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Judges : M.U.ISAAC,P.NARAYANA PILLAI
K.KUNHAMBU - Appellant
Versus
REGISTRAR OF COOPERATIVE SOCIETIES AND OTHERS - Respondent
Case No : W. A. 45 of 1968
Decided On : 02/17/1969
Advocates Appeared :
P. K. Kurien; V. Desikan; K. A. Nayar; K. Sukumaran; For Appellant Advocate General; For Respondents
President - Cannanore District Co-operative Central Bank Ltd. - Madras Co-operative Societies Act, 1932 - S.43, S.60 - The court quashed the order of the Registrar appointing a Special Officer for managing the affairs of the Bank and all proceedings taken by the respondents pursuant to or in furtherance of the said order. The court directed the Registrar to convene a general meeting of the members of the Bank for election of the requisite number of members to the Board of Directors in accordance with the provisions of the Act, the bye-laws and the rules regarding election of directors to the Board of the Bank. The election should be conducted within two months from the date of the judgment. The court also appointed a returning officer for supervising the election and directed the second respondent, who was in management of the Bank as Special Officer, to hand over charge to the new Board of Directors once elected. If the election is not conducted within the specified period, the second respondent will hand over charge of management of the Bank to the appellant, who claims to be the President of a duly elected Board of Directors.
Fact of the Case:
The appellant, President of the Cannanore District Co-operative Central Bank Ltd., appealed against the judgment of a learned judge of the Court. The dispute arose from the election of the Board of Directors of the Bank and the subsequent appointment of a Special Officer by the Registrar to manage the affairs of the Bank.
Finding of the Court:
The court quashed the order of the Registrar appointing a Special Officer for managing the affairs of the Bank and all proceedings taken by the respondents pursuant to or in furtherance of the said order. The court directed the Registrar to convene a general meeting of the members of the Bank for election of the requisite number of members to the Board of Directors in accordance with the provisions of the Act, the bye-laws and the rules regarding election of directors to the Board of the Bank. The election should be conducted within two months from the date of the judgment. The court also appointed a returning officer for supervising the election and directed the second respondent, who was in management of the Bank as Special Officer, to hand over charge to the new Board of Directors once elected. If the election is not conducted within the specified period, the second respondent will hand over charge of management of the Bank to the appellant, who claims to be the President of a duly elected Board of Directors.
Issues: The issues involved the validity of the appointment of a Special Officer by the Registrar to manage the affairs of the Bank, the compliance with the provisions of S.43 and S.60 of the Madras Co-operative Societies Act, 1932, and the violation of the principles of natural justice.
Ratio Decidendi: The court held that the appointment of the Special Officer was invalid as it was made without complying with the mandatory provisions of S.43 of the Act. The court also found S.60 of the Act to be unconstitutional and invalid, as it conferred an arbitrary and naked legislative power on the State Government. The court directed the Registrar to convene a general meeting for the election of the Board of Directors and appointed a returning officer for supervising the election. The court also directed the second respondent, who was in management of the Bank as Special Officer, to hand over charge to the new Board of Directors once elected.
Final Decision: The court quashed the order of the Registrar appointing a Special Officer for managing the affairs of the Bank and all proceedings taken by the respondents pursuant to or in furtherance of the said order. The court directed the Registrar to convene a general meeting of the members of the Bank for election of the requisite number of members to the Board of Directors in accordance with the provisions of the Act, the bye-laws and the rules regarding election of directors to the Board of the Bank. The election should be conducted within two months from the date of the judgment. The court also appointed a returning officer for supervising the election and directed the second respondent, who was in management of the Bank as Special Officer, to hand over charge to the new Board of Directors once elected. If the election is not conducted within the specified period, the second respondent will hand over charge of management of the Bank to the appellant, who claims to be the President of a duly elected Board of Directors.
1. This is an appeal by the petitioner in O.P. No. 113 of 1968 from the judgment of a learned judge of this Court in that case. The appellant is said to be the President of the Cannanore District Co-operative Central Bank Ltd., (hereinafter referred to as the Bank). It is a Society registered in 1963 under the Madras Co-operative Societies Act, 1932 (hereinafter referred to as the Act). The Bank has its registered office at Cannanore; and it started functioning with effect from 171963. The first Board of Directors of the Bank was nominated by the Registrar of Co-operative Societies, who is the first respondent in this appeal, in accordance with bye-law 26A of the bye-laws of the Bank. This Board would remain in office for a period of one year or for a further term not exceeding two years, if the Registrar is of the opinion that it is necessary in the interest of the Bank; but before the expiry of this term, the Board should arrange to hold a general meeting of the Bank for the purpose of electing its Board of Directors under bye-law 26. The term of the first Board was extended by the Registrar; and it would expire on 216 1966.
2. A general meeting of the Board was convened on 6 61965 for the election of the Board of Directors. It is alleged that, at this meeting, the name of Sri. P. R. Kurup, who is the present Honourable Minister for Co-operation in Kerala, was proposed as a candidate for the Board, that objection was raised to the said nomination, which the President of the meeting accepted, that Sri. P. R. Kurup and his followers thereupon behaved in an unruly manner, and that the meeting was subsequently dissolved by the President. The appellant further alleged that a suit was then filed by a nominee of Sri. P. R. Kurup in the Munsiff's Court, Tellicherry for restraining the Board of Directors from conducting the election of a new Board. In that suit, the Munsiff passed a temporary order of injunction restraining the Board of Directors from conducting the election of the new Board, and directing that the existing Board would continue in office for a period of two months after the final disposal of the suit. The suit was not then pressed, and was dismissed on 30101967. In the meanwhile Sri. P. R Kurup became the Minister for Co-operation. Consequent on the dismissal of the suit, the Board of Directors convened a general meeting of the Bank on 30121967 for election of the new Board. On 27-121967, O.P. No 5425 of 1967 was filed in the High Court by Sri. P. H. Kunhiraman Nambiar, an Ex. M. L. A. belonging to the political party of the Honourable Minister, for a writ to restrain the conduct of the said election; and he moved for an interim order of injunction. The O. P. was summarily rejected. It is alleged that Sri. Kunhiraman Nambiar was the nominee of the Honourable Minister in that O. P.
3. One Sri. K. P. Raghavan Nair, said to be a senior advocate of the local Bar, had been appointed the returning officer for conducting the election on 30121967. According to the appellant, the general body met at 10-30 A. M. on that day; and when the polling started, about 30 persons rushed into the polling booth and snatched away some of the ballot papers and other records. The polling was suspended, but it was re-started at 1 P. M.; and the requisite number of members were elected to the Board. Ext. P1 is a copy of the minutes of the proceedings of the election made by the returning officer. On. the same day at 8.30 P. M. a meeting of the Board of Directors was held; and the office bearers were elected. The appellant was unanimously elected as the President of the Board; and the new Board took charge forthwith. Ext. P2 is a copy of the minutes of the said proceedings. This matter was reported by the appellant on the same day to the first respondent with copy to the second respondent, the Deputy Registrar of Co-operative Societies, Cannanore. Ext. P3 is copy of the said report. The election was also reported to the Kerala State
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