*HON'BLE SRI JUSTICE P.S.NARAYANA +W.P.No.17935 of 2009 % 9-10-2009 # Smt.Purandeswari Lift Irrigation Mutually Aided Co-operative Society Limited, Devarapalli village, Parchur Mandal, Prakasam District, Rep. By its Chairman T.Krishna Mohan .. Petitioner And $ The District Co-operative Officer/ Registrar of Mutually Aided Co-operative Societies, Ongole, Prakasam District .. Respondent <GIST: >HEAD NOTE: ! Counsel for petitioner : Sri Koneti Raja Reddy ^ Counsel for respondent : G.P. for Co-operation ?CASES REFERRED: Nil HON'BLE SRI JUSTICE P.S.NARAYANA W.P.No.17935 of 2009 Date : 9-10-2009 Between : Smt.Purandeswari Lift Irrigation Mutually Aided Co-operative Society Limited, Devarapalli village, Parchur Mandal, Prakasam District, Rep. By its Chairman T.Krishna Mohan .. Petitioner And The District Co-operative Officer/ Registrar of Mutually Aided Co-operative Societies, Ongole, Prakasam District .. Respondent HON'BLE SRI JUSTICE P.S.NARAYANA W.P.No.17935 of 2009 ORDER:- This Court ordered notice before admission on 27-8-2009 and issued rule nisi on 6-10-2009. 2. Counter affidavit had been filed on behalf of the respondent. A reply affidavit also had been filed. 3. The writ petition is filed for a Writ of Mandamus declaring the action of the respondent in initiating the enquiry under Section 29 of the A.P.Mutually Aided Cooperative Societies Act (hereinafter in short referred to as ‘the Act’ for the purpose of convenience) for the purpose of reconstituting the existing Managing Committee as illegal and arbitrary and consequently declare the enquiry into the affairs of the society for the said purpose initiated by the respondent as without jurisdiction and pass such other suitable orders. 4. Sri Koneti Raja Reddy, the learned Counsel representing the writ petitioner had taken this Court through the contents of affidavit filed in support of the writ petition and also had further drawn the attention of this Court to Section 29 of the Act and further had drawn the attention of this Court to the relevant definitions under the Act and also Section 23 of the Act as well and would maintain that such enquiry for the purpose of reconstitution of the existing Managing Committee cannot be exercised since the same is not contemplated by the provisions of the Act. 5. Per contra, the learned G.P. for Cooperation had taken this Court through the language of Section 29 of the Act and would maintain that it is not for the purpose of the reconstitution of the existing Managing Committee but however an enquiry was made and enquiry report also was made ready. The learned G.P. for Cooperation also would maintain that the further steps would be taken in accordance with the provisions of the Act. The learned G.P. for Cooperation also had taken this Court through the contents of the counter affidavit and would maintain that in the light of the clear language of Section 29 of the Act, since the power of the respondent in this regard cannot be doubted, the writ petition being devoid of merit, the same is liable to be dismissed. 6. Heard the Counsel. 7. It is the case of the writ petitioner that the petitioner Society was registered on 6-12-2004 in the Office of the Registrar of Mutually Aided Cooperative Societies, Ongole. The Society was established for the purpose of Economic and Social Development based on the self help Mutually Cooperation on Democratic basis on the Principles of Cooperation. The Society was mainly established to distribute water under the lift irrigation scheme established on Ogeruvagu at Upalapadu village of Pedanandipadu Mandal, Guntur District. The Lift Irrigation was sanctioned by the Government and the work is in progress. The work is sought to be executed through contractor. The said Lift Irrigation Scheme was aimed to irrigate about 3,400 acres of land. The contractor had not completed the work for various reasons which is not relevant for the purpose of this writ petition. 8. Further it is stated that one of the Chief Promoters of the Society, nine other Directors are the other Promoters along with the Chairman of the petitioner Society who had sworn to the affidavit filed in support of the writ petition and the main aim of the Society is to Manage and Maintain the Lift Irrigation scheme after its completion and thereafter to manage the supply of water to the lands in a systematic way for the benefit of the ryots. As of now, there is no economic activity as the scheme is not completed. The Society is trying its level best to get the Lift Irrigation Scheme completed. The Chief Promoter and another have spent their personal money to see that the Lift Irrigation Scheme progresses further. The contractor is not doing the work as per the schedule stating that there is escalation of prices of the material as well as labour charges and other service charges. The Chief Promoter and Directors of the petitioner Society are trying their best to see that the project is completed so that the Society can get into action to fulfill its aims. 9. Further it is stated that due to political rivalry, a complaint is said to be sent to the respondent stating that the petitioner Society is not working properly and sought for cancellation of the Committee and reconstitution of the same with the persons mentioned therein on the basis of one P.Pandurangaiah, Assistant Registrar was appointed as an Enquiry Officer and he also submitted a report stating that the activities of the Society are completed and requested to hold an enquiry under Section 29 of the Act. Basis on the said report, the same person was appointed to enquire into the affairs and submit his report within a month. It is also stated that the complaint made is for reconstitution of the Committee by the persons named in the complaint in the place of the existing Committee. 10. It is also stated that the Act was aimed at to provide for the voluntary formation of Cooperative Societies reliant business enterprises, based on thrift, self-help and mutual aid and owned, managed and controlled by members for their economic and social betterment. The Act is aims that to establish Cooperative Societies by self financing Central over those societies by providing Cooperative Tribunals for settlements of the disputes among the members. The Act provides for prescribing qualification of Members, powers and functions of the Board of Directors and the Central Body is the ultimate authority. The Act also contemplates an enquiry by the Registrar with regard to the matters relating to any gross violation of the provisions of the Act. The Power of the Registrar is only with regard to the lapses if any on the part of the Society. The Registrar has no power whatsoever to reconstitute a Committee by himself. The request of the complainants was mainly with regard to reconstitution of the Managing Committee which is not at all permissible under Section 31 of the Act and that he may direct the Board to convey General Body meeting to bring it to the notice about the findings of enquiry or approach the Cooperative Tribunal for appropriate action in accordance with the provisions of the Act. However, the respondent is proceeding on the basis of the complaint seeking to reconstitute the managing Committee which is beyond the power of the respondent. 11. It is also stated that on account of the pressure of the Ruling Political Group in the area, the respondent is proceeding with the enquiry through the person appointed by him. The respondent is not entitled to hold any enquiry with regard to reconstitution of the Managing Committee. The persons who had given complaint are under the impression that the respondent is having power to reconstitute the Committee by the persons of their choice in the place of the present members. There is no such scope under the Act and the enquiry initiated on such misconception and the same is without jurisdiction. Several other further facts also had been narrated in the affidavit filed in support of the writ petition. 12. In the counter affidavit filed by the respondent, it is stated that Smt.Purandeswari Lift Irrigation Mutually Aided Cooperative Society Ltd., Devarapalli village of Parchur Mandal, Prakasam District was registered on 6-12-2004 with Regn.No.AMC/PKM/2004/361, under Section 4 of the Act, in rgs Rc.No.4947/2004 E of District Cooperative Officer, Ongole. 10 Promoters have been appointed as Chairman and Members of Adhoc Committee basing on their resolution dt.1-12-2004 for a period of 60 days or till elections are conducted and elected Committee assumes charge whichever is earlier. 13. It is also averred that Sri T.Krishna Mohan, the petitioner was appointed as Chairman of Adhoc Committee at the time of registration of the Society on 6-12-2004. With reference to the averments in para 4 of the affidavit, it is stated that a petition put in by 6 Board of Directors and 46 Ayakatdars was received in the Office of the District Cooperative Officer, Ongole on 2-7-2009 wherein it is alleged that the Adhoc Committee has not conducted meetings and elections as per the provisions of the byelaws of the Society and not undertaken action for developmental activities of the Society, along with another petition put in by 7 Board of Directors of the said Society stating that the petitioner had not convened Managing Committee Meetings & General Body Meetings, which is against byelaws, alleging that the Chairman is acting against Cooperative Rules & Byelaws, they requested for abolition of the present Committee and reconstitution of new Committee. It is also further stated that the Deputy Executive Engineer, APSIDC, Sub-Division, Chirala in his Lr.No.IDC/DEE/CRL/Devarapalli/123, dt.19-6-2009, had also reported to the Executive Engineer, APSIDC, Ongole under copy to the respondent that Sri Thokala Krishna Mohan, Chairman of the Society had not conducted elections since registration of the Society and the existing Committee is not functioning as per byelaws of the Society. 14. Further it is also stated that to known the veracity of the allegations leveled by the Directors & Ayacutdrars, the respondent in Memo. Rc.No.1333/09/L dt.4-7-2009 had appointed one Sri P.Pandu Rangaiah, Assistant Registrar, Office of the District Cooperative Officer, Ongole as Enquiry Officer with direction to conduct enquiry into the allegations leveled in the said petitions and submit detailed report. The said Assistant Registrar – Enquiry Officer in his enquiry report dt.10-7-2009 had reported that his enquiry revealed that the affairs of Smt.Purandeswari Lift Irrigation Mutually Aided Cooperative Society Ltd. Are critical, members are with dissatisfaction on the Chairman of the Society. The petitioner i.e., the Chairman is not convening Executive Committee Meetings and General Body meetings and elections were also not held as per byelaws. In the said report, he requested for a statutory enquiry under Section 29 of the Act as the Enquiry Officer will be authorized to summon the members. In view of the above and in consideration of the request of more than 1/3rd of the Board of Directors i.e., 7 which is one of the prerequisites for ordering enquiry under Section 29(2) of the Act and by virtue of the powers under Section 29 of the Act vide proceedings No.1333/2009, dt.27-7- 2009, the respondent has ordered for enquiry under Section 29 of the Act and appointed Sri P.Pandu Rangaiah, Assistant Registrar as Enquiry Officer with a direction to submit the enquiry report within one month. Copy of the proceedings were also sent to Sri T.Krishna Mohan, Chairman of the Society i.e., the writ petitioner herein. The enquiry under Section 29 of the Act was ordered as per the provisions of the Act which is a statutory responsibility and there is no illegality in it. The enquiry pursuant to the proceedings dt.27-7-2009 is completed and report is awaited. It is also stated that in view of the complaints received, an enquiry under Section 29 of the Act into the affairs of the said Society was ordered. 15. Further it is averred that in the two petitions received by this respondent, the Board of Directors and Ayacutdars had requested for abolition of the present Committee and reconstitution of New Committee. Section 23(3) of the Act contemplates that “where a Board does not take necessary steps to conduct elections as specified in the bye-laws before the expiry of the terms of the Directors or where there are no Directors remaining on the Board, the Registrar shall at the request of not less than twenty-five members or five percent of the total members of the Cooperative Society whichever is less or may suo motu convene within 30 days a general meeting for appointing as Adhoc Board of the specific purpose of fonducting elections”. However, as there are other allegations besides the allegation of non- conduct of elections in the petitions put in by the Board of Directors and Ayacutdars, an enquiry under Section 29 of the Act was ordered. 16. It is also stated that after receiving the statutory enquiry report, the respondent will take further steps in accordance with the provisions of the Act. Further it is stated that it is the responsibility of the Registrar to “cause enquiry into the specific matter/matters relating to any gross violation of any of the provisions of the Act “by the Cooperative Society” as per the provisions of Section 29(1) and 29(2) of the Act. The allegations of the petitioner are based on mere apprehension as the respondent is not empowered for supersession of the present Committee or reconstitution of new Committee. In view of the Section 23(3) of the Act, the Registrar can convene “A General Meeting for appointing an Adhoc Board for the purposes of conducting elections” only. It is further stated that the contention of the petitioner that the respondent had ordered enquiry on account of the pressure from the ruling party political group in the area is false and baseless and the contention of the petitioner that the enquiry was ordered to reconstitute the Committee in place of the present Committee is only an imaginary one and incorrect. The proceedings issued by this respondent is well within his jurisdiction and in accordance with the provisions of the Act. 17. It is further stated that the contention of the petitioner that the contention of the petitioner that the enquiry sought to be proceeded with by the respondent is liable to be quashed as without jurisdiction is not correct and ordering of enquiry under Section 29 of the Act is well within the powers of the Registrar. It is also stated that this respondent has registered the Society under Section 4 of the Act and has to discharge certain statutory functions under Sections 23, 28, 29, 31 and 38 of the Act. The action initiated by this respondent is well within the purview of the provisions of the Act and perfectly legal and valid. 18. Further it is also stated that the only aim and intention of the petitioner appears to be to pre-empt the authorities from discharging their duties and taking further steps pursuant to the enquiry. The report is yet to be received on the basis of which further action will be taken in consonance with the provisions of the Act. The present writ petition is premature. Further, the writ petition is also not maintainable as no resolution of the Society authorizing the petitioner to file the writ petition had been filed. Further it is stated that there are no merits in the present writ petition and the same is liable to be dismissed. 19. In the reply affidavit several allegations had been denied. It is stated that how the Executive Engineer, APSIBC reported that elections were not conducted. it is stated that a report was submitted by the Assistant Registrar, who is said to have conducted a preliminary enquiry stating that the affairs of the Society were not properly conducted is another act of statutory violation. It is not known as to the nature of enquiry. Such enquiry could be stage managed and reports could be obtained very easily. No copy is sent to the Society without examining the records and without examining the concerned Managing Body, it is not known as to the source of such information and report. Further it is stated that the statute contemplates appointment of adhoc board for conducting elections. But such power is to be exercised by the General Body convened by the Registrar. The Registrar has no power to appoint adhoc board. Otherwise, there is no need to call for a General Body meeting. The power of Registrar is only to convene a General Body meeting for the specific purpose of appointing an adhoc body to conduct elections. In effect the power of the Registrar is to call for a general body meeting with the agenda of appointing adhoc body for the purpose of conducting elections. The meaning given to the powers of the Registrar in the counter is incorrect. In fact the present Committee is elected by the majority members and there is no need to appoint an adhoc body. The enquiry itself is for the purpose of creating a base and on the foot of such favourable enquiry report to hand over the management of the Society to the minority group with the influence of local political pressure. Under the guise of statutory power, the respondent has appointed an Office to get a report the effect that the Society is not functioning properly so as to transfer the management to the opposite group under political pressure. It is further stated that the power is sought to be exercised with a malafide intention to create a base for the purpose of handing over the management to the minority opposite group. Further averments also had been made in paras 6 and 7 of the reply affidavit as well. 20. The Order of the District Cooperative Officer under Section 29 of the Act in Sr.No.1333/2009, dt.27-7-2009 is placed before this Court and the same reads as hereunder:- ORDERS OF THE DISTRICT COOPERATIVE OFFICER U/S.29 OF THE A.P.MUTUALLY AIDED CO-OPERATIVE SOCITIES ACT, 1995 PRESENT: SRI VARAPRASADA RAO Sr.No.1333/2009 Dated: 27-7-2009. Sub:- Smt.Purandheswari Lift Irrigation Mutually Aided Cooperative Society Limited Regd.No.AMC/PKM/DCO/2004/36, Devarapalli, Purchur Mandal – Allegations against the present Committee – Enquiry with regard to cancellation of the present Committee and reconstitution of the Committee and submission of report – issuing orders – Regarding. Read: 1) Complaint of the Committee members and ryots of Purandheswari Lift irrigation Scheme – Received on 2-7-2009. 2) Notice of this office under this number dt.4-7-2009. 3) Enquiry report of the Enquiry Officer Sri P.Pandurangaiah, dt.10-7-2009. *** ORDER:- More than 1/3rd of the members of Smt.Purandheswari Lift Irrigation Mutually Aided Cooperative Society Limited Regd.No.AMC/PKM/DCO/2004/36, Devarapalli, Purchur Mandal and the ryots of the Ayacut made allegations against the present adhoc Committee and sought for reconstitution in through Read 1 above. In the read 2 above, P.Pandurangaiah, Assistant Registrar was ordered to enquire into the complaint and submit his report. In read 3 above, the Enquiry Officer submitted his report or sought for enquiry under Section 29 in view of the fact that the matter is complicated. In view of the above facts and more than 1/3rd of the executive members made a request to enquire into the allegations made in Read (1) above against the executive body of Smt.Purandheswari Lift Irrigation Scheme, Sri Panduranga Rao, Assistant Registrar, Office of the District Cooperative Officer is hereby appointed to enquire into the allegations within one month of the receipt of this orders and submit his report. Issued under my hand and seal on 2nd July, 2009. Sd/- District Cooperative Officer, Ongole. 21. Section 29 of the Act dealing with Inquiry reads as hereunder:- 1) Every Cooperative Society shall furnish any relevant information required by the Registrar in order to enable him to satisfy whether the Cooperative Society has conducted its affairs in accordance with the cooperative principles and the provisions of this Act. 2) The Registrar may, of his own motion, and shall on the application, of a Federation to which the Cooperative Society concerned is affiliated, or of a creditor to whom the Cooperative Society is indebted or of not less than one-third of the Directors, or of not less than one-tenth of the members, hold an inquiry or cause an inquiry to be made into the specific matter or matters relating to any gross violation of any of the provisions of this Act by the Cooperative Society. 3) The inquiry shall be completed within a period of one hundred and twenty days from the date of ordering the inquiry. 4) If the inquiry is not completed within the time specified in sub- Section (3) it shall lapse at the end of the said period and the Registrar shall refund to the applicants, the fee collected from them. 5) The Registrar shall, within a period of thirty days from the date of the completion of the inquiry, as specified in sub-Section (3) or of the lapse or the inquiry as specified in sub-Section (4), communicate the report of the inquiry of the reasons for the non- completion of the inquiry, as the case may be,- a) to the Cooperative Society concerned; b) to the applicant Federation, if any; c) to the applicant-creditor, if any; d) to the person designated by the applicant-directors, if any; e) to the person designated by the applicant-members, if any f) to any person, on payment of fee fixed by the Registrar; and g) to the Cooperative Tribunal where necessary. 6) The inquiry officer acting under this Section shall, among others, specifically state the amount of deficiency, waste or loss which appears to have been caused by the gross negligence or misconduct of any person in the performance of his duties. 22. It is pertinent to note that Section 29(1) of the Act specifies that every Cooperative Society shall furnish any relevant information required by the Registrar in order to enable him to satisfy whether the Cooperative Society has conducted its affairs in accordance with the cooperative principles and the provisions of this Act. Section 23 of the Act deals with elections. Section 23 (3) of the Act reads as hereunder:- “Where a Board does not take necessary steps to conduct elections as specified in the bye-laws before the expiry of the terms of the Directors. Of where there are no Directors remaining on the Board, the Registrar shall at the request of not less than twenty-five members of five per cent of the total members of the Cooperative Society, whichever, is less or automatically suo moto convene within 30 days a general meeting for appointing an ad-hoc Board for the specific purpose of conducting elections.” 23. Section 2 of the Act deals with definitions. Section 2 (n) of the Act defines “general meeting” means a meeting of the general body of a Cooperative Society”. Apart from Section 29 of the Act and Section 23 of the Act, several other provisions also had been relied on in the counter affidavit in relation to discharge of the statutory functions like Sections 28, 31 and 38 of the Act as well. It is needless to say that the respondent is expected to discharge his functions or duties as ordained by the provisions of the statute, the Act aforesaid and nothing beyond thereto. It is stated that only an enquiry had been conducted and the enquiry report is ready and the same had not been submitted. No doubt, the general powers available to the respondent under the provisions of the Act had been strongly relied on. This Court is not inclined to express any opinion whether this enquiry had been aimed at to make it a basis for the purpose of further proceeding with this aspect in order to favour the minority group. However, it is needless to say that the respondent is expected to proceed with the affairs relating to the petitioner Society in accordance with the provisions of the Act. Hence, this writ petition is disposed of making it very clear that the respondent is at liberty to proceed with in accordance with the provisions of the Act. 24. Accordingly, the writ petition is disposed of. No order as to costs. ______________________ Justice