Andhra Pradesh High Court - Amravati
Geddam Kanna Babu, vs The State Of Andhra Pradesh, on 18 September, 2019
HON'BLE SRI JUSTICE D.V.S.S.SOMAYAJULU
W.P.No.13203 of 2019
ORDER :
This writ petition is filed seeking a writ of Mandamus declaring the action of respondent No.1 in exempting all the Cooperative Credit Societies from the provisions of Sections 115-D (16) (a) of A.P.Co-operative Societies Act (for short 'the Act'), through G.O.Rt.No.475, dated 30.07.2019 and consequential proceedings dated 04.08.2019 by respondent Nos.5 and 7 as persons-in-charge as illegal, in-operative etc. Along with this, an application is filed seeking suspension of the order dated 30.07.2019 on the file of respondent No.1.
The reading of the affidavit filed in support of the writ petition shows that although the general attack seem to have been made on G.O.Rt.No.475 dated 30.07.2019, the essential grievance of the petitioner is against the action of respondent No.3 in appointing respondent Nos.5 to 7 as the persons-in- charge of respondent No.4-Society. Learned counsel for the petitioner relies upon Section 115-D (16) (a) of the Act and argues that the elections should be held as per the said schedule. He argues that the whole purpose in suspending the application of this Section to the Cooperative Societies is to postpone the elections. Learned counsel submits that earlier the extensions were granted in this Cooperative society on 29.01.2018. The same was again extended for another six 2 months by order dated 11.07.2018. Learned counsel for the petitioner submits that instead of conducting elections, the impugned GO was issued on 30.07.2019 under Section 123 of the Act, exempting all the Societies from Section 115-D(16)
(a) of the Act. It is the contention of the learned counsel that Cooperative Societies enjoy a special status and that after the 97th Constitution Amendment, the democratic functioning of the Cooperative Societies is the objective and that the core constitutional values of a Cooperative Society are democratic functioning and financial autonomy. He, therefore, submits relying upon Vipulbhai M. Chaudhary v. Gujarat Cooperative Milk Marketing Federation Limited1 that the actions of the respondent are contrary to law. Learned counsel relies upon State of Andhra Pradesh, rep., by its Secretary, Food and Agriculture Department, Hyderabad v. Multicoops' Association, Hyderabad, rep., by its Secretary2 and argues that Section 123 of the Act is meant to meet extraordinary situations and is not to be used in a casual manner to get over the duty of holding elections. Basing on these two judgments, learned counsel argues that the actions of the petitioner/respondents are contrary to law and that therefore, he is entitled to an order as prayed for. 1 (2015) 8 SCC 1 2 1987 (1) ALT 197 3 Learned Government Pleader for Agriculture on the other hand also relies upon the same judgment with reference to the judicial interpretation of Section 123 of the Act, and argues that in line with the said judgment only the impugned G.O. has been issued. He points out that the Division Bench has said that the special power is not to be used casually, it should be resorted to sparingly. He points out that the Division Bench has cautioned the executive and has said that the power cannot be used for the purpose of avoiding elections. Learned Government Pleader draws the attention to the impugned G.O and points out that 12 reasons have been furnished in the said G.O as the reasons for exercising of the power. Learned counsel points out that even though the G.O. has been filed in the Court, as a material paper by the petitioner, none of the 12 reasons are actually been proven to be incorrect or wrong. He points out that the stand of the respondent is made clear. The rationale behind the exercise of power, as per the learned Government Pleader is spelt out and these 12 reasons, according to the learned counsel, have not been disproved or shown to be false. Therefore, he submits that for all valid and cogent reasons the extraordinary power under Section 123 of the Act was exercised. As far as the society to which the petitioner belongs, namely, Namavaram Primary Agriculture Cooperative Credit Society, the learned Government Pleader has filed a copy of his written instructions along with 4 documents. Specifically, for the financial year 2017-18, the following defects have been pointed out:
1. The extended Managing Committee have not taken initiation for developmental activities and not mobilised the nominal share capital holders those having Rs.10 share capital only instead of subscribing for Rs.300/- share capital as stipulated in the APCS Act and Rules, 1964 which his essential for voting right and participate in General Body meetings. As per final Audit Report 2017-18, the society has not taken any action for admission of 100 share holders (below Rs.300/- share capital) as regular members by collecting prescribed share capital.
2. The Departmental Auditor pointed out that, it is alleged that the managing committee and Chief Executive Officer of the Namavaram PACS have failed to take legal action all the loans and due to inaction, all the gold loans worth of Rs.2,18,000/- become barred by limitation and caused loss to the funds of the society.
3. The differential amount of the society is mentioned below.
Difference in Share capital of Rs.7,63,937/- Difference in member SD Loans of Rs.1,576.74/- Difference in member TD of Loans Rs.1,16,438.62/- Difference in member CKCC Loans of Rs.30,715.27/-
4. The Departmental Auditor pointed out that, it is alleged that the managing committee and Chief Executive Officer of the Namavaram PACS have failed to take legal action all the loans and due to inaction, all the loans worth of Rs.7,98,000/- become time barred by limitation and caused loss to the funds of the society.
5. The Management of the society has not taken any action on Adj. Heads 'due to' and 'due by'.
6. The society has not maintained the cash balance in accordance with the byelaws of the society.
Therefore, learned counsel submits that both in respect of society to which the petitioner belongs (4th respondent) and 5 over all cooperative movement also, the power was exercised for cogent reasons. The submission of the learned Government Pleader is that a reading of the impugned G.O shows that the avowed objective is to ensure free and fair elections. He points out that para 4 of the impugned G.O. refers to the 'forthcoming' elections. Therefore, he submits that the action cannot be questioned.
This Court after hearing both the learned counsels notices that there is strength in what is submitted by the learned Government Pleader. The impugned G.O has been issued and 12 reasons are spelt out for exercising the power. As rightly pointed out by the learned Government Pleader, even though the impugned GO is filed, it is not directly attacked by the petitioners. The reasons mentioned in the said G.O. are not been actually questioned nor have the contents been proven to be incorrect or wrong. Other than stating that it has been mechanically issued, nothing concrete has been pointed out to this Court to hold that the action taken by the State is vitiated. Coming to respondent No.4- soceity also, specific reasons have been mentioned for exercising the said power. The impugned G.O. is also different from the notification considered by the Hon'ble Division Bench. There appear to be clear and categorical reasons for the Government to act in the manner that it did. 6
This Court after considering the audit defects by respondent No.4-soceity and the reasons furnished in the impugned G.O., is of the opinion that the power has not been exercised in a casual manner and for some ulterior motive. A reading of the G.O. itself shows that the Government is committed to conducting elections. The G.O. is also issued in order to ensure the conduct of the elections in a more member participation, democratic as well as free and fair manner (para 3 of the impugned G.O.). In the last para, it is also mentioned that the concerned officials will take necessary action and steps to ensure maximum member participation in the forthcoming elections.
In that view of the matter, this Court is of the opinion that the exercise of power by the Government is for cogent reasons as can be seen in general and also in reference to the specific society in question.
This Court, therefore, does not find any reason to interfere with the impugned G.O. The writ petition is, therefore, dismissed. No order as to costs. As a sequel, the miscellaneous applications, if any pending, shall stand closed.
________________________ D.V.S.S.SOMAYAJULU,J Date : 18.09.2019 KLP