IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH THURSDAY, THE 21ST JUNE 2007 / 31ST JYAISHTA 1929 WP(C).No. 14789 of 2007(I) ----------------------------------- PETITIONERS: ------------------- 1. P.VIJAYADAS, EX.M.L.A., MEMBER, BOARD OF DIRECTORS, THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK LTD, EAST FORT, THIRUVANANTHAPURAM. 2. ADV.N.PRAKASAN, MEMBER, BOARD OF DIRECTOR OF THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK LTD, EAST FORT, THIRUVANANTHAPURAM. 3. ADV.G.SOBODAN, MEMBER OF BOARD OF DIRECTORS OF THIRUVANANTHAPURAM DISTRICT CO- OPERATIVE BANK LTD., EAST FORT, THIRUVANANTHAPURAM. 4. G.SHAMSUDDIN, MEMBER OF BOARD OF DIRECTORS OF THIRUVANANTHAPURAM DISTRICT CO - OPERATIVE BANK LTD., EAST FORT, THIRUVANANTHAPURAM. 5. M.A.KARIM, MEMBER OF BOARD OF DIRECTORS OF THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK LTD., EAST FORT, THIRUVANANTHAPURAM. 6. M.P.SHAJU, MEMBER OF BOARD OF DIRECTORS OF THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK LTD., EAST FORT, THIRUVANANTHAPURAM. 7. B.SASIKUMARI, MEMBER OF BOARD OF DIRECTORS OF THIRUVANANTHAPURAM DISTRICT CO- OPERATIVE BANK LTD., EAST FORT, THIRUVANANTHAPURAM. BY ADV. SRI.B.S.SWATHY KUMAR RESPONDENTS: ---------------------- 1. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, KERALA STATE, THIRUVANANTHAPURAM. 2. THE THIRUVANANTHAPURAM DISTRICT CO - OPERATIVE BANK LTD., THIRUVANANTHAPURAM, REPRESENTED BY ITS GENERAL MANAGER. *3. N.BHASURANGAN, PRESIDENT, THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK, THIRUVANANTHAPURAM. *ADDL. R3 IS IMPLEADED AS PER ORDER DATED 28/05/2007 IN IA NO. 6284/2007. R1 BY AV. SRI. P.N. SANTHOSH, GP R2 BY ADV. SRI. T.R.HARIKUMAR BY ADV. SRI.P.V.BABY ---R3 SPL. GOVERNMENT PLEADER SMT. A.G.ANEETHA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15/06/2007, ALONG WITH WPC NO. 15849/2007 & WPC NO. 13925 OF 2007, THE COURT ON 21/06/2007 DELIVERED THE FOLLOWING: WP(C) NO: 14789/2007 APPENDIX PETITIONER'S EXHIBITS EXT.P1. COPY OF THE JUDGMENT IN WPC NO. 7820/2007 DT. 2/4/2007. EXT.P2. COPY OF THE NOTICE NO. ADM/ESTT/BOARD/29/2006-07 DT. 19/3/2007. EXT.P3. COPY OF THE COMPLAINT FILED BY THE PETITIONERS BEFORE THE R1 DT. 20/3/2007. EXT.P4. COPY OF THE JUDGMENT IN WPC NO. 10042/2007 DT. 2/4/2007. EXT.P5. COPY OF THE JUDGMENT IN WPC NO. 11464/2007 DT. 2/4/07. EXT.P6. COPY OF THE NOTICE NO. C.B/ (3) 15796/2007 DT. 19/4/2007 OF THE R1. EXT.P7. COPY OF THE NOTICE NO. M.T (1) 7094/2007 DT. 21/4/2007 OF THE R1. EXT.P8. COPY OF THE MINUTES OF THE MEETINGS DT. 20/3/2007 OF THE R2. EXT.P9. COPY OF THE EXPLANATION BY THE 6TH PETITIONER BEFORE THE R1 DT. 30/4/2007. EXT.P10. COPY OF THE EXPLANATION BY THE P1 BEFOR THE R1 DT. 30/4/2007. EXT.P11. COPY OF THE NEWS ITEM IN DESABHIMANI DAILY DT. 10/4/2007. EXT.P12. COPY OF THE NEWS ITEM IN MALAYALA MANORAMA DAILY DT. 09/04/2007. EXT.P13. COPY OF THE NEWS ITEM IN MATHRUBHUMI DAILY DT. 10/4/2007. EXT.P14. COPY OF THE NEWS ITEM in the HINDU DAILY DT. 10/4/2007. EXT.P15. COPY OF THE ORDER NO. C.N. (3) 15796/2007/112 DT. 2/5/2007 OF THE R1. EXT.P16. COPY OF THE NOTICE NO. 1/2007-08 DT. 30/4/2007. RESPONDENT'S EXHIBITS EXT.R3A. COPY OF THE ATTENDANCE OF THE COMMITTEE MEMBERS OF THE R9 BANK MET ON 20/3/2007. EXT.R3B. COPY OF THE AGENDA AND THE DECISIONS OF THE COMMITTEE OF THE R9 BANK MET ON 20/3/2007. True copy tga K. M. JOSEPH, J. -------------------------------------- W.P.C. NOS. 14789/07, 15849/07 & 13925/07 -------------------------------------- Dated this the 21st June, 2007 JUDGMENT The petitioners in W.P.(C) No.13925/07 are the same as the petitioners in W.P.(C) No.15849/07, i.e. the Kerala State Co- operative Hospital Complex and Centre for Advanced Medical Services Ltd. and Shri M.V. Raghavan who is the Chairman of the Board of Directors (hereinafter referred to as the Hospital Society in brief and second petitioner). W.P.(C) No.13925/07 is filed seeking a Mandamus to compel the Registrar of Co- operative Societies to appoint a Returning Officer to conduct election as per Ext.P2 Resolution forthwith and to see that the election is conducted as per Ext.P2. A Declaration is also sought that the respondent is a statutory board to appoint a Returning Officer to conduct the election as per Ext.P2 forthwith and also in view of Ext.P1 Judgment. 2. It is the case of the petitioners in the aforesaid two Writ Petitions that the Co-operative Hospital is a Society WP(C) 14789, 15849 & 13925/07 2 registered under the Kerala Co-operative Societies Act, 1969 and Shri M. V. Raghavan is the Chairman of the Board of Directors the term of which is to expire on 11.7.2007. They contend that consequent upon the change in the Government in May, 2006, there were various attempts to oust the Board from the control of the Co-operative Society under the directives of the Minister for Co-operation. It is their case that on 22.12.2006 an order was passed removing the Board from office on the ground that eleven Members do not constitute the quorum. The second petitioner challenged the said order in W.P.(C) No. 34569/06 H. The said Writ Petition was allowed and the Board was reinstated in office. The Government challenged that Judgment in Writ Appeal No.187/07 and the Appeal was dismissed. The Co-operative Hospital decided by resolution to conduct election on 9.4.2007. But, the Registrar did not appoint a Returning Officer stating that the Hospital Society is a federal society and there is a gap of 158 days. Ultimately, the matter reached this Court in the form of Writ Petition No.7820/07 and WP(C) 14789, 15849 & 13925/07 3 the matter was disposed of by Ext.P1 Judgment. By Ext.P1 Judgment, this Court held that it is unnecessary to decide the legal questions raised, as the petitioner submitted that a fresh resolution would be taken within two weeks from the date of the Judgment. The Judgment further shows that the Court disposed of the matter leaving it open to the Hospital Society to pass a fresh resolution for conducting the election in the event of which the Registrar of Co-operative Societies was to take steps to appoint a Returning Officer on receipt of the resolution. It was thus that the Board was convened on 13.4.2007at Delhi as one of the Members of the Board, Shri E. Ahammed who is also the Minister for External Affairs had a compound fracture of his leg and is bed-ridden in Delhi, making the holding of the meeting at Delhi unavoidable. They further contend that the Members of the Board went to Delhi meeting the expenses from their own pocket and they also decided not to claim any TA or any amount for the travel to Delhi. Ext.P2 resolution was taken by the Board in the meeting held on 13.4.2007 to hold election of 17 WP(C) 14789, 15849 & 13925/07 4 Members of the Board on 20.5.2007 at Rajadhany Auditorium at Thiruvananthapuram. Ext.P3 is the forwarding letter produced to show that the copy of the resolution was forwarded to the respondent on 17.4.2007 by registered post. On 18.4.2007, the Assistant Registrar in the Office of the Joint Registrar (General) came to the Office of the Society and verified the Minutes Book and found that Ext.P2 resolution was in Order and she put her signature to the effect that she had found Ext.P2 in order. It is stated that there were attempts to manipulate the Minutes of the Meeting of the Board of Directors of the Thiruvananthapuram District Co-operative Bank to show that its Vice President who is a nominee of the Hospital Society and also the elected Member of the Society has been withdrawn. This is done to make it appear that the Board of the Hospital Society has lost its quorum. There are other allegations regarding the holding of the meeting in the Writ Petition which I shall deal with when I refer to the other Writ Petitions. The complaint is that there is inaction and there is no reason to not appoint the Returning WP(C) 14789, 15849 & 13925/07 5 Officer to conduct the election. It is pointed out that it is due to ulterior motives and political influence that the election is not being held. 3. In the Counter Affidavit filed in W.P.(C) No.13925/07 what is essentially stated is that Ext.P2 resolution is not in accordance with the various provisions of the Co- operative Societies Act and the Rules. Therefore, notice was issued under Rule 176 of the Kerala Co-operative Societies Rules to which Ext.R1(b) reply was given and it is stated that a decision will be taken immediately after the hearing is over on the question as to rescinding of the resolution and it is their case that a decision will be taken on the resolution to appoint the Returning Officer subject to the final decision under Rule 176. 4. W.P.(C) No.15849/07 is filed by the same petitioners challenging Ext.P14 which is the decision taken purported to be under Rule 176 of the Rules rescinding Ext.P2 resolution dated 13.4.2007 which is the subject matter in W.P.(C) No.13925/07. The further prayers in the Writ Petition are to direct the WP(C) 14789, 15849 & 13925/07 6 respondent Registrar to conduct the election on the date, time and place fixed by this Court; to issue an order fixing the date, time and place of the election to the Board and also to appoint the Returning Officer to conduct the same and to issue a writ of mandamus commanding to appoint a Returning Officer to ensure that election is held before 12.7.2007 and the Body takes charge and to ensure that the duly elected Board takes charge before 12.7.2007; to direct the respondent to allow the present Board to continue in office till the duly elected Board takes charge and to declare that the Board is a statutory Board to conduct election before 11.7.2007. Of course, the main question to be decided is the validity of Ext.P14 in W.P.(C) No.15849/07 by which the resolution to conduct the election on 20.5.2007 is rescinded under Rule 176. One of the grounds on which the resolution has been rescinded under Rule 176 is that the resolution is vitiated for the reason that there was no quorum for the meeting, as the number of Members who participated in the meeting on 13.4.2007 can only be treated as ten in view of the WP(C) 14789, 15849 & 13925/07 7 fact that one Shri M.P. Shaju who was the delegate of the Thiruvananthapuram District Co-operative Bank to the Hospital Society was withdrawn from the Hospital Society in the meeting of the Thiruvananthapuram District Co-operative Bank held on 20.3.2007, thus depriving the meeting held on 13.4.2007 in which Shri M.P. Shaju participated of its legal foundation as without Shri M.P.Shaju, there were only ten Members when the quorum is treated as eleven. 5. W.P.(C) No.14789/07 is filed by seven Members of the Board of Directors of the Thiruvananthapuram District Co- operative Bank (hereinafter referred to as the Bank) challenging Ext.P15 and also praying to quash the resolution after item No.13 in Ext.P8. Ext.P15 is the order of the Registrar rejecting the request of the petitioners to rescind the resolution taken on 20.3.2007 after the 12th resolution passed in the meeting on 20.3.2007. Item No.19 in the meeting held on 20.3.2007 related to the withdrawal of Shri M.P. Shaju from the Board of the Hospital Society. It is for the reason that the withdrawal of Shri WP(C) 14789, 15849 & 13925/07 8 M.P. Shaju by the impugned resolution in Ext.P8 as confirmed by Ext.P15 decision of the Registrar that this Writ Petition is also connected with the other two Writ Petitions, it is being disposed of by a common Judgment. 6. Admittedly, the term of the Managing Committee of the Hospital Society is due to expire on 12.7.2007. Ext.P2 resolution dated 13.4.2007 was passed to hold meeting on 20.5.2007. The said resolution stands rescinded by Ext.P14 order in W.P.(C) No.15849/07 on essentially three grounds, namely: (1) It is firstly the case of the Registrar that the holding of the meeting in which Ext.P2 resolution was passed at Delhi is impermissible as the area of operation of the Society is restricted to the State of Kerala. The Meeting having taken place at Delhi, the resolution passed in such a meeting could not be treated as a legally valid resolution. (2) Secondly, Ext.P2 resolution has been passed to hold election to fill 17 vacancies. It is the case that under Section 28 WP(C) 14789, 15849 & 13925/07 9 (1A) the maximum number of Members in the managing Committee of a Primary Co-operative Society can only be fifteen. But, the election is proposed to be held for electing seventeen Members. The Hospital Society has federal characteristics and in such circumstances, the competent Body to election is the Election Commission. Therefore, Rule 35(A) will apply and the resolution was not forwarded to the Election Commission as required. (3) Thirdly, there is no quorum for the meeting held on 13.4.2007 as Shri M.P. Shaju stood withdrawn by the Committee Meeting of the Bank held on 20.3.2007 and, therefore, it is impermissible. Learned Special Government Pleader, Shri A.G. Aneetha would also submit that Ext.P2 resolution stands rescinded for the reason that the Byelaws of the Hospital Society were not amended despite the Circular and instruction given by the Department. 7. As noticed, one of the grounds for rescinding Ext.P2 resolution is lack of quorum in view of the withdrawal of Shri WP(C) 14789, 15849 & 13925/07 10 M.P. Shaju. At this state, I may notice the case of the petitioner in W.P.(C) No.14789/07 in some detail. Therein, seven Members of the Managing Committee of the Bank have approached this Court on the allegations which are in brief, as follows: Right from the inception of the office of the present Government, various illegal acts were resorted to for ousting the Board of the Hospital Society. Reference is made to the allegations which I have already referred to in connection with the supersession of the Board of the Hospital Society, leading upto the passing of Ext.P2 resolution. It is the case that when all these efforts to oust the Board failed, the Ruling Party lured the President of the Bank and manipulated and forged the Minutes of the meeting held on 20.3.2007 by writing down the resolutions which were not taken or even discussed in the meeting dated 20.3.2007 or convened as per notice dated 19.3.2007, which had only 13 items in the agenda. The meeting came to an end at 2 P.M. Petitioners then came to know, it is WP(C) 14789, 15849 & 13925/07 11 stated, that the President and the General Manager were manipulating the Minutes by writing down resolutions not taken in the meeting including one stating that Shri M.P. Shaju is withdrawn. This is done with ulterior motives to oust the Board of the Hospital Society. Petitioners filed Ext.P3 complaint on 20.3.2007 itself. Shri M.P. Shaju filed Writ Petition before this Court which was disposed of by Ext.P4 Judgment dated 2.4.2007, directing the Registrar to hear the Members of the Board regarding the complaint of the petitioners and also the complaint if any against the present President of the Bank after hearing him also. This Judgment was dated 2.4.2007. Later, on the same day, the learned Single Judge also disposed of W.P.(C) No.11464/07 with a direction to the Registrar to take a decision on the complaint of the other petitioners against the General Manager after hearing the Members of the Board of Directors. The Registrar issued notice dated 19.4.2007 calling for a personal hearing on 30.4.2007 and also calling for written explanations. It is while so that the first respondent also issued WP(C) 14789, 15849 & 13925/07 12 notice dated 21.4.2007 to the Hospital Society as to why Ext.P2 resolution in W.P.(C) No. 13925/07 should not be rescinded. It is further stated that the cover in which the notice dated 21.4.2007 was issued would show that it was posted only on 26.4.2007 which is significant as W.P.(C) No.13925/07 is filed by the Chairman of the Hospital Society on 26.4.2007 at 11 A.M. The cover would show that the notice proposing to rescind the resolution is posted on 26.4.2007 at 7.13 hours. According to the petitioners, a back date is given to the notice dated 21.4.2007 after the copy of the Writ Petition No.13925/07 was served on the counsel of first respondent. It is pointed out that this shows malafide. Petitioners gave separate written explanation. Ext.P8 is the copy of the Minutes of the meeting held on 20.3.2007. It is stated that the petitioners have also appeared in person before the first respondent on 30.4.2007 and their Statements were also recorded. There is reference to news item appearing in the Desabhimani Daily (Ext.P11), Malayala Manorama Daily (Ext.P12), Mathrubhumi (Ext.P13) and the WP(C) 14789, 15849 & 13925/07 13 Hindu Daily (Ext.P14) wherein it is stated that the Minister for Co-operation has stated that Shri M.P.Shaju has been withdrawn from the Hospital Society and the Board has lost its quorum and it should be ousted. It is pointed out that they were issued after Exts.P4 and P5 Judgments dated 2.4.2007 directing the first respondent to hear and decide the correctness of the resolution withdrawing the nomination of Shri M.P. Shaju. It is by Ext.P15 that the Registrar has rejected the complaint of the petitioners and found that there was no ground for setting aside the resolutions of the meeting held on 20.3.2007. 8. I heard the learned counsel for petitioners, Shri B.S. Swathi Kumar, the learned Special Government Pleader Smt. A.G. Aneetha, Shri P.V. Baby appearing for the President of the Bank, besides Shri T.R. Harikumar appearing for the respondent Bank. Shri B.S. Swathi Kumar, learned counsel for the petitioners would contend that the action of the respondent is illegal, arbitrary and malafide. He would contend that the sequence of events would make it clear that the intention of the WP(C) 14789, 15849 & 13925/07 14 respondent who is acting under the dictate of the political party in power is to circumvent and frustrate democracy in a Co- operative Society. The whole idea according to him is to see that an elected body does not take charge before the expiry of the Hospital Society on 12.7.2007 and to invoke Section 33 of the Act and appoint an Administrative Committee. He would press into service the circumstance that the respondent unsuccessfully passed an order of supersession earlier which was admittedly interfered with by this Court. The Minister also went in Appeal before the Division Bench displaying malafides and his effort was also futile as the Division Bench affirmed the decision of the learned Single Judge, he points out. Still later, when a resolution was taken to hold the election, it was vetoed stating that it was taken on a day which was 158 days apart from the date of the expiry of the term. He pointed out that when this was challenged, the Division Bench of this Court permitted the Hospital Society to take a fresh resolution and upon the intimation of which, the respondent was directed to conduct the WP(C) 14789, 15849 & 13925/07 15 election. It was in such circumstances that Ext.P2 resolution dated 13.4.2007 was taken. There is absolutely no basis to rescind the said resolution, it is pointed out. 9. As regards the first objection is concerned, namely that the meeting took place in Delhi, which is beyond the area of operation of the Hospital Society, it is contended that it was perfectly open particularly having regard to the unavoidable circumstances caused by the compound fracture suffered by Shri E. Ahammed, Minister disabling him from travelling. Shri Swathi Kumar would point out that there is no embargo against the holding of the meeting of the Committee outside its area of operation. He would submit that he would rely on a decision of this Court in Karassery Service Co-operative Bank v. Mokkam Service Co-operative Bank (2007 (1) KLT 555) wherein this Court took the view that housing the building of the Head Office outside the area of operation is not impermissible. What is prohibited is only the carrying on or canvassing business outside the area of operation. As far as the ground that by WP(C) 14789, 15849 & 13925/07 16 Ext.P2 resolution, election is proposed to be held for filling 17 vacancies and election could be held only in regard to fifteen vacancies at the maximum in view of Section 28(1A), he would point out certain facts. He would submit that there was no maximum number of Members fixed originally. It is only in 2005 that the maximum number of Members were fixed as twentyfive and that is approved also by the Department. The matter engaged the attention of this Court in an earlier round of litigation wherein a Division Bench of this Court had concluded the issue saying that it is a primary society. He would, therefore, point out that it is open to the Committee to decide to hold the election to fill up vacancies in a number so long as it does not exceed the maximum number. As far as the contention that it is a Society having federal characteristics and, therefore, the request should have been made to the Election Commission under Rule 35A, he would refer to the provisions of Rule 35A to point out that there is absolutely no merit in the said contention of the respondent as even Rule 35A provides that the copy of the WP(C) 14789, 15849 & 13925/07 17 resolution has to be forwarded to the Registrar who is to forward the resolution to the Commission. He would point out that the respondent is unable to make out a definite case whether the Society is to be treated as a primary Society or a federal Society and somehow the respondent is attempting to see that the election is not held. He would further submit that the main consideration should be the upholding of the democractic values and there cannot be a higher value than the holding of the elections in time, so that a democratically elected body assumes power. This is the essence of the Co-operative movement, he contends. He points out that the election could be ordered limiting the number as fifteen and the Committee has no objection in so limiting the number to fifteen. He points out that the election as proposed is to the following categories: (1) One from Special Institutional Members. (2) Three from Institutional Members. (3) Thirteen from individual Members. He would submit that the Society has no objection in two WP(C) 14789, 15849 & 13925/07 18 vacancies being deducted from the category of individual Members. He would also point out that the ground urged by the learned Special Government Pleader that there was no amendment to the Byelaws and, therefore, election should not be ordered as contended by the petitioners, is meritless. He would point out in the first place that there is no authority with the respondent to direct amendment of the byelaw in this regard. He referred me to Section 12 of the Act to contend that the direction to amend the byelaw could be issued by the Registrar only for certain purposes as enumerated therein. He would therefore contend that there is no basis to contend that there was a disobedience on the part of the Hospital Society in carrying out amendment of the nature in question. He would also contend that this is not a finding which is reflected in the notice and the order. As far as the last ground which is of course integrally connected with the case set up by in the connected case filed by the Members of the Committee of the Bank, he would point out that there is absolutely no ground to find that WP(C) 14789, 15849 & 13925/07 19 the resolutions including the resolution withdrawing Shri M.P. Shaju were passed. He would submit that the meeting scheduled to take place on 20.3.2007 was scheduled as per the notice dated 19.3.2007. In the notice scheduled in the meeting, there is reference only to twelve specific items to be considered at the meeting on 20.3.2007. Thereafter, of course, there is reference to “other items”. Those items were not specifically enumerated. In the meeting held on 20.3.2007 which commenced at 11.30 A.M. and which was over by 2 P.M., none of the resolutions after the 12th item were taken up or discussed or passed, he contends. It is only after the