HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.1733 of 2009 Date: 23-02-2010 Between: 1. Mohd. Osman Baig and 3 others. .. Petitioners And 1. The Deputy Registrar/Divisional Cooperative Officer, Hyderabad, (West Division), Ranga Reddy District and 2 others. .. Respondents * * * ORDER: This Court issued Rule Nisi on 03-02-2009 and granted interim suspension in W.P.M.P.No.2185 of 2009. Respondents 4 to 8 filed an application to implead themselves as parties in W.P.M.P.No.8128 of 2009 and the same was ordered on 21-4-2009 impleading them as R- 4 to R-8. Respondents 1 to 3 filed W.V.M.P.No.1295 of 2009 and respondents 4 to 8 filed W.V.M.P.No.1326 of 2009 to vacate the interim orders. 2. At the request of Sri C. Prakash Reddy, learned senior counsel representing the petitioners, learned Government Pleader for Co- operation, representing R-1 to R-3 and Sri S.R. Ashok, learned senior counsel representing R-4 to R-8, the matter was heard finally. 3. The writ petition is filed for a writ of Mandamus declaring the order passed by respondent No.1 in Rc.No.209/2008, dated 16.01.2009, as illegal, arbitrary, unconstitutional and against the principles of natural justice and consequently to set aside the same and pass such other suitable orders. 4. Sri C. Prakash Reddy, learned senior counsel representing the writ petitioners had taken this Court through the averments made in the affidavit filed in support of the writ petition and also the averments made in the respective counter-affidavits and would maintain that respondent No.1 committed a grave illegality in appointing Person-In- charge Committee to the society when there is duly elected managing committee. The learned senior counsel also would contend that respondents ought to have seen that the election to the managing committee of the society was duly conducted by the erstwhile managing committee on 05.6.2007 for a stipulated period of five years and that during the elections conducted on 05.6.2007 the petitioners herein and five others were duly elected unanimously as members of the managing committee and the said committee has been managing the affairs of the society as per law. The learned senior counsel also would maintain that the inquiry report itself is faulty and the learned senior counsel pointd out to the specific grounds raised in this regard. 5. While elaborating his submissions, the learned senior counsel also would maintain that even otherwise the impugned order was made without issuing any notice or without affording any opportunity, whatsoever, and on this ground also the writ petition to be allowed. 6. The learned senior counsel also further had drawn the attention of this Court to the order passed in CTA Nos.87 and 88 of 2007 which had attained finality and also pointed out to O.S.No.594 of 2004 as well in this regard. The learned senior counsel also would maintain that though the period had not expired, the petitioners are prepared to face yet another election if the same is conducted in accordance with law even at the shortest point of time. The leaned senior counsel also placed strong reliance on several decisions. 7. The learned Government Pleader for Co-operation had taken this Court through the contents of the counter-affidavit and also had further taken this Court through relevant portions of the proceeding under challenge Rc.No.209/2008, dated 16.01.2009, and would maintain that never there had been elections at all and, when that being so, to contend that there had been an election at a particular point of time and an elected managing committee came into existence, cannot be sustained. The learned Government Pleader for Co- operation had pointed out to the relevant portions of the findings in the inquiry report and the findings of the DCO, Ranga Reddy District and further had referred to several proceedings in the correspondence which had been relied on by the writ petitioners and further pointed out to the relevant portions of the proceedings in the records produced before this Court. The learned Government Pleader for Co-operation ultimately would conclude that in the facts and circumstances of the case this writ petition being devoid of merit, the same to be dismissed. 8. Sri S.R. Ashok, learned senior counsel representing R-4 to R-8 would maintain that the decisions relied on by the learned counsel representing writ petitioners are not applicable, since the said decisions are distinguishable on facts. This is not a case where any election had been conducted at any point of time in accordance with law and at no point of time an elected managing committee, in fact, came into existence and the same being non-est and wholly illegal, the contention of the other side that the petitioners being continued till expiry of the term cannot be sustained. The learned senior counsel also would maintain that respondents 4 to 8 also are interested in going for fresh election, but however, such election should be conducted independently in an impartial manner and in accordance with the procedure and if interim suspension is continued and consequently if the petitioners ought to be continued, it will be very difficult to hold even fresh elections in accordance with law. The learned senior counsel also pointed out to the relevant portions of the counter-affidavit and would maintain that in the facts and circumstances of the case the writ petition to be dismissed. 9. Heard the counsel on record, perused the respective averments made in the affidavit filed in support of the writ petition and the counter- affidavits and also the records produced before this Court. 10. It is the case of the petitioners that the writ petitioners are the members of the Hyderabad Rural Co-operative House Building Society Limited (hereinafter called in short “Society”) which was registered under the provisions of the A.P. Co-operative Societies Act, 1964 (hereinafter called in short “the Act”) with registration No.TBC 268 on 28.6.1980. 11. It is also the case of the petitioners that all of them are senior most members of the society and the object of the society is to carry on trade on buildings and of buying, selling, hiring, letting and developing the land in accordance with the cooperative principles, give lands to the members of the society for construction of dwelling houses. There are about 100 and odd members who are duly enrolled in the society. The elections to the managing committee of the society were being conducted from time to time. During the last elections held in the month of May 2007, one Mirza Osman Baig (petitioner No.1 herein) was elected as the President, Gulam Murtuza as Vice-President, Dr.Mohd. Riyazuddin as Secretary and the deponent was elected as Treasurer and petitioners 1, 3 and 4 others were elected as members of the managing committee. The said society is not in receipt of any State aid and, hence, as per the Act and bye-laws, the incumbent managing committee is competent to conduct elections to the managing committee of the society under Rule 22 of the A.P. Co-operative Societies Rules, 1964 (hereinafter called in short “the Rules”). 12. It is also the case of the petitioners that immediately after formation of the society, the members of the society pooled considerable amount for purchase of land for the purpose of allotment of house sites for construction of houses and accordingly the society had entered into an agreement of sale dated 25.02.1982 with one Votla Sattaiah and his sons for purchase of about Ac.10-00 in Sy.No.69 at Kondapur village, Serilingampally Mandal, Ranga Reddy District, at the rate of Rs.10,000/- per acre and subsequently by mutual understanding a supplemental agreement of sale dated 24.3.1982 was entered into between the above said vendors by enhancing the consideration from Rs.10,000/- to Rs.35,100/- per acre and in pursuance of the said agreement, the society had paid various amounts totalling nearly Rs.1,50,000/- to the owners of the land, who had issued due receipts for the same. The balance sale amount of Rs.2.00 lakhs payable by the society to the said vendors was also kept in fixed deposits with the Syndicate Bank vide FDR No.88351008, dated 03.02.2004. However, the sale transaction could not be completed in view of the litigation instituted by one Y. Chinnamma and others against the society and its vendors in O.S.No.160 of 1984 before the Court of II Additional Senior Civil Judge, Ranga Reddy, which was subsequently the subject matter of S.A.No.354 of 1993 before this Court and C.A.No.5615 of 2002 on the file of the Apex Court. 13. Further it is stated that finally the aforesaid suit was decided in favour of the society and its vendors as the said C.A.No.5615 of 2002 was dismissed by the Apex Court on 09.8.2005 in favour of the society and its vendors. When the said matter was pending before this Court in the second appeal, the sons of Votla Sattaiah denied the right and claim of the society over the above said purchased land which is the subject matter of the above said agreement of sale with an oblique motive to avoid registration of sale deed and to get back the land from the society, as the value of the land had increased abnormally. 14. Further it is averred that as per the legal advice, the society instituted a suit O.S.No.594 of 2004 on the file of the Court of II Additional Senior Civil Judge, Ranga Reddy District, against the vendors under the agreement of sale seeking specific performance of the above said agreement of sale and the said suit is still pending for disposal. It is also averred that after knowing the information from respondent No.1 that the society was ordered for liquidation through proceedings in Rc.No.2501/1992, dated 7.01.1994 and Rc.No.2501/1992-41-P, dated 16.5.1994, as it was dormant since 1992, the society represented by its Secretary and also in his individual capacity as a member, filed C.T.A.Nos.87 and 88 of 2007 on the file of the A.P. Cooperative Tribunal at Hyderabad under Section 76 of the Act contending that the said orders of winding up were never issued and they were never acted upon and, in fact, the society had been functioning to achieve its objects and goals and that after a prolonged litigation in various courts up to the Apex Court, the society and its vendors got succeeded finally in respect of the above said land. 15. It is also further averred that after full fledged consideration of the matter, the Co-operative Tribunal vide its order/judgment dated 27.9.2007, allowed the said two appeals by setting aside the orders of winding up alleged to have been passed by respondent No.1 on 07.01.1994 and 16.5.1994. 16. Further it is averred that while things stood thus, respondent No.3 issued proceedings in Rc.No.2469/2006-E, dated 28.8.2008, ordering an inquiry under Section 51 of the Act into the constitution, working and financial position of the society, basing on the representation alleged to have given by one Mohd. Nazir Khan and 4 others on 25.02.2008 by appointing one K. Vinayak Rao, Assistant Registrar, as Inquiry Officer. Questioning the said proceedings, dated 28.8.2008, issued by respondent No.3, the society represented by the Secretary had filed Revision Petition under Section 77 of the Act before the Registrar of Cooperative Societies, A.P. Hyderabad, contending that ordering inquiry on the representation given by 5 persons among whom only one is the member of the society and others are alleged to be the legal representatives of the deceased members of the society, as illegal and contrary to the provisions of the Act, as Section 51 contemplates that the Registrar can order inquiry either on his own motion or on the application of 1/5th of the total number of members of the society. 17. It is also stated that respondent No.2 had issued yet another proceeding in Rc.No.2569/2006-E, dated 26.11.2008, once again ordering an inquiry into constitution, working and financial position of the society by appointing one B. Anjaneya Sarma, the Divisional Cooperative Officer, Hyderabad (West) as an Inquiry Officer. 18. Further it is stated that when the said Inquiry Officer issued summons/notices asking petitioner No.1 to appear before him with concerned records, petitioner No.1 had submitted that the records of the society were with the Secretary of the society and he would produce the same before the Inquiry Officer. Petitioner No.1 also requested the Inquiry Officer to defer the inquiry pending before him, since the revision petition filed by the society questioning the very initiation of inquiry under Section 51 is pending before the Registrar. 19. It is also the case of the writ petitioners that to their surprise and shock, respondent No.2 issued impugned proceeding in Rc.No.209/2008, dated 16.01.2009, appointing one V. Venkateswara Rao, Sub-Divisional Co-operative Officer, Rajendra Nagar, Ranga Reddy District, O/o Divisional Co-operative Officer, West Division, Ranga Reddy District, as a PIC Committee of the society by exercising the powers under Section 32 (7)(A) of the Act read with G.O.Ms.No.34, Food and Agriculture (Coop.iv) Department, dated 18.01.1989, stating that the Inquiry Officer had submitted an inquiry report to respondent No.3 and consequently respondent No.3 issued proceedings in Rc.No.2569/06/E, dated 15.01.2009, by giving a finding that elections conducted to the managing committee of the society on 06.6.2002 and 06.6.2007 are not genuine elections and, thus, directed to appoint PIC committee to manage the affairs of the society. Challenging the same, the present writ petition had been filed specifically raising several grounds. 20. In the counter-affidavit filed by respondent No.1 in para 3 it is averred that all the petitioners’ names had appeared in the admission register as members in the society. Petitioners 3 and 4 were admitted during the year 1982 and petitioners 1 and 2 were admitted on 10.4.1992 by which time there was no elected managing committee existing in the society. Therefore, the validity of the admission of membership of petitioners 1 and 2 herein itself is doubtful under law. Hence, the filing of this writ petition by them is not maintainable. 21. Further it is stated in para 4 of the said counter-affidavit that the petitioners have alleged that the elections to the managing committee of the society were being conducted from time to time and the last elections were held in the month of May 2007. One Mirza Osman Baig (petitioner No.1) was elected as president; Gulam Murtuja was elected as Vice President and Dr. Mohd. Riazuddin was elected as Secretary. The petitioner, who signed on the affidavit, was elected as Treasurer and petitioners 1, 3 and 4 others were elected as members of the managing committee. It is also stated that the elections to the managing committee of the society are not conducted from time to time as alleged by them. The first election to the managing committee of the society was conducted on 16.11.1980 after its registration. The term of the said elected committee was expired on 15.11.1983 and thereafter elections were not conducted to the managing committee of the society till the year 2002. 22. In para 5 it is stated that after 16.11.1983 the society had fallen under dormant condition. During the year 1992 the Election Officer, who was appointed by the District Collector/Election Authority, submitted a special report stating that the society is not traceable. Thereafter, the society was ordered for liquidation vide Proceedings No.2501/1992, dated 07.01.1994 and Rc.No.2501/1992-41P, dated 16.5.1994 after issuing show cause notice dated 23.10.1993 by calling for objections from the society to show cause why the society should not be wound up for the grounds mentioned therein and the Co- operative Sub-Registrar, Rajendranagar Mandal, was appointed as liquidator and the liquidator could not take further action, as the society was not traced out. 23. In para 6 it is stated that in the second para of the affidavit it is also stated that the society is not in receipt of any State Aid and, hence, as per the Act and bye-laws the incumbent managing committee is competent to conduct elections to the managing committee of the society under Rule 22 of the APCS Rules, 1964. As per the amendment of Section 31 of the APCS Act and Rule 22 of APCS Rules, the incumbent managing committees are competent to conduct elections by themselves, which are not in receipt of any State Aid as specified under Section 43 of APCS Act, as per the procedure laid down in the bye-laws well before the expiry of existing managing committees. Till such amendment, there was no power vested in the incumbent managing committees of such societies to conduct the elections to the office of the members of the managing committee. 24. It is also averred that prior to the above amendments to the APCS Act, the officers of the Department were conducting the elections to the managing Committees of the societies. As per the record, no elections were conducted after the expiry of the tenure of office bearers elected in 1980 and there is no record to show that such election expenditure was incurred by the society. There was no incumbent managing committee to the society at the time of conduct of elections by the society by themselves during the year 2002. Therefore, the elections said to have been conducted to the managing committee of the society in 2002 are not valid under the provisions of the Act and Rules and, therefore, the subsequent elections conducted during the year 2007 are also void and invalid. 25. Further, specific stand had been taken that it is devoid that the managing committee of the society got the knowledge about the society was ordered for liquidation during the year 2006, only after filing the papers by their opponent party in civil court. As no elections were conducted to the managing committee of the society after 16.11.1983, the society was ordered for liquidation in 1994. Even the petitioners had stated that the elections to the managing committee of the society were conducted by themselves during the year 2002, but they failed to file such proceedings in the Department in 2002. These elections were conducted without any incumbent managing committee as required under Rule 22 of the Rules and before the expiry of the said committee as required under the provisions of Section 31-A of the Act. Therefore, the above elections stated to be conducted are void ab initio and are invalid under the provisions of the Act and Rules. 26. The order made by the Co-operative Tribunal is not in controversy. Further it is averred that with the permission of the Registrar, a legal opinion from the Government Pleader, Agriculture and Co-operation was requested for filing an appeal on the two judgments of the Co-operative Tribunal, Hyderabad, issued on 27.9.2007 in CTA Nos.87 of 2007 and 88 of 2007. The Government Pleader had given an opinion stating that it is not proper to file an appeal and suggested that an inquiry may be ordered under the provisions of the Act to initiate necessary proceedings against the concerned persons of the society. Meanwhile, a copy of representation had been received from Mohammad Nazeer Khan submitted to the Chief Secretary to the Government alleging that illegal acts were done by Dr. Mohammed Riazuddin, who is stated to be Secretary of the society. After conducting fact finding inquiry and after establishing prima facie case, an inquiry was ordered under Section 51 of the Act into the constitution, working and financial position of the society vide Proceedings in Rc.No.2469/2006-E, dated 28.8.2008, by the DCO, R.R. District, by appointing K. Vinayak Rao, Assistant Registrar as Inquiry Officer. Subsequently, on the request of the Inquiry Officer letter dated 25.11.2008, on health grounds, he was relieved from the inquiry proceedings by issuing modification orders, dated 26.11.2008, and appointed the Divisional Co-operative Officer, Hyderabad (West) Division, R.R. District, as Inquiry Officer to conduct the said inquiry within two months from the date of receipt of the orders. 27. Further it is stated that the society filed revision petition under Section 77 of the Act questioning the proceedings of inquiry order dated 28.8.2008 before the Registrar of Co-operative Societies, Andhra Pradesh, Hyderabad. As there was no stay on the inquiry proceedings under the revision petition, the inquiry was completed and the report was submitted to the DCO, R.R. District on 09.01.2008. 28. It is also averred that V. Venkateswara Rao, Sub-Divisional Co- operative Officer, Rajendranagar, O/o Divisional Co-operative Officer, Hyderabad (West) Division, R.R. District, was appointed as PIC Committee to the society under Section 32 (7) (a) of the Act, as per the findings dated 15.01.2009 of the District Co-operative Officer, R.R. District on the basis of the inquiry report submitted under Section 51 of the Act. As per the findings in the inquiry report, the elections conducted to the managing committee of the society on 06.6.2002 and 06.6.2007 are not valid, as there is no incumbent committee at the time of conduct of elections on 06.6.2002 and all the members, including elected managing committee members, are not eligible voters, as they all had not contributed the required minimum share capital of Rs.300/- as required under Rule 18 of the Act and Rules. 29. Specific grounds raised in the affidavit filed in support of the writ petition also had been answered in paras 13 (a) to (l). 30. In the counter-affidavit filed by R-4 to R-8 almost similar averments had been made as made in the counter-affidavit of R-1 to R- 3. Specific stand had been taken that the writ petition is not maintainable and it is an abuse of process of Court and abuse of process of Law as well. 31. Further it is averred that the subject matter in the writ petition pertains to administration of the affairs of a housing society, by name Hyderabad Rural Co-operative House Building Society, established and registered during the year 1980. The said society, with the funds collected from its members, acquired valuable land through agreement of sale dated 25.02.1982 for the purpose of providing house sites to its members after developing the said land. After expiry of tenure of the managing committee members of the said society on 16.11.1983, the persons then in management of the society did not take any steps to conduct elections, with a mala fide intention to grab the said land. They misled the members, mismanaged the affairs of the society and misappropriated the funds of the society. The then Secretary of the society, Dr. Md. Riazuddin, who is mainly responsible for the administration of the society affairs, sold away Ac.4-00 from the above land of the society, costing crores of rupees, to non-members under 22 registered sale deeds. Though liquidator was appointed by the Department during 1992, since the society office could not be traced, no action could be taken. On the report of respondents 4 to 8 and other members to concerned authorities, a detailed inquiry under Section 51 of the Act was conducted and the authorities concerned found that there was no valid committee managing the affairs of the society during the past 25 years and that several illegalities and irregularities were committed by unauthorized persons in management of the affairs of the society. When the authorities made an attempt to set right the illegalities committed by appointing a person in charge for a limited purpose and for a very limited period, the present writ petition is filed on the basis of false allegations and interim orders were obtained. 32. It is also stated that the petitioners are not entitled to any relief in these proceedings, since the petitioners cannot claim that they are aggrieved in any way on account of the orders dated 16.01.2009, appointing a person-in-charge committee to manage the affairs of the society for a period of six months or the regular elections are held to the managing committee of the society and the new committee assumes charge, whichever is earlier. While there are disputes with regard to the title to an extent of Ac.6-00 out of the aforesaid Ac.10-00 of land on the ground that the said land was purchased under a registered sale deed by third parties, as early as in the year 1965, the society did not obtain any sale deed in respect of the remaining extent