Benny Peruvanthnam v. Kerala State Co-operative Consumers' Federation Ltd. & Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN THURSDAY, THE 21ST DAY OF NOVEMBER 2013/30TH KARTHIKA, 1935 ## **W.P.(C).No.17672 of 2013 (H)** --------------------------------------------------- PETITIONER:- -------------------- BENNY PERUVANTHANAM, THURUTHIPPALLIYIL HOUSE, MURINJAPUZHA P.O., IDUKKI - 685 532. BY ADVS.SRI.P.RAVINDRAN (SENIOR ADVOCATE) SRI.M.R.SABU RESPONDENTS:- ------------------------- 1. KERALA STATE CO-OPERATIVE CONSUMERS' FEDERATION LTD., REPRESENTED BY ITS MANAGING DIRECTOR, GANDHI NAGAR, ERNAKULAM, KOCHI - 682 020. 2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM - 695 001. 3. JOY THOMAS, THUNDATHIL HOUSE, ARAKKULAM, IDUKKI DISTRICT - 685 591. ## *ADDITIONAL 4TH RESPONDENT IMPLEADED: ----------------------------------------------------------------- - ADDL.R4. STATE OF KERALA, - REPRESENTED BY ITS SECRETARY, CO-OPERATION (B) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. - (ADDITIONAL 4TH RESPONDENT IS IMPLEADED AS PER ORDER DATED 17.07.2013 IN I.A.NO.9692 OF 2013). P.T.O. - 2 - W.P.(C).No.17672 OF 2013 **ADDITIONAL 5TH RESPONDENT IMPLEADED: ------------------------------------------------------------------- ** ADDL.R5. N.SUDARSANAN, S/O.NANU, AGED 65 YEARS, RESIDING AT CHITHAVILA HOUSE, KILIMANOOR.P.O., THIRUVANANTHAPURAM DISTRICT. ** (ADDITIONAL 5TH RESPONDENT IS IMPLEADED AS PER ORDER DATED 16.08.2013 IN I.A.NOI.9802 OF 2013). R1 BY STANDING COUNSEL SRI.JOY GEORGE. R2 & R4 BY SPECIAL GOVERNMENT PLEADER SRI.D.SOMASUNDARAM. R3 BY ADVS. SRI.A.SUDHI VASUDEVAN SMT.K.PUSHPAVATHI SRI.JOSE JONES JOSEPH R5 BY ADVS. SRI.RAJU JOSEPH (SENIOR ADVOCATE) SRI.J.JULIAN XAVIER THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13/11/2013, THE COURT ON 21/11/2013 DAY DELIVERED THE FOLLOWING:- vku/- WP(C).No.17672 of 2013 (H) --------------------------------------- ## **APPENDIX** ## PETITIONER'S EXHIBITS:- ------------------------------------- - EXHIBIT P1 PHOTOSTAT COPY OF THE RELEVANT EXTRACT OF THE PROVISION DATED 14/2/2013. - EXHIBIT P2 PHOTOSTAT COPY OF THE CONSTITUTION (NINETY SEVENTH AMENDMENT) ACT, 2011 DATED 12/01/2012. - EXHIBIT P3 TRUE COPY OF THE REPRESENTATION DATED 8/4/2013. - EXHIBIT P4 TRUE COPY OF THE JUDGMENT IN WP(C).10580/13 DATED 11/4/13. - EXHIBIT P5 TRUE COPY OF THE INTERIM ORDER IN WP(C).11650/13 DATED 7/5/13. - EXHIBIT P6 TRUE COPY OF THE PETITION FOR EXTENSION OF TIME. - EXHIBIT P7 TRUE COPY OF THE ORDER IN PETITION FOR EXTENSION OF TIME DATED 14/6/2013 IN I.A.NO.7235/13 IN WP(C).NO.10580/2013. - EXHIBIT P8 TRUE COPY OF THE ORDER DATED 21/6/13. ## RESPONDENT'S EXHIBIT:- - -------------------------------------- EXHIBIT R3(a) - TRUE COPY OF THE G.O.(Rt).NO.125/2011/CO-OP. DATED 13.07.2011 ISSUED BY THE SECRETARY TO THE GOVERNMENT, CO-OPERATION (A) DEPARTMENT. vku/- ( true copy ) **“C.R.”** K. Vinod Chandran, J. -------------------------------------W.P.(C).No.17672 of 2013-H --------------------------------------Dated this the 21[st] day of November, 2013 ## **JUDGMENT** The question raised herein is whether the persons nominated by the Government under Section 31 of the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as “the Act”) to the Apex or Central Society is entitled to continue after the coming into force of Kerala Co-operative Societies (Amendment) Act, 2013 (hereinafter referred to as “the Amendment Act”) in the teeth of the prohibition under sub-section (2A) of Section 31. It is also to be resolved as to whether if the above questions are answered in the negative, would S.R.O.No.508/2013, issued by the Government under Section 101 of the Act, save the position in so far as permitting such nominees and office bearers to continue till the date of next elections. 2. Admittedly respondents 3 and 5, now alleged to be continuing as the President and Vice-President of the 1[st] respondent-Society, were nominated under the unamended Section 31 of the Act and were also elected to the aforesaid offices of the Board of the 1[st] respondent. While they were continuing, the Amendment Act came into force and the petitioner, who is the **- 2 -** WP(C).No.17672 of 2013 President of an Employees' Association of the 1[st] respondent, filed a complaint before the Joint Registrar contending that the President of the 1[st] respondent-Society, the 3[rd] respondent herein, is disentitled to continue in the said post by reason of the amendments made. A learned Single Judge, by Exhibit P4, also directed consideration of the representation expeditiously. The Government, by Exhibit P8 S.R.O., purportedly invoked the powers under Section 101 of the Act to remedy the situation. 3. I have heard the learned Senior Counsel Sri.P.Ravindran appearing for the petitioner, learned Senior Counsel Sri.Raju Joseph appearing for the 5[th] respondent, learned counsel Sri.Sudhi Vasudevan appearing for the 3[rd] respondent as also the Special Government Pleader (Co-operation) Sri.D.Somasundaram. 4. The learned Senior Counsel appearing for the petitioner would contend that the intention in bringing out the Amendment Act is to make the Act in tune with the Constitution 97[th] Amendment Act, 2011, which included Part IXB in the Constitution of India. Going by the Constitutional provisions, the power to nominate is exclusively on the Board [proviso to Article 243ZJ(2)] and the power to co-opt members having knowledge in specialized subjects is also conferred on the Board [Article 243ZJ(3)]. Article 243ZK, by **- 3 -** WP(C).No.17672 of 2013 providing for “election of a Board”, contemplates only members who are elected to a validly constituted Board, as distinguished from “election to a Board”. Article 243ZT mandates that the law relating to Co-operative Societies in force in the State running contrary to Part IXB, shall be valid only for an year or till the same is amended or repealed in consonance with Part IXB. Hence the Amendment Act was brought in. 5. Section 31 was also amended to make it in consonance with the Constitutional provisions and by introduction of sub-section (2A), there is a bar in so far as the nominated members under sub-section (1) of Section 31 continuing to hold office, _inter alia_ , as the President or Vice-President of the Board. On 14.02.2013, when the Amendment Act came into effect, respondents 3 and 5 ceased to hold their respective offices in the Board. Exhibit P8 notification purportedly invoking powers under Section 101 of the Act is assailed as a colourable exercise of power and being bereft of any public interest, on satisfaction of which alone the Government could invoke such powers. The purported action exempting the Societies, in effect, is one exempting the individuals and as such _ultra vires_ the powers conferred under Section 101 of the Act. Section 101 for repugnancy with the Constitutional provisions, could not be invoked **- 4 -** WP(C).No.17672 of 2013 by the Government for remedying a disability which flows directly from the provisions of the Constitution, is the argument. Finally it is also urged that in any event, respondents 3 and 5 having ceased to hold office as on 14.02.2013, the powers under Section 101 could not have been invoked on 21.06.2013, the date of S.R.O.508/2013 (Ext.P8), to make amendments retrospectively. 6. The primary contention raised by the learned counsels appearing for the respondents is that the petitioner has no _locus standi_ and that the writ petition is filed to settle personal vendetta. The allegation of _mala fide_ is casually made without anything to substantiate the same. Exhibit P8, it is contended, cannot be termed as a mere exercise of executive function; but the Government was exercising the power of exemption, a piece of delegated legislation, specifically conferred by the statute under Section 101 of the Act. The Government has given due weightage to the recommendation of the Registrar and has recorded its satisfaction with respect to the public interest, being avoidance of an administrative vacuum in the Apex or Central Societies in which the nominated members who were elected to the Board; were allowed to continue in office, it is urged. The respondents 3 and 5 based their claims on a vested right to continue till the term of office of the Board of Directors expires, **- 5 -** WP(C).No.17672 of 2013 subject only to the pleasure of the Government. There being no express provision that those who were nominated and elected to the offices of the Board, would cease to hold such office, there can be no bar in their continuing, they contend. The legislative intent making no such specific provision as was provided earlier, would indicate that such nominated persons elected to the office of the Board were intended to the continued. 7. The 3[rd] respondent, however, would take an extreme contention that sub-section (2A) would only apply to the persons nominated under the amended sub-section (1). The 3[rd] and 5[th] respondents being persons nominated under the unamended provision, are entitled to continue till the expiry of the term of Board of Directors. The said vested right is urged _de hors_ the exemption granted by Exhibit P8. Sri.Sudhi Vasudevan would also contend that the Amendment Act being remedial in nature and not clarificatory, can have only prospective operation; in the context of the objects sought to be achieved. The object of introduction of sub-section (2A) is further clarified in Exhibit P8, is the argument. The 3rd respondent also relies on Section 4 of the Kerala Interpretation and General Clauses Act, 1125, to buttress his contention. The learned Special Government Pleader would seek to bring home the powers under **- 6 -** WP(C).No.17672 of 2013 Section 101 of the Act on the strength of precedents. The power of exemption granted under the statute is urged as not being a mere executive act. The parties have copiously quoted from the decisions of the Hon'ble Supreme Court and this Court in their arguments which are referred hereunder. 8. The issue of _locus standi_ has to be looked at in the expanding horizons of who comes under the definition of “aggrieved person”. The petitioner claims that he is the President of the Employees' Association of the 1[st] respondent, which is admitted by the State in its counter-affidavit. The issue raised is as to whether the President and Vice-President of the Society are entitled to continue in their respective offices after the Amendment Act. _**Fertilizer Corporation, Kamgar Union (Regd.) v. Union of India**_ **[(1981) 1 SCC 568]** was a case in which the workers of a public sector industry and office bearers of their Union challenged the sale of plant and equipments of one of the units. The majority emphasised the necessity, in appropriate cases, to take a broader view of the question of locus, in the background of changing awareness of legal rights and social obligations. Krishna Iyer, J. in his inimitable style “illumined the (then) half-lit zone of access jurisprudence” and held so in para 48: **- 7 -** WP(C).No.17672 of 2013 “If a citizen is no more than a wayfarer or officious intervener without any interest or concern beyond what belongs to any one of the 660 million people of this country, the door of the court will not be ajar for him. But, if he belongs to an organisation which has special interest in the subject-matter, if he has some concern deeper than that of a busybody, he cannot be told off at the gates, although whether the issue raised by him is justiciable may still remain to be considered. I, therefore, take the view that the present petition would clearly have been permissible under Article 226”. ## _**M.S.Jayaraj v. Commissioner of Excise**_ **[(2000) 7 SCC 552]** also refused to nip in the bud, a motion, solely on the ground of locus standi, in the context of a clear illegality having been pointed out. 9. It is an illegality that is pointed out in the instant case and the petitioner can neither be said to be a mere wayfarer with absolutely no concern deeper than that of a busybody, nor one motivated solely by a desire to settle personal scores. True, the claim of _mala fides_ was just raised with nothing to support it. Equally pertinent is that, no cause for personal vendetta is laid out by the respondents. The State, by its own claims, is a major stakeholder in the 1[st] respondent, constituted as an Apex Society of the 15 District Whole-sale Co-operative Consumers Stores (2 in Palghat District) all formed at the aegis of the State, having together a share capital of **- 8 -** WP(C).No.17672 of 2013 about Rs.6.50 crores. The State is a member having invested about Rs.15 crores in shares. When the President of an Employees' Association cries wolf, as to an usurper in office, this Court cannot turn him away at the threshold, merely for reason of this Court's prior experience of a swamp of meddlesome interlopers. The contention of _locus standi_ raised by the respondents is negatived. 10. The Amendment Act was made in consonance with the 97[th] Constitutional Amendment. The High Court of Gujarat at Ahmedabad has held the 97[th] Amendment to be _ultra vires_ the Constitution of India for not taking recourse to Article 368(2). The learned Senior Counsel for the petitioner maintains that the same does not militate against the application of the 97[th] Amendment in the State of Kerala, since the judgment of the Gujarat High Court can at best have only persuasive effect. The exercise of the power of exemption under Section 101 of the Act, hence, is argued to be repugnant with the Constitutional provisions. The Government cannot invoke the exemption clause for remedying a disability which flows directly from the provisions of the Constitution, is the contention. The aforesaid contention, however, is stoutly opposed by the learned counsel appearing for the respondents based on Article 226(2) of the Constitution. **- 9 -** WP(C).No.17672 of 2013 11. The learned Senior Counsel for the petitioner would rely on _**Election Commission v. Venkata Rao**_ **[AIR 1953 SC 210],** _**K.S.Rashid & Son v. I.T.I. Commission**_ **[AIR 1954 SC 207]** and _**Lt. Col. Khajoor Singh v. Union of India**_ **[AIR 1961 SC 532]** to contend that it is well established that there are only two limitations placed on the High Court under Article 226 of the Constitution. The power is to be exercised only within the territory in relation to which it exercises its jurisdiction and the person or authority to whom the writs are issued should be within such territories. Hence, a writ issued by the Gujarat High Court cannot at all be said to be operative in the entire territory of India and such power is confined to the Supreme Court under Article 141 of the Constitution of India. The learned Senior Counsel also places reliance on _**Kusum Ingots & Alloys Ltd. v. Union of India**_ **[(2004) 6 SCC 254]** . 12. _**Venkara Rao**_ ( _supra_ ) was concerned with a writ, issued by the Madras High Court to the Election Commission, having its seat in New Delhi, and found it to be incompetent. It noticed the rule that cause of action attracts jurisdiction in suits and found it to be inapplicable to writs issuable under Article 226, since that rule was based on a statutory enactment. _**K.S.Rashid Lt. Col. Khajoor Singh**_ (both _supra_ ) followed the said dictum. _**Kusum Ingots**_ ( _supra_ ) **- 10 -** WP(C).No.17672 of 2013 specifically found the dictum to have no application after introduction of clause (2) of Article 226 and found the said clause to be akin to Section 20(c) of the Code of Civil Procedure; the statutory rule applicable to suits. It is to be specifically noticed that clause (2) of Article 226 was introduced on 01/02/1977 by the 42[nd] Amendment and the Constitution Bench decisions with respect to the limitation on the power of the High Court are prior to such introduction. **Kusum Ingots & Alloys Ltd.** ( _supra_ ) considered the effect of clause (2) of Article 226 and held so in paragraphs 21 and 22:- “21. A parliamentary legislation when it receives the assent of the President of India and is published in the Official Gazette, unless specifically excluded, will apply to the entire territory of India. If passing a legislation gives rise to a cause of action, a writ petition questioning the constitutionality thereof can be filed in any High Court of the country. It is not so done because a cause of action will arise only when the provisions of the Act or some of them which were implemented shall give rise to civil or evil consequences to the petitioner. A writ court, it is well settled, would not determine a constitutional question in vacuum. 22. The Court must have the requisite territorial jurisdiction. An order passed on a writ petition questioning the constitutionality of a parliamentary Act, whether interim or final keeping in view the provisions contained in clause (2) of Article 226 of the Constitution of India, will have effect throughout the territory of India subject of course to the applicability of the Act”. **- 11 -** WP(C).No.17672 of 2013 13. What is discernible is that the Hon'ble Supreme Court found that an order passed by a High Court on the constitutionality of a Parliamentary enactment would have effect throughout the territory of India subject, however, to the factum of an injury caused on the application of the Act, which alone gives rise to a valid cause of action. Though clause (2) of Article 226 of the Constitution granted specific power on the High Courts to exercise the powers conferred by clause (1) and issue directions even to Government or authority which does not have their seat within the territories in which it normally exercises its jurisdiction, no such exercise could be made without a valid cause of action. Essentially what the Hon'ble Supreme Court held was; merely because an Act was passed by the Parliament, by virtue of clause (2) of Article 226, a citizen of India cannot choose the High Court of any of the States to challenge the said enactment. On the passing of a legislation, the High Courts also cannot exercise such power, since if exercised in a case where no cause of action arises within its jurisdiction, such exercise of power would be in a vacuum. Only when the implementation of the Act causes an injury, i.e., “subject to the application of the Act” ( _sic_ ), then alone a cause of action arises and the situs of the injury caused would give the High Court which has jurisdiction over such area to **- 12 -** WP(C).No.17672 of 2013 consider invocation of Article 226 on a valid writ petition moved before it. In such circumstance, in my opinion, it cannot be said that the Gujarat High Court decision on the constitutionality of Constitution 97[th] Amendment will not be applicable to the State of Kerala. However, a decision on that may not be relevant here. 14. In this context it is to be specifically noticed that the disability alleged flows from sub-section (2A) of Section 31. This is not an amendment made in tune with the Constitutional provisions. It is to be noticed that Part IXB introduced by the 97[th] Amendment speaks of nomination only in the case of filling up of casual vacancies in the Board, by the proviso to clause (2) of Article 243XJ. The said proviso cannot be understood as prohibiting nomination in any other manner and it only confers the power on the Board to nominate from the same class of members, in the event of casual vacancy. The power of co-option conferred under clause (3) of Article 243ZJ also cannot be said to be a prohibition on nomination of members to the Board. The power to co-opt persons to be members is with a view to obtain the service of an expert in a specialized field, which would further the business and affairs of the society. Article 243ZK mandates election of a Board before the expiry of the term of the Board and cannot at all be considered to be a mandate that there **- 13 -** WP(C).No.17672 of 2013 shall be only elected members on the Board. The power of nomination conferred on the Government by Section 31 was available in the State even before the Constitutional amendment. Part IXB, on a reading of the provisions, does not at all persuade this Court to hold that nomination as such is interdicted by the Constitution. Section 31 does not in any manner run counter to Part IXB; nor is it repugnant to the Constitutional provisions. 15. The introduction of sub-section (2A) can only be considered as the legislature having in its wisdom adopted the objects behind the Constitutional amendment to make it applicable in the case of nominated members also. Definitely it is the autonomy, professionalism and democratic functioning of societies that was in the mind of the legislature when brining in sub-section (2A) to Section 31. It is one thing to say that the amendments have been brought in to make the law in consonance with the Constitutional provisions and quite another to make an independent provision adopting the very same logic behind the Constitutional amendment. Hence, the plea of repugnancy fails and sub-section (2A) of Section 31 is only a statutory bar, in a nominated person holding office of a Board of the Apex or Central Society. **- 14 -** WP(C).No.17672 of 2013 16. The effect of sub-section (2A) of Section 31, which is extracted hereunder, hence, assumes relevance: “(2A) The person nominated under sub-section (1) shall not be eligible to hold the office of the president/chairman or vice-president/vice-chairman of the Apex or Central Society nor will be eligible for being sent as the delegate of the Apex or Central Society”. The contention of the 3[rd] respondent that sub-section (2A) would only be applicable to persons nominated under the amended sub-section (1) is far-fetched; and is to be noticed only to be rejected. Sub-section (1) as it existed previous to the amendment and later on, functionally, change only the number of persons the Government or authority could nominate by reducing it from 3 to 2. A nomination made under the pre-amended sub-section (1) necessarily would continue after the amendment too, provided the number of nominated persons in an Apex Society is confined to 2 and they still enjoy the pleasure of the Government. If the contention of the learned counsel for the 3[rd] respondent was to be accepted, then without a nomination subsequent to the amendment they would not even be entitled to continue in the Board. **- 15 -** WP(C).No.17672 of 2013 17. The next contention is with respect to the vested right having been conferred on the respondents 3 and 5 by their election to the office of the Board. The 3[rd] respondent relies on the decision in _**Central Bank of India v. Their Workmen**_ **[AIR 1960 SC 12]** to draw a distinction between declaratory and remedial enactments to emphasise that the restriction brought in by sub-section (2A) of Section 31 is not in any manner retrospective. Nobody has a case that Section 31or sub-section (2A) has retrospective effect and hence the distinction drawn need not be looked into. The contention that vested rights are taken away is urged on general principles as also Section 4(c) of the Kerala Interpretation and General Clauses Act, 1125. The effect of the amendment is substantially of repeal _**[Bhagat Ram v. Union of India,**_ **AIR 1988 SC 740]** and hence it cannot affect any right or privilege accrued, is the argument. 18. That sub-section (2A), by automatic operation of statute, prohibits any nominated member from holding an office of the Board of an Apex or Central Society cannot at all be disputed. The Government too understood it in such a manner and, hence, the invocation of power under Section 101 to bring in Exhibit P8 S.R.O. Before considering the validity of the S.R.O., the defence raised by the respondents with respect to retrospectivity and the amendment **- 16 -** WP(C).No.17672 of 2013 having taken away vested rights has to be examined. It is undisputed that the amendment was prospective in nature. On the same coming into force as on 14.02.2013 any nominated member holding office of a Board in an Apex or Central Society would cease to hold such office. There is no question of any vested right on an office bearer who is elected by the Board because the will of the Board necessarily should yield to the dictate of the legislature. Admittedly the nominations are at the pleasure of the Government and none who was elected by a Board could claim a vested right to continue as an office bearer, if the nomination itself was withdrawn by the Government. 19. The nomination being a power conferred under the statute, the exercise of such power by the Government would not confer on the nominated person any right over and above that is provided under the statute. When there is a statutory prohibition in any nominated member from occupying an office of the Board, despite his/her election as per the unamended provisions, the same would cease to have effect from the date of such prohibition. The prospective nature of the amendment does not at all aid the respondents 3 and 5 to continue in the office to which they were elected. Neither the nomination nor the election to the office of the **- 17 -** WP(C).No.17672 of 2013 President or Vice-President can be said to have created vested rights on the respondents 3 and 5. On sub-section (2A) coming into the statute book, automatically the nominated persons who were holding an office of the Board as a President/ Vice-President or Chairman/Vice-Chairman would cease to hold such post. 20. Sri.Raju Joseph, learned Senior Counsel contends that the legislature has not provided for a specific clause as was provided when Section 31 was amended in 1987. The original Section 31 provided for nomination of members by the Government to any of the societies, which, by amendment in 1987, was restricted to Apex and Central Societies. When such amendment was made, specifically sub-section (4) was brought in: “31(4) Any person who holds office as a nominated member of the committee of a society, other than an apex or a central society, at the commencement of the Kerala Co-operative societies (Amendment)( Act, 1987, shall cease to hold such office at such commencement”. Such a provision is absent in the present Amendment Act, it is urged, and that enables continuance of those elected validly. 21. The mere absence of such a provision cannot be taken as the legislative intention to continue such members in an **- 18 -** WP(C).No.17672 of 2013 office, _de hors_ sub-section (2A) of Section 31. It is also trite that by legislative exercise when such prohibitions are made, if it was the intention of the legislature to continue members who are already holding office, a saving clause could have been provided so as to enable nominated members, who had already been elected to office, to continue during the term for which they were elected. Such a saving clause having not been provided by the legislature, one cannot infer that the legislative intent was to continue such persons for the balance term of their office. One does not wonder as to why it was not done, for; legislative intent is clear from the absence of the saving clause and it does not warrant any speculation by this Court. 22. This definitely brings us to Section 101, which confers power on the Government to exempt certain societies from certain provisions of the Act. The power under Section 101 definitely cannot be curbed and has wide amplitude as has been laid down in the decisions cited by the learned Special Government Pleader. Clauses similar to Section 101 has been termed a 'Henry VIII' clause, which is defined by the House of Lords as “provision in a bill which enables amendment or repeal of primary legislation using delegated (subordinate) legislation; with or without further parliamentary scrutiny” ( _sic_ ). **- 19 -** WP(C).No.17672 of 2013 23. _In pari materia_ provision granting power of exemption was found to be not excessive delegation of legislative power in _**Registrar, Co-op. Societies v. K.Kunjambu**_ **[AIR 1980 SC 350].** This Court followed the said Supreme Court decision in _**Pampady Rural Co-op. Housing Society v. Joint Registrar**_ **[1986 KLT 921],** _**Feroke Service Co-op. Bank Ltd. v. State of Kerala**_ **[1995 (2) KLT 404]** and _**Nachimuthu v. State of Kerala**_ **[2011 (1) KLT 651],** while upholding Section 101. The possibility of abuse was found to be remedied by conferring the power on the Government itself and hedged in by condition of such exercise being made only in public interest, which satisfaction was to be evident from the recorded reasons. It cannot also be disputed that an exercise of power under Section 101 is not, a mere executive function, but is in the nature of delegated legislation. In _**Union of India v. M/s.Jalyan Udyog**_ **[AIR 1994 SC 88]** an exemption notification exempting import of ocean going vessels which are not imported to be broken up was under challenge. What was assailed was the proviso which provided for levy, when and if such ship was broken up subsequently, deeming the import to be on the date of breaking up. Factually the ship was imported in 1968 and decided to be broken up in 1983, when it was **- 20 -** WP(C).No.17672 of 2013 found to be no longer sea-worthy. The question was whether the duty was leviable on the value at the time of import or at the time of scrapping. The contention was that an exemption notification could only do that and not shift the date of levy and in effect enhance the levy. As a matter of fact due to the increase of world-wide price of steel the scrapped ship was far more valuable in 1984 than when it was purchased as an ocean-going vessel in 1968. The Court conceded the power of the Central Government to create such a fiction deeming the import to be on the date of breaking up and found no warrant for limiting the power. The power drawn under the statute, to exempt, was found to be a conditional legislation or a species of delegated legislation, and not an executive act. 24. The play of Section 101 in so far as invoking the power of exempting societies from the provisions of sub-section (2A) cannot at all be curtailed. The Government is empowered to exempt any of the societies from the provisions of the Act or apply such provisions with such modifications as may be specified. An exercise of the power under Section 101 to exempt any society from the rigour of sub-section (2A) of Section 31 is perfectly within the jurisdiction of the Government. The exercise of such powers also would not be _ultra vires_ the Constitution, as was found hereinabove. **- 21 -** WP(C).No.17672 of 2013 25. The further argument advanced by Sri.P.Ravindran is that Exhibit P8 is _ultra vires_ the powers under Section 101. The power under Section 101 is to specifically exempt any society and it does not empower the Government to keep persons in office against the statutory provisions and in violation of the same, it is argued. According to the petitioner, respondents 3 and 5 have been continuing illegally in the office of the President and Vice-President of the 1[st] respondent-Society even after the Amendment Act coming into force on 14.02.2013. The notification as such is to help the respondents 3 and 5 to continue in office and that would in fact be a premium on persons who had illegally continued in office after the amendment, the petitioner claims. 26. Exhibit P8, S.R.O., has to be examined to understand the true purport of the power exercised by the Government. Exhibit P8 takes into account amendment of sub-section (1) of Section 31 and the introduction of sub-section (2A) and the consequences of the same. It also takes into account the position as it existed before amendment. Noticing that some of the persons nominated under the unamended provisions were elected as office bearers of the respective Apex or Central Societies, it noticed the prohibition under sub-section (2A) by which such persons who are in the committees **- 22 -** WP(C).No.17672 of 2013 and were elected as office bearers of societies would have to step down from their office. The Government considered the recommendations of the Registrar of Co-operative Societies and found that the continuance of such members who were nominated and elected to the office would only further the cause of the Apex and Central Societies and avoid administrative vacuum in the said societies. On such finding, the Government recorded its satisfaction that the public interest necessarily required exemption of the Apex and Central Societies from the provisions of sub-section (1) and sub-section (2A) of Section 31. In exercise of powers under Section 101, it was ordered so: “NOW THEREFORE, in exercise of the powers conferred by section 101 of the Kerala Co-operative Societies Act, 1969 (21 of 1969), the Government of Kerala hereby exempt all the Apex or Central Societies where the persons nominated under section 31 of the said Act, by the Government/Registrar of Co-operative Societies, before the commencement of Kerala Co-operative Societies (Amendment) Act, 2013 (8 OF 2013) still continue as nominated members in the committee and hold the office of the president/chairman or vice president/vice chairman of the Apex or Central Societies so as to enable such societies to allow all the nominated persons in the **- 23 -** WP(C).No.17672 of 2013 committee **and to continue the nominated persons as office bearers with effect from 14[th] February 2013 till the tenure of the existing committee expires,** or till the Government/Registrar withdraws the person from the committee as the case may be whichever is earlier”. 27. The principles on which a public authority bestowed with wide discretion, exercises official powers has been dilated in _**Andhra Pradesgh S.R.T.C. v. State Transport Appellate Tribunal**_ **[(1998) 7 SCC 353]** and _**East Coast Railway v. Mahadev Appa Rao**_ **[(2010) 7 SCC 678].** In the instant case, one has to see whether the power exercised is what is vested in the authority and in such exercise, is there a proper application of mind; discernible and whether it is in public interest. 28. In effect, what the exemption notification did was to permit nominated persons who were elected to the office of Apex or Central Societies to continue in such office _de hors_ the provisions of sub-section (2A) of Section 31. But that is only the direct consequence of the exemption granted to the Apex and Central Societies from sub-section (2A) of Section 31, which the Government is empowered to do under Section 101. Though in effect it allows the continuance of the nominated persons in their elected offices, the **- 24 -** WP(C).No.17672 of 2013 exercise of power under Section 101 is specifically for the societies and not for individuals. It is pertinent that the learned Special Government Pleader has pointed out the schedule which lists out the Apex and Central Societies. The contention that the exemption notification has been applied to the Apex or Central Societies is only to be accepted. Having found that sub-section (2A) is a provision of the statute which is not repugnant to the Constitutional provisions and not made in consonance with the Constitutional amendment, definitely the State's power to exempt such clause under Section 101 has to be conceded to the State: “When an executive agency draws on the freedom that the law vests in it, the judiciary cannot deny or curtail such freedom” ( _sic_ ) [Justice Frankfurter - (dissenting - minority) _**Vitarelli v. Season**_ **359 US 535]** . The exemption notification, hence, is valid in so far as it exempts sub-section (2A) of Section 31 in its operation to Apex or Central Societies. 29. Now the question would be whether in granting such exemption the Government could have directed the continuance of the nominated members as office bearers with effect from 14.02.2013, i.e., retrospectively. _**Strawboard Manufacturing Co. v. G.Mill Workers' Union**_ **[AIR 1953 S.C. 95]** was a case in which an Adjudicator nominated under the U.P. Industrial Disputes Act, 1947 **- 25 -** WP(C).No.17672 of 2013 passed an award after the time prescribed in the order of reference. Still later, the State Government issued an order extending the period, in effect granting ' _ex post facto_ ' sanction. The learned Judges found that the State Government had no such power. _**Indramani v. W.R.Natu**_ **[AIR 1963 SC 274]** was a case in which notification under Forward Contracts (Regulation) Act, 1952 nullifying the contracts already entered into was assailed _inter alia_ on the lack of power to give retrospectivity. On a reading of the provision material to the decision, it was held in that case to be competent to give retrospective effect. On the question of retrospective effect of delegated legislation, it was held so in para 27: “It is clear law that Statute which could validly enact a law with retrospective effect could in express terms validly confer upon a rule-making authority a power to make a rule or frame a bye-law having retrospective operation ...” This is in consonance with the otherwise dissenting judgment of Subba Rao, J., which stated: “This decision is, therefore, an authority for the position that unless a statute confers on the Government an express power to make an order with retrospective effect, it cannot exercise such a power”. **- 26 -** WP(C).No.17672 of 2013 ## _**30. I.T.Officer, Alleppey v. M.C.Ponnoose**_ **[AIR 1970 SC** **385]** dealt with an attachment made by a notified Tax Recovery Officer. The attachment was prior to the notification, but was sought to be sustained on the retrospectivity expressly stated in the notification. The learned Judges negatived the contention of retrospectivity and said so in para 5: “Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the legislature it may or may not be possible to make the same so as to give retrospective operation. It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect. But where no such language is to be found it has been held by the Courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye-law which can operate with retrospective effect”. ## _**Bakul Cashew Co. v. Sales Tax Officer**_ **[1986 (Vol.62) STC 122]** was with respect to a retrospective exemption granted under Section 10 of the Kerala General Sales Tax Act, 1963. Section 10, as it was then, did not confer such power to issue a notification retrospectively and the notification was found to be bad for want of authorization by the legislature to make orders with retrospective effect. **- 27 -** WP(C).No.17672 of 2013 31. What is indicated from the decisions and the declarations in the afore-cited decisions is that unless the legislature specifically grants power to the delegatee; to legislate retrospectively, no such power can be exercised in making subordinate legislation. The Government's contention, that its power in making delegated legislation is co-extensive with the power of the legislature to legislate prospectively or retrospectively, is hence, put in total peril. What has been done by Exhibit P8 is not to exempt sub-section (2A) of Section 31 from its application to Apex or Central Societies. Exhibit P8 attempts in such exercise to revive the office of the nominated persons which stood terminated on sub-section (2A) being introduced in the statute. As noticed above, that could have been achieved by a saving clause introduced by the legislature itself. What the legislature consciously left out cannot be saved by the Government even if exercising the power of delegated legislation; on an assumed inference of legislative intendment. 32. That Section 101 does not grant any power to exempt provisions of the Act retrospectively, calls for no dispute. That by operation of sub-section (2A), no nominated person can hold office of the President/Chairman or Vice-President/Vice-Chairman of the Apex or Central Societies too, brooks no dispute. On the said restriction **- 28 -** WP(C).No.17672 of 2013 being introduced, the nominated persons who held office as per a valid election cease to hold office as has already been found by me. Despite their having continued in office, the later notification exempting sub-section (2A) of Section 31 does not permit them to continue in office till their elected term is over. Necessarily it warrants recalling them to the office which they had vacated by statutory operation. This can only be done by reviving their power to hold office from 14.02.2013; the date of the Amendment Act, which require retrospective exemption of sub-section (2A) of Section 31. Such power of retrospective exemption is not available going by the specific language employed in Section 101 of the Act. This Court is not persuaded to think that the legislative intendment is evident from Exhibit P8. The Government and the party respondents contend that the term of the elected body expires in the 1[st] quarter of next year and there is no reason why this Court should interfere at this stage. The intention of the Government also was to see that the elected office bearers may be continued till the expiry of the term of office, is the plea. In law, not touching upon policy, the best of intentions would fail in the context of sheer absence of power. The 'Henry VIII' clause, Section 101, does not grant power to the executive Government to bring in retrospective exemption. To that end, Exhibit P8 has to be WP(C).No.17672 of 2013 **- 29 -** set aside. In the result, the writ petition is allowed. Exhibit P8 is set aside, to the extent indicated above. The necessary consequence would be that the respondents 3 and 5 should vacate their office. No costs. Sd/K.Vinod Chandran Judge. vku/- ( true copy )