Benny John v. P.M. Mathew and Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE S.SIRI JAGAN & THE HONOURABLE MR. JUSTICE BABU MATHEW P.JOSEPH TUESDAY, THE 12TH DAY OF MARCH 2013/21ST PHALGUNA 1934 WA.No. 402 of 2013 (B) IN WP(C).4215/2013 ------------------------------------------AGAINST THE ORDER/JUDGMENT IN WP(C).4215/2013 of HIGH COURT OF KERALA DATED 06-03-2013 APPELLANT/ADDITIONAL 7TH RESPONDENT IN THE WP(C): ------------------------------------------------------------------------------------------- BENNY JOHN, S/O KORAH ULAHANNAN, AGED 53 YEARS, AVALUMTHADATHIL, CHACHAMATTOM P.O. CHACHAMATTOM, ERNAKULAM DISRICT. BY ADVS.SRI.N.RAGHURAJ SMT.K.AMMINIKUTTY RESPONDENTS/PETITIONERS AND RESPONDENTS 1 TO 6 IN THE WP(C): ------------------------------------------------------------------------------------------------------------------------ 1. P.M.MATHEW, PITTAPPILIL HOUSE, KADAVOOR P.O., POTHANIKKAD VIA ERNAKULAM DISTRICT, PIN - 686 671. 2. P.C.GOERGE, PADINJAREKKARAYIL, CHATHAMATTOM P.O., POTHANIKKAD VIA ERNAKULAM DISTRICT, PIN - 686 671 3. T.D. GEORGE, THEKKEKALAMATTATHIL, CHATHAMATAM P.O., POTHANIKKAD VIA ERNAKULAM DISTRICT, PIN - 686 671. 4. STATE OF KERALA, REPRESENTED BY ITS SECRETARY CO-OPERATIVE DEPARTMENT, GOVERNMENT SECRETARIAT THIRUVANANTHAPURAM - 695 001. 5. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, (GENERAL) OFFICE OF THE JOINT REGISTRAR, CO-OPERTIVE SOCIETIES, ERNAKULAM-682 001. 6. THE KADAVOOR SERVICE CO-OPERATIVE BANK LTD., NO.1882, REP. BY ITS SECRETARY, KADAVOOR P.O. MOOVATTUPUZHA-686 671. 7. THE RETURNING OFFICE FOR ELECTION TO THE MANAGING COMMITTEE, THE KADAVOOR SERVICE CO-OPERATIVE BANK LTD. INSPECTOR OF CO-OPERATIVE SOCIEITES KOTHAMANGALAM UNIT OFFICE OF THE ASSISTANT REGISTRAR CO-OPERATIVE SOCIETIES (GENERAL) KOTHAMANGALAM-686 671. 8. MINI VARGHESE, PITTAPILLIL HOUSE, PAINGATTOOR, KOTHAMANGALAM ERNAKULAM-686 671. 9. THOMAS CANDY, PERUMANKUNNEL, PAINGATTOOR, KOTHAMANGALAM ERNAKULAM-686 671. R1-R3 BY ADV. P.V.LONACHAN (NO MEMO) R4,R5 & R7 BY SR.GOVT.PLEADER SRI.K.K.SAIDALAVI R6 BY ADVS.SRI.BECHU KURIAN THOMAS SRI.S.SREEDEV R8 BY ADV.SRI.N.REGHURAJ R BY ADV.SRI.P.P.JACOB R BY ADV.SRI.D.SREEKUMAR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 12-03-2013, ALONG WITH WA. 406/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AV ## **S.SIRI JAGAN & BABU MATHEW P.JOSEPH, JJ.** ## **------------------------------------W.A.Nos.402 & 406 of 2013 -----------------------------------Dated this, the 12[th] day of March, 2013 JUDGMENT ----------------** ## S.Siri Jagan,J These two writ appeals are filed against the very same interim order in W.P.(C)No.4215 of 2013 passed by a learned Single Judge, at the instance of additional 7[th] respondent in one writ appeal and respondents 5 and 6 in the other writ appeal. The State Co-operative Election Commissioner issued Ext.P3 notification for conducting election to the Management Committee of the Kadavoor Service Cooperative Bank Ltd. The election is to be conducted on 23.03.2013 as per the notification. The respondents 1 to 3 herein, filed the writ petition seeking the following reliefs : “1. To issue a writ of Mandamus other appropriate writ order or direction commanding the 4[th] & 2[nd] respondents to permit the petitioner to contest the ensuing elections as notified by ExtP3 notification. 2. To declare that in the event of the petitioners furnishing sufficient security to full fill their surcharge liability there will not be any disqualification for the petitioners to contest the election to the managing W.A.Nos.402 & 406 of 2013 2 committee of the 3[rd] respondent bank. 3. To pass such other orders deemed fit to be issued by this honourable court in the facts and circumstances of this case in consciences with justice equity and good conscience.” ## In the writ petition, they also sought the following interim prayer : “For the reasons stated in the writ petition and accompanying affidavit this Honourable court may be pleased to direct the respondents to issue a direction to the 4[th] respondent to receive the nominations of the petitioners for the elections notified as per ExtP3” ## On the said interim prayer the learned Single Judge passed an interim order on 06.03.2013, which reads as follows : “There will be an interim direction to the 4[th] respondent to permit the petitioners to contest in the election of the managing committee of the 3[rd] respondent Bank notified under Ext.P3 subject to condition of each of the petitioners remitting the amount of surcharge fixed against hem in Ext.P2 proceedings, by way of cash deposit or by furnishing bank guarantee without prejudice to the contentions raised in W.P (c) No.25303/2009. The amount if deposited or guarantee if any furnished will be liable to be realised towards the liability under Exxt.P2, if the challenge against the said order is ultimately negatived.” The appellants are challenging the said interim order in these writ appeals on the following grounds : During the period 2003-2008 the respondents 1 to 3 W.A.Nos.402 & 406 of 2013 3 and 6 others were members of the Board of Directors of the 6[th] respondent Co-operative Bank. In respect of the affairs of the bank, for the period during which respondents 1 to 3 were members of the Board of Directors, the Registrar ordered an enquiry under Section 65 of the Kerala Co-operative Societies Act. In that enquiry it was found that the Board of Directors of the Bank consisting of respondents 1 to 3 and others caused loss to the Bank on account of their actions. Therefore, on the basis of the report, surcharge proceedings under Section 68 of Kerala Cooperative Societies Act were initiated. By Ext.P1 order dated 22.12.2008, surcharge to the extent of Rs.51,658/- on each of the Board of Directors including respondents 1 to 3 and the Secretary of the Bank was imposed. The respondents 1 to 3 and others filed appeal against the order of surcharge before the Government. That appeal was dismissed. The respondents 1 to 3 and others filed W.P(C).No.25303/09 challenging Ext.P1 order of surcharge. Although this court admitted the writ petition, no stay was granted. That writ W.A.Nos.402 & 406 of 2013 4 petition is pending. Subsequently the respondents 1 to 3 got themselves elected to the Director Board of the Bank for the subsequent period. The appellant in writ appeal No.402/13, filed an application before the Registrar, seeking to disqualify respondents 1 to 3 under Rule 44(3) of the Kerala Co-operative Societies Rules. Since no action was taken by the Registrar on the same, he filed W.P.(C). No.34297/09 before this Court. When the same was taken up for hearing, the Registrar of Co-operative Societies submitted that appropriate action is being taken on the petition filed by the appellant in writ appeal 402/2013. Recording the same the writ petition was disposed of. Subsequently, on 23.12.2009 the respondents 1 to 3 were disqualified from continuing as members of the managing committee of the Bank. That order has not been challenged by respondents 1 to 3. According to the appellant, in view of the surcharge proceedings and the said disqualification pursuant to the surcharge proceedings, the respondents 1 to 3 cannot be legally permitted to contest the election W.A.Nos.402 & 406 of 2013 5 declared by Ext.P3 notification to the managing committee of the Society. The submission is that under Rule 44(1)(l) of the Kerala Co-operative Societies Rules, 1969, no member of a society shall be eligible for being elected or appointed as a member of the committee of a society under Section 28, if he has been surcharged under Section 68. It is submitted that the disqualification under Section 44(1)(l) is not for a specified period, but permanent. That being so, the respondents 1 to 3 cannot be permitted to contest the election declared by Ext.P3, is one contention. The second contention is that the respondents 1 to 3 were earlier, by an order dated 23.12.2009, disqualified from continuing as members of the committee of the society and they have not chosen to challenge the same. As such the disqualification is still in force and consequently they are ineligible to contest the election. The third contention is that in the writ petition, the respondents 1 to 3 have made only one interim prayer namely, to direct the 4[th] respondent to receive the nominations of the respondents 1 to 3 for the elections W.A.Nos.402 & 406 of 2013 6 notified as per Ext.P3. But the learned Single Judge has practically allowed the writ petition itself by granting prayer numbers 1 and 2 in the writ petition, which could not have been done in view of the decision of the Supreme Court in **Bank of Maharashtra v. Race Shipping and Transport** **Co. Pvt. Ltd.** [AIR 1995 Supreme Court 1368]. It is the submission of the appellant that what has been directed in the impugned order is, to enable the respondents 1 to 3 to either pay or furnish bank guarantee for, the surcharge amount for enabling them to contest the election. It is submitted that the disqualification is attracted not for nonpayment of the surcharge amount, but for being surcharge under Section 68 itself. Therefore, even if the respondents 1 to 3 are permitted to pay the surcharge amount or furnish bank guarantee as security for payment of the same, that does not enable the respondents 1 to 3 to contest the election, since the very act of being surcharged under Section 68 attracts disqualification and such disqualification does not cease on payment of the surcharge amount. For 7 W.A.Nos.402 & 406 of 2013 the above reasons the appellants submits that the impugned interim order passed by the learned Single Judge is liable to be set aside. 2. In answer, the counsel for the respondents 1 to 3 would contend that insofar as the order of surcharge is under challenge in W.P.(c).No.25303/09 the surcharge order has not become final and it is only subject to the result of the said writ petition. As such, no disqualification has not yet come into force because of the surcharge order. The second contention is that the disqualification under Rule 44(1)(l) is not for an indefinite period and it can only be for a specified period which is during the next election and not for ever, which period is already over. Lastly, it is contended that the appellants are not in any way prejudiced by the interim order, insofar as the respondents 1 to 3 have only been permitted to take part in the election and if they win the mandate of the electorate, there cannot be any better approval of their candidacy than that. 3. We have considered the rival contentions in detail. W.A.Nos.402 & 406 of 2013 8 4. At the outset, we fail to understand how the learned Single Judge can grant, even provisionally, the first two prayers in the writ petition itself, when the respondents 1 to 3 have only sought an interim prayer directing the 4[th] respondent to receive the nominations of the petitioners for elections notified as per Ext.P3. Infact, it was not proper to grant the main prayers in the writ petition itself as an interim relief, especially since the main prayers have not been sought as an interim prayer. 4. The fact that respondents 1 to 3 have been surcharged under Section 68 is not in dispute before us. Of course that order of surcharge is under challenge in W.P.(C). No.25303/09 at the instance of respondents 1 to 3 and others, but the operation of the order of surcharge has not been stayed by this Court in that writ petition. Therefore, as on today, the order of surcharge is in force. Rule 44(1)(l) reads thus : **“Disqualification of membership of committee.-** (1) [No member of the society shall be eligible for W.A.Nos.402 & 406 of 2013 9 being elected, or appointed as a member of the committee of the society under S.28 if he]:- ## XXXXX ## (l) has been surcharged under Section 68. As rightly pointed out by the counsel for the appellant, the disqualification is not for any specified period but for ever. Of course, the learned counsel for respondents 1 to 3 would contend that even in the Representation of Peoples Act, disqualification is for a specified period and therefore, it cannot be taken that disqualification in Rule 44(1)(l) is permanent and for ever. We are unable to agree. The language of the Rule is plain and simple. It disqualifies a member, who has been surcharged under Section 68 from being member of the committee of a society under Section 28 without any limitation regarding time. It is pertinent to note that although in the Representation of Peoples Act, the Parliament has chosen to fix a specified period during which the disqualification operates, in the Kerala Co-operative Societies Rules the Rule making authority has not chosen to W.A.Nos.402 & 406 of 2013 10 restrict the period of disqualification. Therefore, going by the plain language of the Section, the disqualification is permanent without limitation of any period. That being so, we do not think that as on today, the respondents 1 to 3 can be permitted to contest the election, since the order of surcharge under Section 68 is still in force and consequently the disqualification prescribed in Rule 44(1)(l) is squarely attracted. 5. It appears that the learned Single Judge was under the misapprehension that if the respondents 1 to 3 are permitted to either pay the surcharge or furnish bank guarantee, the disqualification can be avoided . It is not so. It is not the non-payment of the surcharge amount which attracts disqualification under Rule 44(1)(l). The disqualification is attracted, for the very act of being surcharged under Section 68 for avoiding disqualification, the amount should have been paid before the surcharge order is passed. Therefore, even if the amount of surcharge as per Ext.P1 is paid, the disqualification will not cease. W.A.Nos.402 & 406 of 2013 11 That being so, it was not proper for the learned Single Judge to permit the respondents 1 to 3 to pay the surcharge amount or furnish security for the same and on such payment, permitting respondents 1 to 3 to contest the election. In the above circumstances, we are of the opinion that the impugned order is clearly unsustainable in law. In the above circumstances, the impugned interim order dated 06.03.2013 is hereby set aside. The appeals are allowed as above. ## **S.SIRI JAGAN, Judge** ## **BABU MATHEW P.JOSEPH, Judge** AV