IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY WEDNESDAY, THE 22ND JUNE 2011 / 1ST ASHADHA 1933 WA.No. 445 of 2011() -------------------- AGAINST THE ORDER IN WPC.2940/2011 Dated 03/02/2011 .................... APPELLANT/8TH RESPONDENT ---------------------------- THE MANAGING COMMITTEE/BOARD OF DIRECTORS, THIRUVALLA EAST CO-OPERTIVE BANK LTD., NO.3260, H.I.ERAVIPEROOR, REP.BY ITS PRESIDENT, PIN 689542. BY ADV. SRI.P.RAVINDRAN, SENIOR ADVOCATE SMT.S.SHEEJA KUMARY(AYOOR) SMT.APARNA RAJAN RESPONDENTS/PETITIONER/RESPONDENTS 1 TO 7 -------------------------------------------- 1. A.P.GOPALAKRISHNAN, S/O.A.P.PARAMESWARAN PILLAI, ENNIKKATTU HOUSE, KALLOOPPARA P.O., THIRUVALLA. 2. STATE OF KERALA, REP.BY ITS SECRETARY, TO GOVERNMENT, DEPARTMENT OF CO-OPERATION, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN 695001. 3. THE KERALA STATE CO-OPERATIVE ELECTION COMMISSION, OFFICE OF THE KERALA STATE CO-OPERATIVE ELECTION COMMISSION, BY ITS SECRETARY PIN 695001. 4. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), CIVIL STATION, PATHANAMTHITTA, PIN 689001. 5. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES THIRUVALLA (RETURNING OFFICER FOR THE CONDUCT OF ELECTION TO THE MANAGING COMMITTEE OF THIRUVALLA EAST CO-OPERATIVE BNAK LTD., NO.3260, PIN 689101. 6. THE ASSISTANT REGISRAR OF CO-OPERATIVE SOCIETIES (G),OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), RANNI CIRCLE, RANNI (ELECTORAL OFFICER FOR THE CONDUCT OF ELECTION TO THE MANAGING COMMITTEE OF THIRUVALLA EAST CO-OPERATIVE BANK LTD.,NO.3260, PIN 689672. 7. THIRUVALLA EAST CO-OPERATIVE BANK LTD., NO.3260, H.O.ERAVIPEROOR, REP.BY ITS GENERAL MANAGER, PIN 689542. 8. THE ADMINISTRATOR/DEPUTY REGISTRAR (ADMINISTRATION), THIRUVALLA EAST CO-OPERATIVE BANK LTD.,NO.3260, H.O.ERAVIPEROOR, THIRUVALLA, PIN 689542. R1 BY ADV. SRI.S.SUBHASH CHAND R2-R6 BY G.P. SRI.K.C.SANTHOSH KUMAR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 14/06/2011, ALONG WITH WPC NO.2940 OF 2011, THE COURT ON 22/06/2011 DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. .................................................................... Writ Appeal No.445 of 2011 & W.P.(C) No.2940 of 2011 .................................................................... Dated this the 22nd day of June, 2011. JUDGMENT Ramachandran Nair, J. This is the second round litigation in this court pertaining to election to the Thiruvalla East Co-operative Bank Ltd. (hereinafter called the "Bank"). The Bank has 68000 members and atleast 25000 are issued with photo identification cards which is for the purpose of participating in the election to the Board of Directors of the Bank. The last election fixed on 24.10.2009 was postponed by the State Co- operative Election Commission and the same was published in the newspapers. However, on a writ petition filed challenging the postponement of the election, this court directed holding of election on the date usually fixed for the poll. However, the interim order of this court directing holding of the election was not published in the newspapers, whereas the postponement was published in the local newspapers. In the election held pursuant to the orders of this court, W.A. 445/11 & WPC 2940/11 2 only a very low percentage of the members participated in the election i.e. as many as 4400 as against the 25000 members who have phot identification cards. In the Writ Appeals filed the Division Bench of this court felt that the election held with participation of very limited members did not achieve the purpose of constituting a proper Board of Directors which could be called a representative body of the members of the Bank. The election was, therefore, declared invalid vide our judgment in the batch case W.A. No.2392/2010 and connected cases and we ordered repoll without any delay. Though the election was set aside, we allowed the Board that was already constituted and taken over charge to function with a restriction against taking policy decisions. The SLPs. filed against the Division Bench judgment were dismissed by the Honourable Supreme Court. Therafter Review Petition was filed before the Division Bench wherein the Division Bench did not modify earlier judgment but issued certain direction with regard to issuance of photo identification cards. Another SLP was filed against the Review Orders issued by this court which was disposed of by the Honourable Supreme Court on 30.9.2010 directing fresh W.A. 445/11 & WPC 2940/11 3 election to be held within six months from the date of the order. There was also direction by the Supreme Court to appoint an Administrator to oversee functioning of the managing committee which was permitted to continue in office by this court in the Writ Appeal judgment. Pursuant to the judgment of of this court and the order of the Supreme Court in the SLP, election was notified by the State Co-operative Election Commission on 23.9.2009. 2. The above W.P.(C) is filed challenging the election so notified on the ground that it is in complete violation of the provisions of the Co-operative Socieites Act (hereinafter called "the Act") amended by Act 7 of 2010 which came into force on 28.4.2010. The petitioner in the W.P.(C) is a retired Co-operative Bank Manager who is entitled to contest election to the Board of Directors of the Bank in the quota reserved under the newly introduced Section 28AA of the Act. The petitioner's case is that after the amendment to the Act by the Act 7 of 2010, the Board cannot be constituted in the way it is notified by the Co-operative Election Commission which is to elect 11 members with one seat reserved for Scheduled Caste and one for women. Under the W.A. 445/11 & WPC 2940/11 4 amended provisions, mandatory reservation provided is 7 of which three should go to women, two for experts in the field of banking or other professions, one for members holding deposit above Rs.10,000/- and one for Scheduled Caste. Even though election was notified pursuant to judgment of this court and the order of the Hon'ble Supreme Court in the SLP, learned Single Judge felt that such election should be consistent with the amended provisions of the statute which requires initiation and completion of the entire election process and not just a repoll pursuant to the judgment of this court and the order of the Honourable Supreme Court in the SLP. In these circumstances, the learned Single Judge granted stay against holding of election as notified by the State Co-operative Election Commission. 3. The Writ Appeal is filed against the detailed interim order passed by the learned Single Judge. Since the Hon'ble Supreme Court has fixed time limit, we felt there is urgency in the matter and, therefore, when Writ Appeal filed against the interim order came up for hearing, we posted the W.P.(C) also for hearing. We have heard Sri.Subhash Chand, counsel appearing for the petitioner and Senior W.A. 445/11 & WPC 2940/11 5 counsel Sri.P.Ravindran appearing for the contesting respondents and Government Pleader for the State and State Co-operative Election Commission. 4. There is no dispute that fresh election should be held based on the Division Bench judgment of this court in the batch cases and the order of the Honourable Supreme Court in the SLP dated 30.9.2010 produced as Ext.P7 in the W.P.(C). However, the only question is whether a repoll of the election originally notified in September 2009 should be held or whether an altogether new election based on the amended provisions of the Act should be held. Admittedly the Co- operative Societies Act was amended by Act 7 of 2010 which came into force on 28.4.2010 and to have the Board of the Bank constituted in terms of the amended provisions of Section 28 and 28AA, fresh notification has to be issued after amending the Bye-laws of the Bank providing for additional reservations with or without increasing the total number of members of the Board. This is because as against the reservation of two members under the bye- laws of the Society i.e. one for women and other for Scheduled Caste, under the amended W.A. 445/11 & WPC 2940/11 6 provisions reservation has to be provided for seven members, three for women, two for experts in banking or other profession, one representing members with deposits above Rs.10,000/- and one for Scheduled Caste. While the case of the petitioner is that the Honourable Supreme Court while disposing of the SLP on 30.9.2010 directed holding of fresh election within six months from the date of the order and according to him, the long time granted by the Supreme Court itself clearly indicates that the whole process of election should be completed and the same should be consistent with the amended provisions of the Act which provides for reservations to new categories of members, the case of the respondents namely, the Board of Directors which is managing the Bank on adhoc basis under orders of this court is that the Honourable Supreme Court has only considered Division Bench judgment of this court and in the said judgment the Division Bench only expected a repoll and not initiation of an election proceedings afresh. The amendment came after this court rendered judgment in the connected Writ Appeals and passed orders in the Review Petitions filed against the said judgment. Therefore, this court W.A. 445/11 & WPC 2940/11 7 had no occasion to consider the amendment introduced to the Act fixing the maximum strength of Board of Directors and providing extensive reservation to various categories. Even though the amendment was notified by the time the SLP was heard and decided by the Honourable Supreme Court on 30.9.2010, none of the parties brought the amendment to the notice of the apex court and, therefore, the same is not considered in the order. We feel the petitioner or any other parties could have moved the Honourable Supreme Court for clarification of the order in the SLP. However, since it was not done and in the above W.P.(C) the learned Single Judge has stayed the election through a detailed order, we have to necessarily consider whether the fresh election is to be conducted in accordance with the amended provisions of the Act or whether it should be a repoll of the election already notified in September 2009. 5. Counsel for the petitioner has relied on judgment of this court in AZEEZKUTTY VS. RETURNING OFFICER reported in 2008(4) KLT 165 and contended that amendment to the Act has the effect of overruling bye-laws of the Society and after the amendment came into W.A. 445/11 & WPC 2940/11 8 force, no election could be made against the mandatory provisions of the statute. Senior counsel appearing for the respondents on the other hand contended that neither this court nor the Honourable Supreme Court interfered with the election first notified in 2009 and all what the court directed was repoll of the election already notified. According to him, since the Supreme Court has not reversed the judgment of this court, the election ordered to be held pursuant to the orders issued in the SLP on 30.9.2010 is also a repoll only and not an initiation of fresh election proceedings. As already stated by us, the amendment was introduced after this court rendered judgment in the batch cases and passed orders in the Review Petitions and, therefore, the amended provisions of the Act were not in the contemplation of this court when judgment and orders were issued. Even though the Honourable Supreme Court considered and disposed of the SLP after the provisions of the Act were drastically amended, none of the parties including the respondents brought the same to the notice of the Honourable Supreme Court. In fact, respondents themselves could have moved the Supreme Court for a clarification as to whether election should be a repoll or W.A. 445/11 & WPC 2940/11 9 whether it should be in accordance with the amended provisions of the Act. In our view, the only question to be considered is whether the Honourable Supreme Court would have permitted an election contrary to the provisions of the statute, if the amendment was brought to the notice of the court at the time of disposal of the SLP. What the Honourable Supreme Court has directed is to hold fresh election within six months. In our view, the order implies that election should be held in accordance with the provisions of the Act and Rules and the Bye- laws of the Society which obviously means that the members to be elected to the Board should be in accordance with the amended provisions of the Act. The Honourable Supreme Court was well aware of the long time required for initiation and completion of the process of election and that is why six months' time was granted from the date of the order. If the Board of Directors and the statutory authorities have taken steps to amend the Bye-laws of the Bank consistent with the amended provisions of the Act, then election could have been held in terms of the amended provisions probably even within the time fixed by the Honourable Supreme Court. The election so held, in our view, W.A. 445/11 & WPC 2940/11 10 would not have been a violation of the judgment of this court or the order of the Honourable Supreme Court in the SLP. The demand of the respondents for a repoll of the election originally notified without taking into account amendment to the Act, cannot be accepted because any election notified after amendment to the statute should be to constitute Board of Directors of the Bank consistent with the amended provisions of the Act which provides for seven members from the reserved quota as against two proposed to be elected under the existing Bye-laws of the Bank. In our view, the Board to be constituted in the fresh election pursuant to the orders of this court and that of the Honourable Supreme Court will have the full tenure of 5 years. Therefore, we do not find any justification to permit fresh election against the mandatory provisions of the Act introduced more than one year back. Therefore, we uphold the view taken by the learned Single Judge in the interim order impugned in the Writ Appeal i.e. to hold fresh election based on the order of the Honourable Supreme Court in the SLP dated 30.9.2010 in accordance with the amended provisions of the Act. We, therefore, dismiss the Writ Appeal filed against interim W.A. 445/11 & WPC 2940/11 11 order and allow the W.P.(C) by directing the Administrator to amend the Bye-laws after holding General Body meeting for fixing the number of members of the Board of Directors in accordance with the provisions of the Act and Rules simultaneously providing reservations also in accordance with the amended provisions of the Act. This should be done at the earliest and within the minimum required time and the Co- operative State Election Commission is directed to conduct fresh election in accordance with the amended provisions of the Act without any delay. In view of our above direction, if the election could not be held within the time stipulated by the Honourable Supreme Court in the order in the SLP dated 309.9.2010, it is upto the concerned parties to apply for extension of time before the Honourable Supreme Court for compliance with their order. 6. A question incidentally raised before us relates to the maximum permitted number of members to the Board of Directors of the Bank which according to the petitioner, is 13 as provided under the substituted provision namely, sub-section (1A) of Section 28 of the Act. What this Section says is that in the case of a Primary co- W.A. 445/11 & WPC 2940/11 12 operative Society, the Board of Directors shall not have less than 7 members and shall not exceed 13. Senior counsel appearing for the respondent contended that the Bank in this case is not a Primary Co- operative Society and it is an Urban Co-operative Bank. Broadly, the classification of societies under the definition clause and Rule 15 are Apex, Central and Primary and apparently depending on the area of operation, nature of business and identity of members or beneficiaries, the societies are sub-divided through separate definitions. We do not think there is any need for us to decide this issue because it is for the Administrator to consider the Bye-laws, find out identity of the Bank and suggest fixation of maximum permissible members to the Board with reservations in the meeting of the general body of members for their approval. The Bye-laws of the Bank as it stands now provides for constitution of Board with 11 members. Since under the amendment 7 seats will go to the reserved categories, it is for the Administrator to consider whether the present strength of 11 should be increased to the maximum of 13, if the Bank is a Primary Co-operative Society and then to get approval of amendment to the Bye-law from the W.A. 445/11 & WPC 2940/11 13 General Body meeting for the purpose of holding fresh election. The Writ Appeal is dismissed and W.P.(C) is allowed directing the Administrator holding charge of the Board of Directors to immediately take steps for amendment of the Bye-laws and do all the needful for the Co-operative State Election Commission to notify and conduct election in accordance with the amended provisions of the Act, Rules and Bye-laws without any delay. Sd/- C.N.RAMACHANDRAN NAIR Judge Sd/- BHABANI PRASAD RAY Judge True copy P.S. to Judge pms