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Judgment
K.S. Radhakrishnan, Ag. C.J.
State of Kerala and others are the Appellants. They are aggrieved by the judgment of the learned Single Judge setting aside the order of the Registrar of Co-operative Society, dated 22-12-2006 issued in exercise of the powers conferred on him u/s 33(1)(ii) of the Kerala Co-operative Societies Act, 1969 appointing a part-time Administrator for administration and management of the Kerala State Co-operative Hospital Complex and Centre for Advanced Medical Services Ltd. on the ground that the managing committee of the society has lost its quorum.
The first Respondent W.P.(C) 34569/06 is a registered Co-operative Society. The activities of the society include conducting of a medical college, a pharmacy college, a nursing school, a dental college, a medical college public school, Sahakarana Hridyala and so on. Election of the members to the Board of Directors of the above-mentioned society was held on 11-7-2002 and the total number of Board of Directors to be filled up was 13 and a committee was constituted with 13 members. Later the society had nominated 6 members to the Board of Directors. Managing Director being the Ex Officio member was also one among the Directors. The total number of Directors was later increased to 20 by nominating six Directors in addition to 13 elected Directors. Society amended its bye-laws in the year 2005 vide Ext. P-4. Later clauses 20(ii)(d), 20(ii)(e) and 20(ii)(f) of the bye-laws were also made with effect from 29-4-2006 vide Ext.P-7. Later the general body amended the bye-laws and fixed that the maximum number of the Board of Directors as 25. General body has also resolved to amend Clause 1 (a) of the bye-laws of the society including the society under the category of Federal Society.
Registrar of Co-operative Societies had approved the above-mentioned amendments and issued the certificates of registration signed and sealed by him as provided u/s 12 of the Act. The six nominated members from the constituency holding not more than 2 lakhs share capital in the society lost their membership in the Board of Directors of the society since they ceased to be members of the Board of Directors of the institutions from which got elected to the Board of Directors of the society. Accordingly the remaining number of Board of Directors of the society was reduced as 14. The existing nominees under bye-law 20(ii)(d) and (e) can continue only for a period of 6 months from the date of registration of the amendment unless they attain the share qualification. Three directors could not raise the share capital. Consequently they ceased to be the member of the Board of Directors of the society with effect from 29-10-2006 reducing the members of the Board of Directors of the society to 11. Registrar of Co-operative Societies then took the view that u/s 28(5) of the Act the quorum for the meeting of a committee shall be such number of members just above 50% of the total number of members of that committee. Further the Registrar of Co-operative Societies also took the view that the total number of Board of Directors of the society is 25 and accordingly 13 Directors are required to constitute the quorum and since there was only 11 Directors left in the committee they do not constitute the quorum to convene the committees and to manage the day-to-day affairs of the society, resulting in administrative stalemate and hence the Registrar of Co-operative Societies issued an order u/s 33(1) of the Act appointing an Administrator in the place of the Board of Directors. The said order is under challenge in these proceedings.
Learned Single Judge after an elaborate consideration of the rival contentions as well as the case laws on the point took the view that the bye-laws prescribe only the upper limit of the number of the Board of Directors and the total strength of the Board of Directors has to be fixed by the committee and an election to the Board of Directors has to be held as per the procedure laid down. Learned Single Judge took the view that the bye-laws of the society only show that the Board of Directors shall not be more than 25 members, meaning that the maximum limit of the members of the Board of Directors shall be 25 and the lower limit can be anything, as would be constituted by the society. Learned Single Judge took the view, placing reliance on Section 28(5) of the Act, out of the total 20 members of the committee, 11 members constitute just above fifty per cent of the total number of members of that committee and consequently took the view that Registrar of Co-operative Society has committed an error in removing the Board of Directors and appointing a part-time Administrator.
Learned Advocate General appearing for the Appellants submitted that the learned Single Judge has committed an error in holding that 11 members of the Board of Directors constitute quorum. Learned Advocate General also submitted that the bye-laws enumerate the number of members of the Board of Directors as 25 and that bye-law 20(ii) of the society enumerates various constituencies and fix the total number of members of the Board of Directors as 25 and therefore for deciding the total number as prescribed in Section 28(5) the number of Board of Directors fixed by the bye-laws of the society has to be taken into account and not the actual members available in the committee. Learned Advocate General submitted, the expression "that committee" referred to in Sub-section (5) of Section 28 means the committee to be constituted in accordance with the bye-laws. In support of his contention the learned Advocate General placed reliance on the decision this Court in M. Jinadevan and others Vs. State and others, Learned Advocate General also referred to Clause 1(a) of the bye-laws of the society for including the society under the category of Federal Society. Further it was also submitted that the amendment of the bye-laws of the society has come into force with effect from 10-5-2005 and 29-4-2005 respectively and per the amendment the total number of Board of Directors has been fixed as 25 and the society was included under the category of Federal Society.
Learned Counsel appearing for the Respondents Sri George Poonthottam as well as Sri Swathi Kumar supported the findings rendered by the learned Single Judge and submitted that Registrar of Co-operative Societies has committed an error in holding that there is no sufficient quorum in the Board of Directors warranting appointment of part-time Administrator. Counsel submitted the Registrar of Co-operative Societies has committed a grave error in misinterpreting the various provisions of the bye-laws. Counsel submitted, bye-laws prescribe only the upper limit of the number of Board of Directors and the total number of the Board of Directors has to be fixed by the committee and an election to the Board of Directors has to be held as per the procedure laid down and the bye-laws of the society only. show that the Board of Directors shall not be more than 25 members. Counsel placed reliance on the decisions of this Court in SubairKunju v. Trivandrum Taluk M and P Co-op. Society 1990 (2) KLT 584 Kurian v. Registrar and distinguished the decision rendered by the learned single of this Court in Jinadevan�s case. Counsel for the Respondents also submitted that the society in question is a primary society and it is not a federal society. Counsel also referred to the proceedings of the Registrar of Co-operative Societies dated 29-4-2006 stating that the amendment has been wrongly registered and cancelled the certificate stating that the amendment had been effected on the wrong assumption that it was a federal society.
We have gone through the unamended bye-laws and the amended bye-laws extensively. The main point that has to be considered in this case is what is the number of members of the Board of Directors of the society on the date of their removal, whether it is 25 or 20 as submitted by Respondents? Bye-laws of the society states that the number of Board of Directors shall not be more than 25, which would only show that the bye-laws prescribe only the upper limit of the number of Board of Directors and the total number of the Board of Directors can always be fixed by the committee and and election be conducted to fill up the strength. Board of Directors have no power to fill up the total strength beyond 25 which is fixed by the bye-laws. A reading of Rule 35(3)(h) of the Rules also reveal that the mere maximum limit of the Board of Directors stated in the bye-laws do not ipso facto constitute that number of the committee members. Bye-laws of the society at its inception was that the management of the affairs of the society shall vest in a Board of Directors. Later an amendment was recommended by the general body and the same was registered on 10-5-2005 in which, the affairs of the society is vested in Board of Directors consisting of not more than 25 members. The Board of Directors are constituted from different categories. The details of the Board of Directors after the election on 11-7-2002 under various constituencies reveal the total number as 20. This in our view has to be taken as the strength of the Board of Directors so as to calculate the quorum. If so calculated, the Board of Directors have got quorum since they have 11 members out of 20. We have already found that the bye-laws fixed the maximum strength of the Board of Directors of the society is vested in the Board of Directors consisting of not more than 25 members. We also fully endorse the view taken by the learned Single Judge of this Court in Subair Kunju''s case (supra). In these cases the Board of Directors consisted of not more than 11 members, as per Clause 5.1 of the bye-laws. At the relevant time, the committee had only seven members. The strength of the committee has thus not gone upto the maximum of eleven, as provided in the bye-laws. After considering the absence of three members, through resignation or otherwise, the remaining four members were found to constitute the quorum of die committee as contemplated u/s 28(5) of the Act. We are also not impressed by the argument of the learned Advocate General that the society is a federal society. Facts would evidently show that the society has already been treated as a primary society. In our view, that was not a ground on which the committee sought to be removed. The only ground is lack of quorum. We have already found that there is sufficient quorum for the committee since the strength has to be taken as not 25 but 20. We have also found that the bye-law has fixed only the upper limit that is 25 and the total number of members of the Board of Directors is only 20, and since 11 members are in place, there is sufficient quorum and hence the Registrar has committed an error in removing the elected committee on the ground of lack of quorum. Writ appeals lack merits and they are accordingly dismissed.