Telangana High Court
The Nalgonda And Ranga Reddy Milk ... vs The State Of Telangana on 24 January, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 33775 OF 2023
ORDER:
Challenge in this Writ Petition is to the order of the 3rd respondent No. 3 in proceedings Rc. No.4100/2023- MACS/Comp., dated 09.12.2023 passed under Section 21(6)(a) of the Telangana State Mutually-Aided Cooperative Societies Act, 1995 (hereinafter referred to as '1955 Act', for brevity) disqualifying the entire board of petitioner Cooperative Society without following due process of law as being illegal, arbitrary and in violation of the rights of petitioner granted under the Constitution of India.
2. The case of petitioner is that it is the Society formed and registered under the 1995 Act, having primary societies of members involved in the business of milk production and procurement from its members at village level and sale to prospective consumers within the State of Telangana and outside the State for the benefit of its members and farmers. As on date, petitioner Society consists of about 275 eligible members with a Board of 15 members as Directors. As per the bye-laws of petitioner Society, three Members of the Board shall retire every year upon their completion of term of their office of 2 five years and the vacancy so arising shall be filled by way of conducting election to be held on 30th September every year. It is stated that as three vacancies have arisen in 2023 and petitioner Society vide Board Resolution dated 25.07.2023 resolved to conduct election and appointed Sri G.V. Hanumantha Rao as Election Officer to conduct the election; vide communication dated 11.08.2023, all the relevant material as regards requirement of conduct of election had been duly submitted to Election Officer; vide communication dated 17.08.2023, a Draft Schedule of election program has been communicated to Sri G. V. Hanumantha Rao; hence, election notification dated 01.09.2023 has been issued to public in general under Rule 22(8)(a) of the 1995 Act fixing the date of receipt of nomination as 19.09.2023, 20.09.2023 and 21.09.2023 from 11.00 AM to 3.00 PM at Mother Dairy, Hayathnagar Meeting Hall. As per the said Notification, scrutiny of nomination so filed shall be done on 22.09.2023 and date of withdrawal was fixed as 23.09.2023. The final list of the members participating in the election shall be declared on 23.9.2023 after 5.00 pm. Further, it is stated that if at all nominations are limited to members of the vacancy and the said members would have to be declared as unanimous, the same shall be declared on 23.09.2023 after 5.00 PM and on the 3 contrary, if there are more members than number of nominations that required for the vacancy, date of election was fixed as 27.09.2023 to be held between 8.00 a.m. and 1.00 p.m and counting of votes of election so held shall be declared after 2.00 p.m. on the very same day. Petitioner further contended that the said resolution to conduct election, appointment of Election Officer, subsequent notification for conduct of election had been duly submitted to the Office of the 3rd respondent i.e., The District Cooperative Officer, Ranga Reddy District and it is only with the consent of the 3rd respondent that procedure had been adopted in accordance with the Act. It is stated that as per the definition of 'Society' in the bye-laws, a member shall be eligible to vote if at all he has produced milk quantity of 15,000 liters per annum; and any flaw in the said production to the substantial level shall make the member lose his right to vote. However, few members of the Society have addressed letters dated 02.09.2023 and 04.09.2023 seeking clarification regarding eligible voters list for conduct of proposed election and have raised objections to certain members who become ineligible to vote due to various reasons as mentioned in the respective letters. Accordingly, petitioner Society and the existing Board had no other option but to postpone the election pending finalization of voters list. According to petitioner, the 4 same has also been conveyed to Election Officer vide communication dated 08.09.2023 seeking his permission to postpone the election.
Further, it was stated by petitioner that General Body has specifically conducted a meeting on 08.09.2023 with a specific agenda to postpone conduct of election and supplementary notification has been issued by the Election Officer vide proceedings Lr. No. 24/MD/NR/2023, dated 09.09.2023. According to petitioner, the said update has also been conveyed to the 3ed respondent on regular basis through the 4th respondent. It is contended at that juncture, petitioner Society was saddled with impugned order in Proceedings Rc No.4100/2023-MACS/Comp, dated 09.12.2023 disqualifying the Chairman and Directors of petitioner Society under Section 21(6)(a) of the 1955 Act.
3. Learned counsel for petitioner Sri L. Arvind Reddy contends that the impugned order dated 09.12.2023 is off-shoot of the representations of certain Presidents of Primary Milk Producer's Mutually Aided Cooperative Societies Limited and a petition enquiry has been conducted for non-conduct of election. Such proceedings have neither been intimated nor notified to petitioner and no opportunity of hearing has been 5 provided to before conclusion of said proceedings and issuance of impugned order as such the same amounts to violation of principles of natural justice. It is further contended that the 3rd respondent had absolutely misconstrued the provisions of TS MACS Act, 1995 more specifically Section 21(1) is attracted only in case of non-issuance of any notification to conduct election. Bare reading of the order clearly describe the schedule of election, revision cases for conduct of election and resolution of the Board for conduct of election and resolution of the Board for postponing of election and relevant notification issued by the Election Officer. In the background of these facts, learned counsel for petitioner contended that the impugned order dated 09.12.2023 passed by the 3rd respondent is in absolute violation and contrary to the provisions of the Statute and required to be quashed as being illegal, arbitrary and in principles of natural justice.
4. Learned Government Pleader for Cooperation contended that certain Presidents of Primary Milk Producers Mutually Aided Cooperative Societies Ltd. have submitted representation alleging that the Managing Committee members of Nalgonda and Rangareddy Milk Producer's Mutually Aided Cooperative Union Ltd., Rangareddy (hereinafter referred to as NARMUL) failed to conduct elections to three vacant director 6 posts within the stipulated time i.e. September, 2023 and as a result, they have attained disqualification under Section 21(6)(a) of the Act. On receipt of the said complaint, the 3rd respondent directed the 4threspondent to verify the contents of complaint and submit a detailed report. Accordingly, the 4th respondent after enquiry submitted a detailed report dated 08.12.2023 stating that as per the Registered Bye-law. No.22.1 and 22 of Nalgonda and Rangareddy Milk Producer's Mutually Aided Cooperative Union Ltd., Rangareddy, size of the Board including two women directors is 15 and the term of the Board is five years. Further, as per Bye-Law. No. 23(3) of NARMUL, three director vacancies arise at the end of every year and will be filled through elections by the General body before 30th September every year. The 4th respondent also reported that the Board of Directors of NARMUL in its meeting held on 25.07.2023 under agenda item.No.4, resolved to appoint Sri G.V. Hanmanth Rao, Retired Assistant Registrar as Election Officer to conduct elections for three vacant director posts. The Election Officer has issued Election Notification through proceedings Rc.No.45/Elections/2023, dated 01.09.2023 which was scheduled from 19.09.2023 to 27.09.2023 through General Body meeting. It is also contended that in the General Body Meeting dated 27.09.2023, it was resolved that election to three 7 vacant director posts was postponed due to objections raised against the voting rights of some representatives of member societies. The 4th respondent further reported that the Board of NARMUL has failed to conduct elections to fill three vacant posts within the specified time, therefore, the entire Board incurred disqualification and ceased to be continued as directors of NARMUL for the remaining term and requested to initiate suitable action against them as per the provisions of the 1955 Act. It is submitted that on receipt of report from the 4th respondent, the 3rd respondent passed impugned order dated 09.12.2023 disqualifying the entire Board of NARMUL under the provisions of Section 21(6) of the Act and held that they are ceased to be directors of NARMUL for the remaining term. Further, the 3rd respondent also vide impugned orders asked the Managing Director of NARMUL to convene the General Body meeting with all the members and suggest the names of three members for the purpose of appointing an ad hoc Board for specific purpose of conducting elections to the Board of Directors of NARMUL under Section 23 of the Act and further contended that the impugned order passed by the 3rd respondent is perfectly valid, legal and in the interest of Society and the same does not warrant any interference of this Hon'ble court under article 226 of the Constitution of India. It was the 8 specific contention of the 3rd respondent that four directors of NARMUL filed O.P No.29 of 2023 before the Cooperative Tribunal at Hyderabad against the impugned order and the matter is pending before the Tribunal. Petitioner without availing alternative remedy available under the Act filed the Writ Petition and prayed this Court to vacate the interim order dated 14.12.2023 and dismiss the above Writ Petition.
5. Sri P. Harsha Reddy, learned counsel on behalf of the 5th respondent who got impleaded vide order dated 28.12.2023, submits that four out of Fifteen Directors preferred O.P. No.29 of 2023 before the Telangana Co-Operative Tribunal, Hyderabad on 12.12.2023 challenging the order of the 3rd respondent dated 09.12.2023 and petitioner approached this Court, challenging the very same proceedings on 13.12.2023 which amounts to forum shopping. Further, it was contended that writ petition is not maintainable as petitioner has an efficacious alternative remedy before Co-Operative Tribunal.
6. It is an admitted fact that petitioner Society consists of about 275 eligible members with a Board of 15 Members as Directors. Petitioner Society has been registered vide No. A.M.C. 137 on the file of the Registrar of Cooperative Societies and had been operating for the benefit and welfare of Members of the 9 Society in particular and farmers in general. As per the bye-laws of Society, three Members of the Board shall retire every year upon their completion of term of their office of five years and vacancy so arising shall be filled by way of conducting election to be held on 30th September of every year. Further three vacancies have arisen in 2023 and petitioner Society vide Board Resolution dated 25.07.2023 had resolved to conduct election and appointed Sri G.V. Hanumantha Rao as Election Officer to conduct election; vide communication dated 11.08.2023, the relevant material as regards the requirement of conduct of election had been duly submitted to the Election Officer; vide communication dated 17.08.2023, a Draft Schedule of election program has been communicated to Sri G. V. Hanumantha Rao, hence election notification dated 01.09.2023 has been issued to public in general under Section 22(8)(a) of the 1955 Act fixing date of receipt of nomination as 19.09.2023, 20.09.2023 and 21.09.2023 from 11.00 am to 3.00 pm at Mother Dairy, Hayathnagar Meeting Hall. As per the said Notification, scrutiny of nomination so filed shall be done on 22.09.2023 and date of withdrawal of nomination is fixed as 23.09.2023. The final list of the members participating in the election shall be declared on 23.09.2023 after 5.00 pm. Further, it is also not in dispute that if at all nominations are limited to members of the vacancy and 10 said members would have to be declared as unanimous, the same shall be declared on 23.09.2023 after 5.00 pm. and on the contrary, if there are more members than number of nominations that required for vacancy, the date of election was fixed as 27.09.2023 to be held between 8 am. and 1 pm. Counting of votes shall be declared after 2 pm on the very same day. Further, according to petitioner Society, few members of Society have addressed letter dated 02.09.2023 and 04.09.2023 seeking clarification regarding eligible voters list for conduct of proposed election and raised objections to certain members who became ineligible to vote due to various reasons as mentioned in the respective letters. Accordingly, petitioner Society and the existing Board claims that it had no other option but to postpone the election pending finalization of voters' list. According to petitioner, the same has also been conveyed to Election Officer vide communication dated 08.09.2023 seeking permission to postpone the election. In the interregnum, the 3rd respondent received several complaints from some of the Primary Milk Producers' Mutually-Aided Cooperative Societies Ltd. including the 5th respondent who is also the President of Velupally Milk Producers Mutually Aided Cooperative Society in regard to violation of the provisions of Act, 1995 by petitioner Society and upon receipt of the same, the 3rd respondent had 11 directed the 4threspondent to verify the contents of the complaint and submit a detailed report. Accordingly, the 4th respondent after enquiry submitted a detailed report dated 08.12.2023 stating that as per the registered Bye-law No. 22.1 and 22 of Nalgonda and Rangareddy Milk Producer's Mutually Aided Cooperative Union Ltd., Rangareddy, the size of the Board including twos women directors is 15 and the term of Board is five years. Further, as per Bye Law No. 23(3) of NARMUL, three director vacancies arise at the end of every year and will be filled through elections by the General body before 30th September every year. The 4th respondent also reported that the Board of Directors of NARMUL in its meeting held on 25.07.2023 under agenda item.No.4, resolved to appoint Sri G.V. Hanmanth Rao, Retired Assistant Registrar as Election Officer to conduct elections for three vacant director posts. The Election Officer issued Notification through his proceedings dated:01.09.2023 which was scheduled from 19.09.2023 to 27.09.2023 through General Body meeting. In the General Body Meeting dated 27.09.2023, it was resolved that elections to three vacant director posts was postponed due to objections raised against the voting rights of some representatives of member societies. The 4th respondent further reported that Board of NARMUL has failed to conduct elections to fill the three vacant posts within 12 the specified time and therefore the entire Board incurred disqualification and ceased to be continued as directors of NARMUL for the remaining term and therefore requested to initiate suitable action against them as per the provisions of the Act, 1995. Accordingly, on receipt of report from the 4th respondent, the 3rd respondent passed impugned order disqualifying the entire Board of NARMUL under the provisions of Section 21(6) of the Act, 1995 and held that they are ceased to be directors of NARMUL for the remaining term. Further the 3rd respondent also vide impugned orders asked the Managing Director of NARMUL to convene the General Body meeting with all the members and suggest the names of three members for the purpose of appointing an ad hoc Board for specific purpose of conducting elections to the Board of Directors of the NARMUL under section 23 of the Act.
7. At the outset, this Court feels that the present Writ Petition is liable to be dismissed for approaching this Court with unclean hands and for not producing all the documents relevant for the present lis, as such petitioner would be guilty of playing fraud on the court as well as on respondents herein. In S.P. Chengalvaraya Naidu v. Jagannath 1, the Hon'ble Supreme Court held that a judgment or decree which is obtained by fraud 1 (1994) 1 SCC 1 13 is to be treated as nullity and can be questioned even in collateral proceedings. Non-disclosure of relevant material documents with a view to obtain advantage amounts to fraud. At paragraph Nos.5 and 6, the Hon'ble Supreme Court has further held as under:
" The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax- evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal-gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation.
A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. ........... A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as on the opposite party."
This view is also countenanced by the Division Bench of this Court in Komitireddy Janakiram Reddy vs. State of Telangana 2. Admittedly, in the present case, some of the Directors of petitioner Society preferred O.P.No.29 of 2023 2 2022 (5) ALD 670 14 before the Telangana Co-operative Tribunal at Hyderabad under Section 37(1)(e) of the Act challenging the very same impugned order which is the subject matter of the present Writ Petition and the said O.P. is still pending for adjudication before the Tribunal. Petitioner Society is completely silent regarding the said crucial fact in its entire affidavit. It is nothing but approaching this Court with unclean hands, and as such this Hon'ble opines that the writ petition of the petitioner society deserves to be dismissed.
8. Further, learned counsel for the 5th respondent Sri Harsha Reddy vehemently argued that Writ Petition is not maintainable in view of availability of efficacious alternative remedy and to buttress his contention, he relied on the judgment of Hon'ble Apex Court in United Bank of India vs. Satyawati Tondon 3, relevant paragraph on which he made emphasis is extracted hereunder:
" 43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain 3 (2010) 8 SCC 110 15 comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute."
9. In view of the above discussion, this Court is not inclined to entertain the Writ petition under Article 226 of the Constitution of India as the order of the 3rd respondent in proceedings Rc. No.4100/2023-MACS/Comp, dated 09.12.2023 passed under Section 21(6)(a) of the Telangana State Mutually Aided Cooperative Societies Act, 1995 is already under challenge in O.P.No.29 of 2023 before the Telangana Co-operative Tribunal at Hyderabad and since petitioner Society is having efficacious alternative remedy of approaching the Co-operative Tribunal, this court feels that Writ Petition deserves to be dismissed on that ground.
10. Accordingly, the Writ Petition is dismissed. No order as to costs. Consequently, the miscellaneous Applications, if any shall stand closed.
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NAGESH BHEEMAPAKA, J 24th January 2024 ksld