HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.15510 of 2009 Wednesday the 19th day of August, 2009 Between: Takkalapally Gopal Rao. … Petitioner And 1. The Deputy Registrar of Co-Operative Societies/ Divisional Cooperative Officer, Mulug,Warangal District and 5 others. …Respondents * * * HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.15510 of 2009 ORDER: Heard Sri Nandigam Krishna Rao, learned counsel representing writ petitioner, learned Government Pleader for Cooperation and Sri B. Narayana Reddy, learned counsel representing respondents. 2. Takkalapally Gopal Rao, the writ petitioner, filed the present writ petition praying for a writ of Mandamus declaring the proceedings issued by the first respondent, dated 28.7.2009, in Rc.No.327/2009-C appointing respondents 3 to 5 as person in charge committee of the society on the basis of the alleged resignation submitted by the members of the society, holding the society as defunct, as illegal, arbitrary, unconstitutional and violative of principles of natural justice and against the powers vested in him under Section 32 (7)(a) of the A.P. Cooperative Societies Act, 1964 read with sub-rule (5) of Rule 23- AAA of the Andha Pradesh Co-operative Societies Rules, 1964, and consequently to set aside the same and pass such other suitable orders. 3. Sri Nandigam Krishna Rao, learned counsel representing the writ petitioner had taken this Court through the respective stands taken by the parties in the affidavit filed in support of the writ petition and also counter-affidavits and would maintain that in the light of Rule 23-AAA of the Andhra Pradesh Co-operative Societies Rules, 1964 (hereinafter in short referred to as “the Rules” for the purpose of convenience) the very action of submitting resignation letters being not in accordance with law, the proceedings are vitiated and, hence, the writ petition to be allowed. The learned counsel also had drawn the attention of this Court to Section 32 of the Andhra Pradesh Co- operative Societies Act, 1964 (hereinafter in short referred to as “the Act” for the purpose of convenience) and would further maintain that even in the light of the same and also in the light of Rule 23 of the Rules, the impugned action cannot be said to be in accordance with law. 4. The learned Government Pleader for Co-operation specifically had drawn the attention of this Court to Rule 23-AAA (5) and would maintain that in the light of the same it cannot be said that Rule 23-AAA (3) would be attracted and inasmuch as the present action would fall under Rule 23-AAA (5) of the Rules, the same being in accordance with law, the writ petition to be dismissed. The learned Government Pleader for Co-operation also strongly relied on Section 31 of the Act and also specifically pointed out to Rule 23 (2) of the Rules and would maintain that since the quorum for a meeting of the committee shall be the majority of the total members of the committee, inasmuch as the majority members submitted resignation letters, the first respondent is duty bound to hold elections and till the new managing committee takes charge, the first respondent may appoint person-in-charge or direct the Managing Committee to continue to discharge their functions till the elections are held and the new Managing Committee takes charge, the action under challenge in the present writ petition being in accordance with law, the writ petition to be dismissed. 5. Sri B. Narayana Reddy, the learned counsel representing respondents 7 to 14, who were impleaded by this court order in W.P.M.P.No.22145 of 2009 had taken this Court through the contents of the counter-affidavit and would maintain that in the light of the facts and circumstances the order under challenge cannot be said to be illegal and, hence, the writ petition to be dismissed. 6. Heard the counsel on record and perused the respective stands taken by the parties. 7. The relief prayed in the writ petition had already been specified supra. It is the case of the petitioner that the petitioner was elected as president of the Primary Agricultural Co-operative Society, Ghanpur (hereinafter in short referred to as “the Society” for the purpose of convenience) in the elections held in the year 2005. Apart from the petitioner, 12 other members also were elected as Directors of the society, who in turn had elected the petitioner as president of the society. It is further stated that one of the directors namely Reguri Sammi Reddy, who is the Ex-president of the society had started interfering with the affairs of the society from the beginning from 2005 onwards, as he was facing charges of misappropriation along with the Secretary K. Sukhender Reddy and the same was confirmed in the inquiry under Section 51 of the Act by proceedings in Rc.No.856/2008- Defendant, dated 27.5.2009. Section 51 of the Act reads as hereunder. “51. Inquiry:- The Registrar, may of his own motion and shall, on the application of a society to which the society concerned is affiliated, or of not less than one third of the members of the Committee, or of not less than one fifth of the total number of members of the society, hold an inquiry or direct some person authorized by him by an order in this behalf to hold an inquiry into the constitution, working and financial condition of a society. Such inquiry shall be completed within a period of four months and the report of inquiry along with the findings of the Registrar thereon shall be communicated to the managing committee of the society. It shall be the responsibility of the managing committee to place the inquiry report before the General Body or Special General Body convened for the purpose for its information, within a period of one month from the communication of the inquiry report by the Registrar. The Registrar shall be competent to initiate action under the provisions of this Act, if the committee fails to take action as aforesaid. Provided that notwithstanding anything contained in this Act and the Rules made thereunder, the bye laws of a society and the action of the society in placing the inquiry report along with the findings of the Registrar, the Registrar shall not be precluded from taking follow up action as may be required on the basis of inquiry report: Provided further that such action shall not be nullified even if the General Body of the Society passes a resolution negativing the findings of the inquiry: Provided also that the Registrar may for reasons to be recorded in writing extend the period of four months for completion of inquiry for a further period not exceeding two months. Explanation:- For the purpose of this section, “Managing Committee” includes a Committee constituted under Section 31 (1)(a), and a person-in-charge appointed under Section 32 (7)(a) and also a special officer appointed under Section 34 of the Act.” 8. It is also the case of the writ petitioner that the writ petitioner was directed by the official respondents to proceed against the said secretary as well as the Ex-President of the society by filing criminal complaint. The society also filed criminal complaint and the police are yet to take action. While things stood thus, in order to see that the committee of the society becomes defunct under the leadership of Sammi Reddy, Ex-President of the society, the present directors of the society issued notice of No Confidence Motion in Form AAA to the first respondent dated 01.7.2009. Though the said notice is defective in nature, in view of the reason that the signatories to the notice had not furnished their addresses as stipulated under the Rules, however, the first respondent had acted upon the same and directed the society to hold M.C. meeting to discuss about the No Confidence Motion dated 22.7.2009. Accordingly, the M.C. meeting was held on 22.7.2009 wherein due to lack of strength for moving No Confidence Motion, the No Confidence Motion was not carried and the M.C. meeting was concluded by the first respondent holding that since the managing committee members or the petitioner committee members president at the meeting till 12.00 noon on 22.7.2009 i.e., the date fixed for the proposed motion of no confidence against Thakkalapally Gopal Rao, President, and Kandukuri Brahmachary, Vice-President of P.A.C.S, Ghanpur (Mulug) was declared as not carried and accordingly the meeting was concluded. 9. It is also stated that the said Sammi Reddy and others having failed in their attempts to move No Confidence Motion on 22.7.2009 as such in order to defeat the very purpose and democratic functioning of the society, they had submitted their resignations to the first respondent i.e., Deputy Registrar of Co-Operative Societies, Mulugs on 22.7.2009. Though the first respondent has no power or authority under the law to receive the said resignation letters, for the reasons best known to him, he had received the same. Thereafter, based on the said resignation letters submitted by 8 members of the society, had treated the committee of the society as defunct and appointed person- in-charge committee through proceedings Rc.No.327/2009-C, dated 28.7.2009. 10. It is also averred that the committee of the society is constituted under Section 31 of the Act. Section 31 of the Act reads as hereunder. Constitution of committees:- [(1) (a)] The general body of a society shall constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee: [x x x] [Provided that in the case of a society registered after the commencement of the Andhra Pradesh Co- operative Societies (Second Amendment) Act, 2001 the persons who have signed the application for the registration of the society shall conduct the affairs of the society for a period of one month from the date of registration and shall cease to conduct the affairs of the society after duly constituting a committee as per the provisions of the Act thereafter:] [Provided further] that where the bye-laws so provide, the Government or the Registrar may nominate all or any of the members of the committee for such period as may be specified therein; [x x x] [(b) On the Committee of such society or class of societies [other than the societies formed exclusively for the persons belonging to the Scheduled Castes, Scheduled Tribes or Backward Classes] as may be notified by the Government, such number of seats as may be specified by them shall be reserved for the members of the Weaker Section: [Provided that in the case of such classes of Societies as may be prescribed, two seats shall be reserved for women in the manner prescribed and such reservation may be made in the reserved and unreserved categories also:] [Provided further that] in the case of a Primary Agricultural Co-operative Credit Society, a Farmers Service Co-operative Society [x x x] a Co-operative Farming Society, [x x x] a Co-operative Central Bank and a District Co-operative Marketing Society, [not more than one-half] of the total number of seats to be filled by elected members on the committee thereof shall be reserved [to be filled by members of the Scheduled Castes, Scheduled Tribes [Backward Classes and Women in such proportion as may be prescribed:]] [Provided also that] where no such members are elected in the proportion specified in the foregoing proviso the persons elected as members of the committee shall choose in the prescribed manner the members required to fill up the short fall in the said proportion, from amongst the persons belonging to the Scheduled Castes, Scheduled Tribes, [Backward Classes or Women], as the case may be, who are members of the general body of the society: Provided also that in a committee where the number of members elected as aforesaid was fallen short of the said proportion, in respect of any of the categories of the weaker sections, namely, Scheduled Castes, Scheduled Tribes or Backward Classes, the persons elected as members of the Committee shall choose in the prescribed manner the members required to fill up the short fall in the said proportion, from amongst the persons belonging to the other categories of weaker sections in such order of priority as may be prescribed.] Explanation:- For the purposes of this clause--- (1) the expression ‘members of the weaker sections’ shall mean the persons belonging to the Scheduled Castes, Scheduled Tribes, [x x x] Backward Classes and such other socially and economically backward sections of the community as the Government may, from time to time, notify in this behalf; (2) in the determination of ‘one half of the total number of members’ any fraction arrived at shall be counted as one.] [(1-A) Notwithstanding anything in this Act or in the bye-laws he societies referred to in Clause (b) of sub- section (1), the Government may, for the purpose of effective implementation of the reservation specified in Clause (b), by rules made in this behalf, provide for the Constitution of, and election to, the committees of such societies and all other matters relating thereto, including the division of constituencies, allocation of seats and the choice of persons belonging to weaker sections of the society as members of the committee of any central society from amongst the members of the committees of the societies affiliated to such central society, by the members of the central society in cases where no such person is a member of the general body of such central society.] [(2) [(a) Save as otherwise provided in this Act, the term of office of the committee or any of its members or of the President elected in accordance with the provisions of sub-section (5) shall be five years from the date of election of the members of the committee: Provided that the term of office of five years specified in this clause shall be applicable only to a committee or its members or the President elected in any ordinary election conducted after the commencement of the Andhra Pradesh Co-operative Societies (Second Amendment) Act, 1995 and the term of office of any committee or its members or the President holding office at such commencement shall be the same for which they were elected under the law in force when they were elected.] (b) It shall be the duty of the Registrar to hold elections to the [office of the members of the committee of a society which received state aid as specified in Section 43 of the Act before the expiry of their term.] [(c) in respect of other societies it shall be the responsibility of the incumbent committee of such society to hold elections to the office of the members of the committee in the manner specified in the byelaws before the expiry of the term: Provided that where the committee of a society requests the Registrar to hold elections to the office of the members of the committee, the Registrar shall hold elections to the office of the members of the committee in the manner prescribed on payment of costs in advance.] [(3)(a) In the case of the committee of Co- operative Central Bank, a District Marketing Society, a District Co-operative Wholesale Store, a Centrally sponsored Consumer Co-operative Stores, an apex society and a society formed for a sugar factory or for a spinning mill, [such officer of the co-operative department, not below the rank of a Deputy Registrar, as may be authorized by the Registrar in this behalf] shall be he election officer and the election of the members of the committee shall be in such manner as may be prescribed. (b) In any other case, the election officer and the manner of election of the members of the committee shall be such as may be prescribed; Provided that where a requisition signed by not less than one-fifth of the total number of members is received by the Registrar to appoint the election officer to conduct the election, the Registrar shall appoint the election officer to conduct the election.] [(4)(a) For the purpose of electing members to its committee, a society may provide in its bye-laws, for the division of the area of operation of a society into territorial constituencies, or the membership of the society into electoral groups on any other basis, for the number or proportion of members who may be elected to represent each such territorial constituency or electoral group on the committee, and for the manner of election of such representatives. (b) In the absence of such bye-laws, the society may elect members to its committee from among all the members of the society.] [(5) In the case of such classes of Co-operative Societies as may be prescribed, the President shall, subject to the provisions of Section 21-A, be elected by the members of the general body from among themselves in the manner prescribed. The President elected under this sub-section shall be and ex-officio member of the committee.]” 11. The General Body elects the members of the managing committee and in terms of Section 31 of the Act and in terms of Section 31 (2)(a), the term of the committee or any of its members or the president elected in accordance with the provisions of sub-section (5) shall be five years from the date of election of the members of the committee. It is further explained that the term of five years specified in the said Rule shall be applicable only to the committee or its members or the president elected in the ordinary election conducted at the commencement of the A.P.C.S. Act (2nd amendment, 1995) and the term of the office or its members or the president holding office at the commencement shall be the same for which they were elected under the law in force and they were elected. 12. In terms of the said provision, it is clear that the term of the elected members is for five years and as such not only the impugned proceedings are liable to be set aside, but also further the petitioner has right to continue as president of the managing committee of the society for five years from the date of his election. That apart, apart from the petitioner the other members of the society namely (1) Katakam Vanamala (2) Kandukuri Brahmachary (3) Dev Singh and (5) Saggem Srinivas are also entitled to continue to hold the office of the society till the expiry of five years tenure from the date of their election, as such the impugned proceedings issued by the first respondent is in violation of Section 31 (2) of the Act. 13. Further it is stated that the first respondent has no authority under law to receive the resignations from the members of the society addressed to him and further the first respondent cannot accept the same. It is for the managing committee of the society to receive the resignations and accept the same in its meeting. It is also stated that the impugned resignation letters had been addressed to the first respondent by the said 8 members of the society and though the first respondent has no power at all to accept the same, he had received the said defective resignations though they were not addressed to the society or to the president in terms of Rule 23-AAA of the Rules and contrary to the said Rule the impugned order had been made. It is also stated that in case if any member of the committee resigns by sending letter of resignation by registered post or tendering it in person to the Chief Executive Officer/President of the society, the said resignation shall take effect from the date of acceptance by the managing committee. Thus, the resignation letters addressed to the managing committee shall come into effect from the date of its acceptance by the managing committee and until then the Registrar cannot step into the shoes of managing committee of the society by appointing person-in- charge. The relevant provisions of the Act and the Rules also had been referred to in the affidavit filed in support of the writ petition. 14. In the counter-affidavit filed by proposed parties, who came on record as respondents 7 to 14 by impleading themselves by filing W.P.M.P.No.22145 of 2009, substantially, the same stand taken in the counter-affidavit of R-1 and R-2 had been repeated and no doubt the copy of the certificate dated 08.8.2009 also had been placed before this Court. 15. In the counter-affidavit filed by respondents 1 and 2 it is averred that without making Sammi Reddy and another as parties, certain allegations had been made against the non-parties to the writ petition. Further it is stated that none of the official respondents had directed the petitioner to proceed against the Ex-President R. Sammi Reddy and further to their knowledge, no criminal case had been filed against him. It is stated that out of the total strength of the elected managing committee i.e., (13) M.C. members, as many as (9) managing committee members, voluntarily approached the first respondent on 01.7.2009 and filed Form-AAA along with a resolution signed by 9 members, requesting to convene meeting of the managing committee as required under Section 34-A of the Act. Accordingly, the date was fixed on 22.7.2009 at 11.00 a.m. at the seat of the society for debate on the issue of “No Confidence” against the petitioner and vote, but none of the managing committee members were present at that meeting and the first respondent declared the issue of “No Confidence” as not carried and concluded the meeting. The first respondent responded to the Form-AAA filed by majority of members as required under Section 34-A of the Act, but not in order to see the committee of the society becomes defunct as contended by the petitioner. 16. The elected (8) managing committee of the society had approached the first respondent and filed separate letters dated 22.7.2009 tendering resignation to the elected post of the member of the managing committee specifying various reasons for their resignation and the first respondent after careful consideration of the issue, initiated action under sub-rule (5) of Rule 23-AAA of the Rules. Sub-rule (5) of Rule 23-AAA reads as hereunder. “In the event of resignation of the entire Managing Committee or a majority of the Managing Committee, the Registrar of Cooperative Societies shall hold elections and till the new Managing Committee takes charge the Registrar may appoint person incharge or direct the Managing Committee to continue to discharge their functions till the elections are held and the new Managing Committee takes charge.” 17. It may be appropriate to have a glance at sub-rule (3) of Rule 23- AAA and the said sub-rule reads as hereunder. “Notwithstanding anything in the bye-laws of the society, any member or members of the committee may resign their seats by sending a letter of resignation by Registered Post or by tendering it in person to the Chief Executive Officer/President of the society and such resignation shall take effect from the date it is accepted by the Managing Committee.” 18. It may be appropriate to have a look at Rule 23 of the Act and the said Rule 23 reads as hereunder. “Quorum for meeting:- (1) Save as expressly provided in the Act no general meeting shall be held or proceeded with unless there is a quorum as specified in the bye-laws provided that the bye-laws shall not specify quorum which is less than 1/5th of the total members. (2) The quorum for a meeting of the committee shall be the majority of the total members of the committee.” 19. It is also stated that since the majority members resigned, there being no valid committee and the committee with remaining 5 members out of 13 elected members became short fall of quorum and keeping in view the provisions of sub-rule (5) of Rule 23-AAA of the Rules, the first respondent initiated action and appointed person in charge committee under Section 32 (7)(a) of the Act, as the powers under the said section are vested with him as per G.O.Ms.No.34, Food & Agril. (Coop.IV) Dept., dated 16.01.1989, in order to provide management to the society. It is stated that consequently on