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2000 Supreme(Ker) 657

High Court of Kerala
R. Bhaskaran, J.
Thomas - Appellant
Versus
Jaihind Powerloom Industrial Coop Society Ltd & Ors - Respondent
O.P. No. 20375 of 2000
Decided On : 11-10-2000

The resignation of a Director takes effect only when the Director Board approves the resignation. The appointment of an Administrator is a serious matter and entails civil consequences. The withdrawal of resignation by a committee member must be in accordance with the Act and rules.

Headnote:

Cooperative Society - Appointment of Administrator - S.33(1) of the Cooperative Societies Act - Summary of Acts and Sections: S.33(1) of the Cooperative Societies Act - The proviso to S.33(1) makes it mandatory to order a notice on the notice board of the Headquarters of the Society inviting objections to the making of the order of appointment of Administrator and consider such objections. The second proviso to S.33(1) cannot be interpreted in such a way as to take away the effect of the first proviso. Appointment of an Administrator is a serious matter and entails civil consequences. The resignation of a Director takes effect only when the Director Board approves the resignation. The resignation of a member terminates membership from the committee. - The court's decision was influenced by the interpretation of S.33(1) and the legal principles established in previous cases regarding the appointment of Administrator and the acceptance of resignations by the Director Board.

Fact of the Case:

Petitioners and three others were Directors of a Cooperative Society. Disputes arose regarding the resignation of Directors, appointment of an Administrator, and the validity of election notification. The Original Petition was filed to challenge the appointment of the Administrator and the election notification.

Finding of the Court:

The court dismissed the Original Petition, stating that the appointment of the Administrator was valid, the resignation of a member terminates membership from the committee, and the election should proceed for the interest of the Society.

Issues: 1. Validity of the appointment of Administrator without notice by the Registrar. 2. Validity of the withdrawal of resignation by a committee member. 3. Determination of quorum for the Managing Committee. 4. Validity of the election and conduct of the election.

Ratio Decidendi: The court held that the appointment of the Administrator was not valid as the notice inviting objections was not ordered as required by S.33(1). The withdrawal of resignation by a committee member was not valid, and the resignation of a member terminates membership from the committee. The court also determined that there was no quorum for the Managing Committee to continue and allowed the election to proceed for the interest of the Society.

Final Decision: The Original Petition was dismissed, and the court allowed the declaration of the election result and the new committee to take charge of the Society's affairs.

JUDGMENT

R. Bhaskaran, J.

1. Petitioners and three others were the Directors of the first respondentCooperative Society. Out of seven Directors, K. S. Mohini became disqualifieddue to her absence for more than four meetings. Shri B. G. Jose tendered hisresignation. Thereafter, according to the petitioners, the resignation of ShriParameswaran (4th petitioner) was obtained by force in the night of 29th June2000. The next day, the 4th petitioner met the Secretary of the Society andapprised him of the incident and requested him not to remove him from theDirectorship. On 30th June 2000, 5 Directors participated in the meeting.

2. The 4th respondent President resigned from the Director Board. Thepetitioners made Ext. P4 representation to elect a new President. However, byExt. P5 an Administrator was appointed for the Society. The Original Petitionwas filed to challenge Ext. P5.

3. The main contention raised in the O.P. was that the procedure fixed underS.33(1) of the Cooperative Societies Act was not complied with before issuingExt. P5. It is also stated that as per the Bye law 20(d), the resignation takeseffect only when the Director Board approves the resignation. Since it was notplaced before the Director Board there was still the quorum and theAdministrator could not be appointed.

4. The Original Petition was admitted on 19th July 2000 and urgent noticeordered in the O.P. and the application for stay. On 21st August 2000, theadditional 6th respondent issued Ext. P6 election notification for conductingelection cm 6th October 2000. The petitioners amended the Original Petition tochallenge Ext. P6 election notification. The Original Petition was heard andJudgment reserved on 4th October 2000. There was also an interim order tostay the declaration of the result of the election to be held on 6th October2000.

5. The grounds raised in the O.P. are that Ext. P5 order is illegal as no noticewas published inviting objection as required under the proviso to S.33(1) of theAct. It is only in cases where the Registrar is satisfied that it is not practicableto do so that notice is dispensed with under the Act. As per the bye law of theSociety R.20(d) the resignation of a Director takes effect only when theDirector Board approves the resignation. The resignation of the three Directorswere not approved by the Director Board. The resignation of the 4th petitionerwas obtained by force and the same was intimated to the Secretary the nextmorning itself. The consequent election notification also is illegal.

6. A counter affidavit is filed on behalf of the 2nd respondent. It is stated in thecounter affidavit that there is no clause in S.33(1) of the Kerala CooperativeSocieties Act for publishing a notice by the Registrar before appointing anAdministrator. It is also stated that out of the seven Directors, one committeemember became disqualified. Out of the remaining six, Shri P. T. Thomasresigned and his resignation was accepted by the Committee on 15thSeptember 1999. Thereafter, he withdrew his resignation which was alsoaccepted by the Committee. It is contended that once a member resigns itcould not be withdrawn and therefore he ceased to be a member of thecommittee. In that view of the matter, after the resignation of Mr. Jose and thePresident, the question whether the 4th petitioner's resignation was valid ornot was not very relevant as even otherwise there was no quorum and theSecretary was justified in requesting for appointment of an Administrator.

7. A reply affidavit is filed by the first petitioner Shri P. J. Thomas. It is statedthat his resignation was not accepted by the Board of Directors. As per R.38 ofthe Kerala Cooperative Societies Rules, the resignation take effect only whenit is accepted by the Board of Directors. Even after 15th September 1999, thefirst petitioner was attending the Board meeting. He has attended 10 meetingsof the Board of Directors alter the so - called resignation.

8. In the above circumstances, the questions for decision













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