T.K. Kunhiraman ThudhikandiYil v. Registrar of Co-operative Societies & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **MONDAY, THE 4TH DAY OF JULY 2016/13TH ASHADHA, 1938** ## **WP(C).No. 16564 of 2012 (U)** **----------------------------------------** **PETITIONER(S):** - **-----------------------** **T.K.KUNHIRAMAN THUDHIKANDIYIL P.O., SIDHA SAMAJAM, VADAKARA - 673 101.** ## **BY ADVS.SRI.M.K.DAMODARAN (SR.) SRI.P.V.KUNHIKRISHNAN** ## **RESPONDENT(S):** - **-------------------------** **1. REGISTRAR OF CO-OPERATIVE SOCIETIES P.B.NO.185, STATUE, THIRUVANANTHAPURAM - 695 001.** **2. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, KOZHIKODE - 673 020.** **3. THE VATAKARA CO-OPERATIVE RURAL BANK LTD.F-1264, REPRESENTED BY ITS SECRETARY, OFFICE OF THE VADAKARA CO-OPERATIVE RURAL BANK LTD.F-1254, VADAKARA P.O., KOZHIKODE - 673 620.** **4. THE ADMINISTRATIVE COMMITTEE OF VATAKARA CO-OPERATIVE RURAL BANK LTD., F-1264, REPRESENTED BY ITS CONVENER, VADAKARA P.O., KOZHIKODE - 673 620.** **5. SRI.A.K.CHATHU, MEMBER, ADMINISTRATIVE COMMITTEE, THE VATAKARA CO-OPERATIVE RURAL BANK LTD. NO.F-1264, VADAKARA P.O., KOZHIKODE - 673 620.** **6. SASIDHARAN, MEMBER, ADMINISTRATIVE COMMITTEE, THE VATAKARA CO-OPERATIVE RURAL BANK LTD. NO.F-1264, VADAKARA P.O., KOZHIKODE - 673 620.** **msv/** **-2-** **-2-** ## **WP(C).No. 16564 of 2012 (U)** **----------------------------------------** **7. STATE CO-OPERATIVE ELECTION COMMISSION, REP. ITS SECRETARY, TRIVANDRUM - 695 001.** - **ADDITIONAL R8 IMPLEADED** **8. BYJU, S/O.RAGHAVAN, RESIDING AT SAKETHAM, EDAPPA, MADAPPALLY COLLEGE-PO., VADAKARA, KOZHIKODE DISTRICT.** *** IMPLEADED VIDE ORDER DTD.9.4.2014 IN IA.5074/2013.** **R1, R2 & R7 BY SPECIAL GOVERNMENT PLEADER SMT.M.R.SREELATHA R3 BY ADVS. SRI.S.V.BALAKRISHNA IYER (SR.) SRI.P.B.KRISHNAN SRI.P.B.SUBRAMANYAN R4 BY ADVS. SRI.N.N.SUGUNAPALAN (SR.) SRI.K.MOHANAKANNAN SMT.A.R.PRAVITHA R8 BY ADVS. SRI.GEORGE POONTHOTTAM SRI.B.S.SWATHY KUMAR SMT.T.RESHMA SMT.S.SIKKY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04-07-2016, ALONG WITH WPC. 23299/2012 AND CONNECTED CASES THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **msv/** ## **WP(C).No. 16564 of 2012 (U) ----------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS:** ## **--------------------------------------** - **EXHIBITS P1. A COPY OF THE MINUTES OF THE DIRECTOR BOARD MEETING DATED 23.08.2011.** - **EXHIBITS P2. A COPY OF THE LETTER DATED 23.08.2011 ALLOWING TO CONDUCT ELECTION AT GOVERNMENT SANSKRIT HIGH SCHOOL, MEPPAYIL, VATAKARA.** - **EXHIBITS P3. A COPY OF THE ORDER NO.0/5131/2011 DATED 29.08.2011 OF THE 2ND RESPONDENT.** - **EXHIBITS P4. A COPY OF THE JUDGMENT DATED 09.12.2011 IN WPC NO.29153/2011.** - **EXHIBITS P5. A COPY OF THE ORDER DATED 12.03.2012 IN WA NO.132/2012 OF THE DIVISION BENCH OF HIGH COURT OF KERALA.** - **EXHIBITS P6. A COPY OF THE ORDER NO.CRP(2)4667/11 DATED 08.02.2012 OF THE 2ND RESPONDENT.** - **EXHIBITS P7. A COPY OF THE JUDGMENT IN W.P.C.4406/2012 DATED 12.03.2012.** - **EXHIBITS P8. A COPY OF THE JUDGMENT IN WPC NO.13930/2012 DATED 22.06.2012.** - **EXHIBITS P9. A CHART SHOWING THE DATE OF ENROLMENT, MEMBERSHIP** - **NUMBER AND THE TOTAL NUMBER OF MEMBERS (MEMBERSHIP** - **EXHIBITS P10. A COPY OF THE LIST OF MEMBERS WHO ARE OMITTED FROM THE VOTERS LIST BY THE COMMITTEE.** **RESPONDENT(S)' ANNEXURE:** - **-----------------------------------------** ## **ANNEXURE A: NEW CHART** ## **//TRUE COPY//** ## **P.S.TO JUDGE** Ms **v/** ## **SHAJI P. CHALY, J.** -------------------------------------------------- **W.P.(C) Nos.16564, 23299, 23789 & 24360 of 2012 & W.P.(C) Nos.19242 & 21657 of 2016 ----------------------------------------------Dated this the 4th day of July, 2016** ## **JUDGMENT** The first four writ petitions among the six are filed by members of Vatakara Co-operative Rural Bank Ltd. [hereinafter called as 'the Bank'], challenging enrolment of members and removal of existing members by the administrative committee. The other two writ petitions are concerning the very same Bank, with respect to removal and appointment of the administrative committee by the Registrar of Co-operative Societies. Since the writ petitions are intrinsically connected, I propose to deliver a common judgment. Sequence of facts narrated in W.P.(C) No.21657 of 2016 are recited hereunder and wherever separate reference is required with respect to the other writ petitions, same will be made accordingly. 2. The 1[st] respondent, Joint Registrar of Co-operative Societies (General), Kozhikode, as per order dated 29.08.2011 appointed an administrative committee to the Bank with the **W.P.(C) No.16564 of 2012 & conn. cases** 2 petitioner as the Convenor, consequent to the loss of quorum of the then elected managing committee. The term of the committee was further extended for a period of six months from 01.09.2012 to 28.02.2013, as per the notification dated 01.08.2012. The period was extended for a further period of six months from 01.03.2013 to 31.08.2013, as per the notification dated 10.04.2013 and thereafter extended for a period of six months from 01.09.2013 to 28.02.2014, as per notification dated 20.01.2014. Again, as per notification dated 24.01.2014, the period was extended for six months from 01.03.2014 to 31.08.2014. Thereafter, it was being successively extended as per the notifications issued and finally extended the term of the administrative committee for a further period of one year from 01.03.2015 to 29.02.2016, as per Ext.P2. 3. Contention of the petitioner is that, the term of the committee can only be extended by the Government by invoking Sec.101 of the Kerala Co-operative Societies Act, 1969 (for short, 'the Act'] and that the 1[st] respondent has absolutely no power either to extend the term of the committee or to change the constitution of the committee. In **W.P.(C) No.16564 of 2012 & conn. cases** 3 the year 2012, one of the former members of the managing committee filed W.P.(C) No.13930 of 2012, complaining that the administrative committee has not initiated any action for the conduct of election and that they are trying to remove the members of the Bank. That writ petition was disposed of recording the submission of the learned Special Government Pleader that if at all any members are to be removed, such removal would be only in compliance with Rule 16(3) of the Kerala Co-operative Societies Rules [hereinafter called 'the Rules']. Later, W.P.(C) No.16564 of 2012, captioned above, is field alleging that the administrative committee enrolled 2234 members and later by filing I.A.No.13197 of 2012 pointed out that another 881 members were also enrolled. Yet another allegation raised in the said writ petition and other writ petitions connected thereto, was the removal of 3970 members without assigning any reason and violative of Rule 16 (3) of the Rules and praying that a direction may be issued to the Bank administrative committee and the State Co-operative Election Commission not to allow 3115 members enrolled by the administrative committee to cast their votes and further to permit 3970 members wrongly removed by the administrative **W.P.(C) No.16564 of 2012 & conn. cases** 4 committee to vote in the ensuing election to the Bank. 4. Thereupon, a learned Single Judge on 05.10.2012 passed an interim order directing the respondents 3 to 7 therein and the Returning Officer not to allow 3115 members enrolled by the administrative committee to cast their votes and include 3994 members illegally removed by the administrative committee from the voters list. 5. Aggrieved by the said order of the learned Single Judge, administrative committee filed W.A.No.1807 of 2012 and as per the judgment dated 25.03.2013, appeal was dismissed. Being aggrieved, the administrative committee challenged the said judgment in S.L.P No.17632 of 2013 and that the Registrar of Co-operative Societies challenged the very same judgment by filing S.L.P No.17614 of 2013. As per Ext.P3 order dated 09.05.2013, the Apex Court directed to maintain _status quo_ . Therefore, it is the contention of the petitioner that, the administrative committee was in office and so by virtue of Ext.P3, the administrative committee is entitled to continue. Later, as per Ext.P4 common judgment dated 31.03.2016, the Apex Court disposed of the appeals, observing that this Court expeditiously dispose of the said writ petition **W.P.(C) No.16564 of 2012 & conn. cases** 5 preferably within six months from date and the order of _status quo_ was directed to be continued till the disposal of the writ petition. Therefore, it is the contention of the petitioner that, _status quo_ ordered by the Apex Court include the status and composition of the administrative committee and therefore the administrative committee is entitled to continue in power _de hors_ the expiry of period extended by the State Government. 6. It is the contention of the petitioner, administrative committee, in W.P.(C) No.19242 of 2016 that it apprehends, every likelihood of removal of the committee and if the same is done, same will be in violation of Ext.P4 judgment of the Apex Court. Anyhow, thereafter 1[st] respondent passed Ext.P5 order, removed the administrative committee, and appointed the 2[nd] respondent as the administrator. Thus challenging the removal of administrative committee, W.P.(C) No.21657 of 2016 is filed. The facts and circumstances of the other writ petitions are similar, with respect to the enrollment and removal of members by the administrative committee, contending that the administrative committee has no manner of power under the Act to enroll new members and remove the **W.P.(C) No.16564 of 2012 & conn. cases** 6 existing members and that too, without following the procedure prescribed under the Act and the Rules. 7. The first question to be considered is whether the administrative committee is entitled to continue in power. The provisions with respect to appointment of an administrative committee and its extension are contained in Sec.33 of the Act. If the Registrar is satisfied that circumstances contained in Sec.33 exist, as provided under clause (b) of sub-section (1) of Sec.33, Registrar is vested with powers to appoint an administrator or administrative committee consisting of not more than three individuals and one among them as convenor to manage the affairs of the society for a period not exceeding six months as may be specified in the order, which period may, at the discretion of the Registrar, and for reasons to be recorded in writing, be extended from time to time, however the aggregate period shall not, in any case, exceed one year or a new committee enters upon office, whichever is earlier. Therefore, the power vested with the Registrar is limited to a maximum period of one year. However, as provided under sub-section (1A) of Sec.33, after securing permission from the Government, the Registrar is empowered to extend the period ## **W.P.(C) No.16564 of 2012 & conn. cases** 7 of the said administrator or administrative committee for a further period not exceeding one year in the aggregate or till a new committee enters upon office, whichever is earlier. 8. On the basis of the facts discussed above, the maximum period as per Sec.33(1)(b) and Sec.33(1A) is two years and the same is over as early as in 2013, which was being extended obviously by the State Government by invoking the power to exempt from the provisions of the Act, under Sec.101 of the Act. Therefore, the question is whether the administrative committee and its convenor can insist for continuance of the administrative committee in power after Ext.P2 order. The paramount contention raised by the petitioners is that, as per Ext.P4 judgment, the Apex Court has directed to maintain _status quo_ till W.P.(C) No.16564 of 2012 is disposed of by this Court. Therefore, it is contended that, Ext.P5 order passed by the 1[st] respondent is in absolute violation of the judgment of the Apex Court. On a perusal of Ext.P4 judgment of the Apex Court, it is categoric and clear that the same is rendered with respect to the enrollment and removal of members and that was the sole question raised in W.P.(C) No.16564 of 2012. Therefore, when the Apex Court **W.P.(C) No.16564 of 2012 & conn. cases** 8 directed to maintain _status quo_ , in my considered opinion, the same is with respect to the enrollment and removal of members alone and not with respect to appointment and removal of the administrative committee. 9. Therefore, the question is whether the petitioners therein are entitled at all to challenge the appointment of an administrator as per Ext.P5 order or the removal of the administrative committee by the 1[st] respondent. As I have already stated, the maximum period, for appointment of an administrator or administrative committee, as per Sec.33 of the Act, is two years. Thereafter, either the members of the administrative committee or the administrative committee have no manner of power or authority to insist that the administrative committee appointed should be allowed to continue in power, because the statutory period with respect to the appointment and extension is over. 10. Therefore, the question is whether the 1[st] respondent is vested with powers to appoint an administrator. True, the power conferred on the issue is as per Sec.33 of the Act. But, Registrar is vested with various powers under the Act. To cite a few, as already discussed, under Sec.33(1)(b) **W.P.(C) No.16564 of 2012 & conn. cases** 9 and (1A), Registrar is conferred with power to appoint administrator or administrative committee for a period of six months and later extend the same by another period of six months. Thereafter also, under sub-section (1A), after securing permission, the period can be extended for a further period of one year. Registrar is also vested with powers under Sec.29(2) to attend the committee of any society or general body. That apart, Secs.34, 65, 66, 66(1)(a), 66(b) and 68 empower the Registrar to initiate certain actions against the society, its committee and officers. Further, Sec.33(2) of the Act also empowers the Registrar while the administrator or administrative committee in power to issue such instructions from time to time and to exercise all or any of the powers and functions of the committee or of any officer of the society and take all such action as may be required in the interest of the society. Moreover, under the prevailing circumstances and fact situations, the Bank in question cannot be left in lurch. Therefore, merely because the Registrar has no power to appoint or extend the committee than that prescribed under Sec.33(1) and (1A), the Registrar is vested with powers for overall maintenance, supervision and protecting the interest of **W.P.(C) No.16564 of 2012 & conn. cases** 10 the Co-operative Societies under the Act. Therefore, I am of the considered opinion that the Registrar, as the guardian and protector of the Co-operative Societies, is vested with powers under the Act and the Rules to appoint an administrator, apart from the power conferred under Sec.33 in situations like the one at hand, and till election is conducted to the managing committee of the society/Bank. 11. Now the question is whether the administrator or administrative committee appointed by the Registrar is vested with the power to enroll or remove members of the society. In my considered opinion, the said issue is no more _res integra_ . I think the issue can be better explained by traversing through its history. In ' _**Sudhakaran v. Dy. Registrar, Co-operative Societies'**_ [1980 KLT 658], it was held that admission of members is a routine function and the administrator or administrative committee is competent to admit new members. It was affirmed by a Division Bench judgment of this Court in ' _**George v. Joint Registrar**_ ' [1985 KLT 836]. But in _**'Gopalan v. Joint Registrar of Co-operative Societies'**_ [1985 KLT 446], it was held that an Administrator cannot interfere with the constitution and membership of the ## **W.P.(C) No.16564 of 2012 & conn. cases** 11 society and therefore the Administrator was not vested with powers to enroll members. The said judgment was followed in _**'Gangadharan v. Administrator'**_ [1988 (1) KLT 624] and ' _**John v. Joint Registrar**_ ' [1992 (1) KLT 669]. 12. Later the Act was amended by Act 1 of 2000, providing all powers and functions of the committee to the administrator. The Apex Court in the judgment in ' _**K. Shantharaj v. M.L. Nagaraj'**_ [(1997) (6) SCC 37] with respect to the Karnataka Co-operative Societies Act, held that the Administrator has no power to enroll new members. In that view of the matter, a case was referred to a Full Bench of this Court to evaluate whether, the view taken in ' _**George v. Joint Registrar**_ ' [1985 KLT 836] with respect to the power of the Registrar to enroll members, is impliedly overruled by judgment of the Apex Court _supra_ . 13. A Full Bench in _**'Hassan v. Joint Registrar of Cooperative Societies'**_ [1998 (2) KLT 746 (F.B.)] held that Administrator has no power to enroll new members. The said question was taken in appeal before the Apex Court by the State in the case of _**'Joint Registrar of Co-operative Societies v. T.A. Kuttappan**_ ' [(2000) 6 SCC 127 : 2000 (2) **W.P.(C) No.16564 of 2012 & conn. cases** 12 KLT 480 (SC)], wherein it was held that the administrator or administrative committee have no power to enroll new members and further that a Co-operative Society is a democratic body expected to function in a democratic manner through an elected committee of management and that committee of management alone is empowered to enroll new members. The said judgment is rendered after taking note of the amendment by Act 1 of 2000 to sub-section 4 of Sec.32 and sub-section 2 of Sec.33. By Act 1 of 2000, a time limit of two months also is prescribed to dispose of the application for membership, and an appeal is provided under sub-section (2A) of Sec.16. A Division Bench of this Court in _**'Karunakaran Pillai v. Venugopala Pillai'**_ [2005 (3) KLT 348] had occasion to consider, where an application is received and not disposed of by the committee, later the administrative committee had the power to consider the said application, and this Court held that when application for membership in a society is not disposed of within the period specified in sub-section (2) to Sec.16, Sec.16 (2) would not clothe with any power on the Administrator to enroll members. **W.P.(C) No.16564 of 2012 & conn. cases** 13 14. However, in the judgment in _**'Aomanathan v. Deputy Director, Dairy Development Society**_ ' [2004 (2) KLT 887] considered the question in a different angle, as the administrative committee was appointed with an intention to revive a defunct society, and held that only by enrollment of new members, the society could be revived and in that circumstances it was held that the administrative committee was vested with powers to do so. That apart, in another judgment in _**'Shaji v. State Co-operative Election Commission'**_ [2004 (2) KLT 1084], this Court held that as the Administrator was continuing for two years, he will have to confer membership, taking note of the contingencies in appropriate situation. 15. That apart, a Full Bench of this Court in the judgment in _**'Cherthala Agricultural R.D. Bank v. Joint Registrar'**_ [2000 (1) KLT 730 (F.B.)] held that the decision reported in _**1998 (2) KLT 746**_ that Administrator has no power to enroll members will operate only prospectively and not retrospectively. Yet another Division Bench of this Court in _**'Porinchu v. Joint Registrar'**_ [2004 (1) KLT 281] held that an interim administrator appointed under Sec.33 has no power **W.P.(C) No.16564 of 2012 & conn. cases** 14 to enroll new members. Therein, it is also held that the High Court has no power of prospective overruling and no Court other than the Supreme Court can hold that the law declared will be applied prospectively. 16. But later, only Division Bench of this Court in _**'Karunakaran Pillai'**_ case ( _supra_ ), held that amended provisions does not confer any power on the administrator to enroll new members either under Sec.33(2) or under Sec.16 (2), following the judgments of the Apex Court in 'Shantharaj' and 'T.A. Kuttappan' _supra._ 17. Therefore, traversing through the history, it is crystal clear, this Court as well as the Apex Court have considered the question with respect to the power of the administrator to enroll new members, and held that enrollment of members is based on enquiry conducted under Sec.16 of the Act read with Rule 16 of the Rules, and the same cannot be done in an undemocratic manner without looking into the modalities prescribed under the Act and the Rules. That apart, it is also well settled by now that the power vested with the general body of the society or the committee constituted, in a democratic manner will be better suited to conduct such affairs **W.P.(C) No.16564 of 2012 & conn. cases** 15 and therefore the administrator vested with powers to manage the affairs of the society shall not venture to do any such things. In my considered opinion, the same principle applies to the removal of the members of the society The existing members can only be removed, as contemplated under Rule 16 (3) of the Rules. It is clear from the facts and circumstances that the members are removed without adverting to the statutory provisions. In my considered opinion, the administrator appointed is a caretaker to deal with the day-today affairs of the society and it is so constituted to protect the interest of the society, which thus means, will not include the power to enroll new members and remove the existing members. Going by the judgments, it is categoric and clear that such actions taken by the administrator is beyond the powers conferred under sub-section (4) of Sec.32 and subsection (2) of Sec.33. 18. Therefore, taking into account the factual situations and reckoning the provisions of the Act and the Rules and law laid down by Apex Court and this Court discussed above, I have no hesitation in arriving at a conclusion that the enrollment of the members by the administrative in the instant **W.P.(C) No.16564 of 2012 & conn. cases** 16 case cannot be sustained. So is the case with removal of members also. In that view of the matter, respective orders of the administrator enrolling 3115 members and removing 3970 members from the rolls of the society under challenge in the first four writ petitions captioned supra, are hereby quashed. [The number of members enrolled and removed varies, in writ petitions, which is inconsequential in view of the peremptory findings made above]. Therefore, W.P.(C) Nos. 16564, 23299, 23789 & 24360 of 2012 are allowed and W.P.(C) Nos.19242 & 21657 of 2016 are dismissed. Consequentially, the administrator appointed by the Registrar as per its order dated 23.06.2016 is directed to take necessary steps to forward the details with respect to the conduct of the election within two weeks from the date of receipt of a copy of this judgment and in accordance with Rule 34A of the Rules and the State Co-operative Election Commission shall without any further delay, take necessary steps to conduct the election in accordance with the date, time and place notified by the administrator, as directed above, and in accordance with law. **W.P.(C) No.16564 of 2012 & conn. cases** 17 The writ petitions are disposed of accordingly. Sd/- **SHAJI P. CHALY JUDGE** //true copy// P.S. to Judge St/04.07.2016