IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD TUESDAY, THE FOURTEENTH DAY OF JULY TWO THOUSAND AND NINE PRESENT THE HON'BLE SMT. JUSTICE T.MEENA KUMARI and THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT APPEAL NO : 467 of 2009 & WP 16885 of 2007 WRIT APPEAL NO : 467 of 2009 (Writ Appeal under Clause 15 of the Letters Patent against the Order dated 21/10/2007 in WP NO : 16885 OF 2007 on the file of the High Court.) Between: The Perchalra Quarry Workers Labour Contract Co-operative Society Ltd repby its President shaik, Abdullah, s/o Pedda Mastan, R/o Percharla Village, Medikonduru Mndal, Guntur District. ..... APPELLANT AND 1 The Government of Andhra Pradesh repby its Divisional Co-operative Officer (FAC) Co-operation Department, Guntur, Guntur District. 2 The Asst. Director ofMines & Geology H. No. 5-76./22, 4th Lane 2nd Cross Roads, Pandaripuram, Guntur, Guntur District. 3 The Dy. Director of Mines & Geology, H. No.1/1, Ramanna Pet 1st lane, Koritepadu, Guntur, Guntur District. 4 The District Collector Guntur, Guntur District. 5 Gandikota Shaik Tangella, S/o Silar Saheb R/o Perecharla Village, Medikondur Mandal, Guntur District. 6 M/s.Pericherla Quarry Workers LCC Society, rep by its Presiden, S.K.Mastan Vali, S/o Babuni, R6 is impleaded as per Court Order dt:03-07-2009 in WAMP1274/2009 .....RESPONDENTS Counsel for the Appellant:MR.MASTHAN NAIDU CHERUKURI Counsel for the Respondent No. 1 .: GP FOR COOPERATION Counsel for the Respondent Nos. 2,3 and 4: G.P. for Mines & Geology Counsel for the Respondent No.5: Mr. Y. Subrahmanyam Counsel for the Respondent No.6: Mrs. S. Nanda And WRIT PETITION NO : 16885 of 2007 Between: The Perchalra Quarry Workers Labour Contract Co-operative Society Ltd repby its President shaik, Abdullah s/o Pedda Mastan, R/o Percharla Village, Medikonduru Mndal, Guntur District. ..... PETITIONER AND 1 The Government of Andhra Pradesh repby its Divisional Co-operative Officer (FAC) Co-operation Department, Guntur, Guntur District. 2 The Ast. Director of Mines & Geology, H. No. 5-76./22, 4th Lane, 2nd Cross Roads, Pandaripuram, Guntur, Guntur District. 3 The Dy. Director of Mines & Geology, H. No.1/1, Ramanna Pet 1st lane, Koritepadu, Guntur, Guntur District. 4 The District Collector Guntur, Guntur District. 5 Gandikota Shaik Tangella, S/o Silar Saheb R/o Perecharla Village, Medikondur Mandal, Guntur District. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ order or direction more particularly in the nature of Writ of Mandamus declaring the action of the Respondents in the Recommendation made by the First Respondent to the Second Respondent, which is influenced by the letter issued by the Fourth Respondent, which amounts to colourable Exercise of power by the respondents in recommending the Renewal of Lease of the fifth Respondent, who is incompetent to apply for it in his Capacity of Director to the Co-operative Society, In spite of the Resolution of the General Body Meeting of the Co-operative Society not to opt for Renewal of License for Quarrying the Metal Stone, is illegal, unjust and violative of fundamental rights enshrined by Articles 14, 16 and 21 of the Constitution of India, and consequently to direct the respondents to not to consider the Renewal application of the fifth respondent dated 26-6-2007 for Quarry Lease in Sy. No. 155/A, China Palakaluru Village, Guntur District, and to pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner: MR.S.SATYANARAYANA MOORTHY Counsel for the Respondent Nos.1 to 4: GP FOR COOPERATION Counsel for the Respondent No.5: V.Manohar Rao The Court made the following : THE HON'BLE SMT. JUSTICE T.MEENA KUMARI and THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT APPEAL NO : 467 of 2009 & WRIT PETITION No. 16885 of 2007 COMMON JUDGMENT: (per Hon’ble Smt. Justice T. Meena Kumari) This writ appeal is directed against the order of the learned single Judge in Writ Petition No. 16885 of 2007, dated 21.10.2008, whereby and whereunder the learned single Judge dismissed the writ petition filed by the Perecherla Quarry Workers Labour Contract Cooperative Society, represented by its President, the appellant herein, as mis-conceived. The appellant is the writ petitioner. It filed the aforementioned writ petition before the learned single Judge seeking the following relief: “For the reasons stated in the accompanying affidavit, the petitioner herein prays that this Hon’ble Court may be pleased to issue a writ, order or direction more particularly in the nature of writ of Mandamus declaring the action of the respondents in the recommendation made by the first respondent to the second respondent, which is influenced by the letter issued by the Fourth Respondent, which amounts to colourable exercise of power by the respondents in recommending the renewal of lease to the fifth respondent, who is incompetent to apply for it in his capacity of Director of the Cooperative Society, in spite of Resolution of the General Body Meeting of the Cooperative Society not to opt for renewal of licence for quarrying the metal stone is illegal, unjust and violative of Fundamental rights enshrined by Articles 14,16 and 21 of the Constitution of India, and consequently to direct the respondents not to consider the Renewal Application of the fifth respondent dated 26-06-2007, for quarry lease in Sy. No.155/A, China Palakaluru Village, Guntur District, and to pass such other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case.” The appellant-Society is a society registered under the provisions of the A.P. Cooperative Societies Act, 1964 (for short ‘the Act’). It was granted mining lease to quarry metal stone in Survey No. 155/A of Plot Nos. 15 and 16 of Chinapalakaluru Village, Guntur District and as per the terms of the lease, the first renewal was granted for a period of ten years from 1997 to 2007 vide proceedings of the Assistant Director of Mines & Geology, Guntur dated 6.11.1997. Accordingly, a lease deed was executed on 28.3.1998 in favour of the society represented by its President Shaik AbdullaH. When the lease period was coming to an end, the General Body of the society met on 2.9.2006 and passed a resolution empowering the President and the Committee to take a decision with regard to further renewal of lease. Subsequently, on 12.12.2006 the Managing Committee convened a meeting, wherein a decision not to apply for renewal of quarry lease was taken. However, subsequently, an application was filed by the President, Shaik Abdulla on 4.6.2007 for renewal of the lease. Alleging that the signatures of the President on the said application were obtained by coercion, the President, Shaik Abdullah, made another application on 22.6.2007 withdrawing the earlier application dated 4.6.2007. Thereafter, another application dated 26.6.2007 was filed by the 5th respondent who is claiming to be the Managing Director of the said Society seeking renewal of the lease. It is stated that the Divisional Cooperative Officer, Guntur vide his letter dated 27.6.2007 had confirmed the genuineness of the application dated 27.6.2007 filed through the 5th respondent. The Assistant Director of Mines & Geology considered the application dated 26.6.2007 of the society and recommended for grant of quarry lease in favour of the society for a further period of ten years. Being aggrieved, the appellant-society filed the aforesaid writ petition before the learned single Judge. Before the learned single judge, the Divisional Cooperative Officer, the 1st respondent herein, fled a counter affidavit stating that the management of the appellant-society failed to execute the works properly resulting in loss to the society. Aggrieved, some of the members of the society raised an election dispute before the Cooperative Tribunal vide O.A. No.39 of 2006, which was dismissed. While so, the Sub-Divisional Cooperative Officer, Sattenapalli after due enquiry, submitted a report on 19.9.2006 stating that the President and the Secretary of the society managed to resolve in the meeting dated 12.12.2006 not to file any application for renewal of lease, which is detrimental to the interest of the members and that the President and Secretary appear to have colluded with each other and got filed applications for grant of lease by some third parties, who are no other than their benamis. It was also stated that the President and Secretary were hand in glove with each other and intentionally avoided to file renewal applications within the stipulated period on behalf of the society. It is also mentioned that 243 members of the society made a requisition to the Divisional Cooperative Officer requesting to direct the President of the society to convene the General Body Meeting under Section 32(2) of the A.P. Cooperative Societies Act under the supervision of the Departmental Officer. Accordingly, the President of the Society was addressed a letter on 27.5.2006 to convene a General Body meeting. However, the President refused to do so. In the circumstances, the Divisional Cooperative Officer vide proceedings dated 9.8.2006 issued a statutory direction under Section 32(2) of the Act to the President and other Managing Committee members to convene the General Body Meeting. Accordingly, though a General Body Meeting was convened on 10.9.2006, the proceedings were disrupted by some of the expelled members and the situation turned violent. The same was reported by the Sub-Divisional Cooperative Officer, Sattenapalli through his report dated 19.9.2006. The result of the said meeting was not known. Since the genuine members were put to troubles and the society incurred losses, the 1st respondent by letter dated 31.3.2007, directed the appellant herein to appear before the authorities to get the quarry lease renewed. However, the appellant failed to do so. The Secretary of the Society also colluded with the President and both of them managed to resolve in the Managing Committee Meeting held on 12.12.2006 not to file any application for renewal in favour of the society, which is contrary to the existence of the society and detrimental to the interest of 320 members, who depended on the quarry lease for their livelihood. Having realized the same, the members of the society pressurized the President of the appellant-Society to file an application within the stipulated period. Though such an application was filed on 4.6.2007, the President of the appellant-society absconded from the headquarters and addressed a letter dated 22.6.2007 to the Assistant Director of Mines & Geology through courier service withdrawing the renewal application and requesting him to cancel the same. It is also stated that by the time, the Divisional Cooperative Officer, Guntur conducted a meeting of the society on 7.6.2007 under the Chairmanship of the Revenue Divisional Officer, Guntur, found that the President and Secretary had willfully neglected filing of renewal application within the stipulated period and accordingly by letter dated 8.6.2007 requested the Assistant Director of Mines & Geology, Guntur to consider the renewal application of the society dated 4.6.2007. Apart from the President’s letter dated 22.6.2007 withdrawing the renewal application, the Secretary of the Society was reported to have submitted his resignation to the post of Secretary. It was therefore concluded that the resolution passed by the Managing Committee on 12.12.2006 not to file any renewal application was of no value and the Members of the Society themselves conducted a General Body Meeting on 26.6.2007. Since the President was not available in the headquarters, keeping in view the larger interest of the society, it was resolved by the general body to authorize the 5th respondent to file an application for renewal of the lease and the 1st respondent was requested to recommend the renewal in favour of the society. Accordingly, the 5th respondent filed an application dated 26.6.2007 for renewal on behalf of the society. On receipt of the same, the 2nd respondent sought a clarification whether the members themselves can file applications for quarry lease individually. The Divisional Cooperative Officer by his letter dated 7.7.2007 informed the actual facts and requested the 2nd respondent to consider the application of the society for renewal so as to do justice to the poor members of the society stating that the President and Secretary of the Society were acting contrary to the interest of the members of the society. On behalf of the respondents 2,3 and 4, the Assistant Director of Mines and Geology filed a separate counter affidavit on similar lines explaining that it came to their notice that the appellant, who is the President of the society was far away from the headquarter and the Secretary, Abdul Ghani had resigned to the office and therefore the members of the society in the General Body Meeting held on 26.6.2007 resolved to authorise the 5th respondent, who is a Member of the Managing Committee to file an application for quarry lease, apart from authorizing him to sign on the same. It was also resolved by the General Body that the action of the President in withdrawing the second renewal application dated 23.6.2007 was not in the interest of the society, but it was only to see that the lease was granted to one of his benamis who made applications for grant of lease. Accordingly, the recommendations of the Divisional Cooperative Officer were called for and basing on the recommendations of the Divisional Cooperative Officer, proposals were submitted to the Government. The learned single Judge having heard the learned counsel for the parties and having gone through the averments made in the counter affidavit and also the Provisions of Sections 9 and 31 and also Rule 22-A of the A.P. Cooperative Society Act and the Rules made thereunder, by the order impugned in this appeal, dismissed the writ petition as mis- conceived. Hence, the appellant-society filed the present appeal. Learned counsel for the appellant-society contends that as per Section 32-B of the Act, if the President of the Society is continuously absent from the Head Quarters for more than fifteen days, the Vice President of the Society alone can perform the functions of the President, but not the Managing Committee or the Director. Learned counsel contends that the 5th respondent, who is the Managing Director of the Society has no power to convene a meeting and apply for renewal of lease. In the instant case, since the 5th respondent has convened the general body meeting in the absence of the President and also passed a resolution for renewal of lease contrary to Section 32-B of the Act, the same is liable to be set aside. On the other hand, learned Government Pleader appearing on behalf of the respondents tried to support the recommendation made by the 1st respondent in his proceedings dated 27.6.2007 stating that in view of the fact that the President and the Secretary were not acting in the interest of the society, the members of the society in the general body meeting held on 26.6.2007 resolved to make an application for renewal of lease on behalf of the society and authorized the 5th respondent to make such an application and accordingly on 26.6.2007 an application was made by the 5th respondent to the 1st respondent in that regard and the 1st respondent having considered the same, recommended to the Assistant Director of Mines and Geology for renewal of lease. The learned single judge, taking note of these facts, while declining to interfere with the recommendation of the 1st respondent dated 27.6.2007 of the Divisional Cooperative Officer and the consequential proceedings of the 2nd respondent dated 19.7.2007 granting lease in favour of the 5th respondent, dismissed the writ petition and the same needs no interference. Sri Y. Subrahmanyam, learned counsel appearing on behalf of the unofficial respondent No.5 and Mrs.S. Nanda, learned counsel appearing on behalf of the 6th respondent, who got himself impleaded as party respondent to the writ petition, have stated that as the President of the appellant-society has withdrawn the application for renewal of quarry lease dated 4.6.2007 on 22.6.2007 and failed to protect the interest of the members of the society, the action of the Divisional Cooperative Officer in recommending the case of the society for renewal of lease cannot be found fault with. Hence, they submit that the order of the learned single judge need not be interfered with. In the writ appeal also, the 1st respondent filed counter affidavit while reiterating the very same averments which were stated in the counter affidavit filed with the writ petition. It is further stated that an enquiry was ordered under Section 51 of the A.P.C.S. Act, 1964 by the District Cooperative Officer vide proceedings in Rc. No.6595/2005-C, dated 29.7.2008 into the working and financial position of the said society and the enquiry officer after conducting an enquiry into the affairs of the society, has submitted a report stating that the society in its general body meeting held on 26.3.2008 has expelled the appellant and elected Shaik Mastan Vali, the 6th respondent herein, as President of the said society. It is also averred that the Statutory Inquiry Officer has reported in his final enquiry report that the then President Sk. Abdullah and the Secretary, Sk. Abdul Ghani have resorted to mis-appropriation of funds of Rs.2.22 lakhs by indulging themselves in illegal quarrying and utilizing the seigneorage bills twice without accounting for the same. Hence, the enquiry officer recommended for recovery of the mis-appropriated amount by invoking Section 60 of the A.P.C.S. Act besides initiating criminal action against them for resorting to cheating and falsification of accounts of the society. It is also reported that the erstwhile President and the Secretary have committed various irregularities in filing renewal applications, enrollment and removal of members. Heard the learned counsel for the parties and perused the impugned order of the learned single judge. On a perusal of the record, it is seen that on an earlier occasion when 243 members of the society made a requisition to the Divisional Cooperative Officer requesting him to direct the President of the Society to convene a General Body Meeting, the Divisional Cooperative Officer addressed a letter to the President of the appellant-Society on 27.5.2006 to convene the General Body Meeting, the President of the appellant- society refused to convene the same. Thereafter, the Divisional Cooperative Officer through proceedings dated 9.8.2006 has directed the President and other Members of the Managing Committee to convene the General Body Meeting. Accordingly, when a General Body Meeting was convened on 10.9.2006, the proceedings were disrupted by some expelled members. Thereafter, the Managing Committee, which met on 12.12.2006, has taken a decision not to apply for renewal of quarry lease and in fact, the 5th respondent is also a signatory to the said resolution. Subsequently, an application has been made by the President of the appellant-society on 4.6.2007 for grant of lease. However, he withdrew the said application on 22.6.2007 on the ground that his signature was obtained by coercion. Thereafter, another general body meeting is said to have been convened by the members of the society on 26.6.2007 under the leadership of the 5th respondent, wherein it was resolved to authorize the 5th respondent to file an application for renewal of quarry lease and to request the 1st respondent to recommend for renewal of lease in favour of the society. Secondly, it is to be noted that though in the impugned order, the learned single judge has observed that “admittedly the general body of the society consisting of 243 members in its meeting held on 26.6.2007 resolved to make an application for renewal on behalf of the society and authorized the 5th respondent to make such an application”, on a perusal of the copy of the minutes of the meeting, which is appended to the material papers, it is seen that only 13 members have signed the resolution authorizing the 5th respondent to apply for the renewal of lease and not 243 members, as contended by the 5th respondent and as observed by the learned single judge in the impugned order. The Minutes further state that as per the advice of the Assistant Director of Mines, it was resolved to apply for renewal of lease and immediately on the very next day, the 1st respondent herein, through his proceedings in Rc. No. 671/2006-B4, dated 27.6.2007, has recommended to the Assistant Director of Mines and Geology, the 2nd respondent herein, to consider the application of the 5th respondent for grant of quarry lease. It is necessary to extract the relevant portion of the proceedings of the 1st respondent, which reads thus: “Further it is to state that in the oral discussions with the Assistant Director by the undersigned over telephone talk, you have promised to issue lease in favour of the society in case the society or the Divisional Cooperative Officer file application before 30 days of expiry of lease. Therefore since the present Managing Committee member in the absence of the President and Secretary, filed application on behalf of the society the said application may be considered and grant lease in favour of the society. Keeping in view of the facts and also the President and Secretary are playing games by filing applications individually against the interest of the members, the individual applications cannot be considered since they have not lost their membership till date. Finally I request you to consider the application of the present Managing Committee member on behalf of the society and grant the lease in favour of the society keeping in view the nearly 320 member workers livelihood.” On a perusal of the aforesaid proceedings, it is quite clear that the Divisional Cooperative Officer, Guntur has in fact made up his mind for grant of lease in favour the 5th respondent. The proceedings also refer to a telephonic conversation between the 1st respondent and the 2nd respondent about the grant of lease in favour of the fifth respondent. It is also seen from the record that a challan was also taken by the 5th respondent in fact on 25.6.2007 itself, i.e., one day prior to the resolution was passed by the society for making application to the 1st respondent for renewal of lease. All this would clearly go to show that the 1st respondent is biased and shown official favoritism in favour of the 5th respondent. The third important factor is that the 5th respondent, who is a member of the society has convened the general body meeting on 26.6.2007, contrary to the provisions of the Act. According to Section 32-B of the Act, in the absence of the President, such powers and functions devolve on the Vice President and the 5th respondent is not empowered to convene the meeting. It is apt to extract the said Section, which reads thus: “Section 32-B: Devolution of the powers and functions of the President or Vice President: If the President ceases to hold office under sub-section (3) of Section 32 or if he has been continuously absent from the headquarters for more than fifteen days, or is incapacitated for more than fifteen days, his powers and functions on such cessation or during such absence or incapacity shall devolve on the Vice President.” Even as per Rule 23-AAA of the A.P. Cooperative Societies Rules, 1964 in the absence of the President, it is the Vice President who is empowered to discharge the functions of the President. It reads thus: “23-AAA (1) Notwithstanding anything contained in the bye-laws of the society, the President may resign his seat by sending a letter of resignation by Registered Post or by tendering it in person to the Registrar and such resignation shall take effect from the date it is accepted by the Registrar. (2) The powers and functions of the President shall devolve on vice-president till election to the post of the President is held as per bye-laws. (3) 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 Officers/President of the society and such resignation shall take effect from the date it is accepted by the Managing Committee. (4) In the event of absence of