2021 Supreme(Ker) 690

IN THE HIGH COURT OF KERALA AT ERNAKULAM
C.T. RAVIKUMAR, SHIRCY V., K. HARIPAL, JJ.
M.S. Anil - Appellant
Versus
The Joint Registrar (General) of Co-Operative Societies & Ors. - Respondents
W.A. No. 876 of 2019
Decided On : 02-07-2021

Proceedings for supersession of a committee under Section 32 of the KCS Act do not survive after the expiry of the term of the Managing Committee.

Headnote:

CO-OPERATIVE SOCIETIES - KERALA CO-OPERATIVE SOCIETIES ACT, 1969 (KCS ACT) - SECTION 32 - SUPERSESSION OF COMMITTEE - CONSEQUENCES OF SUPERSESSION - DISQUALIFICATION OF MEMBERS - INTERPRETATION OF SECTION 32(1)(e) - SCOPE OF CONTINUATION OF PROCEEDINGS - JURISDICTION IN FUTILITY.

Fact of the Case:

The writ petition challenged Ext.P8 order dated 22.09.2018 superseding the Managing Committee of Marayamuttom Service Co-operative Bank Ltd.No.984 (for short 'the Bank'), the term of which was to expire on 26.10.2018. The learned Single Judge set aside Ext.P8 order of supersession, relying on two Division Bench decisions of this Court viz; Sahadevan v. Padmanabhan (2004 (1) KLT 192) and State of Kerala v. Urukunnu Service Co-operative Bank Ltd. (2013 (2) KLT 74). In the course of further consideration the decision in Gireesh Kumar's case (supra) was taken into account. In the said decision it was held that the order of supersession under Section 32(1) of the KCS Act, in addition to removal of the Committee and appointment of an Administrator, has another consequence of disqualification of Committee members from contesting the election in view of Clause (e) thereof. Though the members of the Committee have a right to resign if the resignation was after the notice of commencement of the proceedings under Section 32(1) of the KCS Act, i.e., after the issuance of notice of enquiry, the proceedings initiated will have to come to a logical end, it was further held therein. Applying the dictum thus laid down in Gireesh Kumar's case (supra) to the factual position, despite the expiry of the term of the Managing Committee on 26.10.2018 and the fact that the Administrator appointed had taken charge on the strength of Ext.P8 order, the learned Single Judge gave liberty to the Joint Registrar (General), Co-operative Societies, Thiruvananthapuram to proceed further with Ext.P3 notice issued under Section 32(1) of the KCS Act, based on Ext.P4 explanation and Ext.P6 reply offered by the petitioner/appellant. As a necessary sequel the following further directions are issued under the impugned judgment :-

Finding of the Court:

The court held that when a democratically elected Managing Committee of a society is not in existence and thereby not available to be replaced and in its place an administrator or administrative committee is appointed, continuance of proceedings under Section 32 of the KCS Act to supersede the said non-existing committee for the purpose of considering whether the consequence of being a member of a superseded committee could be fastened on every member of the said committee, is nothing but a futile exercise.

Issues: 1. Whether the proceedings for supersession to remove the Committee of a Society initiated under Section 32 of the KCS Act survive after the expiry of the term of the Managing Committee ? 2. When the Managing Committee of a Society upon receipt of notice calling for its objections as to the proposal for supersession under Section 32 of the KCS Act resigns en bloc and consequently, an Administrator or an Administrative Committee is appointed continuation of the proceedings notionally, for the limited purpose of considering whether supersession of the Committee was called for (taking into account the consequence of order of supersession of a Committee under Section 32(1)(e) of the KCS Act) to ensure befalling of the three fold consequences on every member of that Committee in case its answer is in the affirmative, is legally permissible ?

Ratio Decidendi: The court held that the proceedings under Section 32 of the KCS Act is for the supersession of a committee and under Section 68 is for imposing surcharge on members or other responsible persons of a society are independent and separate proceedings. The court further held that supersession could only be that of a committee and not that of member/members.

Final Decision: The court answered the reference as hereunder:- Matsyafed’s case is no more good law to be followed as a precedent. When the Managing Committee of a society is not actually existing the fact that proceedings initiated against it under Section 32 of the KCS Act for supersession, but could not be completed due to the expiry of the prescribed term of the Committee, is no ground to permit continuation of such proceedings for supersession against a non-existent committee even for the limited purpose of conducting it notionally and subject to its outcome, to impose consequential disqualifications under Section 32(1) (e) of the KCS Act. Even in a case where on initiation proceedings for supersession an order of supersession was passed and an administrator or administrative committee was appointed, once the order of supersession is successfully challenged and in the meanwhile the prescribed term of the Managing Committee got elapsed, the proceedings for supersession under Section 32 of the KCS Act to remove the Committee would not survive thereafter and in other words it would get abated. In such circumstances, it will not be permissible to exercise the jurisdiction in futility to direct for continuation of such proceedings. If actions or omissions on the part of an existing committee call for its supersession it should be initiated in accordance with law and an inability to initiate or failure to initiate it, within the tenure of the committee in the prescribed manner is no ground to seek for exercise of jurisdiction in futility. Even if proceedings were initiated and an order of supersession of the existing committee under section 32 of the KCS Act was passed upon interference with the order of supersession by the Court on any of the legally permissible ground, the fact that such interference was on technical ground is no ground or reason for granting liberty to proceed with such proceedings for supersession if the term of office of that committee had expired in the meanwhile. However, we make it clear that if the report on an inquiry under Section 65 or an inspection under Section 66 was the basis for initiation of proceedings under section 32, interference with the order of supersession by itself would not invalidate such a report. If it is capable of satisfying the ingredients for an action under Section 68 of the KCS Act it could be initiated and, needless to say that, in such eventuality it will have necessary consequences, subject to its outcome.