IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 28.04.2010 CORAM THE HON'BLE MR. JUSTICE V.PERIYA KARUPPIAH O.A.No.461 of 2010 ORDER This application has been filed for the issuance of order of interim injunction restraining the 1st respondent from in any manner proceeding with the conduct of election to the Board of Directors shown as Item No.5 of the Agenda to the notice dated 08.04.2010 and on any other subsequent date. 2. Heard Mr.Balan Haridas, learned counsel for the applicant and Mr.C.V. Ramachandramoorthy, learned counsel for the 1st respondent and Mr.V. Lakshminarayanan, learned counsel for the 2nd respondent. 3. Learned counsel for the applicant would submit in his argument that the applicant is an employee working in Canara Bank and is also member of the 2nd respondent society which was registered under Multi State Co-operative Societies Act among its 2766 members through out India. He would further submit that the applicant was one of the elected directors of 2nd respondent society for a period of five years and his period along with other directors is expiring by 30.04.2010. He would also submit that the directors are elected by general body in an election conducted through secret ballots and the said election shall be conducted by the full time secretary of the society who is a paid employee and he is the Chief Executive of the 2nd respondent society and he is the person to convene meetings of the general body, the board and the Executive Committee and other committees or sub committees u/s. 52(e) of the Multi State Co-operative Societies Act (herein after referred to as Act) and the said post of the secretary/ Chief Executive of the 2nd respondent Society fell vacant from 31.03.2008 since the then secretary retired voluntarily and from the said date onwards Board of Directors did not take steps to fill up the vacancy. 4. He would further submit that four directors of the 2nd respondent society became vacant due to the retirement of three directors and one due to not attending four consecutive board meetings and the new directors have to be elected in their place also. So according to Sec.45 of the Act and as per Rule 36 of the Bye laws, secret ballots in the general meeting has to be conducted by the returning officer to be appointed and only then new officers could be elected. He would further submit that election process for filling up the four directors was initiated by the 2nd respondent society by its president on 25.02.2009 and it was questioned by the applicant in a writ and the arbitration proceedings are now pending in that regard. 5. However, the 2nd respondent without appointing the secretary of the society who is the Chief Executive to conduct the election has usurped the powers of secretary and had initiated the commencement of general meeting in the name of returning officer. He would further submit in his argument that as per schedule 8 of the Act, after the conduct of the election the Secretary has to keep the ballots and other records of election for a period of six months but there is no appointment of Chief Executive in the 2nd respondent society. He would also submit that as per 1(d) of the schedule, the Registrar containing the entire members of the society will have to be handed over 30 days prior to the date fixed for election in the general meeting for the purpose of election and the 2nd respondent society has not followed the said procedure. He would further submit that the returning officer in turn has not prepared any list of members/voters for the purpose of conducting election and he has also not published the said list of members in order to facilitate the members to hold the election. He has further submitted that as per schedule 1 (g), notice of the general meeting shall also be exhibited in the notice board and it must contain full particulars as required in the said provision and the notice given to the applicant would go to show that nomination will be invited on 28.04.2010 and if necessiated election will be held on 29.04.2010, which is absent and contrary to the notice affixed in the notice board. He would also draw the attention of the court that even the notice issued by the returning officer on 10.04.2010 is a different one from the notice received by the applicant regarding the time of the filing of nomination. He would pinpoint that nomination will be invited on 27.04.2010 where as in the returning officer notice dated 10.04.2010 shows that the filing of nomination forms will be available on 26th and 27th April between 10. a.m and 04.00 p.m and to be filed on or before 05.00 p.m on 27.04.2010. 6. He would also submit in his argument that the time of holding of election was not mentioned in the notice. However, in the returning officer's notice, it is mentioned as 05.30 p.m on 29.04.2010. He would also submit that the said notice does not contain the name of the returning officer as per the rules in the schedule for conducting the election and the explanation offered in the counter filed by the 2nd respondent will not meet the factual defect. He would further submit in his argument that as per 3(a) of schedule the nominations should be made in form III which has to be supplied by the returning officer free of cost where as the notice of the returning officer dated 10.04.2010 would show that the nomination form may be received by the members from the society's office. He would insist in his argument that the returning officer does not discharge his statutory function but is acting on the whims and fancies of 2nd respondent. 7. He would further submit in his argument all these deficiencies would certainly vitiate the election proposed to be conducted on 29.04.2010 and the conduct of the election should have been injuncted. He would also submit in his argument that the election of the office bearers of the society cannot be equated to general election under Representation of peoples Act and the rules and therefore the preparation and process of the election by the 2nd respondent will not disentitle the applicant from seeking the relief for injunction against the 2nd respondent. He would draw the attention of this court to a judgment of this court made in 2001 3 CTC 486 in between Mr. R. Karuppan, Advocate vs. P.K. Rajagopal, The Advocates Association, High Court. He would also draw the attention of the court to a judgment of this court made in CDJ 2010 MHC 1836 in between R. Ramasamy vs. The Central Registrar of Co-operative Societies, Government of India, New Delhi & others in support of his case. He would also submit that the respondent's argument to the effect that the Chief Executive cannot be appointed owing to the order passed by the arbitrator is a lame excuse. The post of the Secretary/Chief Executive of the 2nd respondent society cannot be put in charge and the notice dated 08.04.2010 produced by the applicant even if it is considered as a draft of the notice, produced in page 7 of the typed set of the 2nd respondent would be still worse as it does not contain the particulars of the timing of the nomination and time of withdrawal or scrutiny of nomination or election and declaration of result and therefore, the said argument advanced by the 2nd respondent could not be relied upon. He would also submit that the Returning Officer appointed has seriously violated the provisions governing the conduct of elections. The various schedules in the act governing the conduct of election for the Board of Directors for the 2nd respondent society has not been followed by the returning officer. 8. He would also submit that the intimation of conduct of the election should have been made to the Central Registrar and on that aspect also the rules of election has been violated. The disputes arising out of the 2nd respondent society has to be referred to an arbitrator and merely because the applicant does not initiate arbitration proceedings the relief u/s.9 should not be refused. The violation in following the procedures for conducting election are serious and if the election is permitted to be conducted it will promote illegality and it would warrant further action to be taken for setting aside the election. 9. He would further submit that the expenditure incurred so far would not make the illegal election into a legal one and therefore the circumstances warrant the granting of an order of injunction. Such an order will prevent the irreparable loss likely to have caused to the applicant and also on the 2nd respondent and consequently on its members. He would further submit that the balance of convenience is therefore in favour of the applicant. He would also draw the attention of this court to a judgment of Hon'ble Apex court reported in (2005) 7 SCC 181 in between Pundlik vs. State of Maharashtra & Ors to the proposition that the arrangement of election would not in anyway prevent the courts from passing an order of injunction when the election process are found to be illegal. He would also draw the attention of the court to a judgment of this court reported in CDJ 1998 MHC 1140 in between S.R.Vetrivel vs. The Election Officer, O/o The Dharmapuri District Consumers Co- op., Wholesale Stores Limited, Dharmapuri Town and others for the proposition that the statutory violation alone will be sufficient for granting injunction in so far as the election to co-operative societies are concerned. Therefore, he would request the court that the election, scheduled to have been held on 29.04.2010 has to be restrained by an order of injunction to be passed against the respondents. 10. Learned counsel for the 2nd respondent society would submit in his argument that the 2nd respondent society has 678 members and 11 directors and the Chief Executive namely the Secretary of the society even though he is full time member is a ex-officio director. The order passed by the arbitrator appointed in respect of the election of 4 directors would go to show that the said 4 directors were barred from exercising their vote even though they were permitted to participate in the meetings and if any decision involving contentious issues, policy matter to be brought under or any other matter with the permission of the board should have been deferred and therefore the appointment of Chief Executive could not be done with the existing coram of the board of directors. 11. He would further submit in his argument the applicant has not impleaded the president of the 2nd respondent society nor the returning officer who was appointed for the conduct of election and therefore any order passed against 2nd respondent society would not be complete nor bind the returning officer. He would further submit in his argument that the applicant who was also one of the directors was present in the board meeting held on 26.02.2010 and after the conclusion had been reached in the board of directors he left the meeting without signing the minutes and it is an admitted fact, since the applicant himself has mentioned the participation in the said meeting in his letter written to the president of 2nd respondent society on 07.04.2010. Having participated in the said meeting the applicant had acquiesced to the resolution of the board meeting held on 26.02.2010. He would further submit that the applicant is doing a phishing exercise and since his nominee could not be considered for the post of Chief Executive. He has unnecessarily interfered in the administration of the society since the election process should have been commenced and the election should have been held before the tenure of board of directors is over by 30.04.2010 and therefore returning officer was appointed as per the decision reached in the board meeting as per the statutory requirement. He would further submit that P.S.Gopalan, anemployee of Canara bank who is not a member of the society has been appointed as returning officer and he has commenced the work in accordance with the procedure contemplated under the Act and its schedule. 12. He would further submit that the members have been informed about the election process on 29.03.2010 itself and the expenditure of Rs.16,604.60 has been incurred for sending notice of election through post. He would further submit in his argument that board of directors have got power u/s. 49 of the Act and it is not mandatory that the Chief Executive of the society alone to convene meetings and general meetings since the Chief Executive has to work under the supervision of the board of directors. He would also draw the attention of the court to the byelaws Rule 47 that the Chief Executive shall aid and assist the board of directors in the day to day administration of the society. 13. He would further submit that the information regarding the nomination and election in the notice produced by the applicant at page 6 of his typed set is only a draft given to the applicant as a director of the society. It could be evident that it does not bear the signature of the president where as the correct notice is produced in page 7 of the 2nd respondent's typed set and it is also shown in the photograph of the notice board produced by the applicant in his additional typed-set. He would also submit in his argument that the wrong particulars furnished by the applicant will dis-entitle the applicant for any discretionary relief since he has come to Court with unclean hands. He would also submit in his argument that the election process commenced by the returning officer is in accordance with the rules of the schedule and it started on 12.02.2010 by issuing notice and on 26.02.2010 by holding a Board of Directors meeting. Thereafter, it was promptly informed to the Central Registrar of Co-operative Societies New Delhi on 08.04.2010 at page 6 of the typed set and thereafter, the schedule for the election process exhibited in the notice by the returning officer as in page 10 and the list of members to vote the election was handed over to the returning officer on 22.03.2010 and the notice despatched to the members through post and courier and the publication was also effected in the paper as seen from page 11. The requirement of sending notice through tapal and other modes have been followed promptly and therefore the provisions of schedule 1 has been completely followed by the society as well as the returning officer. 14. He would further submit in his argument that the society by appointing the returning officer, had commenced the election process and notices have been given to all its members through the modes given under law including publishing in news paper and in the said circumstances if the election is stopped by passing an order of injunction it would certainly affect the society which is statutorily required to hold election before the expiry of the tenure of its Directors. He would further submit in his argument that the applicant having no bonafide in his action has come forward with the application after the 2nd respondent had taken steps to process the election, with an ill idea of causing loss to the 2nd respondent society. He would further submit in his argument that in an earlier occasion also the applicant had filed a writ as well as application u/s. 9 of the Arbitration and Conciliation Act with false particulars and obtained injunction and thereafter, on the intervention of 2nd respondent society the said injunction was suspended on the ground of suppression of facts. He would further submit in his argument that the applicant has approached this court for obtaining interim injunction in order to cause loss to the 2nd respondent at the last moment when the election process are about to come to an end. He would draw the attention of the court to the judgment of Hon'ble Apex court reported in (2007) 7 SCC 125 in between Adhunik Steels Ltd vs. Orissa Manganese and Minerals (P) Ltd to the proposition that the guiding factors for granting interim injunction under specific relief act are applicable to grant an injunction as a relief sought for u/s. 9 of the Arbitration and Conciliation Act. He would also draw the attention of the court to a judgment of Hon'ble Apex court reported in AIR 2001 SC 3982 in between SANT SADGURU JANARDAN SWAMI (MOINGIRI MAHARAJ) SAHAKARI DUGDHA UTPADAK SANSTHA, AND ANOTHER vs. STATE OF MAHARASHTRA AND OTHERS to the principle that when the election process have already been commenced it cannot be stopped by any order of injunction. He would also cite a judgment of this court made in W.P.No.30473/2005 dated 20.09.2005 in between A. Babu Rao vs. Bar council of Tamil nadu rep. by its Secretary and the The Advocate General for the same principle. He would also draw the attention of the court to a judgment of Hon'ble Apex court reported in (2006) 8 SCC 487 in between Avtar singh Hit vs. Delhi Sikh Gurdwara Management Committee and Ors for the principle that the non joinder of necessary parties would entitle the court to dismiss an application. He would also bring it to the notice of this court to a judgment of Hon'ble Apex court reported in AIR 1999 SC 1566 in between Umesh Shivappa Ambi ande Ors vs. Angadi Shekara Basappa and Ors for the principle that the court will not ordinarily interfere with the elections when the preparations have been made. He would again submit in his argument quoting the decision of Delhi High Court reported in AIR 2006 Delhi 200 in between Javed Rahat and Ors vs. Bar Council of India and Ors in support of the aforesaid principle laid down by this court and Hon'ble Apex court for the proposition that once the election process has been commenced, no injunction can be granted. The learned counsel for the 2nd respondent would submit in his argument that the applicant even though he be a Director kept quiet all these days making the 2nd respondent to spend on the election process and had come forward with the application for injunction and it cannot be appreciated, while exercising the discretionary relief of injunction. 15. He would further submit in his argument that the relief of granting interim injunction u/s. 9 of the Arbitration and Conciliation Act is with an idea to preserve the subject matter of the dispute to be referred to an arbitrator during the pendency of arbitral proceedings. However, no dispute has been referred to the arbitrator regarding the election process. If the relief sought for by the applicant is granted by way of injunction from proceeding with the election there would not be any dispute available for being decided by the arbitrator since the dispute regarding the election would be stopped by passing an order of injunction. Therefore, the application sought for granting a relief u/s. 9 of the Arbitration and Conciliation Act cannot be maintained by the applicant. Summing up the case, the learned counsel for the 2nd respondent would submit in his argument that in any angle the applicant has no legs to stand in order to maintain the claim of injunction against the 2nd respondent from conducting the election and therefore, the application has to be dismissed. 16. Learned counsel for the 1st respondent would submit in his argument that he is Central co- operative registrar and he has to abide by the orders passed by the court as to the relief sought for by the applicant and therefore, he would abide the orders to be passed by this court. 17. I have paid anxious considerations to the arguments advanced on either side. The case of the applicant is that he is one of the Directors in the second respondent society and the term of the said directors except four Directors whose term were already over would expire on 30.04.2010 and the election for those vacancies have to be filled up prior to the expiry of the term of the Directors and the said strategy has not been disputed by both parties. It is also an admitted fact that a person, who is working in the Canara Bank in any of the branches of the Country alone could become a member of the second respondent society (herein after referred to society). Indisputably, it is governed by the Multi-State Co-operative Society Act, and the provisions of the said act, are applicable for the conduct of society as well as the functions in conducting the election for the Office bearers. The applicant is put forth various contentions that the election called for by the second respondent society was not in accordance with the provisions of Multi-State Co-operative Societies Act (herein after referred to Act) and its rules and schedules framed there under. The Society had arranged for an election to be conducted on 29.04.2010 as per the schedule mentioned in the notice dated 10.04.2010 issued by the returning officer appointed by the society. 18. The further contention of the applicant would be that the society did not appoint the Secretary despite the post of the Secretary fell vacant from 31.03.2008 onwards and the tenor of the act as per section 52(e) would be that the Chief Executive (Secretary) should convene the general meeting for an election and other meetings necessary for periodical conduct of the society. Since there is no Secretary appointed for convening the meetings and to do other functions of the society leading to the conduct of the election through general meeting to be held on 29.04.2010, the said process undertaken by the president of the society are not valid. The other points raised by the applicant would be that the returning officer did not comply with the Rule 2 in the schedule of the act by listing the members so as to find out the correctness of members eligible for voting. Moreover, it has been contended by the applicant that the rules 1 ,2 and 8 of the schedule of the act have not been complied with. Therefore, the election scheduled to have been held by the society on 29.04.2010 is not convened as per law and therefore, it has to be injuncted by an order of the Court under section 9 of the Arbitration and Conciliation Act, 1996. However, it has been resisted by Society that the rules contemplated under the schedule for the conduct of the election was promptly followed by the society and the returning officer has been appointed and he has commenced the process of election and the society had incurred much expenditure in the process of issuing notices to the persons through post and by publication. It is also replied that once election process have been commenced, the process of election may not be injuncted by an order of this Court. It is relied upon the judgment of this Court made in W.P.No.30473 of 2005 dated 20.09.2005 between A.Babu Rao Vs. Bar Council of Tamil Nadu, that once a process of election has commenced, the Court could not interfere until the election results are declared. The relevant passage of the judgment of this Court would run as follows:- "3. In our opinion although Article 329(b) of the Constitution only relates to the elections held for Parliament or the State Legislative Assemblies, the principle of that provision also applies to elections held under statutes such as Municipal Elections, Panchayat Elections, etc. Even regarding such elections, in our opinion, once the election process has commenced, the Court should not interfere until the election results are declared, and even then the Court can come into the picture only when an election petition is filed under the relevant statutory provision, or if there is no such provision for filing an election