E.J. Augusthy S/o Joseph and Others v. Joint Registrar of Co-operative Societies (General), Assistant Registrar of Co-operative Societies (General), Meenachil Primary Agricultural Rural Development Bank Ltd. and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **THURSDAY, THE 17TH DAY OF DECEMBER 2020 / 26TH AGRAHAYANA, 1942** ## **WP(C).No.25091 OF 2020(J)** ## **PETITIONERS:** - **1 E.J.AUGUSTHY S/O. JOSEPH, AGED 78 YEARS, EDATHINAL, KURIANAD P.O, KOTTAYAM DISTRICT-686 636** - **2 VARKEY GEORGE VALIYAPARAMBIL, S/O. VARGHESE, AGED 67 YEARS, VALIYAPARAMBIL HOUSE, BHARANANGANAM P.O, KOTTAYAM DISTRICT.** - **3 SHYLAJA RAVEENDRAN, W/O. RAVEENDRAN, AGED 56 YEARS, PURAKKAT HOUSE, PAYAPPAR P.O, KOTTAYAM DISTRICT.** - **4 PHILOMINA PHILIP, W/O. PHILIP, AGED 60 YEARS, AMBALATHU MUNDAKKAL, MUTHOLI P.O, KOTTAYAM DISTRICT** - **5 HEZAKIEL M.J, S/O. M.H. JOHN, AGED 57 YEARS, MACHIYANIKKAL HOUSE, MECHAL P.O, KOTTAYAM DISTRICT.** - **BY ADVS. SRI.GEORGE POONTHOTTAM (SR.) SRI.K.C.VINCENT SMT.NISHA GEORGE** ## **RESPONDENTS:** - **1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) KOTTAYAM-686 001** - **2 ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) KOTTAYAM-686 577** - **3 THE MEENACHIL PRIMARY AGRICULTURAL RURAL DEVELOPMENT BANK LTD. NO. K 197, MEENACHIL, PALA, KOTTAYAM DISTRICT-686 577, REPRESENTED BY ITS SECRETARY.** ## **WP(C).No.25091 OF 2020(J) -2-** **4 SUNNY DEVASSYA, MEMBER NO. 6915, CONVENER, ADMINISTRATIVE COMMITTEE, MEENACHIL PRIMARY AGRICULTURAL RURAL DEVELOPMENT BANK LTD. NO. K 197, MEENACHIL, PALA, KOTTAYAM DISTRICT-686 577, RESIDING AT THEKKEDATH, VEMPALLY P.O, KOTTAYAM DISTRICT. 5 K.P. JOSEPH, MEMBER NO. 10672, ADMINISTRATIVE COMMITTEE, MEENACHIL PRIMARY AGRICULTURAL RURAL DEVLOPMENT BANK LTD. NO. K 197, MEENACHIL, PALA, KOTTAYAM DISTRICT-686 577, RESIDING AT KUNNATH PURAYIDAM, POOVARANI P.O, KOTTAYAM DISTRICT. 6 JOSEPH THOMAS, MEMBER NO. 32696, ADMINISTRATIVE COMMITTEE, MEENACHIL PRIMARY AGRICULTURAL RURAL DEVELOPMENT BANK LTD. NO. K 197, MEENACHIL, PALA, KOTTAYAM DISTRICT-686 577, RESIDING AT VALIPLAKKAL, IDAPPADI P.O, BHARANANGANAM P.O, KOTTAYAM DISTRICT-686 578 R1-R2 BY SPL. GOVERNMENT PLEADER SRI.BIMAL K. NATH R3 BY ADV. SRI.GEORGE MECHERIL R4, R6 BY ADV. SRI.P.C.SASIDHARAN R5 BY ADV. SRI.K.S.ARUN KUMAR R5 BY ADV. SMT.AMRUTHA K P** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17.12.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **SATHISH NINAN, J.** **= = = = = = = = = = = = = = = = = = W.P.(C) No.25091 of 2020** **= = = = = = = = = = = = = = = = = = Dated this the 17[th] day of December, 2020** ## **JUDGMENT** Ext.P1 order appointing an Administrator for the third respondent Society under Section 33 of the Co-operative Societies Act, and Ext.P2, the subsequent order replacing the Administrator with an Administrative Committee, are under challenge in this writ petition. 2. Heard learned Senior Counsel Sri.George Poonthottam on behalf of the petitioners, Sri.Bimal K. Nath, learned Special Government Pleader on behalf of respondents 1 and 2 and Sri.P.C.Sasidharan on behalf of respondents 4 and 6. 3. The strength of the managing committee of the third respondent Society is 13 (thirteen). The managing committee, of which the 1[st] petitioner was the president, assumed office on 10.02.2019. On 03.11.2020, 7 (seven) of the committee members resigned from office. This resulted in lack of W.P.(C) No.25091 of 2020 -: 2 :- quorum, thus attracting Section 33 of the Cooperative Societies Act entailing appointment of Administrator/Administrative Committee. 4. As per Ext.P1 order dated 03.11.2020, the first respondent appointed an Administrator for the Society. Subsequently, on 11.11.2020, at the request of the Administrator, as per Ext.P2 order he was removed from office and an Administrative Committee consisting of three members were appointed. The three members so appointed as the Administrative Committee are from the seven members who had resigned from the Committee. Alleging malexercise of power and arbitrariness, the members of the managing committee who remained in office has filed this writ petition. 5. The appointment of Administrator is challenged on two grounds; firstly, violation of Rules 38(3) and 38(4) of the Co-operative Societies Rules which require resignation to be tendered to the President of the Committee, who is to place it before the Committee; secondly, violation of the first proviso to Section 33(1) which requires W.P.(C) No.25091 of 2020 -: 3 :- inviting of objections prior to making an order appointing an Administrator. 6. Though it is the specific pleading of the petitioners that the resignation was not tendered to the President, the same has not been denied in the counter affidavit or the statement filed by the respondents. So also, there is no case for the respondents that the resignation was tendered to the Committee. 7. Learned counsel Sri.P.C.Sasidharan, relying on the judgment of a Division Bench of this Court in _**Dy. Registrar of Co-operative Society v. George [1974 KLT 189]**_ would contend that, the procedure contemplated under Rule 38(3) is only a formality and that noncompliance of the same is not fatal. He also relies on the explanation to Section 33(1) which provides that, tender of resignation by a member operates as termination of membership. To substantiate that mere tender of resignation is sufficient to effect resignation he relied on the judgments of this Court in _**Baby Chemparathy v. Joint Registrar of Co-operative**_ W.P.(C) No.25091 of 2020 -: 4 :- ## _**Societies [2002 (2) KLT 730]**_ and _**Nataraj Gownder v. Registrar [2008**_ _**(2) KLT 335].**_ Law has been declared in the aforesaid decisions that, membership ceases on the mere tender of resignation by a member. 8. Here the question is, to whom the resignation is to be tendered. Rule 38(3) provides that the resignation is to be tendered to the President. In the decision reported in 1974 KLT 189(supra), the resignation by two of the nominated members was not tendered to the President. As per the rule, the president, to whom the resignation is to be tendered, was to place it before the authority who nominated the member. The Division Bench held that “The right of accepting the resignation, in the case of a nominated member, is in the authority who nominated him; and clause (4) of Rule 38 provides that the resignation shall be placed before that authority and shall be effective only from the date of acceptance by such authority.” It was observed that, the President merely acts as a conduit pipe for transmitting the resignation to such authority and the failure to W.P.(C) No.25091 of 2020 -: 5 :- route it through him is not fatal. It was in the said context that it was held that non-conformity with sub rule 3 of Rule 38 will not invalidate the resignation. Therefore, it cannot be said that nontendering of resignation to the President or Committee is immaterial or is not relevant. 9. The first proviso to Section 33(1) stipulates that, prior to the making of an order appointing Administrator/Administrative Committee, objections are to be invited by publishing notice on the notice board of the Head Office of the Society. In the case at hand, there has been no such publication. The respondents seek to take shelter under the second proviso to Section 33(1) which provides that such publication of notice is not necessary in cases where the Registrar is satisfied that it is not reasonably practicable to do so. Ext.P1 order appointing Administrator does not reflect any such satisfaction of the Registrar. Sri.P.C.Sasidharan the learned counsel, relies on paragraph 6 of the judgment of the Division Bench of this Court in 1974 KLT 189(supra) to contend W.P.(C) No.25091 of 2020 -: 6 :- that, the order need not mention about the satisfaction of the Registrar or that the requirement of notice has been dispensed with. The said paragraph reads thus:- _“We are equally unable to share the learned Judge's view that the proceedings are invalid for want of publication of a notice on the notice-board of the Head-office, inviting objections to the proposed action, as required by the first proviso to S. 33(1) of the Act. The second proviso to the Section indicates that the publication of the notice is unnecessary, where the Registrar is satisfied that it is not reasonably practicable to do so. It is quite unnecessary that Ext.P11 order should expressly recite that the requirement of the notice has been dispensed with. (See Swadeshi Cotton Mills Co. Ltd. v. State Industrial Tribunal, U.P.-AIR. 1961 SC. 1381 at 1387). In paragraph 4 of the counter-affidavit, the Deputy Registrar has stated that he was satisfied that it was not practicable to issue notice to the members. We think this satisfies the requirements of the Section and that Ext.P11 order is not open to attack on the ground that the_ W.P.(C) No.25091 of 2020 -: 7 :- _publication of the notice had not been dispensed with.”_ 10. In _**Swadeshi Cotton Mills Co. Ltd. v. State Industrial Tribunal, U.P.-AIR. 1961 SC. 1381 at 1387**_ referred to in the above quoted paragraph it was observed thus, _“But the power to pass an order under S.3 arises as soon as the necessary opinion required thereunder is formed. This opinion is naturally formed before the order is made. If, therefore, such an opinion was formed and an order was passed thereafter, the subsequent order would be a valid exercise of the power conferred by the section. The fact that in the notification which is made thereafter to publish the order, the formation of the opinion is not recited will not take away the power to make the order which had already arisen and led to the making of the order. The validity of the order therefore does not depend upon the recital of the formation of the opinion in the order but upon the actual formation of the opinion and the making of the order is consequence. It would therefore follow that if by inadvertence or otherwise the recital of_ W.P.(C) No.25091 of 2020 -: 8 :- _the formation of the opinion is not mentioned in the preamble to the order the defect can be remedied by showing by other evidence in proceedings (for example, by filing an affidavit) where challenge is made to the validity of the order, that in fact the order was made after such opinion had been formed and was thus a valid exercise of the power conferred by the law. The only exception to this course would be where the statute requires that there should be a recital in the order itself before it can be validly made.”_ 11. The Apex Court held that, unless the statute otherwise require, if opinion was in fact formed but it was omitted to be mentioned in the order, then it could be shown through other material that, the opinion as required, was formed. The last two sentences of the paragraph quoted from 1974 KLT 189(supra) are of significance. Therein it is stated that, in the counter affidavit filed by the Deputy Registrar it was affirmed that he was satisfied that it was not practicable to issue notice to the members. Therefore, it was on the W.P.(C) No.25091 of 2020 -: 9 :- peculiar facts of that case, it was held that the mere fact that the order does not reflect the satisfaction and dispensation of the notice, is not of significance. It cannot be understood to mean that the first proviso inserted to Section 33(1) is of no purpose or force. Pertinently, the statement filed by the first respondent who issued Ext.P1 does not contain any mention that he was satisfied that it was not practicable to issue notice as mandated under the proviso. Therefore, it can only be found that the said requirement has not been complied with. 12. However, the fact remains that out of the 13 members of the Managing Committee, seven members amounting to majority are at loggerheads with the remaining members and have submitted their resignation. As rightly contended by Sri.P.C.Sasidharan, the learned counsel for respondents 4 and 5, this Court should not be issuing a writ in futility, since it is impossible for the present Managing Committee to function without a majority. Hence I am not inclined to W.P.(C) No.25091 of 2020 -: 10 :- interfere with Ext.P1 order appointing Administrator. 13. Now I proceed to consider the grievance of the petitioner regarding appointment of the three members who chose to resign from the committee, as the Administrative Committee for management of the Society. No doubt, as argued by Sri.Bimal K.Nath, the learned Special Government pleader a wide discretion is vested with the Registrar to choose the personnel to constitute the Administrative Committee. However, the action must have some rationale and reasonableness. There has to be fair play in his action. The first petitioner who is the President of the Society, is stated to have been the President of the Society for the past 28 years. The petitioners, have contended that there has not been any instances of complaints against him nor has there been any statutory enquiries or audit reports against him. The present committee assumed office on 10.02.2019 and till the date of resignation of the seven members, there is no allegation of any mal-administration. While it is W.P.(C) No.25091 of 2020 -: 11 :- true that in the counter affidavit of respondents 4 and 6, it is stated that the seven members who resigned from the Committee are interested in the administration of the Society and that they chose to resign as they did not want to be parties to the mal-administration under the leadership of the first petitioner, no specific instances/allegations are levelled. A mere difference with the President need not result in resignation from the Committee. If the President acts against the interests of the Society or if there is dereliction of his duty, a no-confidence motion could be moved against him in terms of Rule 43A. Conducting an election involves huge expenditure for the Society. The elected members of the Committee have an obligation, responsibility and duty to the members of the Society. Resigning en bloc on a difference with the President, and thus necessitating the holding of another election, and that too when the present Committee had assumed office only in the year 2019, cannot be looked upon as an act in the interest of the Society. As noticed above, there are no W.P.(C) No.25091 of 2020 -: 12 :- allegations of mismanagement against the members of the Committee who chose to remain in office. In that backdrop, appointing three persons from out of the members who resigned from the committee, as members of the Administrative Committee, lacks reason, justifiability and fair play. Arbitrariness is writ large in such action. 14. Incidentally it is also to be noticed that, the en bloc resignation was on 03.11.2020. Reports regarding the same have been obtained by the Joint Registrar at Kottayam from the Assistant Registrar/ Valuation Officer of the Meenachil Agricultural Rural Development Bank and from the Assistant Registrar, Meenachil on the very same day. So also, Ext.P1 order appointing Administrator was also issued by the Joint registrar on the very same day. I do notice the lightning speed at which the entire events have taken place. It is also curious to note that, the Assistant Registrar while recommending substitution of Administrator with and Administrative Committee has also forwarded consent letters of three resigned members expressing their W.P.(C) No.25091 of 2020 -: 13 :- willingness to be members of the Committee. Anyway, since I am of the opinion that a further deliberation on those aspects are not necessary for disposal of the writ petition, I choose to leave it there. 15. Be that as it may, as held by me supra, the appointment of three members who had resigned from the Managing Committee, as the Administrative Committee, suffers from arbitrariness and is illegal. Ext.P2 order is liable to be interfered with and I do so. Ext.P2 is accordingly quashed. On the discussions made, it would only be appropriate that the first petitioner and any other two members who have not resigned from the Managing Committee of the Society be appointed as the Administrative Committee. The first respondent is directed to have the needful done forthwith. Writ petition is allowed as above. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge **WP(C).No.25091 OF 2020(J)** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE ORDER NO. JRGKTM/2191/2020-CRB DATED 03.11.2020 ISSUED BY THE JOINT REGISTRAR. EXHIBIT P2 TRUE COPY OF THE ORDER JRGKTM/2191/2020-CRB DATED 11.11.2020 ISSUED BY THE JOINT REGISTRAR. EXHIBIT P3 TRUE COPY OF THE NEWSPAPER REPORT PUBLISHED IN DEEPIKA DAILY DATED 9.12.2020** -----