IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN WEDNESDAY, THE 13TH OCTOBER 2010 / 21ST ASWINA 1932 WP(C).No. 15361 of 2010(U) --------------------------------------- PETITIONER: ------------------- A.P.AMEER, PRESIDENT, VELLAMPURAM K.S.S LTD., NO.M 156(D), APCOS, KARADU P.O., MALAPPURAM DISTRICT, NOW RESIDING AT AALIKKAPARAMBIL HOUSE, KARADU P.O., MALAPPURAM DISTRICT. BY ADV. SRI.K.ANAND. RESPONDENTS: ------------------------ 1. THE DEPUTY DIRECTOR, DIARY DEVELOPMENT DEPARTMENT, MALAPPURAM. 2. THE DIARY EXTENSION OFFICER, WANDOOR, MALAPPURAM. 3. THE VELLAMPURAM K S S LTD., NO.M 156(D), APCOS, KARADU P.O., MALAPPURAM DISTRICT, REP. BY ITS SECRETARY. R1 BY SR. GOVERNMENT PLEADER SRI. K.C. SANTHOSH KUMAR. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/08/2010, THE COURT ON 13/10/2010 DELIVERED THE FOLLOWING: prv. 'CR' K.SURENDRA MOHAN, J. ------------------------------------------- W.P.(C) No.15361 of 2010 ------------------------------------------- Dated this the 13th October , 2010 JUDGMENT The petitioner has filed this Writ Petition challenging Ext.P6 order of the first respondent superseding the Managing Committee of the Vellampuram KSS Ltd. No.M 156 (D) APCOS, Vellampuram, Malappuram District, a Co-operative Society registered under the provisions of the Kerala Co- operative Societies Act, 1969 (hereinafter referred to as the ‘Act’ for short) and the Rules thereunder. According to the petitioner, who is the President of the present Managing Committee of the Society, action has been taken against them for the misdeeds of the previous committee, which is impermissible in law and fact. WPC No.15361/2010 2 2. The earlier Managing Committee was removed through a No-Confidence Motion. There were allegations of various irregularities against the former Managing Committee. After the removal of the former Managing Committee, a fresh election was conducted on 29.8.2009 and on 30.8.2009, a new Managing Committee assumed charge, with the petitioner as its President. It is not in dispute that some of the members of the previous Managing Committee are members of the present Managing Committee also. After the petitioner and the newly elected Managing Committee took charge, a general body meeting of the society was conducted on 5.12.2009 and decisions were taken for the rectification of all irregularities that were detected in respect of the tenure of the previous Managing Committee. The irregularities were detected in an enquiry conducted on 10.11.2008 by the District Level Committee. Pursuant to the said report, Ext.P1 notice had been WPC No.15361/2010 3 issued to the then Managing Committee by the first respondent directing them to rectify the irregularities. However, the said Committee had not taken any action to rectify the said irregularities. It was in the above circumstances that the present Managing Committee convened a meeting of the general body on 5.12.2009 and necessary decisions for rectification of the said irregularities were taken. Ext.P3 (series) evidences the rectification of such defects. 3. While so, the first respondent issued Ext.P4 notice under Section 32 of the Act directing the present Managing Committee to rectify the irregularities detected as stated above and threatening to initiate action against them if the irregularities were not rectified. The petitioner replied to Ext.P4 by Ext.P5 informing the first respondent that all the irregularities detected in the functioning of the Society had been rectified. Copies of all necessary documents evidencing WPC No.15361/2010 4 the said assertion were also furnished. However, it is alleged that in spite of the explanation in Ext.P5, proceedings were issued by the first respondent superseding the present Managing Committee. The said proceedings of the first respondent dated 3.5.2010 are evidenced by Ext.P6. Pursuant to Ext.P6, as per Ext.P7, a part time Administrator has also been appointed for the Society, pending the conduct of a fresh election. The proceedings of the first respondent evidenced by Exts.P6 and P7 are under challenge in this writ petition. 4. According to the petitioner, the present Managing Committee having taken charge only on 30.8.2009 are not responsible for the misdeeds of the previous Managing Committee. It is pointed out that the enquiry that was conducted by the District Level Committee was into the allegations of irregularities levelled against the former Managing Committee. The report of the said Committee is WPC No.15361/2010 5 dated 12.11.2008, long before the election of the present Managing Committee, which was conducted only on 29.8.2009. Therefore, it is submitted that they are superseded for reasons that are extraneous and unsustainable. It is also alleged that the impugned proceedings are vitiated by political considerations. 5. A counter affidavit has been filed on behalf of the first respondent wherein it is contended that the order of supersession has been passed strictly in accordance with law, in the face of persistent default committed by the Society in carrying out the lawful directions issued by the statutory authority. However, the said decision is alleged to have been taken in the best interests of the Society and to avoid a further stalemate in the functioning thereof. The further contention of the first respondent is that some of the members of the present Managing Committee were members of the former Managing WPC No.15361/2010 6 Committee also. Therefore, it is pointed out that the irregularities were all within the knowledge of the present Managing Committee also and that the delay in rectification of the defects was without any justification. Further, it is alleged that the present Managing Committee had failed to take effective steps to recover the public money that had been taken away by the former Managing Committee. 6. A reply affidavit has been filed by the petitioner refuting the allegations in the counter affidavit of the first respondent. The petitioner has produced Ext.P9 proceedings issued to him by the Society under the Right to Information Act informing him that the amounts alleged to have been taken away by the Managing Committee were recovered and that action has been initiated to recover the amounts remaining outstanding and unpaid. It is therefore pointed out that there are absolutely no allegations against the present Managing Committee justifying their supersession under Section 32 of the WPC No.15361/2010 7 Act. 7. I have heard the counsel for the petitioner as well as the learned Senior Government Pleader Mr.K.C.Santhosh Kumar in detail. I have also perused the records of the case and given anxious consideration to the rival contentions of the parties. 8. It is not in dispute that the petitioner and the Managing Committee headed by him were elected only on 29.8.2009 and that they took charge only on 30.8.2009. The irregularities that are alleged to be in existence relate to the period prior to their election. In fact, the enquiry of the District Level Committee was conducted into the allegations against the former Managing Committee and its report is dated 12.11.2008. On 12.11.2008, when the irregularities were detected as per the report of the District Level Committee, the petitioner and the present Managing Committee had not been elected. I also notice that after the petitioner and the present Managing WPC No.15361/2010 8 Committee assumed office, a general body meeting of the Society was conducted on 5.12.2009 and action has been initiated for the rectification of the irregularities, as evidenced by Ext.P3 (series). Therefore, it cannot be said that the present Managing Committee was negligent in rectifying the irregularities that were pointed out by the report of the District Level Committee. It is also worth noticing that on receipt of Ext.P4 notice issued by the first respondent intimating the present Managing Committee that action would be taken against them under Section 32 of the Act if the irregularities detected were not rectified, they have replied to the same as per Ext.P5, pointing out that the irregularities were all rectified. It is also stated in Ext.P5 that if there were any defects in the manner in which the irregularities were rectified, such defects would also be remedied by them. It is in the face of the above reply that Ext.P6 has been issued superseding the present WPC No.15361/2010 9 Committee. A reading of Ext.P6 does not show that the first respondent has applied his mind to the contentions of the petitioner in Ext.P5. Though the communication has been referred to, the same has not been considered properly. The allegation in Ext.P6 that the present Managing Committee was not prompt in initiating action for rectification of the irregularities pointed out for recovering the public money that was taken away, is therefore without any basis. On the contrary, the documents produced by the petitioner show that the Society has initiated action in this regard. 9. The power under Section 32 of the Act is hedged in by various safeguards that are intended to ensure that the power is not misused. Therefore, the said power can be exercised only in circumstances where the Registrar or in the present case, the first respondent is satisfied – i) after an enquiry by himself or ii) through his subordinates or WPC No.15361/2010 10 iii) on a report of the financing bank, or iv) the Vigilance & Anti Corruption Bureau of the Government or v) the Vigilance Officer or otherwise, that the Committee of any Society persistently was in default or was negligent in the performance of the duties imposed on it by the Act or the Rules or Bye-laws or does anything that is prejudicial to the interests of the Society etc. Therefore, the authority exercising power under Section 32 has to be satisfied by one of the modes stipulated by the above provision about the misdeeds of the Managing Committee of the Society. In the present case, the report that was considered by the first respondent related to the irregularities committed by the former Managing Committee. Admittedly, there were no allegations or irregularities against the present Managing Committee headed by the petitioner. Though Ext.P6 seeks to make out some justification for the supersession by alleging lack of promptitude on the part of the present Managing Committee in rectifying the irregularities pointed out, the said allegations are not substantiated. Though the first respondent has stated WPC No.15361/2010 11 that he is satisfied of the culpability on the part of the present Managing Committee, the same is also not supported by any material or evidence. Therefore, Ext.P6 is nothing but action initiated for the irregularities that were detected in the functioning of the previous Managing Committee. 10. The question whether the present Managing Committee could be superseded for the acts of misdeeds committed by the previous Managing Committee of the Society has been considered by a Division Bench of this Court in Writ Appeal No.1363 of 2004. As per judgment dated 6.8.2004, this Court has held that no Managing Committee could be proceeded against for the misdeeds of a previous Managing Committee. Speaking for the Bench, Cyriac Joseph, J. (as he then was) has concluded the issue in the following words: “Section 32 of the Kerala Co- operative Societies Act can be invoked only against a Committee which has committed the irregularities or defaults. Removal of a committee WPC No.15361/2010 12 for the defaults and irregularities of a previous committee is not contemplated by Section 32. It may be pointed out that under Rule 44(1) (k) of the Kerala Co-operative Societies Rules, no member of the society shall be eligible for being elected or appointed as a member of the committee of the society under Section 28 if he was a member of the committee which has been superseded and a period of one year has not elapsed form the date of supersession. Thus removal of the committee under Section 32 casts a stigma and imposes a disqualification on the members of the committee and the removal visits such members with serious consequences. Therefore, we are of the view that the committee of a Co- operative Society cannot be superseded under Section 32 of the Kerala Co-operative Societies Act for the defaults and irregularities alleged to have been committed by a previous committee.” 11. In view of the above binding precedent, there cannot be any doubt that Ext.P6 cannot be sustained. The general purport of the Act and the Rules is to leave the administration WPC No.15361/2010 13 of a Co-operative Society to its elected Managing Committee. It is only when the Managing Committee is guilty of gross irregularities or violations of law or is not in a position to carry on the administration smoothly that the drastic step of supersession is resorted to. Even when the Managing Committee is superseded, an Administrator is appointed only to ensure that the administration of the Society is carried on smoothly until an elected Managing Committee takes charge. In the present case, a proper election was conducted on 29.8.2009 and the Managing Committee headed by the petitioner took charge only on 30.8.2009. There are no grounds to supersede the said Committee and to order conduct of an election afresh, as sought to be done by Exts.P6 and P7. Therefore, it is absolutely necessary that the administration of the society is restored to the elected Managing Committee of which the petitioner is the President, without further delay. WPC No.15361/2010 14 Exts.P6 and P7 proceedings are unsustainable and liable to be set aside. For the foregoing reasons, this writ petition is allowed, Exts.P6 and P7 are set aside. The administration of the society shall be restored to the elected Managing Committee of which the petitioner is the President, forthwith. No costs. K.SURENDRA MOHAN, JUDGE css/