The President, Priyadarshini Ksheerolpadaka Sahakarana Sangham Pt 141(D) APCOS, Puthanambalam P.O., Kadambanadu, Pathanamthitta District-691553 v. State of Kerala, Department of Diary Development, Secretariat, Thiruvananthapuram-695001 and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V** **FRIDAY, THE 08TH DAY OF JANUARY 2021 / 18TH POUSHA, 1942** ## **WP(C).No.28376 OF 2020(V)** ## **PETITIONERS:** - **1 THE PRESIDENT, PRIYADARSHINI KSHEEROLPADAKA SAHAKARNA SANGHAM PT 141(D) APCOS 141 (D) APCOS, PUTHANAMBALAM P.O, KADAMBANADU, PATHANAMTHITTA DISTRICT-691 553.** - **2 PRIYADARSHINI KSHEEROLPADAKA SAHAKARANA SANGHAM P.T 141 (D) APCOS, PUTHANAMBALAM P.O, KADAMBANADU, PATHANAMTHITTA DISTRICT691 553, REPRESENTED BY ITS SECRETARY.** **BY ADVS. SRI.N.ANAND SRI.N.KRISHNA PRASAD** ## **RESPONDENTS:** - **1 THE STATE OF KERALA DEPARTMENT OF DIARY DEVELOPMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001, REPRESENTED BY ITS SECRETARY.** - **2 THE DIRECTOR, DEPARTMENT OF DIARY DEVELOPMENT, PATTOM, THIRUVANANTHAPURAM-695 004** - **3 THE DEPUTY DIRECTOR OF DIARY DEVELOPMENT, CIVIL STATION, PATHANAMTHITTA-689 645** - **4 THE DIARY FARM INSTRUCTOR, DAIRY EXTENSION SERVICE UNIT, PARAKKODE BLOCK, PARAKODE, PATHANAMTHITTA-691 554** - **5 THE STATE CO-OPERATIVE ELECTION COMMISSION CO-BANK TOWERS, VIKAS BHAVAN POST, THIRUVANANTHAPURAN-695 033, REPRESENTED BY ITS SECRETARY.** ## **SMT MABLE C KURIAN, SR GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.28376 OF 2020** **2** ## **JUDGMENT** Being aggrieved by the inaction on the part of the respondents in holding elections to the Priyadarshini Ksheerolpadaka Sahakarana Sangham, a Society registered under the Kerala Co-operative Societies Act and the Rules framed thereunder, the petitioners have approached this Court. 2. The petitioners herein, who are the office bearers of the society state that the present committee entered office following elections which were held on 181.2016 and its term is scheduled to expire on 17.1.2021. The committee in its meeting held on 16.11.2020, resolved to hold elections on 14.1.2021. In the very same meeting, they approved the preliminary voters list consisting of 25 members eligible to vote in the proposed election. The proforma was submitted before the 4th respondent and the requisite fees were also remitted. However, with the objective of appointing an Administrator, to manage the society, no action was taken by the respondent. According to the petitioners, the reason for non-conduct of election is an innocuous conflict between the provisions of the bye-laws of the Society with the provisions of the Act. As per the provisions of the bye-laws, the term of the committee is 5 years consisting of 12 months each from the date of assuming charge, whereas the provisions of the Act provides that the term of committee shall be five years from the date of election. According to the petitioners, **WP(C).No.28376 OF 2020** **3** Section 13A and the explanation to section 28A is clear when it states that the provisions of the Act would override the byelaws. It is further stated that by way of abundant caution, the Special General Body of the Society in its meeting held on 11.12.2020 has amended clause 5(1)(a)(2) of Ext.P1 bye-laws to make it in conformance with the provisions of the Act. The petitioners have also produced Ext.P7 communication addressed by the 2nd petitioner forwarding Ext.P6 decision to the 3rd respondent and also Ext.P8 challan as per which the requisite fees were deposited. In spite of taking all necessary measures, no steps are being taken by the respondents to hold the election. It is in the above backdrop that the petitioners are before this Court seeking a declaration that the respondents are statutorily bound to conduct elections to the managing committee of the Society before the term of its present managing committee and also for directions to the respondents to take immediate measures to complete the election process. 3. Sri. Anand, the learned counsel appearing for the petitioners, submitted that the petitioners have carried out all acts that are mandated under the Act and Rules and there is no justification on the part of the respondents in delaying the conduct of the election. According to the learned counsel, the intention of the respondents is to appoint an Administrator by backdoor methods. 4. The learned Government Pleader, on instructions, submitted that though directions were issued to the petitioners to make the bye-laws in consonance with the provisions of the Act, no steps were taken. If the amendment has been forwarded, the same shall be registered and steps shall be taken to hold **WP(C).No.28376 OF 2020** **4** the election, is the submission. 5. From the submissions advanced by the learned Government pleader, the delay in forwarding the resolution was due to the fact that the society failed to carry out the direction of the respondents to make the bye-laws in tune with the provisions of the Act. As rightly submitted by the learned counsel appearing for the petitioners, even if there are inconsistent provisions in the bye-laws, the provisions of the Act will prevail. It is thus apparent that the petitioners cannot be entirely faulted for the delay in holding the election. 6. It is borne out from the records that the term of the existing Committee is due to expire on 17.1.2021. I also take note of the fact that the respondents have no case that the functioning of the Society is riddled with issues as described in Section 33 (1) of the Act or that any adverse inquiries or audit reports are pending against them. It is also undisputed that no proceedings for surcharge have been initiated against the members of the Managing Committee of the Society casting any stigma. In such a situation, if the elections cannot be held during the term of the present managing committee, the respondents in terms of Section 33 (1)(b) of the Act is required to constitute an ad hoc Committee to manage the affairs of the Co-operative Society till proper elections are conducted and a new Managing Committee is put in place. In such an event, it is the request of the petitioners that instead of appointing an ad hoc Committee composed of strangers, members of the Managing Committee themselves be appointed to manage the Society in the interregnum. **WP(C).No.28376 OF 2020** **5** 7. In this context, it would be apposite to take note of the observations of a Division Bench of this Court in judgment dated 7.7.2017 in WP (C) 18310/2017, wherein it was held as follows. “6. The term of the Committee has completed. The election ought to have been conducted, but because of the pendency of amendment of the bye laws, it could not be so done. The result is that in such a situation the Registrar, in terms of Section 33(1)(b), is required to constitute an adhoc committee to manage the affairs of the Co-operative Society till proper elections are conducted and a new Managing Committee is put in place. Thus, the appointment of ad hoc committee was not on account of any maladministration or misfeasance on the part of the Committee, but only on account of the correction of the bye- laws. Otherwise, there is no default on the part of the Co-operative Society. Thus, even though the Registrar has a discretion to appoint an adhoc committee of maximum three persons, one among them as a convenor, who need not be member of the society to manage the affairs of the society, it does not bar the members of the Co-operative Society itself. Considering that the Co-operative Society is a democratic institution by and for the benefit of the members themselves, it would ordinarily be desirable that members of the Co-operative Society be considered, if not otherwise disqualified. Why should a foreigner to the Cooperative Society be considered, if there are competent persons in the Co-operative Society itself. Discretion conferred by Section 33(1)(b) is not an arbitrary or a fanciful discretion. It has to be exercised on some principles, one of which would be to avoid administration of a society by non members, even on an adhoc basis, unless there are good reasons to avoid the members.” 8. Further, in **Board of Directors of Koliyoor Service Co-operative** **Bank Ltd. , Tvm and Another v. Returning Officer, Koliyoor Service Cooperative Bank Ltd. Tvm and Others** [ 2015 (5) KHC 450], this Court had occasion to hold that there is no taboo for a member of the Managing Committee to **WP(C).No.28376 OF 2020** **6** be part of the Administrative Committee appointed on failure to constitute a Managing Committee to succeed in time. It was observed thus in paragraph No.6 of the judgment. The second question to be considered is as to whether the three members of the erstwhile managing committee could be included in the administrative committee as raised in WP (C) No. 23813/2015. A cursory look at S.32(1)(e) and S.33(1)(b) of the Act is needed for answering this question and the provisions germane are extracted herein below: "32. Supersession of Committee.-- xxxx xxxx xxxx (e) Every member of the committee superseded under this section shall from the date of order of such supersession stand disqualified to contest in the election to or to be nominated to the committee of any Society or to be appointed as an administrator in any society for two consecutive terms. xxxx xxxx xxxx 33. Appointment of new committee or administrator on failure to constitute committee, etc.-- (1) Where the term of office of a committee has expired and a new committee has not been constituted, or where a no - confidence motion is passed by the general body against the existing committee or where the existing committee resigns enbloc or where vacancies occur in the committee either by resignation or otherwise and the number of remaining members cannot constitute the quorum for the meeting of the committee, or where the committee fails to hold its regular meeting consecutively for six months or where the Registrar is satisfied. xxxx xxxx xxxx (b) that a new committee is prevented from entering upon office or a new committee fails to enter upon office, on the date on which the term of office of the existing committee expires, the Registrar may, either suo motu or on application of any member of the society, after intimating the Circle Co - operative Union, appoint one Administrator or an administrative committee consisting of not more than three individuals, who need not be member of the society, one among them as convener to manage the affairs of the society, for a period not exceeding six months as may be specified in the order, which **WP(C).No.28376 OF 2020** **7** period may, at the discretion of the Registrar and for reasons to be recorded in writing, be extended, from time to time, so, however, that the aggregate period shall not, in any case, exceed one year or till a new committee enters upon office, whichever is earlier." (emphasis supplied) S.32 of the Act envisages the appointment of an administrator or administrative committee to a Society where the term of the managing committee is yet to expire and has instead been superseded. S.33 of the Act envisages the appointment of an administrator or administrative committee to a Society on failure to constitute a managing committee in time. Only when the managing committee is superseded in terms of S.32 of the Act does any of its members incur a disqualification to be included in the administrative committee soon after. The disqualification lingers on for two consecutive terms under S.32(1)(e) of the Act and such member of the managing committee superseded cannot aspire to be in the administrative committee till such time. But there is no such embargo for any member of the managing committee to be included in the administrative committee appointed in terms of S.33(1)(b) of the Act. A wide discretion is vested in the Registrar to appoint an administrator or an administrative committee consisting of not more than three individuals under S.33(1)(b) of the Act. The Statute is specific that the three members 'need not be' a member of the Society implying thereby that any member whomsoever could be included in the administrative committee. There is no taboo for a member of the managing committee to be part of the administrative committee appointed on failure to constitute a managing committee to succeed in time. 7. Much was argued by the petitioner in WP (C) No. 23831/2015 on the basis of the decision in Joint Registrar v. Chatha, 1999 (3) KLT 139 wherein the following observations can be found: "In view of the above rulings, we are of the view that the members of the present managing committee, whose term has already expired, cannot be permitted to continue as administrative committee which would only amount to giving them power through back door." The 'rulings' relied on in the above decision are none other than Kottappady Service Co - op. Bank's case, (1994 (2) KLJ 795 (DB) and Kaithari Neithu Sahakarana Sangam's case, **WP(C).No.28376 OF 2020** **8** (1999 (1) KLJ 885) (DB) cited supra. The said decisions dealt only with the question as to whether a managing committee of a Society could be permitted to continue in office after the expiry of its term when the Act is silent. The question whether the administrative committee appointed in terms of S.33 of the Act could take in members of the erstwhile managing committee was never considered. The omnibus observation in Chatha's case hat the members of the managing committee cannot continue in administrative committee has no precedential support. The same is obviously made without comprehending the ratio decidendi in Kottappady Service Co - op. Bank's case and Kaithari Neithu Sahakarana Sangam's case relied on. The distinction between S.32(1)(e) and S.33(1)(b) of the Act in the matter of disqualification for members of the managing committee has been overlooked. I have no hesitation to hold that the decision in Chatha's case does not lay down the correct law and is without reference to the statutory provisions applicable. It can safely be declared that the decision in Chatha's case is per incurium (See: A. R. Antulay v. R. S. Nayak (AIR 1988 SC 1531) and Govt. of Andhra Pradesh v. B. Satyanarayana Rao, (AIR 2000 SC 1729). 8. It is the admitted case of either parties that no proceedings for surcharge have hitherto been initiated against the members of the erstwhile managing committee of the Society casting any stigma. This Court had cautioned in its interim order in WP (C) No. 22460/2015 that no members against whom proceedings for surcharge are pending shall be included in the administrative committee. The discretion exercised by the Registrar in appointing the three members of the erstwhile managing committee of the Society in the administrative committee later cannot be faulted with. Xxxxxxxxxx” 9. The Co-operative Society registered under the Act is bound to function as a democratic institution and conduct its affairs based on democratic principles. Democratic member control is one of the main co-operative principles as enunciated under Schedule 2 framed under section 2 (eccc) of the Act. As observed by the **WP(C).No.28376 OF 2020** **9** Division Bench above, considering that the Co-operative Society is a democratic institution by and for the benefit of the members themselves, it would ordinarily be desirable that members of the Co-operative Society be considered, if not otherwise disqualified. Why should a foreigner to the Co-operative Society be considered, if there are competent persons in the Co-operative Society itself, particularly in view of the contextual facts in the instant case. 10. Having considered the entire facts and circumstances, I direct the respondents to make all efforts to conduct the election of the managing committee in an expeditious manner. If it is impossible to conclude the election process on or before 17.1.2021, the respondents shall ideally and preferably consider the possibility of constituting an Administrative Committee comprising of the present Managing Committee to manage the affairs of the 2nd petitioner Society, in the event of the 2nd respondent choosing to exercise his discretion under Section 33 (1) of the Act. This is however subject to the condition that no proceedings for surcharge are pending against the members of the Managing Committee who are to be included in the Administrative Committee when formed. This petition is disposed of. **SD/-** ## **RAJA VIJAYARAGHAVAN V** ## **JUDGE** NS **WP(C).No.28376 OF 2020** **10** ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1** **TRUE COPY OF THE RELEVANT PORTION OF BYELAWS OF PETITIONER NO.2 SOCIETY.** **EXHIBIT P2 TRUE COPY OF THE DECISIONS ARRIVED AT BY MANAGING COMMITTEE OF PETITIONER NO.2 SOCIETY.** **EXHIBIT P3 TRUE COPY OF DECISION NO.4 ARRIVED AT BY MANAGING COMMITTEE OF PETITIONER NO.2 SOCIETY IN ITS MEETING HELD ON 16.11.2020.** **EXHIBIT P4 TRUE COPY OF PROFORMA SUBMITTED TO RESPONDENT NO.4.** **EXHIBIT P5 TRUE COPY OF CHALLAN ISSUED BY GOVERNMENT TREASURY, ADOOR SHOWING PAYMENT OF RS. 1000/-** **EXHIBIT P6 TRUE COPY OF THE RELEVANT PORTION OF MINUTES BOOK OF PETITIONER NO 2 SOCIETY EXHIBIT P7 TRUE COPY OF COMMUNICATION DATED 18.12.2020 ADDRESSED BY PETITIONER NO 2 TO RESPONDENT NO 3 EXHIBIT P8 TRUE COPY OF CHALLAN DATED 18.12.2020**