IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN WEDNESDAY, THE 17TH DECEMBER 2008 / 26TH AGRAHAYANA 1930 WP(C).No. 36233 of 2008(L) -------------------------------------- PETITIONER(S): ----------------------- K.VIJAYAN, S/O.KANDACHAMY, KORATHA PARAMBIL, PILAPULLY, VADAVANNUR P.O., PALGHAT. BY ADV. SRI.T.C.MOHANDAS RESPONDENT(S): -------------------------- 1. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), CIVIL STATION, PALGHAT. 2. ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), PALGHAT. 3. UNIT INSPECTOR, MUNDUR UNIT, O/O THE ASSISTANT REGISTRAR, PALGHAT. 4. MOHAMED FAIZEE, JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (AUDIT), CIVIL STATION, PALGHAT. GOVERNMENT PLEADER SRI. K.C.SANTHOSHKUMAR FOR R1 & R2 ADV. SRI.V.G.ARUN FOR R3 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15/12/2008, ALONG WITH WPC. NO.36432 OF 2008 THE COURT ON 17/12/2008 DELIVERED THE FOLLOWING: THOTTATHIL B. RADHAKRISHNAN, J. = = = = = = = = = = = = = = = = = = = = = = = = W.P.(C).Nos.36233/2008-L & 36432/2008-K = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 17th day of December, 2008. JUDGMENT “CR” 1.These writ petitions raise common questions and relate to the same co-operative society. Hence, they are jointly heard and are being disposed of, by this common judgment. Reference is made to materials available in WP(C).36432/2008. Exts.P6 and P7 therein are under challenge. Parties also go by their status in that matter. 2.The committee of the society resolved on 13-5-2008 to hold election and forwarded the list of persons eligible to vote. The election is governed by Rule 35 of the Kerala Co-operative Societies Rules, 1969, hereinafter referred to as the “Rules”. Returning Officer was appointed, WP(C)36233 & 36432/08 -: 2 :- election was conducted and a new committee assumed office with the petitioner in WP(C). 36432/2008 as its President and the petitioner in WP(C).36233/2008 as one of its members. The fourth respondent contested and lost in that election. He filed Ext.P5 seeking to rescind the resolutions drawn up by the society in connection with that election. After enquiry in that regard through his subordinate officers, Joint Registrar issued Ext.P6 rescinding that resolution along with an earlier decision of the committee dated 14-8-2006, as also, the resolution dated 6-1-2008 of the General Body. Following Ext.P6, Ext.P7 has been issued invoking Section 33(1) of the Kerala Co- operative Societies Act, 1969, hereinafter, the “Act”, for short, appointing an administrator on account of the fall of the committee consequent of Ext.P6. 3.Ext.R4(a) resolution dated 10-9-2005 deciding to WP(C)36233 & 36432/08 -: 3 :- enhance the share value of 'A' class shares was registered on 27-2-2006. That amendment with the endorsement of the Registrar is Ext.R4(b) and Ext.R4(c) is the certificate issued by the Joint Registrar in that regard. Therefore, on 30-8-2006, the General Body resolved authorizing the committee to make that amendment operational. However, the committee on that day itself, resolved that though the amendment has been registered by the Joint Registrar, it need not be given effect to, until a decision is taken by the society in that regard. Thus, the enforcement of the clause prescribing a higher share value for 'A' class shares was never made operational. On 13-5-2008, the committee in office, resolved to conduct the election. Following the election, results were declared on 16-7-2008 and the new committee took charge on 18-7-2008. It was thereafter that Ext.P5 complaint was made by the fourth respondent. Ext.P6 was issued on 25-11-2008 followed by WP(C)36233 & 36432/08 -: 4 :- Ext.P7 on 6-12-2008. These facts are not in dispute. 4.The petitioners contend that a resolution issued in connection with an election and the resultant election having become final, Rule 176 of the Rules is unavailable to rescind the committee’s resolution to hold the election. It is argued that the Registrar does not have such wide powers under Rule 176 and that the impugned action is an unauthorized encroachment into the democratic rights. It is further contended that the proceedings, resulting in Ext.P6 and its follow up Ext.P7, are generated by Ext.P5 complaint by the fourth respondent, who was a candidate and having participated and lost in the election, he is incompetent to challenge the basis of the election in which he was a candidate and the impugned exercise is an abuse of power to favour the fourth respondent whose only available remedy to challenge the election WP(C)36233 & 36432/08 -: 5 :- was to take recourse to arbitration under Section 69 of the Act. It is also contended in WP(C).36233/2008 that the impugned order is a pre-dated one and a non-speaking order and is issued in violation of the statutory provisions. 5.The fourth respondent has, apart from relying on materials referred to above, contended that the provisions in the Act and Rules do not confer any authority on the committee to resolve to conduct an election, except in accordance with the bye-laws and on the face of the undisputed fact that there is no member of the society who has paid the remaining share amount to be treated as an 'A' class share-holder, there could not have been even one person available, who could file a valid nomination and therefore, the entire process of election is vitiated from its inception. The learned Government Pleader also supports this contention. On behalf of the fourth respondent, it is also pointed out that WP(C)36233 & 36432/08 -: 6 :- even if the impugned orders are to be treated as illegal, this Court would not set aside those orders in exercise of writ jurisdiction when the fact situation that would be generated by that exercise, would be only to restore an illegality, i.e., the continuance of a committee which came into force following an election with not even a single person being eligible to submit a valid nomination. 6.Section 11(1) of the Act provides, inter alia, that a society may change the form or extent of its liability by an amendment of its bye-laws, subject to the provisions of the Act and Rules. Section 12(1) provides that no amendment to any bye-law shall be valid unless such amendment has been registered under the Act. Section 13 provides that an amendment of the bye-laws shall come into force on the day on which it is registered, unless it is expressed otherwise. Ext.R4(a) amendment does not express that it WP(C)36233 & 36432/08 -: 7 :- shall come into operation on any particular day. Exts.R4(b) and Ext.R4(c) prove that that amendment came into force on 27-2-2006, the date on which it was registered. By the amendment to the bye-law, the value of 'A' class share was fixed as Rs.100/-. Without paying the differential, no 'A' class member would be eligible to vote. This is the effect of Section 19 of the Act. 7.Section 28(1) enjoins that 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. When the bye-law amendment was registered on 27-2-2006, the election of a committee, thereafter, would be in accordance with the bye-laws, only if the membership and the entitlement to vote stand modulated by the amended bye-law provision. The General Body knew this. This is why it authorized the WP(C)36233 & 36432/08 -: 8 :- committee, on 30-8-2006, to make the bye-law amendment operational since that was the basic requirement, to have the election conducted in accordance with the bye-laws, for constitution of a committee by the time the term of the committee then in office would end by efflux of time. On the face of that decision of the General Body, the prime authority in the Society, the committee deferred enforcement of that bye-law amendment until the society decides again in the matter. This, firstly, was against the mandate of the Act and Rules. Secondly, it is against the command of the General Body. 8.The net result of the above situation was that there was an inexcusable infraction of the direction in Rule 35(3)(b) of the Rules, that the committee in office shall prepare a list of members qualified to vote at the election in accordance with the provisions of the Act, the Rules and the bye-laws………. The bye-laws, with WP(C)36233 & 36432/08 -: 9 :- Ext.R4(a) amendment, oblige the committee to include in the list of members only those who would be qualified to vote in terms of that bye- law prescription. The undisputed fact is that no member of the society has paid the additional contribution of the share value in terms of that approved amendment. This means that there was none entitled among 'A' class members. 9.Without any person who is eligible from the 'A' class members being available, it would be nothing but illusory to assume that there would be at least one whose nomination would be valid in terms of the bye-law provisions. With that, the exercise of drawing up a resolution in terms of Rule 35(1) would become an empty formality because it would never achieve the destined object, namely, the election of a committee in accordance with the Act, the Rules and the bye- laws. Therefore, the resolution of the committee for conducting the election would, itself, be a WP(C)36233 & 36432/08 -: 10 :- hollow document, unworthy of any institutional use. Therefore, that resolution could not stand at all. 10.The question now is as to whether the power under Rule 176 could be exercised after the stage of an election. Incidental to this, is the issue as to whether Section 69 of the Act excludes the jurisdiction under Rule 176 in relation to a resolution drawn up to satisfy Rule 35(1) of the Rules. 11.Rule 35(1) postulates the drawing up a resolution. This is followed by the appointment of a Returning Officer. That action has to be taken by the Registrar. The Returning Officer will take necessary steps for the conduct of the election and the committee shall render all necessary help to the Returning Officer for the constitution of the committee. The committee is to prepare the list of members qualified to vote WP(C)36233 & 36432/08 -: 11 :- and supply the same to the Returning Officer. This prescription in Rule 35(3)(b) read with the provisions in sub-rules 1 and 2 of Rule 35, as already noticed, clearly demonstrates that the process of election aimed at constituting a committee would commence only when the Returning Officer takes necessary steps to conduct the election by publishing the copies of the list of members as supplied by the committee. This is where the process, what can be called as “in connection with the election” would commence. The committee, by providing the list of members, enables the Returning Officer to commence his exercise to “take necessary steps for the conduct of election” as enjoined by Rule 35(2). The appointment of a Returning Officer by the Registrar in terms of Rule 35(2), following a resolution in terms of Rule 35(1), leads to the commencement of the process of election. This involves actions by statutory authorities on the basis of obligatory resolution in terms of the WP(C)36233 & 36432/08 -: 12 :- command in Rule 35(1). Those are not matters which could be treated as incidents “in connection with the election” for the purpose of sub-sections 1 and 2(c) of Section 69. Matters relatable to decisions taken by the committee or the orders issued by statutory authorities preparatory to, or, leading to the commencement of the process of election do not fall within the sweep of Section 69 of the Act. 12.The power to rescind a resolution in exercise of power under Rule 176 is not dependent upon the subject matter or purpose of the resolution. A resolution of a committee or of the General Body can be rescinded. If it appears that the resolution is ultra-vires the bye-laws or is contrary to the better interest of the society, the Registrar would be well within powers, to rescind the resolution. The sweep of that power is vast; regulated by the conditions prescribed in that rule. Restraint has to be a necessary WP(C)36233 & 36432/08 -: 13 :- concomitant of power. But, there is no restriction anywhere in the Act or Rules which denudes the Registrar of the power to rescind the resolution passed by the committee of a society, scheduling the election. There is also no provision under the Act inhibiting the Registrar from interfering with any type of resolutions. Therefore, there is abundant power in Rule 176 to interfere with a resolution issued under Rule 35(1) of the Rules, subject only to the indefeasible principle that the exercise of that power has to be only in obedience to the law contained in that provision and only on being satisfied of any of the conditions stipulated in that rule. The existence of that condition gives competence and authority for the Registrar to rescind. 13.Having contested the election and lost it, is the fourth respondent precluded from invoking Rule 176? If yes, is the impugned decision bad WP(C)36233 & 36432/08 -: 14 :- on that count? These are the next questions that arise. Valour is a shade of individuality. One may gallantly loose; yet another may meekly win. After battling it out at the hustings, he who looses need not always be expected to rest licking his wounds. Unlike in the realm of service law and other facets of administrative law, even if the fourth respondent is to be treated as one who perched on the fence and invoked the jurisdiction under Rule 176, he cannot be tied down, on any settled principle of law relating to acquiescence, estoppel or the like, thereby denuding him of the right to bring to the notice of the competent authority that the resolution leading to the initiation of the electoral process was contrary to the Act, Rules or bye-laws. Even if he is to be criticized, that could not be on a point of law because, the power of the Registrar to rescind as enshrined in Rule 176 does not depend upon that power being invoked by any party. A proceeding under WP(C)36233 & 36432/08 -: 15 :- Rule 176 is, essentially, not a lis, but referable only to the larger supervisory and visitorial power of the Registrar in terms of that rule. 14.As already noticed, the ground reality remains that, as on the last date for submission of nominations, there was not even one member in the society who was eligible to be treated as a candidate on the basis of a valid nomination. Any election conducted on such a premise would never be in the better interest of the society, apart from the fact that it would be ultra-vires and contrary to the provisions of the bye-laws, Act and Rules. Hence, the impugned orders do not warrant interference under Article 226. The writ petitions fail. They are accordingly dismissed. THOTTATHIL B. RADHAKRISHNAN, Sha/171208 JUDGE.