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Judgment
G.C. Bharuka, J.—The Appellant is a Co-operative Bank registered under the provisions of the Karnataka Co-operative Societies Act, 1959 (in short the ''Act''). It has preferred this intra Court appeal against the order dated 24.6.2000 passed by the learned Single Judge in Writ Petition No. 21834 of 2000 wherein the Returning Officer had been directed to hold elections for the Committee of the Appellant-bank after accepting nomination paper filed by the 6th Respondent-Smt. Rajeshwari Devi.
The erstwhile Committee of the Appellant-bank was constituted on 21.3.1997 and its term was for three years i.e. upto 31.3.1999. But before its expiration, which was due on 31.3.1999, the Government issued General Notification u/s 132(2) of the Act extending the term of the Committees of the Co-operative Banks till upto 31.5.1999. Though, Sub-section (2) of Section 39-A of the Act, which was inserted by Act No. 25 of 1998 and had come into force on 27.10.1998, specifically providing that every general election of members of the committee shall be held within 15 days before the date of expiry of the term of the office committee, but it seems no efforts were made by the erstwhile committee for holding elections even much after expiry of the term thereof.
Subsequently the Deputy Registrar of Co-operative Societies, Bellary, informed the jurisdiction Joint Registrar (Respondent No. 2) that out of 14 members of the Committee of the Appellant-bank, 8 have submitted their resignations and therefore for want of quorum, which requires minimum of 8 members, steps should be taken for appointing a Special Officer as provided u/s 31(1) of the Act.
Acting on the report of the Deputy Registrar, the Respondent-Joint Registrar, passed an order dated 16.11.1999 (Annexure ''C'' to the writ petition) appointing the Assistant Registrar, Bellary, as the Special Officer for the Appellant-Bank for a period of six months.
Subsequent to appointment of Special Officer, the Respondent-Joint Registrar, as he has stated himself in his affidavit dated 11.12.2000 appointed the Respondent-Assistant Commissioner, Bellary, as the Returning Officer for conducting the election of members to the committee of the Appellant-bank as provided under Rule 14 of the Karnataka Co-operative Societies Rules, 1960 (in short the Rules). The Returning officer so appointed issued calendar of events on 3.6.2000 to hold elections for 11 seats to the Committee of the Appellant-bank. It may be noticed that after reorganisation of district and in view of the amendment to the Act, the number of members to be elected was reduced from 14 to 11. As per the calendar of events, the date of poll was fixed on 25.6.2000.
Respondent-Smt. Rajeshwari Devi was also one of the members of the erstwhile Committee, which had failed to make arrangements for holding general elections in terms of Section 39-A(2) of the Act. In accordance with the calendar of events, though she had also filed her nomination but the same was rejected by the Returning Officer. The reason whereof was communicated to her under endorsement dated 20.6.2000 (Annexure ''E''), the ground disclosed was that as per Section 29-C(1)(n) of the Act, the erstwhile Committee of which the Respondent-Rajeshwari Devi was a member, had failed to make arrangements for conducting election within the time limit specified u/s 39-A of the Act, therefore, as provided u/s 28-B(2) of the Act, she had become ineligible for being elected as member of the committee of the Appellant-bank. The above endorsement (Annexure ''E'') issued to the Respondent-Rajeshwari Devi, was challenged by her by filing the writ petition in Writ Petition No. 21834 of 2000 which was allowed by the learned Single Judge by the impugned order giving directions as noticed above.
The reasons given by the learned Single Judge for quashing the endorsement (Annexure ''E'') reads as under.-
The Returning Officer failed to make distinction between the administrator being appointed for want of quorum as against inaction of the Committee in conducting the election before expiry of the period. In cases where administrator is appointed for want of quorum, it cannot be said that the elected members will be disqualified for conducting the future election since the Special Officer is appointed not on account of inaction on the part of the Committee to conduct election but because there was want of quorum. In the circumstances, to disqualify the Petitioner from contesting the elections merely on the ground that the Committee was superseded for not holding elections is erroneous.
The learned Counsel appearing for the Appellant has submitted before us that the reasoning given by the learned Single Judge for directing acceptance of the nomination of the contesting Respondent is fallacious inasmuch as the Returning Officer had rejected nomination in question not on the ground of supersession of the Committee and appointment of the Special Officer for want of quorum but on the ground that the members of the erstwhile committee had failed to make arrangements for holding of elections in terms of Section 39-A of the Act. In our opinion, there is substance in the arguments advanced on behalf of the Appellant-bank.
For appreciating the issues involved in the present appeal, it is necessary to refer to some of the provisions of the Act. These are contained in Sections 28-A(5), 28-B (1) and (2), 29-C (1)(n) and (7), 39-A(2) of the Act and Rule 14(1) and (2) of the Rules. These provisions read as under.-
28-A. Management of Co-operative Societies vest in the Committee.-(1) *** *** *** ***
(5) If the new committee is not constituted u/s 29-A on the date of expiry of the term of office of the Committee, the Registrar or any other officer within whose jurisdiction the society is situated, and who is authorised by the Registrar, shall be deemed to have assumed charge as Administrator and he shall, for all purposes function as such committee of management. The Administrator shall, subject to the control of the Registrar, exercise all the powers and perform all the functions of the committee of the co-operative society or any office bearer of the co-operative society and take all such actions as may be required, in the interest of the co-operative society.
28-B. Committee to arrange for election.-(1) The committee shall make arrangement for election of members of the next committee in accordance with the Act, rules and the bye-laws.
(2) The members of the committee who have failed to make arrangements for election within the time limit specified in Section 39-A, shall be deemed to have vacated their office on the last day of the time limit so specified and such members shall not be eligible for election as members of the committee for a period of five years from the date of expiry of their term.
29-C. Disqualification for membership of the committee.-(1) No person shall be eligible for being elected or appointed or continued as a member of the committee of any co-operative Society, if-
(a) *** *** *** ***
(n) he was a member of the committee which failed to make arrangement for election within the time limit specified in Section 39-A.
(7) Any question as to whether a member of the committee was or has become subject to any of the disqualifications mentioned in this section shall be decided by the Registrar after giving the person concerned a reasonable opportunity of being heard.
39-A. Conduct of elections.-
(1) *** *** *** ***
(2) Every general election of members of the committee shall be held within fifteen days before the date of expiry of the term of office of the committee. The date of such general election shall be fixed by the committee or in the absence of the committee by the Administrator or Special Officer.
Rule 14. Procedure for election of members of the committee.-Election of the members of the Committee of Management of co-operative society shall be held in the following manner, namely:
(1) The Registrar shall appoint an officer or official of the State Government or a local authority as Returning Officer for the purpose of conducting the election of members to the committee of every co-operative society.
(2) The Returning Officer appointed under Sub-rule (1) shall publish a calendar of events for the purpose of conduct of elections of members of the committee, at least twenty one days before the date of election.
Reading of Section 39-A(2) of the Act clearly mandates that every general election of the members of the Committee has to be held within 15 days before the date of expiry of the term of the office of the Committee and for this purpose, the date was to be fixed by the existing committee. In case new committee is not constituted before the expiry of the term of the office of the committee within the meaning of Section 29-A of the Act, then the provisions contained in Sub-section (5) of Section 28-A of the Act comes into play. According to this provision, on the expiry of term of the existing committee the Registrar or any other officer within whose jurisdiction the Society situate and who is authorised by the Registrar for the purpose, shall be deemed to have assumed charge as Administrator and he shall for all purposes function as the committee of management.
Coming to the facts of the present case, admittedly, the term of erstwhile committee had expired on 31.5.1999 and by that time new committee was not constituted for the Appellant-bank. Therefore, by operation of law, the Registrar became the administrator of the Appellant-bank and it was he who was required to discharge the functions of the committee of the bank. That being the situation, there was absolutely no occasion on the part of the Respondent-Joint Registrar to issue any order u/s 31 for appointment of any Special Officer on the alleged ground of resignation of certain members resulting in shortfall of the required number to form quorum.
As it appears and as is now admitted before us by the Registrar of the Co-operative Societies and Respondent-Joint Registrar of Co-operative Societies, who are present in person before us, they had completely lost sight of the legislative scheme contained in Section 28-A(5) of the Act which provides for automatic taking over of management of a co-operative society by the Registrar or his authorised nominee, as administrator, immediately on expiry of the term of the existing committee and non-constitution of the new committee. This being the situation, appointment of special officer by the order dated 16.11.1999 (Annexure ''C'') passed by the Joint Registrar was clearly an exercise in futility and was of no legal consequence conferring any authority whatsoever, on the Assistant Registrar, to manage the affairs of the Appellant-bank.
During the course of arguments, the learned Registrar brought to our notice the notification issued by the State Government purporting to exercise its powers u/s 2-A(5) of the Act authorising the Joint Registrar to discharge the functions of the administrator under Sub-section (5) of Section 28-B of the Act. By relying on this notification, the Registrar raised a submission that keeping in view the deeming provisions contained in Sub-section (5) of Section 28-A of the Act, it will be the Joint Registrar who should be deemed to have become the Administrator and therefore he could have taken the steps for holding elections to the committee of the Appellant-bank.
The notification of the State Government referred to by the Registrar reads as under.-
Notification
In exercise of the powers conferred by Sub-section (5) of Section 2-A of K.C.S. Act, 1959 and in supersession of notification No. CMW 119 CLM 98, dated 17.9.1998, the Government of Karnataka, hereby confers on the following officers, the powers of the Registrar of Co-operative Societies under the provisions of K.C.S. Act, 1959 specified in corresponding entries in column No. (3) in respect of co-operative societies specified in column No. (2) thereof namely:
Sl.No. Co-operative Societies Powers delegated 1. *** *** *** *** *** 3. Divisional Joint Registrar of Co-operative Societies. a) All Co-operative Societies Section 29-G(1) whose area of operation and (2) extends to a taluk. b) All Co-operative Societies Sections 12 (5) and (6) whose area of operation extends 28-A(5), 29-F(7) and beyond a taluk and extends (8), 29-G(6), 31, 31-A, to a District. 58-E, 110-A and 128-B.
In our opinion, the stand taken by the Registrar is fallacious for more than one reason. Firstly, in the present case, as already noticed above, the term of the erstwhile committee had expired on 31.5.1999, whereas, the above notification was issued subsequent thereto i.e. on 17.8.1998. Therefore pursuant to the said notification, the Joint Registrar could have been deemed to be the administrator of the Appellant-bank to discharge the functions of the committee. Secondly, even if Section 2-A(5) of the Act empowers the Government to issue notifications to authorise certain officers to discharge the functions of Registrar, the State Government could not have exercised this power for the purpose of Sub-section (5) of Section 28-A because under this provision any person other than the Registrar can act as administrator, if and only if, he was an officer within whose jurisdiction the society is situated and who is authorised by the Registrar. Therefore for assuming the charge of the Administrator under this provision, it can either be Registrar himself or any other jurisdictional officer who has been specifically authorised by the Registrar to discharge such functions.
In the present case, Registrar by himself had admitted before us, that no such authority was conferred on the Joint Registrar to act as administrator for the Appellant-bank. Therefore, after 31.5.1999 and till the new committee was constituted within the meaning of Section 29-A of the Act, it was the Registrar alone could have discharged the functions of the committee of the Appellant-bank. Accordingly, it was the responsibility of the Registrar to fix the date for general elections of the members to the Committee which admittedly has not been done by him. This being the situation, the Joint Registrar of his own could not have initiated the process of elections by appointing the Returning Officer. As such the very appointment of the Respondent-Assistant Commissioner, as the Returning Officer and his publishing calendar events for the purpose of conducting of election of the members to the Committee and consequent acts done by him including the declaration of the elections of the some of the members, are all ultravires and void in the eye of law.
In the above view of the matter, in our opinion, the learned Single Judge could not have directed the Respondent-Assistant Registrar to complete the process of election by accepting the nomination paper of Smt. Rajeshwari Devi.
Having found and held as above, there still remains another important aspect of the dispute raised before us. This pertains to disqualification of the members of the erstwhile committee of the Appellant-bank who had failed to make arrangements to fix the date for General Elections of the members to the Committee within 15 days before the date of expiry of the term of office of the Committee.
In the present case, admittedly, date for elections was not fixed. But then, for the fault of which of the members, it had happened is required to be enquired into and finally determined by the Registrar as provided under Sub-section (7) of Section 29-C of the Act. Even Section 28-B(2) of the Act does not even by necessary implication suggest that all the members of the erstwhile committee shall be deemed to be responsible for not making such arrangements and therefore they will automatically stand debarred from participating in the future elections for 5 years from the date of expiry of their term. This provision being quasi penal in nature touching upon the civil rights of the members of the society, has to be constructed strictly and befitting the principles of rationality and reasonableness enshrined in Article 14 of the Constitution of India. Viewed from this angle, members of the erstwhile committee can be deemed to ineligible as per Section 28-B(2) of the Act only after the decision is given by the Registrar on this score under Sub-section (7) of Section 29-C of the Act.
Respondent No. 6 has brought to our notice that after passing of the impugned order, she has also obtained a consequential order from the learned Single Judge in Writ Petition No. 23061 of 2000 (Dated 4.7.2000) wherein the Returning Officer had been directed to declare her as elected and the said direction has already been carried out.
In our considered opinion, since the Respondent-Joint Registrar had no authority to appoint any Returning Officer unless the Registrar had fixed the date for holding elections, therefore, the entire process of elections has to be held as unauthorised and illegal and, therefore nobody can be deemed to have been elected to the committee of management of the Appellant-bank pursuant to such exercise.
We accordingly direct the Registrar to fix the date for holding of elections so that the election process can be commenced in terms of Rule 14 of the Rules. But before that, if so found advisable, the Registrar or any other officer competent in this behalf to do so, must complete the enquiry pertaining to disqualification and ineligibility of members to contest elections in terms of Sub-section (7) of Section 29-C of the Act.
In the result, the impugned order is set aside. The appeal is allowed subject to the directions as above. Anyhow, keeping in view the facts of the case, there will be no order as to costs.