Madras High Court
The Special Officer, Varadarajaswami ... vs T. Anbalagan And Ors. on 20 April, 1989
Equivalent citations: (1989)2MLJ379
JUDGMENT Sathiadev, J.
1. Seven members of Ammaiyarkuppam Saravanan Weavers ' Co-operative Society, Ammaiyarkuppam-petitioners in W.P. No. 11904 of 1988 are the appellants herein and the four respondents therein are the respondents herein. This writ appeal is preferred against the order dated 18.11.1988 in W.M.P.Nos. 17747 and 20091 of 1988 in W.P. No. 11904 of 1988.
2. The writ petition was filed for issue of a writ of mandamus directing respondents to maintain the status quo as on 13.4.1988 permitting the petitioners to function as members of the Board of Management of the said society, and pending its disposal, in W.M.P. N0. 17747 of 1988, they have sought for an interim direction which is no different from the prayer made in the writ petition. Respondents 1 to 3 preferred W.M.P. No. 20091 of 1988 to vacate the interim stay granted pending the writ petition on 7.10.1988, and both these W.M.Ps.came to be disposed of together on 18.11.1988, vacating the interim direction given on 7.10.1983, dismissing W.M.P. No. 17747 of 1988 and allowing W.M.P. No. 20091 of 1988. Hence this writ appeal.
3. In the writ petition (ranking of parties as in W.P.) Petitioners claimed that they were duly nominated members the Managing committee of the society for the period from 1.6.87 to 31.5.1988 under Bye-law No. 20 of the Society read with the proviso to Section 27 of the Tamil Nadu Co-operative Societies Act, 1961 (hereinafter referred to as the old Act). On their ushering of Tamil Nadu Cooperative Societies Act, 1983 (hereinafter referred to as the new Act), by virtue of Section 33(5), they are entitled to continue as members of the Board of Directors to manage the affairs of the society since they were legally and validly holding office as Driectors on 13.4.1988 when the new Act came into force. Section 33(5) read as follows:
Not withstanding anything contained in this Act or in any other law ffor the time being in forcee the term of office of every member of every board constituted under the Tamil Nadu Co-operative Societies Act, 1961 (Tamil Nadu Act 33 of 1961) and holding office as such on the date of commencement of this Act shall expire on such date as may be specified by the Government, by notification and different dates may be specified for classes or categories of societies.
4. In May, 1988, Government announced its decision to hold elections for electing members to the Board of Management in Co-operative Societies in Tamil Nadu, and accordingly, notification dated 21.5.1988 was issued under Rule 52(6) of the Rules fixing the schedule for holding the elections. However, by G.O.Ms. No. 345, Co-operation dated 18-8-1988, Government cancelled the holding of election, and there is no likelihood of election being held in near future. A Special Officer came to be appointed for the period upto 12.10.1988. As his term would expire on that day, and under Section 89 of the new Act, neither his appointment nor his continuance is valid, the members of the Managing Committee who were holding office on 13.4.1988 alone are entitled to be in Office, and therefore, the writ petition had to be filed.
5. In the counter-affidavit filed by respondents 1 to 3 it was stated that the Board of the Society consists of seven members, and they were being nominated from time to time, and the last nomination was for the period from 1.6.87 to 31.5.88. Hence, on expiry of the period on 31.5.1988, they had no right to continue to be in office, and hence, a Special Officer came to be appointed under Section 89(4) of the Act. Initially, he was appointed for the period upto 12.10.1988, but it has since been extended for a further period till 25.12.1988. The Special Officer had been appointed under the said section "only for the societies where the term of nominated Boards expire." Section 33(5) will apply only to elected Boards, that were constituted under the old Act, because Section 27(1) reads as under:
The general body of a registered society shall constitute a committee in accordance with the by-laws and entrust the management of the affairs of the registeered society to such committee:
Provided that in the case of a society registered after the commencement of this Act, the persons who have signed the application to register the society may appoint a committee to conduct the affairs of the society for a period of three months from the date of registration or for such further period as the Registrar may consider necessary; but the committee appointed under this proviso shall cease to function as soon as a committee has been constituted in accordance with the by-laws; Provided further that where the by-laws so provide, the Government or the Registrar may nominate all or any of the members of the committee for such period as may be specified in the by-laws.
Hence, a combined reading of Section 27 and the bproviso thereon in the old Act reveals that there is a difference between a board which has been constituted and Board which has been nominated. Even under the new Act, Section 33(1)(b) makes a provision for nominations. Hence, Section 33(5) applies only to the Boards constituted by election and not those who were nominated. In as much as the petitioners have demitted office on the date of expiry of the last order of nomination, it is not open to them to claim protection under the said section.
6. A reply-affidavit was filed claiming that they still continued in office because they have not handed over charge of account books, ledgers, etc.
7. The learned Judge by taking note of the order passed by the Division Bench staying the order in W.P. No. 9792 of 1988; passed orders in the two W.M.Ps. as stated above.
8. Mr. Manivannan, learned Counsel for the petitioners, submits that a misconception had been entertained by respondents that Section 33(5) of the new Act takes note of the difference between elected Boards of Directors and nominated Boards of Directors. Out of the points advanced during the course of the hearing, the primodial point is to find out whether Section 33(5) as framed, takes note of any distinction between a Board in which the members have been nominated under the provisions of the Act. It opens with a non-obstanti clause by stating "notwithstanding anything contained in this Act or in any other law for the time being in foce...." ...It is not necessary to deal with the well-settled case law as to how to understand a non-obstanti clause. In respect of as pects covered under such a section, as and when necessity arises to apply the provisions/aspects contained therein, they will have to prevail irrespective of whatever be the other provisions made in the Act or in any other law for the time being in force. It is only relating to the provisions made therein, and which may happen to be contrary to any other provisions in that regard, they will prevail. Now to look into what aspects it deals with, it states that the terms of office of every member of every Board constituted under the Old Act and holding of Office on 13.4.1988 shall expire on such date as may be specified by the Government by notification.
9. What is a "board" is defined in Section 2(7) in the Act as follows:
"board" means the board of directors or the governing body of a registered society by what- ever name called to which the direction and control of the management of the affairs of the society is entrusted;" no such definition is found in old Act.
The relevant provision in the old Act is Section 27(1) which is extracted in para 3 above. It is by relying upon this section, respondents plead that when a Board of Management had come into existence as envisaged therein, it cannot be equated to a Board which would come into existence under Section 2(7) of the new Act. There are sections dealing with eligibility to acquire membership, disqualification, supression of the society and the like and they apply with equal force whether the Board of Management is one which had come into existence by an election process or by nomination. It is when a society is formed under Section 9 read with Section 21(2) Second Proviso of the old Act; under the by-laws, a nominated Board is brought into existence, so that the society may establish itself onsound co-operative principles through nominated members and that constituted Board of Management is equally subjected to regulatory measures under the provisions of the Act and as found in the by-laws. Its origin is immaterial for several purposes under the Act. The Legislature being fully aware that a Board of management could come into existence in two ways i.e.either by nomination or by election, had chosen not to confine Section 33(5) only to elected Boards. Mr. Narasimhan, learned Counsel, would try to emphasise on the word'constituted' to restrict it only to an elected board and not to a nominated Board. He refers to Section 27(1), but it has to be remembered that the meaning of the word 'constitute' is to set up, establish, to give due or lawful form to, to legal process. The second proviso to it uses the word 'nominate', but by that process it gets constituted. Hence, a committee could be constituted by an election process or by a nomination process. As soon as a particular process is over, the Board gets constituted under the provisions of the Act.
10. The next aspect is what is meant by a member of the Board of management holding office on 13.4.1988. When a Director, whether elected or nominated, had assumed office, he is a member of the Board in every sense and has a right to hold office during his tenure. Hence, on 13.4.1988, whether a member was an elected member or nominated member, he was a member holding office of Director on that day, and hence, his term could expire only on such date as specified by the Government in notification. Whatever might have been the term for which a member might have been elected or nominated, statutorily a right to continue in office came to be conferred on such of those persons, who were in office on 13.4.1988. They were allowed to be in office till a notification is made, even though their term may come to an end as originally fixed, at any time between 13.4.1988 and till date of notification. When the statute has chosen to extend the term of office of members in such a fortitutions circumstance, no functionary under the Act could ever usurp their office. Therefore, when a member of the Board constituted under the old, either by election or by nomination, was in office on 13-4-1988, he had the right to continue in office till a notification is published by the Government under Section 33(5) irrespective of the fact whether his term was to expire on any date, between 13.4.1988 and the date of notification. It is admitted case that till date, the Government had not issued any notification under Section 33(5). Hence, on the first point, it held, that Section 33(5) does not take into of any distinction between an elected member or a nominated member of a Board in a Co-operative Society which had been constituted under the old Act, and those who are in office on 13.4.1988 have the right to continue as Directors till notification is issued.
11. Petitioners having been nominated as members of the Board of Management for the period from 1-7-87 to 31.5.1988, and on the second respondent appointing fourth respondent as Special Officer under Section 89(1) of the new Act, they got displaced and the Special Officer had taken charge of the affairs of the Society. Petitioners would state that on material date, certain interim orders were granted by this Court, and they were in Custody of records, but it is not necessary to go into these factual claims, because it is the fourth respondent who is incharge of the affairs of the Society from the date of his appointment. Petitioners state that they were informed by the Government by a notification in May, 1988 that elections would be held in July-August 1988, and to this effect, a notification came to be issued on 21.5.1988 under Rule 52(6) of the new Rules, and therefore, they thought that even though their office had been usurped by the Fourth respondent illegally, they could contest the elections, within the next one or two months. It is only thereafter, when the Government went back on its assurance by postponing the holding of election in G.O.Ms. No. 345, Co-operation, dated 1.8.1988, they have come forward to agitate their rights, which had been lost by the illegal action of the respondents. Respondents claim that on the appointment of the Special Officer, petitioners having demitted their office, they have waived the right to hold office, and hence they cannot ask for being restored to office assuming that they had a right to continue in office inspite of having been nominated to the Board of Management. In M.P. Sugar Mills v. State of U.P. A.I.R. 1971 S.C. 621 it was held that waiver is a question of fact and has to be raised in the pleadings with factual foundation, and when waiver is an abandonment of right and it could be either express or implied from conduct and it must be an intentional act with knowledge of what the person was waiving. It was then held:
...There can be no waiver unless the person who is said to have waived is fully informed as to his right and with full knowledge of such right, he intentionally abandons it....
Hence, when petitioners herein got displaced by the illegal order of the second respondent appointing fourth respondent as Special Officer, and by mere force of authority, they having been relieved from office, there is no question of petitioners having surrendered their office voluntarily.
12. It is then contended that nothing prevented petitioners to move this Court immediately for appropriate relief. It has been nowhere held that if a party fails to prevent illegal action being taken, he will be deprived of his lawful rights. As to whether the petitioner is guilty of laches in this regard, is an aspect relating to the exercise of jurisdiction under Article 226. If a petitioner comes within a reasonable time to agitate his legal/constitutional rights, he cannot be denied relief by putting forth the claim that having not rushed to court then and there, he had waived his rights. The reason given by petitioners in this case is plausible and acceptable, because even before the period of nomination came to an end, Government had announced that they will hold elections in July/August, 1988. Hence, it was not considered necessary to get into an expensive litigation process. It is only when the Government backed out by issuing a notification in August, 1988 cancelling the holding of elections, they found that their right to hold office which had been usurped illegally is persisted in, and when responsible officers having not chosen to put them back in office, they have come forward with the writ petition. Under such circumstances, it can never be held that they have waived their claim to hold office. heence, the second point that they have waived their right fails.
13. The third point is based on Section 89 of the new Act. It is claimed by respondents that the contingency which has arisen comes within the fold of Section 89(1)(i) and (iv) and (a) of the new Act. It reads as follows:
(1) Where (1)the term of office of the board of any reigstered society has expired and a new board cannot be constituted in accordance with the provisions of this Act, the rules and the by-laws; or...(iv) (a) vacancies have arisen for any reason, or.
14. As far as the first part is concerned, as pointed out earlier, under Section 33(5), the Board which was in existence on 13.4.1988 had been allowed to continue, and hence, when this period has not expired, the Special Officer could not have been appointed under Section 89(1) (i) of the new Act.
15. As far as Section 89(1)(iv)(a) is concerned, it is only when a vacancy arises, a Special Officer, could be appointed, here again, the finding already given that no vacancy had arisen on 31.5.88 is a direct answer against its applicability. Yet, what is pleaded by respondents quite fervently is that, on fourth respondent-Special Officer taking charge of the affairs of the society by virtue of the appointment order made by the Second Respondent, a vacancy had arisen. Certainly, this is not a case wherein the members have either resigned or abandoned their office or vacated it voluntarily. But for the order of the second respondent, they would not have been displaced by the Fourth respondent. It is only by virtue of the illegal act of the second respondent, fourth respondent usurped the powers of the Board. They as law abiding citizens, had to keep themselves away from the society. They did not want to create unseemly situation, when an authority under the guise of an order displaced them. Hence, it cannot in law be held, that it had resulted in a vacancy being created. A vacancy in office would arise only in the manner as provided in Sections 34, 35, 36 etc. An usuper in office, by his illegal act could never claim that incumbent in office had vacated it. hence, in view of Section 33(5) which applies to the facts and circumstances of this case, none of the circumstances contemplated under Section 89(1) had arised, and therefore, the appointment of Special Officer was illegal and without jurisdiction.
16. On behalf of the respondent, it is contended that there being no provision in the Act for restoration to office, petitioners cannot get such a relief in a petition of this nature. This is a curious contention, which responsible authorities could never put forth. Having usurped office illegally, and having no right to function as Special Officer under the Act, respondents have no manner of right to prevent the rightful holders in office to take charge of the affairs of the society, Statutorily, when the petitioners had acquired a right to contine to be in office till a notification is made under Section 33(3) of the Act, in the eye of law, they are the only persons who are entitled to manage the affairs of the society. By an illegal order of the second respondent, their right had been interfered with, and that illegal order is now set aside. The resultant effect is their right to continue in office is recognised by an order of court and a declaratory relief to that effect could be granted. Further, in effect, it is not an order restoring the petitioners to office, but allowing them to exercise their legal rights by removing the usuerper.
17. One other contention put forth is that, in C.M.P. No. 14400 of 1988 in W.A. No. 1442 of 1988, by order dated 27.10.1988, a division Bench of this Court had passed an order that members like petitioners have demitted office, and therefore, there is no question of vacancy existing, and therefore, the view expressed therein will have to be followed. It has been quite often held that any order passed in an interlocutory application, could have no binding effect, when main matters are heard and disposed of. The aspect of 'continuance' could arise only if the induction of the Special officer had been lawful. Hence, when the appointment made by the second respondent could not come within the fold of Section 89, the concept of "continuance in office," has no relevance and applicability.
18. Hence, the order of the second respondent appointing fourth respondent as Special Officer and extending his continuance in office is hereby set aside, and a direction is issued to the fourth respondent to entrust the affairs of the society to the petitioners within 48 hours of the service of the steno copy of order upon him. Irrespective of whether a copy of order is received from this Court or from his superiors; on the petitioners serving a steno copy of the order; he has to scrupulously comply with the order within the time limit fixed. Accordingly this writ appeal is allowed with costs. Counsel fee Rs. 250.
19. Writ Appeal No. 1442 of 1988: The points raised and the circumstances involved are identical to what have been considered in W.A. No. 102 of 1989. Hence, this writ appeal is also dismissed with costs payable to respondents 1 to 7 herein (one set) Counsel fee Rs. 250.
20. W.P. Nos. 11904 to 11909 of 1988: The points taken herein are covered by the decision in W.A. No. 102 of 1989. Hence, as per the terms contained therein, these writ petitioners are allowed with costs. Counsel fee Rs. 250 in each writ petition.