THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.22193 of 2010 Dated 07th February, 2011 Between: Vijaya Milk Producers Mutually Aided Cooperative Society Limited …Petitioner And The Commissioner/Registrar Mutually Aided Co.op Societies (RCS), Gruhakalpa, Hyderabad and others …Respondents Counsel for the petitioner: Sri N.Rajeswara Rao Counsel for respondent Nos.1 & 2: GP for Cooperation Counsel for respondent No.5 : Sri Gandra Mohan Rao The Court made the following: ORDER: This writ petition is filed for a mandamus to set aside proceedings, dated 21.08.2010, of respondent No.2, and proceedings, dated 06.07.2010, of respondent No.3. The petitioner sought for a consequential direction to respondent No.2 to take necessary steps for conducting elections for two vacant posts of Directors of the petitioner- Society. I have heard Sri N.Rajeswara Rao, learned counsel for the petitioner, the learned Government Pleader for Cooperation representing respondent Nos.1 and 2, and Sri Gandra Mohan Rao, learned counsel representing respondent No.5. Though served, respondent No.3 has not entered appearance. The petitioner is a Society registered under the A.P.Mutually Aided Cooperative Societies Act, 1995 (for short ‘the Act’). Respondent No.3 is the Karimnagar District Milk Producers Mutually Aided Cooperative Union Limited, of which, the petitioner is a Member. The term of two of the Directors of the petitioner-Society was coming to an end by 30.06.2010. Though steps were taken for holding elections, which were fixed for 28.06.2010, evidently on account of clash between two groups, the elections did not take place. On a representation made by the President of the petitioner- Society, respondent No.2 issued proceedings in Rc.No.3023/2010-W, dated 02.08.2010, whereby he has appointed one B.Raja Gangaram, Assistant Registrar, O/o.Sub-Divisional Cooperative Officer, Sircilla, as an Election Officer for conducting elections to two vacant posts of Directors. These proceedings were subsequently, cancelled by proceedings in Rc.No.3023/2010-W, dated 21.08.2010, of respondent No.2. On the same date, respondent No.2 issued another proceedings, wherein it was directed that a General Body Meeting shall be held on 09.09.2010 at 10.30 am for appointment of an ad hoc Committee for conducting elections. It is further directed therein that the Managing Director of respondent No.3 shall issue a notice in daily newspapers regarding holding of General Body Meeting, apart from causing beat of tom tom in the Villages concerned. In this writ petition, the petitioner has questioned both these proceedings inter alia on the grounds that having issued proceedings on 02.08.2010 appointing an Election Officer for holding elections for two vacant posts of Directors, respondent No.2 is not justified in cancelling the said proceedings, even without a notice to the petitioner and that even assuming that respondent No.2 was satisfied that fresh elections for the Board of Directors need to be held as per the bye- laws, constitution of an ad hoc committee and involvement of respondent No.3 in the election process is illegal. Separate counter affidavits have been filed by respondent Nos.2 and 5. In the counter affidavit of respondent No.2, it is inter alia stated that the petitioner failed to conduct elections to two vacant posts of Directors before 30.06.2010 as per bye-law No.18.07 of the petitioner- Society, that as such, all the Managing Committee Members, including the President of the petitioner-Society, were disqualified and that the Managing Committee ceased to exist. It is further stated that in the absence of the Managing Committee to run the Society, the Registrar/the then District Cooperative Officer (FAC), Karimnagar, exercising his power under Section 23(3) of the Act, called for a General Body Meeting to constitute an ad hoc committee to run the Society smoothly vide his proceedings, dated 21.08.2010 and fixed the General Body Meeting on 09.09.2010. It is further averred that as per bye-law No.18-1, the strength of the Committee of the petitioner- Society is ten and under bye-law No.18.2, the term of the elected Managing Committee is five years and two elected members will retire every year by drawal of lots. It is also averred that as the term of two Directors was coming to an end by 30.06.2010, as per bye-law No.18.5, the Society was to hold elections by convening General Body Meeting and accordingly, it has initiated action for conducting elections on 28.06.2010, that as there was obstruction from non-members, elections could not be held. That on the representation made by the President of the petitioner-Society on 29.06.2010, the District Collector, Karimnagar granted special permission to conduct the elections before 30.06.2010 and there upon, the District Cooperative Officer (FAC) issued proceedings, dated 02.08.2010, appointing an Election Officer fixing 12.09.2010 as the date of election. That the Election Officer, who visited the Society on 12.08.2010, submitted a report on 17.08.2010, stating that as per the provisions of bye-law Nos.18.5 and 18.07 (A), the Managing Committee ceased to exist in view of non holding of election to the two vacant posts of Directors and he requested for cancellation of the election notice in view of provisions of Section 23(3) of the Act. It is further averred that having regard to the above legal position, respondent No.2 issued proceedings, dated 21.08.2010, cancelling the elections and fixing the General Body Meeting on 09.09.2010 for appointment of an ad hoc committee for the purpose of conducting elections to the Managing Committee of the petitioner- Society. The counter affidavit filed by respondent No.5 is also on similar lines. The sum and substance of the stand of respondent Nos.2 and 5 is that having regard to the peremptory provisions of Section 23(3) of the Act and bye-law No.18.7 of the bye-laws of the petitioner-Society, all the Directors of the Board have ceased to hold their offices on account of failure of the Board to conduct elections for the two vacant posts of the Directors on or before 30.06.2010. On realising this position in law through the report of the Election Officer appointed by respondent No.2, the impugned proceedings have been issued. At the hearing, Sri N.Rajeswara Rao, learned counsel for the petitioner, has not disputed the legal position that if vacant posts of Directors are not filled up, all the Directors of the Board will automatically cease to be the Directors by operation of Section 23(3) of the Act and bye-law No.18. The learned counsel, however, emphasised that even according to the counter affidavit of respondent No.2, efforts were made by the Board to hold elections for filling up two vacancies, but due to the interference by outsiders, which resulted in clashes, the elections could not be held and therefore, there is no justification to declare that the whole Board ceased to exist. A perusal of Section 23(3) of the Act and bye-law No.18.7 shows that two consequences ensue if the elections are not held within the time stipulated. Firstly, all the Board of Directors will cease to hold their offices as Directors and secondly, they also incur disqualification for contesting the elections for three years as per the Act and two years as per their bye-laws. Neither of these provisions contains any exceptions. However, for the present, this Court is not concerned with whether the above provisions which disqualify all the Directors of the Board from contesting elections on account of non- holding of elections is valid or not. The fact, however, remains that by operation of the above provisions of the Act and the bye-laws, the Board ceased to exist. In this situation, I do not find any illegality in the action of respondent No.2 in cancelling his previous proceedings, dated 02.08.2010 and issuing proceedings, dated 21.08.2010, calling for a General Body Meeting. The further question raised by the petitioner is whether the constitution of an ad hoc committee is valid or not. Section 23(3) of the Act reads as under: “23. Elections:- (1) …. (2) …. (3) Where a Board does not take necessary steps to conduct elections as specified in the bye-laws before the expiry of the terms of the Directors, of (sic-or) where there are no Directors remaining on the Board, the Registrar shall at the request of not less than twenty-five members or five per cent of the total members of the Co-operative Society whichever is less or may suo moto convene within 30 days a general meeting for appointing as ad-hoc Board for the specific purpose of conducing elections.” The above re-produced provision makes it clear that one of the contingencies for appointment of an ad hoc committee for holding elections is absence of Directors on the Board. As noted above, with the failure of the Board of the petitioner-Society to hold elections to the two vacant posts of Directors, all the Board Members have ceased to exist and therefore, Section 23(3) of the Act gets attracted empowering respondent No.2 to appoint an ad hoc committee for conducting elections. Finally, coming to the grievance of the petitioner that respondent No.3 has been given a role for conducting elections, I find justification therein. Even if the petitioner is a member of respondent No.3-Union, in the absence of any statutory provision or bye-law, respondent No.3 cannot be involved in the elections of the petitioner- Society. To this extent, proceeding, dated 21.08.2010, of respondent No.2 cannot be sustained, and the same is accordingly set aside. Respondent No.2 is directed to issue a fresh notice fixing date of holding General Body Meeting for the purpose of appointment of an ad hoc committee for holding elections. He shall fix the date of meeting, which shall not be later than one month from the date of receipt of a copy of this order. Subject to the above, the writ petition is disposed of. Before parting with this case, it is necessary to observe that the disposal of this writ petition would not prevent the outgoing Directors of the petitioner-Society from availing appropriate remedy before the competent forum regarding their disqualification from contesting elections. As a sequel to disposal of the writ petition, the interim order, dated 06.09.2010, granted by this Court, shall stand vacated and W.P.M.P.No.28773 of 2010 and W.P.M.P.No.171 of 2011 are disposed of as infructuous. C.V.NAGARJUNA REDDY, J 07th February, 2011 VGB