Judgment:
P. Shanmugam, J.
1. The petitioner is the President of the Pallithodu North Fisheries Development Welfare Co-operative Society. He is a delegate representing the Society in the 3rd respondent-Apex Society. He was also elected to its Board of Directors in February, 1994. One Simon Sebastian, a member of the primary Co-operative Society represented to the 2nd respondent that the petitioner is disqualified from continuing as a member of the primary society since he is a resident outside the area of operation of the society. After giving opportunity to the petitioner by the impugned proceedings dated 2-12-1996 the 1st respondent found that the petitioner is neither residing nor owning property within the area of operation of the Society and therefore he is continuing in violation of Section 16(1)(a) (iii) and Rule 16 (2)(b) under the Kerala Co-operative Societies Act and Rules. Consequently he declared that the petitioner has ceased to be a member of the primary society. The Original Petition is against this order for a declaration that he is entitled to continue as a member of the primary society.
2. Learned Senior counsel appearing on behalf of the petitioner submitted that Clause VI A of the bye-laws of the primary society allows 2% of the total members to social workers from the fish catching area and the petitioner was admitted in that category. When the society was registered on 3-10-1992 containing these clauses in their bye-laws, the Registrar was satisfied that the proposed bye-laws are not contrary to the provisions of this Act and the Rules. By the issue of certificate of registration under Section 8 it is conclusively established that the said society is duly registered. Section 101 read with Rule 181 gives power to the Government to exempt any society from any of the provisions of the Act. It is submitted that by virtue of the registration under Section 7 and the issue of certificate under Section 8 even assuming that the bye-law goes beyond Section 16 and Rule 16 in reference to the qualifications of persons who shall be admitted to be a member it should be presumed that the Government had granted exemption to these provisions. It is further submitted that about 200 similar Fishermen Societies are premitted to be registered with the same eligibility condition. Therefore, the Government is deemed to have granted exemption to the conditions imposed under Section 16 read with Rule 16. In this context he has referred to the following decisions in Izhar Ahmad v. Union of India, AIR 1962 SC 1052 and Somawanti v. State of Punjab, AIR 1963 SC 151 on the principle of conclusive proof and contended that once Society is duly registered it is not open to anybody to reopen the validity of the registration of bye-laws.
3. Learned Government Pleader on behalf of the 1st and 2nd respondents submitted that the petitioner is residing outside the area of operation of the society and is having no property within the area of operation. Hence his admission is contrary to the requirement under Section 16(1) of the Act and Rule 16 of the Rules. The Government has not granted any exemption in favour of the Society enabling the petitioner to continue as a member. The area of operation of the Society and its boundaries have been set out in the bye-laws as Ward No. 10 of Kuthiathode Panchayat of Cherthala Taluk, Alappuzha District. According to him, the petitioner is clearly not a person residing or having property within the area of operation of the society.
4. Learned Government Pleader further submitted that he cannot also claim to be a member as a social worker since he is not from the fish catching area of operation of the society. The Society is intended for the benefit of the members of a particular area and therefore they must be only from the area of operation. The 'fish catching area' in the absence of a definition could only mean the area of operation of the Society. According to learned Government Pleader, if the bye-laws are in conflict with the Act and the Rules, the latter should prevail.
5. I have heard the counsel. The main question that arises for consideration is whether the bye-law of the society will prevail over the provisions of the Act and Rules and whether the registration of the society is a conclusive evidence on the, contents of the bye-laws of the Society.
6. Section 16 of the Act lays down the qualification of persons who may become members of the society. One of the conditions is that the person should be a resident within, or is in occupation of land in the area of operation of the society. Rule J 6 of the Rules deals with the conditions to be complied with for admission or membership. Sub-rule (2) of Rule 16 states that no person shall be eligible for admission as a member of the society, if he is not a resident or does not own or possess land within the area of operation of the society. Section 16 (1) (a) (iii) read with Rule 16 (2)(b) leaves no room for doubt that no person shall become a member unless he is a resident or possess land within the area of operation of the society.
7. Clause VIA of the bye-laws of the Matsyathozilal Vikasanakeshma Samithy Sahakarana Sangom deals with membership. According to the bye-law to become a member a member of the society he must be an actual fisherman residing within the area of operation of the society and he must be prepared to do fishing in the manner and at the places as directed by the society, and to do trade at the places mentioned by the society. The bye-law also enables a social worker from the fish catching area be admitted as a member, but such membership should not exceed 2% of the total membership.
8. The petitioner is a member claiming to be coming under the social worker category. He became a member of the Board of Management of the society. He is a delegate representing the society in the 3rd respondent-apex society. He was elected to its Board of Directors of the apex society.
9. The case of the petitioner is that he was admitted as a non-fisherman social worker category and therefore the condition that he must be residing within the area of operation* or own or possess property would not apply to him. This special condition made in the bye-laws of the society runs counter to Section 16 and Rule 16 of the Act and Rules. The argument of learned counsel for the petitioners is that in view of the registration of the bye-laws it must be presumed that the Government has granted exemption from the rigour of Section 16 and Rule 16. Rule 5 of the Rules enjoins that the bye-laws of a society shall not be contrary to the provisions of the Act and Rules. It also states that while dealing with matters relating to terms and qualifications for admissions to membership, it shall not go against the provisions of the Act and the Rules. The Registrar has to satisfy himself under Section 7 of the Act that the proposed bye-laws are not contrary to the provisions of the Act and the Rules. Thus Section 7 of the Act read with Rule 5 of the Rules mandates that no bye-law can be registered if it is against the provisions of the Act and the Rules. In the light of this categorical and clear position of law it may not be possible to infer that even though the bye-law in question is contrary to the provisions of the Act and the Rules. The Registrar is deemed to have granted exemption in reference to Section 16 and Rule 16 of the Act and the Rules. I had occasion to consider this question in O. P. No. 4138 of 1996. Following the Supreme Court judgments and this Court judgment I have held as follows :
'The bye-law which is inconsistent with the statutory rule is illegal and Supreme Court in Co.op. Cr. Bank v. Ind. Tri. Hyderabad, AIR 1970 SC 245, B. K. Garad v. Nasik Merchants Co.op. Bank Ltd., AIR 1984 SC 192, Burmah Shell Co. op. Housing Society Ltd. v. Chief C.I.T., 1995 Supp. (1) SCC 533 and this Court in Babu v. Joint Registrar (1994) 2 Ker LT 516 have held that bye-laws cannot go against the statutory rules and in case of conflict the rule will prevail. As far as this proposition of law is concerned, I cannot have any second opinion that the bye-laws of a co-operative society cannot go against the statutory rule of Co-operative Societies Act or Rules, and in the event of a conflict the Act and Rules would prevail'.
The registration of the bye-law under Section 7 and the issue of certificate under Section 8 is conclusive evidence in reference to the registration. Section 9 deals with consequence of the registration. By virtue of the registration the society shall render it a body corporate by the name with perpetual succession and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purpose for which it was constituted, The registration by itself does not validate anything done contrary to the Act or Rules. As a matter of fact if any one of the conditions set out in Section 7 is not in 'existence, the registration is liable to be cancelled. The satisfaction of the Registrar must be for compliance of the provisions of the Act. The presumption is that the society had complied with all the requirements set out under Section 7. If it is found at a later point of time that some of the bye-laws are contrary to the provisions of the Act, those provisions to that extent have to be declared as invalid in the light of Rule 5 read with Section 7 (1)(b) of the Act. No right can accrue under those bye-laws.
10. The power to grant exemption is a power that can be exercised only if it is invoked. There cannot be any deeming exemption of the provisions of the Act. As a matter of fact the Government must be satisfied that it is necessary in the public interest, that the society or class of society can be exempted from the provisions of the Act. Thus before granting exemption it may be found that there are materials and reasons and necessary to do so in public interest for the grant of exemption. Exemption cannot be inferred or deemed to have been granted in those circumstances.
11. The second limb of the qualifications set out in the bye-laws for social workers can only mean that the society has releaxed the condition in reference to the requirement of prefession of the members, but not in reference to the area of operation of the society. In other words persons who are not actually fishermen are entitled to become members if they are social workers. But they also must be from the fish catching area. This could only mean that they must be from the area of operation of the society. Any other interpretation would not only make the bye-law illegal but also would lead to anomalous result of enabling any social workers from any fish catching area to become a member. That will defeat the object and purpose of the society to serve the fishermen of that locality apart from going against the provisions of the Act and the Rules. Therefore the fish catching area has to be read and interpreted to mean as an area within the operation of the society.
In that view of the matter I do not find any infirmity in the order passed by the Joint Director of Fisheries and no grounds to interfere with the said order. Hence the Original Petition is dismissed.