M. Raghava Kurup vs Joint Registrar of Co-operative Societies and Others

T. L. Viswanatha Iyer, J.—The petitioner was a candidate for, election to the (managing) committee of the second respondent Bank, which is a Co-operative Society deemed to be registered under the Kerala Co-operative Societies Act, 1969 (the Act). The election was stated to be held on June 11, 1988. The petitioner had been a member of the committee of the Bank for three terms consecutively, and it was for the fourth time that he submitted his nomination for the election to be held on June 11, 1988. The third respondent returning officer rejected the nomination; but the petitioner was not informed the reason for the rejection. The petitioner sought information about the reason by his petition Ext.P2 submitted to the returning officer; to which the latter sent reply Ext.P3, stating that there was no provision in the Co-operative Societies Rules (the Rules) requiring the reason for rejection of the nomination to be furnished to the candidate. The petitioner had an apprehension that his nomination had been arbitrarily and unreasonably rejected, a view in which he was fortified by the evasive reply Ext. P3. He filed this Original Petition seeking to quash the rejection of his nomination. The respondents appeared, and as the parties desired an authoritative decision on the point involved, the petition was heard on merits, despite the fact that the matter was only at the stage of acceptance of nominations. The third respondent, the Returning Officer, filed a counter affidavit stating that the petitioner''s nomination was rejected under bye-law 34 of the bye-laws of the Bank under which no member could continue to be a member of the committee for more than three terms consecutively except with the special sanction of the Deputy Registrar. No such sanction had been obtained by the petitioner. The petitioner was therefore disqualified from contesting for the fourth term consecutively.

The Bank in question had been constituted in the year 1956 at a time when the Travancore-Cochin Co-operative Societies Act, 1951 (Act X of 1952) was in force. The petitioner was one of the founder members of the Bank, which had, over the years, grown into a big institution with over 5400 members. Petitioner''s membership number is 2 which evidences his seniority, and connection with the Bank right from its beginning. The petitioner had been a member of the committee for three consecutive terms and had also been its President.

The petitioner challenges the rejection of his nomination as not warranted by the Act and the Rules. He points out that the bye-law in question had its genesis in Rule XXVIII(1)(h) of the Travancore-Cochin Co-operative Societies Rules, 1953 which rendered a person ineligible for appointment as a member of any society if he, after having served continuously as a committee member for a period of three terms, did not obtain previous exemption from the Registrar to stand for re-election. The rules under the (Kerala) Act re-enacted this disqualification in a modified form in Rule 44(1)(m), which reads as follows:

44(1) No member of the society shall be eligible for being elected, or appointed as a member of the committee of the society u/s 28 if he:-

(m) has been a member of the Committee for two consecutive terms, (whether for the full term of each Committee or only for part of the terms of both or any one of them) and a period of two years has not elapsed from the date of expiry of the latter of such term, unless he obtains previous exemption from the Registrar to stand for election."

This sub-rule itself was omitted from the Rules by S. R. O. No. 16/81 published in the Kerala Gazette dated 6-1-1981. In consequence, there was no statutory bar after 6-1-1981 for a person being a member of the committee for any length of time or for any number of terms, consecutive or otherwise. The petitioner''s contention is that after the omission of rule 44 (1) (m), he is not barred from contesting for the fourth consecutive terra, despite the provision in the bye-laws to the contrary. Bye-law 34 ceases to have effect automatically on the omission of clause (m) of Rule 44 (1) and has to be ignored.

The bye-laws of a Co-operative Society, like the Articles of Association of a Company, constitute a contract not only between the Society and its members but also between the members inter se. They are binding between the members and govern their mutual relationship and rights inter se vis-a-vis the affairs of the Society ( Shiv Omkar Maheshwari Vs. Bansidhar Jagannath, They rule the internal management, business or administration of the Society (Co-operative Central Bank Ltd. v. Additional Industrial Tribunal 245 S.C. AIR 1970 and Babaji Kondaji Garad Vs. Nasik Merchants Co-operative Bank Ltd., Nasik and Others, . The provisions contained in section 28 of the Act and Rule 44 of the Rules have given effect to this principle. Sub-section (1) of Section 28 which provides for the appointment of the committee of a Co-operative Society, directs the general body of the Society to constitute the committee in accordance with its bye-laws, and to entrust the management of its affairs to such committee. Sub-section (2) of the section prescribes certain disqualifications for appointment as, or for being, a member of the committee. Rule 44, framed u/s 109 (2) (xiv) of the Act, enumerates further disqualifications for membership of the committee. Inter alia, clause (j) of sub-rule (1) makes a member ineligible from such membership if he is disqualified under any "other" provision in the bye-laws of the Society, The bye-laws may therefore add heads of disqualification which are not otherwise found in Section 28 (2) or Rule 44(1), or to put it differently, a person may be disqualified under the bye-laws even though he may not be disqualified u/s 28 (2) or Rule 44 (1). This is in accord with the proposition earlier mentioned that the bye-laws constitute a contract between the members, and that the terms and conditions of their inter se relationship as set forth in the bye-laws should bind them. The bye-laws govern so long as they are not inconsistent with the Act or the Rules.

It is in this background that we have to deal with bye-law 34. The members of the Society have prescribed by their duly "approved bye-laws that no person shall be a member of the managing committee for more than three consecutive terms except with the special sanction of the Deputy Registrar. Such a bye-law is authorised'' by Rule 44 (1)(j). It is not inconsistent with the Act or the Rules. If so, it should govern. The petitioner was not therefore eligible to contest a(sic) the election as he had already had three consecutive terms as member of the committee. His nomination was rightly rejected by the Returning Officer. Counsel for the petitioner pleaded that the petitioner bad been one of the founder members of the Society and that he had done yeomen service to the Society. May be so. But that will not entitle him to ignore the bye-laws or the statutory provisions. When rule 44(1)(j) disqualifies a person from membership of the committees, when he is not eligible under the bye-laws, the petitioner has to surrender himself to the bye-laws and stand outside the election.

The Original Petition is therefore dismissed, without however any order as to costs.