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Andhra Pradesh High Court
Judges : G.BIKSHAPATHY
TCS Kosgi Group, rep.by its Licensee m.Chandraiah and President, Ch.Venkataiah - Appellant
Versus
Prohibition and Excise Superintendent, mahabubnagar - Respondent
Decided On : 11-17-95
CO-OPERATIVE SOCIETIES ACT - SECTION 34 - SUPERSESSION OF COMMITTEE - SERVICE OF NOTICE - NATURAL JUSTICE - RENEWAL OF LICENSE - CRIMINAL CASE PENDING - REJECTION OF RENEWAL APPLICATION - ILLEGALITY. 1. Under Section 34 of the Co-operative Societies Act, the Registrar of Co-operative Societies can supersede the committee of a society and appoint a special officer or a committee to manage its affairs for a specified period, but before doing so, he must give the committee an opportunity to make its representation. 2. The requirement of service of notice on the President of the managing committee cannot be construed as a service on the committee itself. All the members of the committee, including the President and Directors, are required to be served with notice so that their representation can be considered. 3. The renewal of a license cannot be rejected solely on the ground of the pendency of a criminal case.
Fact of the Case:
The petitioner, a Tappers Cooperative Society, challenged the proceedings of the Prohibition and Excise Superintendent, who constituted a persons committee to manage the society's affairs under Section 34(1) of the Co-operative Societies Act. The petitioner also challenged the rejection of its license renewal application due to a pending criminal case. The Excise authorities had granted a license to the society for 1994-95 in the name of the then President, M. Chandraiah. After the petitioner was elected as President in May 1995, the name of the President was not changed in the license. The license expired on September 30, 1995, and the society paid the necessary fees and complied with all formalities for renewal. However, the Excise authorities did not renew the license due to a pending criminal case. The petitioner filed a writ petition seeking a direction to renew the license without reference to the criminal case. The court granted an interim order to renew the license.
Finding of the Court:
The court held that the proceedings to supersede the managing committee and appoint a persons committee were illegal and invalid due to the following reasons: 1. No notice was issued to the President and the members of the managing committee, and their representation was not received. 2. The Excise Sub-Inspector conducted a perfunctory enquiry without giving any proper opportunity to the concerned persons. 3. The show cause notice was not served on the President and the other Directors of the society. 4. The service of notice on the President alone cannot be construed as a service on the committee, and all the members of the committee are required to be served. The court also held that the renewal of the license could not be rejected solely on the ground of the pendency of a criminal case.
Issues: 1. Whether the proceedings to supersede the managing committee and appoint a persons committee were legal and valid. 2. Whether the renewal of the license could be rejected solely on the ground of the pendency of a criminal case.
Ratio Decidendi: 1. Under Section 34 of the Co-operative Societies Act, the Registrar of Co-operative Societies can supersede the committee of a society and appoint a special officer or a committee to manage its affairs for a specified period, but before doing so, he must give the committee an opportunity to make its representation. 2. The requirement of service of notice on the President of the managing committee cannot be construed as a service on the committee itself. All the members of the committee, including the President and Directors, are required to be served with notice so that their representation can be considered. 3. The renewal of a license cannot be rejected solely on the ground of the pendency of a criminal case.
Final Decision: The court allowed both writ petitions and quashed the impugned orders. It directed the Excise authorities to renew the license of the petitioner society for 1995-96 in the name of the President, Chimanbavi Venkataiah, and to renew the license of the petitioner society for 1995-96 without reference to the pendency of the criminal case.
( 1 ) AS both the Writ Petitions are inter-connected and the learned counsel for the petitioner as well as the learned Government Pleader submitted that the full length arguments have been advanced at the time of considering the application for the vacating the interim orders, and they requested this Court to pass final orders in both the Writ Petitions. Accordingly, these two Writ petitions are dealt with finally. W. P. No. 23149 of 1995:
( 2 ) THE facts in W. P. No. 23149 of 1995 would be relevant for proper appreciation of the entire case. The Writ Petition is filed by the Tappers Cooperative Society, Kosgi, Mahabubnagar District represented by its President, chimanbavi Venkataiah. In the said Writ Petition, the proceedings of me 1st respondent - Prohibition and Excise Superintendent, Mahabubnagar in RC no. A7/4367/93 dated 11-10-1995 are challenged, wherein the Persons committee was constituted by the 1st Respondent by virtue of powers vested in him under Section 34 (1) of the Co-operative Societies Act.
( 3 ) THE Excise authorities had granted licence for 1994-95 to the TCS Kosgi in the name of President M. Chandraiah, who was the President of the Society at the relevant time. The deponent Sri Chimanbavi Venkataiah, the present president was elected as a President of TCS Kosgi on 27-5-1995 for a period of three years. The election was conducted by the excise authorities. The society has 24 members on its rolls. After Sri Venkataiah was elected as President, the name of the President was not changed in the Excise Licence already issued for 1994-95 to the TCS Kosgi. The licence expired on 30-9-1995. The necessary licence fees and other charges were paid by the society through its President and all the formalities as required under the Rules were complied. An advance payment of rental amounting to Rs. 26,073/- was paid through challans. However, the excise authorities did not renew the licence on the ground mat the criminal case in COR No. 118/94-95 dated 9-3-1995 is pending. At that point of time W. P. No. 22167/95 was filed for direction to renew the licence without reference to the pendency of the criminal case. When the matter came up for orders on interim application on 12-10-1995 it was brought to the notice of the counsel for the petitioner that the licensing authority had rejected the renewal application on 4-10-1995 and the appeal filed before the Dy. Commissioner (Appellate Authority) was also dismissed on 10-10-1995. It was also brought to the notice of the counsel on 12-10-1995 that the managing committee of TCS kosgi was superseded by persons committee appointed by the 1st respondent in proceedings dated 1140-1995 and an objection was sought to be placed by the counsel taking notice on behalf of the persons committee stating that in view of the supersession, no relief can be granted in W. P. No. 22167/95. Therefore implead petitions and petition for amendment of prayer filed in W. P. No. 22167/95 (were filed) and the said petitions were allowed on 13-10-1995. Interim direction was also issued to the respondents to renew the licence of the tcs Kosgi without reference to the pendency of the criminal case. Simultaneously W. P. No. 23149/95 was heard on 13-10-1995 and interim suspension of the proceedings dated 11-10-1995 was granted by this Court. The petitioner in W. P. No. 23149/95 submits that no notice was issued to the petitioner before the impugned orders are passed with the grounds mentioned in the impugned supersession order dated 11-10-1995 that the Society is not functioning properly and they have not given any benefits to the members (which) are absolutely incorrect. Therefore, the appointment of the respondents No. 2 to 4 as persons committee is illegal and without jurisdiction. It was submitted that the official respondents created ante-dated proceedings at the instance of the local M. L. As and the higher authorities. The 2nd respondent is appointed as Chairman of the committee, he wa
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