Karnataka High Court
Sri. Kashinath S/O Chandrashekar ... vs The Principal Secretary on 10 October, 2013
Author: H.N.Nagamohan Das
Bench: H.N.Nagamohan Das
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R
IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
DATED THIS THE 10TH DAY OF OCTOBER 2013
BEFORE
THE HON'BLE MR.JUSTICE H.N.NAGAMOHAN DAS
WRIT PETITION No. 64956/2010 (CS-RES)
BETWEEN :
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1. Sri. KASHINATH
S/O CHANDRASHEKAR SHIRAKOLI
AGED 60 YEARS
OCC AGRICULTURE
R/O NADIGALLI, SANKESHWAR
TAL. HUKKERI, DIST. BELGAUM.
2. Sri. SHANKAR
S/O SANGAPPA KARDEGOUDA
AGE 65 YEARS
OCC AGRICULTURE
R/O HARGAPURGALLI
SANKESHWAR
TAL. HUKKERI, DIST. BELGAUM.
3. Sri. LAXMAN
S/O PARSHARAM SHENDAGE
AGE 54 YEARS
OCC AGRICULTURE
R/O NADIGALLI, SANKESHWAR
TAL. HUKKERI, DIST. BELGAUM.
4. Sri. CHANAGOUDA
S/O APPASAHEB PATIL
AGE 41 YEARS
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OCC AGRICULTURE
R/O GADAGIGALLI
SANKESHWAR
TAL. HUKKERI, DIST. BELGAUM.
5. Smt. SUJATA
W/O RAJARAM MANE
AGE 51 YEARS
OCC AGRICULTURE
R/O NAMAZMAL
NEAR PADAGUDI
SANKESHWAR
TAL. HUKKERI, DIST. BELGAUM. ... PETITIONERS
(By Sri. F V PATIL, ADV. )
AND :
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1. THE PRINCIPAL SECRETARY
GOVT. OF KARNATAKA
DEPT. OF CO-OPERATION
M.S. BUILDING
DR. AMBEDKAR VEEDHI
BANGALORE 560 001.
2. THE JOINT-REGISTRAR OF
CO-OPERATIVE SOCIETIES
BELGAUM
DIST. BELGAUM.
3. THE DEPUTY REGISTRAR
OF CO-OPERATIVE SOCIETIES
BELGAUM
DIST. BELGAUM.
4. THE ADMINISTRATOR,
THE SANKESHWAR PRATAMIK
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KRISHI PATTIN
SAHAKARI BANK LTD.,
SANKESHWAR, TAL. HUKKERI
DIST. BELGAUM.
5. THE SANKESHWAR PRATAMIK
KRISHI PATTIN SAHAKARI
BANK LTD.,
SANKESHWAR, TAL. HUKKERI
DIST. BELGAUM
REP. BY ITS SECRETARY.
6. Sri. MARUTI
S/O RAMAPPA GHASTI
AGED MAJOR
OCC AGRICULTURE
R/O NADIGALLI
SANKESHWAR
TAL. HUKKERI, DIST. BELGAUM.
7. Sri. APPASAHEB
S/O DUNDAPPA KARADIGOWDA
OCC: EX-SECRETARY
R/O: NEAR D PHARMACY COLLEGE
ANANTH NAGAR, HUKKERI
TQ & DIST: BELGAUM.
8. Sri. SHIVAPUTRAPPA
S/O. SHANKARAPPA SHIRKOLI
AGE 62 YEARS
9. Sri. ANNASAHEB
S/O. BHIMGOUDA PATIL
AGED 60 YEARS
10. Sri. SURESH
S/O. CHANDRAPPA JARALI
AGED 64 YEARS
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11. Sri. VISWANATH
S/O. DUNDAPPA NESARI
AGED 47 YEARS
12. Sri. APPASAB
S/O. MALAGOUDA PATIL
AGED 40 YEARS
13. Smt. SUSHILA
W/O. APPASAHEB DEVARAKKI
AGED 55 YEARS
14. Sri. MAHADEV
S/O. IRAPPA GASTI
AGED 42 YEARS
15. Sri. SADASHIV
S/O. GANAPATI CHORAGE
AGED 65 YEARS
R-8 TO 15 ARE R/O. SANKESWAR
TQ. HUKKERI
DIST. BELGAUM. ... RESPONDENTS
(By Sri. A.G. MALDAR, HCGP, FOR R1 TO R4
Sri. VIJAYA KUMAR B HORATTI, ADV., FOR R-5
Sri. GIRISH HIREMATH, ADV., FOR R-6
Sri. SHIVRAJ P MUDHOL, ADV., FOR R-8 TO R-15
Sri. ANAND D BAGEWADI, ADV., FOR C/R-7 )
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THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA WITH A
PRAYER TO QUASH THE IMPUGNED ORDER OF
SUPERCESSION VIDE ANNEXURE-K DATED 02/12/2008,
PASSED BY THE RESPONDENT NO. 3 AND ETC.
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THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS, NAGAMOHAN DAS, J,
PRONOUNCED THE FOLLOWING;
ORDER
In this writ petition the petitioners have prayed for a writ in the nature of certiorari to quash the order of supersession dated 02.12.2008 - Annexure K, the order of the Appellate Authority dated 07.12.2009 - Annexure M and the order of the Revisional Authority dated 03.07.2010 - Annexure R and for other reliefs.
2. Respondent No. 5 - the Sankeshwar Pratamik Krishi Pattin Sahakari Bank Limited (for short `the Bank') originally came to be registered under the Bombay Cooperative Societies Act in the year 1914. After reorganisation of States respondent No. 5 - Bank came within the territorial limits of Karnataka State. After coming into force of the Karnataka Cooperative Societies Act, 1959 (for short `the Act'), respondent No. 5 - Bank continued to function under the provisions of this Act. In the elections held on 19.03.2008 the petitioners and others got elected as members of the committee of management of respondent No. 5 - Bank for a term of 5 years. On :6: 14.10.2008 an order came to be passed as per Annexure E directing respondent No. 5 - Bank to show cause as to why action should not be initiated under Section 64 and 68 of the Act alleging as many as five charges. Aggrieved by this order at Annexure E the petitioners filed an appeal before respondent No. 3 under Section 106 of the Act. During the pendency of the appeal before respondent No. 3, respondent No. 5 - Bank filed an application for impleading and the same came to be allowed. Against the order allowing the impleading application, the petitioners approached this Court in W.P. No. 65640/2009. This Court vide order dated 15.10.2009 stayed all further proceedings in the appeal before respondent No. 3.
3. When the matter stood at that stage a show cause notice dated 10.11.2008 came to be issued under Section 29(c) and 8(d) of the Act as per Annexure G. Petitioners submitted their reply. Respondents issued another show cause notice dated 11.11.2008 as per Annexure H under Section 30 of the Act again alleging the very same charges to supersede the committee of management of respondent No. 5 - Bank. The petitioners filed their detailed :7: objections on 24.11.2008 as per Annexure J. Without considering the objections filed by the petitioners the impugned order of supersession came to be passed as per Annexure K dated 02.12.2008. Aggrieved by this order of supersession Annexure K the petitioners filed an appeal before the Appellate Authority, that is, respondent No. 2 herein. Respondent No. 2 vide order dated 07.12.2009 as per Annexure M dismissed the appeal filed by the petitioners. Aggrieved by the order of supersession - Annexure K and the order of the Appellate Authority at Annexure M the petitioners filed a revision petition before respondent No. 1. Respondent No. 1 - Revisional Authority granted an interim order of stay on 26.04.2010 staying the operation of order of supersession - Annexure K and order of Appellate Authority - Annexure M. At the instance of contesting respondents the Revisional Authority preponed the case and vacated the interim order of stay granted on 13.05.2010 without notice of the petitioners. In the meanwhile respondent No. 7 issued calendar of events on 22.04.2010 to hold fresh elections to respondent No. 5 - Bank. Aggrieved by the order of vacating stay by the Revisional Authority and the calendar of :8: events petitioners approached this Court in W.P. No. 16196/2010 and connected matters. This Court vide order dated 02.06.2010 allowed the writ petitions, set aside the order of the Revisional Authority dated 13.05.2010 and stayed the declaration of elections dated 18.05.2010 until disposal of the matter by the Revisional Authority. The matter was remanded to the Revisional Authority for disposal of revision petition filed by the petitioners.
4. After disposal of W.P. No. 16196/2010 and connected matters the Revisional Authority passed the impugned order dated 03.07.2010 - Annexure R dismissing the revision petition filed by the petitioners. Hence, this writ petition.
5. Heard arguments on both the side and perused the entire writ papers.
6. This Court in the case of C. Shivalingaiah and others Vs. State of Karnataka and others, 2008 (4) AIR Kar. R 216 had the :9: occasion to consider the scope of Section 30(1) of the Act. The relevant portion for the purpose of this case is as under:
"21. The powers conferred under S.30(1) of the Act to the Registrar is not absolute power and the same is conditional. The condition precedent for exercising the power of supersession against an elected Committee of Management of the society is that there must be persistent default in the performance of its duties. Despite the directions or warning by the Government or the Registrar if the society persists in making default in discharge of its duties, then only it can be said that the society has persistently made default. Therefore, the issuance of directions or warnings is the first measure to which the Registrar should resort before rushing to exercise the power of supersession. As far as possible the power of supersession should be exercised only as a last measure. The power of supersession should be used very sparingly and only when the Registrar is fully satisfied that the continuance of the Committee of the Management in power is prejudicial to the interest of the society as a whole and its members. The frequent use of this power and its exercise are likely to defeat the very object and spirit of co-operative movement. If : 10 : the power of supersession is freely exercised, then the duly elected Committee of Management and its members will be in perpetual fear of axe of supersession. Therefore strict compliance of the requirement under S.30(1) of the Act is a must to remove the duly elected Committee of Management and to appoint an administrator in its place."
The Supreme Court in the case of State of M.P. Vs. Sanjay Nagayach, 2013 AIR SCW 2832 considered similar provision in Madhya Pradesh Cooperative Societies Act. The relevant portion is as under"
"29. Statutory functionaries like Registrar/Joint Registrar of Cooperative Societies functioning under the respective Co-operative Act must be above suspicion and function independently without external pressure. When an authority invested with the power purports to act on its own but in substance the power is exercised by external guidance or pressure, it would amount to non-exercise of power, statutorily vested. Large number of cases are coming up before this Court and the High Courts in the country challenging the orders of supersession and many of them are being passed by the statutory functionaries due to external influence ignoring the fact that they are ousting a : 11 : democratically elected Board, the consequence of which is also grave because the members of the Board of Directors would also stand disqualified in standing for the succeeding election as well.
30. The Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with pre- conceived notion and shall not speak his masters' voice, because the formation of opinion must be his own, not somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. In our view, the impugned order will not fall in that category.
xxx xxx xxx
35. Further, we are inclined to give the following general directions in view of the mushrooming of cases in various Courts challenging orders of supersession of elected Committees:
i. Supersession of an elected managing Committee/Board is an exception and be : 12 : resorted to only in exceptional circumstances and normally elected body be allowed to complete the term for which it is elected.
ii. Elected Committee in office be not penalised for the shortcomings or illegalities committed by previous Committee, unless there is any deliberate inaction in rectifying the illegalities committed by the previous committees. iii. Elected Committee in Office be given sufficient time, say at least six months, to rectify the defects, if any, pointed out in the audit report with regard to incidents which originated when the previous committee was in office.
iv. Registrar/Joint Registrar are legally obliged to comply with all the statutory formalities, including consultation with the financing banks/Controlling Banks etc. Only after getting their view, an opinion be formed as to whether an elected Committee be ousted or not.
v. Registrar/Joint Registrar should always bear in mind the consequences of an order of supersession which has the : 13 : effect of not only ousting the Board out of office, but also disqualify them for standing for election in the succeeding elections. Registrar/Joint Registrar therefore is duty bound to exercise his powers bona fide and not on the dictation or direction of those who are in power.
vi. Registrar/Joint Registrar shall not act under political pressure or influence and, if they do, be subjected to disciplinary proceedings and be also held personally liable for the cost of the legal proceedings.
vii. Public money not to be spent by the State Government or the Registrar for unnecessary litigation involving disputes between various factions in a cooperative society. Tax payers money is not expected to be spent for settling those disputes. If found necessary, the same be spent from the funds available with the concerned Bank.": 14 :
7. Keeping in view the law declared by this Court and the general directions issued by the Apex Court in the decisions referred to supra it is necessary to examine the fact situation in the present case. It is not in dispute that the petitioners and others got elected as members of committee of management of respondent No. 5 - Bank on 19.03.2008 for a term of 5 years, that is up to 31.11.2013. The show cause notice dated 11.11.2008 - Annexure H issued under Section 30 of the Act specifies as many as five charges. All the five charges in the show cause notice at Annexure H relates to the period prior to 19.03.2008. No allegations are made against the petitioners for the period subsequent to 19.03.2008. No material is placed on record to show that the present committee of management committed default in discharge of its duties. There is no evidence on record that the respondents issued directions or warnings to the newly elected members of the committee of management of respondent No. 5 - Bank as a first measure to correct their mistakes. In the absence of any such material on record I am of the considered opinion that the impugned order of supersession is liable to be quashed.
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8. The material on record discloses that subsequent to the election of new committee of management of respondent No. 5 - Bank proceedings under Section 64 and 68 of the Act came to be initiated on 14.10.2008. Further on 10.11.2008 proceedings are initiated under Section 29(c) and 8(d) of the Act. Thereafter proceedings under Section 30 of the Act for supersession came to be initiated. The nature of charges leveled and the order of supersession manifestly establishes that at every stage the respondents passed illegal orders, initiated unfounded and baseless proceedings and made every attempt to dislodge the duly elected body of respondent No. 5 - Bank. The respondent authorities have yielded to extraneous influences resulting in passing illegal, arbitrary and baseless orders. The impugned orders are contrary to the law declared by this Court and the Apex Court in the decisions referred to supra. Therefore the impugned orders are liable to be quashed.
9. Relying on the judgment of the Supreme Court in the case of State of M.P. and others Vs. Sanjay Nagayach and others, 2013 AIR SCW 2832 learned counsel for the petitioners contend that the : 16 : petitioners be reinstated as members of committee of management of respondent No. 5 - Bank and allow them to continue for the period they were put out of office. The Supreme Court in Sanjay Nagayach's case by considering Section 7-A of the Madhya Pradesh Cooperative Societies Act directed reinstatement of the committee of management and allowed them to continue for the period they were put out of office. Section 7-A of the Madhya Pradesh Cooperative Societies Act reads as under:
(7-A)(i) The term of the committee shall be five years from the date on which first meeting of the committee is held:
Provided that where a committee superseded, suspended or removed under the Act is reinstated as a result of any order of any Court or authority, the period during which the committee remained under supersession, suspension out of office as the case may be, shall be excluded in computing the period of the term aforesaid.
10. Under the Karnataka Cooperative Societies Act there is no such provision in par with Section 7-A(i) of the Madhya Pradesh Cooperative Societies Act. The issue involved in the present case : 17 : demands justice of reinstatement of the committee of management of respondent No. 5 Bank and continue them for the period they were put out of office by virtue of the impugned orders. On the other hand there is no statutory provision for reinstatement of superseded committee and allowing them to continue for the period they were put out of office. Thus there is a gap between law on one hand and the need for justice on the other hand.
11. The Constitution envisages the nature of society the citizens have to build. The statutes provide for realisation of individual rights and enforcement of duties. It is to be remembered that even in written Constitution and Statutes, express provision is not found for every conceivable situation. At the time of enactment of laws the legislators might not have contemplated a situation of illegal supersession, reinstatement of superseded body and allowing them to continue for the period they were put out of office. In such a situation judiciary shall respond to the changing needs of the society. It is necessary to interpret the laws enacted by the legislature to meet the dynamic social needs. Former Chief Justice of India, Justice J.S. : 18 : Verma while delivering B.N. Datar Centenary Endowment Lecture observed as under:
"Justice is the ideal to be achieved by law. Justice is the goal of law. Law is a set of general rules applied in the administration of justice. Justice depends on application of law to a particular case. Jurisprudence is the philosophy of law. jurisprudence and law have ultimately be tested on the anvil of administration of justice. Law as it is, may fall short of law as it ought to be, for doing complete justice in a cause. The gap between the two may be described as the field covered by morality. There is no doubt that the development of the law is influenced by morals. The infusion of morality for reshaping the law is influenced by the principles of equity and natural justice, as effective agencies of growth. The ideal State is that where the rules of law satisfy the requirements of justice and the gap between the two is bridged. It is this attempt to bridge the gap which occasions the development of new jurisprudence."
12. The Karnataka Cooperative Societies Act was enacted in the year 1959 thinking of a particular condition. Before this Court several writ petitions are filed challenging the orders of supersseion : 19 : of democratically elected committees of management of other cooperative societies. Quite often the power vested with the authority under Section 30 of the Act was abused arbitrarily to dislodge the elected committee of management. It is necessary to make the concerned person with whom the power is vested accountable when the power is abused. Each successive generation should realise its duties to work out afresh its views on the new problems and conditions and enact new laws and update the existing laws. Therefore it is necessary for the legislature to amend the Karnataka Cooperative Societies Act and to incorporate necessary provisions to do justice for reinstatement of illegally superseded committee of management and to allow them to continue in the office for the period they were put out of office. Till the legislature enacts suitable amendments to the Karnataka Cooperative Societies Act, it is necessary for this Court to do justice to the committee of management of respondent No. 5 Bank who are illegally superseded.
13. It is brought to my notice that subsequent to the order of supersession of respondent No. 5 Bank on 02.12.2008 an : 20 : Administrator was appointed. On the expiry of the term of the Administrator elections were held and new committee of management was elected consisting of respondent Nos. 8 to 15. This newly elected committee was stayed by this Court in W.P. No. 16196/2010 and connected matters vide order dated 02.06.2010 till the disposal of the revision petition before the Government. The Government disposed the revision petition on 03.07.2010 and consequently newly elected body assumed charge of respondent No. 5 Bank. In the facts and circumstances of this case the newly elected committee of management consisting of respondent Nos. 8 to15 is an outcome of the order of supersession which is now quashed by this Court. Therefore the respondent Nos. 8 to 15 are not entitled to continue as members of management committee of respondent No. 5
- Bank in view of quashing of the order of supersession.
14. In the absence of any specific provision in the Karnataka Cooperative Societies Act for reinstatement of superseded committee and allowing them for the period they are excluded from office, it is necessary, in the interest of justice, that they are to be : 21 : reinstated for the remaining period of their tenure of office. Petitioners are elected on 19.03.2008 for a term of 5 years, that is up to 31.11.2013. Since the term of petitioners as elected members of respondent No. 5 Bank is not completed, they are entitled to be reinstated for the period up to 31.11.2013.
15. For the reasons stated above, the following;
ORDER
i. Writ petition is hereby allowed.
ii. The impugned order of supersession dated 02.12.2008
- Annexure K, the order of the Appellate Authority dated 07.12.2009 - Annexure M and the order of the Revisional Authority dated 03.07.2010 - Annexure R are hereby quashed.
iii. The petitioners and other elected members of committee of management of respondent No. 5 Bank on 19.03.2008 are hereby reinstated and allowed them to continue till the end of their term, that is up to 31.11.2013.
: 22 :iv. Registry is hereby directed to send a copy of this order to the Chief Secretary and Principal Secretary, Cooperative Department, Government of Karnataka for their consideration to bring necessary amendments to Karnataka Cooperative Societies Act.
SD/-
JUDGE Lrs.