IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN SATURDAY, THE 19TH NOVEMBER 2011 / 28TH KARTHIKA 1933 WP(C).No. 27541 of 2010(P) -------------------------------------- PETITIONER: ------------------- THE MANAGING COMMITTEE OF THE OLAVANNA VANITHA CO-OPERATIVE SOCIETY LTD. NO.D 2770, PALAZHI-PALA, KOZHIKODE, REPRESENTED BY ITS PRESIDENT. BY ADVS. SRI.P.P.JACOB, SRI.T.P.GOPAKUMAR. RESPONDENTS: ------------------------ 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), KOZHIKODE-4. 2. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, CO-OPERATION DEPARTMENT, SECRETARIAT, TRIVANDRUM-1. R1 & R2 BY SR. GOVERNMENT PLEADER SMT. ANITHA RAVINDRAN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19/11/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).NO.27541/2010-P: APPENDIX PETITIONER'S EXHIBITS:- EXT.P.1: COPY OF THE RESOLUTION OF THE COMMITTEE OF THE PETITIONER DTD. 24/07/08. EXT.P.2: COPY OF THE PROPOSED AMENDMENT APPROVED BY THE COMMITTEE. EXT.P.3: COPY OF THE BYELAW AMENDMENT APPROVED BY THE GENERAL BODY OF THE PETITIONER DTD. 16/08/08. EXT.P.4: COPY OF THE COVERING LETTER FORWARDED BY THE PETITIONER TO THE R.1. DTD. 29/08/08. EXT.P.5: COPY OF THE JUDGMENT IN W.P.(C).229/2010 DTD. 08/01/2010. EXT.P.6: COPY OF THE ORDER ISSUED BY THE JOINT REGISTRAR TO THE PETITIONER DTD. 26/12/2008. EXT.P.7: COPY OF THE ORDER IN APPEAL DTD. 15/07/10 ISSUED BY THE GOVERNMENT. EXT.P.8: COPY OF THE CLAUSE 7 OF THE BYELAW OF KOZHIKODE TOWN VANITHA CO- OPERATIVE SOCIETY. EXT.P.9: COPY OF THE ORDER ISSUED BY THE JOINT REGISTRAR DTD. 07/08/2010. RESPONDENTS' EXHIBITS:- NIL. //TRUE COPY// P.S. TO JUDGE Prv. P.N.RAVINDRAN, J. ----------------------------------------- W.P(C).No.27541 of 2010 ----------------------------------------- Dated this the 19th day of November, 2011 JUDGMENT The petitioner is a co-operative society registered under the Kerala Co-operative Societies Act, 1969, (hereinafter referred to as the Act for short). It is classified as a Vanitha Co-operative Society by the Registrar of Co-operative Societies in tune with rule 15 of the Kerala Co-operative Societies Rules, 1969, (hereinafter referred to as the Rules for short). The area of operation of the petitioner society is Olavanna Grama Panchayat in Kozhikode Taluk. The authorised share capital of the petitioner society is Rs.16,00,000/-. A General Body meeting of the petitioner society was convened and held on 24.7.2008 to consider the amendments proposed to the bye-laws relating to the area of operation and authorised share capital of the society. By that amendment the area of operation was proposed to be altered as Kozhikode Municipal Corporation and Olavanna Grama Panchayat with the object of improving the functioning of the society. The other amendment proposed was to raise the authorised share capital of W.P(C).No.27541 of 2010 -:2:- the society from Rs.16,00,000/- to Rs.26,00,000/-. The General Body unanimously approved the amendments to the bye-laws. 2. The Secretary of the society thereupon forwarded the resolution adopted by the General Body on 16.8.2008 to the Joint Registrar of Co-operative Societies (General) Kozhikode along with Ext.P4 letter dated 29.8.2008 with a request to register the amendments to the bye-laws. When orders were not passed on the application to register the amendments to the bye-laws, the petitioner society filed W.P.(C)No.229 of 2010 in this Court. When that writ petition came up for hearing on 8.1.2010 the learned Government Pleader appearing for the respondents submitted on instructions that the Joint Registrar of Co-operative Societies has by Ext.P6 order passed on 31.12.2008 declined to register the amendments to the bye-laws. In view of that submission W.P.(C) No.229 of 2010 was closed as infructuous reserving liberty with the petitioner to challenge Ext.P6 order dated 26.12.2008 passed by the Joint Registrar of Co-operative Societies in other appropriate proceedings. The petitioner challenged Ext.P6 order in appeal before the State Government. By Ext.P7 order passed on 15.7.2010 the Government set aside Ext.P6 on the ground that it is not a speaking order and directed the Joint Registrar of Co- operative Societies to pass fresh orders in the matter. The Joint W.P(C).No.27541 of 2010 -:3:- Registrar of Co-operative Societies thereafter passed Ext.P9 order dated 7.8.2010 once again declining to register the amendments to the bye-laws. Hence this writ petition challenging Ext.P9 and seeking the following reliefs:- i. Issue a writ of certiorari or any other writ, order or direction calling for the records leading to the issue of Ext.P9 and quash the same. ii. Issue a writ of mandamus or other writ or order directing the first respondent to register the proposed bye-law amendment approved by the general body of the petitioner society as evidenced by Ext.P5 enabling the functioning of the society properly. The main contention raised by the petitioner is that Vanitha Co- operative Societies are exempted from the purview of clause (c) of sub-section (1) of section 7 of the Act and therefore the Joint Registrar of Co-operative Societies erred in declining to register the amendment to bye-law 2 on the ground that if that bye-law is amended, the area of operation of the petitioner society will overlap the area of operation of two other societies of similar type. As regards the rejection of the amendment to bye-law 7 it is contended that once the area of operation is widened the society will need more funds to improve its functioning, necessitating increase in share capital. W.P(C).No.27541 of 2010 -:4:- 3. The first respondent has filed a counter affidavit wherein it is stated that Dairy Co-operative Societies are exempted from the purview of section 7(1)(c) of the Act. As regards enhancement of the authorised share capital it is stated that though at present the authorised share capital is Rs.16,00,000/-, the paid up share capital is only Rs.2,83,130/- which corresponds to 17% of the authorised share capital and that mere enhancement of the authorised share capital would not serve any purpose. It is contended that if the share value is raised many members are likely to withdraw their membership and it will really result in loss to the society. 4. I heard Sri.P.P.Jacob, learned counsel appearing for the petitioner and Smt.Anitha Ravindran, learned Government Pleader appearing for the respondents. I have also gone through the pleadings and the materials on record. The fact that the paid up share capital of the petitioner society is only Rs.2,83,130/- which corresponds to 17% of the authorised share capital of Rs.16,00,000/- is not disputed. It is also not in dispute that as on today there are only 226 members in the society. By the proposed amendment the authorised share capital is sought to be raised from Rs.16,00,000/- to Rs.26,00,000/-. As per the existing bye-laws the authorised share capital is Rs.16,00,000/- consisting W.P(C).No.27541 of 2010 -:5:- of 10,000 A class shares of Rs.100/-, 20000 B class shares having a face value of 25/- and 10,000 C class shares having a face value of Rs.10/-. By the proposed amendment the society proposes to raise the share value of A class shares to Rs.200/- thereby raising the authorised share capital to Rs.26,00,000/-. As rightly held by the Joint Registrar of Co-operative Societies the society has not been able to enroll adequate number of members and raise the authorised share capital. Only 17% of the authorised share capital has so far been issued. I therefore find no reason why at this point of time the society should raise its share capital. I am therefore, of the opinion that the challenge to Ext.P9 in so far as it relates to bye-law 7 does not merit interference. However, as regards bye-law 2, I am of the opinion that the petitioner is entitled to succeed. The Joint Registrar of Co- operative Societies has declined to register the amendment to bye-law 2 only on the ground that if the area of operation is altered, it will result in overlapping with the area of operation of societies of similar type. It is not in dispute that Vanitha Co- operative Societies are exempted from the purview of clause (c) of sub-section (1) of section 7 of the Act. Such being the situation as new societies can be registered within the area of operation of the existing Vanitha Co-operative Societies in Kozhikode W.P(C).No.27541 of 2010 -:6:- Corporation or elsewhere in Kozhikode Taluk, I find no reason why the amendment of the bye-law relating to the area of operation of the petitioner society cannot be registered. I am therefore of the considered opinion that Ext.P9, in so far as it declines to register the amendment to bye-law 2 cannot be sustained. I accordingly allow the writ petition, quash Ext.P9 to the extent it declines to register the amendment to bye-law 2 and direct the Joint Registrar of Co-operative Societies to register the amendment to bye-law 2 as proposed by the General Body of the petitioner society at its meeting held on 24.7.2008 and issue orders in that regard within one month from the date of receipt of a certified copy of this judgment. It will be open to the petitioner society, at a later stage after the area of operation is widened and a substantial portion of its authorised share capital is paid up, to place a proposal to amend bye-law 7 before its General Body and thereafter seek registration of the amendment after it is approved by the General Body. P.N.RAVINDRAN, Judge. ahg. P.N.RAVINDRAN, J. --------------------------- W.P(C).No.27541 of 2011 ---------------------------- JUDGMENT 19th November, 2011