AI Structured Summary
Not yet generated for this judgment
Judgment
R. Bhaskaran, J.—Petitioners and three others were the Directors of the first Respondent, Co-operative Society. Out of seven Directors, K.S. Mohini became disqualified due to her absence for more than four meetings. Shri B.G. Jose tendered his resignation. Thereafter, according to the Petitioners, the resignation of Shri Parameswaran (4th Petitioner) was obtained by force in the night of 29th June 2000. The next day, the 4th Petitioner met the Secretary of the Society and apprised him of the incident and requested him not. to remove him from the Directorship. On 30th June 2000, 5 Directors participated in the meeting.
The 4th Respondent President resigned from the Director Board. The Petitioners made Ext. P-4 representation to elect a new President. However, by Ext. P-5 an Administrator was appointed for the Society. The Original Petition was filed to challenge Ext. P-5.
The main contention raised in the O.P. was that the procedure fixed u/s 33(1) of the Kerala Co-operative Societies Act was not complied with before Ext. P-5. It is also stated that as per the Bye-law 20(d), the resignation takes effect only when the Director Board approves the resignation. Since it was not placed before the Director Board there was still the quorum and the Administrator could not be appointed.
The Original Petition was admitted on 19th July 2000 and urgent notice ordered in the O.P. and the application for stay. On 21st August 2000, the additional 6th Respondent issued Ext. P-6 election notification for conducting; election on 6th October 2000. The Petitioners amended the Original Petition to challenge Ext. P-6 election notification. The Original Petition was heard and judgment reserved on 4th October 2000. There was also an interim order to stay the declaration of the result of the election to be held on 6th October 2000.
The grounds raised in the O.P. are that Ext. P-5 order is illegal as no notice was published inviting objection as required under the proviso to Section 33(1) of the Act. It is only in cases where the Registrar is satisfied that it is not practicable to do so that notice is dispensed with under the Act. As. per the bye-law of the Society Rule 20(d) the resignation of a Director takes effect only when the Director Board approves the resignation. The resignation ol the three Directors were not approved by the Director Board. The resignation of the 4th Petitioner was obtained by force and the same was intimated to the Secretary the next morning itself. The consequent election notification also is illegal.
A counter-affidavit is filed on behalf of the 2nd Respondent. It is stated in the counter-affidavit that there is no clause in Section 33(1) of the Kerala Co-operative Societies Act for publishing a notice by the Registrar before appointing an Administrator. It is also stated that out of the seven Directors, one committee member became disqualified. Out of the remaining, six, Shri P.T. Thomas resigned and his resignation was accepted by the Committee on 15th September 1999. Thereafter, he withdrew his resignation which was also accepted by the Committee. It is contended that once a member resigns it could not be withdrawn and therefore he ceased to be a member of the committee. In that view of the matter, after the resignation of Mr. Jose and the President, the question whether the 4th Petitioner''s resignation was valid or not was not very relevant as even otherwise there was no quorum and the Secretary was justified in requesting for appointment of an Administrator.
A reply affidavit is filed by the, first Petitioner Shri P.J. Thomas. It is stated that his lesignation was not accepted by the Board of Directors. As per Rule 38 of the Kerala Co-operative Societies Rules, the resignation takes, effect only when it is accepted by the Board of Directors. Even after 15th September 1999, the first Petitioner was attending the Board meeting. He has attended 10 meetings of the Board of Directors after the so-called resignation.
In the above circumstances, tht questions for decision are:
Whether Ext. P-5 order of appointment of Administrator without notice by the Registrar is valid.
Whether P.J. Thomas was a committee member at the relevant time and whether the withdrawal of his resignation was valid.
Whether the finding that there was no quorum for the Managing Committee to continue is correct.
Whether the declaration of election and conduct of the election is valid.
The proviso to Section 33(1) of the Co-operative Societies Act makes it mandatory to order a notice on the notice board of the Headquarters of the Society inviting objections to the making of the order of appointment or Administrator and consider such objections. However, the further proviso states that it shall not be necessary to publish such notice in cases where the Registrar is satisfied that it is not reasonably practicable to do so. In the present case Ext. P-5 does not disclose any reason for dispensing with the notice. Moreover, the counter-affidavit filed by the 2nd Respondent also does not show that the notice under the proviso to Section 33(1) was not reasonably practicable. On the other hand, the definite case in paragraph 6 of the counter-affidavit is that Section 33(1) of the Kerala Co-operative Societies Act does not provide any clause for publishing a notice by the Registrar before appointing an Arbitrator in a Society.
The second proviso to Section 33(1) cannot be interpreted in such a way as to take away the effect of the first proviso and it is only in cases where the circumstances show that issue of a notice under the first proviso is reasonably not practicable that a notice can be dispensed with. Any other interpretation would nullify the effect of the first proviso and lead to arbitrary action on the part of the authorities to meddle with the democratic functioning of a society.
This Court in Sadasivan v. Joint Registrar 1994 (2) K.L.T 238 has considered the case of an order passed after notice and tht order only stated that the explanation is not satisfactory. It is held by this Court that appointment of an Arbitrator is a very serious matter and it entails civil consequences. It is stated that a quasi judicial order which has serious impacts ought to give reasons in support of it, particularly on the facts of the case when there is a mass of conflicting versions and materials either way, with assertions and counter assertions.
In Registrar of Co-operative Societies v. Sasi 1992 (2) KLT 942, a Division Bench of this Court had occasion to consider a case of similar nature as in Ext. P-5. In that case also the order appointing Arbitrator did not give any reason for not publishing a notice inviting objections. This. Court said as follows:
We are not satisfied that he acted mindlessly and in disregard or in violation of the requirement regarding the publication of notice,
Another Division Bench of this Court in Deputy Registrar of Co-operative Society v. George 1974 KLT 189 has stated that it is quite unnecessary that an order passed u/s 33(1) should expressly recite that the requirement of the notice has been dispensed with. But in that case the counter-affidavit has stated that it was not practicable to issue notice to the members. In the absence of any averment even in the counter-affidavit that notice under the proviso to Section 33(1) was not practicable, it is possible to contend that Ext. P-5 haa to be struck down for violation of the procedure prescribed for appointment of Administrator and there is great force in the contention also. However, on the facts of this case, I do not think that there is sufficient ground to interfere in exercise of my jurisdiction under Article 226 of the Constitution of India.
As already noticed, out of the seven members of the managing committee, K.S. Mohini became, disqualified on account of not attending the committee meeting for four consecutive meetings. Shri P.J. Thomas, who is the first Petitioner in this petition had admittedly resigned from the Board of Directors. In the counter-affidavit, it is stated that the resignation was accepted by the committee in its meeting held on 15th September 1999 and on 11th October 1999, he withdrew his resignation and the committee accepted the withdrawal at the meeting held on 28th October 1999. It is stated in the counter-affidavit that this withdrawal has no authority as per the clause in Section 33(1) of the Act and the decision in Sadasivan''s case 1994 (2) KLT 238. In the reply affidavit filed by the first Petitioner, it is stated that his resignation was never accepted by the Board of Directors and it takes effect only when the same is accepted by the Board. It is however stated that even after 15th September 1999 he was acting and attending in the meetings in the capacity of a member of the Board and he has attended several meetings about 10 which could be seen from the minutes book and other related documents. Prima facie, it is impossible for a member who has tendered his resignation to continue in the managing committee and no provision has been pointed out for the managing committee to accept the withdrawal of resignation. The consistent view taken by this Court in all the decisions quoted above is that tendering of resignation will have the effect of terminating membership from the committee. This is also clear from the Explanation to Section 33(1) of the Act. The learned Government Pleader also brought to my notice the unreported judgment in O.P. No. 13060 of 1998 and connected cases where a learned single Judge of this Court took note of the decision in Varma v. Joint Registrar 1987 (2) KLT 420 and Sadasivan v. Joint Registrar 1994 (2) KLT 238. It is stated that though Sub-rule (4) of Rule 38 requires the President to place the resignation before the committee for consideration, the committee has no role to play in the matter of acceptance or non-acceptance of the resignation, inasmuch as it takes effect on its being tendered to the President. In the light of the above statement of law, the .continuance of the first Petitioner in the managing committee does not seem to be according to the Act and the rules. Out of the remaining five members Shri B.G. Jose also tendered his resignation. The resignation is not in dispute. It is the resignation of the 4th Petitioner Shri Parameswaran that is in dispute. In his case also, he admits the resignation in the letter of resignation, but he states that it was obtained by threat. He has not elaborated; in the O.P. as to the circumstances under which he signed in the resignation letter. Therefore, by his resignation the minimum number of persons required to have the quorum of the committee meeting was not available. It is possible to contend that the question whether the resignation of the 4th Petitioner was valid or was made under threat would have been considered if a proper notice was issued under the proviso to Section 33(1) and a finding by the Registrar in that respect would be very material. This Court could have directed an enquiry regarding that fact. But the President of the Committee Shri C.S, Preman also resigned on 3rd July 2000. Therefore, it is clear that the majority of the committee members had resigned from the committee and it is not psossible to conduct the affairs of the Society in a satisfactory manaer. No doubt, in Sadasivan''s case, this Court has held that there is no automatic cessar of the committee by want of quorum. But it is also clear that it is not possible to take any policy decision for the proper working of the society and it is not in the interest of the society in such a state of affairs have to continue in office.
Pending the O.P., an election have been conducted to the managing committee and there is no case for the Petitioners that the Administrator has enrolled new members and the interest of the existing members is in any way prejudiced by the act of the Administrator. Since the election is already over and the declaration of the result alone is withheld on the basis of the interim order in the O.P., I think it will be only in the interest of the Society if the result is declared and the new committee takes charge of the affairs of tho Society.
In the result, the O.P. is dismissed.