Karnataka High Court
Addagal Vssn Co-Operative Society vs State Of Karnataka on 25 November, 2013
Author: B.S.Patil
Bench: B.S.Patil
WP.50081/2013
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 25TH DAY OF NOVEMBER, 2013
BEFORE
THE HON'BLE MR.JUSTICE B.S.PATIL
W.P.No.50081/2013 (CS-EL/M)
BETWEEN
ADDAGAL VSSN CO-OPERATIVE SOCIETY
MANDIKAL HOBLI
CHICKBALLAPUR TALUK & DISTRICT
REP. BY ITS AUTHORIZED MEMBER
G.B. SHRIRAM REDDY. ... PETITIONER
(By Sri NANJUNDA REDDY, SR.COUNSEL
FOR SRI JAGADISH J R, ADV.)
AND
1. STATE OF KARNATAKA
DEPARTMENT OF COOPERATION
M.S. BUILDING
BANGALORE
REP. BY ITS PRINCIPAL SECRETARY
2. STATE ELECTION COMMISSION FOR CO-OPERATION
KARNATAKA STATE COOPERATIVE HOUSING FEDERATION
2ND FLOOR, KARIYAPPA ROAD
BASAVANAGUDI
BANGALORE
3. DEPUTY COMMISSIONER / ELECTION OFFICER
APPOINTED FOR KOLAR -CHIKKABALAPR DCC BANK
KOLAR
4. KOLAR - CHIKKABALAPUR DISTRICT CENTRAL
COOPERATIVE
KOLAR DISTRICT
KOLAR
REP. BY ITS MANAGING DIRECTOR
WP.50081/2013
2
5. AVALAGURKI VSSN SOCIETY
AVALAGURKI VILLAGE
CHIKKABALAPUR TQ
CHIKKABALPUR DIST
BY ITS SECRETARY
6. MANDIKAL VSSN SOCIETY
MANDIKAL VILLAGE
CHIKKABALLAPUR TQ
CHIKKABALPUR DIST
BY ITS SECRETARY
7. ASSISTANT COMMISSIONER / RETURNING OFFICER
APPOINTED FOR KOLAR - CHIKKABALAPR DCC BANK
KOLAR. ... RESPONDENTS
(By Sri.K.A.ARIGA, AGA FOR R1-3 & 7,
Sri M.JAYAPRAKASH REDDY, ADV. FOR R5 & 6
Sri KALLESHAPPA K.S.A, ADV. FOR R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE
RESPONDENT NO.7 NOT TO ALLOW OR PERMIT THE
RESPONDENTS NO.5 & 6 TO PARTICIPATE, COTNEST, VOTE IN
THE ELECTION SCHEDULE TO BE HELD ON 15.11.2013 TO THE
RESPONDENT NO.4 BANK AND TO DELETE THEIR NAMES FROM
THE FINAL VOTERS LIST.
THIS PETITION COMING ON FOR ORDERS THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
1. Petitioner is a Co-operative Society duly registered under the provisions of the Karnataka Co-operative Societies Act, 1959 (for short, 'the Act'). It has approached this Court seeking a direction against the 7th respondent - Returning Officer appointed for conducting election to the 4th respondent - Kolar- WP.50081/2013 3 Chikkaballapur District Central Co-operative Bank (for short, 'the DCC Bank'). Respondents 5 & 6 are also Co-operative Societies catering to the needs of farmers in their respective jurisdiction as is the case of the petitioner.
2. The elections to the 4th respondent - DCC Bank was scheduled to be held on 15.11.2013 as per the calendar of events published on 27.09.2013. The grievance made by the petitioner before this Court is that although respondents 5 & 6
- Societies were not eligible to participate in the election to elect the members of the Board of the DCC Bank, the 7th respondent
- Returning Officer had illegally accepted the nominations. It is urged in the writ petition that as per Section 20(2)(b)(iv) of the Act, such of the Societies whose principal object is to advance loans and whose percentage of recovery is less than fifty per cent of the total demand for the co-operative year immediately preceding the co-operative year during which the meeting is held and which has failed to pass on to the financing bank or the credit agency, as the case may be, to which it is indebted, fifty per cent of the demand of the society, if the demand of the society is less than the demand of the financing bank or credit agency or the actual demand of the financing bank or credit WP.50081/2013 4 agency, if the demand of the society is more than the demand of the financing bank or credit agency, not later than 15 days of the close of the said co-operative year, then the said Society shall not have the right to vote at a general meeting or at an election of the members of the Board of the Co-operative Society in which they are members.
3. It is pointed out by the learned Senior Counsel Mr. Nanjunda Reddy appearing for the petitioner that as is evident from Annexure-C1 and C2 statements issued by the DCC Bank the recovery of the demand and the amount passed on to the financing bank for the co-operative year immediately preceding the co-operative year during which the election is scheduled to be held is 0%. Despite the same, only because as on 30.10.2013 certain amount was paid by the Society to the Bank, the Bank has proceeded to certify as per Annexure-C1 and C2 that there was compliance of the provisions contained under Section 20(2)(b)(iv) of the Act. He, therefore, contends that there is apparent violation of the eligibility criteria prescribed under the provisions, as the DCC Bank has incorrectly and illegally certified respondents 5 & 6 societies as eligible though they did not recover the amount and pass it on WP.50081/2013 5 to the financing bank on or before 15.04.2013. He, therefore, contends that the action of the Returning Officer who has blindly accepted the certificate issued by the DCC Bank and has permitted respondents 5 & 6 to participate in the election process by including their names in the voters list is illegal.
4. Mr. Kalleshappa, learned Counsel appearing for respondent No.4 - DCC Bank and Mr. Jayaprakash Reddy, learned Counsel appearing for respondents 5 & 6 - societies, support the action of the Returning Officer in including the names of respondents 5 & 6 - societies in the voters list. They invite the attention of the Court to the explanation appended to Section 20(2) of the Act to contend that if indeed respondents 5 & 6 had defaulted in effecting such recovery of 50% of the amount and had failed to pass on the same to the financing bank, then a notice of 30 days ought to have been given by the financing bank calling upon the societies to make good the amount. If the societies had failed to remit the amount despite such notice, atleast 15 days before the date of general meeting or the date of election of the members of the Board then such defaulting members could be debarred from participating in the election process.
WP.50081/20136
5. Learned Counsel for the respondents 5 & 6 - societies submits that such a notice has not been issued and at any rate, as respondents 5 & 6 have remitted the amount well before the date of election i.e., on 30.10.2013, they have to be held eligible to participate in the election process and have been indeed rightly permitted to participate in the election process by the Returning Officer. Learned Counsel further urges that this is a case where the petitioner has to raise a dispute regarding the validity of the election in case it is aggrieved, as this Court will not interfere in such matters when there is an alternative remedy.
6. Learned Additional Government Advocate submits on the merits of the grievance made by the petitioners stating that the explanation appended to Section 20(2) of the Act has no application to the provisions contained under Section 20(2)(b)(iv) of the Act. He supports the contention of Sri Nanjundareddy, the Senior Counsel for the petitioner. He, however, contends that even this aspect can also be effectively gone into in the appropriately instituted election dispute. WP.50081/2013 7
7. I have heard the learned Counsel for the parties and considered the respective contentions in the light of the provisions contained under Section 20 of the Act.
8. It is necessary to notice here that on 13.11.2013, this Court has granted an interim order in the following terms:
"Prima facie, I find from the statement issued by the DCC Bank, Kolar - respondent No.4 herein produced at Annexures-C1 and C2 that respondents 5 and 6 - Primary Agricultural Credit Co-operative Societies have not recovered the required amount as provided under Section 20(2)(iv) of the Co-operative Societies Act, 1959, inasmuch as the percentage of recovery for the co- operative year immediately preceding the co-operative year during which the elections are being held is shown to be 0%. Elections are scheduled to be held on 15.11.2013. As it is not advisable to interrupt the election process, keeping in mind the ends of justice and the prima facie case made out by the petitioner, there shall be an interim direction to the 7th respondent - Returning Officer to ensure that the votes cast by respondents 5 and 6 are preserved separately in a sealed box and the result of the election of Chickballapur Taluk Primary Agricultural Credit Co-operative Society Constituency shall not be announced till further orders of this Court."WP.50081/2013 8
9. Subsequently, on 15.11.2013, elections have been conducted. The votes cast by the delegates of respondents 5 & 6
- societies have been preserved separately in a sealed box. The results of the elections has not been announced. As a result of this, it will have its adverse effect on the elections to be conducted to the post of President and Vice-President of the Federal Society viz., the DCC Bank, which is scheduled on 30.11.2013.
10. Though this matter is listed for orders on IA-1/2013 filed by respondents 5 & 6 - societies seeking to vacate the interim order, with the consent of the learned Counsel for both parties, the matter is heard on merits.
11. The only controversy raised in the writ petition pertains to the understanding of the scope of Section 20(2)(b)(iv) of the Act and the explanation appended thereto. It is necessary to extract the entire provision contained in Section 20 for the sake of better appreciation of the controversy raised. It reads as under:
"20. Votes of members.- (1) No member, no representative or no delegate of a society shall have more WP.50081/2013 9 than one vote in the general meeting or in the election of the members of the board of the co-operative society:
(2) The following shall not have the right to vote at a general meeting or an election of the members of the board of the co-operative society in which they are members, namely.-
(a) a nominal or associate member;
(a-i) an individual member who is a defaulter;
(a-ii) members admitted as per clauses (d), (e), (f) and (g) of sub-section (1) of Section 16, who are defaulters;
(a-iii) a person, who has become member of a society not later than twelve months prior to the date of such meeting:
Provided that nothing in this clause shall apply to member of a society participating in the first general body meeting of such society held immediately after its resignation.
(a-iv) a member, a representative or a delegate who has failed to attend three general meetings out of the last five general meetings;
(a-v) a member or a representative who has failed to utilize such minimum services or facilities in a co- operative year as may be specified in the bye-laws for three consecutive co-operative years;WP.50081/2013 10
(b) a co-operative society.-
(i) the board of which stands superseded or to which a special officer is appointed under Section 31 of the Act.
(ii) which is ordered to be wound up under
Section 72;
(iii) which has not commenced working or has ceased to work;
(iv) whose principal object is to advance loans and whose percentage of recovery is less than fifty per cent of the total demand for the co-
operative year immediately preceding the co- operative year during which the meeting is held and which has failed to pass on to the financing bank or the credit agency, as the case may be, to which it is indebted.-
(a) fifty per cent of the demand of the society, if the demand of the society is less than the demand of the financing bank or credit agency; or
(b) the actual demand of the financing bank or credit agency, if the demand of the society is more than the demand of the financing bank or credit agency, not later than fifteen days of the close of the said co-operative year.
(v) other than the society referred to in sub-
clause (iv), which is a defaulter.
WP.50081/201311 Explanation.- A member shall be deemed to be a defaulter if he has failed to pay the arrears of any kind due by him to the society as borrower or has failed to pay any other amount due by him to the society or in any other capacity, at least fifteen days before the date of the general meeting or the date of election of the members of the board after a notice of not less than thirty days in this behalf has been issued to him.
12. As can be seen from Sub-section (2) of Section 20 of the Act, it deals with persons or Societies who will not have the right to vote at a general meeting or at an election of the members of the Board of Co-operative Society in which they are members. An individual member who is a defaulter, members admitted as per clauses (d), (e), (f) and (g) of sub-section (1) of Section 16 who are defaulters and other categories of persons enumerated in sub-clauses (a-iii) to (a-v) are held not entitled to vote in the election of the members of the Board of the Co- operative Society. Clause (b) to sub-section (2) of Section 20 of the Act imposes similar ineligibility to a co-operative society to participate in the election process. We are concerned with a co- operative society which is enumerated in sub-clause (iv) of clause (b) of sub-section (2) of Section 20 of the Act as the respondents 5 & 6 societies fall within this category of societies. Their principal object is to advance loans. It is not in dispute WP.50081/2013 12 that for the relevant co-operative year immediately preceding the co-operative year during which the meeting is held for electing the members, the percentage of recovery is 0%, if calculated, up to 15.04.2013. Sub-clause (iv) of clause (b) of sub-section (2) of Section 20 of the Act enacts that such of the societies whose principal object is to advance loan and who have failed to recover atleast 50% of the total demand for the co-operative year immediately preceding the co-operative year during which the meeting is held and pass it on to the financing bank within the period not later than 15 days of the close of said co-operative year, shall be ineligible to participate in the election process.
13. The defence of the respondent - societies is that though they have not recovered the amount on or before 15 days of the close of co-operative year 2013-14 i.e. to say on or before 15.04.2013, by virtue of the explanation found in sub-section (2) of Section 20 of the Act, ineligibility would be attracted only if demand had been made by the financing bank namely the DCC Bank calling upon respondents 5 & 6 Societies to remit the amount by giving them 30 days time and despite such WP.50081/2013 13 notice, if the Society had failed to remit the amount within 15 days before the date of election.
14. This contention of respondents 5 & 6 is wholly misconceived and untenable. The explanation appended to sub- section (2) of Section 20 does not govern the provisions contained in sub-clause (iv) of clause (b) of sub-section (2) of Section 20. Sub-clause (iv) does not refer to any defaulter. It only refers to the requirement of recovery of 50% of the total demand for the co-operative year immediately preceding the co- operative year during which the election was held. It specifically imposes the time frame within which such recovery has to be made and to be passed on to the financing bank requiring that the same has to be not later than fifteen days of the close of the said co-operative year.
15. If the contentions of respondents 5 & 6 - societies is accepted, the expression 'not later than 15 days of the close of said co-operative year' would render redundant. This Court cannot render the operation of any provision of the Act unworkable or redundant. It is the cardinal principle of the interpretation of statutes that the provisions of an enactment have to be interpreted as they are and in the absence of any WP.50081/2013 14 ambiguity in the provision, true and full meaning has to be given to the words used therein. There is no ambiguity in the provisions contained under sub-clause (iv) of clause (b) of sub- section (2) of Section 20 referred to supra. It is evident from the explanation appended to this clause that it refers to the defaulters named in sub-section (2) of Section 20 and not to the Societies which advance loans and whose percentage of recovery is less than 50% as stipulated in sub-clause (iv) of clause (b) of sub-section (2) of Section (20). Therefore, the authorities, particularly the 7th respondent - Returning Officer and the DCC Bank - 4th respondent herein were in gross error in including the name of respondents 5 & 6 in the voters list, although they were apparently ineligible to participate in the election process. They are included in the voters list on the ground that they had remitted the amount on 30.10.2013, though as on the prescribed date i.e. 15.04.2013, their remittance to the financing bank was 0%. Such belated remittance will not make respondents 5 & 6 eligible to participate in the election process.
16. Insofar as the contentions urged by the counsel for respondents 5 & 6 that the question raised in this petition has WP.50081/2013 15 to be urged by raising an election dispute and this Court should not interfere at this stage, it has to be seen that when there is no disputed question to be examined with regard to the factual aspect and when the matter involves interpretation and understanding of the scope and effect of the provisions contained in sub-clause (iv) of clause (b) of sub-section (2) of Section 20 and the explanation appended thereto, it is neither appropriate, nor just to permit respondents 5 & 6 to participate in the election process by violating the express provision of law and ask the petitioner to raise an election dispute in this regard. In fact, precisely for this reason, an interim order has been granted directing the Returning Officer to put the votes cast by the respondents 5 & 6 - Societies separately in a sealed box and not to announce the result of the election. Now that the controversy regarding the understanding of the provision is resolved, the consequence has to follow. Since there is no other question to be adjudicated by relegating the parties to the Election Tribunal, this writ petition deserves to be allowed.
17. In the result, this writ petition is allowed. Respondents 5 & 6 - Societies being not eligible to participate in the election process in terms of the provisions contained in sub-clause (iv) WP.50081/2013 16 of clause (b) of sub-section (2) of Section 20 of the Act, the votes cast by them which are put in sealed box separately as per the interim order granted by this Court shall not be counted for the purpose of declaring the result of the election held on 15.11.2013 to the DCC Bank. As the election for the post of President and Vice-President to the Federal Society viz., the DCC Bank is scheduled to be held on 30.11.2013, the result of the elections held on 15.11.2013 shall be announced forthwith.
Sd/-
JUDGE PKS