IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE TUESDAY, THE 13TH DAY OF AUGUST 2013 22ND SRAVANA, 1935 WP(C).No. 19912 of 2012 (L) ---------------------------- PETITIONER(S): -------------------------- GIREESH KUMAR, M. NO. 3436, EX-PRESIDENT, ANKAMALY SERVICE CO-OPERATIVE BANK LIMITED NO. 714, RESIDING AT KIZHAKKE MOOTHATT HOUSE (GIRI BHAVAN) H. NO. 135, NAYATHODE, ANKAMALY. BY ADVS.SRI.P.P.JACOB SRI.T.P.GOPAKUMAR RESPONDENT(S): ---------------------------- 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, ERNAKULAM, COCHIN ”
016.
2. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), ALUVA, PIN ”
101.
3. THE STATE OF KERALA, REPRESENTED BY SECRETARYTO GOVERNMENT, CO-OPERATION (C) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM ”
001. R1 TO R3 BY GOVERNMENT PLEADER SMT. ROSE MICHAEL BY SPL.GOVERNMENT PLEADER SRI.D.SOMASUNDARAM THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23/01/2013, ALONG WITH WPC. NO.20217/2012 AND CONNECTED CASES,THE COURT ON 13/08/2013 DELIVERED THE FOLLOWING: Kss WPC.NO.19912/2012 (L) APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE ORDER DTD. 31/01/2012 ISSUED BY FIRST RESPONDENT. P2: COPY OF THE ORDER DTD. 1/12/2010 ISSUED BY FIRST RESPONDENT. P3: COPY OF THE RESOLUTION NO.716 DTD. 9/03/2010 OF THE PETITIONER. P4: COPY OF THE RESOLUTION NO.720 OF THE FIRST PETITIONER DTD. 9/03/2010. P5: COPY OF THE RELEVANT PORTION OF THE GENERAL BODY RESOLUTION 20 A) PAGES 129 158,159,160 DTD. 27/03/2012. P6: COPY OF THE ORDER ISSUED BY SECOND RESPONDENT DTD. NIL. P7: COPY OF THE ORDER ISSUED BY FIRST RESPONDENT TO THE PETITIONER DTD. 3/07/2012. P8: COPY OF THE PRELIMINARY OBJECTION FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT DTD. 10/07/2012. P9: COPY OF THE APPEAL DTD. 28/07/2012 FILED BY THE PETITIONER BEFORE THE THIRD RESPONDENT. P10: COPY OF THE STAY PETITION IN APPEAL DTD. 28/07/2012 FILED BY THE PETITIONER BEFORE THE THIRD RESPONDENT. P11: COPY OF THE RESOLUTION NO.1407 DTD. 18/08/2012 OF THE PETITIONER. P11(A): COPY OF THE LETTER RECEIVED BY THE JOINT REGISTRAR (G), ERNAKULAM AND ASSISTANT REGISTRAR (G), ALWAYE ON 21/08/2012. /TRUE COPY/ P.S.TOJUDGE Kss A.M.SHAFFIQUE, J.
---------------------------------------------------- W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 of 2012 --------------------------------------------------- Dated this the 13th August, 2013
JUDGMENTThese writ petitions are concerned with the affairs of the Angamaly Service Co-operative Bank limited, (hereinafter referred as the 'Bank') a Society registered under the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as the 'Act'). Since the matters complained are in connection with affairs of the Bank the cases are decided by a common judgment.
2. The facts as disclosed would show that the Managing Committee assumed office on 4.11.2007 and their term was to expire by 3.11.2012. On the basis of a complaint filed by certain persons, steps were taken by the Joint Registrar to conduct an enquiry under S. 65 of the Act. On the basis of a report received from the Inspector appointed for the purpose of enquiry, a show cause notice was issued to the members of the Managing Committee on W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
2. 3.7.2012 to explain why the Committee should not be superseded. The Managing Committee members filed an objection stating that the show-cause notice was premature. They also filed W.P.(C)No.16377/2012 challenging the show cause notice. This Court by judgment dated 24.7.2012 disposed the writ petition directing Joint Registrar to consider the objection filed by the Managing Committee and pass appropriate orders.
3. In the meantime on 26.7.2012 the election notification was published fixing the last date of nomination as on 23.8.2012. On 17.8.2012 all the members of the Committee submitted their resignation from the Managing Committee. On 18.8.2012 the President submitted his resignation from the Managing Committee by entrusting the letter of resignation to the Secretary. The Registrar was intimated about the resignation of the Managing Committee members on 21.8.2012. In the meantime, on 18.8.2012 the Joint Registrar fixed the date of hearing of the notice under W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
3. S.32(1) of the Act on 22.8.2012. As the Managing Committee members resigned, they did not attend the hearing and accordingly the Joint Registrar passed order dated 22.8.2012 superseding the Managing Committee under S. 32(1) of the Act. Thereafter, former committee members submitted nomination to the Returning Officer. The same were rejected on the ground that they were members of the Managing Committee which were superseded by the Joint Registrar.
4. W.P.(C) No.19912 of 2012 is filed by a former president of the Bank for a direction to the Joint Registrar to supply copy of the order passed in Exhibits P3, P4 and P5. It is alleged that steps were taken by the Joint Registrar to conduct an inquiry into certain allegations against the managing committee members. Exhibit P3 is the resolution dated 9/3/2010 of the Board members deciding to seek permission from the Joint Registrar to purchase property for the society at Rs.31,68,900/-. Exhibit P4 is the resolution W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
4. dated 9/3/2010 by which it was decided to get approval from the general body and to inform the Joint Registrar accordingly. Exhibit P5 is the resolution passed by the general body on 27/3/2012. The allegation is that without passing any order an inquiry is conducted and therefore the petitioner sought for the direction in the writ petition. It is contended that without giving any permission in terms of Exhibit P3, P4 and P5 the Joint Registrar and issued notice under section 32(1) of the Act calling for an explanation, which according to the petitioner is premature and unless the direction as sought for is issued it may not be possible for the members to defend Ext.P7 notice properly. It is also alleged that the members of the committee have resigned on 18/8/2012 and the said fact was intimated to the Joint Registrar and Assistant Registrar on 21/8/2012.
5. W.P.(C) No. 20217 of 2012 is filed by the former president of the Bank challenging the action of the Joint Registrar in issuing notice under section 32(1) of the Act on W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
5. the ground that members of the committee had tendered resignation on 18/8/2012 and thereafter the Joint Registrar has no power to take action under section 32(1) of the Act.
6. W.P.(C) No.20343 of 2012 is filed by the former president and another member of the managing committee of the Bank challenging the action of the returning officer in rejecting their nomination as well as that of the other members of the managing committee which is superseded by the Joint Registrar under section 32(1) of the Act. It is inter alia contended that when the managing committee members have resigned on 18/8/2012 and the said fact was intimated on 21/8/2012 to the Joint Registrar and there was no committee in existence to exercise the power of supersession.
7. W.P.(C) No. 20348 of 2012 is filed by the former president of the Bank and the members of the managing committee challenging Exhibit P13 order passed by the Joint registrar superseding the society under section 32 (1) of the W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
6. Act. It is inter alia contended that the the Joint Registrar could not have invoked section 32(1) for the reason that, the members of the managing committee had not indulged in the activities as alleged in the notice under clauses (a) to (d) of section 32(1)of the Act. It is also contended that the joint registrar has not consulted the Circle Co-operative Union or the financing Bank as provided under section 32(2) of the Act. Another contention raised is that the members of the managing committee have resigned from their position as committee members and therefore it was not open for the Joint Registrar to take action for superseding the managing committee under section 32(1) of the Act. It is also contended that there was no situation warranting interference without conducting proper inquiry into the allegations raised in the show cause notice.
8. Counter affidavit is filed by respondents 1 and 2 in W.P.(C) No. 20348 of 2012 supporting the stand taken by the Joint Registrar. It is inter alia contended that the members of W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
7. the managing committee were involved in certain acts which are detrimental and to the Bank, which has caused substantial loss to the Bank. It is also contended that while taking a decision to purchase land the procedure prescribed under the rules has not been followed. It is also contended large amounts had been spent for taking on lease certain premises without any benefit to the Bank. They justified the stand taken by the Joint Registrar in invoking section 32(1) of the Act and superseding the society, despite the resignation of the members.
9. W.P.(C) No. 20351 of 2012 is filed by former members of the committee rejecting their nomination by the returning officer in the elections to be held on 9/9/2012 to the managing committee of the Bank on the ground that they are disqualified as provided under section 32(1)(e) read with rule 44(1)(k) of the rules on the ground that the petitioners were members of a committee which is superseded as per order dated 22/8/2012. It is contended W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
8. that the Joint Registrar has no jurisdiction to invoke section 32(1) of the Act without hearing the petitioner under section 65(4) of the Act. It is also contended that since the committee members have resigned as early as on 18/8/2012, there is no committee to be superseded and hence the disqualification of the petitioners is bad in law.
10. In the counter affidavit filed by the second respondent in W.P.(C) No. 20351 of 2012, it is inter alia contended that in order to supersede the committee it is not necessary to complete the procedure under sections 63, 64, 65, and 66 of the Act. Still further it is contended that since the petitioners have not challenged the order of supersession, they are deemed to be disqualified in terms of section 32 [1] [e] of the Act. It is also contended that the resignation was communicated to the Joint Registrar and Assistant Registrar only on 21/8/2012. it is also contended that tendering resignation by itself will not suffice as the petitioners did not comply with rule 38 of the rules. In so far W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
9. as the resignation has not been accepted by the committee, they still continue to be members of the managing committee.
11. W.P.(C) No.22220 of 2012 is filed by the former president of the Bank challenging the action of the Administrator in enrolling members to the membership of the society after superseding the managing committee in terms of Exhibit P2. It is inter alia contended that the Administrator does not have any such power. Counter affidavit is filed by the second respondent, who is the part- time administrator of the Bank, inter alia contending that the Registrar had issued Ext.R2(a) circular no. 38/2012 dated 18/10/2012 based on the judgment of the Supreme Court. The circular only permits enrollment of members for the purpose of granting loan. It is contended that the members who are enrolled for the purpose of granting loan and to enable certain persons to become sureties are not given voting rights. W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
10. 12. W.P.(C) No.24149 of 2012 is filed by a former member of the society challenging Exhibit P6 circular issued by the Registrar by which membership is directed to be issued to persons for the purpose of granting loans. It is inter alia contended that the only intention behind the acceptance of membership from strangers and ineligible persons is for dislocating the democratic functioning of the back.
13. In these writ petitions, mainly the following questions arise for consideration: a) Whether an enquiry for supersession of the Managing Committee under Section 32(1) of the Act is not maintainable without finalising the enquiry under Section 65 of the Act read with Rule 66 (5) of the Co-operative Societies Rules. b) Since the Managing Committee members have resigned with effect from 17.8.2012 and 18.8.2012, whether the proceedings for supersession of the Managing Committee had become futile and whether any orders could W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
11. have been passed by the Joint Registrar to supersede the Society under section 32(1) of the Act. c) Even assuming that any orders could have been passed under S. 32(1) of the Act, whether the Joint Registrar had followed the mandatory provision under Section 32(2) by consultation with the Circle Co-operative Union or the financing Bank. d) Is the order of supersession based on materials which were not substantiated and for which the members of the Managing Committee were not responsible. e) Whether the Returning Officer was justified in rejecting the nomination of the members of the managing committee as the order of supersession is ineffective and against law on account of the fact that the members of the committee have resigned before the date when the order of supesession was passed. f) Whether the Administrator appointed pursuant to the order of supersession is justified in admitting W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
12. members without any power in that regard and whether circular no. 38/2012 dated 18/10/2012 (Ext.P6 in W.P.(C) No.24149 of 2012) is liable to be quashed.
14. Having regard to the contentions urged by either side, the first question that requires consideration is whether the Joint Registrar can initiate proceedings under S. 32(1) before completing an enquiry under S. 65 of the Act. The argument of the petitioner is that as per Section 65(6) of the Act, the Registrar is entitled to initiate action in accordance with the provisions of section 32(1) only on completion of the enquiry. It is argued that the enquiry was not completed. As per section 32(1) of the Act the Registrar can take action, after an enquiry by himself or through other agencies, or is otherwise satisfied that the Committee of any Society has acted or omitted to act in terms of Clauses (a) to (d) of section 32(1), after issuing notice to the committee. The expression 'or otherwise' clearly enables the Registrar to take any action even if an W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
13. enquiry is not completed. The provision under section 65(6) is only one among the methods to initiate enquiry under section 32. Reference is made by the learned counsel for petitioner to the judgment of the learned single judge of this court in Kandalloor Farmers S.C.B. Ltd. v. Joint Registrar (2008 (4) KLT 856). That was a case in which a notice was issued under section 65(5) of the Act. No such situation has arisen in this case. The above judgment was followed by a learned single judge in Mariyamma George v. Joint Registrar (2010(3) KHC 307). The position of law in this regard is clear from the judgment of a division bench of this court in State of Kerala v. Sudarsanan (1997 (2) KLT
522) wherein court held as under: "The condition precedent for exercising the power under S. 32 is that the Registrar on materials placed before him should be satisfied that the grounds mentioned in S. 32 exist for supersession of the committee. It is not necessary for this purpose that the Registrar or the Assistant W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
14. Registrar should exercise the powers under Ss. 63, 64, 65 and 66 of the Act. No doubt, in the present case, enquiry was made under S. 66 of the Act. Under S. 66(5) of the Act, the Registrar can direct the Society or its officers to take such action as may be specified in such order within the time that may be mentioned in such order. But, on inspection, if it is found that the committee has committed such irregularities or that there has been neglect of the orders issued by the Registrar or that huge losses have been occurred due to the negligence of the committee, it cannot be said that the Assistant Registrar, should under S. 65 of the Act, direct the society to cure the defects. If the circumstances are so serious the Assistant Registrar can report the matter to the Registrar to take suitable action individually under S. 32 of the Act.
8. A similar question came up before the Supreme Court in AIR 197.SC 99.(Registrar, Co-operative Societies, Madras v. Rajagopal). Their Lordships were considering W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
15. the provisions of S. 72 of the Madras Co-operative Societies Act, which is akin to S. 32 of the Kerala Act. Ss. 64 to 67 of the Madras Act relate to audit, inspection etc. similar to sections 63 to 67 of the Act. The contention before the Supreme Court was that before conducting enquiries under Ss. 64 to 67, the Registrar cannot take action under S. 72 of the Act. Dealing with the above contention, the Supreme Court held as follows:- "It is significant that S. 72(1) does not contain any mention of Ss. 64 to 67 which appear in S.70(l) and of Ss. 65, 66 and 67 which are expressly mentioned in S. 85(1). If the intention of the Legislature was that the supersession of the Committee under S. 72 can be ordered by the Registrar only after recourse to Ss. 64, 65, 66 and 67, there is no reason why language analogous to S. 70(1) or S. 85(1) containing an express mention of the aforesaid sections, should not have been W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
16. employed. An audit under S. 64 has to be done every year in view of the mandatory form of the language of that S.
64. But as regards Ss. 65 & 66 the Registrar has been given the discretionary powers to make an inquiry or an inspection in accordance with those sections, there is no duty or obligation cast on him for doing so before he proceeds to take action under S.
72. All that is required by S. 72(l)(a) is that the Registrar should form an opinion that the Committee of any Registered society is not functioning properly or has wilfully disobeyed or failed to comply with any lawful order or direction issued by him. So far as the question of the society not functioning properly is concerned, that may depend on what the Registrar discovers after a proper audit, enquiry and inspection. But he can form that opinion even on material aliunde and the language of the W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
17. section does not warrant by necessary implication that the taking of the view that be is bound to form that opinion after following the entire procedure prescribed by the other sections under discussion."(emphasis added) Further the Supreme Court observed as follows:- "It may be that when the Registrar acts under the second limb of S. 72(l)(a) and proposes to supersede the committee for wilful disobedience or wilful failure to comply with any lawful order or direction issued by the Registrar under the Act or the rule that the provisions contained in Ss. 64, 65 and 66 may become relevant. But that does not and cannot mean that the Registrar must as a condition precedent give a direction under those sections for the defects or the irregularities to he remedied and should take action only under the W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
18. second limb i.e. when there is a wilful disobedience or wilful failure to comply with those orders or directions".(emphasis added) Thus, it has been clearly laid down that it is not necessary to complete the exercise under Ss. 63 to 66 to enable the Registrar to take action under S. 32 of the Act." Therefore I do not think that a different view can be taken from the law laid down by the division bench of this court in Sudarsanan's case (supra).
15. The next issue is whether an order of supersession could be passed, when the Committee members have already resigned. It is not in dispute the committee members have resigned by tendering their resignation before the order was passed under section 32(1) of the Act. What would happen to the management of a society when there is an enbloc resignation is dealt under section 33 of the Act. Section 33(1) of the Act takes care of a situation where the existing committee resigns enbloc or where there W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
19. is no quorum to hold meetings on account of lack of quorum. In that event, if a new committee cannot be constituted before expiry of the term, the Registrar, can either suo moto or on an application by any member of the society, after consultation with the Circle Co-operative Union appoint an Administator or an Administrative Committee. Explanation to section 33(1) reads as under: "Explanation- For the purpose of this sub-section, a tender of resignation by a member of the committee shall have the effect of terminating his membership from the Committee." Rule 38 (3) to (6) of the Rules which relates resignation of committee members reads as under: "3) Any member of a committee, whether elected or nominated may tender his resignation to the President of the committee. (4) The President, on receipt of a resignation, shall within seven days from the date W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
20. of receipt thereof place it before the committee of the society for consideration if the member is an elected person or send it to the authority who nominated the member, if he is a nominee. The resignation shall have effect only from the date of its acceptance by the committee or the authority who nominated the member concerned as the case may be. The fact of its acceptance or otherwise shall also be communicated to the member concerned. In the case of nominees the fact of acceptance or otherwise shall be communicated to the society also. (5) Casual vacancy of an elected member of the committee shall be filled up by election in the manner provided in the rules. In the case of nominated members the vacancies will be filled up by fresh nomination subject to the provisions in R.37. W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
21. (6) Where the President desires to tender resignation the letter of resignation shall be placed before the committee for consideration". As per the Rules any member of a committee can tender resignation to the President of the Committee. Sub-rule (4) provides that on receipt of the resignation the President shall within 7 days from the date of receiving the same place it before the Committee of the society for consideration. The resignation shall have effect only from the date of acceptance by the Committee. The fact of its acceptance shall also be communicated to the member concerned. Sub-rule (6) deals with the resignation of President. If he resigns, the same shall be placed before the Committee for consideration. But when the explanation to section 33(1) clearly stipulates that the resignaton shall take effect on tendering the resignation, acceptance by the committee is only directory in nature and is not a W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
22. mandatory provision. Therefore on tendering of the resignation letter by the committee members, the resignation comes into effect. A learned single judge of this court Nataraj Gownder v. Registrar (2008(2) KLT
335) held that the provision in the rules which provides for acceptance of the resignation is void. If the resignation is enbloc definitely this is an instance where the Registrar can take action under section 33(1) of the Act. In the present case all the committee members submitted their resignation on 17.8.2012. The President submitted his resignation on 18.8.2012. As there was no committee, the Registrar had to take action under section 33(1) of the Act. The law in this regard is well settled in the light of the following judgments: (i) In Deputy Registrar of Co-operative Society & another v. P.K. George (1974 KLT
189) a division bench of this court while considering the scope of section 33(1) of the Act, held as under: "The Section itself contains no provision as to the modus operandi for resigning from the membership of the W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
23. Committee. The Explanation only enacts that a tender of resignation shall have the effect of terminating the membership for the limited purpose of S.33(1). R.38 of the Co-operative Societies Rules provides for the mode and manner of tendering resignation. xxxx 5 Counsel for the Respondent stressed the well-known principle that when the law has ordained that a certain act shall be done in a certain manner, it shall be done only in that particular manner, or, not at all. He pointed out that under the Explanation to S.33. a tender of resignation shall have the effect of terminating the membership of the Committee, and that a tender of resignation is contemplated only by sub-rule (3) of R.38 and therefore must be done as enjoined by that sub-rule; and if not, cannot be regarded as valid. Sub-rules 3 and 4 between them provide for the whole process of resignation, from tender, to acceptance. Non-compliance with every step does not invalidate the resignation. We are unable to read W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
24. sub rule (3) as anything more than a procedural provision. The same is only directory, and non-compliance with it, does not, in our opinion, invalidate the resignation, as the same is to be accepted by the appointing authority, and is to become effective only on such acceptance. The explanation to S.33 is for the limited purpose of action under the said Section. The ordinary mode of resignation and its acceptance is contained in R.38, and despite the Explanation, nothing precludes the Registrar from acting under S.33 after a resignation has taken effect in the usual way. (ii) In Varma v. Joint Registrar (1987 (2) KLT
420) a learned single Judge of this court held as under:
8. The possibility of such a situation has been visualised by the legislature by incorporating explanation to S.33(1) of the Act, by Amending Act 33 of 1971. The explanation states that for the purpose of this sub-section tender of resignation by a member of the committee shall have the effect of W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
25. terminating his membership from the committee. The rule certainly cannot over-ride the provision in the statute. Where the tender of resignation creates a situation inviting action under S.33(1) of the Act, sub-rule (4) of R.38 of the Rules cannot have any effect. The provision in the statute would have over-riding effect. That being so, when four members of the committee tendered resignation it had the effect of terminating their membership from the committee. The result was that the vacancies occurred in the committee by resignation and only three members remained and they cannot constitute quorum for the meeting. There could therefore be no doubt that a situation inviting action under S.33(1) of the Act arose in the instant case. The finding to that effect by the first respondent cannot be found fault with. (iii) In Sadasivan v. Joint Registrar (1994 (2) KLT
238) a learned single judge of this court held as under:
12. A legal point was also raised by counsel for the petitioner that the letter of resignation which by the W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
26. Explanation to S. 33 (1) takes effect on its being tendered cannot operate as a resignation unless it is presented in the manner prescribed. He refers to R.38(3) which prescribes that any member of a committee may tender his resignation to the President of the committee. Sub- rule (4) lays down that the President on receipt of the resignation shall place it before the committee.within seven days for consideration, if the member is an elected person. In this case, admittedly the resignation was not submitted to the first petitioner President of the committee of the society, but to the Assistant Director (Dairy). It is pointed out therefore that the resignation has not taken effect; nor is it a valid resignation and that therefore the second petitioner was in any event entitled to withdraw the same before it took effect.
13. The Government Pleader's reply to this contention of counsel for the petitioners is that the committee had ceased to exist when once the number of members got W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
27. reduced to four by the resignation of five members and therefore the second petitioner could tender his resignation only to the Assistant Director, a course which is permitted to him by the decision of this court in Varma v. Joint Registrar, 1987 (2) KLT 420.I shall deal with this point first.
14. The alleged letter of resignation Ext.R4(a) was addressed to the Assistant Director (Dairy) and handed over to him. It was not handed over to the first petitioner President of the Society. The explanation given for not handing it over to the first petitioner President is that by the resignation of the five members on 17-11-1993, the committee ceased to exist and that therefore the first petitioner was no longer the President.
15. The Explanation to S. 33(1) states that the tendering of resignation by a member of the committee shall have the effect of terminating his membership from the committee. As to how he should tender his resignation is W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
28. laid down in Rule 38(3) namely that it should be tendered to the President of the committee. As soon as the resignation is so tendered it takes effect and the member ceases to be a member of the committee. Though sub- rule (4) requires the President to place the resignation before the committee for consideration, the committee has no role to play in the matter of acceptance or non- acceptance of the resignation, inasmuch as it takes effect on its being tendered to the President, and the member ceases to be a member when it is tendered to the President. When the consequence of tender of a resignation is so serious and the member ceases to be in the committee immediately on such tender, it is imperative that the mode prescribed for tender of resignation is strictly followed, before it can take effect as a resignation. The procedure prescribed is mandatory. The Act or the Rules do not prescribe any other mode of tendering resignation by a member of the committee. It is beyond W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
29. controversy that when an act is required to be done in a particular manner, it shall be done in that manner and not in any other. Other modes of performance are necessarily forbidden. This is so even if there are no negative words. The position is well established since the decision of the Privy Council in Nazir Ahamad v. Kind Emperor, AIR 193.P.C.
253. If this be so, the only permitted mode of resignation of a member of a committee is to tender it to the President, except in the exceptional circumstance postulated in Varma's case, to which I shall refer later.
16. The explanation offered by the respondents that the committee had ceased to exist when once the number of members got reduced below the quorum and therefore there was no President to whom the resignation could be tendered is not capable of acceptance. For one thing, it is not possible for a member of the committee when he resigns to know whether the quorum has got reduced below the limit or not. Secondly, there is no automatic W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
30. termination of the term of the committee even when it ceases to have quorum. No such automatic cesser of the term is provided anywhere in the Act or the Rules. What S. 33 does is to provide a ground for the Registrar to supersede a committee in cases where the number of remaining members cannot constitute the quorum for a meeting of the committee. In that event, the Registrar has to act in the manner provided in the section and pass an order either suo motu or on application of any member of the society, and after intimating the Circle Co-operative Union about it, appointing either a new committee or one or more administrator or administrators to manage the affairs of the society. Unless and until the Registrar acts in the manner provided in S. 33, the remaining members of the committee do not cease to be members of that committee, though they may not be in a position to act or transact business without the necessary quorum, except carrying on the day to day administration. The Act does W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
31. not envisage a vacuum in the management of a co- operative society. Either a managing committee is there or an administrator comes in its place - there is no hiatus. That will be the result, if. there is an automatic cesser of the office of the managing committee as soon as its membership gets reduced below the quorum. A necessary concomitant of this conclusion is that the President of the committee does not cease to be its President, merely because the number of members got reduced below the quorum. The fact that he cannot place it before the committee under Rule 38(4) cannot lead to a contrary conclusion because the requirement of placing before the committee is only for informing it about the resignation and not for any other purpose, as the Act or the Rules do not require the committee to accept the resignation. It takes effect the moment it is tendered in accordance with Rule 38(3) to the President. Therefore, the tender of the resignation (assuming that it is a true W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
32. one) by the second petitioner to the Assistant Director (Dairy) was not in accordance with law, and was not a valid resignation, which takes effect eo instanti.
17. The situation in Varma's case was different. That was a case where there was no President for the committee inasmuch as he was removed from that office by a no confidence motion. It was in that vacuum that this court held that the resignation could be submitted to the Registrar. That is not the situation here." The facts of this case would disclose that a show cause notice was issued to the members of the Managing Committee on 3.7.2012 to explain why the Committee should not be superseded under section 32(1) of the Act. The Managing Committee members filed an objection stating that the show-cause notice was premature. They also filed W.P.(C)No.16377/2012 challenging the show cause notice. This Court by judgment dated 24.7.2012 disposed the writ petition directing Joint Registrar to consider the objection W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
33. filed by the Committee members and pass appropriate orders. In the meantime on 26.7.2012 the election notification was published fixing the last date of nomination as on 23.8.2012. On 17.8.2012 all the members of the Committee submitted their resignation to the President. By notice dated 18.8.2012 the Joint Registrar fixed the date of hearing of the notice under S.32(1) of the Act on 22.8.2012. On 18.8.2012 the President submitted his resignation from the Managing Committee by entrusting the letter of resignation to the Secretary. The Joint Registrar was intimated about the resignation of the Managing Committee members on 21.8.2012. Therefore it could be seen that an attempt had been made by the members of the committee to circumvent the proceedings under section 32(1) of the Act. Of course proceedings under section 32(1) can be initiated only when the committee is in office. If the committee is not in office, there is no question of initiating any proceedings under section 32(1). This is a case in which W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
34. when notice was issued under section 32(1) to show cause, the members of the committee were in office. They tendered resignation only on 17/8/2012 and 18/8/2012. In the meantime the members of the committee had already submitted their objection. At that stage of the proceedings, when the members resign from the committee, does it automatically frustrate the proceedings? It is not in dispute that a committee is superseded on the allegation that they are involved in all or any of the acts as stated in clauses (a) to (d) of section 32(1) of the Act. Can such a proceeding be circumvented by resignation by the committee members or is it that the Joint Registrar could proceed with the enquiry and complete the proceedings. The order of supersession under section 32(1) of the Act, in addition to removal of the committee and appointing an Administrator, has another consequence of disqualification of the committee members from contesting the election in view of section 32(1)(e) of the Act. Therefore though the committee members have a W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
35. right to resign if the resignation is after a notice commencement of proceedings under section 32(1) of the Act, that is after issuing notice of enquiry, the proceedings will have to come to a logical end. Resignation from the committee after initiating the proceedings. The discretion is purely with the Registrar and of course nothing prevents the Registrar from taking action under section 33(1) of the Act, as well, on account of enbloc resignation by the committee members.
16. The next question is whether there is any consultation in terms of S.32(2) of the Act. The impugned order of supersession does not indicate compliance of S. 32 (2) of the Act. It is not in dispute that S. 32(2) of the Act is a mandatory provision and therefore unless the said mandatory provision is complied with the order of supersession is bad in law. The position of law is clear from the following judgments: In Jose Kuttiyani v Registrar of Co-operative Societies W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
36. (1981 KLT SN.65) a division bench of this court held as under: "In order that there may be a legal consultation the allegations, the objections, the full materials in support of the allegations and the tentative conclusion of the Registrar should be followed to have a meaningful consultation. The word 'consult' implies a conference of two or more persons or an impact of two or more minds in respect of a topic in order to enable them to evolve a correct or at least a satisfactory solution. In order that the two minds may be able to confer and produce a mutual impact, it is essential that each must have for its consideration full and identical facts, which can at once constitute both the source and foundation of the final decision. The Registrar in this case never consulted the financing Bank after considering the explanation and forming a prima facie conclusion on the matter. So the order of supersession is invalid." In Sahadevan v. Padmanabhan (2004 (1) KLT
192) a division W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
37. bench of this court held as under: "The consultation contemplated under sub-s.(2) of S.32 of the Act can be effective and meaningful only if the show cause notice issued under S.32(1), the explanations/objections given by the Committee to such how cause notice and the tentative findings arrived at by the Joint Registrar after considering such explanations/objections are also forwarded to the Financing Bank and the Circle Co-operative Union requesting them to offer their views on the proposal to supersede the Committee. Such a consultation process has not taken place in this case. Therefore, the provisions of sub-s.(2) of S.32 of the Act have been violated." 17. In regard to the contention that the Managing Committee were not responsible for the acts complained of in the order of supersession, I don't think that the correctness of such an order is required to be considered in view of my finding that the order of supersession is bad in W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
38. law on account of failure to comply with the mandatory consultation as provided under section 32(2) of the Act.
18. The next question is regarding the rejection of nomination of the former members of the managing committee on the ground of supersession and consequent disqualification. It is not disputed that the members of the committee have resigned before the order of supersession. Taking into consideration the fact that I am inclined to set aside the order of supersession, the said question also does not arise for consideration.
19. The final question is regarding the Administrator's power to admit members and the validity of Ext.P6 in W.P. (C) No.24149 of 2012. It is not disputed that the Administrator has no power to give membership to any person. The Registrar has issued a circular no. 38/2012 dated 18/10/2002 (Ext.P6 & R2(a)) permitting the Administrator to enroll members for the purpose of granting loan and to enable certain persons to become sureties. This W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
39. is based on the restrictions imposed by the judgment of the Supreme Court in Jt.Registrar of Cooperative Societies v T.A.Kuttappan (2000 (2) KLT 48.(SC). Hence I do not think that such enrollment of members for limited purpose of granting loan is against any specific provision under the Act or Rules framed thereunder That apart it is made clear that such members will have no voting right. Therefore the apprehension of the petitioner that the membership is given to create majority is out of place.
20. W.P.(C) No.19912 of 2012 is filed only for a direction to the Joint Registrar to supply copy of the order passed in Exhibits P3, P4 and P5. Though it is contended that the committee members were unable to submit their defence, in so far as there is no material to indicate that any orders were passed by the Joint Registrar, the petitioner does not have a legal right to seek a direction as prayed for. Hence this writ petition is liable to be dismissed. W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
40. 21. W.P.(C) No. 20217 of 2012 is filed challenging the action of the Joint Registrar in issuing notice under section 32(1) of the Act. Since orders were already passed pursuant to the said notice and the order is under challenge in separate proceedings there is no necessity to consider this writ petition on merits and hence liable to be dismissed.
22. W.P.(C) No.20343 of 2012 and W.P.(C) No. 20351 of 2012 are filed by former members of the committee rejecting their nomination by the returning officer in the elections to be held on 9/9/2012 to the managing committee of the Bank on the ground that they are disqualified as provided under section 32(1)(e) read with rule 44(1)(k) of the Rules, as they were members of a committee which is superseded as per order dated 22/8/2012. In view of my finding that the superssession is illegal for non compliance of section 32(2) of the Act, this writ petition is only to be allowed. Other issues are left open to be considered in appropriate proceedings. W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
41. 23. W.P.(C) No. 20348 of 2012 is filed challenging Exhibit P13 order passed by the Joint registrar superseding the society under section 32 (1) of the Act. This writ petition is liable to be allowed in view of my finding regarding non- compliance of section 32(2) of the Act.
24. W.P.(C) No.22220 of 2012 is filed challenging the action of the Administrator in enrolling members to the membership of the society after superseding the managing committee and W.P.(C) No.24149 of 2012 is filed challenging Exhibit P6 circular. For the reasons stated above these writ petitions are liable to be dismissed.
25. Having regard to the aforesaid factual circumstances and the position of law emerging from what is stated above, the writ petitions are disposed as under: (i) W.P.(C) No.19912 of 2012, 20217 of 2012, 22220 of 2012 and 24149 of 2012 are dismissed. (ii) W.P.(C) No. 20348 of 2012 is allowed quashing W.P.(C) Nos. 19912, 20217, 20343, 20348, 20351, 22220 and 24149 o”
42. Ext.P13 without prejudice to the respondents to take appropriate action in accordance with law. (iii) W.P.(C) No. 20343 of 2012 is allowed quashing Ext.P2 and 20351 of 2012 is allowed quashing Exts.P7 series. The Election Commission/Returning Officer shall proceed to conduct the election as early as possible. Sd/- A.M.SHAFFIQUE, JUDGE rka /true copy/