Kerala High Court
Shabin Antony vs Gireesh Kumar M.S on 2 November, 2017
Author: Devan Ramachandran
Bench: P.R.Ramachandra Menon, Devan Ramachandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
&
THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
TUESDAY, THE 5TH DAY OF DECEMBER 2017/14TH AGRAHAYANA, 1939
WA.No. 2444 of 2017 ()
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AGAINST THE JUDGMENT IN WP(C).24534/2013 of HIGH COURT OF KERALA DATED 2.11.2017
APPELLANT/ADDL. 3RD RESPONDENT IN WP(C):
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SHABIN ANTONY,
AGED 43 YEARS, S/O.P.V.ANTONY,
PADAYATTIL HOUSE, NAYATHODU P.O.,
ANKAMALY VIA, ERNAKULAM DISTRICT,
PIN-683572.
BY ADVS.SRI.V.G.ARUN
SRI.T.R.HARIKUMAR
RESPONDENTS/PETITIONERS & RESPONDENTS 1,2 & 4 IN WP(C):
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1. GIREESH KUMAR M.S.,
'GIRI BHAVAN',
NAYATHODE P.O., ANGAMALY,
ERNAKULAM DISTRICT- PIN-683572.
2. V.A.VELAYUDHAN,
VELLIMATTATH HOUSE,
NAYATHODE P.O., ANKAMALY,
ERNAKULAM DISTRICT- PIN-683572.
3. JERIN JOSE,
MANJALI HOUSE, ANGAMALY P.O.,
ERNAKULAM DISTRICT- PIN-683572.
4. T.G.BABY,
THATTIL HOUSE,
NAYATHODE P.O., ANKAMALY,
ERNAKULAM DISTRICT- PIN-683572.
5. SIJO JOSE,
THETTAYIL HOUSE, CHAMPANOR,
ANGAMALY SOUTH P.O.,
ERNAKULAM DISTRICT- PIN-683572.
6. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES,
ERNAKULAM, CIVIL STATION,
KAKKANAD, KOCHI-682030,
ERNAKULAM DISTRICT, PIN-683572.
7. THE ANGAMALY SERVICE CO-OPERATIVE BANK LTD. NO.714,
ANGAMALY P.O., PIN-683572,
ERNAKULAM DISTRICT,
REPRESENTED BY ITS SECRETARY.
WA.No. 2444 of 2017 ()
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8. THE RETURNING OFFICER,
ANGAMALY SERVICE CO-OPERATIVE BANK LTD. NO.714,
UNIT INSPECTOR, ALUVA UNIT,
OFFICE OF THE ASSISTANT REGISTRAR(GENERAL),
ALUVA-683101.
R1-R5 BY SRI.GILBERT GEORGE CORREYA
R6 & R8 BY GOVERNMENT PLEADER SRI.P.M.SHAMEEN
R7 BY SRI.O.V.MANIPRASAD
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05-12-2017, THE
COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
EL
CR
P.R.Ramachandra Menon &
Devan Ramachandran, JJ.
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W.A.No.2444 of 2017
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Dated this the 5th day of December, 2017
JUDGMENT
Devan Ramachandran, J.
The facts involved in this appeal certainly presents a rather unusual scenario.
2. The supersession of a Managing Committee of a Society, ordered by the Registrar of Co-operative Societies invoking the powers under Section 32 of the Kerala Co- operative Societies Act, 1969 ('the Act' for brevity), appears to have been set aside, in the judgment impugned herein, on the basis of a subsequent order issued by the competent authorities in surcharge proceedings against the members of the superceded Committee, initiated under Section 68 of the Act, wherein all the allegedly proven irregularities and acts of defiance of the Committee against lawful orders of the authorities were offered post factum ratification and imprimatur. The learned Single Judge, therefore, took the WA2444/17 2 view that since the allegations that led to the supersession have been subsequently ratified, albeit under an independent surcharge proceedings, the order of supersession itself had lost its foundational justification and the said order was consequently quashed.
3. The appellant challenges the impugned judgment, inter alia, on the specific assertion that the order of supersession cannot be set aside on the basis of a subsequent order in surcharge proceedings, which according to his contention,is an independent and unconnected proceedings.
4. Before we proceed to examine the contentions in the appeal, a sylloge of the unexpendable facts need to be stated, which is as under:
5. The appellant is the third respondent in W.P.(C)No. 24534/2013. This writ petition was disposed of by the learned Single Judge along with three other writ petitions, all involving challenge and contentions relating to supersession of and consequent fresh elections ordered to be conducted to the Managing Committee of a Society by name Angamaly Service Co-operative Bank Ltd., which has been arrayed as the seventh respondent in this appeal.
WA2444/17 3
6. The appellant states that respondents 1 to 5 in this appeal were the original members of the managing committee of the said Society and that the first respondent was its President. According to the appellant, on account of certain very grievous allegations made against committee, steps were taken to supersede it, which finally led to Exhibit P3 order dated 22.08.2012, by which the Registrar of Co-operative Societies superseded the committee. He further says that even while the proceedings for supersession was continuing, an election notification was published on 26.07.2012, notifying the elections to the Society to be held on 09.09.2012.
7. In the meanwhile, the order of supersession of the Managing Committee, namely Exhibit P3, came into effect on 22.08.2012, consequent to which the nominations of respondents 1 to 5 were rejected, since they were found statutorily disqualified under the provisions of Section 32(1)
(e) of the Act. It transpires that these actions led to several writ petitions being filed before this Court, one challenging the supersession, the other challenging the rejection of nominations and the third challenging the election notification on various grounds. The order of supersession was challenged WA2444/17 4 by respondents 1 to 5, which culminated in a judgment dated 17.12.2016 in W.P.(C)No.29838/2012, wherein the order was upheld. The primary contentions in the said writ petition was that as the committee had already resigned from office on 18.08.2012, the order of supersession was uncalled for since the committee was not in existence. A learned Judge of this Court found that it is not permissible that the members of the committee can be allowed to resign from office in such manner so as to defeat the purposes for which the proceedings under Section 32 had been invoked, especially because notices under Section 32(1) had already been and served on the committee members. It appears that based on this judgment, Exhibit P4 final order for supersession was issued, which has been challenged by respondents 1 to 5 in the writ petition involved in this appeal, namely W.P.(C)No. 24534/2013.
8. The learned Single Judge, as we have mentioned earlier, considered this writ petition along with three others and concluded that because of a subsequent order issued by the competent authorities which ex post facto ratified all the allegations of mismanagement against respondents 1 to 5 WA2444/17 5 while they were in office, the substratum of the order of supersession stood completely eroded and, therefore, that the order was liable to be set aside. The learned Single thus set aside the order and allowed the elections to the committee to go on as per the election notification which was earlier published on 26.07.2012. The writ petitioner has challenged the findings of the learned Single Judge holding the order of supersession to be illegal, on the assertion that it has been so done based on an order issued in a subsequent surcharge proceedings, which, according to him, has no relevance to the proceedings leading to the supersession and also on the additional contention that the elections now allowed to be continued on the basis of the election notification of the year 2012 is improper and unconstitutional.
9. We have heard Sri.V.G.Arun, learned counsel for the appellant, Sri.Gilbert George Correya, learned counsel for respondents 1 to 5, Sri.O.V.Maniprasad, learned counsel for the seventh respondent and the learned Government Pleader for respondents 6 and 8.
10. It is certain that that the Managing Committee of the Society, in which respondents 1 to 5 were members, was WA2444/17 6 superseded by Exhibit P4 order. In that order certain specific instances of misfeasance and misconduct against the members are seen adverted to. After that order was issued and the Committee thus superseded, action under Section 68 of the Act, to impose surcharge on the members of the committee, including respondents 1 to 5, were initiated by the competent authority, which was initially subjected to a challenge before this Court in a writ petition culminating in a judgment, wherein the statutory authority was directed to reconsider the issues relating to imposition of surcharge and to pass fresh orders. This apparently led to another order being issued by the Joint Registrar (General) of Co-operative Societies, Ernakulam dated 20.09.2017, wherein it was found that the alleged irregularities referred to in Exhibit P4 against the committee in charge at the relevant time had been ex post facto ratified by two other orders of of the Joint Registrar (General) and the Registrar of Co-operative Societies dated 21.02.2017 and 29.05.2017 respectively. On such basis the proceedings for imposition of surcharge, against the members of the erstwhile committee, including respondents 1 to 5, under Section 68 of the Act was dropped.
WA2444/17 7
11. Noticing this order, which appears to have been placed on record in one of the connected writ petitions, the learned Single Judge concluded that the substratum of the action under Section 32 of the Act, which concluded in Exhibit P4 order against the committee in charge at the relevant time, has now been completely eroded and that no purpose would be served in disqualifying respondents 1 to 5, for either offering their candidature or otherwise participating in the ensuing elections. In effect, Exhibit P4 order, earlier issued by the Registrar of Co-operative Societies under Section 32 of the Act, has been set aside expressly finding that the subsequent orders ratifying all allegations of misconduct by the members of the erstwhile committee would take away the basis on which that order was issued.
12. Sri.V.G.Arun, the learned counsel for the appellant submits that the findings in the impugned judgment that the substratum of the action under Section 32 has been eroded is forensically untenable because, the process leading to the order, which was relied upon by the learned Single Judge, was not one which was investigating the action of the Registrar under Section 32 of the Act but was one concerning the action WA2444/17 8 subsequently proposed under Section 68 of the Act to impose surcharge. According to him, the order under Section 68 could not have been used or accepted to set aside an order under Section 32, which had already attained finality.
13. We do find some force in the above submissions of the learned counsel for the appellant. It is beyond doubt that the operational ambit of the provisions of Section 32 and that of Section 68 of the Act are completely different and independent of each other. Section 32 of the Act provides that the Registrar is vested with the power to remove the Committee if he is satisfied that the said Committee (a) persistently makes default or is negligent in the performance of the duties imposed on it by the Act or the rules or bye-laws or (b) does anything which is prejudicial to the interests of the society or (c) wilfully disobeys or fails to comply with any lawful order or direction issued under the Act or the rules or
(d) makes any payment contrary to the Act or the rules or the bye-laws or (e) causes any loss or damage to the assets of the society, by breach of trust of wilful negligence or (f) misappropriates amounts owned by the society and (g) destroys or tampers with the records or causes the destruction WA2444/17 9 of the records to cover up any misconduct or malpractice. When it comes to the provisions of Section 68 of the Act, it is prescribed that action can be taken against any person who is or was entrusted with the organisation or management of such society or who is or has at any time been an officer or an employee of the society if he/she (a) has made any payment contrary to the Act and the rules or the bye-laws, (b) has caused to any loss or damage in the assets of the society by breach of trust or wilful negligence or mismanagement, (c) has misappropriated or fraudulently retained any money or other property belonging to such society and (d) has destroyed or caused the destruction of the records.
14. A comparative survey of the above two provisions makes it irrefragible that surcharge proceedings can be initiated only with respect to fiscal indiscipline or mismanagement causing loss to the assets of the society or if the delinquent has illegally retained any money belonging to the society or has destroyed the records with intend to cover such misfeasance. The provisions of Section 32 on the other hand does not confine itself to fiscal mismanagement or indiscipline alone, though they are also included in the criterion leading to WA2444/17 10 such action and the Registrar is statutorily entitled , after following due procedure, to order supersession, if he finds persistent negligence and default in performance of the duties or if any act is found proved prejudicial to the interests of the society or if the committee wilfully disobeys or fails to comply with any lawful order. It is, therefore, leculent that the powers and considerations under Section 32 is of a much wider compass than that would be involved in a surcharge proceedings, even though a few of the criterion, namely those relating to fiscal management or indiscipline, are common in both. In such view of the matter, no doubt, it might appear that setting aside an order under Section 32 because of a subsequent order under Section 68 of the Act would become incongruous.
15. The above being said, however, we are also cognizant of the fact that the order issued by the Joint Registrar in the Section 68 surcharge proceedings refers to two other orders, as we have already mentioned above, one being issued by himself on 21.02.2017 and the other by the Registrar of Co-operative Societies dated 29.05.2017, whereby most of the complaints adverted to and found established in Exhibit P4 have been virtually ratified post factum. The WA2444/17 11 learned Single Judge, therefore, took the view that the substratum of Exhibit P4 order has been now removed.
16. Even though on a highly technical analysis, the submissions of Sri.V.G.Arun may commend some attention because the proceedings under Section 32 of the Act for supersession of a committee and that under Section 68 of the Act, to impose surcharge on members or other responsible persons of a Society, are independent and separate proceedings, one being unconnected to the other, in the facts of this case the position becomes slightly different. This is because, in the peculiar circumstances presented in this case, when orders were issued to terminate proceedings under Section 68 of the Act, two earlier orders issued by the Joint Registrar (General) and the Registrar of Co-operative Societies, were adverted to, which had offered ex post facto ratification to all allegations against the erstwhile committee and its members, including respondents 1 to 5. It is specifically noticing this, that action to impose surcharge was dropped. Hence even though technically and on strict application, the order in the Section 68 proceedings could not have been used to efface the act of supersession ordered WA2444/17 12 through Exhibit P4, the practical effect of the two orders above mentioned, ratifying the allegations of misconduct on the erstwhile committee and its members, would obliterate the foundations of the action that led to its supersession. Viewed from that perspective, the conclusions now arrived at by the learned Single Judge would warrant no interference.
17. When we made our view as above clear, Sri.V.G.Arun, the learned counsel for the appellant predicates that by the impugned judgment, the learned Single Judge had virtually impeded his client's rights against the two orders which have ratified the illegalities referred to in Exhibit P4 order. This submission, in our considered view, is one which merits our attention because it is certainly available to the appellant to challenge the order of the Joint Registrar (General) dated 20.09.2017 in the Section 68 proceedings as also the two orders of the Joint Registrar (General) dated 21.02.2017 and that of the Registrar of Co-operative Societies dated 29.05.2017, ratifying post factum the alleged illegalities that were found against the committee in Exhibit P4 order. We are certain that the rights of the appellant will require to be left open and we declare that nothing contained in this WA2444/17 13 judgment of the learned Single Judge, impugned in this appeal, will stand in the way of the appellant challenging these orders, if he is so desirous and if such challenge eventually end up in conclusions and decisions against respondents 1 to 5, obviously, the rigor of Exhibit P4 supersession order would stand automatically restored.
18. However, as matters now available, since the hypostasis of Exhibit P4 order stands obliterated on account of the two orders, referred to by the Joint Registrar (General) in his final order in the Section 68 proceedings, we deem it appropriate that we allow the elections to continue subject to the liberty of the appellant as aforementioned.
19. That being said, we are also certainly of the view of that the elections notified through the earlier notification dated 26.07.2012, whereby it was originally scheduled on 09.09.2012, cannot be allowed to continue as if nothing happened in the intervening five years, as has been now permitted by the learned Single Judge. We say this because for any meaningful and purposeful election, it is necessary that the proceedings prescribed under Rule 35A of the Kerala Co-operative Societies Rules is allowed to be first carried on WA2444/17 14 by the Returning Officer. The notification, which is now allowed by the learned Single Judge to lead to the election, was published as early as on 26.07.2012 and we do not know whether any proceedings under Rule 35A has been completed by the Electoral Officer at any time prior. We are told by the learned counsel for the respondents that some such procedure was adopted and completed by the Electoral Officer as early in the year 2012. We do not think that this is sufficient and we are certainly of the view that going by the rigor of Rule 35A, it is the duty of the Electoral Officer to publish a preliminary voters list in Form 34 in the Notice Board of the Head Office and Branches of the Society and call for objections to it, if any. This provision cannot be, in any manner or for any reason, be allowed to be jettisoned or evaded and we are firm in our view that since the elections are to go on as per the notification published on 26.07.2012, the Electoral Officer is enjoined to act in accordance with the imperative provisions of Rule 35A before the date of election is declared.
20. We, therefore, direct the Electoral Officer to publish a preliminary voters list in Form No.34 in the notice board of the Society and call for objections against such list in WA2444/17 15 terms of law and thereafter conclude the proceedings under Rule 35A by following due process and only then, after concluding such procedure, notify the date of election on an appropriate and convenient date.
21. We are told by the learned counsel for the parties that the elections are now scheduled on 17.12.2017, which is also evident from Annexure-I appended to this appeal. Since it is not practically possible to conduct elections on that date, in view of our above directions, we order the Electoral Officer to notify a fresh date for election after completing the exercise ordered herein.
22. We are aware that the appellant has filed this appeal only against one of the writ petitions involved in the judgment impugned but that would be of no consequence with respect to the directions that we have given above because the conduct of the election can only be done in terms of law and after complying with the implicit statutory requirements. We are not interdicting the elections in any manner but we are only saying that the elections be conducted in absolute adherence to the provisions in the Act and Rules to ensure a proper electoral process which is free and fair. It is for this WA2444/17 16 purpose that we have directed the Electoral Officer to act in terms of Rule 35A of the Rules as above.
Subject to the above directions and observations, we dispose of this appeal affirming the other directions contained in the impugned judgment of the learned Single Judge.
P.R.Ramachandra Menon, Judge Devan Ramachandran, Judge tkv