THE HON'BLE SRI JUSTICE P.S.NARAYANA W.P.No.3271 of 2006 Date : 23-10-2009 Between: Gun Rock Enclave Coop. Hosing Society Ltd. .. Petitioner And The Deputy Registrar of Cooperative Societies, Divisional Cooperative Officer, Secunderabad Division, A.P.H.B. Complex, Near Exhibition Grounds, Nampally, Hyderabad and others .. Respondents *THE HON'BLE SRI JUSTICE P.S.NARAYANA +W.P.No.3271 of 2006 % 23-10-2009 # Gun Rock Enclave Coop. Hosing Society Ltd. .. Petitioner And $ The Deputy Registrar of Cooperative Societies, Divisional Cooperative Officer, Secunderabad Division, A.P.H.B. Complex, Near Exhibition Grounds, Nampally, Hyderabad and others .. Respondents <GIST: >HEAD NOTE: ! Counsel for petitioner : Sri Govardhana Chary ^ Counsel for respondent No.1 : G.P. for Co-operation Counsel for respondent No.2 : Sri Polavarapu Srinivas ?CASES REFERRED: 1. AIR 1954 Madras 103 2. AIR 1987 S.C. 849 3. AIR 1991 A.P. 163 4. 1996(2) ALD 798 THE HON'BLE SRI JUSTICE P.S.NARAYANA W.P.No.3271 of 2006 ORDER: 1. The Writ Petition is filed praying for a Writ of Mandamus declaring that the Award A.R.C.No.28/2000 dated 20-7-2002 of the 1st respondent – Deputy Registrar of Cooperative Societies, Secunderabad Division, Hyderabad confirmed by the A.P. Co-operative Tribunal at Hyderabad in C.T.A.No.133/2002 through its judgment dated 26-10-2005 as without jurisdiction, power or authority, illegal, arbitrary and contrary to the judicial pronouncements of this Court and to set aside the same and to pass such other suitable orders. 2. Sri Govardhana Chary representing Sri D.V. Bhadram, the learned Counsel for the writ petitioners had taken this Court through the contents of order under challenge and would maintain that the A.P.Co-operative Tribunal, Hyderabad (hereinafter in short referred to as “Tribunal” for the purpose of convenience) totally erred in recording certain findings. The learned Counsel also would point out that it is clear from the prayer that the process of election already had commenced and hence the matter to be agitated by way of election dispute under Section 61(3) of the A.P. Co-operative Societies Act 1964 (hereinafter in short referred to as “Act” for the purpose of convenience). The learned Counsel also further pointed out that the Tribunal had not appreciated the questions of fact and questions of law involved. The learned Counsel also pointed out that the reliance placed by the Tribunal on certain decisions without properly appreciating the applicability thereof also cannot be sustained. The learned Counsel while further elaborating his submissions had taken this Court through the relevant provisions of the Act, Section s23, 61, 62, 76 and 77 of the Act and would maintain that since the dispute of this nature would not fall within the meaning of Section 61 of the Act at all, there is no question of granting such relief. The learned Counsel also would maintain that even otherwise, the said order is an appealable order under Section 76 of the Act. Hence viewed from any angle, the remedy invoked by the 2nd respondent in the Writ Petition being a misconceived remedy, the order under challenge is liable to be set aside. The learned Counsel also placed reliance on certain decisions. 3. The learned Assistant Government Pleader for Co-operation had taken this Court through the language of Section 61 of the Act and would maintain that the Tribunal recorded appropriate findings after referring to certain decisions and inasmuch as concurrent findings had been recorded, this is not a fit case to be interfered with. 4. Sri Polavarapu Srinivas, the learned Counsel representing the 2nd respondent would maintain that by virtue of a subsequent Amendment, the remedy of Appeal had been provided for under Section 76 of the Act. The Counsel also pointed out to the Grounds of Appeal and also the written arguments and would maintain that the availability of a revisional remedy under Section 77 of the Act alone had been referred to and this submission which is being made is an after thought. The learned Counsel also would maintain that this is a dispute challenging the expulsion order. Merely because incidentally the election process had been in progress, that would not seriously alter the situation. Even if it is to be taken that the order is revisable, revision being not an effective alternative remedy inasmuch as the order had been made in utter violation of the provisions of the Act without affording any opportunity whatsoever, the impugned order cannot be found fault in any way and the Writ Petition to be dismissed. The Counsel also placed strong reliance on certain decisions. 5. Heard the Counsel and perused the order under challenge. 6. It is the case of the writ petitioners that 1st petitioner is a Society registered under the Act and the Rules framed thereunder to cater to the housing needs of its members. The Society had been functioning in accordance with the provisions of the Act, the Rules and the Bye-Laws. It is also the case of the writ petitioners that the 2nd respondent who was a member of the Society filed I.A.No.1/2000 on 14-9-2000 in A.R.C.No.28/2000 under Section 61 of the Act before the 1st respondent praying to direct the defendants therein to include his name in the valid voters list stating that the elections to the Managing Committee of the Society is going to be held on 26-9-2000. It is also stated that there was no dispute that A.R.C.No.28/2000 was filed by the 2nd respondent before the 1st respondent. Further it is stated that the 1st respondent passed interim order dated 14-9-2000 in I.A.No.1/2000 in A.R.C.No.28/2000 setting aside the expulsion of the petitioner therein i.e., 2nd respondent in the Writ Petition. The 2nd respondent filed written arguments in A.R.C.No.28/2000 which were received by the Counsel for petitioners on 16-11-2001. The petitioners counsel also filed written arguments dated 21- 1-2002 before the 1st respondent for which a reply was also filed by the 2nd respondent which was received by the petitioners counsel on 23-6-2002. The 1st respondent through his Award dated 20-7-2002 (corrected as 20-6-2002) ordered that the 2nd respondent is continued as member of the society for non-fulfilment of the required provisions under Section 23(1) and (2) of the Act. The said order was received by his counsel on 16-8- 2002 which the 2nd respondent filed caveat dated 13-8- 2002 before the Tribunal. It is also stated that C.T.A.No.133/2002 was filed under Section 76(1) of he Act before the Tribunal challenging the Award aforesaid of the 1st respondent which was dismissed by Judgment dated 26-10-2005. In such circumstances the Award in A.R.C.No.28/2000 of the 1st respondent/Deputy Registrar of Co-operative Societies, Secunderabad Division, Hyderabad, as confirmed in C.T.A.No.133/2002, these are being challenged in the present Writ Petition. Several grounds also had been averred in detail and certain decisions also had been relied on. 7. In C.T.A.No.133/2002, the Tribunal after referring to the brief facts and after hearing the arguments, formulated the following Point or consideration : Whether the impugned award suffers from any illegalities or infirmities and liable to be set aside and further after recording reasons in detail at paras 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 ultimately dismissed the Appeal without costs referring to certain decisions as well. The Tribunal at para-16 observed : “A perusal of Section 23(1) of APCS Act 1964 clearly indicates that the member should not be expelled unless he is given proper opportunity to represent his case and until the resolution passed by the General Body is approved by the Registrar and a copy of the resolution expelling the member as approved by the Registrar shall be communicated to the member. In the instant case it has observed by the learned Arbitrator that no such an opportunity was not given to the 2nd respondent. The order passed by the Deputy Registrar approving the General Body Meeting resolution has not been served on the 2nd respondent. The society also failed to do so, as well as Deputy Registrar who passed approval order and failed to furnish relevant documents before the Arbitrator. The society also failed to produce document to show whether the name of 2nd respondent was included in the election between the period 1999- 00. The learned Arbitrator gave a sound reasoning order. I do not find any grounds with the Award passed by him and as such the appeal is liable to be dismissed”. 8. Section 23 of the Act dealing with Expulsion of members reads as hereunder:- (1) Any member who acted adversely to the interests of the society may be expelled upon a resolution of the general body passed at its meeting by the votes of not less than two-thirds of member of the members present and voting at the meeting. (2) No member shall be expelled under sub-section (1) without being given an opportunity of making his representation and until the resolution referred to in that sub-section is approved by the Registrar. A copy of the resolution expelling the member as approved by the Registrar shall be communicated to the members. 9. Section 61 of the Act dealing with Dispute which may be referred to the Registrar reads as hereunder:- (1) Notwithstanding anything in any law for the time being in force, if any dispute touching the constitution, management or the business of a society, other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society, arises – (a) among members, past members and persons claiming through members, past members and deceased members; or (b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society; or (c) between the society or its committee, and any past committee, any officer, agent or employee, or any past officer, past agent, or past employee or the nominee, heir or legal representative of any deceased officer, deceased agent or deceased employee of the society; (d) between the society and any other society, such dispute shall be referred to the Registrar for decision. Explanation:- For the purposes of this sub- section a dispute shall include – (i) a claim by a society for any debt or other amount due to it from a member, past member, the nominee, heir or legal representative of a deceased member, whether such debt or other amount be admitted or not; (ii) a claim by surety against the principal debtor where the society has recovered from the surety amount in respect of any debtor or other amount due to it from the principal debtor as a result of the default of the principal debtor whether such debt or other amount due to be admitted or not; (iii) a claim by a society against a member, past member of the nominee, heir or legal representative of a deceased member for the delivery of possession to the society of land or other immovable property resumed by it for breach of the conditions of assignment or allotment of such land or other immovable property. (2) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the constitution, management or the business of a society, such question shall be decided by the Registrar. (3) (a) Every dispute relating to, or in connection with, any election to a committee of a society referred to in clause (1) of sub-section (3) of Section 31 shall be referred for decision to a Subordinate Judge, or where there is no such Subordinate Judge, to the District Judge having jurisdiction over the place where the main office of the society is situated, whose decision thereon shall be final. (b) Every dispute relating to, or in connection with any election to the office of President of the Primacy Co-op. Society referred to in sub-section (5) of Section 31 or to a committee of such class of societies as may, by notification in the Andhra Pradesh Gazette, be specified by the Government in this behalf and referred to in Clause (b) of sub- section (3) of Section 31, shall be referred for decision to a District Munsif having jurisdiction over the place where the main office of the society is situated, and his decision thereon shall be final. (4) Every dispute relating to, or in connection with any election shall be referred under sub-section (3) only after the date of declaration of the result of such election. 10. Section 76 of the Act deals with Appeals. Section 76(1) of the Act prior to the Amendment of 2001, read as hereunder:- “Any person or society aggrieved by any decision passed or order made under sub-section (1) and sub-section (1-A) of Section 21-A, Section 21-AA, sub-section (3) of Section 32, Section 34-A, sub- section (1) of Section 60, sub-section (2), sub- section (3), or sub-section (4), of Section 62, Section 70, Section 71 or Section 73 may appeal to the Tribunal: Provided that nothing in this sub-section shall apply to any order of withdrawal or tender of a dispute under sub-section (3) of Section 62.” Certain submissions were made that the remedy of Appeal was not available at the relevant point of time since by virtue of the Amendment of the Act, the remedy of Appeal as against an order made under Section 23 also had been provided for. 11. Section 62 of the Act dealing with Action to be taken by the Registrar on such reference reads as hereunder:- (1) The Registrar may, on receipt of the reference of a dispute under Section 61 – (a) elect to decide the dispute himself; or (b) tender it for disposal to any person who has been invested by the Government with power in that behalf; or (c) refer it for disposal to an arbitrator. (2) Where the reference relates to any dispute involving immovable property, the Registrar or such person or arbitrator may order that any person be joined as a party who has acquired any interest in such property subsequent to the acquisition of interest therein by a party to the reference and any decision that may be passed on the reference by the Registrar or the person or the arbitrator aforesaid, shall be binding on the party so joined as if he were an original party to the reference. (3) The Registrar may, by order for reasons to be recorded therein, withdraw any reference transferred under Clause (b) of sub-section (1) or referred under Clause (c) of that sub-section and may elect to decide the dispute himself or tender it to any other person under Clause (b) of sub- section (1) or refer it to any other arbitrator under Clause (c) of that sub-section. (4) The Registrar, such person or arbitrator shall decide the dispute in accordance with the provisions of this Act and the rules and bye-laws and such decision shall, subject to the provisions of Section 76, be final. Pending final decision on the dispute, the Registrar, such person or arbitrator, as the case may be, may make such interlocutory orders as he may deem necessary in the interest of justice. 12. Section 77 of the Act deals with Revision. Certain submissions were made that the since this is a dispute concerning the expulsion of a member and inasmuch as the election process had commenced, the remedy may be by way of an election dispute or the remedy by way of appeal. At any rate, such dispute would not fall within the meaning of Section 61 of the Act aforesaid. 13. The language of Section 61 of the Act already had been referred to above. In Madhava Rao Vs. Surya Rao [1] the Full Bench of Madras High Court while dealing with the words “touching the business of a society” under Section 51 of the Madras Co-operative Societies Act 1932 observed : “The words “touching the business of a society” must be given their full import, bearing in mind the object of the legislation. Taking the dictionary meaning of the word ‘touching’ it indicates that the dispute need not directly arise out of the business of the society, but that it is enough that it should have reference or relation to or concern the business of the society. The word ‘touching’ was clearly not intended to restrict the meaning of the word business; it was designed to enlarge its scope. Similarly, the word ‘business’ in S.51 is not used in a narrow sense. It is no doubt true that some sections of the Act refer to the “affairs of the society”, while others refer to the business of the society. But the words ‘affair’ and ‘business’ have been used as interchangeable terms in the Act and are not intended to denote different concepts. The business has to be that of the society i.e., the corporate activity of the society and what the permissible corporate activities of the society are, have to be gathered from the sections of the Act, the rules framed under the Act and the bye-laws made by the corporation which are intra vires the Act. For, the power of the corporation is derived from these three sources, and so long as its activity is within those powers, it cannot be questioned as being invalid”. 14. The language of Section 23(2) of the Act is similar to the first proviso to Section 36 of Gujarat Co- operative Societies Act 1962. The Apex Court in The Balasinor Nagrik Co-op. Bank Ltd. Vs. Babubhai [2] while dealing with Section 36 of the Gujarat Co-operative Societies Act 1962 at para-4 observed : “…..The exercise of power of expulsion of a member for his acts which are detrimental to the interests of the society formed by sub-section (1) of Section 36 is made subject to the fulfilment of the conditions prerequisite, namely, it has to be by resolution passed by three-fourths majority of all the members present and voting at a general meeting of members held for that purpose. There is no doubt or difficulty as to the precise function of the two provisos appended to sub-s.(1) of S.36 of the Act. The power of expulsion of a member by a society under sub-s.(1) of S.36 is made subject to a defeasance clause engrafted in the first proviso. It interdicts that: (1) no such resolution for expulsion of a member passed under sub-s.(1) of S.36 of the Act shall be valid unless the member concerned is given an opportunity of representing his case to the general body and (2) unless it is submitted to the Registrar for his approval and approved by him. Condition No.2 keeps the resolution for expulsion of a member in abeyance.” 15. I n Konda Seetharamulu Vs. The Mahendra Bamboo Workers Industrial Co-operative Society Limited [3] at paras 6 and 8 the learned Judge of this Court observed : “I am of the view that the above decision of the Supreme Court squarely applies to the facts of the present case. S.23 of the Act which deals with expulsion of members, reads as follows: “23. Expulsion of Members:- (1) Any member who has acted adversely to the interests of the society may be expelled upon a resolution of the general body passed at its meeting by the votes of not less than two-thirds of the number of the members present and voting at the meeting. (2) No member shall be expelled u/sub.sec.(1) without being given an opportunity of making his representation and until the resolution referred to in that sub-section is approved by the Registrar. A copy of the resolution expelling the member as approved by the Registrar shall be communicated to the members. The opportunity contemplated u/sub-s.(2) of S.23 is similar to the opportunity that is contemplated u/sub-s.(2) of S.77. As the Supreme Court observed in the case of sub-section (2) of S.77 as also in the case of sub-s.(2) of S.23, the requirement of opportunity of making representation is a mandatory requirement and in the absence of such an opportunity explicitly being given to each of the members expulsion of the members is vitiated and is liable to be set aside. ….. In the light of the above referred decisions of the Supreme Court, I am satisfied that on the facts of the present case, the mandatory requirement in sub-s.(2) of S.23 of the Act that an opportunity of making representation should be given to the member is contravened because opportunity as contemplated by sub-s.(2) of S.23 of the Act was not given to each of the petitioners before the impugned resolution was passed by the 1st respondent-society. The notice issued to the petitioners, as already stated above, was only communication of the resolution passed by the executive committee of the 1st respondent at its meeting held on 21-3-1990 wherein it was resolved to convene general body meeting of the 1st respondent on 2-4-1990. The impugned resolution dated 2-4-1990 enumerates 12 charges against the 15 petitioners and recites that no explanation was received from the petitioners till the date of passing of the impugned resolution dated 2-4- 1990. But the petitioners were never informed of the said 12 charges nor were they asked to submit their representations to them at any time. It is stated in the affidavit in support of the Writ Petition that the petitioners are all bamboo workers eking out their livelihood by engaging themselves in the said profession and that they have no other source of income. It is also stated that in accordance with the existing procedure, each member of the 1st respondent-society is entitled to receive prescribed number of bamboos from the Government on controlled price and if they are expelled from the society, they will have to purchase the bamboos in open market at a high price and that thus their livelihood would be affected. The right to membership of a co-operative society is a valuable right. That is the reason why S.23 of the Act provides for procedure to be followed by a co- operative society for expulsion of members. The said procedure is mandatory and non-observance of it will vitiate the expulsion. One of the mandatory requirements imposed by the said Section is that no member shall be expelled without being given an opportunity of making his representation. Sub-s. (2) of S.23 does not specify to whom the representation should be made unlike the first proviso to S.36 of the Gujarat Co-operative Societies Act, 1962 wherein it is specified that opportunity is to be given to the member concerned to represent his case to the general body. In the context, it is obvious that in the case of sub-s.(2) of S.23 also the representation is to be made by the member concerned to the general body. The opportunity which is to be given to the member u/sub-s.(2) of S.23 should be adequate and reasonable both as regards time and as regards content. It will be reasonable in content only if the various charges or allegations against the member because of which his expulsion is contemplated are communicated to the concerned member with full particulars so as to enable him to meet them and answer them fully. Reasonable time also has to be given to the concerned member to give his explanation. On the facts of the present case, I am satisfied that adequate and reasonable opportunity was not given to the petitioners for making their representations as contemplated by sub-s.(2) of S.23 of the Act. The impugned expulsion of the petitioners from the 1st respondent-society is therefore, liable to be set aside. In that view of the matter, it is not necessary to deal with the other contentions sought to be raised by the learned Counsel for the petitioners.” Reliance also was placed on A.Subbaiah Vs. Assistant Commissioner of Excise, Nellore [4]. 16. The Tribunal in fact referred to Sections 23, 61, 62 and also 77 of the Act, recorded reasons in detail and strongly relied upon the decision referred (1) supra and ultimately came to the conclusion that the Appeal is devoid of merit and accordingly the same was dismissed without costs. This Court had carefully gone