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2017 Supreme(Kar) 1165

IN THE HIGH COURT OF KARNATAKA BENCH AT KALABURAGI
G. NARENDRA, J.
Sharanabasappa and Ors. - Appellants
Vs.
The State of Karnataka and Ors. - Respondent
W.P. No. 203490 of 2017 (CS-EL/M)
Decided On : 09-08-2017

Advocates Appeared:
For the Appellant : Ameet Kumar Deshpande
For the Respondents: R.V. Nadagouda, Shivaputra Udbalkar

Headnote:KARNATAKA CO-OPERATIVE SOCIETIES RULES, 1960 - Rule 14-AK(4) – KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959 [K.A. No. 11/1959] - Section 28(A) – Appointment of Special Officer - Challenged - Assistant Registrar appointing Special Officer on account of non-availability of minimum number of members to form a quorum to conduct the day to day business and directing to hold elections to elect new Board of Directors under Section 28(A) of Karnataka Co-operative Societies Act, 1959 - Held, The act of resignation by a majority of members of the Board would indeed result in automatic dissolution of the Board in the light of the provisions of sub-section (3) of Section 31 of the Act which mandates that the remaining members cannot constitute a quorum and they shall vacate or shall be deemed to have vacated their offices. In the light of the language employed and in the light of the deeming provisions, that on the occurrence of the circumstances enumerated in Section 31 of the Act, the remaining members shall be deemed to have vacated their offices. In the light of the language employed in the provision itself, whereby the term of the office to be enjoyed by an elected member is made subject to the provisions of Sections 29(A) and 39(A) of the Act. The provisions of sub-section (2) of Section 29(A) of the Act if read in conjunction with sub-rule (4) of Rule 14-AK, the only inference that can be drawn is that the term of office of the Board shall commence from the date on which the required number of elected members are available to constitute a quorum as stipulated under sub-rule (4)of Rule 14-AK. The full strength of the Board is eleven in number and a quorum in excess of 50% would necessarily mean 6 members, but the present strength, pursuant to the resignation of 6 members, is only 5 and hence less than the minimum stipulated strength to form a quorum to constitute functional board and to conduct the business of the Society. It is also not the case of the pretitioners that they constitute the required quorum, to enable the functioning of the Board. The provision does not vest any discretion to the authority in respect of implementation of the provisions of Section 31 of the Act. Hence, it cannot be gainfully argued that the Act vests a discretion in the authority either to invoke the provisions of Section 29(E) or Section 31 of the Act. The deeming provisions not only provides for vacation of seats but also provides for assumption of the charge i.e., nominating the person to act and discharge the functions of the Special Officer as envisaged under the provisions. The appointment of a Special Officer is mandated by operation of law and does not require any executive act except to implement the act in letter and spirit. Hence, the contention on behalf of the petitioner that the authority has erred in choosing to exercise the powers vested under Section 31 of the Act is without substance and requires to be rejected and is accordingly rejected.

       KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959 [K.A. No. 11/1959] -Section 28(F) - Casual vacancy - Meaning of - The word 'casual vacancy' is defined by the Oxford English Reference Dictionary in the Second Edition as - (1) accidental; due to change (2) not regular or permanent; temporary, occasional (3) a unconcerned, uninterested (4) informal. If the definition of word 'casual' is read in conjunction with reference to the provisions of sub-rule (4) of rule 14-AK and sub-section (2) of Section 28(A) of the Act, then it must be held to mean that the elections or nominations are impermissible under the provisions of Section 29(E), when the total sum of members to be elected/nominated is less than the strength stipulated under sub-rule (4) of Rule 14-AK. If the number of vacancies are more than the percentage of strength as provided in the said Rule, then the provisions of Section 31 of the Act would not be attracted.

ORDER :

G. Narendra, J.

1. Heard the Learned Counsel for the petitioners, the Learned Additional Advocate General for respondent Nos. 1 to 3 and 6 and the Learned Counsel for respondent No. 5.

2. The matter is listed for orders and it is taken up for disposal on the request of the Learned Counsels.

3. The petitions are preferred assailing Annexure-D, being the proceedings of the Asst. Registrar of Co-Operative Societies i.e. the second respondent herein, whereby the second respondent has appointed the fourth respondent as a Special Officer on account of non-availability of minimum number of members to form a quorum to conduct the business as mandated under the provisions of sub-Rule (4) of Rule 14-AK of the Karnataka Co-operative Societies Rules (hereinafter referred to as 'the Rules' for short) to appoint a Special Officer to conduct the day-to-day business of the fifth respondent - Society and has further directed to hold elections to elect the members for constituting the Board afresh as provided under the provisions of Section 28(A) of the Karnataka Co-operative Societies Act, 1959 (herein after referred to as 'the Act' for short).

4. The petitioners were elected as Directors of the fifth respondent - Society. The petitioners along with six others had been declared as elected on 23.05.2017. It is contended that by virtue of the election declared on 23.05.2017, the petitioners are entitled to remain in the office and discharge their duties for a period of five years from the date of declaration of election as mandated under the provisions of sub-Section (4) of Section 28(A) of the Act. That by the impugned order, this right conferred on the elected candidates under the provisions of sub-Section (4) of Section of 28(A) of the Act has been curtailed and violated and hence, the impugned order stands vitiated, as being contrary to and against the spirit of the said provision.

5. It is further contended that the provisions of Section 29(E) of the Act provides for filling of casual vacancies arising in the office of the members of the Board and that the second respondent ought to have resorted to the said provision only and ought not to have directed for holding of elections for the Constituencies from where the petitioners have been elected i.e., the second respondent ought to have directed holding of elections in respect of the six seats only, where the vacancies arose on account of resignation of some of the members. Hence, the impugned proceedings directing holding of elections to all the seats of the Board afresh is violative of the provisions of the Act and calls for interference.

6. Per contra, the Learned Counsel for respondent No. 5 would draw the attention of this Court to the provisions of sub-Section (2) of Section 28(A) of the Act and would contend that to constitute a Board of Management, there must be not less than 11 number of members including the Chief Executive.

7. He would draw the attention of this Court to the provisions of sub-Rule (4) of Rule 14-AK, which stipulates that the minimum quorum to enable functioning of the Board shall be the number next to 50% of the stipulated strength of the Board as specified in the bye-laws and the same shall form the quorum for a meeting of the Board and if there is no quorum at the time of transacting any business in any meeting of the Board, no such business shall be transacted. He would submit that the implication is that the members to form a quorum to conduct the business of the Society by the Board is that there ought to be atleast six members but on account of resignation of six members out of 11 members, the strength of the remaining members i.e. 5 members is not sufficient to constitute a quorum as mandated by the provisions of sub-Rule (4) of the Rule 14-AK.

8. He would also draw the attention of the Court to the provisions of Section 31 of the Act specially enacted to address such situation i.e., where the Board has been rendered defunct or un-workable on account of non-

































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