Beena Vijayan and C.K. Sivarman v. State Co-operative Election Commission and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR.JUSTICE K.SURENDRA MOHAN** **FRIDAY, THE 20TH DAY OF JUNE 2014/30TH JYAISHTA, 1936** **WP(C).No. 14372 of 2014 (V)** **----------------------------** **PETITIONER(S):** **--------------** **1. BEENA VIJAYAN, AGED 41 YEARS W/O.VIJAYAN, PRESIDENT MEENANGADI SERVICE CO-OP. BANK LTD. NO.F.1061 MEENANGADI P.O., WAYANAD DISTRICT.** **2. C.K.SIVARAMAN, AGED 62 YEARS S/O.LATE KESAVAN NAIR, AKSHARA, KALPETTA P.O. WAYANAD DISTRICT -673 122.** **BY ADV. SMT.ANU SIVARAMAN** **RESPONDENT(S):** **--------------** **1. THE STATE CO-OPERATIVE ELECTION COMMISSION, REPRESENTED BY ITS SECRETARY THIRUVANANTHAPURAM - 691 001.** **2. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, WAYANAD-678 121.** **3. WAYANAD DISTRICT WHOLESALE CONSUMER, CO-OPERATIVE STORE LTD., NO.W.36, KALPETTA P.O. WAYANAD DISTRICT - 673 121 REPRESENTED BY ITS SECRETARY.** **4. ELECTORAL OFFICER, WAYANAD DISTRICT WHOLE SALE CONSUMER STORE LTD. (ASSISTANT REGISTRAR (GENERAL) VYTHIRI) - 678 976.** **5. RETURNING OFFICER, WAYANAD DISTRICT WHOLE SALE CONSUMER STORE LTD. (UNIT INSPECTOR, KALPETTA OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES)- 678 121.** **R3 BY ADV. SRI.P.N.MOHANAN R1-R4 BY ADV. GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20-06-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 14372 of 2014 (V)** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS -----------------------** |**EXT.P1:**|**TRUE COPY OF THE ORDER NO.CS(2)54058/2011 DATED 7/6/2012**| |---|---| ||**ISSUED BY THE REGISTRAR OF CO-OP. SOCIETIES**| |**EXT.P2:**|**TRUE COPY OF THE ORDER NO.C.S(2)54058/2011 DATED 5/6/2013**| ||**ISSUED BY THE REGISTRAR, CO-OPERATIVE SOCIETIES.**| |**EXT.P3:**|**TRUE COPY OF THE JUDGMENT IN WPC 26188/2013 DATED**| ||**22/11/2013 OF THIS HON'BLE COURT.**| |**EXT.P4:**|**TRUE COPY OF THE NOTIFICATION NO.E(2)/1222/2013/SCEC**| ||**DATED 17/5/2014 ISSUED BY THE 1ST RESPONDENT.**| |**EXT.P5:**|**TRUE COPY OF THE OBJECTION PREFERRED BY THE 1ST**| ||**PETITIONER DATED 26/5/2014 TO THE ELECTORAL OFFICER.**| |**EXT.P6:**|**TRUE COPY OF THE OBJECTION PREFERRED BY THE 2ND**| ||**PETITIONER AND OTHERS DATED 26/5/2014 TO THE ELECTORAL**| ||**OFFICER.**| |**EXT.P7:**|**TRUE COPY OF THE SHARE CERTIFICATE NO.9 FOR RS.4,500/-**| ||**ISSUED BY THE DIRECTOR, WAYANAD DISTRICT WHOLESALE CO-**| ||**OPERATIVE CONSUMERS' STORES LIMITED NO.W.36.**| |**EXT.P8:**|**TRUE COPY OF THE ORDER NO.364/2014 DATED 30/5/2014 ISSED**| ||**BY THE ASSISTANT REGISTRAR (GENERAL), WAYANAD DISTRICT,**| ||**WHOLESALE CO-OPERATIVE CONSUMERS' STORES LIMITED NO.W.36**| ||**TO THE 1ST PETITIONER.**| |**EXT.P9:**|**TRUE COPY OF THE ORDER NO.364/2014 DATED 30/5/2014 ISSED**| ||**BY THE ASSISTANT REGISTRAR (GENERAL), WAYANAD DISTRICT,**| ||**WHOLESALE CO-OPERATIVE CONSUMERS' STORES LIMITED NO.W.36**| ||**TO THE 2ND PETITIONER.**| |**EXT.P10:**|**TRUE COPY OF THE FINAL VOTERS LIST - A CLASS PUBLISHED BY**| ||**THE 4TH RESPONDENT DATED 31/5/2014.**| |**EXT.P11:**|**TRUE COPY OF THE MEMBERS WHO WERE EXCLUDED FROM THE**| ||**VOTERS LIST A CLASS PUBLISHED BY WAYANAD DISTRICT**| ||**WHOLESALE CO-OPERATIVE CONSUMERS' STORES LIMITED NO.W.36.**| |**EXT.P12:**|**TRUE COPY OF THE OBJECTION SUBMITTED BY THE SECRETARY,**| ||**VENGAPPALLY VILLAGE INDUSTRIES CO-OP. SOCIETY,**| ||**MANIYANCODE.**| **RESPONDENT(S)' EXHIBITS -----------------------** **EXT.R3(A) COPY OF THE NOTICE OF THE GENERAL BODY MEETING OF THE THIRD RESPONDENT BANK.** **WP(C).No. 14372 of 2014 (V)** |**EXT.R3(B)**|**COPY OF THE ORDER DATED 20.11.2013 OF THE JOINT**| |---|---| ||**REGISTRAR.**| |**EXT.R3(C)**|**COPY OF THE PAPER NOTIFICATION DATED 16.12.2013 PUBLISHED**| ||**IN MADHYAMAM DAILY.**| |**EXT.R3(D)**|**COPY OF THE REQUEST RECEIVED FROM VYTHIRI CARD BANK AND**| ||**KALPETTA SCB.**| |**EXT.R3(E)**|**COPY OF THE APPLICATION OF ONE MR.SURESH, PETITIONER IN**| ||**EXT.P3 AND K.K.RAJENDRAN AND C.K.REGHAVAN AND**| ||**V.P.SANKARAN NAMBIAR.**| **/TRUE COPY/** **P. A. TO JUDGE** **Pn** **C.R.** **K.SURENDRA MOHAN, J. ------------------------------------** W.P.(C)No.14372 of 2014 **-----------------------------------** Dated this the 20[th] day of June, 2014 ## **J U D G M E N T** The petitioners are members of the 3[rd] respondent Cooperative Society. An election to the Managing Committee of the Society has been notified as per Ext.P4. The proceedings have progressed substantially and the actual polling is scheduled to be conducted on 26.06.2014. According to the petitioners, they have been excluded from the final voters list prepared, which is produced as Ext.P2. Though they had submitted their objections to the draft voters list, by Exts.P8 and P9, their objections have been rejected. Thereafter, the voters list has been finalised, which is Ext.P10. 2. The contention of the petitioners is that the bye-laws of the 3[rd] respondent Society were amended at a General Body that was held on 26.10.2013. There are allegations against the manner in which the General Body was convened. Amendments to the byelaws were passed at the said General Body Meeting enhancing the share value. The amendments have been duly registered. Thereafter, notices were published in newspapers intimating the shareholders that they would have to pay the enhanced share value within a stipulated time. The petitioners have not paid the said share value. According to the counsel for the petitioners, individual notices ought to have been given to the shareholders, since the number W.P.(C)No.14372 of 2014 2 of members of the Society is less than 2000. Consequently, it is contended that a large section of the members of the Society have been excluded from the voters list. If the election is conducted on the basis of the Ext.P10 voters list, it would not be a proper, fair or legal election. Therefore, it is contended that, Ext.P10 is liable to be quashed. A consequential direction to include the names of all eligible persons in the voters list is also sought for. An election shall be conducted only permitting all the eligible members of the Society to participate and vote, it is contended. 3. Separate counter affidavits have been filed by the 3[rd] and 4[th] respondents. According to the 3[rd] respondent, the bye-laws contemplate two types of members namely, A class members who are institutions and individual members. The share value of the institutional members was `500/- per share while the share value of individuals was `100/-. The General Body Meeting held on 26.12.2013 decided to enhance the share value of A class members to `1,000/- and that of individual B class members to `500/-. The notice convening the General Body Meeting is Ext.R3(a). The petitioners took part in the General Body Meeting. However they did not raise any objections. The amendments were duly passed and were registered as per Ext.R3(b) by the Joint Registrar on 20.11.2013. After receipt of approval of the amendments, notices were published in the 'Madhyamam' and 'Veekshanam' dailies on 3 W.P.(C)No.14372 of 2014 16.12.2013 and 17.12.2013 respectively requesting all the members to pay the balance share value within a period of two months therefrom. It has also been intimated by the notice that, in the event of omission to pay the enhanced share value, the amounts remaining to their credit would be transferred to the suspense account. The said notice is Ext.R3(c). For the purpose of enhancing the share value, separate resolutions had to be adopted by each of the institutional member Societies. The resolution adopted by one of the Societies is Ext.R3(d). Copies of the applications made by some of the members for remitting the enhanced share value are produced as Ext.R-3(e). The petitioners though they were aware of the formalities and the necessity of remitting the enhanced share value to the society, did not choose to remit the enhanced share value and thereby, they have forfeited their rights to vote at the election. 4. The counter affidavit of the 4[th] respondent also is more or less on the same terms. It is stated that, a list of members qualified to vote at the elections had been furnished by the Managing Director to the Electoral Officer. The Electoral Officer published the draft Electoral Roll and invited objections to the same. The objections received have been duly considered and it was only thereafter that the final voters list Ext.P10 has been finalised. Since the procedure followed by the Society was in order, it is contended W.P.(C)No.14372 of 2014 4 that, there are no grounds to interfere with the election that is scheduled to be conducted on 26.06.2014. 5. I have heard Adv.Sri.Anu Sivaraman who appears for the petiitoners, Adv.Sri.P.N.Mohanan who appears for the 3[rd] respondent as well as Sri.D.Somasundaram, the Special Government Pleader who appears for respondents 1, 2, 4 and 5. I have considered the contentions advanced before me, anxiously. 6. It is worthwhile noticing in the first place that, though the petitioners have submitted objections to the draft voters list, the orders Exts.P8 and P9 rejecting the said objections have not been challenged in this writ petition. What has been challenged is the final voters list, Ext.P10. As already noticed above, the bye-laws were amended at the General Body Meeting that was held on 26.12.2013. The amendments have been duly approved by the Joint Registrar. Thereafter, two months time was granted to the individual members to remit the enhanced share value. The petitioners have admittedly not remitted the enhanced share value. It is contended by the counsel for the petitioner that, since one of the petitioners is holding 9 shares of `500/- value each, which accounts for a total amount `4500/-, that could be treated as 4 shares having the enhanced share value. The said contention cannot be accepted for the reason that, such a unilateral action on the part of the 3[rd] respondent cannot be permitted in the absence of W.P.(C)No.14372 of 2014 5 an enabling provision in the bye-laws. No such provision has been brought to my notice. 7. The main contention of the counsel for the petitioner is that the members should have been issued with individual notices informing them about the enhancement in share value. They should have been thereafter given sufficient time to remit the amount. The learned Special Government Pleader has drawn my attention to the decision reported in _**Rajan v. Electoral Officer [2009(3) KLT 1046]**_ where a similar question had arisen. A learned Single Judge of this Court has considered the issue in the following words : “11. A reading of S.11 of the Act in the light of R.12 therefore indicate that S.11 and the individual notices as contemplated under S.11(2), cannot have any relevance when the Society enhances its share value. In view of R.12, S.11 and the change of liability mentioned therein, is the change of liability from unlimited to limited and that to, only in respect of societies with unlimited liability, which were in existence at the time when the Act came into force and are continuing to function as such, in view of the proviso to S.5(1) of the Act. 12. Admittedly, the 3[rd] respondent was incorporated under the Kerala Co-operative Societies Act, 1969 and in terms of S.5 of the Act, registration of a Society under the Act is possible only with limited liability. Further the rights and liabilities of members are provided only in Chapter III of the Act. In the light of all these, the necessary inference is that S.11 has no relevance when a society enhances its share value, as in the instant case. Therefore, the contention of the learned counsel for the 3[rd] respondent Bank, which is duly endorsed by the learned Government Pleader, deserves acceptance and I do so.” ## 8. It has been held by this Court in _**Balakrishnan and**_ ## _**another v. Returning Officer and others [1993 (1) KLJ 280]**_ that no member of a Society can exercise the rights of a member unless he has made such payments to the society in respect of W.P.(C)No.14372 of 2014 6 membership or has acquired such interest in the Society, as may be prescribed by the rules or the bye-laws, within the time stipulated by the Kerala Co-operative Societies Act, 1969 and Rules thereunder. It has also been held by a Division Bench by this Court ## in _**Kadakam Service Co-operative Bank Ltd. v. Narayana Bhat [2004(2) KLT 179]**_ as follows : 8. Admittedly the first respondent has not been removed from the membership of the Bank either under R.16 (3) or under R.16(4). Hence it cannot be said that consequent on his failure to pay the additional share value he ceased to be a member or that he will have to apply for fresh membership. The only effect of his failure to pay the additional share value is that until he pays the additional share value, he will not be entitled to exercise any of the rights of a member of the Bank. But once he is removed from the membership following the procedure under R.16(3) or under R.16(4), he ceases to be a member and if he again wants to be a member of the Bank, he will have to make a fresh application for membership. Since the first respondent has not been removed from the membership either under R.16(3) or under R.16(4), the Bank could not have refused to accept the difference in share value, eventhough it was submitted by him belatedly. At the same time until he pays the additional share value, the first respondent cannot exercise the rights of a member. We are justified in taking such a view in the light of the provisions contained in S.19 of the Kerala Co-operative Societies Act which reads thus : “ **19.Member not to exercise rights till due payment made:** - No member of a society shall exercise the rights of a member unless he has made such payments to the society in respect of membership or has acquired such interest in the society, as may be prescribed by the rules or the bye-laws.” The expression “such payments to the society in respect of membership” includes the extra amount to be paid by a member on account of any subsequent amendment to the bye-laws increasing the share amount. Hence a member who fails to pay the difference in share value within the stipulated period will remain to be a member in name without any rights of a member until he is duly removed from membership following the procedure laid down under R.16(3) or under R.16 (4) of the Kerala Co-operative Societies Rules. To this extent we disagree with the learned Single Judge. W.P.(C)No.14372 of 2014 7 To the same effect is the dictum in _**Jose v. Registrar of Co-**_ _**operative Societies [1992(2) KLT 673]**_ . In view of the above, it has to be held that, the omission to make up the deficiency in share value that has arisen consequent to the amendment to the bye-laws is fatal to the rights of the petitioners to exercise their voting rights. Therefore, Exts.P8 and P9 by which, the objections to the preliminary voters list have been rejected cannot be found fault with. Inasmuch as Exts.P8 and P9 have not been challenged in this writ petition, I do not find any grounds to interfere with Ext.P10 or to set aside the same as sought for in this writ petition. 9. As rightly pointed out by the counsel for the respondents, in view of the decision of the Honourable Apex Court in _**Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha, And Another v. State of Maharashtra and Others [AIR 2001 (SC) 3982]**_ since the electoral process has commenced with the preparation of electoral rolls the same can be called in question only after the declaration of the results of the election by filing an election petition challenging the same. The petitioners, if they are still aggrieved, shall be at liberty to challenge the election that is scheduled, in a properly framed election petition. I do not find any grounds to interfere with the process of election that has already progressed considerably or to grant any of the reliefs sought for in this writ petition. W.P.(C)No.14372 of 2014 8 For the above reasons, this writ petition fails and the same is accordingly dismissed. Sd/- **K.SURENDRA MOHAN, JUDGE.** AV