* THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN + WRIT PETITION NO. 3191 OF 2008 % 30.12.2008 # K. Srinivas, S/o Hanumaiah, aged about 45 years, Occ: President, Fishermen Co-operative Society, Miryalguda, Nalgonda District, R/o Miryalguda, Nalgonda District. ….. Petitioner Vs. $ The Commissioner of Fisheries, Mastya Bhavan, Shanthinagar, Vidyanagar Colony, Hyderabad and others. ….Respondents. ! Counsel for the Petitioner: Ms. M. Vidyavathi. ^ Counsel for Respondents 1 to 3: GP for Fisheries. Counsel for respondents 4 and 5: Sri P. Venugopal. < Gist: >Head Note ? Citations: 1. 2002 (5) ALD 515 2. 2004 (1) ACE 310 (SC) 3. 1994 (1) ALT 363 4. 1988 (1) ALT 278 5. AIR 1987 SC 71 6. (1993) 1 SCC 78 7. (2004) 1 ACE 310 THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION No.3191 of 2008 ORDER: The relief sought for in this writ petition is for a mandamus to declare the show cause notice issued by the Deputy Director of Fisheries, Nalgonda, dated 04-02-2008, as contrary to the provisions of the A.P. Cooperative Societies Act, 1964, arbitrary and in violation of principles of natural justice. Facts, in brief, are that the petitioner is the President of the Fishermen Co-operative Society, Miryalaguda, Nalgonda District. He was elected as such, along with the directors of the managing committee, by the general body of the society, at the instance of the Person-Incharge Committee, on 25-02-2005. On the basis of a complaint levelled against the petitioner by respondents 4 and 5, the Deputy Director of Fisheries, Nalgonda, issued notice dated 30-04-2007 asking him to appear, along with the records of the Society, on 09-05-2007. In the said notice, the petitioner was alleged not to have distributed the income derived from fishing to all the members, to have been running the business for his own benefit with the income of the society and to have threatened the members of the society that he was the President upto 2010, that nobody could do anything and that, if necessary, he would remove the members from their membership. The Deputy Director of Fisheries issued another notice dated 11.05.2007, which the petitioner alleged to be based on different grounds. The petitioner was asked therein to show cause why another President should not be elected indirectly within one week. These notices were the subject matter of challenge in W.P.No.10784 of 2007 and this Court, by order dated 09-07-2007, noted that the grounds mentioned in the notice dated 11-05-2007 were totally different from the grounds mentioned in the earlier notice dated 30-04-2007, that the Deputy Director of Fisheries had not mentioned the provision under which he proposed to take further action, that the records disclosed that the authority, who conducted the election to the petitioner-Society in February, 2005, was not aware of the amendment, that he had proceeded to conduct the election through direct process and it was only two years subsequent to the election that the second respondent had raised this ground. This Court further held that, even assuming that the election of the President of the Society took place through direct means, it was not revealed what prejudice any individual, or the government, had suffered, that resolution of the disputes, relating to the election, was entrusted to a totally different agency under the Act and that the second respondent was not conferred with any power in this regard. This Court held that the impugned proceedings could not be sustained and, accordingly, set aside the said proceedings. Thereafter, the second respondent issued notice dated 04- 02-2008 calling upon the petitioner to show cause why he should not be declared to have ceased to be the President of the Society under Section 32(3) of the A.P. Cooperative Societies Act, 1964 (for short ‘the Act’). In the said notice, the Deputy Director of Fisheries placed reliance on an enquiry report of the Assistant Director of Fisheries, Suryapet, dated 14-12-2007 to the effect that the petitioner had failed to conduct a general body meeting between 02-04-2006 and 02.10.2006, and the managing committee meetings between 05.12.2006 and 05.03.2006, as required under Section 32(3) of the Act. Petitioner would contend that the show cause notice issued by the Deputy Director of Fisheries ought to have been under Section 32(1)(A) of the Act, and not Section 32(3) of the Act, that a general body meeting had to be convened by the Committee and not by the President alone, that the President had to hold the meeting on behalf of the Committee but not in his individual capacity and that the show cause notice dated 04-02-2008 was bad, contrary to the provisions of the Act and the orders of this Court. Petitioner would allege that the Deputy Director of Fisheries had started to issue a series of notices with false allegations, and with a malafide intention, just to dethrone him from the post of President, though he was elected in a democratic manner. He would allege that he, and the committee members, had convened the general body meetings, and the managing committee meetings, regularly as per the Act and that the alleged enquiry report annexed to the show cause notice was not correct as no such enquiry was held. He would further allege that the Assistant Director of Fisheries had simply visited the place and had taken over the society records, that the alleged enquiry report was false as no enquiry was conducted and that, even otherwise, the enquiry conducted was in violation of principles of natural justice since neither the petitioner nor the other members were given an opportunity to project their views. Petitioner would further contend that the Deputy Director of Fisheries, Nalgonda, had no power to conduct such a comprehensive enquiry without referring to the provisions of law and that the show cause notice of the Deputy Director of Fisheries was arbitrary and contrary to the provisions of the Act. In the counter affidavit filed by respondents 4 and 5, it is stated that they were members, and managing committee members, of the Fishermen cooperative society, Miryalaguda and that it was on their complaint that show cause notices were issued to the petitioner and an enquiry was conducted into the affairs of the society. They would contend that, since the proceedings impugned in the writ petition was a show cause notice, the writ petition, as filed, was not maintainable. They would allege that the petitioner had committed several financial and administrative irregularities, that he had misappropriated huge amounts which legally belonged to the poor members of the society, that he was running the society according to his whims and fancies, that he was not conducting managing committee meetings within the time stipulated or the procedure prescribed under Section 32(3) of the Act and that it was in such circumstances that respondents 4 and 5 had given a complaint to the Registrar who, in turn, had appointed the Assistant Director of Fisheries to conduct an enquiry into the affairs of the society. They would state that the Assistant Director of Fisheries had conducted an open enquiry on 11-11- 2007, 16-11-2007 and 10-12-2007 and that he had submitted his report on 14.12.2007. They would further state that basing on the enquiry report, submitted by the Assistant Director of Fisheries, the Deputy Director of Fisheries, Nalgonda, had issued show cause notice dated 04-02-2008. With regards the petitioner’s failure to conduct general body meetings, and managing committee meetings, they would state that since it was not even the petitioner’s case that the show cause notice was issued without any authority, and as the second respondent had the power to initiate action under Section 32(3) of the Act and the delegation of powers in G.O.Ms.No.1982 dated 05-06-1966, his action cannot be said to be arbitrary or illegal. Ms. M.Vidyavathi, learned counsel for the petitioner, would submit that the petitioner was elected as the President on 25-02- 2005 along with the other members of the Managing Committee, that respondents 4 and 5 were also members of the Managing Committee and that the impugned notice dated 04-02-2008, as issued by the Deputy Director of Fisheries, was without jurisdiction. Learned counsel would state that, while the petitioner had denied the allegations in the show cause notices with regards his failure to hold general body meetings and the managing committee meetings, since the proceedings impugned in the writ petition was a show cause notice, she was not seeking adjudication on these factual aspects and that her contention was limited only to the question of jurisdiction. Learned counsel would state that, for failure to hold a meeting, the consequences, under Section 32(1A) and (3) of the Act, were cessation as members of the managing committee and the President of the Society, that the legislature had not provided for the manner in which such cessation should take effect and that, in the absence of any power being specifically conferred on the Registrar to declare that either the members of the managing committee, or the President of the Society, had ceased to hold office, the impugned notice, calling upon the petitioner to show cause why he should not be declared to have ceased to hold office, was without jurisdiction. According to the learned counsel, in the absence of any power being conferred under the Act either on the Registrar of Cooperative Societies, or on the second respondent to make such a declaration, the second respondent could not confer on himself any such power and the impugned show cause notice was, therefore, ultra vires Section 32(1)(A) and (3) of the Act. Learned counsel would state that the society was governed by its bye-laws and, in case of failure to hold a meeting either of the managing committee or of the general body, it was only the members of the society, in a meeting of the general body, who could take action against the President or the members of the managing committee and that neither the Registrar nor the second respondent had any such power. Learned counsel would submit that conferring power either on the Registrar, or on the second respondent, in the absence of any specific provision in the statute would disable the cooperative societies from functioning independently. She would rely on P.Chandra Reddy and others v. Government of Andhra Pradesh[1]in this regard. According to the learned counsel, even if the powers of the Registrar had been delegated to the second respondent, it is only such of those powers conferred on the Registrar which could be exercised by the second respondent and, since Section 32 did not confer any power on the Registrar to declare that either the President or the members of the managing committee had ceased to hold office, such a power could not be exercised by the second respondent. She would further contend that a non-existent power cannot be delegated and, since the Registrar himself had no power under Section 32, such a power cannot be said to have been delegated to the second respondent. Learned Government Pleader for Fisheries would submit that, in exercise of the powers conferred by Section 3 of the Act, the Government, vide G.O.Ms.No.1982 dated 05-06-1966, had conferred such of those powers, on the authorities, as were available to the Registrar as specified in the corresponding entry in Column 3 of the Schedule. She would submit that the Deputy Director of Fisheries, and the Director of Fisheries, were conferred all the powers of the Registrar under the Act except those specified in Sections 50, 84 to 115 and, since Section 32 did not fall under the excepted powers, the second respondent could exercise the powers of the Registrar under Section 32 of the Act. She would state that, under Section 4(2) of the Act, every society registered or deemed to be registered under the Act could function subject to such directions as could be issued by the Registrar from time to time, in the interests of the Cooperative movement or in public interest or in order to prevent the affairs of the society from being conducted in a manner detrimental to the interest of the members or of the depositors or the creditors thereof, and that the society was required to comply with such directions. Learned Government Pleader would submit that failure to hold general body meetings, or the meetings of the managing committee, was detrimental, to the interest of the members of the society and, on a conjoint reading of Sections 4(2) and 32 with the delegation of power under G.O.Ms.No.1982 dated 05-06-1966, the second respondent had the power to declare that either the President or the members of the managing committee had ceased to hold office. Sri P.Venugopal, learned counsel appearing on behalf of respondents 4 and 5, would submit that the impugned proceedings is merely a show cause notice, that such a notice was issued not only to the petitioner but to all the members of the managing committee, including respondents 4 and 5, calling upon them to submit their explanation and that nothing prevented the petitioner from submitting her explanation thereto. Learned counsel would take this Court through the affidavit filed in support of the writ petition in support of his contention of lack of pleadings to the effect that the second respondent had neither the power nor the jurisdiction to issue the said notice. He would submit that, in the absence of a specific plea in the affidavit, the writ petition filed challenging the show cause notice was not maintainable. Learned counsel would place reliance on Special Director v. Mohd. Ghulam Ghouse[2] in this regard. Learned counsel would further submit that under Section 32(1)(a), on the failure on the part of the managing committee to convene a general body meeting, the Registrar had the power, notwithstanding, anything in the bye- laws, to call such a meeting, that similarly, under sub-section 5(a) thereof, the Registrar had the power to call for the meeting of the managing committee and, since such a power had been conferred on the Registrar, it is he who is empowered, under the Act, to make the declaration that the President, or the members of the managing committee, had ceased to hold office for their failure to hold managing committee meetings or a general body meeting. Learned counsel would further contend that, in the absence of any prohibition, principles of natural justice had to be read into a statutory provision and, when so read, Section 32(1)(a) and Section 32(3) would require the President and the members of the managing committee to be put on notice of their failure to hold meetings, and to be called upon to show cause why a declaration should not be made that they had statutorily ceased to hold office. Learned counsel would submit that, as the power of general superintendence is conferred on the Registrar under Section 4(2) of the Act, it is he alone who is competent to issue a notice in this regard. According to the learned counsel, since the powers of the Registrar, under Sections 4 and 32, have been delegated to the second respondent, the impugned proceedings cannot be said to be without jurisdiction. Learned counsel would place reliance on Awari Devanna, President, Primary Agricultural Cooperative Credit Society, Kammarpalli v. The Divisional Cooperative Officer, Nizamabad District[3]. Before examining the rival contentions, it is necessary to briefly note the relevant statutory provisions. Under Section 2(b) of the A.P. Co-operative Societies Act, a ‘Committee’ has been defined to mean the governing body of a society, by whatever name called, to which the management of the affairs of the society is entrusted. Clause (c) defines ‘Co-operative year’ to mean the period commencing on the first day of April of any year and ending with the 31st day of March of the succeeding year. Clause (g) defines ‘general body’, in relation to the society, to mean all the members of the society. Clause (h) defines ‘general meeting’ as the meeting of the general body of a society. Clause(j) defines ‘member’ to mean a member of the society. Clause (l) defines ‘prescribed’ to mean prescribed by rules made under the Act. Clause (n) defines ‘Registrar’ to mean the Registrar of Cooperative Societies appointed under Section 3(1) and to include any other person on whom all, or any of the powers of, the Registrar under the Cooperative Societies Act are conferred. Section 4 relates to Societies which may be registered and, under Sub-section (2) thereof, every society registered or deemed to be registered shall function subject to such directions as may be issued by the Registrar from time to time, in the interest of the Cooperative movement or in public interest or in order to prevent the affairs of the society from being conducted in a manner detrimental to the interests of the members or of the depositors or creditors thereof, and that the society shall comply with such directions. Section 9 provides that the Society shall be a body corporate. Chapter IV deals with the Management of Societies. Under Section 30, the ultimate authority of the society shall vest in the general body. Section 30(2) provides that, subject to the other provisions of the Act, the matters enumerated therein are to be dealt with by the general body in the manner prescribed. Among those matters are elections and removal of members of the committee. Section 31 relates to constitution of committees and, under sub-section (1)(a), the general body of a society shall constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such a committee. Section 31-A provides that the committee of a society shall, subject to the provisions of the Act, rules, bye-laws and resolutions of the general body, exercise the powers and functions enumerated therein, which include the power to admit members of the general body, recommend removal of any of the committee members disqualified under Sections 21-A, 21-AA, 21-B, conduct elections in the manner specified in the bye-laws to the office of the members of the committee before the expiry of the term, to conduct general meetings as prescribed under the Act and to expel a member who has acted adverse to the interests of the society. Since the entire dispute, in the case on hand, revolves around Section 32, it is extracted, to the extent relevant, hereunder:- Section 32: General meetings and committee meetings: 1. The committee may, at any time, call not less than two general meetings of a society in a cooperative year: Provided that one meeting shall be held in each half year. 1-A If the general meeting is not convened in accordance with the provisions of sub-section (1), the members of the Committee shall cease to hold office on the day next after the 1st day on which the general meeting should have been held, and it shall be competent for the Registrar, notwithstanding anything in the bye- laws, to call such general meeting in such manner as may be prescribed. 2. xxxxxxx 3. It shall be the duty of the President of the society to call the meetings of the committee so that atleast one meeting of the committee is held in every three months. If the President fails to discharge that duty with the result that no meeting is held, within such period of three months or within one month following such period, he shall with effect from the date of expiration of one month aforesaid cease to be the President: Provided that it shall also be the duty of the President to call such meetings within fifteen days of the date of receipt of requisition in writing in that behalf from any of the requisitionists specified in sub-section (2). 4. The requisition referred to in sub-section (2) or sub- section (3) shall specify the purpose for which the meeting is to be called, and shall be signed by the requisitionists and delivered in person or by registered post at the registered address of the society. 5. (a) If for any reason, a meeting is not called in accordance with the requisition delivered under sub- section (4), or if, in the opinion of the Registrar there is no committee or officer competent under this Act, the rules or the bye-laws to call a meeting, or if there be a dispute regarding the competence of the committee to function, then notwithstanding anything in the bye-laws of the society, the Registrar shall have the power to call such meeting in the manner prescribed, and to determine the time for such meeting and the subjects to be considered thereat. The Registrar or a person authorized by him in writing in this behalf shall preside at such meeting, but he shall not be entitled to vote. (b) (i) If, at any general meeting of the society called by the Registrar himself under clause (a), otherwise than in pursuance of the requisition, there is no quorum, the meeting shall stand adjourned to such other date and time as the Registrar may determine. (ii) If at the adjourned meeting also there is no quorum for holding the meeting, the members present shall constitute the quorum. (c) If at any general meeting of the society called by the Registrar himself under clause (a) in pursuance of the requisition, there is no quorum, the requisition shall lapse. In exercise of the powers conferred by Section 130(1) of the Andhra Pradesh Cooperative Societies Act, 1964, the Andhra Pradesh Cooperative Societies Rules, 1964, were made. Rule 23- A relates to meetings to be called by the Registrar and, under Sub- rule (1) thereof, the Registrar may convene a general meeting of a society under sub-section (1-A) or under sub-section (5)(a) of Section 32, after giving due notice to the members of the date, time and place of the meeting and the subjects to be considered in the said meeting. Under Sub- rule (2), the notice of meeting shall be given by affixture in the office of the society. Rule 24 relates to disqualification for membership of the managing committee including the President. Rule 24(4) provides that, before passing a resolution under sub- rule 3(c) or 3(d) thereof, the Committee of a society shall give such person an opportunity to state his objections, if any, to the proposed action and, if the person wishes to be heard, he shall be given an opportunity to be heard. The rule further provides that the general body of such society shall, through a resolution, declare that a person shall cease to be a member of the committee of the society concerned from the date of disqualification. Failure to hold meetings of either the managing committee or the general body is not among the disqualifications specified in Rule 24. It is no doubt true that Section 32 does not provide for the manner in which a person should be declared to have ceased to hold office either as a President or as a member of the managing committee. The cessation as a member of the committee has been held, under sub-section (1-A), to come into force on the day next after the 1st day on which the general meeting should have been held and, under sub-section (3), to come into force with effect from the date of expiry of one month. While the date from which such cessation is required to come into force has been specified by the legislature, the manner in which such cessation should be brought about has not been provided for. I n P.Chandra Reddy1, the action of the Government in issuing an order granting post facto permission for conducting an annual general meeting, exempting the society under Section 123 of the Act, was in issue. Section 123 empowers the Government, by general or special order and for reasons to be recorded therein, to exempt any society or any class of societies from any of the provisions of the Act. The Government had issued an order under Section 123 granting post facto exemption to conduct a general body meeting. It is in this context that this Court observed: “………..A plain reading