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M.V. Hydrose Vs. Dy. Registrar of Co-operative Societies and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtKerala High Court
Decided On
Case NumberO.P. No. 6032 of 1970
Judge
Reported inAIR1972Ker233
ActsKerala Co-operative Societies Act, 1969 - Sections 2 and 33; Kerala Co-operative Societies Rules - Rule 39
AppellantM.V. Hydrose
RespondentDy. Registrar of Co-operative Societies and ors.
Respondent Advocate V. Bhaskaran Nambiar, Adv. and; K. Chandrasekharan, Govt. Pleader
DispositionPetition dismissed
Cases ReferredState of Uttar Pradesh v. Babu Ram Upadhya
Excerpt:
.....- non-compliance of provision will not invalidate appointment of administrator - extended term of committee expired - no fresh election took place - no valid committee constituted for day to day work - petition dismissed. - - 4. there is yet another point which the petitioner unsuccessfully urged before the tribunal and that relates to the correctness of the statement made by the deputy registrar in ext. i find considerable force in this objection, but it is unnecessary for me to finally decide that point because even on the merits of the contentions taken by the petitioner i am of the view that the writ petition has only to fail. --33. appointment of new committee or administrator on failure to constitute committee, etc. -(1) where the term of office of a committee has..........the said office. the order ext. p2 was passed by the deputy registrar on the ground that the term of office of the committee of the society which was originally due to expire on 30-6-1970 had been extended only till 30-9-1970 by virtue of an order passed by him and that even though the extended period had also come to a close on 30-9-1970 the society had not made any arrangements for conducting elections to the board of directors and that hence it had become necessary to take urgent action for making suitable alternate arrangements for the day to day management of the society.2. the attack levelled by the petitioner against the said action taken by the deputy registrar before the co-operative tribunal was two-fold. firstly, it was urged that the impugned order had been passed.....
Judgment:
ORDER

V. Balakrishna Eradi, J.

1. The petitioner has come up with this writ petition seeking to quash the decision of the Kerala Cooperative Tribunal evidenced by Ext. P3, whereby the Tribunal has dismissed an appeal which the petitioner had preferred before it. By that appeal the petitioner had challenged an order passed by the Deputy Registrar of Co-operative Societies. Trichur on 3-10-1970 (Ext. P2) ap-pointing an administrator to be in charge of the affairs of the Punnavurkulam Service Co-operative Society under Section 33 of the Kerala Co-operative Societies Act. 1969 (hereinafter referred to as the Act). The petitioner was the President of the said Co-operative Society and he has a claim that he still continues to occupy the said office. The order Ext. P2 was passed by the Deputy Registrar on the ground that the term of office of the Committee of the Society which was originally due to expire on 30-6-1970 had been extended only till 30-9-1970 by virtue of an order passed by him and that even though the extended period had also come to a close on 30-9-1970 the Society had not made any arrangements for conducting elections to the Board of Directors and that hence it had become necessary to take urgent action for making suitable alternate arrangements for the day to day management of the society.

2. The attack levelled by the petitioner against the said action taken by the Deputy Registrar before the Co-operative Tribunal was two-fold. Firstly, it was urged that the impugned order had been passed without consulting the Circle Co-operative Union as provided in Section 33 of the Act. The second objection was that there had not been due compliance with the procedure prescribed in the proviso to Section 33 which enioins the publication of a notice on the notice board of the Society inviting obiections to the making of the proposed order appointing an administrator. According to the petitioner by reason of the non-compliance with the statutory requirements referred to above the order passed by the Deputy Registrar was null and void. These contentions did not find favour of the Tribunal and it accordingly rejected the appeal.

3. The very same contentions have been reiterated by the petitioner before this Court also in support of his plea that the decision of the Tribunal suffers from errors of law apparent on the face of the record.

4. There is yet another point which the petitioner unsuccessfully urged before the Tribunal and that relates to the correctness of the statement made by the Deputy Registrar in Ext. P2 that the period of office of the Board of Directors of the Society had expired on 30-6-1970. According to the petitioner the term of office of the Board of Directors of which he was the President will expire only on 31-1-1971 and hence it was not open to the Deputy Registrar to proceed to ap-point any administrator for the Society in purported exercise of his power under Section 33 of the Act. The Tribunal re-jected this contention holding that under the bve-laws of the Society read in the light of Section 2 (u) of the Act and Rule 39 of the Kerala Co-operative Societies Rules the term of office of the Society did expire on 30-6-1970. The Tribunal relied also on the fact that the Board of which the petitioner was the President, had itself proceeded on the basis that its term was to expire on 30-6-1970 and had appli-ed to the Deputy Registrar for an extension of it term by a period of three months beyond 30-6-1970 and that it was after having obtained such an extension and enioved the benefit thereof and when a second request made by the Board for a further extension of its term was turned down by the Deputy Registrar and an administrator was appointed for the Society under Section 33 that the peti-tioner had raised the above contention.

5. Though the counsel appearing for the petitioner urged the aforesaid contention before this Court also. I do not find any force in the argument advanced by him that on a correct interpretation of bye-laws Nos. 33 and 34 of the Bvc-laws of the Societv the term of office of the Board of Directors would expire only on 31-1-1971. It is admitted that the Board of which the petitioner was the President was inducted into office pursuant to an election held on 19-1-1969 and the Board took charge on 31-1-1969. Under bye-law 33 the term of the elected members of the Board is only two vears. Rule 39 of the Co-operative Societies Rules lavs down that the bve-laws of everv Societv shall provide that the term of its committee shall expire on the same date as may be specified and that all the members of the committee including those elected in casual vacancies, whether representing Societies or individuals, shall vacate their office on the dates specified irrespective of the dates on which they were elected as members of the committee. That rule also states that if no such date is specified in the bye-laws the date of expiry shall be the 30th of June of the year in which the term expires. The word 'year' has been defined in Section 2 (u) of the Act as meaning 'the period commencing on the first day of July of any year and ending on the 30th June of the succeeding year or in the case of any registered Society or class of registered societies, the accounts of which are to be made up to any other date with the previous sanction of the Registrar, the year ending with such date.' In the present case the first part of the definition alone is applicable and hence in respect of the Co-operative Society with which we are concerned the year is the period commencing on 1st July and ending on the succeeding 30th day of June. Since the Board of Directors took office on 31-1-1969, their term of office was therefore to expire on 30-6-1970 as rightly held by the Deputy Registrar and the Tribunal. The petitioner's contention that his term of office was to enure till 31-1-1971 cannot therefore be accepted. I find that the above interpretation placed by me on bye-law No. 34 is supported by the view taken by a Division Bench of this Court in O. P. No. 2523 of 1967 (Ker) where also this Court had occasion to consider the identical question with reference to a bye-law which was similarly worded.

6. The Position then is that the petitioner was no longer the President of the Society nor even a member of the Board of Directors of the Society at the time when he instituted this writ petition and he was only just an ordinary member of the Society. On behalf of the respondents a preliminary objection has been taken that the impugned order whereby an administrator had been appointed to look after the affairs of the Society until fresh elections are held and a new Board is constituted, does not in any manner affect any legal right of the petitioner and that therefore the petitioner has no locus standi to challenge the said order before this Court. I find considerable force in this objection, but it is unnecessary for me to finally decide that point because even on the merits of the contentions taken by the petitioner I am of the view that the writ petition has only to fail.

7. The two points raised by the petitioner have been already noticed. The first is that in passing the order Ext. P2, the Deputy Registrar has omitted to cpmplv with the requirement of Section 33 relating to consultation with the Circle Co-operative Union. The argument of the petitioner's advocate is that the provision in Section 33 requiring such consultation is mandatory in character and that a contravention thereof renders the impugned order invalid and void. In this context it is necessarv to extract the relevant portion of Section 33 which is in the following terms:--

'33. Appointment of new committee or administrator on failure to constitute committee, etc. -- (1) Where the term of office of a committee has expired and a new committee has not been constituted or where the Registrar is satisfied-

(a) that a new committee cannot be constituted before the expiry of the term of office of the existing committee; or

(b) that a new committee is prevented from entering upon office or a new committee fails to enter upon office on the date on which the term of office of the existing committee expires, the Registrar may, either suo motu or on the application of any member of the society, after consulting the circle cooperative union, appoint-

(i) a new committee consisting of not more than three members of the Society; or

(ii) one or more administrator or administrators who need not be a member or members of the society to manage the affairs of the society till a new committee enters upon office.

Provided that before making such order, the Registrar shall publish a notice on the notice board of the head office of the society inviting obiections to the making of the order within a period specified in the notice and consider such obiections:

Provided further that it shall not be necessary to publish such notice in cases where the Registrar is satisfied that it is not reasonably practicable to do so.

XXX X X'

In support of the contention that the condition enioining consultation with the Circle Co-operative Union is mandatory in character the petitioner relied on the decisions of the Supreme Court reoorted in Banwarilal Agarwalla v. State of Bihar (AIR 1961 SC 849) and Chandramoule-shwar Prasad v. Patna High Court. (AIR 1970 SC 370) and also on a ruling of the Madras High Court reported in R. Push-pam v. State of Madras (AIR 1953 Mad 392). On behalf of the respondents the Government Pleader submitted that the test for determining whether a particular satutory provision is mandatory or only directory has to be determined with reference to the context or setting in which it appears and the purpose for achieving which the provision has been enacted by the legislature. It is argued by the Government Pleader that it could never have been the intention of the Legislature that an omission to comply with the require-ment regarding consultation with the Cooperative Union should render void the action taken under Section 33 since it would result in very serious public inconvenience if the Society's administration should be left in a state of chaos merely on account of the default committed by the official concerned in the matter of complying with the aforementioned procedure. It is urged that by such a construction the very object of the section, namely that of making an emergency arrangement for the conduct of the affairs of the Society in the interregnum between the expiry of the term of office of the previous Board of Directors and the election of the next Board would be completely defeated.

8. After giving my anxious consideration to the arguments advanced on both sides. I have come to the conclusion that the correct interpretation to be placed on Section 33 is to construe the words 'after consulting the Circle Cooperative Union' occurring therein as being only directory in nature. The distinction between discretionary and compulsory powers has been pointed out by Sir Arthur Channell in the leading decision of the Privy Council reported in Montreal Street Rly Co. v. Normandin, (1971 AC 170) = (AIR 1917 PC 142) in these words:--

'The question whether provisions in a statute are directory or imperative has verv frequently arisen in this country, but it has been said that no general rule can be laid down, and that in every case the object of the statute must be looked at.....When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to presons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done.'

The above dictum of the Privy Council was cited and followed by our Federal Court in Biswanath Khemka v. Emperor (AIR 1945 FC 67). In that case the Federal Court had to consider the effect of non-compliance with the provisions of Section 256 of Government of India Act 1935 which was in the following terms:

''No recommendation shall be made for the grant of magisterial powers or of enhanced magisterial powers to or the withdrawal of any magisterial powers from any person save after consultation with the District Magistrate of the district in which he is working, or with the Chief Presidency Magistrate, as the case may be.'

The Federal Court held that the provision contained in Section 256 was only directory and not mandatory and that non-compliance with it would not render an appointment otherwise regularly and validly made ineffective or inoperative. The learned Judges observed that:

'Any other view would lead in many cases to results which could not have been intended by Parliament and would entail general inconvenience and iniustice to persons who have no control over those entrusted with the duty of making recommendations for the grant of magisterial powers.'

In State of U. P. v. Manbodhan Lal (AIR 1957 SC 912) the above decision of the Federal Court was referred to with approval by the Supreme Court and following the principles laid down therein It was held that the provision in Article 320(3)(c) of the Constitution which prescribe that the Union Public Service Commission or the State Public Service Commission, as the case may be, shall be consulted on all disciplinary matters affecting a person serving under the Government of India or under the State Government in a civil capacity including memorials or petitions relating to such matters is only directory in character. In State of Punjab v. Satya Pal Dane (AIR 1969 SC 903) one of the questions which arose for decision before the Supreme Court was whether the provision in Article 199(4) of the Constitution laving down the require-ment that there shall be endorsed on every Money Bill when it is transmitted to the Legislative Council under Article 198, and when it is presented to the Governor for assent under Article 200, the certificate of the Speaker of the Legislative Assembly signed by him that it is a Money Bill is mandatory or only directory. In dealing with this question the following observations were made by Their Lordships which may be usefully extracted:

'There are several tests to determine when the provision may be treated as mandatory and when not and they have been culled from books and set down by Subba Rao J. (as he then was) in State of Uttar Pradesh v. Babu Ram Upadhya, 1961 (2) SCR 679 (at p. 710) = (AIR 1961 SC 751 at P. 765) and earlier by Venkata-rama Iyer J. in State of Bombay v. R M. D. Chamarbaugwala, 1957 SCR 874 at D. 950 (sic). For our purpose it is necessary to emphasise only one distinction. In those cases where strict compliance is indicated to be a condition precedent to the validity of the act itself the neglect to perform it as indicated is fatal. But in cases where although a public duty is imposed and the manner of performance is also indicated in imperative language, the provision is usually regarded as merely directory when general injustice or inconvenience results to others and they have no control over those exercising the dutv.

Judged from this test the provisions of Article 199(4) cannot be viewed as mandatory but only as directory. If the Constitution saw the necessity of providing a Deputy Speaker to act as the Speaker during the latter's absence or to perform the office of the Sneaker when the office of the Speaker is vacant, it stands to reason that the Constitution could never have reposed a cower of mere certification absolutely in the Speaker and the Speaker alone. The happenings in the Assembly lend support to this inference. It is reasonable to think that the Speaker in his then mood might have declined to certify and a second impasse would have ensued. A similar situation may arise not because of intransigence but because of illness or absence. The inconvenience to the State and the public at large is avoided by holding the provision to be directory and not imperative.'

Judged by the test laid down in the above decisions I have no hesitation to hold that the provision relating to consultation with the Circle Co-operative Union contained in Section 33 is only directory in character because- if due regard is had to the scheme of the Act and the purpose for which the section itself has been enacted it would not be reasonable to think that the Legislature would have intended that non-compliance with the said require-ment should bring about the disastrous result of lending the affairs of the Society in utter confusion by invalidating the appointment of the administrator and creating a state of vacuum in the administration of the Society. It has to be noted that the power conferred by Section 33 is to be invoked only when the term of the office of the committee of a Society has already expired and a new committee has not been constituted and in consequence an emergency has arisen requiring immediate action being taken for placing the affairs of the Society in the charge of some person or podv of persons by way of an interim arrangement pending the election of a new committee. The said purpose will be wholly defeated if merely on account of a technical irregularity committed by the officer exercising the power under Section 33 in omitting to consult the Circle Co-operative Union the appointment of the administrator is itself to be held void. The functions of the Circle Cooperative Union have been enumerated in Rule 141 of the Co-operative Societies Rules and it is significant that the rendering of any advice or opinion in regard to a proposal for the appointment of an administrator for a Society is not one of the matters specifically mentioned therein. Further, any opinion that the Circle Cooperative Union may express on its being consulted is not at all made binding on the Registrar and in such circumstances it is not reasonable to regard the require-ment for consultation with such a body as mandatory in character in the absence of any other indication in the statute supporting such a conclusion -- see AIR 1957 SC 912.

9. It is true that while passing the impugned order an irregularity has been committed by the Deputy Registrar in not properly complying with the require-ments of the section. Such remissness on the part of any official is certainly not to be commended. Even if a statutory pro-vision is not mandatory in character, it is expected that the officers who are charged with the responsibility of administering the powers under the statute, would duly complv with the procedure laid down by it while exercising such powers. The inconvenience and loss that would inevitably result to the Co-operative Society concerned and also to the general public who have no control over the functioning of the officials entrusted with the statutory duty, is the main consideration which detracts the Court from holding that such provisions are mandatory in character. To hold null and void acts done in respect of such a duty would work serious general inconvenience to the members of the Society and any interpretation of the statute which would lead to such a result would as far as possible, be avoided by the Court if without doina violence to the language employed by the Legislature it is reasonably possible to construe the Section as only directory in nature. I accordingly hold that the provision in Section 33 of the Act requiring consultation with the Circle Co-operative Union is only directory in character and that non-compliance with the said require-ment will not bring about the result of invalidating the appointment of the administrator.

10. The next contention urged by the petitioner is that there has also been a similar default committed by the Deputy Registrar in the matter of complying with the reauirement of the first proviso to Section 33 relating to publication of a notice on the notice board of the Society inviting objections to the making of the proposed order under Section 33. This proviso itself is followed by a further proviso which qualifies it by stating that it shall not however be necessary to publish such a notice in cases where the Registrar is satisfied that it is not reasonably practicable to do so. The reasons stated by me in the preceding paragraphs for holding that the provision in Section 33 relating to consultation with the Circle Co-operative Union is only directory will apply with equal force in regard to the requirement of the first proviso also. But it is really unnecessary in this case to decide whether the said provision is mandatory or only directory because it is clear from the impugned order that the Registrar was satisfied that the action had to be taken very emergently in view of the circumstance that even the extended term of the committee had already expired and still no steps for holding an election had been taken with the result that there was no validly constituted committee to be in charge of its day to day administration. Under the second proviso to Section 33 it is permissible for the Registrar to dispense with the procedure prescribed by the first proviso in cases where very urgent action has to be taken and it is not Practicable to wait till objections are called for and considered before action under the section is taken. It is obvious from the records that the Registrar considered the present case to be one of extreme urgency. The second contention advanced by the petitioner also, therefore, fails.

11. The original petition falls and is dismissed. The parties will bear their respective costs.


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