Bappu Haji vs Joint Registrar of Co-operative Societies and Others

M. Jagannadha Rao, C.J.—The Appellant before us, Sri A.P. Bappu Haji, has filed this appeal with leave as he was not impleaded as a party in the writ petition. The writ Petitioner, which is the Board of Directors of the Co-operative Bank in question, now figures as the first Respondent in this appeal.

The point arising in this appeal touches upon certain aspects which have come up before a Division Bench of this Court in O.P. 1812 of 1992 (Ali Hassan v. State of Kerala and Ors.) and batch dated 8th April 1992. The interpretation of Section 28(1A) of the Kerala Cooperative Societies Act, 1969 (hereinafter referred to as ''the Act'') as introduced by Kerala Act 5 of 1992 and Rule 39 of the Rules also falls for consideration.

The facts of the case are as follows: The writ petition was filed by the President of the Board of Directors of the Co-operative Bank (hereinafter referred to as ''the Committee'') which is a Society registered under the Kerala Co-operative Societies Act. As per Clause 33(c) of the bye-laws, the term of the Committee was to be five years from the date of election. The present Committee is elected to office in the election held on 22nd October 1989. Due to a stay order in regarding to the counting of votes granted by this Court in a Miscellaneous Petition in O.P. 8488 of 1989, the counting was held only on 24th February 1990 and the Board took charge on 26th February 1990. By operation of the Kerala Co-operative Societies Amendment Act of 1992 referred to above, the term of the Committee has been reduced to three years. It is stated, even in paragraph 2 of the memorandum of writ petition filed by the first Respondent before us, that as per the amended Act, the Committee could continue in office only till 30th June 1992. The Act contemplates every Society to take certain steps in regard to the election of the next Committee or the Board, as the case may be, so that there will be continuity in the functioning of the Co-operative Society. In other words, the Act contemplates election of a new Committee or Board by an existing Society well before the expiry of its term. Rule 35(1) of the Rules provides that the Committee in office shall meet at least 60 days in advance of the date of expiration of its term and pass a resolution fixing the date, time and place for conduct of election for the new Committee. Bye-law Clause 35(A) of the bye-laws of the Bank in question also permits conduct of elections sufficiently early so as to enable the newly elected Committee to succeed in office on the expiry of the term of the existing Committee. Therefore, the Committee in question in its meeting held on 20th March 1992 resolved to conduct election to the Managing Committee of the Society on 31st May 1992 in the general body meeting scheduled between 8 to 17 hours and the venue of the election was also fixed. The said resolution is marked as Ext. P-1. As prescribed by Rule 35(1), there is no dispute that the said resolution was forwarded to the second Respondent in the writ petition, namely, the Assistant Registrar of Co-operative Societies, (General), Manjeri, Malappuram who is the authority to appoint the Returning Officer. A formal request was also made in the said resolution for appointment of a Returning Officer for conducting the election. The request alongwith copy of the resolution was forwarded by registered post with acknowledgement due and the same was received by the Assistant Registrar of Co-operative Societies on 26th March 1992. The postal acknowledgement is marked as Ext. P-2. It is said that there are 8,000 members in the Society and the voters list has also to be prepared for the purpose of election. The grievance of the writ Petitioner-Board was that the Assistant Registrar of Co-operative Societies, inspite of the receipt of Ext. P-1 resolution and the request of the Committee to appoint a Returning Officer, was not doing so and his inaction was highly suspicious in view of other influences that might be working on. The Board, therefore, filed the writ petition for the issue of a writ of mandamus directing the second Respondent in the writ petition to appoint a Returning Officer for conduct of election to the Managing Committee of the Bank on 31st May 1992. A further direction was sought to permit the existing committee to continue in office till the fresh election. This writ petition was filed on 27th April 1992.

The writ petition was disposed of on 10th June 1992 after hearing the Government Pleader. The learned Single Judge, after mentioning the above facts, noticed a subsequent event, namely, that a fresh resolution was again passed by the Board on 3rd June 1992 fixing the date of election on 19th July 1992 and a copy of the said resolution Was also forwarded to the Joint Registrar of the Co-operative Societies (first Respondent in the writ petition). The learned Judge, therefore, passed the following order:

Second Respondent is, therefore, directed to appoint a Returning Officer without any delay and on such appointment, the Returning Officer shall proceed to conduct the election in accordance with the procedure contemplated under Rule 35 of the Co-operative Societies Act. The present Managing Committee is permitted to continue in Office till election is held and new Board Directors assumes charge O.P. is allowed.

The Appellant in this appeal is aggrieved by the direction of the learned Single Judge permitting the existing Managing Committee to continue in office till the new election is held. According to the Appellant, after the amendment of 1992 and the introduction of Section 28(1A), the existing committee would automatically cease on 30th June 1992 on the expiry of its term and that thereafter the Registrar has necessarily to appoint an Administrator or a Committee, as stated in Section 28(1A) of the Act and there is no other choice. He also contends that even assuming that the term of the existing Managing Committee is to be extended, such powers being vested under Rule 39(2) of the Rules only in the Registrar, the learned Judge should have issued directions to the Registrar to consider the said question rather than himself extending the term. It is contended that since the power to permit continuance of the existing Committee is vested only in the Registrar, it is not for the Court to exercise the said power.

At the outset it is necessary to refer to the provisions of Section 28 as amended by Act 5/92, in so far as they are relevant. They read as follows:

Appointment of Committee.- (1) The general body of a society shall constitute a committee, for a period not exceeding three years, in accordance with the bye-laws and entrust the management of the affairs of the society to such committee;

Provided....

Provided further....

Provided also that the committee of a society already constituted and in existence at the commencement of the Kerala Co-operative Societies (Amendment) Act, 1992, shall-

(a) if that Committee has completed three years or more, cease to be in existence at such commencement, and

(b) if that committee has not completed three years or the term as provided in the bye-laws, cease to be in existence on the expiry of three years or the term as provided in the bye-laws, whichever is earlier.

Clause (1A) introduced by the Act 5/92 reads as follows:

(1A) Where the committee of a society has ceased to be in existence as provided in the third proviso to Sub-section (1), the Registrar shall appoint-

(i) a new committee consisting of not more than three members of the society; or

(ii) one or more Administrator or Administrators, who need not be a member or members of the society, 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, so, however, that the aggregate period shall not in any case, exceed one year or till the new committee enters upon office, whichever is earlier.

Rule 39(2) deals with, extension of the term of a committee by the Registrar. We shall refer to Rule 39 in its entirety:

Election and term of the members of Committees.- (1) The bye-laws of every society shall provide that the term of its committee shall expire on the same date as may be specified. All the members of the committee (including those election in casual vacancies) whether representing societies or individuals shall vacate their office on the date specified irrespective of the date on which they were elected as members of the committee. If no such date is specified in the bye-laws the date of expiry shall be 30th June of that year in which the term expires.

Explanation. For the purpose of calculating the term of a committee, an year shall be taken to be the period commencing on the first day of July of the year and ending with 30th June of the succeeding year. Each year of the term shall be calculated so as to end on 30th June of year, irrespective of the date of election or taking charge of the Committee earlier in the year.

(2) The election of all the members of the committee referred to in Sub-rule (1) shall be held on or before the expiry of the term of office of the committee members. If, for any reason election is not held the Registrar may extend the term until such time within which the election should, in his opinion, be held.

It will be noticed that after the introduction of the third proviso in Section 28(1) by Act 5/92 with effect from 7th February 1992, the existing committees which had a five year tenure, have the tenure reduced to three years. Upon such reduction, they fall into two categories: (1) where the three year period has already expired by 7th February 1992, (2) where the three year committee has not expired or the term as provided in the bye-laws whichever is earlier. So far as the committees falling in the first category are concerned, it is obvious that a new committee has to be elected in accordance with the provisions of Rule 35 which we shall refer to presently. So far as the committees falling in the 2nd category are concerned, the term of those committees is to expire after 7th February 1992 and the question of election of a new committee would arise only on a date subsequent to 7th February 1992.

Before a new election is held, an existing committee has to take certain steps as provided in Rule 35 of the Rules, such as passing of a resolution for the said purpose and sending it by registered post to the competent authority and the latter has then to appoint a Returning Officer who is to prepare and publish the voters list and conduct the election. Sub-clauses (1) and (2) of Rule 35 read as follows:

Procedure regarding conduct of election to the Committee of Societies. The election of the members of the committee of a Society shall be conducted in the following manner:

(1) The committee shall meet at least 60 days in advance before the date of expiration of its term and pass a resolution fixing the date, time and place for the conduct of the election of the new committee. A copy of the resolution shall be sent to the Registrar by registered post within a week.

(2) The Registrar may on receipt of such resolution appoint a Returning Officer for the conduct of election. The Returning Officer so appointed may be given such necessary steps for conduct of the election and the committee shall render all necessary help to the Returning Officer for the constitution of the Committee.

Explanation.- For the purpose of Sub-rules (1) and (2) the expression ''Registrar'' means, (a) in the case of Societies having State-wide jurisdiction, the Registrar of Co-operative Societies; (b) in the case of Societies the jurisdiction of which is confined to one district and in the case of Primary Societies the jurisdiction of which exceeds one circle, the Joint Registrar of the District concerned; and (c) in the case of Primary Societies the jurisdiction of which does not exceed one circle the Assistant Registrar of the Circle concerned.

After the Ordinance which was replaced by Act 5/92, several questions have arisen. There have been cases where even before 7th February 1992, certain Societies have passed resolutions for conduct of elections to a new committee.

We are here specifically not dealing with cases of committees which-because of the reduction of term from 5 years to 3 years-could not pass resolutions before 7th February 1992, 60 days before 7th February 1992.

There have also been cases where a committee whose term is to expire after 7th February 1992, as stated above, has passed resolution before such expiry for conduct of elections. If the aid resolution had been passed 60 days in advance of the expiration of the term and a copy thereof had been sent to the Registrar by registered post within a week, as stated in Rule 35(1), it is possible to presume that the committee in office has done all that is required of it, for the conduct of an election to the new committee. The case before us falls in this category and the grievance is that even though the committee has done all that it should have done, the Registrar is deliberately not appointing a Returning Officer under Rule 35(2) but intent upon appointing a three member committee or an Administrator u/s 28(1A) and is waiting for the expiry of the term of the committee. It is pointed out that while the term of the committee was to expire on 30th June 1992 (i.e., after 7th February 1992), a resolution had been passed on 20th March 1992, sixty days in advance, and the same was sent to the Registrar who received it on 26th March 1992 and inspite of it, the Registrar has not appointed a Returning Officer under Rule 35(2) even by 27th April 1992 when the Writ Petition was filed. The writ Petitioners suggest that the intention of the Registrar is to postpone the matter beyond 30th June 1992 with a view to exercise his power u/s 28(1A) for appointing a three member committee or an Administrator/Administrators. In fact, by the time the writ petition was heard, i.e., 10th June 1992, hardly 20 days were left for the appointment of a Returning Officer and for election and the learned Judge therefore felt that the term of the committee is to be extended till such time as a Returning Officer is appointed. But the Appellant, contends that u/s 28(1A) an Administrator must have been allowed to be appointed by the Registrar and that, even assuming that, alternatively, the term of the existing committee could have been extended, that power cannot be exercised by the Court but should have been allowed to be exercised only by the Registrar under Rule 39(2).

Before we go into the above aspects, we must refer to Anr. contention raised by the Respondents-writ Petitioners relying on the judgment of a Division Bench of this Court in O.P. No. 1812/92 and batch dated 8th April 1992 decided by Varghese Kalliath and Guttal, JJ. The judgment deals with the validity of certain provisions of the Ordinance which was replaced by Act 5/92, and in particular, with the reduction of the term of the existing committees from 5 years to 3 years. In that case, a contention was raised for the writ Petitioners that the power of appointment of Administrators may be resorted to unjustifiably. The Division Bench clarified (para 111) that if the term of three years of a committee had not expired by 7th February 1992, and the term was in the normal course to expire on a future date, there is absolutely ho necessity for appointing Administrator/Administrators or a new three member committee u/s 28(1A). This is in fact clear because Section 28(1A) itself does not contemplate any such appointment unless the three year period has expired after 7th February 1992. This is also clarified by the clarificatory memo filed by the Additional Advocate General before the said Division Bench. It reads as follows:

Sub-section (1A) inserted by Section 3(2) of the Ordinance may be read and understood to mean that where the committee has not completed three years or the term as provided in the bye-laws at the commencement of the Ordinance and its term will expire only on a future date, a new committee or Administrator contemplated in Sub-section (1A) will not be appointed unless the existing committee fails to conduct election to the new committee in accordance with the provisions of the Act, the Rules and the bye-laws before the expiry of three years or the expiry of the term as provided in the bye-laws, whichever is earlier. But if the committee has completed three years or more at the commencement of the Ordinance, the committee shall cease to be in existence at the commencement of the Ordinance and the Registrar shall appoint a new committee or Administrator as contemplated in Sub-section (1A).

In our view, the learned Judges were conscious that Section 28(1A) does not make any provision for appointment of an Administrator or three member committee before the expiry of the three year or other term in the bye-law (whichever was earlier), such term expiring on a day after 7th February 1992. The clarification was not also, we are clear, intended to mean that if the committee ''fails to conduct election'', an Administrator could be appointed u/s 28(1A) even before the expiry of the three year term or other term in the bye-law, as stated above, such expiry taking place after 7th February 1992. The expression ''fails to conduct election'' has been further clarified for the Government before us as meaning cases where the committee has not passed the requisite valid resolution as provided in Rule 35(1) and communicated the same as specified therein. In other words, the clarification and the observations mean that if the existing society has passed a valid resolution before 60 days of the expiry of the term as contemplated by Rule 35(1) for conduct of a next election and has also sent the same to the Registrar by registered post in a week as stated therein, the power of appointment of three member committee or an Administrator u/s 28(1A) shall not be resorted to. Such a power could be resorted to where the existing committee has not complied with Rule 35(1) as stated above. We might again state that we are not here dealing with committees which, because of the reduction of the five year term to three years, could not comply with Rule 35(1) procedure of passing a resolution, etc.

We next come to the power of extension of the term of the committee under Rule 39(2) of the Rules. As stated above, in cases where the Act 5/92 which came into force on 7th February 1992 permitted the committees to function beyond 7th February 1992 till the expiry of three years or other term provided by the bye-laws (whichever was earlier), and the existing committees had done all that was expected of it by passing a resolution tender Rule 35(1) and sending the same by registered post in a week to the Registrar, the Registrar cannot-in case no Returning Officer is appointed and election conducted before the term-proceed to exercise powers u/s 28(1A) for appointment of a three member committee/Administrator. In fact, in such cases, we are of the view that, he ought, before the expiry of the term, to exercise his powers under Rule 39(2) for extending the term of such committee which had not been in default.

On the facts of the present case, the position is that-and it is not in dispute-the existing society had passed a resolution as contemplated by Rule 35(1). However, as stated in the memorandum of grounds of appeal, there were several disputes as to whether the membership of a few thousands of members was valid or not. The said dispute was pending before the Arbitrator and is, in fact, still pending. The Appellant is interested in the said question being thrashed out before the fresh election is held to the committee while the Respondents-writ Petitioners were interested in having the election first. It is, however, not in dispute before us that in O.P. No. 8488 of 1989 there is a direction dated 2nd February 1990 for the Arbitrator to dispose of the matter relating to validity of membership and also that in O.P. No. 8250 of 1992 there is a direction dated 26th June 1992 that the elections shall not be conducted before the arbitration case is decided. This latter direction was issued in O.P. No. 8250 of 1992 on 26th June 1992 subsequent to the impugned judgment dated 10th June 1992 now in appeal before us.

It is true that, as on 10th June 1992, the Registrar had not appointed a Returning Officer even though Rule 35(1) was complied with by the existing committee before expiry of its term on 30th June 1992. If this Court, apprehended that the Registrar ought to consider extension of the term of the committee, this Court could have asked the Registrar to do so, in the light of the clarificatory memo filed in O.P. No. 1812 of 1992 and batch dated 8th April 1992. Whenever a particular authority under the Act or Rules, vested with a power is not exercising a power, this Court would direct that authority to perform its duty under Rule 39(2).

The question is whether we should now set aside the order of the learned Judge extending the term of the committee beyond 30th June 1992? If we were disposing of this appeal well before 30th June 1992, we could have issued directions to the Registrar to exercise powers under Rule 39(2). The Registrar has power to extend the term only during the existence of the committee and not after its term has expired. But now, in this case the term has expired on 30th June 1992. As it is now too late to direct the Registrar to exercise powers under Rule 39(2) and, in fact, he cannot even if he wants to, we do not propose to interfere with the order of the learned Single Judge extending the term of the committee till fresh elections are held.

For the aforesaid reasons, this Writ Appeal is dismissed. No Cost.