Devarajan and another v. Kerala State Co-operative Coir Marketing Federation Ltd. and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.SURENDRA MOHAN** ## **THURSDAY, THE 28TH DAY OF AUGUST 2014/6TH BHADRA, 1936** ## **WP(C).NO. 2990 OF 2013 (W)** **---------------------------------------** **PETITIONERS: --------------------** **1. DEVARAJAN, AGED 55 YEARS, S/O. RAGHAVAN, PERUMPALLITHARAYIL, ALAPPAD, ALLUMKADAVU.P.O, KARUNAGAPPALLY.** **2. K.M. RAJU, AGED 58 YEARS, S/O. S. MADHAVAN PILLAI, KOCHARIYATTU SAIKARUNYA, NANGIARKULANGARA.P.O., ALAPPUZHA.** **BY ADVS.SRI.R.SUNIL KUMAR, SMT.A.SALINI LAL.** ## **RESPONDENTS:** **------------------------** **1. THE KERALA STATE CO-OPERATIVE COIR - MARKETING FEDERATION LTD.NO. 679, P.B. NO. 4616, ALAPPUZHA-688 001, REP. BY ITS MANAGING DIRECTOR.** **2. THE ELECTORAL OFFICER, THE KERALA STATE CO-OPERATIVE COIR MARKETING - FEDERATION LTD. NO. 679, P.B. NO. 4616, ALAPPUZHA-688 001, (ADDITIONAL DIRECTOR OF COIR DEVELOPMENT, DIRECTORATE OF COIR DEVELOPMENT, THIRUVANANTHAPURAM.)** **3. THE STATE CO-OPERATIVE ELECTION COMMISSION, REPRESENTED BY ITS SECRETARY, THIRUVANANTHAPURAM, PIN-695 001.** **....2/-** **Prv.** **:-2-:** ## **W.P.(C).NO.2990/2013 - W:** ## ***ADDL.R.4. IMPLEADED:** **4. SAJIKUMAR.S, PRESIDENT, THE KERALA STATE CO-OPERATIVE COIR MARKETINGFEDERATION LTD. NO.679, P.B. NO.4616, ALAPPUZHA - 688 001.** ***ADDL.R.4. IMPLEADED AS PER ORDER DATED 07/02/13 IN I.A. NO.1898/13.** ## ****ADDL.R.5. IMPLEADED:** **5. N. SAIKUMAR, AGED 50, S/O. D. NARAYANAN THAMBI, RESIDING AT KALLUVILA HOUSE, MUTTAPPALAM, PERUMKUZHI.P.O., THIRUVANANTHAPURAM.** - **** ADDL.R5. IMPLEADED AS PER ORDER DATED 18/02/13 IN I.A.NO.2682/13.** **R1 BY SRI.K.S.HARIHARAPUTHRAN, S.C, SRI.GEORGE MATHEW, S.C, SRI.JOBY CYRIAC, S.C,** **R2 BY SPL.GOVERNMENT PLEADER SRI. D. SOMASUNDARAM, ADDL. R4 BY ADVS.SMT. LEKSHMI RAJAN,** **SRI.TITUS DOMINIC,** **ADDL.R5. BY SRI.C.P.SUDHAKARA PRASAD, SENIOR ADVOCATE, ADVS. SRI.S.RAMESH,** **SRI.NAVEEN.T,** **SMT.POOJA SURENDRAN.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26-08-2014, ALONG WITH W.P.(C).NOS. 2696/2013 & 4434/2013 THE COURT ON 28-08-2014 DELIVERED THE FOLLOWING:** **Prv.** ## **W.P.(C).NO.2990/2013 - W:** ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** - **EXT.P.1: COPY OF THE BYE-LAW OF THE 1ST RESPONDENT.** - **EXT.P.2: COPY OF THE AGENDA DTD. 29/11/12 PREPARED BY THE MANAGING DIRECTOR.** - **EXT.P.3: COPY OF THE MINUTES OF 29/11/12 CIRCULATED ON 19/1/13.** - **EXT.P.4: COPY OF THE OBJECTION PREFERRED BY THE PETITIONER BEFORE THE 1ST RESPONDENT.** - **EXT.P.5: COPY OF THE COMPLAINT BEFORE THE ELECTORAL OFFICER AND ITS ACKNOWLEDGMENT.** - **EXT.P.6: COPY OF THE ELECTION NOTIFICATION DTD. 11/1/13.** - **EXT.P.7: COPY OF THE DECISION CIRCULATED AMONG THE DIRECTOR BOARD MEETING ON 19/01/2013.** ## **RESPONDENTS' EXHIBITS:** - **EXT.R1.(A): TRUE COPY OF MINUTES OF THE BOARD MEETING DTD. 13/08/2012.** - **EXT.R1.(B): TRUE COPY OF MINUTES OF THE BOARD MEETING DTD. 18/10/2012.** - **EXT.R1.(C): TRUE COPY OF THE RELEVANT PAGES OF MINUTES DTD. 30/04/2012 OF ANNUAL GENERAL BODY MEETING.** - **EXT.R1.(D): TRUE COPY OF THE MINUTES DTD. 19/01/2013.** - **EXT.R1.(E): TRUE COPY OF PAGES 13 TO 16 OF BYE LAWS.** - **EXT.R1.(F): TRUE COPY OF THE AGENDA DTD. 29/11/2012. EXT.R1.(G): TRUE COPY OF THE RESOLUTION DTD. 29/11/2012. EXT.R5.(A): TRUE COPY OF MINUTES OF THE BOARD MEETINGS DTD. 13/08/2012. EXT.R5.(B): TRUE COPY OF MINUTES OF THE BOARD MEETINGS DTD. 18/10/2012.** - **EXT.R5.(C): TRUE COPY OF MINUTES DTD. 30/04/2012 OF ANNUAL GENERAL BODY MEETING.** - **EXT.R5.(D): TRUE COPY OF RESOLUTION DTD. 19/01/2013. EXT.R5.(E): TRUE COPY OF PAGES 13 TO 16 OF BYE LAWS. EXT.R5.(F): TRUE COPY OF THE AGENDA DTD. 19/01/2013.** - **Prv.** ## **W.P.(C).NO.2990/2013 - W:** **EXT.R5.(G): TRUE COPY OF MINUTES DTD. 29/11/2012. EXT.R5.(H): PROCEEDINGS OF THE REGISTRAR OF COIR CO-OPERATIVE (DIRECTOR OF COIR DEVELOPMENT), THIRUVANANTHAPURAM. EXT.R5.(A): TRUE COPY OF THE ORDER DTD. 20/02/2013 ISSUED BY THE REGISTRAR OF COIR CO-OPERATIVES. (IN I.A. NO.15691/2013). EXT.R5.(B): TRUE COPY OF THE ORDER DTD. 20/08/2013 ISSUED BY THE REGISTRAR OF COIR CO-OPERATIVES (IN I.A. NO.15691/2013). EXT.R5.(C): TRUE COPY OF THE DECISION OF THE ADMINISTRATIVE COMMITTEE DTD. 28/12/2013. (IN I.A. NO.8750/2014). EXT.R5.(D): TRUE COPY OF THE NOTE DTD. 24/06/2014 SENT BY THE CHAIRMAN, ADMINISTRATIVE COMMITTEE (IN I.A. NO.8750/2014).** ## **//TRUE COPY//** **P.A. TO JUDGE.** **Prv.** ## K. SURENDRA MOHAN,J. ------------------------------- W.P(C) NO. 2990, 2696 & 4434 OF 2013 ---------------------------------- ## Dated this the 28th August, 2014. ## JUDGMENT These writ petitions are all filed challenging a notification issued by the State Co-operative Election Commission scheduling an election to the Board of Directors of the Kerala State Co-operative Coir Marketing Federation Ltd. No: 679, PB No: 4616, Alappuzha ('Coirfed' for short). Since the contentions raised are identical, these writ petitions are considered together. WPC 2990/2013 is treated as the leading case and the parties as well as the documents produced are referred to in the manner in which they are referred to in the said writ petition. 2. The Coirfed is a co-operative society registered under the Kerala Co-operative Societies Act, and the Kerala Co- WPC Nos: 2990 & 2696 & 4434/2013 2 operative Societies Rules, 1969 (hereinafter referred to as the 'Act' and the 'Rules' for short). The Coirfed is an apex society. Its members are, the primary co-operative societies, Mats and Matting Co-operative Societies and other cooperative societies registered under the Coir Development Scheme. The Government as well as nominated or associate members are also members. The petitioners in these writ petitions are all representatives of the member societies, with the exception of WPC 4434/2014 in which the first petitioner is a member society. The petitioners are all delegates of the member societies and are members of the Board of Directors of the Coirfed in their said capacity. The object of the Coirfed is to arrange purchase and sale of Coir fibre, coir yarn and other coir products of the affiliated members. At present it is stated that there are about 800 affiliated societies. The Board of Directors of the Coirfed consists of 23 members of which two are nominated by the Government. 3. The present Director Board was elected on 20.2.2009. WPC Nos: 2990 & 2696 & 4434/2013 3 Their term expired on 19.2.2013. Well before the expiry of their term, the Board of Directors had met on 29.10.2012 for the purpose of deciding the date, venue and other details of the fresh election that had to be conducted. Ext.P2 is the agenda of the meeting. According to the petitioners, no draft voters list was placed before the Board of Directors at the said meeting or got approved. However, when the minutes of the said meeting were circulated at the next meeting of the Board of Directors on 19.1.2013, as is the usual practice, the petitioners were surprised to note that it contained a decision of the Board of Directors to the effect that the voters list was approved. The petitioners immediately objected to the same by submitting Ext.P4. Since no action was taken on Exts.P4, P5 was submitted to the second respondent Electoral Officer. It is the specific contention of the petitioners that, the decision that is shown as 141(c) in Ext.P3 is a subsequent insertion, not supported by any decision of the Board. According to the petitioners, the voters list in question contains the names of WPC Nos: 2990 & 2696 & 4434/2013 4 even persons who are ineligible to participate in the election for the reason that they had not remitted the enhanced share value. 4. Clause 15 of Ext.P1 bye-laws was amended on 9.7.2009 enhancing the share value to Rs.5,000/- from Rs.100/-. Clause 15(2) of the bye-laws provides that the existing members could pay the balance share value either in a lump or in instalments, within a period of six months. Since the amendments were adopted on 27.5.2009, the period of six months expired on 27.11.2009. The members who did not remit the deficit share value before the said date are ineligible to be included in the voters list. It is alleged that more than 50 members who are so ineligible have been included. On the basis of the said voters list, the third respondent has finalised the proceedings and issued Ext.P6 notification scheduling an election to be conducted on 15.2.2013. A perusal of the election notification issued shows that three seats have been reserved therein for women. WPC Nos: 2990 & 2696 & 4434/2013 5 According to the petitioners, two constituencies, Thrissur and North Paravoor have been removed from the category of general constituencies and are designated as constituencies reserved for women. The said act of reserving seats for women has been unilaterally done without the sanction of either the general body or the Board of Directors. Therefore, it is contended that Ext.P6 election notification is unsustainable and liable to be set aside. 5. Identical contentions are raised by the petitioners in WPC 2696/2013 also. In the said writ petition, the election notification has been produced as Ext.P2. WPC 4434/2013 has been filed by the first petitioner who is a member society of the Coirfed and its President, the second petitioner. The second petitioner had submitted a nomination for contesting from the Thrissur constituency. The same has been rejected stating that the said constituency has been reserved for women. The petitioners have therefore challenged the reservation of the said constituency for women alleging that, WPC Nos: 2990 & 2696 & 4434/2013 6 only the general body has the power to make any such reservation. Separate counter affidavits have been filed on behalf of the Coirfed, the Electoral Officer as well as the present President of the first respondent in all the writ petitions 6. According to the counter affidavit of the first respondent Coirfed, though the member societies were bound to remit the requisite share value consequent to the amendment of the bye-laws within a period of six months from the date of the award, remittances made even after the said date have been accepted. Exts.R1(a) and Ext.R1(b) are the minutes of the meetings of the Board of Directors, in which the petitioners had also participated, accepting the balance share value so remitted. Having permitted the said societies to remit the deficit share value and having accepted the same, it is contended that the petitioners are estopped from questioning the rights of such persons to participate in the election. It is pointed out that they are all persons who WPC Nos: 2990 & 2696 & 4434/2013 7 had remitted the entire share value before the cut off period of 60 days stipulated by the Act. 7. With respect to the reservation of constituencies for women, the stand of the first respondent is that, as per Ext.R1 (c) the bye-laws have been amended, increasing the number of seats in the category of general constituencies from 5 to 7 and setting apart two out of the said constituencies for women. The amendments have not come into force for the reason that the Registrar has not issued proceedings granting registration to them. Therefore, in view of the necessity of conducting a fresh election the Managing Director had in consultation with the President of the first respondent, set apart Thrissur and North Paravoor as constituencies reserved for women. The said decision has been ratified by the Board of Directors as per Ext.R1(d). It is also contended that Clause 25(1) of the bye laws empowers the Board of Directors to take such a decision. It is contended that no ineligible members have been included in the voters list. Apart from the above, WPC Nos: 2990 & 2696 & 4434/2013 8 the locus standi of the petitioners who are only functionaries of the member societies or delegates thereof are challenged contending that they are persons, who do not have anything to do with the first respondent society. 8. A statement has been filed by the second respondent Electoral Officer. According to the said statement, the voters list that was accepted was the one that was approved by the Board of Directors at its meeting on 29.11.2012 as per the decision, 141(c). The draft voters list had thereafter been published, objections have been considered and the final voters list has been published, after considering the objections. As per Sections 19 and 20 of the Act all persons who have been admitted to the membership of the society at least 60 days prior to the date of the election have the right to vote. Therefore, all such members who have paid the enhanced share value 60 days prior to the date of election have been included in the voters list. It is contended that, the election notification is therefore perfectly valid and not liable WPC Nos: 2990 & 2696 & 4434/2013 9 to be interfered with. A separate counter affidavit has been filed by the additional fourth respondent putting forward similar contentions. 9. I have heard Mr.R.Sunil Kumar and V.G.Arun, Advocates who appear for the petitioners, the Special Govt. Pleader Shri. D.Somasundaram, Senior Counsel Shri. C.P.Sudhakara Prasad who appears for the additional fourth respondent and Smt.Lakshmi Rajan who appears for the additional fifth respondent. 10. The first question to be considered is whether the inclusion of members who have remitted the requisite share value after the last date stipulated for remitting the same has vitiated the proceedings. Clause 15(2) of Ext.P1 bye-laws reads as follows:- “The existing members who have not completed the minimum share amount of Rs.5000/- as per clause 15(1) above will be given time up to six months, either in installments or in full from the date of registration of the amendment WPC Nos: 2990 & 2696 & 4434/2013 10 to complete at least the value of one share amounting to Rs.5000/-. (Amended on 27.5.2009)” It is true that the above provision stipulates that the enhanced share value should be paid either in instalments or in a lump within a period of six months. But the said provision does not stipulate that a member who does not make the payment within the stipulated time would entail any disqualification. In the absence of any such stipulation in the bye-law provision, it is the provision of law that has to apply. Section 20 of the Act provides that every member of a society would have one vote, provided a member admitted within sixty days immediately prior to the election shall not have the right to vote. Section 19 provides that no member of the society shall exercise the rights of a member unless he has made such payments to the society in respect of membership. Therefore, it follows that a person who has paid the share value in full before the cut off period of sixty days prior to the date of election, has the right to vote. Inasmuch as the bye- law WPC Nos: 2990 & 2696 & 4434/2013 11 provision does not stipulate any disqualification for not having paid the amount within the time stipulated, the members who have paid subsequent to the cut off date cannot be excluded. It is also worth noticing that the Board of Directors have ratified such payments made after the last date, by Exts.R1(a) and R1(b) minutes, to which the petitioners were also parties. Therefore, it is held that the said persons have been rightly included in the voters list. 11. The next question to be considered is whether the decision of the Board of Directors in Ext.P3 numbered as 141 (c) was a subsequent insertion. There is no evidence or material on record to support the above contention. Ext.P2 agenda of the meeting discloses that the matters on which decisions were required to be taken have been specified therein with sufficient clarity. It is true that the petitioners have objected to the decision 141(c), by submitting Exts.P4 and P5. However, the fact remains that, the objections of the petitioners is regarding the inclusion of persons who had not WPC Nos: 2990 & 2696 & 4434/2013 12 paid the enhanced share value within the stipulated time, in the voters list. Since I have already found that nonpayment of the enhanced share value within the stipulated time is not of any consequence, the above question has also to be answered against the petitioners. 12. The other question that requires consideration is whether reservation of two seats for women, without the approval of the general body is proper or not. The contention of the respondents is that the bye-laws have already been amended making provision for reservation of two more seats for women. Already one seat is reserved. Since reservation of two seats for women is mandated by Section 28 of the Act, the Managing Director has in consultation with the President reserved the constituencies so as to facilitate the conduct of the election at the appropriate time, it is contended. Clause 25(1) arms the Board of Directors with sufficient powers to make such reservation, it is contended. WPC Nos: 2990 & 2696 & 4434/2013 13 13. Clause 25(1) of Ext.P1 bye-laws is extracted hereunder:- “The Board shall exercise all powers of the Federation except those reserved for the General Body and in particular shall have the following powers and duties.” As per the above clause the Board is empowered to exercise all powers of the federation “except those reserved for the General Body”. Clause 22 of the bye-laws reads as follows:- “Amendments of bye-laws shall only be carried out by a majority of not less than 2/3[rd] of the members present and voting in a General Body Meeting provided, that prior notice of the intentions to discuss such amendments in the meeting has been given. Such amendments shall be forwarded to the Registrar for registration within a period of one month from the date of the General Body Meeting.” As per the above clause, amendments to bye-laws are to be carried out by the General Body, by a majority of 2/3[rd] of the members present and voting. It is clear from the above WPC Nos: 2990 & 2696 & 4434/2013 14 provision that, power to amend the bye-laws is one that has been specifically reserved for the general body. Therefore, the Board of Directors cannot and does not have the power to effect any amendment to the bye-laws. According to Clause 23 of the bye-laws, the administration of the first respondent is vested in a Board consisting of 23 members. As per the said clause, reservation for only one woman member has been provided. Any election conducted in violation of the above bye-law provision would not be a proper election under the Act. As per Section 28 of the Act, the Board of Directors has to be constituted in accordance with the bye-laws of the society. Therefore, the act of the respondents in reserving two constituencies for women is without the authority of law. The conduct of an election on the basis of Ext.P6 notification therefore, would not be a proper election. 14. The question as to whether the Managing Committee of the Board of Directors was competent to provide for such reservation by amending the bye-laws had come up for WPC Nos: 2990 & 2696 & 4434/2013 15 consideration before a Division Bench of this Court in Udayakaran v. Ahammedkannu {2004(2) KLT 969} Cyriac Joseph, J (as he then was) has considered the question in paragraphs 12 & 13 of the said judgment in following words:- “12. It is not disputed that the authority competent to make and amend the bye-law is the General Body of the Society. S.27 of the Act also says that subject to the provisions of the Act, the Rules and the bye-laws, the final authority of a society shall vest in the General Body of the members. Therefore, in the absence of necessary provisions in the Act specifying the authority and the criteria to determine the ward/constituency for reservation under S.28A, it is for the General Body of a Society to make necessary provisions in the bye-laws of the society for the reservation contemplated under S.28A. In other words, the General Body should suitably amend the bye-laws either determining the ward/constituencies to be reserved under S.28A or specifying the authority competent to determine and laying down the criteria for such WPC Nos: 2990 & 2696 & 4434/2013 16 determination. Since the committee of a Society is not competent to amend the byelaws of the Society, unless specified in the byelaws the Committee is not competent to determine the ward or constituency for reservation under S.28A or to lay down the criteria for such determination. 13. Moreover, there is an inherent danger in conceding such arbitrary power to an existing committee of the Society to determine the constituency to be reserved under S.28A. If such a power is conceded to the Committee, the existing members of the Committee may arbitrarily exercise that power to reserve the constituency/ward to their advantage of their opponents. Such a situation will not be in the best interest of the Society or in accordance with the spirit of the provisions of the Act.” In view of the above binding dictum, the impugned action of the respondents in issuing Ext.P2 notification is unsustainable. The election notification in Ext.P6 is therefore liable to be set aside. WPC Nos: 2990 & 2696 & 4434/2013 17 15. Pursuant to the interim orders passed by this Court an Administrative Committee has been appointed to be in charge of the affairs of the first respondent society. The Administrative Committee is in charge of the administration of the first respondent. The said situation cannot be permitted to continue indefinitely. As already held above, the election notification Ext.P6 is invalid. Therefore, all action taken on the basis of the said notification, including the polling are invalid and of no consequence. In view of the above, it is only appropriate that a proper election is conducted at the earliest. However, the conduct of an election is possible only after amending the bye laws suitably to make provision for the reservation of two more women members in terms of the mandate of Section 28A of the Act. Though the bye laws had been amended by the General Body meeting held on 30.4.2012, as per proceedings dated 22.3.2013 of the Director of Coir Development, registration of the amendments have been rejected. Therefore, the amendments would have WPC Nos: 2990 & 2696 & 4434/2013 18 to be moved afresh and got passed by the General Body of the first respondent. The Administrative Committee would have to convene a General Body meeting for the purpose. Since the Administrative Committee has been continuing in office for a considerably long period of time, it is absolutely necessary that all the necessary formalities are completed in a time bound manner and a proper election conducted, within the shortest possible time. For the foregoing reasons these writ petitions are allowed as follows:- i) The proceedings of the third respondent notifying the election, evidenced herein by Ext.P6 (Ext.P2 in WPC 2696/2013 & 4434/2013) is set aside. Consequently, all action taken on the basis of the said notification including the polling, are also set aside. ii) The first respondent shall take immediate steps to formulate necessary amendments to Ext.P1 bye laws so as to make provision for the reservation of two more seats for WPC Nos: 2990 & 2696 & 4434/2013 19 women and to make the same conform to the mandate of Section 28A of the Act. The said procedure shall be completed within a period of one month of the date of receipt of a copy of this judgment and the amendments so adopted shall be forwarded for registration to the concerned authority, immediately thereafter. The second respondent shall consider the amendments and shall pass necessary orders registering the amendments within two weeks of receipt thereof provided there is no legal impediment in doing so. iii) The first respondent is directed to adopt a proper resolution to have an election to the Board of Directors of the first respondent conducted on a suitable date. Such resolution shall be adopted, as expeditiously as possible and at any rate within a period of two weeks of the date of grant of registration to the amendments to the bye laws, to be adopted as per direction (ii) above and shall forward the resolution to the third respondent through the proper channel. WPC Nos: 2990 & 2696 & 4434/2013 20 iv) The third respondent shall, on receipt of such resolution issue a notification scheduling the election to be conducted. Necessary action shall be taken expeditiously with the object of ensuring that the entire proceedings are completed within an outer limit of three months of the date of receipt of a copy of this judgment. It is directed that the time limit stipulated above be strictly adhered to and all efforts taken to ensure that the elected committee is put in office, without further delay. Sd/K. SURENDRA MOHAN Judge jj /True copy WPC Nos: 2990 & 2696 & 4434/2013 21