Judgment:
(Prayer: Petition under Article 226 of the Constitution of India praying that in the circumstance stated in the Affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction, more in the nature of Mandamus, declaring that the present Board of Directors of 2nd respondent Milk Producers Mutually Aided Cooperation Society, Urumadla Village, Chityal Mandal, Nalgonda District cease to hold office as Directors and also incurred disqualification to contest elections as per Sections 23 and 21 (6) of Act 30 of 1985 and that the 4th respondent ceased to represent the 2nd respondent Primary Society before the 3rd respondent Federation and also contest any election in 3rd respondent Federation and consequently direct the 1st respondent to convene general Body meeting of 2nd respondent Society for appointing adhoc board for specific purpose of conducting elections to the entire Board of Directors and election of Chairman to the 2nd respondent Society.)
The petitioners are members of Milk Producers Mutually Aided Cooperative Society, Urumadla Village, Chityala Mandal, Nalgonda District, the 2nd respondent herein, (for short ‘the Society’). The 4th respondent is the Chairman of the Society. The Managing Committee of the Society has 10 Directors. The term of Office of Directors is 5 years, in such a way, that on 30th June of every year, the term of two of them would expire. The resultant vacancies are to be filled by the General Body.
The term of the two women members of the Managing Committee was to expire on 30.06.2011. The term of the 4th respondent, as President, was also to expire on that date. An Election Officer was appointed, a nd he, in turn, issued a notification, proposing to conduct the election to the vacancies of Directors a nd of the President, on 29.06.2011. However, on 26.06.2011, the Election Officer postponed the election, on the ground that he has fallen sick. The petitioners state that, on account of their failure to conduct elections before 30.06.2011, the 4th respondent and the entire Managing Committee, not only ceased to be operative, but also have incurred disqualification to be elected for the next term, by operation of Sections 21(6) and 23 of the Mutually Aided Cooperative Societies Act (for short ‘the Act’). They seek declaration to that effect a nd direction to the 1st respondent to convene General Body meeting of the Society for appointing an ad hoc Board for the specific purpose of conducting elections.
The District Cooperative Officer, Nalgonda, the 1st respondent, filed a counter-affidavit. He admitted the facts pleaded by the petitioners to the extent that the Election Officer postponed the elections a nd that by 30.06.2011, elections could not be held to the Offices of two Directors a nd of the President. He further stated that the failure to conduct elections was not due to any lapse on the part of the Society or the Managing Committee, but on account of the illness of the Election Officer. He has also stated that the General Body of the Society met on 29.06.2011, and took stock of the situation. It is further stated that the Managing Committee, through its resolution, dated 15.07.2011, appointed one Sri G.Devender Reddy, as Election Officer, and that the latter issued a notification, dated 16.07.2011, for conducting elections. The 1st respondent stated that in the elections so conducted, two women Directors and the President of the Society were elected. According to him, the disqualification provided for under Section 145 of the Act does not operate automatically, a nd that once the Society and its Managing Committee made sincere efforts to conduct the elections before expiry of the term of two Directors, it cannot be said that there was any deliberate lapse on their part.
Respondents 2 a nd 4 filed counter-affidavits almost on the same lines.
Sri P. Gangaiah Naidu, learned Senior Counsel for the petitioners, submits that the Act clearly mandates that if the Managing Committee fails to conduct elections to the Society, not only President and its members would incur disqualification, but also would become ineligible to be elected for the next term. He contends that the objective underlying the provision is to ensure that the Managing Committee functions without any break, and that there does not exist any exception at all for the operation of the provisions. Learned counsel submits that though a notification was issued within the stipulated time, the Election Officer postponed the elections deliberately, by feigning ill-health. He further submits that the so-called elections conducted subsequent to 30.06.2011, are of no consequence.
Learned Government Pleader for Cooperation and learned counsel for respondents 2 and 5, on the other hand, submit that even according to the petitioners, the election notification was issued much before expiry of the term of 2 directors and of the President and that postponement of elections, on account of the ill-health of the Election Officer, does not result in disqualification of the members of the Managing Committee. According to them, the Managing Committee and General Body of the Society, have taken steps without any loss of time, and the elections to the positions of two Directors and the President of the Society were held within the earliest possible time. It is also pleaded that, in case the petitioners are of the view that any illegality has taken place in the process, they have to initiate proceedings before the Tribunal constituted under the relevant provisions of law.
The constitution, management and functioning of the Cooperative Societies in the State used to be u nder the A.P. Cooperative Societies Act, 1964. This enactment provides for extensive, and some cases persuasive control of the societies, by the Government. With a view to reduce the level of interference by the authorities of the Government and to provide autonomy to the societies, the State Legislature enacted the Mutually Aided Cooperative Societies Act, in the year 1985. Except on certain important aspects, almost full freedom is ensured to the societies to regulate their affairs. However, in order to ensure that elections to the Managing Committees are held promptly, Legislature introduced certain provisions that lead to automatic cessation of the Managing Committee, in the event of its failure to conduct elections within the stipulated time.
The structure of the Managing Committee under the Act is such that its members have staggered terms. In a way, it resembles the pattern of Rajya Sabha. While one-third of the members retire on expiry of the term of two years, in case of Rajya Sabha, it is one-fifth on expiry of each year, in case of the Societies under the Act.
The Managing Committee of the 2nd respondent – Society has 10 members. Two of them would retire on 30th June of each year. In the year 2011, two women Directors completed their term. The resultant vacancies were to be filled. The petitioners do not dispute that the Managing Committee of the Society appointed an Election Officer well in advance and the Election Officer, in turn, issued a notice proposing to conduct elections on 29.06.2011. However, three days before the date of election, i.e. on 26.06.2011, he postponed the election, on the ground that he had suffered ill-health. The petitioners brought this, i.e., the failure on the part of the Managing Committee to conduct elections, to the notice of the 1st respondent, through letter, dated 01.07.2011.
Taking note of the postponement of elections, the General Body, on the one hand, and the Managing Committee, on the other, passed resolutions. One Sri Deve nder Reddy was appointed as Election Officer and he conducted the elections by issuing notification, dated 29.07.2011.
It is a matter of record that the elections were not held to fill the two vacancies of Directors and of the President, before 30.06.2011. The contention of the petitioners is that on account of this failure, the consequences provided for under Section 21 of the Act, must ensue. The provision reads:
“Board of Directors:-
(1) There shall be a Board of Directors for every Cooperative Society constituted and entrusted with the direction of the affairs of the Cooperative Society in accordance with the provisions of the Act and the bye-laws.
(2) The size of the Board shall be a multiple of the term of office of its Directors.
(3) The Directors of the Board shall have staggered terms such that at any point of time the vacancies arising as a result of the terms of Directors coming to an end, are less than one half of the total strength of the Board:
Provided that the term of a Director shall not exceed five years:
Provided further that at the first election all the Directors shall be elected at once, and their terms staggered by drawal of lots specifying different terms.
(4) In addition to such criteria as may be specified in the bye-laws, a person shall be ineligible for being chosen as a Director, if such person;
a) has at any time lost the right to vote as a member or to continue as one as specified in the bye-law.
b) Incurs any other disqualification specified in the bye-laws.
(5) In addition to such criteria as may be specified in the bye-laws, a person shall cease to be a Director if he incurs any of the disqualifications specified in sub-section (4) or,-
a) absents himself from three consecutive Board meetings without leave or absence;
b) absents himself from General Body Meetings out of three consecutive Board meetings without leave or absence;
c) is penalised under this Act.
(6) In addition to such criteria as may be specified in the bye-laws, the Directors of the Board shall incur disqualification for a period of three years for being chosen as Directors and shall be ineligible to continue as Directors of any Cooperative Society, if during their term as Directors of a Cooperative Society,-
a) They did not conduct elections within the time specified in the bye-laws and before the expiry of the terms;
b) They did not conduct their annual General Body Meeting within six months of closure of the cooperative accounting year, or a requisitioned meeting of the General Body within the specified time;
c) They did not place the audited accounts for the preceding financial year along with the report of the auditors before the General Body at its annual General body Meeting.”
(sub-sections 7, 8 and 9 are omitted, as they are not necessary)
From a perusal of sub-section (6) of Section 21 of the Act, it becomes clear that, the Board of Directors shall incur disqualification to hold the Office, if they did not conduct elections within the time stipulated in the bye-laws, before the expiry of the term. In addition to that, they incur disqualification from being elected, for a period of three years. If read in isolation, the consequences, referred to above, must follow, if the elections are not held before the stipulated date, whatever be the cause. However, such a drastic interpretation does not appear to be warranted, if one takes into account, the other provisions of the Act. Section 23 of the Act, which specifically deals with the conducting of elections, provides guidance in this regard. It reads:
“Elections:-
(1) The conduct of election of Directors of a Cooperative Society shall be the responsibility of the incumbent Board of the Cooperative Society.
(2) Election shall be conducted before the expiry of the term of office of the outgoing Directors in the manner specified in the bye-laws.
(3) Where a Board does not take necessary steps to conduct elections as specified in the bye-laws before the expiry of the terms of the Directors, of where there are no Directors remaining on the Board, the Registrar shall at the request of not less than twenty-five members or five per cent of the total members of the Cooperative Society whichever is less or may suo moto convene within 30 days a general meeting for appointing as ad hoc Board for the specific purpose of conducting elections.
(4) The term of the ad hoc Board appointed under sub-section (3) shall not exceed one month over a nd above the minimum period required under the bye-laws to conduct elections, and the ad hoc Board shall cease to function as soon as a regular Board is elected in accordance with the bye-laws.
(5) The Director shall hold office for the period for which they are elected and the newly elected Directors shall assume office at the end of this period.
(6) The Directors may be eligible for re-election, if the bye-laws so provide.”
A perusal of sub-section (3) makes it clear that it is not just the failure to conduct elections, whatever be the cause, that invites the penal consequences. On the other hand, it is failure of the “Board to take steps for conducting the elections”. In other words, if adequate steps are taken by the Board to conduct the elections, it cannot be said that there was any lapse on its part, if for any unforeseen reason the election was not conducted. The present case itself would provide an example. The Managing Committee did everything, which it was required under law, to conduct the elections. The meeting was convened, the Election Officer was appointed and the latter, in turn, issued a notification to conduct the elections, well within time. The failure to conduct elections was not at all referable to any lapse, on the part of the Managing Committee. On the other hand, it was the ill-health of the Election Officer. The Legislature could never have contemplated that even where every possible steps were taken by the Managing Committee to conduct the elections, the members thereof would incur disqualification, if the elections are not held on account of the inability or the failure of the Election Officer. Take for instance, the elections were scheduled to take place before the expiry of the term of the outgoing members, but the election as such did not take place either on account of any natural calamity, or other similar factors. If the consequences provided for under sub-section (6) of Section 141 of the Act are to follow in such cases also, the easiest thing for a disgruntled group of members in the Society would be to create some trouble, on account of which, the election does not take place for the Office of two Directors. By resorting to such a step they, would achieve three objectives or aims, namely,
a) prevent the election of candidates against the vacancies;
b) get the Chairman and Directors of the Managing Committee disqualified from continuing in the office; and
c) get such Directors from being elected for a period of three years disqualified.
No Legislation can be expected to subject a democratic process to such a humiliating absurdity not to expose an elected body to such deleterious effects. Even if a provision exist making such results possible, it has to be read down, to mean that it is only a deliberate attempt on the part of the entire Managing Committee that should lead to such consequences. If this is not possible, the provision itself deserves to be set aside.
In the realm of interpretation of statutes, it is well established when the Act or a part of it frames a scheme or deals with a subject, all the provisions relating to the scheme or subject must be read inconformity with each other. One particular provision cannot be read in isolation. It is also equally settled that an interpretation, which leads to absurdity, must be avoided, if necessary by straining principles in this regard.
This principle was well explained way back 1864 in Attorney General v. Sillem ((1864) 2 H. and C. 431,515) as u nder:
“In endeavouring to discover the true construction of any particular clause of a statute the first thing to be attended to, no doubt, is the actual language of the clause itself, as introduced by the preamble; 2nd, the words or expressions which obviously are by design omitted; 3rd, the connection of the clause with other clauses in the same statute, and the conclusions which, on comparison with other clauses, may reasonably and obviously be drawn… If this comparison of one clause with the rest of the statute makes a certain proposition clear and undoubted, the Act must be construed accordingly, and ought to be so construed as to make it a consistent and harmonious whole. If, after all, it turns out that that cannot be done, the construction that produces the greatest harmony and the least inconsistency is that which ought to prevail.
(see Craies on statute law, 7th Edition, pages 92 and 93)”
In Shamrao v. District Magistrate, Thana (AIR 1952 SC 234), the Supreme Court held:
“The object of the construction of a statute being to ascertain the will of the legislature, it may be presumed that neither injustice nor absurdity was intended. If, therefore, literal interpretation would produce such a result, and the language admits of an interpretation which would avoid it, then such an interpretation may be adopted.”
The following passage from the same treatise is apt to be quoted:
“Where the language is explicit, its consequences are for Parliament, and not for the courts, to consider. In such a case the suffering citizen must appeal for relief to the lawgiver and not to the lawyer. The rule is thus laid down by Cotton L.J. in Reid v. Reid ((1886) 31 Ch.D. 402, 407). “In considering the true construction of an Act, I am not so much affected as some judges are by consequences which may arise from different constructions. Of course, if the words are ambiguous, and one construction leads to enormous inconvenience, a nd another construction does not, the one which leads to least inconvenience is to be preferred.” The courts will not lightly impugn the wisdom of the legislature, and if any alternative construction, although not the most obvious, will give a reasonable meaning to the Act and obviate the absurdities or inconveniences of an absolutely literal construction, the courts deem themselves free to adopt it.
(Craies on statute law page 90)”
The existence of an elected committee is almost a lifeline of a cooperative society. Every effort must be made to ensure that a committee elected once is permitted to complete its term. It is only when the Committee defeats the provisions of the Act through its acts and omissions that its term can be brought to an end before it expires. An accidental omission on the part of a third party, in the matter of carrying out the mandate of the Managing Committee, can not at all be permitted to liquidate the committee itself and to attach disqualification to its members. If two interpretations are possible, of the same provision, the one which respects the mandate of the General Body must be chosen.
The petitioners do not dispute that within the earliest possible time, from the date on which the election scheduled earlier was postponed, the members as well as the President, have been elected. If they find that the election of the Directors or the President, is contrary to law, they can avail the remedy as provided for under Section 87 of the Act.
Hence, the writ petition is dismissed.
The miscellaneous petition filed in this writ petition also stands disposed of.
There shall be no order as to costs.