Andhra HC (Pre-Telangana)
Gottipati Ramarao And Ors. vs Special Cadre Deputy Registrar Of ... on 3 October, 1991
Equivalent citations: 1991(1)ALT532
Author: P. Venkatarama Reddi
Bench: P. Venkatarama Reddi
ORDER P. Venkatarama Reddi, J.
1. The petitioners herein are challenging the proceedings dated 23-8-1991 issued by the first respondent (Special Cadre Deputy Registrar of Co-operative Societies, A.P.D.D.C.F., Hyderabad) appointing five persons as Persons-in-charge to manage the affairs of the Appapuram Milk Producers Co-operative Society till 11-11-1991 or till an elected committee assumes charge or subject to modified orders that may be issued, whichever is earlier. By the said proceedings respondents No. 2 to 6 were appointed as Persons-in-charge. Amongst them the 6th respondent is the Supervisor of Milk Producers Co-operative Union Limited, Vadlamoodi. The petitioners have no objection for the inclusion of the fifth respondent. The petitioners are seeking for a declaration that they along with fifth respondent shall be allowed to act as persons-in-charge of the Appapuram Milk Producers Co-operative Society Limited.
2. The petitioners and the fifth respondent were the elected members of the Managing Committee of Appapuram Milk Producers Co-operative Society Limited (hereinafter referred to as 'the Society'). Their term of office had expired on 10-11-1988. They were being appointed from time to time as persons-in-charge to manage the affairs of the society as there was no election to the society from that date. However, on 18-5-1991, the sixth respondent was appointed as person-in-charge to look after the management of the society till 5-8-1991. But the fifth respondent actually assumed the charge of office on 5-8-'91 as evident from a letter addressed by him to the first petitioner asking him to handover the records on 12-8-1991. While so, the first respondent, on the recommendation made by the General Manager of the Guntur District Milk Producers Co-operative Union Limited, again appointed, by his order dated 12-8-1991, the petitioners and the fifth respondent as persons-in-charge to manage the affairs of the society for a period of three months from the date of the order or till an elected committee assumes charge or subject to the modified orders that may be issued by him. Within a few days thereafter i.e., on 23-8-1991, the 1st respondent cancelled the order dated 12-3-1991 and appointed Respondents 2 to 6 as persons-in charge.
3. Let us see the back ground in which this order came to be passed by the first respondent. A representation addressed to the Hon'ble Minister for Animal Husbandry with a copy marked to the first respondent was submitted by the respondents Nos. 2 to 4 and two others. This was received by the first respondent on 22-8-1991. In that representation, it was stated that there are a number of allegations of abuse of power and illegal activities against the first petitioner Sri G. Rama Rao and that the society must be taken out of the clutches of the said Rama Rao to ensure proper administration of the society. No specific allegations have been mentioned. The very next day, the 1st respondent passed the impugned order dated 23-8-1991 appointing the first three amongst the five who signed the representation, as persons-in-charge. The 5th respondent who was also a member of the previous committee and the sixth respondent who is the supervisor of the Milk Producers Co-operative Union were added to that list. Admittedly no notice or an opportunity of making representation was given to the Petitioners whose term was prematurely put to an end to. No enquiry could have been made or could be caused to be made by the 1st respondent sitting at Hyderabad, after receipt of the petition from respondents Nos. 2 to 4 and before the impugned order was passed. At any rate, there is nothing on record to show that an enquiry or verification was made. There is no averment made in the counter to that effect.
4. I will now refer to the reasons spelt out in the impugned order dated 23-8-1991 and in the counter-affidavit filed by the first respondent. The first respondent states that it had come to his notice that the ex-elected committee did not manage the affairs of the society during their tenure of three years properly. Except this bald allegation there is not even a brief reference to the irregularities, if any committed by the petitioners during their tenure of three years or thereafter. Between 12th August and 23rd August, 1991, there was no material before the first respondent excepting the petition of respondents No. 2 to 4 to form a bonafide opinion that the petitioners, as members of the former elected committee, indulged in acts of mis-management of the society. As already noticed, even the petition submitted by Respondents 2 to 4 does not disclose any particular acts of mis-conduct or irregularities.
5. The second reason stated is that it was brought to the notice of the 1st respondent that the custody of all the records of the society were with the ex-president (first Petitioner), whereas the Paid-Secretary should have the custody of the records of the society as per the relevant bye-law. Here again, there is no material on record to show that the first petitioner was having unlawful custody of the records. It is not clear as to whether the first respondent is finding fault with the petitioner for not handing over the records when his extended term as person-in-charge was over or he was referring to the period during which the first petitioner was the Chairman of the committee of Persons-in-charge. Perhaps the only basis for the comment of the first petitioner is the report of the General Manager of Guntur Milk Producers Co-operative Union Limited, dated 8-7-1991. In the said report while recommending the appointment of the petitioners and certain others as persons-in-charge referred to the fact that "Ex-Chairman P.I.C. Committee failed to handover the records to the Election Officer" and hence the sixth respondent was appointed as person-in-charge on 18-5-1991. In the very same report the General-Manager slated that the "Ex-Chairman P.I.C. Committee has received the records from the Election Officer" and that he is ready to hand over the records to the Election Officer for the ensuring elections. He, therefore, suggested the appointment of the petitioners and others as persons-in-charge. Thus even on 12-8-1991 when the first respondent appointed the petitioners and fifth respondent as persons-in-charge, this information was available to him and he thought it fit to appoint the petitioners and the fifth respondent as persons-in-charge. So, the allegation of the first petitioner having the custody of the records of the society was obviously not considered to be an impediment for reappointing the petitioners as persons-in-charge. In so far as the handing over the records to the official person-in-charge appointed by the first respondent on 18-5-1991 is concerned, it is clear from the communication addressed to the first petitioner by the said person-in-charge, (6th respondent), that the latter took charge only on 5-8-1991. The first petitioner was asked to handover the records and other assets of the society on 12-8-1991. On that very day, as already noticed, the petitioners were appointed as persons-in-charge by an order of the first respondent. Therefore, it appears that the allegation of the first- petitioner keeping custody of the records vague as it is, is only pressed into service to suit the convenience of the first respondent
6. The third reason given is that there are factions among the members of the society and it is felt necessary to give representation to all the groups in the management of the society. The ideal professed by the first respondent is no doubt a laudable one. But the big question is whether the first respondent really accomplished that objective. The record discloses the fact that on a copy of the petition received from respondents 2 to 4 and two others, the first respondent thought it fit to appoint the first three who are the signatories to that petition, adding one more apparently belonging to the petitioner's group i.e., the fifth respondent. The fifth person appointed is an official who is the Supervisor of the Guntur Milk Producers Co-operative Union and who was earlier appointed as person-in-charge for a spell of three months. Having regard to the composition of the committee of person-in-charge appointed by the impugned order dated 23-8-1991, it is difficult to believe that the first respondent wanted to give abroad-based representation to all sections or factions amongst the members of the society. There is also nothing to show that the first respondent made or caused to be made any enquiry to ascertain as to how best different groups could be accommodated before reorganising the committee of persons-in-charge. Virtually, what the first respondent has done is to induct one group of members to the exclusion of the other group to act as persons-in-charge. The professed impartiality of the first respondent in re-organising the committee does not inspire much of confidence in an objective mind. The last reason given in he impugned order is that according to the judgment of the Supreme Court and of this Court, the Ex-Committee has no right to continue on the expiry of its 'elected term' and that the State and its agencies shall be given free hand to appoint whomsoever they deem fit as persons-in-charge. Here again, the reasoning of the first respondent is fallacious. While no exception can be taken to the principle that members of the Ex-Managing Committee has no right as such to be appointed as persons-in-charge after the expiry of their term- in fact this legal position is made clear by Section 3 of the A.P. Co-operative Societies (Amendment) Act of 1990, the Supreme Court or this Court never laid down any embargo against the appointment of the former members of the Managing Committee as persons-in-charge. On the other hand, it was made clear by the Division Bench of this Court in Writ Petition No. 8783 of 1990, etc., that instead of appointing the officials as persons-in-charge, the members of the former Managing Committee who acquitted themselves well and against whom there are no allegations worth mentioning should be preferred. The Supreme Court in its judgment in Special Leave Petition (C) No. 4324, 4408 of 1991, dated 8-4-1991 requested the High Court " to bring all the stay orders in line with their judgment in W.P.No. 8783 of 1990 and leave the day-to-day affairs of Co-operative Societies in the hands of persons chosen by the State in terms thereof till the elections are held and new committees appear on the scene to take over".
Thus, the Supreme Court, in a way, affirmed the principle enunciated by this Court. Hence, it is not open to the first respondent to contend that he was required to modify the order dated 12-8-1991 to fall in line with the Supreme Court's or High Court's Judgment. Neither the Supreme Court nor this Court has permitted the first respondent to displace the persons-in-charge appointed by him at his whim and caprice. It is well settled that a power conferred on a statutory functionary or the executive, should be exercised bonafide for the purpose for which such power was conferred on him and that arbitrariness in the exercise of even a discretionary power gives rise to the violation of Article 14 of the Constitution. Section 32 (7) (a) of the A.P. Co-operative Societies Act confers the power on the Registrar to appoint a person or persons to manage the affairs of the society for a specified period, where it is not possible to call a general meeting for the purpose of conducting the election. In exercise of that power, the petitioners were appointed as persons-in-charge for a term of specified duration, such appointment cannot be reversed arbitrarily or on irrelevant grounds. Arbitrariness in the exercise of power strikes at the root of the impugned order. The exercise of power under Section 32 (7) (a) by the Registrar is conditioned by built-in- limitations and it-must be so exercised as to advance the purpose of the Act. This was the ratio decidendi of the Division Bench ruling of this Court in the afore-mentioned case. If the Registrar had exercised the power without verification and consideration of relevant facts and without proper application of mind, the resultant order is liable to be struck down. Such is the situation in the present case. As soon as a petition signed by respondents 2 to 4 was submitted to the 1st respondent making omnibus allegations against the first petitioner, a readily obliging first respondent reverses his earlier order passed a few days back without making or directing any enquiry and without putting the petitioners on notice. If the first respondent wanted to change the Managing Committee on some facts which have come to his light subsequent to the appointment of petitioners as persons-in-charge, the least that could have been done by him is to cause an enquiry to be made into such facts or to give an opportunity of making a representation to the petitioners who are adversely affected by the proposed action. As this has not been done and the impugned order is nothing but an instance of arbitrary exercise of power, the impugned order dated 23-8-1991 is not legally sustainable.
7. The learned Government Pleader for Co-operation Mr. Ramakrishna Raju and the learned counsel for respondents 2 to 4, Mr. Nageswara Rao, Krushi Babu have argued that certain defects were pointed out in the audit reports of the society pertaining to the years 1987 to 1990 when the petitioners were managing the affairs of the society and therefore the learned counsel submits that the 1st respondent is justified in passing the impugned order. There is no merit in this argument. The defects pointed out in the audit reports were obviously not even at the back of the mind of the 1st respondent. Neither in the impugned order which set out various reasons for passing the order or in the counter, a reference has been made to these audit reports. It cannot be presumed that the 1st respondent suddenly became aware of these past audit reports within a fortnight after the impugned order was passed. Such is not the case set up in the counter.
8. I am not for a moment expressing the View that the petitioners acquitted themselves creditably during their tenure of office or that they did not indulge in any malpractices or irregularities. I am only finding fault with the manner in which the decision has been taken by the 1st respondent. As pointed out by Venkatachalaiah, J., speaking for the Supreme Court in State of U.P. v. Dharmander Prasad Singh, , judicial review under Article 226 "is directed not against the decision but is confined to the examination of the decision making process". The Supreme Court observed "When the issues raised in judicial review is whether a decision is vitiated by taking into account irrelevant or neglecting to take relevant factors or is so manifestly unreasonable that no reasonable authority, entrusted with the power in question could reasonably have made such a decision, the judicial review of the decision making process includes examination, as a matter of law, of the relevance of the factors".
9. In view of the foregoing discussion, I quash the impugned order of the 1st respondent dated 23-8-1991. As a result of quashing the impugned order, the persons-in-charge appointed by order of the 1st respondent dated 12-8-1991 will continue in office till the expiry of the period stipulated in the said order. If there are any compelling reasons or circumstances justifying displacement of the petitioners in the meanwhile, it is open to the Registrar of Co-operative Societies, Andhra Pradesh (not the 1st respondent), designated as such by Section 3 of the A.P. Co-operative Societies Act to take action according to law in the light of this Judgment. So also, I direct that on the expiry of the term of the petitioners as prescribed in the order dated 12-8-1991, the Registrar of Co-operative Societies shall take a decision whether or not the petitioners shall be continued and whether different persons-in-charge shall be appointed, if the elections do not take place by that time. However, in doing so, the Registrar will no doubt be guided by the principles laid down by the Division Bench of this Court in W.P.No. 8783 of 1990, etc.
10. The writ petition is allowed with costs as indicated above. Advocate's fee: Rs. 250/-.