Telangana High Court
P Bhaskar Reddy vs The State Of Telangana, on 20 March, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No. 6404 OF 2024
ORDER:
Petitioner files the Writ Petition to declare the Notice issued by the 3rd respondent under Section 34-A of the Telangana Cooperative Societies Act, 1964 (for short, 'the Act') and Rule 24-A of the Rules framed thereunder in R.C. No. 755/2024-C, dated 05.03.2024 for conducting a meeting of No Confidence against him on 21.03.2024 at the office of Nizamabad District Cooperative Central Bank, as illegal, arbitrary and unjust.
2. The affidavit reveals that petitioner hails from Pocharam Village and owns Acs.2.00 of agricultural land; due to his land ownership, he became a member of Deshaipet Primary Agricultural Cooperative Society, Deshaipet, Banswada Mandal, now Kamareddy district (for short, 'the Society'). He was elected as a Director of the Society in 2020 and subsequently, the members elected him as President of the Society.
It is noted that the District Cooperative Central Banks are formed and administered by the elected Presidents of the Primary Agricultural Cooperative Societies; therefore, representing Deshaipet Primary Agricultural Cooperative 2 Society, petitioner also holds membership in the District Cooperative Central Bank, Nizamabad.
It is stated that before bifurcation of the Districts in Telangana State, for each District, a District Cooperative Central Bank is established and registered under the Cooperative Societies Act, 1964. These DCCBs served as lending banks catering to the financial needs of Primary Agricultural Cooperative Societies (PACS) in their respective districts. Following petitioner's election as President of the Society and his subsequent membership in the District Cooperative Central Bank, Nizamabad, he was elected as the Chairman of Nizamabad DCCB in 2020. Since then, he has diligently performed his duties, resulting in a significant increase in the bank's turnover and financial stability.
It is also stated that following recent elections in Telangana, certain members of the District Cooperative Central Bank, Nizamabad have developed animosity against petitioner. Some of these members, who borrowed funds from the bank in violation of RBI Regulations, faced pressure from petitioner to repay, leading them to allege 'lack of transparency'. They submitted a proposal for No Confidence Motion to the 3rd respondent, however, the proposal lacks signature at Sl. No.14 and does not adhere to the mandatory requirements outlined in 3 Form No.AAA under Rule 6-A(1) and Section 34-A of the Act and Rule 24-A of the Rules. Specifically, the proposed motion lacks signatures in the presence of witnesses and is not accompanied by the prescribed Form AAA as required by the Rules framed under the Act. The affidavit underscores that the proposed No Confidence Motion is vague and is not supported by allegations, leaving petitioner unaware of the grounds for the Motion. Despite the same, the 3rd respondent proceeded to issue the impugned notice, which called for a meeting on 21.03.2024 at 11.00 a.m. According to petitioner, notice was served personally on 06.03.2024 and via Registered Post on 08.03.2024, falling short of the mandatory fifteen-day notice period prescribed by Section 34-A. Furthermore, public holidays should have been excluded from the notice period calculation. Consequently, the notice issued by the 3rd respondent is deemed contrary to the mandatory provisions of Section 34-A of the Act and Rule 24 of the Rules.
Upon receiving the notice, petitioner was surprised to find that some members had proposed No Confidence Motion and efforts to contact them were unsuccessful. This situation deprived petitioner of the opportunity to address any grievance they may have had, violating constitutional and democratic 4 principles as well as contravening the Rules framed under the 1964 Act and the principles of natural justice.
The 3rd respondent has no power or authority to issue the impugned notice as he was delegated with the powers of the Registrar. According to GO Ms. No. 10 Agriculture & Cooperation (Coop.II) Department, dated 30.01.2017, the powers of the Registrar are delegated to the District Cooperative Central Banks under the jurisdiction of District Collectors. Therefore, the District Cooperative Officer, acting as the Joint Registrar, lacks the authority to issue the impugned notice and convene a meeting for the purpose of 'No Confidence' and only, the Registrar of Cooperative Societies possesses the requisite authority.
3. I.A.No. 2 of 2024 was taken out to permit impleadment of Sri Kuntla Ramesh Reddy as the 4th respondent to the Writ Petition. In the affidavit filed in support thereof, it is stated that he is the Vice-Chairman of the Bank; a no confidence motion was moved against petitioner and the District Cooperative Officer, Nizamabad already examined the documents relating to no confidence motion and given the date as 21.03.2024. It is stated that though he filed caveat on 07.03.2024, he was not made a party to the Writ Petition. As petitioner has stated several irrelevant facts in the affidavit, he 5 filed the present Application. This Court, in view of the reasons stated in the said affidavit, ordered the said Application on 19.03.2024.
4. In the counter-affidavit filed on behalf of the respondents, the 3rd respondent stated that NDCCB Limited, Nizamabad was established and registered under the Act and all the Primary Agricultural Cooperative Societies from both Nizamabad and Kamareddy districts are members of the NDCCB Limited. Petitioner, having been elected as President of PACS Ltd., Deshaipet, became a member of the NDCCB Ltd., Nizamabad; subsequently, in 2020, he was elected as Chairman of NDCCB Limited, Nizamabad.
Respondent no. 3 contends that issuance of a notice of No Confidence motion, as per Section 34A and Rule 24A, does not mandate specific allegations or violations of RBI Regulations by Managing Committee members as claimed by petitioner; therefore, notice was duly issued by the 3rd respondent.
As per the Section 21-A (1) (b) " 1) No person shall be eligible for being chosen as, and for being, a member of the committee, if he -
(b) is in default in the payment of any amount due in cash or kind to the society or any other society or stood as guarantor Society/Co- executants to any member who committed 6 default, for said period as may be prescribed or is a delegate of a society which is defunct or which is in default as aforesaid." As such, the President/ Managing Committee itself have powers to cease the membership of the individuals, if the managing committee members are defaulters.
The 3rd respondent acknowledges that signature of Sl.No. 14 is missing from the motion submitted by the members of the NDCCB Ltd., Nizamabad, despite the notice stating that it was received from Sri. K. Ramesh Reddy and other 14 Managing Committee members of the Bank. This implies that only 15 members signed the motion, excluding Sl. No. 14. It is asserted that the Act grants Managing Committee members the right to initiate such motions, even if the Chairman is elected indirectly by them. The 15 Managing Committee members of NDCCB Ltd., Nizamabad submitted a notice of "No-Confidence Motion" on 04.03.2024 and requested the 3rd respondent to convene a meeting for its consideration promptly, providing it in the prescribed Form-AAA. However, it is argued that there is no specific format prescribed for submitting a No-Confidence Motion in the Act, as Rule 6 and 6A were omitted by G.O.Ms. No.37 Agril & Coop. (Coop-IV), dated 28.01.2002. Hence, use of Form-AAA, prescribed under Rule 6-A(1) of the Rules is deemed 7 meaningless, as such it is not necessary to take signatures of two witnesses.
It is submitted that, as per Rule 24-A (1), as soon as the notice along with a copy of the Motion expressing no- confidence is received, the Registrar shall, notwithstanding anything in the byelaws, convene a meeting of the committee. Accordingly, the 3rd respondent has given notice to all the Managing Committee members of the NDCCB Ltd., Nizamabad for conduct of open debate and voting on "No confidence motion" received. Further, as per Sec 34-A(10), the Registrar shall not speak on the merits of the motion and he shall not be entitled to vote thereon. Hence, there is no scope to talk about "No Transparency" which was alleged by the Members of the Bank in No confidence Motion.
It is also stated that as per Section 34 A (3) of the Act, the Registrar shall then convene a meeting for consideration of the motion at the office of the Society on a date appointed by him which shall not be later than thirty days from the date on which the notice under sub-section (2) delivered to him. He shall give to the members notice of not less than fifteen clear days from the date of notice of such meeting in such manner as may be prescribed. The notice issued for No 8 Confidence Motion meeting on 21.03.2024, provided a 15-day span, excluding both the first and the last day, aligning with the definition of "clear days." Therefore, exclusion of public holidays is not mandatory, in accordance with Section 34-A of the Act and Rule 24 A of the Rules. The 3rd respondent issued notice on 05.03.2024, after receiving a motion from 15 Managing Committee members of NDCCB Ltd., Nizamabad on 04.03.2024, requesting a meeting for consideration of the proposed No Confidence Motion. The notice was served on all 20 Members in person with acknowledgment from the individuals, refuting the claim that they were out of station.
It is stated that the government has delegated powers of Registrar of Cooperative Societies to the departmental authorities vide G.O.Ms.No.10 Agril & Coopn., (Coop-II), dated 30.01.2017 as under.
S.NO AUTHORITY Types of Extent of power
cooperative
societies
1. District Collector (i) District All powers of the
Cooperative Registrar under
Central Banks
the Act except those
under Sections 4(2),
17,18, Sections32(7), 34,
50, 64 (1),77, 86, 115,
116, 116-A and 116-C
and the powers of the
Registrar under Rules
4,12,28,29,34(14),
39,41,45, 59, 68
2. Deputy Registrar (i) District All the powers of the
of Cooperative Cooperative Registrar All powers
9
Societies/Special Central Banks under the Act, except
Cadre Deputy and District those under Sections
Registrars/Joint Cooperative 4(2),17,18,32(7),34,50,60,
Registrar working Marketing 64 (1),77, 86, 115, 116,
as District Societies 116- A and116-C and the
Cooperative powers of the Registrar
Officers under Rules 4,12,28,29,
34(14),39,41,45, 59, 68.
Hence, the District Cooperative Officer acting as Joint Registrar, is having power to entertain notice of No confidence motion and issued notice. The District Cooperative Central Bank (DCCB) in Nizamabad was established before the district's bifurcation in 2016 and remains undivided despite the administrative division of the district. As the DCCB is registered in the erstwhile Nizamabad District, the administrative jurisdiction falls under the District Cooperative Officer, Nizamabad. Therefore, the respondent, as the District Cooperative Officer, Nizamabad, has the authority to issue notices for convening meetings related to No Confidence motions. This action is not illegal, arbitrary, or in violation of principles of natural justice.
It is finally stated that as per Section 76 of the Act, any person or Society aggrieved by any decision passed or order made under Sections 6, 9A, 9B, 9C, 12A, 13, 16, 17, 19, 21, 21A, 21AA, 23, sub-section (3) of Section 32, 34, 34A, 60, 62, 64, 66, 70, 71, 73 and 117 may appeal to the Tribunal. Hence, the petitioner has a remedy under Section 76 of the Act. Hence, 10 it is submitted that, there is no violation of the Principles of natural justice and the contentions of the Petitioner is not correct.
5. Heard learned counsel for petitioner Sri Emamsetty Akhil, learned Government Pleader for Cooperation and Sri K. Durga Prasad, learned counsel for the 4th respondent.
6. The prime allegation of petitioner is that notice issued by the 3rd respondent is contrary to the mandatory provision of Section 34-A of the Act, which reads as under:
" 34-A. Motion of No Confidence in the President and Vice-President of the Committee:
(2) A written notice of intention to make the motion, signed by not less than one-half of the total elected membership of the committee including vacancies if any as constituted under Section 31 of this Act together with a copy of the proposed motion shall be delivered in person, by any two of the members signing the notice, to the Registrar having jurisdiction over the society.
(3) The Registrar shall then convene a meeting for the consideration of the motion at the office of the society on a date appointed by him which shall not be later than thirty days from the date on which the notice under sub-section (2) delivered to him. He shall give to the members notice of not less than fifteen clear days from the date of notice of such meeting in such manner as may be prescribed."
The mentioned provision clearly says that members shall be given notice of not less than fifteen clear days from the date notice. According to petitioner, notice dated 05.03.2024 was served personally on 06.03.2024 and via Registered Post on 08.03.2024, falling short of the mandatory fifteen-day notice 11 period prescribed by Section 34-A. Furthermore, public holidays should have been excluded from the notice period calculation. Here, it is apt to not that in K. Sujatha v. Government of Andhra Pradesh 1, it is held that dispatch of notice of motion to every member with clear 15 days between the date of issue of notice and the date of convening the meeting is mandatory, but the service of said notice on a member with less than 15 clear days prior to the date of meeting is not mandatory. It has also been interpreted by a Full Bench of this Court that purpose and object of giving notice of consideration of no confidence motion is only to give due intimation to the members or information of the proposed meeting. Proceedings cannot be said to be vitiated on that ground unless it is shown that a prejudice has been caused to the said member due to short fall in the notice. Learned Government Pleader also cited the judgment of High Court of Kerala at Ernakulam in WP(C) No. 20935 of 2022 wherein it was held that 'the fifteen clear days notice contemplated in Rule 43-A(ii) of the Kerala Cooperative Societies Rules, 1969 can only mean that fifteen clear days shall intervene the date of issue of notice and the date of meeting. The Rule does not provide that there shall be fifteen clear days between the date of receipt of notice and the date of meeting. In 1 2004(3) ALD 1(FB) 12 Joseph Varghese v. BDO, Ranni 2, the Kerala High Court held that if the date of receipt of notice is taken as criteria for counting seven clear days, any member can dodge the receipt of notice for a few days and effectively prevent any meeting being held for consideration of the motion. Therefore, it was held that seven clear days contemplated under sub-section (4) of Section 157 of Kerala Panchayat Raj Act, 1994 has to be counted from the date of despatch of notice. The Hon'ble Supreme Court in Jai Charan Lal Anal v. State of U.P. 3 interpreting the provisions of U.P. Municipalities Act, dealing with 'seven clear days notice' in the matter of motion of no confidence held that seven clear days shall intervene the date of despatch of notice and the date of meeting. Therefore, 'not less than fifteen clear days of notice of such meeting', as provided in Rule 43-A(ii) has to be understood as 15 clear days computed from the date of issue of notice and not from the date of service of notice. If any other interpretation is given, it will make the provisions unworkable as it is always possible that a person may evade the service for a longer period to frustrate the holding of the meeting for passing the motion of no confidence.
2 2003 (1) KLT 321 3 AIR 1968 SC 5 13
7. In the instant case, the impugned notice dated 05.03.2024 was issued to convene the meeting on 21.03.2024 which shows that there is a clear fifteen days span. Hence, in view of the aforesaid precedents set out by the Kerala High Court as well as the Hon'ble Apex Court, it can be said that the mandate of clear fifteen days as provided in Section 34-A(3) has been followed.
8. As regards the other contentions that in the motion, Sl.No.14 is not signed, respondents have agreed that out of Sl.Nos. 1 to 16, the signature of Sl.No.14 is not there; as stated in the counter, 15 Managing Committee members have submitted notice of no confidence motion on 04.03.2024 duly signed thereon and requested the 3rd respondent to convene a meeting and they have submitted in the prescribed format i.e. Form-AAA, though there is no specific format prescribed therefor as Rule 6-A was omitted vide G.O.Ms.No. 37, dated 28.01.2022, hence, it is not also necessary to take signatures of the two witnesses. The contention of learned counsel for petitioner in that regard do not merit consideration.
8. As far as the argument that notice is not supported by any allegation for petitioner to know, Section 34-A particularly sub-section (10) says that the Registrar shall not speak on the merits of the motion and he shall not be entitled to 14 vote thereon. Hence, there is no scope to talk about 'no transparency' which was alleged by the members of the bank in no confidence motion.
9. The contention of petitioner insofar as competency of the 3rd respondent to issue notice, the government vide G.O.Ms.No.10, dated 30.01.2017, delegated the powers of the Registrar of the DCCBs. to that of the District Collectors. The District Cooperative Officer acting as the Joint Registrar is having power to entertain notice of no confidence motion and issued notice under Section 34-A of the Act. The administrative jurisdiction of NDCCB Limited falls under District Cooperative Officer, Nizamabad and the District Cooperative Officer, Nizamabad is one of the officio members of the bank from the beginning of the Society till today, hence, the 3rd respondent has power to issue notice to convene a meeting.
10. Further, according to the respondents, under Section 76 of the Act, any person or society aggrieved by any decision passed or order made under Section 34-A has a remedy of Appeal to the Tribunal.
11. In view of the foregoing discussion, petitioner failed to make out a case to seek the relief in his favour. This Court therefore, of the view that Writ Petition is devoid of merit and is liable to be dismissed.
15
12. The Writ Petition is accordingly, dismissed. No costs.
13. Consequently, the miscellaneous Applications, if any shall stand closed.
-------------------------------------- NAGESH BHEEMAPAKA, J 20th March 2024 ksld