The Administrative Committee of the Badagara Co-operative Rural Bank Ltd. v. T.K. Kunhiraman ThundikandiYil & Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE BABU MATHEW P.JOSEPH MONDAY, THE 25TH DAY OF MARCH 2013/4TH CHAITHRA 1935 WA.No. 1807 of 2012 () IN WP(C).16564/2012 -------------------------------------------- AGAINST THE ORDER DATED 5.10.2012 IN I.A.13197/2012 IN WP(C). 16564/2012. APPELLANT/4TH RESPONDENT: ------------------------- THE ADMINISTRATIVE COMMITTEE OF THE BADAGARA CO-OP. RURAL BANK LTD. NO. F.1264, H.O.VATAKARA, REPRESENTED BY ITS CONVENOR VADAKARA P.O., KOZHIKODE-673620. BY ADVS.SRI.N.N.SUGUNAPALAN (SR.) SRI.K.MOHANAKANNAN RESPONDENS/PETITIONER AND RESPONDENTS 1 TO 3 AND 5 TO 7: ------------------------------------------------------- 1. T.K.KUNHIRAMAN THUNDIKANDIYIL P.O., SIDHA SAMAJAM, VADAKARA-673101. 2. REGISTRAR OF CO-OPERATIVE SOCIETIES P.B.NO. 185, STATUE, THIRUVANANTHAPURAM 695001. 3. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES KOZHIKODE-673020. 4. THE VATAKARA CO-OPERATIVE RURAL BANK LTD. F-1264, REPRESENTED BY ITS SECRETARY OFFICE OF THE VATAKARA CO-OPERATIVE RURAL BANK LTD. F-1264 VATAKARA P.O., KOZHIKODE-673620. 5. SRI. A.K.CHATHU MEMBER, ADMINISTRATIVE COMMITTEE THE VATAKARA CO-OPERATIVE RURAL BANK LTD. F-1264 VATAKARA P.O., KOZHIKODE-673020. 6. SASIDHARAN MEMBER, ADMINISTRATIVE COMMITTEE THE VATAKARA CO-OPERATIVE RURAL BANK LTD. F-1264 VATAKARA P.O., KOZHIKODE-673020. : 2: 7. STATE CO-OPERATIVE ELECTION COMMISION REPRESENTED BY ITS SECRETARY, TRIVANDRUM-695001. R5 R6 BY ADV. SRI.MOHANAKANNAN R1 BY ADV. SRI.P.V.KUNHIKRISHNAN R1 BY ADV. SRI.M.K.DAMODARAN (SR.) R4 BY ADV. SRI.S.V.BALAKRISHNA IYER (SR.) R2,R3 & R7 BY SPECIAL GOVERNMENT PLEADER SRI.D.SOSMASUNDARAM THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 19-02-2013, ALONG WITH WA. 1856/2012, THE COURT ON 25-03-2013 DELIVERED THE FOLLOWING: ## **PIUS C. KURIAKOSE & BABU MATHEW P. JOSEPH, JJ.** ------------------------------------------------------------ W.A. Nos. 1807 of 2012 & 1856 of 2012 ------------------------------------------------------------Dated this the 25[th] day of March, 2013 ## **JUDGMENT** ## Babu Mathew P. Joseph, J. These Writ Appeals are directed against the order dated 5.10.2012 on I.A.No.13197 of 2012 in W.P.(C) No.16564 of 2012 of a learned single Judge of this Court. The appellant in W.A.No.1807 of 2012 is the 4[th] respondent in I.A. and Writ Petition. The 1[st] respondent is the petitioner in I.A. and Writ Petition. The respondents 2 to 7 in this Writ Appeal are the respondents 1 to 3 and 5 to 7 respectively in I.A. and Writ Petition. The appellants in W.A.No.1856 of 2012 are not parties to I.A. and Writ Petition. They have preferred this Appeal challenging the said order of the learned single Judge with the leave granted by this Court. The respondents 1 to 4, 6 to 8 and 2 [W.A.Nos. 1807/2012 & 1856/2012] the 5[th] respondent in this Writ Appeal are the respondents 1 to 7 and the appellant respectively in W.A. No.1807 of 2012. The parties are referred to in this judgment as they are arrayed in W.A.No. 1807 of 2012 and the appellants in W.A.No.1856 of 2012 will be referred to separately as and when required. By the impugned order, the learned single Judge directed not to allow 3115 new members enrolled by the appellant to cast their votes and directed to include in the voters list 3994 members who were removed by the appellant from the voters list and allowed them to cast their votes in the coming election to the 4[th] respondent Vatakara Co-operative Rural Bank Ltd. (for short, the Bank). 2. Heard Shri. N.N.Sugunapalan, the learned Senior Counsel appearing for the appellant in W.A.No. 1807 of 2012, Shri. T. Krishnanunni, the learned Senior Counsel appearing for the appellants in W.A.No.1856 of 2012, Shri.M.K.Damodaran, the learned Senior Counsel appearing for the 1[st] respondent, Shri.D.Somasundaram, the learned Special Government Pleader appearing for the respondents 2, 3 and 7, Shri. S.V.Balakrishna Iyer, the learned Senior Counsel appearing for the 4[th] respondent, and Shri.K.Mohanakannan, the learned counsel appearing for the 3 [W.A.Nos. 1807/2012 & 1856/2012] respondents 5 and 6. Since similar questions are involved, both the Writ Appeals were heard together and are being disposed of by this common judgment. 3. The brief facts necessary for the disposal of these Writ Appeals are as follows: The 1st respondent is a member of the 4[th] respondent, the Bank. He was an elected member of the Board of Directors of the Bank. He also functioned as the Vice President of the Bank. The last election to the Board of Directors of the Bank was held on 12.11.2006. The term of office of the Board of Directors was to expire on 12.11.2011. However, for want of quorum, the Board of Directors of the Bank was superseded by Ext.P3 order dated 29.8.2011 issued by the 3[rd] respondent, Joint Registrar of Co-operative Societies (General). By that order, an Administrative Committee with three members was constituted for managing the affairs of the Bank for a period upto six months. The 3[rd] respondent, as per Ext.P6 order dated 8.2.2012, extended the term of the Administrative Committee of the Bank by six months from 1.3.2012 and directed it to take necessary steps for election to the Board of Directors. It was also directed in Ext.P6 to remove ineligible members from the Bank and to give membership to those persons who were denied membership in 4 [W.A.Nos. 1807/2012 & 1856/2012] the Bank. The 1[st] respondent and another challenged Ext.P6 order before this Court in W.P.(C) No.4406 of 2012. As regards the direction issued by the 3[rd] respondent to give membership to persons who were denied membership in the Bank, the learned Special Government Pleader submitted before this Court in that Writ Petition that in view of the decision of this Court in **Karunakaran Pillai** v. **Venugopala Pillai** (2005 (3) KLT 348), the Administrative Committee cannot enrol members and it can only accept the applications, if any, received from persons seeking membership for consideration by the elected Managing Committee as and when the elected Managing Committee is constituted. W.P.(C) No.4406 of 2012 has been disposed of by this Court by Ext.P7 judgment dated 12.3.2012. It was observed in Ext.P7 that the members of the Bank can be removed only after following the procedure prescribed in Rule 16 of the Kerala Co-operative Societies Rules and the provisions in the Bye-laws and hence, directed that the ineligible members, if any, in the Bank shall be removed only after following the procedure prescribed in the Act, Rules and the Bye-laws. 4. Since the Administrative Committee of the Bank has not initiated any action for conducting election to the Managing 5 [W.A.Nos. 1807/2012 & 1856/2012] Committee and the Administrative Committee was trying to remove members of the Bank in violation of law, the 1[st] respondent filed W.P.(C) No.13930 of 2012 before this Court. In that Writ Petition, the learned Special Government Pleader submitted that the Administrative Committee would pass necessary resolution for conducting election to the Managing Committee before 30.6.2012. Also submitted that the notices produced in that case were not the notices proposing to remove the members and if at all any member was to be removed, such removal would be only in compliance with Rule 16(3) of the Kerala Co-operative Societies Rules. Therefore, this Court disposed of that Writ Petition by Ext.P8 judgment dated 22.6.2012 recording the undertaking so made by the learned Special Government Pleader and directing the Administrative Committee to abide by that undertaking. 5. The 1st respondent has filed the present Writ Petition raising the grievance that the Administrative Committee illegally enrolled 2234 new members. He has produced Ext.P9 chart showing the date of enrolment, numbers of membership and total number of members enrolled. Ext.P9 shows that a total of 2234 members were enrolled on 27.6.2012, 28.6.2012, 29.6.2012 and 6 [W.A.Nos. 1807/2012 & 1856/2012] 2.7.2012. The 1[st] respondent contended that the enrolment of 2234 persons, as evident from Ext.P9, by the Administrative Committee was invalid and hence, they cannot have any right to cast vote in the coming election to the Managing Committee. The 1[st] respondent also contended that the enrolment of new members thus effected by the Administrative Committee was against the spirit of Ext.P7 judgment and was illegal as held by the Honourable Supreme Court and this Court in different rulings and hence, they have no legal right to cast vote in the coming election to the Managing Committee. 6. The Administrative Committee enrolled 881 new members on 30.7.2012 i.e., after filing this Writ Petition. Similarly, 3970 members were removed from the voters list by the Administrative Committee without assigning any reason. Ext.P10 is a copy of the list of members who were thus removed from the voters list. Their removal was effected without following Rule 16 (3) of the Co-operative Societies Rules. Therefore, the 1[st] respondent filed I.A.No.13197 of 2012 in the Writ Petition for a direction not to allow 3115 members (2234 + 881) newly enrolled by the Administrative Committee to cast vote and for a direction to allow 3970 members (Ext.P10 list) wrongly removed by the 7 [W.A.Nos. 1807/2012 & 1856/2012] Administrative Committee from the voters list to cast their votes in the coming election to the Bank. The learned single Judge, after hearing the parties and considering the matter, allowed that I.A. Aggrieved by the order so passed by the learned single Judge, the appellants have preferred these Writ Appeals. 7. Both the sides have advanced detailed arguments before us. They have cited rulings as well. 8. The learned single Judge observed in paragraph 6 of the impugned order as follows: “6. The contesting respondents also did not seriously dispute the fact that the enrollment of new members is against the spirit of Ext.P7 judgment and the settled legal position. In the counter affidavit filed by the 4[th] respondent it is not disputed that the administrator enrolled new members. The counter affidavit is silent about the recording of the submission of the learned Special Government Pleader in Ext.P7 judgment and the legal position that only elected committee alone can enroll members and not by administrator or administrative committee in charge. Therefore, the petitioner has made out a strong prima facie case”. The learned single Judge also observed in paragraph 7 of the impugned order as follows: 8 [W.A.Nos. 1807/2012 & 1856/2012] “7. The second contention raised by the petitioner is regarding the removal of members of the Bank from the roll of membership. The petitioner contended that in addition to the enrollment of 3115 members the administrative committee removed 3970 members from the voters list without assigning any reason. The learned counsel for the 4[th] respondent produced the register which shows that 3994 members were removed. The petitioner produced the copy of the list of members who are omitted from the voters list by the administrative committee. Ext.P10 is the list containing the names of 3970 members. This Court in Ext.P7 judgment held that the members of the Co-operative Society can be removed only after following the procedure prescribed in Rule 16 of the Kerala Cooperative Societies Rules (for short, 'the Rules') and the provisions and bye-laws.” Thereafter, it was observed in paragraph 8 of the impugned order as follows: “.......This Court passed Ext.P8 judgment dated 22.6.2012 in W.P.(C) No.13930/2012. In Ext.P8 judgment, this Court recorded the submission the learned Special Government Pleader that if at all any member is to be removed, such removal would be only in compliance with Rule 16(3) of the Rules. This Court recorded the submission of the learned Special 9 [W.A.Nos. 1807/2012 & 1856/2012] Government Pleader and directed the administrative committee of the 3[rd] respondent Bank to abide by the said undertakings. The learned senior counsel for the petitioner contended that the membership of 3917 members are not cancelled after following Rule 16(3) of the Rules and hence the cancellation is against the spirit of Exts.P7 & P8 judgments”. 9. Learned single Judge found that the 4[th] respondent or other respondents in the Writ Petition were unable to produce any notice issued by the Society calling upon a member or members to show cause as to why he/they shall not be removed for the reasons set out in Rule 16(3) of the Rules. Only in a case where administrative committee found that the member is ineligible, proceedings for removal can be initiated and continued. In this case, there was no written order or any indication in the records produced which would prove that the committee had any occasion to look into the question as to whether a particular member is ineligible for membership. The administrative committee had no occasion to consider whether 3994 members are ineligible for membership and, therefore, proceedings shall be initiated against them. In such circumstances, no notice has been issued to 3994 members directing them to make 10 [W.A.Nos. 1807/2012 & 1856/2012] representation as to why they shall not be removed from membership. It is a fact that there was no decision to initiate proceedings, no notice has been issued and there was no occasion to consider the case of the removed members as to whether they are ineligible to continue as members. In spite of Exts.P7 and P8 judgments, the Administrative Committee removed 3994 members without following the procedure prescribed under Rule 16(3) of the Rules. On the basis of the available materials on record, this Court is of the view that the petitioner has made out a strong prima facie case as regards the removal of 3994 members, the learned single Judge further observed. In these circumstances, the learned single Judge has issued the directions in the impugned order. 10. Learned Senior Counsel for the appellants and the Bank contended that the Writ Petition and the I.A. filed by the 1[st] respondent were bad for non-joinder of necessary parties. Learned single Judge has directed not to allow 3115 new members including the appellants in W.A.No.1856 of 2012 enrolled by the Administrative Committee to cast their votes in the ensuing election. This is done without hearing any one of those persons. They are affected and necessary parties. No order can be legally 11 [W.A.Nos. 1807/2012 & 1856/2012] passed against them without giving an opportunity of being heard to them. Otherwise, it will be violative of the principles of natural justice. The petitioner has not impleaded any of them even in a representative capacity. Therefore, the Writ Petition as well as the Interlocutory Application were bad and not maintainable, contended by them. Learned Senior Counsel for the appellant in W.A.No.1856 of 2012 further submitted that his parties were necessarily to be impleaded by the petitioner in the Writ Petition because at their instance and based on the direction issued by this Court in their Writ Petition viz.,W.P.(C) No.25634 of 2011, the 3[rd] respondent Joint Registrar of Co-operative Societies issued Ext.P6 order directing the Administrative Committee to take steps to remove the ineligible members and to give membership to those persons who were denied it. 11. Learned Senior Counsel for the appellants and the Bank relied on the decisions of the Honourable Supreme Court in **Udit Narain Singh** v. **Board of Revenue** (AIR 1963 SC 786) and in **State of Assam** v. **Union of India** [(2010) 10 SCC 408] in order to substantiate their case that the Writ Petition and the I.A. were bad for non-joinder of necessary parties. In **Udit Narain Singh's** case (supra), the Tribunal whose order was sought to be quashed 12 [W.A.Nos. 1807/2012 & 1856/2012] was made a party but the persons who were parties before the Tribunal and in whose favour the impugned order was passed were not joined as parties. In such a circumstance, the petition was held to be incompetent. Similarly, the case of **State of Assam** (supra) where the burden of payment to be made to the Attendants was imposed on the State Government without hearing them. Therefore, both these decisions cited in support of the contention cannot be applied to the facts obtained in the cases on hand. 12. Learned single Judge found, based on judicial pronouncements, that the Administrative Committee has no power to enrol members. The Honourable Supreme Court in **K.Shantharaj** v. **M.L.Nagaraj** [(1997) 6 SCC 37] held that the administrator or special officer of the co-operative society has to conduct election with the members as on the rolls. He has no power to enrol new members and conduct the election by including them also. A Full Bench of this Court in **Hassan** v. **Joint Registrar of Co-operative Societies** [1998(2) KLT 746(F.B.)] held that the power given to the administrator to exercise all or any of the functions of the committee under sub-section (2) of Section 33 of the Co-operative Societies Act would not take in 13 [W.A.Nos. 1807/2012 & 1856/2012] the power to enrol new members. The Apex Court in **Jt. Registrar of Cooperative Societies** v. **T.A. Kuttappan** [(2000) 6 SCC 127] held that enrolment of new members would involve alteration of the composition of the society itself and such a power should be exercised by an elected committee rather than by an administrator or a committee appointed by the Registrar while the Committee of Management is under supersession. A Division Bench of this Court in **Karunakaran Pillai** v. **Venugopala Pillai** [2005(3) KLT 348] dealing with Sections 33(2) and 16 of the Co-operative Societies Act, held that the amended provisions would not confer any power on the Administrator to enrol new members to the Co-operative Society. 13. In the light of these authoritative judicial pronouncements, there cannot be any doubt with regard to the fact that an Administrative Committee or an Administrator in a Co-operative Society does not have the power to enrol new members to the Society. Therefore, the enrolment of new members effected by the Administrative Committee in this case is illegal and those members who were thus enrolled by the Administrative Committee will not have any right, including the right to vote, based on such enrolment as members. In the light of this legal 14 [W.A.Nos. 1807/2012 & 1856/2012] position, the argument advanced that the Administrative Committee has acted based on the direction issued by the Joint Registrar of Co-operative Societies in Ext.P6 cannot be held to be an acceptable argument. Since the Administrative Committee does not have the authority to enrol new members, any direction issued by the Joint Registrar of Co-operative Societies, like Ext.P6, cannot clothe the Administrative Committee with the power to enrol new members. The direction issued by the Joint Registrar of Co-operative Societies in Ext.P6 cannot be interpreted as one giving authority to the Administrative Committee to enrol new members. Ext.P6 cannot go against the provisions of law as interpreted by various judicial pronouncements already adverted to. For the very same reason, the argument of the learned Senior Counsel for the appellant in W.A.No.1807 of 2012 that the 1[st] respondent has not challenged Ext.P6 order passed by the Joint Registrar of Co-operative Societies and Ext.P6 is still in existence is without any merit and hence, rejected. 14. We shall now deal with the argument advanced by the learned Senior Counsel appearing for the appellants and the Bank that the Writ Petition filed by the 1[st] respondent was bad for non-joinder of necessary parties. According to them, those 15 [W.A.Nos. 1807/2012 & 1856/2012] persons who were newly enrolled by the Administrative Committee and now prevented by the learned single Judge from casting their vote in the ensuing election are necessary parties for proceeding with the Writ Petition. 15. It is well settled that a necessary party is one without whom no order can be made effectively. The Apex Court in **T. Ramegowda** v. **R.Krishnamurthy** (AIR 1994 SC 85), dealing with the enrolment of new members by the special officer without jurisdiction, held that for declaring the membership of such newly enrolled members as invalid, no opportunity of hearing need be given to them. They can be deleted without hearing them. In **S.L.Kapoor v. Jagmohan** [(1980) 4 SCC 379], the Honourable Supreme Court held that where on the admitted or indisputable facts only one conclusion is possible and under the law only one penalty is permissible, the court may not issue its writ to compel the observance of natural justice, not because it is not necessary to observe natural justice but because courts do not issue futile writs. This is followed by the Supreme Court in **M.C.Mehta** v. **Union of India** [(1999) 6 SCC 237]. In the case on hand, there cannot be any dispute regarding the fact that the Administrative Committee cannot enrol new members to the Society and hence, 16 [W.A.Nos. 1807/2012 & 1856/2012] members illegally enrolled by the Administrative committee cannot have any right to cast their votes based on such illegal enrolment. Therefore, even if notice is given directly or indirectly to those newly enrolled members, the result would be one and the same. Hence, absence of notice to them is of no consequence as far as the Writ Petition filed by the 1[st] respondent is concerned. 16. A Division Bench of this Court in **Purushothaman** v. **Registrar** [1996 (2) KLT 26] held that even though the courts are to zealously uphold the principles of natural justice, the courts are not to issue futile writs. When it has come out that majority of the appointments were effected on account of manipulations and on payment of money, any direction to comply with the principles of natural justice in the sense to afford them a hearing will only be a futile exercise of power. Persons who got the orders of appointment by resort to backdoor methods should be sent out through backdoor itself. 17. In the light of these judicial pronouncements, the argument of the appellants and the Bank that the Writ Petition filed by the 1[st] respondent is bad for non-joinder of necessary parties cannot be accepted. Needless to say that, for similar reason, the argument advanced by the learned Senior Counsel for 17 [W.A.Nos. 1807/2012 & 1856/2012] the appellant in W.A.No.1856 of 2012 that, at least, the notice shall be given to the affected persons under Rule 148 of the Kerala High Court Rules is also only to be rejected and hence, we do so. 18. No person already admitted to membership of a Society can be removed from membership without the procedure prescribed under Rule 16(3) of the Co-operative Societies Rules is followed. The learned single Judge has specifically found after examining the documents produced that the Administrative Committee of the Bank had not followed the procedure prescribed under the said Rule. In the light of the submissions made by the learned Special Government Pleader before this Court and the observations and directions issued by this Court in different judgments, the Administrative Committee was duty bound to scrupulously follow Rule 16(3) of the Rules if any member has to be removed from membership. Learned Senior Counsel for the appellants and the Bank made an attempt during the course of arguments before us to show that the required notice under Rule 16(3) has been issued to the members who were removed from membership of the Bank. We have perused the copies of such notices shown to us by the learned 18 [W.A.Nos. 1807/2012 & 1856/2012] Senior Counsel. We were satisfied that those notices were not at all sufficient to comply with Rule 16(3) of the Rules in order to remove a member. None of the notices issued to the members so removed from membership has been produced before this Court by the appellants or the 3[rd] respondent. In view of these facts, we are constrained to find that the wholesale removal of members from the Society has been effected in gross violation of Rule 16(3) of the Co-operative Societies Rules. Therefore, the finding entered by the learned single Judge in that respect cannot be faulted. 19. Learned Senior Counsel for the appellant in W.A.No.1856 of 2012 submitted that, by the impugned order, the learned single Judge has granted more reliefs than prayed for in the Writ Petition. The 1st respondent has not even amended the Writ Petition incorporating those reliefs prayed for in the I.A. Even though an amendment application has been filed for incorporating those reliefs, that application remains not allowed by the learned single Judge. Therefore, the learned single Judge ought not to have granted the reliefs so prayed for in the I.A. This is a hypertechnical and far-fetched argument. The 1st respondent has prayed for the reliefs in the I.A. filed in the Writ Petition. 19 [W.A.Nos. 1807/2012 & 1856/2012] Moreover, he has filed an application for amending the Writ Petition for incorporating the reliefs so sought for in the I.A. The learned single Judge has exercised jurisdiction under Article 226 of the Constitution in order to prevent an illegality committed by the Administrative Committee of the Bank. The Writ Petition, I.A. praying for the reliefs and the amendment application were available before the learned single Judge while passing the impugned order. So, the records available before the court at the time of passing the impugned order justify such an order passed by the learned single Judge. Exercising jurisdiction by this Court under Article 226 of the Constitution in order to prevent an illegality committed by the Administrative committee, that too without adhering to the observations and the directions made by this Court in different judgments, cannot be found mistaken based on such technical grounds. 20. Learned single Judge has considered in detail the relevant aspects while passing the impugned order. We find no reason to interfere with the findings or the directions issued by the learned single Judge in the impugned order. These Writ Appeals are devoid of any merit. Therefore, they are liable to be dismissed. 20 [W.A.Nos. 1807/2012 & 1856/2012] In the result, Writ Appeal Nos. 1807 of 2012 and 1856 of 2012 are dismissed. Sd/- **PIUS C. KURIAKOSE, JUDGE.** Sd/- **BABU MATHEW P. JOSEPH, JUDGE.** krs. //True Copy // P.S. to Judge.