IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 17.9.2009 CORAM: THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYA AND THE HONOURABLE MR.JUSTICE V.DHANAPALAN Writ Appeal No.994 of 2002 and Writ Petition No.3350 of 2002 Mr.K.Vairamuthu .. Appellant in W.A.No.994 of 2002 and petitioner in W.P.No.3350 of 2002 Vs. 1. Thirumayam Rural Electric Co-operative Society Ltd., Thirumayam, Pudukottai District Rep. by its Special Officer. 2. State of Tamil Nadu, rep. by its Secretary to Government, Energy Department, Fort St.George, Chennai-9. 3. The Registrar of Co-operative Societies, N.V.Natarajan Maligai, 170, E.V.R. High Road, Kilpauk, Chennai-10. 4. The Joint Registrar of Co-operative Societies, Pudukkottai. 5. The Tamilnadu Electricity Board, rep. by its Chairman, M.P.K.R.R.Maligai, Anna Salai, Chennai-2. 6. Tamil Nadu Min Oozhiyar Madhya Amaippu (CITU), rep. by its Sub-Division Secretary, A.Raju, Kumaran Nagar, SIPCOT Post, Pudukkottai Dist. 622 002. https://hcservices.ecourts.gov.in/hcservices/ 7. Desiya Minsara Thozhilalar Sangam (INTUC), Pudukkottai District, Regn.No.158/PDKT, rep. by its District Vice President S.Adhinarayanan, Plot M-19, Poonga Nagar West, Rajagopalapuram Housing Unit Post, Pudukkottai Dist. 622 008. 8. Pudukkottai Mavatta Anna Min Paniyalargal Sangam, rep. by its Secretary, G.Shanmugavel, Plot No.7, Ram Nagar, 4th Street, Machuvadi, Pudukkottai Dist. 9. Thirumayam Gramya Minsara Kutturavu Thozhilalar Munnetra Sangam, rep. by its President S.Thennarasu, Sandaipet, Thirumayam Post, Pudukkottai Dist. 10. Tamil Nadu Electricity Board Engineers Sangam, rep. by its General Secretary, 793 Anna Salai, Chennai-600 002. (Respondents 6 to 9 impleaded-vide Order of Court, dated 4.2.2005 made in W.A.M.P.Nos. 126 to 129 of 2005) (Respondent No.10 impleaded-vide order of Court, dated 11.11.2008 made in W.A.M.P.No.151 of 2008) .. Respondents in W.A.No.994 of 2002 1. State of Tamil Nadu, rep. by its Secretary to Government, Energy Department, Fort St.George, Chennai-9. 2. The Tamil Nadu Electricity Board, rep. by its Chairman, M.P.K.R.R.Maligai, Anna Salai, Chennai-2. 3. The Registrar of Co-operative Societies, N.V.Natarajan Maligai, 170, E.V.R. High Road, Kilpauk, Chennai-10. https://hcservices.ecourts.gov.in/hcservices/ 4. The Special Officer, Thirumayam Rural Electric Co-operative Society Ltd., Thirumayam, Pudukkottai District. 5. Tamil Nadu Min Oozhiyar Madhya Amaippu (CITU), rep. by its Sub-Division Secretary, A.Raju, Kumaran Nagar, SIPCOT Post, Pudukkottai Dist. 622 002. 6. Desiya Minsara Thozhilalar Sangam (INTUC), Pudukkottai District, Regn.No.158/PDKT, rep. by its District Vice President S.Adhinarayanan, Plot M-19, Poonga Nagar West, Rajagopalapuram Housing Unit Post Pudukkottai District 622 008. 7. Pudukkottai Mavatta Anna Min Paniyalargal Sangam, rep. by its Secretary, G.Shanmugavel, Plot No.7, Ram Nagar, 4th Street, Machuvadi, Pudukkottai Dist. 8. Thirumayam Gramya Minsara Kutturavu Sanga Thozhilalar Munnetra Sangam, rep. by its President S.Thennarasu, Sandaipet, Thirumayam Post, Pudukkottai District. (Respondents 5 to 8 impleaded-vide Order of Court, dated 14.12.2004 made in W.P.M.P.Nos.35090 to 35093 of 2004 respectively) .. Respondents in W.P.No.3350 of 2002 Writ Appeal No.994 of 2002 against the order dated 28.3.2002 passed by the learned single Judge in Writ Petition No.12026 of 1997 This Writ Petition presented to this Court under Article 226 of the constitution of India to issue a writ of Mandamus directing the respondents to forbear from in any manner interfering with the function administration and business of the petitioner-Society otherwise than in accordance with law, in pursuance of G.O.Ms.No.124, Energy Department, dated 27.6.1997. Writ Petition No.3350 of 2002 filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Mandamus, to forbear the respondents 1 to 3 herein from in any manner interfering with the functions of the fourth respondent-Society, either under G.O.Ms.No.124, Energy Department, dated 27.6.1997 or otherwise and https://hcservices.ecourts.gov.in/hcservices/ the fourth respondent from handing over the business or functions of the Society to the second respondent or any other person pursuant to the said Government Order or otherwise. For appellant in W.A.No.994 of 2002: Mr.AR.L.Sundaresan, Senior Counsel for M/s.A.L.Gandhimathi For petitioner in W.P.No.3350 of 2002: Mr.R.Subramaniam For first respondent in W.A.No.994 of 2002 and fourth respondent in W.P.No.3350 of 2002: Mr.R.Parthiban For second, third and fourth respondents in W.A.No.994 of 2002 and for first and third respondents in W.P.No.3350 of 2002 : Mr.P.S.Raman, Addl. Advocate General, assisted by Mr.D.Sreenivasan, Addl.G.P. For fifth respondent in W.A.No.994 of 2002 and for second respondent in W.P.No.3350 of 2002: Mr.P.Srinivas For respondents 6 to 10 in W.A.No.994 of 2002 and for respondents 5 to 8 in W.P.No.3350 of 2002: Mr.M.Muthupandian COMMON JUDGMENT S.J.MUKHOPADHAYA,J In both the cases, as common questions are involved, preferred by same petitioner against same respondents, they were heard together and disposed of by this common judgment. 2. Thirumayam Rural Electric Co-operative Society Limited (hereinafter referred to as 'the Co-operative Society'), through its then Special Officer, preferred Writ Petition No.12026 of 1997 for issuance of a Writ of Mandamus, to direct the respondents therein to forbear from in any manner interfering with the functions, administration and business of the petitioner-Society therein (i.e. Thirumayam Rural Electric Co-operative Society Limited) otherwise than in accordance with law, in pursuance of G.O.Ms.No.124, Energy Department, dated 27.6.1997 or otherwise. 3. By the aforesaid G.O.Ms.No.124, dated 27.6.1997, the Government of Tamil Nadu decided that the Rural Electric Co-operative Societies at Kumbakonam, Vandavasi and Thirumayam (the petitioner-Co- operative Society) shall be wound up and that the distribution of power supply in these areas shall be entrusted to the Tamil Nadu https://hcservices.ecourts.gov.in/hcservices/ Electricity Board (hereinafter referred to as 'the Electricity Board'). The Chairman of the Tamil Nadu Electricity Board was therefore directed to take immediate steps to take over the functions of the said three Rural Electric Co-operative Societies. 4. Initially, an interim order of injunction was passed in Writ Petition No.12026 of 1997, which later on continued to be in force. The Co-operative Society subsequently resolved to merge with the Electricity Board and to withdraw W.P.No.12026 of 1997. Learned counsel for the Co-operative Society was so instructed and on the instructions of the Co-operative Society, W.P.No.12026 of 1997 was dismissed as withdrawn by the impugned order dated 28.3.2002. The said order of dismissal as withdrawn has been assailed in Writ Appeal No.994 of 2002 by a third party, namely Mr.K.Vairamuthu, the then President of the Co-operative Society. 5. The said K.Vairamuthu has also filed Writ Petition No.3350 of 2002 seeking for issuance of a Writ of Mandamus, to forbear the respondents 1 to 3 herein from in any manner interfering with the functions of the fourth respondent, i.e. Thirumayam Rural Electric Co-operative Society Limited, either under G.O.Ms.No.124, Energy Department, dated 27.6.1997 or otherwise and the fourth respondent- Co-operative Society from handing over the business or functions of the Co-operative Society to the second respondent or any other person pursuant to the said Government Order or otherwise. 6. In Writ Appeal No.994 of 2002, it was argued that Writ Petition No.12026 of 1997 was maliciously withdrawn by the Co- operative Society in a dubious manner. The Co-operative Society acts in the interest of its members and the said Writ Petition was filed in the interest of its members. The Co-operative Society democratically elected its members/President through the Board of Directors and said democratic Board of Directors was replaced by a Special Officer under the provisions of the Tamil Nadu Co-operative Societies Act, 1983, and the Special officer, after assuming charge, took a decision for withdrawal of the Writ Petition. The learned single Judge ought to have seen that while normally, no person can be compelled to litigate, but the said principle could not have been applied in the present case, as withdrawal was vitiated by mala-fide, prejudice and bias in favour of the Electricity Board. 7. So far as Writ Petition No.3350 of 2002 is concerned, it was submitted that the State Government cannot dissolve a Co-operative Society, nor it can be taken over in the manner it has been sought for, except by process known to law. The action of the respondent- State in directing the winding up of the Co-operative Society and handing over the business to the Electricity Board, is arbitrary, illegal, unjust and unsustainable in the eye of law. The Co-operative Society, having been duly granted licence to carry on business of https://hcservices.ecourts.gov.in/hcservices/ distribution of electrical energy in Thirumayam Taluk under Section 28 of the Indian Electricity Act, 1910, the said licence gives a vested right on the Co-operative Society and its members to carry on business and thereby, the Co-operative Society cannot be compelled to hand over the distribution of electricity supply to the Electricity Board so long as the licence is in force and it is not cancelled or revoked in the manner known to law. On behalf of the petitioner, it was contended that none of the circumstances contemplated under Sections 3 and 4 of the Indian Electricity Act exist to warrant any such revocation. At any rate, there is no justifiable reason or cause to cancel the licence. Further, the cancellation, if any, can only be made after opportunity being given to the Co-operative Society and after observing the principles of natural justice. In the present case, no such action having been taken by giving opportunity to the Co-operative Society, the action can be held to be violative of the rules of natural justice. 8. Learned counsel for the appellant in W.A.No.994 of 2002 and the learned counsel for the petitioner in W.P.No.3350 of 2002, raised the question of winding up of the Co-operative Society, which according to them, can be done only under Section 137 of the Tamil Nadu Co-operative Societies Act and not by any other mode. According to him, no circumstances contemplated under Section 137 of the Tami Nadu Co-operative Societies Act exist to warrant the winding up and at any rate, the winding up cannot be done unilaterally, but can be done if at all only after giving opportunity to the Co-operative Society. The Special Officer is duty bound to act in the interest of the Co-operative Society and cannot sacrifice the Co-operative Society itself. The Resolution, dated 11.1.2002 passed by the Special Officer of the Co-operative Society for withdrawal of W.p.No.12026 of 1997, is against the interest of the Co-operative Society and its members. 9. Learned counsel appearing on behalf of the State and the Electricity Board, while questioning the locus-standi of the appellant in preferring the Writ Appeal against the order of "dismissal as withdrawn", also submitted that the appellant- petitioner-K.Vairamuthu, in his individual capacity, even as a member/the then President of the Co-operative Society, cannot assail G.O.Ms.No.124, dated 27.6.1997 issued from the Energy Department, the Co-operative Society having decided to act in terms of the said G.O. The counsel for the Electricity Board placed reliance on different orders issued from time to time and Section 28 of the Indian Electricity Act to suggest that even the Co-operative Society had no right to continue the business of supply of electricity, except by sanction of the State. 10. We have heard the learned counsel appearing on behalf of the parties and perused the records. https://hcservices.ecourts.gov.in/hcservices/ 11. For determination of the case, it is necessary to notice the relevant facts and the Notifications issued from time to time, as referred to hereunder. 12. It appears that the Co-operative Society initially applied for grant of licence under Section 3 of the Indian Electricity Act. In the light of Section 3(2) of the Indian Electricity Act and Rule 15(4) of the Indian Electricity Rules, 1956, objections were called for, vide G.O.Ms.No.786, Public Works Department, dated 20.4.1982. However, for the reasons best known to the authorities and to the petitioner, no licence under Section 3 of the Indian Electricity Act was granted. The Co-operative Society wanted to have a sanction for supply, transmission and use of energy under Section 28 of the Indian Electricity Act and in terms of Section 28(1) of the Indian Electricity Act, the State Government, vide G.O.Ms.No.1716, dated 27.8.1982, issued from the Public Works Department, granted permit to the Co-operative Society to carry on the business of distribution of electrical power to Thirumayam Taluk, covering Ponnamaravathi, Arimalam and Thirumayam blocks in accordance with the provisions of the Indian Electricity Act and the Rules framed thereunder. It was made clear that the said permit granted under Section 28(1) of the Indian Electricity Act will be treated as cancelled on and from the effective date of the licence issued to the Co-operative Society under Section 3 of the Indian Electricity Act. 13. It appears that the Co-operative Society was continuously working on loss eversince its inception, the main contributing factor being free supply of power to the huts and agricultural pumpsets in the areas of operation. The said loss of the Co-operative Society could not be compensated, though the Co-operative Society was preferring the claim year after year. The Chief Financial Controller of the Electricity Board, vide letter dated 10.2.1995, stated that the Board charged 0.18 paise per unit, even though the High Tension and cost as estimated for 1995-1996 was 161.18 paise per unit and that the Electricity Board lost 143.18 paise per unit sold to the Co- operative Society. It was opined that if higher and viable tariff rates were not acceptable, it was better that the distribution network of the Societies may be handed over to the Electricity Board, so that the loss to the Board will be reduced to a great extent. The matter was also referred by the Registrar of the Co-operative Societies, vide letter dated 18.2.1994. The State Government, in its turn, referring the abovesaid facts, issued G.O.Ms.No.124, Energy (A2) Department, dated 27.6.1997 and directed the Chairman of the Electricity Board to take immediate steps to take over the functions of the three Rural Electric Co-operative Societies--Kumbakonam, Vandavasi and Thirumayam. 14. That was the stage during which the Co-operative Society preferred Writ Petition No.10015 of 1997 against the decision https://hcservices.ecourts.gov.in/hcservices/ aforesaid. Three other Writ Petitions were also filed by individuals in W.P.Nos.10623, 10627 and 10653 of 1997. All those Writ Petitions were taken up on 17.7.1997 when the learned Government Advocate informed on instructions that the impugned order is an enabling order which records a decision taken by the Government and that further steps will be taken in conformity with law under the provisions of the applicable statues. In view of such clarification, the apprehension of the Co-operative Society and the other petitioners that the licence granted under the Indian Electricity Act is cancelled or was sought to be cancelled, was shown to be unjustified and the Court accordingly disposed of those Writ Petitions. 15. The Electricity Board, through its Accounts Member, informed the Registrar of Co-operative Societies, vide letter dated 20.7.1997 that the Electricity Board has proposed to take over the three Societies on 15.8.1997 and thereby, requested the Registrar of Co- operative Societies, Chennai, to issue suitable instructions to the Managing Director of the three Societies. The Registrar of Co- operative Societies, Chennai, in his turn, by letter dated 30.7.1997, informed the matter to the Regional Joint Registrars of Pudukkottai, Thanjavur and Thiruvannamalai, Regions and the Presidents of the Vandavasi, Kumbakonam and Thirumayam Rural Electric Co-operative Societies, asking them to attend a meeting with the details of the members, including the names of the staff, latest audited balance sheet of the Societies, assets, liabilities, etc. 16. By letter dated 31.7.1997, the Joint Registrar of Co- operative Societies informed the Managing Director (in-charge) of the Co-operative Society of the aforesaid facts and further informed that it was his duty and responsibility to supervise the Acts, the Rules and the Bye-laws and Rule 146(1) of the Tamil Nadu Co-operative Societies Rules and nothing should occur contrary to the Acts and Rules and Bye-laws. It was the duty of the Managing Director to protect the properties of the Co-operative Society without occurring any damage and thereby, requested him to supervise the activities of the Co-operative Society and to do any further activities only after obtaining permission from the State Registrar. All the particulars were also called for from the President and the Managing Director of the Co-operative Society, by the Joint Registrar of Co-operative Societies, Pudukkottai, in his letter dated 1.8.1997. 17. It was at that stage, the Co-operative Society preferred Writ Petition No.12026 of 1997, wherein interim order of injunction was passed by this Court on 7.8.1997, restraining the respondents, their men, servants and agents from in any manner interfering with the functions and business of the Co-operative Society till 17.9.1997. The said order dated 7.8.1997 was subsequently allowed to continue in force, by order dated 17.12.1999. https://hcservices.ecourts.gov.in/hcservices/ 18. It appears that the Co-operative Society has changed the Board of Governors/Directors and appointed the Special Officer for the Co-operative Society under the provisions of the Tamil Nadu Co- operative Societies Act. It appears that the said order was not challenged by any person before any Court of law. The Co-operative Society subsequently considered the matter taking into consideration the relevant facts, particularly the Writ Petition preferred against G.O.Ms.No.124, dated 27.6.1997 issued from the Energy (A2) Department and resolved that in the interest of the Co-operative Society, to initiate action to withdraw the case in Writ Petition No.12026 of 1997 filed before this Court and to bear the expenses from common fund. The Resolution, dated 11.1.2002 was communicated by the Special Officer of the Co-operative Society. The aforesaid Resolution was brought to the notice of the Court and prayer was made by the counsel for the Co-operative Society to withdraw the Writ Petition, which was allowed by the learned single Judge, by the impugned order dated 28.3.2002 in W.P.No.12026 of 1997, which is challenged in Writ Appeal No.994 of 2002. 19. It is settled law that no person can be forced to fight a litigation. If any person has moved before a Court of law for any relief, he has a right to withdraw the case with or without liberty. The Court generally accepts the prayer for withdrawal of the case, if sought for without any liberty, till it is shown that it was not in public interest or with some mala-fide attitude that the party wanted to withdraw the case. 20. In the present case, the Co-operative Society has not preferred Writ Appeal. The Writ Appeal has been preferred by a third party, who was the erstwhile President of the Co-operative Society and he has not challenged the decision of the Registrar of the Co- operative Societies, whereby the Board of Directors/Governors was dissolved and the Special Officer was appointed. The Resolution dated 11.1.2002 of the Co-operative Society, whereby, it was decided to withdraw the case, is also not under challenge. In this background, the appellant-Vairamuthu cannot assail the withdrawal of Writ Petition No.12026 of 1997, as prayed for in W.A.No.994 of 2002. Therefore, no relief can be granted in W.A.No.994 of 2002. 21. So far as Writ Petition No.3350 of 2002 is concerned, it is preferred by merely a member of the Co-operative Society and not by the Co-operative Society. This Court has noticed the fact that the Co-operative Society requested to grant licence under Section 3 of the Indian Electricity Act, pursuant to which, objections were also called for, but having been not granted such licence, the State Government only permitted the Co-operative Society to supply electricity in the area(s) in question. 22. Part-III of the Indian Electricity Act, 1910 (Central Act https://hcservices.ecourts.gov.in/hcservices/ No.IX of 1910) relates to supply, transmission and use of energy by non-licensees and Section 28 therein relates to sanction required by non-licensees in certain cases. Section 28(1) reads as follows: "Section 28. Sanction required by non-licensees in certain cases--(1) No person, other than a licensee, shall engage in the business of supplying energy to the public except with the previous sanction of the State Government and in accordance with such conditions as the State Government may fix in this behalf, and any agreement to the contrary shall be void. (1-A) the State Government shall not give any sanction under sub-section (1)-- (a) Except after consulting the State Electricity Board; and (b) except with the consent-- (i) in any case where energy is to be supplied in any area of which a local authority is constituted, of that local authority. (ii) in any case where energy is to be supplied in any area forming part of any cantonment, aerodrome, fortress, arsenal, dockyard or camp or of any building or place in the occupation of the Government for defence purposes, of the Central Government. (iii) In any area falling within the area of supply of a licensee, of that licensee: Provided that except in a case falling under sub-clause (ii), not such consent shall be necessary if the State Government is satisfied that such consent has been unreasonably withheld. (2) Where any difference or dispute arises as to whether any person is or is not engaging, or about to engage, in the business of supplying energy to the public within the meaning of sub-section (1), the matter shall be referred to the State Government, and the decision of the State Government thereon shall be final." 23. From the aforesaid provisions, it would be evident that a Co- operative Society is not a licensee, but is a permit-holder under Section 28, which also could not have been granted, except after consulting the State Electricity Board and the consent of the local authority where the electricity is to be supplied. 24. It has been noticed by this Court, as recorded above, that the Co-operative Society was going in loss and was charging very minimal amount in supplying the energy, causing loss to the Electricity Board. In fact, the Co-operative Society was not in a position to pay the money to the Electricity Board. In this background, if the State Government resolved to take over the https://hcservices.ecourts.gov.in/hcservices/ functions of the Co-operative Society and to provide such functions to the Electricity Board in the interest of supply of electricity to the public in general, it cannot be alleged to be illegal or any mala-fide. 25. Section 137 of the Tamil Nadu Co-operative Societies Act, 1983, deals with the winding up of Registered Societies. In this case, there is no order passed by any of the authority to wind up the Co-operative Society. What has been ordered by the State Government by the impugned G.O.Ms.No.124, dated 27.6.1997, is only to take over the functions of the Co-operative Society so far as it relates to supply of electricity to the public in general. That means, the permit which was granted to the Co-operative Society under Section 28 (1) of the Indian Electricity Act, was merely withdrawn and the Electricity Board was allowed to distribute the power in the area(s) which have the jurisdiction under the Indian Electricity Act/Electricity (Supply) Act, by using the transmission, supply and usage system of electricity supply by the Co-operative Society. The Co-operative Society has not been ordered to be dissolved and for the said reason, the Co-operative Society preferred Writ Petition No.12026 of 1997 in the initial stage and is now the party-respondent in the Writ Appeal, and therefore, the question of application of Section 137 of the Tamil Nadu Co-operative Societies Act, does not arise. Further, the Co-operative Society having no objection against the take over of its functions in the matter of supply of electricity as used to be made under Section 28(1) of the Indian Electricity Act, its members cannot make any grievance. If any of the member like the petitioner in W.P.No.3350 of 2002 or the appellant in W.A.No.994 of 2002 has got a grievance against a Co-operative Society itself, or its Special Officer, he has a remedy under the provisions of the Tamil Nadu Co-operative Societies Act, but cannot challenge the order impugned (G.O.Ms.No.124, dated 27.6.1997), the Co-operative Society having accepted the said G.O. and acted on the basis of the Resolution, dated 11.1.2002. 26. We find no merits in either Writ Appeal No.994 of 2002 or in Writ Petition No.3350 of 2002 and accordingly, both Writ Appeal No.994 of 2002 and Writ Petition No.3350 of 2002 are dismissed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar cs https://hcservices.ecourts.gov.in/hcservices/ To 1. Thirumayam Rural Electric Co-operative Society Ltd., Thirumayam, Pudukottai District Rep. by its Special Officer. 2. The Secretary to Government, State of Tamil Nadu, Energy Department, Fort St.George, Chennai-9. 3. The Registrar of Co-operative Societies, N.V.Natarajan Maligai, 170, E.V.R. High Road, Kilpauk, Chennai-10. 4. The