Housing Co-Operative Society Ltd. v. State Co-Operative Election Commission
2023-12-12
N.NAGARESH
body2023
DigiLaw.ai
JUDGMENT : N. NAGARESH, J. 1. The 1st petitioner is a Primary Rural Housing Co-operative Society and the 2nd petitioner is its delegate to vote in the election to the Managing Committee of the 4th respondent-Kerala State Co-operative Housing Federation Limited. The petitioners seek to quash Ext.P8 to the extent it includes respondents 5 to 11 in the voters list. 2. The petitioners state that respondents 5 to 11 Societies are under liquidation and are under the control of a Liquidator appointed by the Co-operative Department. Election to the 4th respondent-Kerala State Co-operative Housing Federation Limited has been notified as per Ext.P1 notification dated 03.11.2023. The date of publication of final voters list was on 23.11.2023. The date of poll is 16.12.2023. 3. The petitioners state that the right of a Primary Society to send delegate to cast vote and to contest to the Managing Committee of Apex Society is conferred only upon those Primary Societies which have a Managing Committee in office or Administrator/Administrative Committee in office. A Primary Society can send its member as delegate when the Administrator/Administrative Committee is in office. Such power is not conferred when the Primary Society is under liquidation. Therefore, Ext.P8 voters list to the extent of inclusion of respondents 5 to 11 which are under liquidation, is ultra-vires Sections 20 and 21 of the Kerala Co-operative Societies Act and Rule 44A of the Kerala Co-operative Societies Rules. The respondents are therefore compellable to eschew respondents 5 to 11 from Ext.P8 voters list, contend the petitioners. 4. The Standing Counsel for the 1st respondent-State Co-operative Election Commission resisted the writ petition. Referring to the Bye-laws of the Kerala State Co-operative Housing Federation Limited, specifically to Clause No. 4(e), the Standing Counsel pointed out that any member-Society shall cease to be a member only if such a member-Society is liquidated. As the liquidation proceedings are still not concluded in respect of respondents 5 to 11, the Societies are entitled to send a delegate for voting in the election to the Managing Committee of the 4th respondent-Federation. 5. The Standing Counsel further urged that once the election notification is published, this Court shall not interfere in the election proceedings, since the petitioners have an efficacious alternate remedy under Section 69 of the Kerala Co-operative Societies Act.
5. The Standing Counsel further urged that once the election notification is published, this Court shall not interfere in the election proceedings, since the petitioners have an efficacious alternate remedy under Section 69 of the Kerala Co-operative Societies Act. As respondents 5 to 11 are under liquidation, the Government of Kerala is a necessary party to the writ petition. The writ petition is liable to be dismissed for non-joinder of necessary parties. 6. Standing Counsel entered appearance on behalf of the 4th respondent-Apex Society. The 4th respondent supported the arguments of the petitioners and submitted that a member-Society under liquidation process cannot send a delegate for voting in the election to the Managing Committee of the 4th respondent-Apex Society. 7. I have heard the learned counsel for the petitioners, the learned Standing Counsel representing respondents 1 to 3 and the learned counsel appearing for the 4th respondent. 8. Section 21 of the Kerala Co-operative Societies Act, 1969 reads as follows: 21. Manner of exercising vote: (1) Every member of a society shall exercise his vote in person. (2) Notwithstanding anything contained in Sub-Section (1), a society or corporation or a statutory or nonstatutory Board, Committee or other body of persons which is a member of another society may, subject to any rules made under this Act, appoint one of its members to vote on its behalf in the affairs of that other society. Sub-Section (2) of Section 21 makes it clear that the right of a Society or Corporation or a statutory or non-statutory Board, Committee or other body of persons which is a member of another society will be subject to rules made under the Kerala Co-operative Societies Act. Such Societies may appoint one of its members to vote on its behalf. 9. Rule 44A of the Kerala Co-operative Societies Rules, 1969 reads as follows: 44A.
Such Societies may appoint one of its members to vote on its behalf. 9. Rule 44A of the Kerala Co-operative Societies Rules, 1969 reads as follows: 44A. Delegate of Societies in the committee to another society to be members of the committee: The person appointed to represent a society in any other society and vote shall be a member of the committee of the society which he represents: Provided that if the affairs of the society are managed by Administrator/Administrators/ Administrative Committee appointed under S.28 or S.32 or S.33 of the Act, the person or persons so appointed shall have power to nominate any member of the society to be its delegate in the other society and such delegate shall be eligible to vote and to be elected as a member of the committee of the other society in which he sits as a delegate if he is otherwise qualified to be a delegate under the relevant rules: Rule 44A enables Societies managed by an Administrator, Administrators or Administrative Committee appointed under Section 28 or Section 32 or Section 33 of the Act, to nominate any member of the Society to be its delegate eligible to vote and to be elected as a member of the Committee of another Society. Proviso to Rule 44A does not take in societies administered by Liquidators and under winding up proceedings. 10. The reason is obvious. The societies managed by Administrator, Administrators or Administrative Committee will be functional Societies and the administration of those societies will necessarily be taken over by duly elected Managing Committees, as per the provisions of the Kerala Co-operative Societies Act. A Society under winding up will not be a functional Society in the long term and winding up is intended to stop the functioning of the societies and to dissolve the society. 11. Sections 71 and 72 of the Kerala Co-operative Societies Act read as follows: 71.
A Society under winding up will not be a functional Society in the long term and winding up is intended to stop the functioning of the societies and to dissolve the society. 11. Sections 71 and 72 of the Kerala Co-operative Societies Act read as follows: 71. Winding up of societies: (1) If the Registrar, after an inquiry has been held under section 65 or an inspection has been made under section 66 or on receipt of an application made by not less than three-fourths of the members of a society, is of opinion that the society ought to be wound up, he may, after giving the society an opportunity of making its representation and in consultation with the financing bank to which the society is affiliated and the circle co-operative union, by order in writing, direct it to be wound up. (2) The Registrar may of his own motion, by order in writing, direct the winding up of a society: (a) where it is a condition of the registration of the society that the society shall consist of at least twenty-five members and the number of members has been reduced to less than twenty-five. (b) where the society has not commenced working within six months of its registration, unless extension of time is granted by the Registrar, or has ceased to work. (c) where the number of actual workers falls below the prescribed limit in the case of a society formed exclusively for the benefit of persons engaged in a particular industry or occupation. (3) If a proposal for revitalisation of a society, in respect of which an order under sub-section (2) has been passed, is received by the Registrar within a period of one year from the date of such order, the Registrar may cancel the same and allow the society to continue to exist: Provided that this Sub-Section shall not apply in the case of a society which does not commence functioning within a period of six months form the date of registration. 72. Liquidator: (1) Where the Registrar has made an order under section 71 for the winding up of a society, he shall appoint a liquidator for the purpose and may fix his remuneration.
72. Liquidator: (1) Where the Registrar has made an order under section 71 for the winding up of a society, he shall appoint a liquidator for the purpose and may fix his remuneration. (2) The liquidator shall, on appointment, take into his custody or under his control all the property, effects and actionable claims to which the society is or appears to be entitled and shall take such steps as he may deem necessary or expedient to prevent loss or deterioration of, or damage to, such property, effects and claim. (3) Where an appeal is preferred under section 83 against an order of winding up of a society made under section 71 such order shall not operate thereafter until it is confirmed in appeal: Provided that the liquidator shall continue to have custody or control of the property, effects and actionable claims mentioned in Sub-Section (2) and to have authority to take the steps referred to in that Sub-Section. (4) Where an order of winding up of a society is set aside in appeal, the property, effects and actionable claims of the society shall re-vest in the society. 12. Section 71 empowers the Registrar to direct the winding up of a Society when the membership of the Society is reduced considerably or when the Society has not commenced working within six months of its registration or during the extended period, or has ceased to work and, in respect of the societies formed for the benefit of persons engaged in a particular industry or occupation, where the number of actual workers falls below the prescribed limit. 13. In cases of such societies ordered to be wound up, the Registrar can cancel the winding up order and allow the Society to continue to exist, if a revitalisation proposal has been passed and is received by the Registrar within a period of one year from the date of winding up order. It is to be noted that even during such period, the Society will not be a functional Society and therefore the rule making authorities decided not to give voting rights to such societies under winding up. 14.
It is to be noted that even during such period, the Society will not be a functional Society and therefore the rule making authorities decided not to give voting rights to such societies under winding up. 14. Section 72 would make it clear that once an order is passed under Section 71, the Liquidator has to take control of the property, effects and actionable claims of the Society and take steps to prevent loss or deterioration or damage to such property, effects and claims. The Liquidator can carry on the business of the Society only in so far as it is necessary for the beneficial winding up of the Society. Section 72(4) provides that where an order of winding up of a Society is set aside in appeal, the property, effects and actionable claims of the Society shall re-vest in the Society. 15. Section 72 would make it abundantly clear that when a Liquidator is appointed pursuant to Section 71, such Liquidator does not become the Society itself. Society remains distinct from the Liquidator. For that reason also, the Liquidator cannot by himself or through any nominated person cast vote on behalf of the Society in an election to the Managing Committee of another Society. 16. Therefore, Societies which are under winding up proceedings under Section 71 of the Kerala Co-operative Societies Act and which are administered by a Liquidator appointed under Section 72 cannot be permitted to nominate any person to participate and cast vote in any other Society, on its behalf. The petitioners are therefore bound to succeed in this writ petition. 17. Ext.P8 voters list to the extent it includes respondents 5 to 11 Societies which are under winding up proceedings, is set aside. There will be a further direction to respondents 1 to 3 not to permit respondents 5 to 11 or their nominees to cast votes and contest election to the Managing Committee of the 4th respondent. 18. The writ petition is disposed of with the afore directions.