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P.G.Jayakumar Thozhilali Vikasana Kshema Sahakarana

High Court Of Kerala|16 December, 2014
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JUDGMENT / ORDER

Antony Dominic, J.
This writ appeal is filed against the judgment of the learned single Judge in WP(C) No.31371/14, which was disposed of along with WP(C) No.31449/14 by judgment rendered on 10th of December, 2014. The appellant filed the writ petition seeking to quash Ext.P2 election notification issued by the 1st respondent and Ext.P3 notice published by the 4th respondent convening a general body meeting on 14th of December, 2014 for election to the Board of Directors of the Society. By the judgment under appeal, the writ petition was dismissed by the learned single Judge and it is this judgment which is under challenge before us.
2. We heard the learned counsel for the appellant, learned special Government Pleader appearing for respondents 1 to 3 and the learned counsel appearing for the 4th respondent.
3. Briefly stated, the facts of the case are that the appellant is the President of Njarakkal Nayarambalam Malsya Thozhilali Vikasana Kshema Shakarana Sangom, a member of the 4th respondent, an Apex Society, as defined in Section 2(a) of the Kerala Co-operative Societies Act (hereinafter referred to as 'the Act' for short). The society of which the appellant is the President is a society affiliated to the 4th respondent and the appellant is the delegate from his society.
4. Ext.P1 is the bye law of the 4th respondent society.
Clause 14 provides for the constitution of the Board of Directors. As per Clause 14(a), 15 members are to be elected from the delegates of 'A' class members from among themselves. It is also provided that out of the 15 members, one seat shall be reserved for a lady member and another shall be reserved for a SC/ST member. It is also provided that the maximum number of members in the Board of Directors shall be 25. Clause 14(b) provides for seven Ex.Officio Directors and the persons who are the Ex. Officio Directors are designated in their official capacity. Clause 18 of the bye law provides for the election of an Executive Committee and as per this provision, it shall be competent for the Board of Directors to elect such a committee from among them. Clauses 20 and 22 deal with the constitution of the general body and the powers thereof.
5. Section 28 of the Act providing for the appointment of committee of a Co-operative Society underwent amendments and in terms of Section 28(1A), notwithstanding anything contained in the bye laws of the society, the number of members of the committee shall not be less than seven and shall not exceed twenty one, in the case of societies other than primary Co- operative Societies. Section 28A provides reservation for women members and members belonging to Scheduled Castes or Scheduled Tribes in the Committee. This section also was substituted in 2000 and as per this provision, notwithstanding anything contained in the Act, the rules or the bye laws, there shall be reserved in the committee of every society, three of the total seats for women members and one seat for a member belonging to SC/ST.
6. The administration of the 4th respondent society is now vested in an Administrative Committee. From Ext.R1(a), the recommendation made by the Registrar to the Election Commissioner, it appears that, on 7/10/14, the administrative committee passed resolution No.1233/14 and based on that resolution, the Managing Director of the society addressed the Registrar. On that basis, the Registrar has issued Ext.R1(a) to the Election Commissioner stating that in view of the statutory provisions contained in Section 28(1A), despite the provisions of the bye laws of the society, the total number of members of the Board of Directors should be restricted to 21 and that after including the Ex.Officio Directors, the number of elected Directors should be restricted to 14 as against the bye law provisions fixing the number at 15. On this basis, he recommended to the Election Commissioner to issue necessary notification for election to the Board of Directors of the 4th respondent society.
7. On the recommendation of the Registrar, the 1st respondent issued Ext.P2 notification dated 31/10/14 for election to 14 seats in the Board of Directors. Out of these 14, 10 are earmarked as general, three are reserved for women and one is reserved for a SC/ST member. The schedule of election is also mentioned in this notification. It was on this basis that the society published Ext.P3 notice of general body and this notice is dated 6/11/14. In these circumstances, challenging Exts.P2 and P3 and seeking a declaration that only in accordance with the bye laws of the society that an election notification can be issued by the 1st respondent and election conducted, the writ petition was filed by the appellant.
8. According to the appellant, going by the provisions of the bye laws, election should be conducted to fill up 15 seats in the Board of Directors and that in the absence of a resolution passed by the general body amending the bye laws, variation thereof as reflected in Exts.P2 and P3, based on a decision allegedly taken by the Administrative Committee, which is incompetent to do so, is illegal.
9. The writ petition was admitted on 25/11/14. The 1st respondent and the 4th respondent filed their counter affidavits. According to the 1st respondent, the bye laws will have to yield to the statutory provisions and they took steps for the conduct of the election in compliance with the request made by the Registrar as per Ext.R1(a) mentioned above.
10. In so far as the 4th respondent is concerned, counter affidavit was filed and in para 3 thereof, they contended thus;
“3. Here in this connection it is worthwhile to mention that the provisions in the KCS Act were amended. In view of the said amendment of the provisions of the KCS Act, which was notified and given effect, an election to the managing committee of an Apex Society or even a primary society cannot be held other than in the manner as provided in the Act. With the amendment of the provisions of the KCS Act the maximum strength of a committee of an Apex Society shall not increase 21. Therefore, this respondent is obliged under law to fix the strength of the Board of Directors in a realistic and purposive manner. As per the provisions of law the maximum number of members in the committee of an Apex society cannot exceed 21. As stated earlier there is no provision of law enabling the committee of a society to reduce the strength of the ex-officio members. When the matter in issue is examined from the above perspective, it can be seen that the notification issued restricting the number of elected representatives as 14 is the only legal way by which an election to the Board of Directors can be held. The decision so taken by the committee is in conformity with the provisions in the parent Act and the rules made thereunder. Further the bye laws will give way for the provisions in the Act. When that be the factual position, there is no merit in any of the contentions as raised in the writ petition. It is therefore submitted that the writ petition is only to be dismissed.”
11. In the judgment under appeal, the learned Judge placed reliance on the decision of this Court in Gopinathan Nair v. Senior Inspector of Co-op. Societies (1986 KLT 1269).
According to the learned Judge, the fact that Ex.Officio Directors were stipulated in the bye laws coupled with the fact that the Government has substantial financial interest in the 4th respondent, would not commend a reduction of such Ex.Officio members to comply with the mandate of Section 28(1A). Thereafter, the learned Judge also held that definitely, the appellant's contention that a reduction of elected members would also have to be placed before the general body; cannot be altogether ignored and that when looking at the substantial financial interest the Government has in the society and the need for continuance of the Ex.Officio Directors, the reduction of the elected members by one could only be the practical view to be adopted to go ahead with the election; so as to make the bye laws concede to the mandate of the statute. It is on this basis, the learned single Judge has upheld the reduction of one seat among the elected members of the Board of Directors of the society pursuant to a decision to that effect taken by the administrative committee. It is this judgment, which is under challenge before us.
12. Admittedly, as per clause 14 of the bye laws of the society providing for the constitution of the Board of Directors provide for 15 elected members from among the delegates of A class members. It also provides that out of the 15 members to be elected, one shall be reserved for a lady member and another shall be reserved for a SC/ST member. It is also provided that the maximum number of members shall be 25. Clause 14(b) provides for 7 Ex. Officio members, who are named by designation. As rightly pointed out by both sides, bye laws of a society cannot be contrary to the provisions of the Act or the Rules. As we have already pointed out, Section 28 of the Act provides for appointment of committee. Section 28(1A) of the Act provides that notwithstanding the provisions of the bye laws of the society, the number of members of the committee shall not be less than seven and shall not exceed twenty one in the case of an apex society like the 4th respondent. Section 28A(1) of the Act, as it now stands, provide that notwithstanding the provisions of the Act, the rules or the bye laws, there shall be reserved in the committee of every society, three seats for women members and one seat for a member belonging to the Scheduled Castes or the Scheduled Tribes. This, therefore, means that the provisions of the bye laws as it obtains now providing for reservation only for one lady member and that the maximum number can be 25 are contrary to the provisions of the statute. In such a situation, the bye laws should yield to the statute and will have to be brought in line with the statutory provision. That process can be completed only by an amendment of the bye laws, which is a power reserved to the general body of a society, as is evident from Section 29(cd) of the Act.
13. In so far as this case is concerned, even the 4th respondent has no case that the administrative committee had convened a special general body as contemplated in Section 30 of the Act. Instead, what is contended before us is that, having regard to the fact that the Ex. Officio members are from financing agencies, it would be neither prudent nor possible for the general body to effect any amendment to clause 14(b) and that, therefore, the only practical solution to the problem was to reduce the number 15 mentioned in Clause 14(a) to 14.
14. Counsel also contended that, in such a situation, even if it was placed before it, the general body would not have taken a decision to amend clause 14(b) and therefore placing the matter before the general body would have been an empty formality as held by the Apex Court in its judgment in Aligarh Muslim University v. Mansoor Ali Khan {(2000) 7 SCC 529}. Reliance was also placed on the judgment of this Court in Gopinathan Nair's case (supra).
15. We are unable to agree. We have already held that, in an issue of this nature, amendment to the bye laws is the only solution and that the power to amend bye laws is a power vested only in the general body of a society as is provided in Section 29 (cd) of the Act. In so far as this case is concerned, clause 14 of the bye laws provides for the constitution of the Board of Directors from two sources viz., elected Directors and Ex.Officio Directors. The upper limit of 21 prescribed in the Act could be achieved by either reducing the number of elected members from 15 to 14 or by reducing the number of Ex.Officio Directors from 7 to 6. The choice as to whether such a reduction should be made from out of the elected members or the Ex.Officio Directors is a choice which should be left entirely to the wisdom of the general body and such power of the general body cannot be usurped by the administrator or the administrative committee, which is in office.
16. In so far as the theory of empty formality that was canvassed by the learned counsel for the society is concerned, the theory of empty formality has been applied by the Apex Court in the judgment in Aligarh Muslim University's case (supra) by specifically indicating that it applies only in a case where “on the admitted or indisputable facts, only one view is possible”. In so far as this case is concerned, as we have already stated, this is a case where, in order to comply with the statutory mandate, the general body had more than one option available to it and it was for the general body to choose the best option. Therefore, this is not a case where on the admitted and indisputable facts, only one view was possible as indicated by the Apex Court.
17. The other contention raised before us was that in view of the fact that the Ex.Officio Directors are representatives of the financing agencies, it is neither prudent nor possible for the general body to amend clause 14(b) and thereby to reduce their number. Such a factual contention now urged before us does not find any footing in the counter affidavit filed by the 4th respondent society, paragraph 3 of which has been extracted by us in the earlier portion of this judgment. Therefore, we are unable to accept this contention of the learned counsel for the 4th respondent. Evidently, therefore, in the absence of a decision by the general body amending the bye laws of the society, the administrative committee could not have on its own recommended for the election in the manner it has done.
18. Learned counsel for the 4th respondent then contended that societies alone are the members of the apex society and that the appellant, being an individual, is not a member of the society and therefore, does not have the locus standi to maintain the writ petition. It is true that the appellant has filed the writ petition in his capacity as President of a society, which is affiliated to the 4th respondent. But, however, such filing of the writ petition was pursuant to Ext.P4, the minutes of the Board of Directors of the Society of which he is the president, where he was authorised to initiate legal proceedings impugning Exts.P2 and P3 on behalf of the Society. In other words, he did not file this writ petition in his individual capacity but has filed the writ petition as a representative of the Co-operative society, which is a member of the 4th respondent, the apex society.
19. Learned counsel then contended that the remedy available to the appellant is to raise a dispute as provided under Section 69(2)(c) of the Act. Counsel also placed reliance on the judgments of the Apex Court in State of U.P. v. C.O.D. Chheoki Employees' Co-operative Society Ltd. {(1997) 3 SCC 681}, Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha v. State of Maharashtra {(2001) 8 SCC 509} and the judgment of this Court in Raghavan M. V. v. Returning Officer (2009) 2 KHC 47).
20. It is true that in matters relating to preparation of electoral roll and disputes regarding election, this Courts have consistently relegated the parties to pursue the alternate remedies, considering the nature of the disputes that are involved. In so far as this case is concerned, there is absolutely no factual issues in controversy and the question raised and considered by us is purely legal. In such a circumstance, when infringement of the statutory provisions is complained of before this Court, the alternate remedy available under Section 69 of the Act is no bar for entertaining the writ petition. It has been so held by the Apex Court in its judgment in Akalakunnam Village Service Co-operative Bank Ltd. v. Binu N. {(2014) 9 SCC 294}.
21. Lastly, it was urged that Ext.P2 notification was issued on 31/10/14 and that the writ petition was filed only on 22/11/14. It was stated that after the writ petition was filed, nominations were received and after scrutiny and withdrawal, 28 candidates were left in the election fray as on 28/11/14. Therefore, according to the counsel, by the time the writ petition was heard on 9/12/14 and judgment was rendered on 10/12/14, there were 28 contestants for the election, who are affected by the challenge in the writ petition against Ext.P2 notification. Learned counsel contended that these persons were necessary parties and their nonjoinder was fatal to the writ petition.
22. First of all, the fundamental challenge in this writ petition was against Ext.P2 notification issued by the Election Commission. When such is the challenge, the responsibility to justify the notification is that of the commission and the society. In such a situation, the persons, who have come into the picture subsequently as contestants in the election so declared, are not necessary parties, but, at best, are only proper parties. Nonjoinder of such proper parties cannot be fatal to the proceedings instituted by the appellant. This view we take finds support in the judgment of this Court in Amina Nahna v. State of Kerala (2011 (3) KLT 753). Even otherwise, the fate of any action taken under the notification would be dependent upon the challenge against the notification and those actions cannot have any independent existence. In such circumstances, we cannot accept the case of the nonjoinder contended by the learned counsel for the 4th respondent.
23. Though we accept the contentions of the learned counsel for the appellant regarding the incompetence of the administrative committee to have reduced the number of seats to be filled by election in the Board of Directors in the absence of a resolution passed by the general body of the society amending the bye laws, the question still survives as to what relief should be granted in this proceedings. As we have already stated, even if the matter goes to the general body, there are options available to the general body. The decision of the general body can be either to retain the number of elected Directors at 15 and to reduce the Ex.Officio Directors by one. It can also be to retain the number of Ex.Officio Directors at 7 and to reduce the number of elected Directors by one. In both scenarios, the minimum number of elected members in the Board of Directors of the 4th respondent society would be 14. If the decision of the general body is to retain the number of elected Board of Directors as 15, the consequence would be that, one more member of the Director Board will have to be elected. In such a situation and when the appellant himself did not argue any other vitiating circumstances invalidating the election that was held on 14/12/14, with the whole state as one single constituency, we see no reason to invalidate the election already conducted to the 14 seats in the Board of Directors.
24. In such circumstances, we set aside the judgment of the learned single Judge dismissing WP(C) No.31371/14 and dispose of this appeal with the following directions;
1. The Administrative Committee will immediately convene a special general body meeting as contemplated in Section 30 of the Act for considering amendments to the bye laws of the society to bring it in line with the provisions of Section 28 (1A) and 28A of the Act.
2. If the resolution in the special general body meeting so held necessitates election to one more seat in the Board of Directors, necessary recommendation will be made to the Registrar, who, in turn, will take up the matter with the Election Commission. On that basis, election will be held to fill up that one vacancy.
3. In the meantime, the Administrative Committee in office will continue and the results of the election already held will be withheld until election is held on the basis of the decision to be taken by the special general body.
4. On the other hand, if election is not necessitated, results of the election held on 14.12.14 will be declared immediately and the elected members will be put in charge of the affairs of the society.
5. It is directed that the whole process shall be completed, as expeditiously as possible, at any rate, within three months from the date of receipt of a copy of this judgment.
Rp //True Copy// PA to Judge Sd/-
ANTONY DOMINIC JUDGE
Sd/-
ANIL K. NARENDRAN
JUDGE
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Title

P.G.Jayakumar Thozhilali Vikasana Kshema Sahakarana

Court

High Court Of Kerala

JudgmentDate
16 December, 2014
Judges
  • Antony Dominic
  • Anil K Narendran
Advocates
  • Sri