IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF AUGUST, 2019 PRESENT THE HON’BLE MR. ABHAY S. OKA, CHIEF JUSTICE AND THE HON’BLE MR. JUSTICE MOHAMMAD NAWAZ WRIT APPEAL NOS.3075-3076 OF 2019 (GM-KSR) BETWEEN:
1. KEB SCHEDULED CASTE AND SCHEDULED TRIBES WELFARE ASSOCIATION, REG. NO. 466, KEB (BESCOM) OFFICE COMPOUND, DR. B. R. AMBEDKAR VEEDHI, K. R. CIRCLE, BANGALORE-560 001, BY ITS PRESIDENT, MR. K. DAS PRAKASH, S/O. LATE VEERA DASIAHA.
2. KEB SCHEDULED CASTE AND SCHEDULED TRIBES WELFARE ASSOCIATION, REG. NO. 466, KEB (BESCOM) OFFICE COMPOUND, DR. B. R. AMBEDKAR VEEDHI, K. R. CIRCLE, BANGALORE-560 001, BY ITS GENERAL SECRETARY, G. GURULINGAIAH, S/O. GURUVAIAH.
... APPELLANTS (BY SRI. JAYAKUMAR S. PATIL, SR. COUNSEL FOR SRI. DEVI PRASAD SHETTY, ADVOCATE) AND:
1. THE STATE OF KARNATAKA, DEPARTMENT OF CO-OPERATION, M. S. BUILDING, BANGALORE-560 001, REPRESENTED BY ITS PRINCIPAL SECRETARY.
2. THE STATE OF KARNATAKA, DEPARTMENT OF CO-OPERATION, M.S. BUILDING, BANGALORE-560 001, REPRESENTED BY ITS SPECIAL OFFICER AND EX-OFFICIO JOINT SECRETARY.
3. DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES DISTRICT REGISTRAR OF CO-OPERATIVE SOCIETIES, 4TH CIRCLE, BANGALORE DISTRICT, SAHAKARA SOUDHA, 3RD MAIN ROAD, 8TH CROSS, MARGOSA ROAD, MALLESHWARAM, BANGALORE-560 001.
4. SHRI KISHORE KUMAR JOSHI, ADMINISTRATOR, ASST. REGISTRAR OF CO-OPERATIVE SOCIETIES, 2ND CIRCLE, BANGALORE-560 027.
... RESPONDENTS (BY SRI. I. THARANATH POOJARI, AGA) THESE WRIT APPEALS ARE FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 08/08/2019 PASSED IN W.P. NOS.32649-650/2019.
THESE WRIT APPEALS ARE COMING ON FOR ORDERS THIS DAY, CHIEF JUSTICE DELIVERED THE FOLLOWING:
J U D G M E N T By these appeals, the appellants have taken an exception to the order dated 8th August 2019, passed by the learned Single Judge by which the writ petition filed by the appellants have been rejected.
2. The issue concerns management of a society known as KEB Scheduled Caste/ Scheduled Tribes Welfare Association ®, Central Committee, which is duly incorporated and registered under the Karnataka Societies Registration Act, 1960 (for short ‘the said Act of 1960’). Under the Rules and Regulations (bye-laws) of the said Society, there is a provision for the general body electing Central Executive Committee (for short ‘the Executive Committee’). It is not in dispute that the tenure of the Executive Committee is of three years and that the same has expired on 18th June 2019. The challenge in the writ petitions filed by the present appellants was to order dated 26th July 2019 passed by the second respondent in exercise of powers under Sub-section (1) of Section 27A of the said Act of 1960. By the said order, the second respondent appointed Assistant Registrar of Co-operative Societies as the Administrator of the said Society who will continue to hold the office till holding of elections of the Executive Committee and handing over the charge to the new management board or for a period of three months period, whichever is earlier. The said order appointing Administrator was confirmed by the impugned order passed by the learned Single Judge. However, the learned Single Judge directed the Administrator to conclude the elections of the Society within two months from the date of receipt of certified copy of his order.
3. The submission of the learned Senior Counsel for the appellants is that the view taken by the learned Single Judge that before appointing an Administrator by exercising power under clause (b) of Sub-section (1) of Section 27A, no enquiry is needed, is completely erroneous. He submits that, if such interpretation is accepted, the statutory provision will expose itself to unconstitutionality. Inviting our attention to clause (c) of Sub-section (1) of Section 27A, he submitted that action of appointing an Administrator can be taken only after an enquiry is held. He submitted that the effect of order appointing Administrator is very drastic. He invited our attention to Sub-sections (2) to (4) of Section 27A. He would submit that even in a case where clause (b) of Sub-section (1) of Section 27A is attracted, the appointment of an Administrator cannot be mechanically made. He submitted that there may be about two lakh societies governed by the said Act of 1960 in the State and by that logic, an Administrator will have to be appointed in case of all the societies where the term of the governing body has expired. He invited our attention to the order passed by this Court in W.P.Nos.12882-883/2019 by the learned Single Judge on 17th June 2019. He submitted that the election of the Executive Committee would have been held even before the expiry of his term and only because an Administrator was illegally appointed, that election could not be held. He submitted that even the process of appointing Returning Officer was sought to be thwarted. He submitted that the specific stand of the State Government was that in the order dated 17th June 2019, a direction was issued to the State Government to appoint an Administrator. He lastly submitted that even under bye-law 20 of the Bye-laws of the said Society, it is permissible for the office bearers and Executive Committee members to hold their office till formation of new committee even after the term of the Executive Committee expires. He submitted that even this aspect has not been considered.
4. We have considered the submissions. Section 27A of the said Act of 1960, reads thus:
“27A. Appointment of Administrator.- Notwithstanding anything in this Act,---
(1)(a) where any society on account of the pendency of litigation or otherwise has not held or is unable to hold the annual general meeting; or (b) where the term of office of the members of the governing body of a society has expired and a new governing body has not for any reason been constituted; or (c) where on a report made by the Registrar or otherwise, on enquiry, the State Government considers it necessary in public interest so to do, --the State Government may, by order published in the official Gazette, appoint an Administrator for such society for such period, not exceeding six months, as may be specified in the order, to manage the affairs of the society:
Provided that for reasons to be recorded in writing, the State Government may, by like order, extend either prospectively or retrospectively, the said period by any further periods not exceeding six months at a time, so however subject to the provisions of clause (5), the aggregate period shall not extend beyond four years;
(2) the expenditure incurred by the State Government towards the salary and allowances of the Administrator shall be paid to the State Government from out of the funds of the society;
(3) on the appointment of the Administrator under clause (1) and during the period of such appointment the governing body of the society shall cease to exercise any powers and perform and discharge any functions or duties conferred or imposed on it by this Act, or its memorandum of association or the rules and regulations or any other law and subject to any directions which the State Government, may from time to time issue, all such functions or duties shall be performed or discharged by the Administrator;
(4) the Administrator shall, before the expiry of the period of his appointment take necessary action to convene the general body meeting of the society and hold elections for the constitution of the governing body;
(5) if the Administrator is not, for reasons beyond his control, able to convene the general body meeting or inspite of such meeting being convened, the general body fails to elect the governing body, the Administrator shall forthwith send a report to the State Government, who may pass such orders as are considered necessary, either extending the period of appointment of the Administrator for a further period or if satisfied that public interest so requires, for the dissolution of the society;
(5A) the State Government may, if it thinks fit, appoint an Advisory Council to advise and assist the administrator appointed under sub-section (1) in the exercise of the powers and performance and discharge of the duties and functions conferred or imposed on him under this Act. The members of the Advisory Council shall hold office during the pleasure of the State Government.
(6) where an order of dissolution is passed under sub-section (5) the assets of the society shall vest in and the liabilities shall devolve on the State Government.”
(underline added) 5. On plain reading of Section 27A, there are three distinct grounds incorporated in clauses (a), (b) and (c) of Sub-section (1) of Section 27A on which the power of appointment of an Administrator can be exercised. The clause (b) is attracted when the term of office of the members of the governing body has expired and a new body has not for any reason been constituted. In the case in hand, clause (b) is applicable. In these appeals, what is challenged is an order made by the learned Single Judge in exercise of discretionary and equitable jurisdiction under Article 226 of the Constitution of India. The challenge will have to be appreciated in the light of the fact that there is no dispute that the term of the Executive Committee has admittedly come to an end on 18th June 2019. Whatever may be the reason, it is an admitted position that as of today, a meeting of the general body for electing Executive Committee members has not been held.
6. It will be necessary at this stage to make a reference to the order dated 17th June 2019 passed by the learned Single Judge in earlier writ petition filed by the present appellants. The writ petitions were filed challenging the order dated 14th March 2019 passed by the second respondent appointing Administrator under Section 27A of the said Act of 1960. It appears from the judgment that for appointing the Administrator, clause (c) of Sub-section (1) of Section 27A was invoked. The specific submission of the appellants in the said writ petitions was that no enquiry, as envisaged by clause (c), was conducted. The learned Single Judge accepted the argument that by invoking clause (c), the appointment of an Administrator could not be made without holding an enquiry. While passing the said order which has become final, the learned Single Judge was made aware of the fact that the term of the Executive Committee was to expire on 18th June 2019. Therefore, in paragraph-5 of the said order, the learned Single Judge observed thus:
“5. xxxxx This Court is conscious of the fact that the term of the Managing Committee of the Society shall come to an end tomorrow ie., 18.06.2019. So far as reliance placed by learned Additional Advocate General on the decision of this court in B. BALAJI supra is concerned, since, in the aforesaid case, there was a dispute with regard to the term of the office bearers of the Society, therefore, the Registrar of Societies was directed to appoint an Administrator for conducting free and fair elections of the Society. The aforesaid direction was issued in the fact situation of that case and has no application to the obtaining factual matrix of the case. Therefore, it will be open to the State Government to take an action for appointment of an Administrator in accordance with law, expeditiously and to ensure that free and fair elections of the petitioners-Societies are held expeditiously in accordance with law.
With the aforesaid directions, the petition is disposed of.”
7. As noted in the said paragraph, the learned Single Judge has distinguished a decision of this court in the case of ‘B. BALAJI VS. THE HEBBAR SRI VAISHNAVA SABHA (REGD.) & ORS.’ in W.P.No.50154/2017 on the ground that there was a dispute in the said case with regard to the term of office bearers of the Society. The challenge to the subsequent order of appointing Administrator by invoking clause (b) of Sub-section (1) of Section 27A will have to be appreciated in the light of the observations made by the learned Single Judge in the earlier writ petitions filed by the appellants themselves.
8. Now coming back to the impugned order, the learned Single Judge has observed that the term of the Executive Committee has admittedly expired on 18th June 2019. Clause (b) of Sub-section (1) of Section 27A confers a power to appoint an Administrator when the term of office of the members of the governing body of a Society has expired and a new governing body has not, for any reason, been constituted. The learned Single Judge held that on admitted facts, clause (b) of Sub-section (1) of Section 27A was applicable. Even the order which was impugned before the learned Single Judge provided that the Administrator was appointed till holding of the elections of the Society and handing over the charge to the new management board or for three months, whichever is earlier. While passing the impugned order, the Administrator has been directed to conclude the elections within a period of two months. We may note here that under Sub-section (4) of Section 27A of the said Act of 1960, the Administrator is under an obligation to take necessary action to convene the general body meeting of the Society and hold the elections for constitution of the governing body. That is how the learned Single Judge has directed the Administrator to conclude the elections within a period of two months from the date of receipt of the order passed by the learned Single Judge.
9. We have perused sub-clause (v) of clause (3) of bye-law 20(1) adopted by the said Society. Apart from the fact that the bye-laws cannot override the provisions of the said Act of 1960, the bye-laws do not confer any right on the members of the Executive Committee to continue to function as such, even after their term has expired.
10. All that the learned Single Judge has held is that the admitted position is that the term of the managing committee has expired on 18th June 2019 and the election has not been held. He was of the view that if Clause (b) of Sub-section (1) of Section 27A was attracted on admitted facts, no fault can be found even if an enquiry is not held.
11. We are not impressed by the argument that if the impugned order is confirmed, Administrator will have to be appointed in case of lakhs of societies. If provisions of law warrant appointment of an Administrator, the State can always exercise the said power in accordance with law, irrespective of the fact that the power will have to be exercised in case of large number of societies.
12. After all, looking to the provisions of the said Act of 1960, the principle appears to be that all the societies will be democratically governed. Therefore a democratically elected Executive Committee whose term has expired, cannot continue as a matter of right and surely cannot object to the appointment of Administrator, especially when Administrator has been directed to hold elections within a period of two months.
13. We are, therefore, of the view that there is no reason to interfere with the discretionary and equitable order passed by the learned Single Judge in exercise of powers under Article 226 of the Constitution of India. While we say so, we must record here that we have made no final adjudication on the issue whether before exercising power of appointment of an Administrator under clause (b) of Sub-section (1) of Section 27A, holding of an enquiry is mandatory. In the facts of this case, even assuming that enquiry was mandatory, no prejudice is caused to anyone as the term of the Executive Committee has already expired and as the learned Single Judge has ensured that elections will be held within two months.
14. Subject to what is observed above, the appeals are dismissed. Pending applications do not survive and are accordingly disposed of.
Sd/- CHIEF JUSTICE Sd/- JUDGE RD