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2022 Supreme(Ker) 755

IN THE HIGH COURT OF KERALA AT ERNAKULAM
A.K. JAYASANKARAN NAMBIAR, MOHAMMED NIAS C.P., JJ.
A. Krishnan, S/o. Kumhan - Appellant
Versus
The Kerala State Co-operative Marketing Federation Ltd. & Ors. - Respondents
W.A. No. 1179 of 2021
Decided On : 01-09-2022

Advocates Appeared:
For the Appellant : Sri. P.K. Suresh Kumar (Sr.), Sri. Rinny Stephen Chamaparampil.
For the Respondent: Sri. Ashok M. Cherian, Addl. Adv. General, Sri. P.P. Thajudheen, Government Pleader, Sri. B. Ashok Shenoy, Sri. N.N. Sugunapalan (Sr.), Sri. S. Sujin, Sri. P.S. Gireesh.

A person whose interests/rights are infringed through an action of another can be seen as an aggrieved person for the purposes of initiating legal action. The appointment of the Managing Director in contravention of the bye-laws and Service Rules was held to be illegal and void ab initio, and ratification by the Board of Directors did not validate the illegal appointment.

Headnote:

Appointment of Managing Director - Locus Standi - Kerala Co-operative Societies Act, 1969 - Sections 80, 80B, Rule 196 - Ext.P6 Government Order - Bye-laws of MARKETFED - Ext.P2, Ext.P3 Subsidiary Rules and Service Regulations - Appointment contrary to bye-laws and Service Rules - Illegal appointment - Ratification by Board of Directors - Locus Standi of appellant - Aggrieved person - Legal principle on locus standi

Fact of the Case:

The appellant, a member of a Co-operative Society, challenged the appointment of the Managing Director of the Apex Society, MARKETFED, contending that the appointment was contrary to the bye-laws and Service Rules. The State Government and MARKETFED argued that the appellant had no locus standi to challenge the appointment and that the appointment was ratified by the Board of Directors.

Finding of the Court:

The court found that the appellant had locus standi as an aggrieved person due to the impact of the appointment on the economic interests of the appellant. The court held that the appointment of the Managing Director was illegal as it contravened the bye-laws and Service Rules, and the subsequent ratification did not validate the illegal appointment.

Issues: Locus standi of the appellant to challenge the appointment of the Managing Director, legality of the appointment in contravention of bye-laws and Service Rules, and the effect of ratification by the Board of Directors.

Ratio Decidendi: The legal principle established is that a person whose interests/rights are infringed through an action of another can be seen as an aggrieved person for the purposes of initiating legal action. The appointment of the Managing Director in contravention of the bye-laws and Service Rules was held to be illegal and void ab initio, and ratification by the Board of Directors did not validate the illegal appointment.

Final Decision: The court set aside the impugned judgment, quashed the Government Order, and declared the Managing Director ineligible and unqualified. The court did not nullify any actions taken by the Managing Director during his tenure but expressed displeasure at the callous manner of appointment by the State Government and MARKETFED.

JUDGMENT :

A.K. Jayasankaran Nambiar, J.

1. The petitioner in W.P.(C).No.14176 of 2020 is the appellant herein, aggrieved by the judgment dated 28.7.2021 of the learned Single Judge in the writ petition. The brief facts necessary for disposal of the Writ Appeal is as follows :

The appellant/writ petitioner is a member of the South Wayanad Co-operative Rubber & Agricultural Marketing Society, which is a Co-operative Society registered under the Kerala Co-operative Societies Act, 1969. It is affiliated to the Kerala State Co-operative Marketing Federation Limited [MARKETFED], which is the Apex Society in relation to the Primary Society aforementioned. As per the bye-laws of the MARKETFED, that are produced as Ext.P2 in the writ petition, the Managing Director had to be appointed by the Board of Directors in consultation with the State Government. The Subsidiary Rules and Service Regulations of MARKETFED, that were framed by the Board of Directors in exercise of their powers under the bye-laws, and which were approved by the Registrar of Co-operative Societies, in terms of the Kerala Co-operative Societies Act, the Managing Director of the Society had to be appointed by deputation of an Officer by the Government in the IAS cadre in the senior time - scale. The said provisions is found in Schedule – B to Ext.P3 Subsidiary Rules and Service Regulations.

2. It was the case of the writ petitioner that taking note of a communication [Ext.P4] dated 22.2.2018 issued by the Private Secretary to the Minister for Co-operation, Tourism & Devaswom addressed to the Special Secretary, Department of Co-operation, Government of Kerala, that the Minister concerned had instructed to appoint Sri. S.K. Sanil as Managing Director, and to take necessary action, the Government, through Ext.P6 Government Order dated 25.5.2018, appointed the said Sri. S.K. Sanil, the 4th respondent herein, as Managing Director of MARKETFED. The writ petitioner relied on Ext.P7 file notings to demonstrate the manner of movement of the file and the fact that the provisions of the Subsidiary Rules and Service Regulations of MARKETFED and the provisions of the bye-laws with regard to appointment of the Managing Director had not been specifically noticed by the Government while appointing the 4th respondent as the Managing Director of MARKETFED. It was under the above circumstances that the Government Order was impugned in the writ petition, where, a declaration was also sought that the 4th respondent was not entitled to hold the post of Managing Director.

3. In the statement filed on behalf of the State Government, and in the counter affidavit filed on behalf of the 4th respondent to the writ petition, the stand taken was that the appellant/writ petitioner had no locus standi to maintain a writ petition impugning the order of appointment of the 4th respondent as the Managing Director of MARKETFED. It was pointed out that although the bye-laws contemplated that the appointment of the Managing Director had to be done by the Board of Directors, based on the practice hitherto followed in the MARKETFED, the nomination of the Managing Director was done by the Government, and the said nomination was ratified by the Board of Directors. It was contended therefore that even if there was an irregularity in the method of appointment, the same stood regularised through the ratification done by the Board of Directors. With regard to the contention in the writ petition that the 4th respondent was not qualified, in terms of the Subsidiary Rules and Service Regulations, to be appointed as the Managing Director, it was contended that the said Subsidiary Rules and Service Regulations were against the specific provisions of Sections 80 and 80B of the Kerala Co-operative Societies Act read with Rule 196 of the Kerala Co-operative Societies Rules, and therefore, the Rules and Regulations were not adhered to by the Society. It was also pointed out that, at any rate, the Rules had been subsequently amen

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