*HON’BLE SRI JUSTICE P.S. NARAYANA HON’BLE SRI JUSTICE G. BHAVANI PRASAD +Writ Petition Nos.14870 and 22836 of 2009 and W.P.M.P. No.32419 of 2009 in W.P. No.22836 of 2009 % 12/03/2010 W.P. No.14870 of 2009: # Vancha Veera Reddy and another .. Petitioners And $ The District Cooperative Officer, Nalgonda, Nalgonda District and others .. Respondents ! COUNSEL FOR THE PETITIONERS: Smt. Bobba Vijayalakshmi ^ COUNSEL FOR 1 AND 2 RESPONDENTS: Government Pleader for Cooperation ^ COUNSEL FOR 3 TO 6 RESPONDENTS: Sri G. Anandam ^ COUNSEL FOR 7TH RESPONDENT: Sri P. Pratap Reddy W.P. No.22836 of 2009: # Vallakonda Narasinga Rao .. Petitioner And $ The District Cooperative Officer, Karimnagar, Karimnagar District and others .. Respondents ! COUNSEL FOR THE PETITIONER: Smt. Bobba Vijayalakshmi ^ COUNSEL FOR 1 AND 2 RESPONDENTS: Government Pleader for Cooperation ^ COUNSEL FOR 3RD RESPONDENT: W.P.M.P. No.32419 of 2009 In W.P. No.22836 of 2009: # Koothuru Venkat Reddy and another .. Petitioners And $ Vallakonda Narsinga Rao and others .. Respondents ! COUNSEL FOR THE PETITIONERS: Sri P. Giri Krishna ^ COUNSEL FOR 1ST RESPONDENT: Smt. Bobba Vijayalakshmi ^ COUNSEL FOR 2 AND 3 RESPONDENTS: Government Pleader for Cooperation ^ COUNSEL FOR 4TH RESPONDENT: < Gist : Ø Head Note: ? CITATIONS: 1. 2008 (2) ALD 616 2. 1998 (1) ALT 617 3. 2004 (3) ALD 1 (FB) 4. AIR 1966 SC 330 5. AIR 1992 Karnataka 356 6. AIR 1990 SC 247 7. AIR 1988 Orissa 116 8. 1997 (6) ALD 514 9. 1999 (2) ALD 298 10. W.A. Nos.1755 and 1579 of 2003, dated 16-10-2003 11. AIR 1961 SUPREME COURT 751 12. AIR 1963 SUPREME COURT 1618 13. (1985) 3 Supreme Court Cases 53 14. (1975) 2 Supreme Court Cases 482 15. (2000) 7 Supreme Court Cases 372 16. (2002) 6 Supreme Court Cases 33 17. (2005) 4 Supreme Court Cases 480 18. (2007) 10 Supreme Court Cases 528 19. AIR 1983 ANDHRA PRADESH 83 20. (2000) 1 Supreme Court Cases 566 21. 1998 (1) ALT 617 22.1997 (6) ALT 796 HON’BLE SRI JUSTICE P.S. NARAYANA HON’BLE SRI JUSTICE G. BHAVANI PRASAD Writ Petition Nos.14870 and 22836 of 2009 and W.P.M.P. No.32419 of 2009 in W.P. No.22836 of 2009 COMMON ORDER: (per Justice G. Bhavani Prasad) Writ Petition Nos.14870 and 22836 of 2009 arise out of a challenge to the respective notices issued under Section 34-A of the Andhra Pradesh Co-operative Societies Act, 1964 (for short “the Act”). The petitioners in W.P. No.14870 of 2009 contended that respondents 3 to 6 therein and the petitioners were elected as Directors with the 1st petitioner being further elected as the President of the Primary Agricultural Co-operative Society, Renikunta, Nalgonda District on 23-10-2005. Respondents 3 to 5 were claimed to have absented themselves for three consecutive meetings of the Managing Committee, while the 6th respondent was claimed to have become a defaulter in respect of two loans in spite of demand notices. The petitioners claimed respondents 3 to 6 to have been, therefore, disqualified to hold the offices under Sections 21-B and 21-A of the Act respectively, which was brought to the notice of the District Co-operative Officer and Deputy Registrar of Co-operative Societies by the 1st petitioner- President. The resolution of the Managing Committee, dated 30- 06-2009 removing respondents 3 to 6 from the Managing Committee, as they ceased to hold the office, and filling up the vacancies through cooption by a majority of eight Directors, was also communicated for necessary action. The petitioners stated that due to the disputes between the 1st petitioner, the President and the 7th respondent, the Vice-President, a letter appeared to have been given by five Directors along with respondents 3 to 6 under Section 34-A of the Act on 09-07-2009 proposing to move a no confidence motion against the 1st petitioner. The Deputy Registrar of Co-operative Societies issued a notice, dated 09-07- 2009 under Section 34-A (3) of the Act read with Rule 24-A of the Andhra Pradesh Co-operative Societies Rules, 1964 (for short “the Rules”) convening a meeting of the Managing Committee on 30- 07-2009, which was served on persons related to the petitioners on 22-07-2009. The notice was not served on the petitioners and no enquiries were made about the availability of the petitioners apart from the copy of the proposed no confidence motion not being enclosed to the notice. The service of notice was in violation of the minimum period of fifteen clear days prescribed by Section 34-A (3) of the Act and any service or tender of a notice to the relatives or family members is no service and no confidence motion cannot be sustained, as respondents 3 to 6 ceased to hold office, though it was held in Gaddampalli Jagpal Reddy v. District Collector, Nalgonda[1] that disqualification or cessation is not automatic, but is subject to a decision by the General Body of the society. Hence, the petitioners sought for setting aside the issuance of the notice under Section 34-A of the Act as illegal, arbitrary and in violation of the principles of natural justice. This Court passed an interim order on 24-07-2009 in W.P.M.P. No.19521 of 2009 permitting the proposed meeting to go on to discuss the no confidence motion but directing that the decision that will be taken in the meeting shall not be given effect to. The official respondents 1 and 2 claimed the letters about the disqualification of respondents 3 to 6 under Sections 21-B and 21-A of the Act respectively to have been received only on 14-07- 2009 by the 2nd respondent who referred the same to the Sub- Divisional Co-operative Officer, Bhongiri for enquiry. Claiming to have received the letter proposing to move a no confidence motion on 09-07-2009 and to have issued the notice in question in consequence, it was stated by respondents 1 and 2 that the notices of the petitioners were served on a relative of the 1st petitioner and brother of the 2nd petitioner on 23-07-2009 respectively, as the petitioners were unavailable. While claiming the notice to be as per the Statute and the Statutory rules, respondents 1 and 2 claimed the copies of the notice to have been affixed on the notice boards of the society, the Registrar’s Office and the Mandal Development Office. Respondents 3 to 5 were learnt to have not been given any opportunity of being heard and the 6th respondent was learnt to have not been subjected to any action in respect of his default and hence, respondents 1 and 2 sought for the dismissal of the writ petition. Respondents 3 to 6 contended that not impleading the other Directors makes the petition bad for non-joinder of necessary and proper parties and they denied absenting themselves for any meetings of the Managing Committee and claimed the 6th respondent to have not been subjected to any order of adjudication by any competent authority concerning any default. In any view, respondents 3 to 6 claimed to have a right of reinstatement on notice from the competent authority and to have not been served with any such notice. They claimed the notice of no confidence to suffer from no error of law or fact and the receipt of notice with knowledge of the contents of the same to be amounting to waiver. Respondents 3 to 6 claimed that they are entitled to participate in the process of no confidence and desired the writ petition to be dismissed with exemplary costs. The 7th respondent’s case is that the 2nd respondent did not initiate any action so far on the alleged disqualification of respondents 3 to 6, which is not automatic, but has to be dealt with by the General Body. The 7th respondent claimed that the petitioners and 11 other Directors attended the meeting on the motion of no confidence on 30-07-2009 and the motion was carried by a majority of the Managing Committee members making the 1st petitioner not entitled to continue as the President. W.P. No.22836 of 2009 was filed by the President of the Primary Agricultural Co-operative Society, Sirisilla, Karimnagar District, claimed to have been elected as such on 23-10-2005, who claimed to have come to know about the convening of a meeting to consider a no confidence motion moved by some of the members of the Managing Committee by a letter, dated 30-09-2009 through Asani Parasuram Reddy, a Director of the society, who was served with notice of the meeting convened on 26-10-2009 for the purpose by the Deputy Registrar of Co-operative Societies, Jagityal. The notice under Section 34-A (3) of the Act was claimed to have been not served on the petitioner as per Rule 24-A of the Rules either personally or through registered post. Claiming that the notice, dated 01-10-2009 was not served on him in spite of his availability with any clear gap of 15 days as prescribed by the statutory provision, the petitioner desired the issuance of notice to be struck down. This Court passed an interim order on 26-10-2009 directing that the no confidence motion may go on but the decision need not be given effect to until further orders. In addition to the official respondents, the Vice-President and a Director of the society desired to be impleaded as respondents 4 and 5, claiming in W.P.M.P. No.32419 of 2009 that 11 Directors including the petitioners submitted a no confidence motion letter on 30-09-2009, on which the Deputy Registrar of Co- operative Societies issued personal notice to all the members of the Managing Committee on 01-10-2009, which was received by the writ petitioner on 03-10-2009. They claimed that the writ petitioner conveniently waited till 23-10-2009 and made a false allegation about coming to know about the meeting through another Director only three days prior to the writ petition. The result of the no confidence motion was not declared due to the interim orders of the Court, though the motion was passed by 11 Directors. The official respondents 1 to 3 did not file any counter and no document/material/evidence has been placed before the Court by any of the respondents to probablise that the writ petitioner received the notice of the meeting convened on 26-10-2009, on 03- 10-2009. When W.P. No.14870 of 2009 came up for hearing before one of us (Hon’ble Sri Justice P.S. Narayana) on 20-10-2009, it was considered that it will be just and proper for a Division Bench to decide whether Gaddampalli Jagpal Reddy v. District Collector, Nalgonda (1 supra) has to be affirmed in the light of the language of Rule 24-B of the Rules and whether the deletion of Rule 24-B by G.O.Ms. No.37, Agriculture & Cooperation (Coop.IV) Department, dated 28-01-2002 has to be approved or disapproved, as it was a mere executive order and also whether 15 days clear notice is mandatory or directory and whether any element of prejudice would alter the situation. The controversy about automatic cessation was also noted with reference to K. Ramulu v. Commissioner for Cooperation[2]. The nature of requirement of fifteen days clear notice and the principle laid down in K. Sujatha v. State[3] were referred to and consequently, the matter was referred in toto to be decided by a Division Bench and is hence, before us. W.P. No.22836 of 2009 was directed to be listed along with the above writ petition as involving a similar question. Smt. Bobba Vijayalakshmi, learned counsel for the writ petitioners, Sri A. Jayasurya, learned Government Pleader for Cooperation, Agriculture and Marketing for the official respondents in both the writ petitions, Sri G. Anandam, learned counsel for respondents 3 to 6 in W.P. No.14870 of 2009, Sri P. Pratap Reddy, learned counsel for the 7th respondent in W.P. No.14870 of 2009 and Sri P. Giri Krishna, learned counsel for the petitioners in W.P.M.P. No.32419 of 2009 are heard at length and the provisions and the precedents referred to by them will be appropriately referred in due course. Before going into the questions in controversy, it has to be noticed that the petitioners in W.P.M.P. No.32419 of 2009 in W.P. No.22836 of 2009 being the Vice-President and Director of the society in question are, undoubtedly, interested and proper parties and hence, their request for being included in the writ petition has to be positively considered, more so in the absence of any serious opposition for their request from the parties to the writ petition. Accordingly, W.P.M.P. No.32419 of 2009 is allowed and the petitioners therein are impleaded as respondents 4 and 5 in W.P. No.22836 of 2009. Though the deletion of Rule 24-B from the Rules by G.O.Ms. No.37, Agriculture & Cooperation (Co-op. IV) Department, dated 28-01-2002 was suspected to be through a mere executive order, while rendering the order of reference, the copy of the Rules Supplement to Part II Extraordinary of the Andhra Pradesh Gazette, dated 12-02-2002, in which the said Government Order was notified and published, shows that the Government Order was issued in exercise of the powers conferred by Sub-Section (1) of Section 130 of the Act by the Governor, making amendments to the Statutory Rules of 1964. The amendment was specified to be coming into operation from the date of notification and Section 130 Sub-section (1) of the Act clearly empowers the Government to make the rules by notification published in the Andhra Pradesh Gazette. A reference to Sections 6, 7 and 21 of the Andhra Pradesh General Clauses Act, 1891 would show the amendments to be duly made and the publication in the official Gazette of the amendments purporting to have been made in exercise of the rule making power under a notification shall have to be considered as conclusive proof that the amendments to the rules were duly made and must be deemed to be duly made. Para 18 of the amendments under the said Government Order notified and published in the Andhra Pradesh Gazette directed that Rule 24-B of the Rules shall be omitted and hence, the said Rule 24-B must be deemed to have been omitted with effect from 12-02-2002 and the question (b) referred to the Division Bench has to be answered accordingly. That leaves the remaining two questions to be decided about the nature and manner of cessation of membership on the ground of disqualification and the nature and manner of the notice required by Rule 24-A of the statutory Rules. Coming to the second question first, Rule 24-A of the Rules about the meeting after receipt of no confidence notice was added to the original rules of 1964 by G.O.Ms. No.102 (Co-op.IV), dated 27-02-1986 prescribing by Sub-Rule (2) the service of notice to be effected either by giving or tendering it to such person or by sending it by registered post to their addresses. Sub-Rule (1) prescribed a copy of the motion expressing no confidence to be enclosed to the notice and Sub-Rule (3) mandated that copies of notice shall be affixed on the notice boards of the society, the office of the Registrar, Panchayat offices and/or Mandal offices. This Rule has to be traced to be arising out of Section 34-A of the Act dealing with motion of no confidence in the President and Vice President of the Committee, Sub-Section (3) of which prescribes that the Registrar shall give to the members notice of not less than fifteen clear days of such meeting in such manner as may be prescribed. Even for an adjourned meeting under the Proviso to the said Sub-Section (3), such fifteen clear days notice was prescribed. The manner of service of such notice under Sub- Section (3) was, thus, prescribed by Rule 24-A Sub-Rules (1) and (2) of the Rules. While considering whether the relevant provisions of Section 34-A of the Act and Rule 24-A of the Rules are mandatory or directory, a learned Judge of this Court considered them to be mandatory in Gaddampalli Jagpal Reddy v. District Collector, Nalgonda (1 supra). The learned Judge referring to the contention that the President refused to receive the notice resulting in affixture on the door, noted that such affixture of notice was not contemplated under Rule 24-A (2) of the Rules and opined that the manner of service must be by giving or tendering it to such a person or by sending it by registered post to his address. The learned Judge concluded that if such a person refused to take notice when tendered, the only course left open is to send such notice by registered post. Hence, it was concluded that affixture of notice on the door is not sufficient service unless it is sent by registered post. The learned Judge also noted that the rule contemplates that the notice has to be given or tendered to the member alone but not to a family member of a member of the Managing Committee and service of notice on the wife or son of the member is also not in accordance with Rule 24-A (2) of the Rules. Further, as in the case before the learned Judge, the notice of no confidence motion was not served on a member giving fifteen clear days notice as contemplated under Section 34-A (2) of the Act read with Rule 24-A (2) of the Rules, the learned Judge set aside the said notice and held that the meeting for consideration of motion of no confidence pursuant to such notice cannot be held. Similar provisions under the Andhra Pradesh Panchayat Raj Act, 1994 were under consideration of a Full Bench of this Court in K. Sujatha v. State (3 supra). The statutory provision prescribed further action on a notice of a motion of no confidence to be in accordance with the procedure prescribed and the relevant statutory rules prescribing the manner and method of such motion and notice stipulated notice of not less than fifteen clear days excluding the date of notice and the date of proposed meeting in the prescribed form by giving or tendering such notice to the member or if such member is not found, by leaving such notice at his last known place of residence or business or by giving or tendering the same to some adult member or servant of his family or by sending it through registered post with acknowledgement due in case of outside residential address being known or where none of the earlier means is available or if the member or adult member of his family or servant of his family refused to receive the notice, by affixing the same at some conspicuous part of his place of residence or business. The same is the procedure for a notice even for an adjourned meeting. The Full Bench referred to K. Narasimhaiah v. Singri Gowda and others[4], wherein the Supreme Court considered mere despatch of the notice to the address of the person not to be complete giving or tendering of the notice and that the requirement of the rule should ordinarily mean that it must reach the hands of the person to whom it has to be given, even if the person to whom it is tendered refuses to accept it. The Supreme Court also held that any irregularity in complying with the provision of three clear days notice will make the proceedings invalid only when the proceedings were prejudicially effected by such irregularity. The conclusion was with reference to the other relevant provisions of the Statute throwing light on the intention of the Legislature. The Full Bench then considered a Full Bench decision of Karnataka High Court in C. Puttaswamy v. Prema[5], wherein also a similar prescription of fifteen clear days notice in respect of a motion of no confidence under the State Legislation concerning Panchayats, was under examination. The provisions of Karnataka and Andhra Pradesh Legislations were noted to be in pari materia and the Full Bench of Karnataka High Court following the ratio of the Supreme Court in Karnal Leather Karamchari Sanghatan v. Liberty Footwear Company[6] concluded serving of notice with not less than fifteen clear days before the meeting to be mandatory. The Full Bench also referred to the Full Bench decision of Orissa High Court in Sarat Padhi v. State of Orissa[7] considering a similar provision of Orissa Panchayat Legislation, wherein it was held that the duty to issue the notice and margin of fifteen clear days are mandatory, while any non-compliance with the requirement of mode of service or failure of any member to receive the notice was held to be only directory. It should be noted that the relevant statutory provision clearly provided that the proceedings of a meeting shall not be invalid merely on the ground that the notice has not been received by any member. The Full Bench then referred to Sri Challapureddy Venkata Rao v. Revenue Divisional Officer, Vizianagaram and another[8], wherein a learned Judge of this Court held the requirement of fifteen clear days notice to be not mandatory and unless real prejudice is demonstrated, the meeting is not vitiated by any inadequacy in the period of notice. It was also concluded that the period of notice has to be taken from the date of despatch and it is immaterial when it is served upon the members. The Full Bench further referred to Reddy Raghava Reddy v. Government of Andhra Pradesh[9] rendered by a Division Bench of this Court, wherein the notice was considered to be only directory and it was opined that mere use of the word “shall” cannot make it mandatory especially when no consequence of non-compliance has been provided by the Legislature. In B. Ananda Reddy v. The Revenue Divisional Officer, Jagtial[10] that led to the reference to the Full Bench, service of fifteen days clear notice was held mandatory and insufficiency of the notice in the prescribed form annexed to the rules was held to make the meeting and the proceedings thereunder a nullity. The Full Bench on an analysis of the rules in the background of the precedential law found that it must be held that the officer concerned must give and is bound to give notice of motion to every member in a requisite form annexed to the rules, which requirement is mandatory. The second portion of the rule that there should be fifteen clear days available between the two relevant dates i.e. the date of notice and the date of proposed meeting, was also held mandatory, inasmuch as the concerned officer cannot act in a manner of even issuing notice of a period of less than fifteen clear days. It was, hence, concluded that breach of these two mandatory conditions would make the meeting as well as the proceedings taken therein invalid. Dealing with different modes of delivery of notice, the Full Bench held that the purpose and object of giving notice is only to give due intimation to the members and unless it is shown that the shortfall in the period of notice of the meeting has caused some prejudice to the member, neither the meeting nor the proceedings taken thereunder would be said to be invalid. Therefore, it was concluded that the decision of the Division Bench in B. Ananda Reddy v. The Revenue Divisional Officer, Jagtial (10 supra) is incorrect. It should be noted that under Rule 24-A of the Rules herein, the alternative modes of delivery of notice by leaving such notice at the last known place of residence or business of the member or by giving or tendering the same to some adult member or servant of his family or in case of the refusal of the member or the adult member of his family or servant of his family to receive the notice, by affixing the same at some conspicuous part of his place of residence or business, are not available like under the rule under consideration of the Full Bench. It should also be noted that the learned Single Judge deciding Gaddampalli Jagpal Reddy v. District Collector, Nalgonda (1 supra) had specifically noticed that any delivery or service by affixture of notice is not contemplated by the statutory rule and similarly it also did not