Karnataka High Court
Sri. Y.Basanna S/O Hanumanthappa vs The Government Of Karnataka on 13 December, 2017
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 13 t h DAY OF DECEMBER 2017
BEFOR E
THE HON'BLE MRS.JUSTICE K.S.MUDAGAL
WRIT PETITION No.109565 of 2017 [CS-RES]
C/w.
WRIT PETITION No.104931 OF 2017 [CS-RES]
WRIT PETITION No.21046 OF 2017 [CS-RES]
In WP No.109565/2017:
BETWEEN:
SRI. Y.BASANNA S/O HANUMANTHAPPA
@ K.BASANNA, AGED ABOUT 44 YEARS,
OCC: AGRICULTURIST & DIRECTOR
PRIMARY AGRICULTURAL CREDIT
CO-OPERATIVE SOCIETY, KOLUR,
R/O: BEHIND KOLUR GRAMA PANCHAYATH,
KOLUR, BALLARI DISTRICT-583 101.
... PETITIONER
(BY SRI.T M NADAF, ADVOCATE)
AND:
1. THE GOVERNMENT OF KARNATAKA
REPRESENTED BY ITS
PRINCIPAL SECRETARY,
CO-OPERATIVE SOCIETIES DEPARTMENT,
VIKASA SOUDHA, AMBEDKAR VEEDHI,
BENGALURU-560 001.
2. PRIMARY AGRICULTURAL CREDIT
CO-OPERATIVE SOCIETY, KOLUR,
:2: WP No.109565/2017
C/w. WP No.104931/2017
WP No.21046/2017
BALLARI DISTRICT-583 101,
REPRESENTED BY ITS
VICE PRESIDENT.
3. THE DEPUTY REGISTRAR OF
CO-OPERATIVE SOCIETIES,
BALLARI DISTRICT, BALLARI.
4. ASSISTANT REGISTRAR OF
CO-OPERATIVE SOCIETIES,
BALLARI SUB DIVISION,
BALLARI.
5. SRI.SHARANABASAPPA
SALES OFFICER,
OFFICE OF ASSISTANT REGISTRAR
CO-OPEERATIVE SOCIETIES, BALLARI,
AT PRESENT WORKING
CO-OPERATIVE DEVELOPMENT OFFICER
AT HADAGALI, BALLARI DISTRICT.
6. SRI.K.HANUMANTHAPPA
S/O MUDIMALLAPPA,
AGED ABOUT 56 YEARS,
OCC: CHIEF EXECUTIVE OFFICER,
PRIMARY AGRICULTURAL CREDIT
CO-OPERATIVE SOCIETY, KOLUR,
BALLARI DISTRICT-583 101.
... RESPONDENTS
(BY SMT.VEENA HEGDE, AGA FOR R1, R3 & R4)
(BY SRI.ANANT HEGDE, ADVOCATE FOR-6)
( RESPONDENT NOS.2 AND 5 ARE SERVED)
:3: WP No.109565/2017
C/w. WP No.104931/2017
WP No.21046/2017
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
& 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
a) TO CALL FOR THE RECORDS IN APPEAL
NO.1/2015-16 ON THE FILE OF RESPONDENT
NO.3.
b) QUASH THE ORDER DATED:25.04.2017, PASSED
BY RESPONDENT NO.3, IN APPEAL NO.1/2015-
16, TO THE EXTENT OF DIRECTING TO
REINSTATE AND CONTINUE THE RESPONDENT
NO.6 AS CHIEF EXECUTIVE IN RESPONDENT
NO.2 SOCIETY BY SETTING ASIDE THE ORDER
OF REMOVAL OF RESPONDENT NO.6
DATED;29.09.2015, PRODUCED AT ANNEXURE-
R.
In WP No.104931/2017:
BETWEEN:
SRI. Y. BASANNA S/O HANUMANTHAPPA
AGED ABOUT 44 YEARS,
OCC: AGRICULTURIST AND DIRECTOR
PRIMARY AGRICULTURAL CREDIT
CO-OPERATIVE SOCIETY, KOLUR,
R/O: BEHIND KOLUR GRAMA PANCHAYATH,
KOLUR, BALLARI DISTRICT-583 101.
... PETITIONER
(BY SRI. T.M.NADAF, ADVOCATE)
AND:
1. THE GOVERNMENT OF KARNATAKA
REPRESENTED BY ITS
PRINCIPAL SECRETARY,
CO-OPERATIVE SOCIETIES DEPARTMENT,
VIKASA SOUDHA, AMBEDKAR VEEDHI,
BENGALURU-560 001.
:4: WP No.109565/2017
C/w. WP No.104931/2017
WP No.21046/2017
2. THE RETURNING OFFICER
PRIMARY AGRICULTURAL CREDIT
CO-OPERATIVE SOCIETY, KOLUR,
BALLARI TALUK AND
INSPECTOR CO-OPERATIVE SOCIETIES,
OFFICE OF THE ASSISTANT REGISTRAR,
CO-OPERATIVE SOCIETIES,BALLARI,
BALLARI DISTRICT-583 101.
3. PRIMARY AGRICULTURAL CREDIT
CO-OPERATIVE SOCIETY KOLUR,
BALLARI DISTRICT-583 101,
REPRESENTED BY ITS
CHIEF EXECUTIVE.
4. THE DEPUTY REGISTRAR OF
CO-OPERATIVE SOCIEITES,
BALLARI DISTRICT, BALLARI.
... RESPONDENTS
(BY SMT.VEENA HEGDE, AGA FOR R1, R2 & R4)
(NOTICE TO R3-SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
& 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASH THE NOTICE ISSUED BY RESPONDNET NO.2
DATED:31.05.2017 PRODUCED AT ANNEXURE-"J" BY
ISSUING A WRIT IN THE NATURE OF CERTIORARI OR ANY
OTHER WRIT OR WRITS OR DIRECTION AS MAY DEEMS FIT
BY THIS HON'BLE COURT.
In WP No.21046 /2017:
BETWEEN:
1. SRI Y. BASANNA S/O HANUMANTHAPPA,
AGED ABOUT 44 YEARS,
OCC:AGRICULTURIST AND PRESIDENT
PRIMARY AGRICULAR CREDIT
CO-OPERATIVE SOCIETY, KOLUR,
:5: WP No.109565/2017
C/w. WP No.104931/2017
WP No.21046/2017
R/O BEHIND KOLUR GRAMA PANCHAYATH,
KOLUR, BALLARI DISTRICT-583 101
... PETITIONER
(BY SRI.T.M.NADAF, ADVOCATE)
AND:
1. THE GOVERNMENT OF KARNATAKA
REPRESENTED BY ITS PRINCIPAL SECRETARY,
CO-OPERATIVE SOCIETIES DEPARTMENT,
VIKASA SOUDHA, AMBEDKAR VEEDHI,
BENGALURU-560 001.
2. THE AUTHORISED OFFICER
AND ELECTION OFFICER,
PRIMARY AGRICULTURAL CREDIT
CO-OPERATIVE SOCIETY,
KOLUR AND SALES OFFICER,
OFFICE OF THE ASSISTANT REGISTRAR,
CO-OPERATIVE SOCIETIES, BALLARI,
BALLARI DISTRICT-583 101.
3. PRIMARY AGRICULTURAL CREDIT
CO-OPERATIVE SOCIETY, KOLUR,
BALLARI DISTRICT-583 101
REPRESENTED BY
ITS CHIEF EXECUTIVE.
... RESPONDENTS
(BY SMT.VEENA HEGDE, AGA FOR R1 & R2)
(NOTICE TO R3-SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
& 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASH THE NOTICE ISSUED BY R-2 DATED O2.O5.2017 AT
ANNEXURE-G.
:6: WP No.109565/2017
C/w. WP No.104931/2017
WP No.21046/2017
These Writ Petitions are coming on for Preliminary
Hearing, this day the Court made the following:-
O R D E R
Since all these matters involve common questions of law and facts, they are taken up together for disposal by this common order.
2. Heard.
3. Petitioner in all these cases was the President of Primary Agricultural Credit Co-operative Society, Kolur. He made complaint before the Assistant Registrar of Co-operative Societies (for short, 'ARCS') alleging certain malpractices and defalcation of the funds of the Society. Therefore, the ARCS directed the Senior Auditor of the Co- operative Societies, B allari to hold an inquiry into the matter and submit the report. Accordingly, he conducted inquiry and submitted the report on 31.03.2015.
:7: WP No.109565/2017C/w. WP No.104931/2017 WP No.21046/2017
4. The findings in the report are that K.Hanumanthappa the Chief Executive Officer of the Society and Mariswamy the Clerk have committed temporary misappropriation and certain irregularities in recovery of the dues. The ARCS on 15.05.2015 accepted the report. The ARCS directed that the Governing body shall take steps to recover the amount misappropriated from the Chief Executive Officer and the Clerk and initiate disciplinary action against them and submit the compliance report within one month.
5. The said K.Hanumanthappa the Chief Executive Officer of the Society is the 6th respondent in W.P. No.109565/2017. In all these petitions, the other respondents are the State of Karnataka, the Society, the Deputy Registrar and Assistant Registrar of Co-operative Societies.
6. On receipt of the order of ARCS dated 15.05.2015, the petitioner passed an order :8: WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 dated 29.09.2015 terminating K. Hanumanthappa the Chief Executive Officer from service and directed him to pay Rs.7,50,000/- within one month with 18% interest etc. He passed that order purportedly under Sections 69 and 70 of the Karnataka Co-operative Societies Act, 1959 (for short, 'KCS Act').
7. Before that, the said Chief Executive Officer had presented a memorandum of appeal dated 12.08.2015 before the Deputy Registrar of Cooperative Societies (for short, 'DRCS') challenging the order of the ARCS of acceptance of the auditor's report. By the time the Deputy Registrar took up the appeal for consideration, the petitioner had passed order of termination in respect of the Chief Executive Officer.
8. On 25 t h April 2017, the DRCS partly allowed the appeal upholding the acceptance of the report of the Auditor. Further, he held that :9: WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 the termination of the Chief Executive Officer/ respondent No.6 is contrary to the directions in the order of the ARCS, since the decision was not taken by the Governing body and without holding disciplinary inquiry against the Chief Executive Officer. He further directed to reinstate K.Hanumanthappa in the post of Chief Executive Officer. The petitioner has challenged that order of reinstatement and reversal of the termination order in Writ Petition No.109565/2017.
9. It appears, some elected members of the Society submitted representation to the ARCS to move a no confidence motion against the petitioner for his removal from the post of President. On that basis, the ARCS appointed the Sales Officer as authorized Officer and returning Officer to hold proceedings of the no confidence motion. Accordingly, the authorized Officer issued notice dated 02.05.2017 to the Directors and other office bearers of the Society as well as the petitioner : 10 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 fixing the meeting on 10.05.2017 at 10.00 a.m. for bringing the no confidence motion. The petitioner challenges the said notice in Writ Petition No.21046/2017.
10. When the said matter was pending before this Court, the proceedings of the no confidence were conducted on 10.05.2017 and the petitioner was removed from the office of the President of the Society. After such removal, the Returning Officer under the orders of the ARCS, proceeded to hold election of the President of the said Society. The Returning Officer convened meeting on 08.06.2017 for holding the election and issued meeting notice on 31.05.2017. The petitioner challenges the said notice in Writ Petition No.104931/2017.
11. Thus, in these Writ Petitions the petitioner challenges the following actions:
(a) The order of the DRCS sofar it relates to reinstating Hanumanthappa to the post of Chief Executive Officer.: 11 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017
(b) The notice of no confidence motion.
(c) The process of election of new
President to the Society.
12. Sri.T.M.Nadaf, learned counsel for the
petitioner seeks to challenge the order of
reinstatement of the Chief Executive Officer of the Society on the following grounds:
i) that, the appeal against the said order does not lie to DRCS and aggrieved person should take the matter in dispute before the ARCS under Section 70 of the KCS Act,
ii) the order of the DRCS is without jurisdiction.
13. He challenges the initiation of the no confidence motion and his removal from the post of President on the following grounds:
i) Section 29(H) of the KCS Act states that such proceedings shall be conducted in the prescribed manner, but when the proceedings were conducted there were no : 12 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 rules governing the proceedings, therefore the proceedings are illegal.
14. He challenges the initiation of the process of election of new President on the following ground:
i) since his removal from the post is illegal, the proceedings for election of the new President are illegal.
15. Sri.Anant Hegde, learned counsel who represents Hanumanthappa, the Chief Executive Officer and Smt.Veena Hegde, learned AGA, contend that against the order of DRCS, a revision lies to the Government under Section 108 of the KCS Act, therefore the Writ Petitions are not maintainable.
16. Sri.Anant Hedge, the learned counsel further contends that the order of termination of C.E.O. passed by the petitioner is without any authority of law. He contends that, since termination order is passed pending the appeal : 13 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 before DRCS which lead to these cases before this Court, has raised a dispute before the ARCS, under Section 70 of the KCS Act so far.
17. Smt.Veena Hegde, learned AGA contends that the Government exercising powers under Section 132 of the KCS Act has brought an order prescribing the procedure for moving a no confidence motion and ultimately, the Government has framed the Rules on 29 t h July 2017. She further contends that as per the said Rules and order, the procedure for moving a no confidence motion is as per R ule 14-AKK and that procedure is followed.
18. She further contends that the Government amended the Karnataka Co-operative Societies (Removal of Difficulties) Ord er, 2016 on 04 t h May 2017 whereunder the period of six months prescribed under the order dated 26 t h August 2016 is substituted by one year, therefore, as on the date : 14 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 of the commencement of the no confidence motion proceedings there were rules.
19. Having regard to the rival contentions of the parties, the questions that arise for consideration are :
"(i) Whether the ord er of reinstatement of the Chief Executive Officer passed by the DRCS on 25 t h April 2017 is sustainable?
(ii) Whether the no confidence motion proceedings initiated against the petitioner are valid?"
REG: ORDER OF DRCS RE-INSTATING THE C.E.O.
20. The petitioner has accepted the order of ARCS accepting the report of the enquiry officer as well as the directions given by the ARCS under his communication dated 15 t h May 2015. The said communication is produced at Annexure 'B' in Writ Petition No.109565/2017. In that order, ARCS has : 15 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 specifically directed that the Governing body shall initiate action for recovery of the sum misappropriated and to take disciplinary action.
21. Rule 18(4) of the KCS Rules governs the conditions of service of employees of the Co- operative Societies with regard to their superannuation, voluntary retirement, etc. Rule 18(5) of the KCS Rules governs their service conditions, which reads as follows:
"18. The method of recruitment and conditions of services of the employees of a co-operative society.--(1) x x x (5) Other service conditions.--The rules governing leave facility, gratuity, conduct and discipline of employees of co-operative societies shall be as provided in their bye-
laws."
(Emphasis Supplied)
22. The above Rule says that conducting of disciplinary proceedings against an employee of the : 16 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 co-operative society shall be as provided in their Bylaws. The Society in question has its own Bylaws. Bylaw No.55 states that the Governing body has the power to hold disciplinary action against the erring employees and impose penalty on them. Thus, as per the Bylaws and as per the order of the ARCS the initiation of disciplinary proceedings against the Chief Executive Officer or imposition of penalty on him should have been by the Governing body.
23. Sri.T.M.Nadaf, learned counsel for the petitioner contends that Bylaw No.48 confers upon the President the general power of taking any decision in the interest of Society, which includes the termination of the employees also. Bylaw No.48 says that the President has the power to transact in the interest of the Society as per the General Direction of the Governing body.
: 17 : WP No.109565/2017C/w. WP No.104931/2017 WP No.21046/2017
24. Bylaw No.48 by no stretch of imagination confers any unbriddled power on the President to take any material decision. Therefore, apparently, the petitioner had no power either by virtue of the order of the ARCS or under the Bylaws of the Society to initiate disciplinary proceedings against the Chief Executive Officer and to impose penalty on him.
25. Admittedly, no meeting to the Governing body was held to take up the agenda of initiating disciplinary proceedings against the Chief Executive Officer or for imposition of penalty and any resolution is passed for initiation of the disciplinary proceedings appointing any inquiry officer or for imposition of penalty.
26. Since the said order of termination was passed pending the appeal before the DRCS, the Chief Executive Officer had no cause to seek a relief with regard to that in his appeal memo. At any : 18 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 rate, since the petitioner himself accepts the order of ARCS dated 15 t h May 2015 and the Bylaws of the Society, the order of termination passed by him is apparently without jurisdiction.
27. It is not the case of the petitioner that the DRCS was wrong in confirming the order of the ARCS to the extent of acceptance of the report of the enquiry officer. His only contention is that the order of reinstatement is without jurisdiction, as the aggrieved employee should have raised a dispute under Section 70 of the KCS Act.
28. It is true that such a remedy is open to the aggrieved employee. But the fact remains that such order was passed pending appeal before DRCS and then this Court seized of the matter in his own writ petition. Therefore, the contention that C.E.O could not raise dispute under Section 70 of the KCS Act for such reasons is acceptable. The fact remains that the order of the petitioner himself was : 19 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 without any jurisdiction. Therefore, this Court while exercising powers under Articles 226 and 227 of the Constitution of India can test the validity of orders of the petitioner. Therefore, in Writ Petition No.109565 of 2017, the impugned order of the reinstatement has to be modified to remit back the matter to the Society to initiate the disciplinary proceedings against the 6th respondent in accordance with the order of the ARCS dated 15.05.2015, Rule 17 of the KCS Rules 1960 and the Bylaws of the Society. Till then, the status quo ante´ his termination is to be maintained.
REG. VALIDITY OF THE CONFI DENCE MOTION /PROCEEDINGS
29. So far the validity of the no confidence motion initiated against the petitioner, Section 29H of the Act governs the said procedure. Section 29H(3) of the Act states that the procedure for no confidence motion shall be as prescribed. : 20 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 Indisputably, prescribed means prescribed by R ules made under the Act.
30. Section 29H was introduced by the amendment Act 18 of 2016 with effect from 27 t h July 2016. However, under Section 132 of the Act, the Government brought an order titled as "Karnataka Co-operative Societies (Removal of Difficulties) Order, 2016" on 26 t h August 2016. Clause (2) of the said order, provided that for bringing a no confidence motion against the office bearer, the procedure prescribed for election of office bearers of the Committee as per Rule 14AG of the KCS Rules shall be followed.
31. But, Section 1(i) and (ii) of the very same Order provided that the Act shall come into force from the date of its publication in the official gazette and shall be in force upto six months from the date of its commencement. That order is published in the official gazette on 26 t h August : 21 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 2016. Therefore, the shelf-life of such Rules was six months only from 26.08.2016.
32. The notice of the meeting of no confidence motion was issued in this case on 02 n d May 2017. The Government issued notification on 04 t h May 2017 to substitute the period of six months by one year on 04 t h May 2017. But by that time, the proceedings of no confidence motion had commenced. Therefore, as on the date of commencement of the proceedings there were no rules prescribing the procedure for initiation of the no confidence motion as required under Section 29H(3). Therefore, the notice of no confidence has to fail on that ground.
33. The Government has framed the Rules under Section 29H of the Act only on 29 t h July 2017. Even as per R ule 1 of 14AKK, the members of the Board have to issue a requisition to the Chief Executive Officer of the Society of the proposed : 22 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 motion. Then, he shall send a copy of the said notice to the jurisdictional Registrar within seven days from the date of receipt of notice of no confidence. Then the jurisdictional Registrar has to appoint the authorized officer to preside over the meeting of the Board called to consider the no confidence. The authorized officer has to issue not less than 15 days notice of meeting to the elected members of the Board. In this case, all such procedure has not taken place. Therefore, the impugned notice of meeting of no confidence has to be quashed. Consequently, the notice of election has no legs to stand.
34. In the result, all these Writ Petitions are allowed accordingly. The petitioner as well as the 6 t h respondent in Writ Petition No.109565/2017 are restored to their status quo anté the impugned notice of meeting of no confidence meeting of election of new President and the order of : 23 : WP No.109565/2017 C/w. WP No.104931/2017 WP No.21046/2017 termination of the 6th respondent CEO dated 29.09.2015.
35. The Society, Board as well as the petitioner are at liberty to proceed with the matter as per the order of the ARCS dated 15 t h May 2015 and for bringing no confidence motion, if any, in accordance with law and the observations made in these writ petitions.
Sd/-
JUDGE 1 - 1 1 : CK K / 12 - end : RK /-