Andhra Pradesh High Court - Amravati
Pottepalem Sudhakar vs The State Of Andhra Pradesh, on 30 August, 2019
HONOURABLE SRI JUSTICE D.V.S.S. SOMAYAJULU
WRIT PETITION No.11815 of 2019
ORDER:
This Writ Petition is essentially filed by the petitioner challenging the G.O.Rt.No.475 Agriculture & Cooperation (COOP-IV) Department, dated 30.07.2019, issued by the 1st respondent; the Memo No.AGST-74/135/2017, COOP-IV, dt.30.07.2019 issued by the 2nd respondent and the instructions issued by the 3rd respondent, in file No.13021/81/2018/PACS-III, dated 30.07.2019, to all the District Cooperative Officers in the State. This Court has heard Sri Prabhunath Vasireddy and Madhava Rao Nalluri, learned counsels for the petitioner and the learned Government Pleader appearing for the 1st to 6th respondents.
With the consent of both the learned counsel the writ petition itself is taken up for hearing and for disposal. Learned counsel for the petitioner argued that the elected body of the 6th respondent-the Damaramadugu Primary Agriculture Co-operative Society Limited (in short "the Society") was elected on 31.01.2013 and their term expired on 31.01.2018. As per the G.O.Ms.No.8 Agriculture (COP.IV) Department, dated 29.01.2018, the term of the elected committee was extended by six months. Later, by 2 G.O.Ms.No.92, dated 11.07.2018, the term of the elected body was extended by another six months. Ultimately, by G.O.Ms.No.10, dated 30.01.2019 the term was further extended up to 30.07.2019. The same was done in the case of many elected bodies in the Cooperative sector throughout the State of Andhra Pradesh. Thus, the petitioner submits that the term of the Primary Agricultural Cooperative Credit Societies in the State of Andhra Pradesh, including the 6th respondent society were extended upto 30.07.2019. Thereafter, the impugned G.O.Rt.No.475, dated 30.07.2019 was issued, whereby the Government by exercising its powers under Section 123 of the Andhra Pradesh Cooperative Societies Act, 1964 (in short "the Act") exempted all the Primary Agricultural Cooperative Credit Societies term in the State from the provisions of Section 115- D (16) (a) of the Act. This Section 115-D (16) (a) of the Act gives the power to the Registrar to conduct the elections within six months from the date of supersession. However, the proviso states that the Government may direct the Registrar to extend the term of the existing managing committee for a period of not exceeding six months at a time and for a total period of two years. This requirement has been relaxed by exercising the power under Section 123 of the Act, which enables the authorized authority/state to relax and exempt a society as a class of societies from the provisions of the Act. Learned counsel for the petitioner 3 submits that in very quick succession immediately thereafter the Government directed the Registrars to appoint persons in- charge by executive instructions, dated 30.07.2019. Thereafter, on the very same day on 30.07.2019 the Registrar of Cooperative Societies appointed three persons (R 7 to R 9) as persons in-charge on 31.07.2019 vide proceedings bearing R.C.No.120/2018/C, to the 6th respondent society. Learned counsel for the petitioner submits that there are no allegations of financial irregularities, mismanagement etc., against the Managing Committee of the 6th respondent society. He points out that the Government felt it expeditious to extend the period of the committee on three earlier occasions for the same reasons. However, he submits that in view of the change in the political scenario, the Society committee was exempted from operation of Section 115 of the Act and three new people were appointed as persons in- charge. He submits that the three people, who are nominated are not at all eligible to hold the post; that there are standards to define eligible persons; that they are the supporters of the ruling party and as the erstwhile committee members were the political opponents of the members of the Managing Committee; they were unceremoniously prevented from continuing the office, without any notice or opportunity also.
It is the contention of the learned counsel for the petitioner that similarly placed cooperative societies in the 4 neighboring area / district were allowed to continue while in the case of the present 6th respondent and others a biased view was taken. Learned counsel submits that the entire excise of power is a mala fide, arbitrary, irrational exercise of power and therefore, he prays for an appropriate direction to the 3rd respondent to extend the term of the existing committees for another six months from 30.07.2019 and to take steps to ensure member participation in the working and the election of all the cooperative societies in the State. The learned counsel also submits that the elected members are eligible to be continued as persons in-charge of the 6th respondent society.
Learned counsel for the petitioner relies upon the judgment of the learned Single Judge of the High Court of Judicature, Andhra Pradesh at Hyderabad, reported in Elakolanu Primary Agricultural Co-op. Credit Society, Ltd., Elakolanu and others v Government of Andhra Pradesh and others1 and argues, on the basis of para-10 of this judgment, that apart from appointment of a person in- charge to facilitate the management, the Registrar also has to take necessary steps to issue directions for conduct of elections and that the person in-charge does not have necessary authority to issue instructions or takes a decision for holding the election. Therefore, learned counsel argues 1 2001 SCC OnLine AP 8682003) 6 ALT 274 (DB) 5 that the petitioner is entitled to an appropriate direction as prayed for.
In reply to this learned Government Pleader argues that as there is no improvement in the functioning of the 6th respondent society and other similar societies, the Government was compelled to issue G.O.Rt.No.475, dated 30.01.2019 exempting all cooperative societies from Section 115-D (16) (a) of the Act. He points out that a study of the cooperative societies found that in many cases the administrative registers in the societies are not upto date and the clear list of members is not really available to ensure member participation and election. Although the share capital was increased to Rs.300/- many of the members are continuing with Rs.10/- share capital only and the same raises a question of the eligibility of the member to participate in the elections. It is submitted that by examining overall situation prevalent throughout the State the decision had to be taken. Coming to the case on hand and with regard to the 6th respondent-society learned Government Pleader points out that there are the following defects:
"Note on instructions with regard to functioning of Damaramadugu PACS, SPSR Nellore District.
1. As per final audit report for the year 2017-18, the departmental auditor reported that the following amounts are not reconciled since several years.
Differences in Due to:
I. O.B.Difference in
1. C/A. in NDCC Bank : Rs.4,16,883.77 ps
2. Srinidhi Deposit in NDCC Bank : Rs.2,93,259/-
3. Cash Credit Govt. Share : Rs.21,096/-
II. Intt., recoverable from Ex-Secy., : Rs.1,82,036/- 6 Differences in Due By:
I. O.B. differences taken to sundry creditors
1. Suspense Account Difference in NDCC Bank : Rs.44,590/-
2. Difference in Members loans & Advances : Rs.2,83,032/-
3. Member Share Capital Difference (873 members):Rs.1,56,902/-
4. Member Fixed Deposit Difference : Rs.9,232/-
2. The Society has not invested Reserve Fund amount of Rs.21,69,590/- as per provisions of Act.
3. The Society has not taken legal action on overdue loans to tune of Rs.28,86,394/-.
4. The Society has not reconciled Savings Deposit, Thrift Deposit, SUP Deposit and Recurring Deposit with proper records.
5. The society has not maintained the records of General ledger, Audit defect rectification register and Thappal register.
6. The society failed to place the defaulters list which requires under Rule 21-B before the General body and also failed to place the audit report before the General Body.
7. The Managing Committee have not taken any action for rectification of Audit Defects during his entire tenure of six years and six months."
Learned Government Pleader submits that there are strong and compelling reasons for passing the G.O.Rt.No.475, dated 30.07.2019. He also points out that subsequent thereto three persons (Respondent Nos. 7 to 9) have been appointed as persons in-charge. These people have already assumed charge on 31.07.2019 itself. He also states that after considering their eligibility only the Registrar decided to appoint a person's in-charge. He states that the 18 item check list, which is filed along with the written instructions would show that respondents 6 to 8 are eligible. Apart from that he relies upon the judgment of the Division bench of the High Court of Andhra Pradesh reported in Elakolanu PACS Case (1 supra), which is also under the A.P. Cooperative 7 Societies Act, 1964. After extracting Section 32 (7) of the Act, the Division Bench clearly held as follows:
"7. A bare perusal of the aforementioned provision would clearly show that even assuming that the appellants herein do not stand disqualified, the same by itself cannot be a ground for their appointment as persons-in-charge. A writ in the nature of mandamus can be issued provided the writ petitioner establishes the existence of a legal right in himself and a corresponding legal duty in the respondent. Section 32(7) of the Act does not envisage that only the erstwhile members of the co-operative society would be appointed as persons-in-charge. Section 32(7) confers discretion upon the appropriate authority to appoint persons-in-charge. It is not the case of the appellants that such a direction has been arbitrarily exercised or is abused by the respondents herein. In such a situation, we are of the opinion that in the absence of the plea of malice-in-law, the Court shall not issue any directions which run contrary to the discretionary power conferred upon the appointing authority in terms of the aforementioned clause." (Emphasis supplied).
Therefore, learned Government Pleader argues that there is virtually no mistake in the appointment made and that the petitioner is not entitled to appointment.
He points out that G.O.Rt.No.475, which is filed in the paper book is not complete in all respects and he furnishes the full copy of the said G.O., which contains 12 reasons in para-2 to show why the Government arrived at the decision to revitalize and improve the functioning of the cooperative credit structure in the State.
This Court after hearing both the learned counsel notices that the 6th respondent society had a managing committee 8 whose term was extended three times, and so they were in Office till 30.07.2019 although their elected term expired on
31.01.2018. Thereafter, as can be seen from G.O.Rt.No.475, dt.30.07.2019, at least 12 separate grounds were listed by the Government in arriving at a conclusion that all the cooperative credit societies in the State should be exempted from the operation of Section 115-D (16) (a) of the Act. These 12 reasons, in the opinion of this Court, are clear and compelling reasons. The Government also has clearly stated in the said G.O. that a decision was arrived with an object of strengthening the movement to ensure that the conduct of the elections in a more member participative, democratic as well as in a free and fair manner. A reading of the G.O.Rt.No.475 shows that there are quite a few areas that requires urgent attention in order to make the cooperative movement stronger and better.
Coming to the present society viz., the Damaramadugu Primary Agriculture Co-operative Society Limited, the issues including the issues that need to be reconciled etc., are already set out in the preceding paragraphs. These facts are not really disputed as far as the present society is concerned. A Division bench of this Court in the case cited by the respondent in Elekolanu PACS case (1 supra) clearly held in paragraph-7 that the power of the Government is not limited to appointment only of the erstwhile members of the cooperative society as persons in-charge. The discretion 9 given to the appropriate authority under section 32 (7) of the Act is quite wide and the Division Bench did not notice any fetters or restriction in the exercise of said discretion for the appointment of a person or persons as persons in charge. A plain language interpretation also leads to the same conclusion - that there are no limitations / restrictions on the power of the State to appoint a 'person' or 'persons'.
Apart from that learned Division Bench clearly held that there is no allegation of any malice etc., in law. This Court also observes that even such allegation of mala fides, arbitrariness etc., exists, the quality of proof required is quite high (E. P. Royappa vs State Of Tamil Nadu & Anr2). If this case is examined against the backdrop of this well-known case a mere allegation of arbitrariness, malice etc., is not enough, it should be backed by adequate pleading and proper evidence. The Honourable Supreme Court held that there is a heavy burden on the person who alleges mala fides and the proof should be of high credibility. The case on hand, in the opinion of this Court, does not meet the said standard.
The managing committee of the 6th respondent society had the benefit of three extensions. They cannot as a matter of right seek another extension. G.O.Rt.No.475 does disclose that there are reasons for the Government to go in this manner which are not really proven to be untrue, false or motivated. Thus, the exercise of the power under Section 123 2 (1974) 4 SCC 3 = 1974 SCR(2) 348) 10 of the Act by the State cannot be said to be arbitrary; irrational etc. As far as the present society is concerned, there are also issues, which are detailed herein before, which resulted in this action.
The Division Bench held that a writ of mandamus cannot be issued unless the writ petitioner establishes a right in himself and a corresponding legal duty from the respondent. The petitioner as a former president does not have a vested right to be appointed.
Hence for all these reasons the writ petition is dismissed. There shall be no order as to costs.
As a sequel, miscellaneous petitions, if any, pending in this Writ Petition shall stand closed.
__________________________ D.V.S.S. SOMAYAJULU, J Date: 30.08.2019 Ssv