Telangana High Court

Kashapogu Mahesh, vs The Central Registrar Of Cooperative ... on 2 February, 2024

Author: Nagesh Bheemapaka

Bench: Nagesh Bheemapaka

       HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA

            WRIT PETITION No. 33211 OF 2023

ORDER:

This Writ Petition is filed to declare the action of the

respondents, without following the due procedure of law, in

amending the Bye-Laws 24(viii) of the 4th respondent Society

which was approved by the 1st respondent vide Proceedings

F.No.L-11016/20/1986(e), dated 28.01.2023 and without

providing Rule of reservation for SC & ST and Women

candidature under Section 15 of the Multi State Co- operative

Societies ( Amendment) Act, 2023 and issued the election

notification for elect Delegates on 28-08-2023 and conducted

elections for the delegates on 17-10-2023 & 19-10-2023 and

also announced results on 25-10-2023 to 30-10-2023 and

issued election notification for elect Directors on 11-11-2023

and elections conducted on 25-11-2023 and announced results

on 25-11-2023 at 1:30 PM of the 4th respondent South Central

Railway Employees Cooperative Credit Society Limited as

ex-facie illegal, violative of principles of natural justice and the

provisions of the Multi State Co-operative Societies Act, 2002,

the Multi-State Co-operative Societies( Amendment) Act 2023

and Articles 14, 19 & 21 of the Constitution of India and also

against the catena of judgments of this Hon'ble Court and the

Apex Court. Consequently, direct the respondents to issue fresh

election notification for the delegates and directors by following

due procedure of law which occupies the field by providing

reservation for SC & ST and Women under provisions of the

Multi State Co-operative Societies( Amendment) Act, 2023.

2. It is stated, the Managing Committee of the Society

amended Bye-Law 24 (viii) on 13.07.2022 to the effect that "has

held office as a Director of the Board for two immediately

preceding consecutive terms" in place of "has held office as a

Director of the Board/Delegate for two immediately preceding

consecutive terms" by violating Sec.11(4) (iii), (iv)(v)(vi) (vii) of the

Multi State Co-Operative Societies Act, 2002, which is violating

due procedure of law and the due procedure of law is basic

structure of the Constitution of India. Section 11(4) (iii), (iv), (v),

(vi), (vii) of the Multi-State Co-Operative Societies Act, 2002

occupies the field to amend Bye-Laws of the Society, which was

registered under Sec. 11(4) (iii), (iv)(v)(vi)(vii) for the Society

registered in 1923 under the provisions of the Act, vide Regd.

No. 1548(SCRECCSL) and serving approximately 44,000

members, who are discharging duties of the South Central

Railway. It is further stated that Section 11(4) (iii), (iv), (v), (vi),

(vii) of Act contemplates that to amend any bye-Law, Section

11(4) (iii), (iv), (v), (vi), (vii) of the Act, 2002 prescribes procedure;

in every case in which a multi-state co-operative society

proposes to amend bye-laws, an Application to register such

amendments shall be made to the Central Registrar together

with the total number of members of Multi-State Co-operative

society, quorum required for such meeting, number of members

present at the meeting, number of members who voted in such

meeting, number of members who voted in favor of such

amendments. The Society has not followed the above statutory

and mandatory provisions in amending the bye-law on

13.07.2022 and the same was approved by the Central Registrar

on 28.01.2023 and issued proceedings vide F.No.L-

11016/20/1986(e) -Reg is not tenable in the eye of law.

It is stated that based on the above-said impugned

bye-law, election notifications were issued by the 5th

respondent to elect Delegates and Directors of the Society for

five years and process started from 28.08.2023 to 25.11.2023,

without following Section 15 of the Multi State Co-operative

Societies( Amendment ) Act, 2023 and providing reservation for

Scheduled Castes, Scheduled Tribes, Women.

It is the case of petitioner that the Society has no

right to act as an individual, without following due procedure of

law, which occupies the field in amending the byelaw.

3. Petitioner filed additional affidavit stating that

Section 84 is not prescribed to deal with the election matters of

the Society and this Court is having ample power to examine the

present Writ Petition Under Article 226 of the Constitution of

India and the same has stated by an Apex Court in catena of

Judgments including in the case in Akalakunnam Village

Service Co-operative Bank Limited v. Binu N. 1

4. Learned counsel for petitioner Sri Chikkudu

Prabhakar submits that Society is a State under Article 12 of

the Constitution and the same has inserted in Constitution

under Article 243-ZH, ZI, ZK of the Constitution. Learned

counsel relied on the judgment of the the Hon'ble Apex Court in

Whirlpool Corporation v Registrar of Trade Marks,

Mumbai 2' wherein it has been held as under:

14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for "any other purpose".

(2014) 9 SCC 294

(1998) 8 SCC 1

15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field.

He submits that the Hon'ble Supreme Court in Akalakunnam

Village Service Co-operative Bank Limited's case (supra)

held as under:

" Considering aforesaid provisions of Section 69, we do not find any force in the contention of the appellants regarding availability of alternative remedy by way of filing an arbitration case under Section 69 of the Act since in our opinion dispute between the Writ Petitioners and the Bank does not come within the provisions of this Section. We are also of the view that the Bank has failed to conduct written examination and interview as per the then existing guidelines issued by the Registrar of Cooperative Societies. Indisputably, the respondent - writ petitioners moved the High Court challenging the circulars."

He submits that the above-said judgment is

applicable to this case because the 4th respondent Society has

grossly violated the provisions of the 2002 Act in amending

bye-laws and the 1st respondent approved the above-said bye-

law by violating Section 11(4)(iii)(iv)(v)(vi) and (vii) of the above-

said Act and not following Section 15 of the Multi-State

Cooperative Societies Act, 2023 (amended) by providing

reservation to SC & ST and women, amounts to gross

violation of statutes. It is submitted that the 1st respondent

approved the amended bye-law and issued registration

certificate on 28.01.2023 which is not valid in the eye of law

because it has not followed the mandatory provisions which

amounts to violation of Article 14 of Constitution. It is

submitted that when Article 14 is violated, it would have

impact on Article 21. It is argued that the 4th respondent

being a State cannot act in arbitrary and discriminatory

manner as was straight-away struck down in Union of India

v. International Trading Company 3, paragraphs 15 and 16

of which read as under:

" 15. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the State, and non- arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely

(2003) 5 SCC 437

defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness.

16. Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in a different manner which does not disclose any discernible principle which is reasonable itself shall be labelled as arbitrary.

Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary.

It is contended that the 4th respondent being a State

shall not act as an individual and it should act in accordance

with law, which occupies the field; in the present case, the bye-

law was amended without following due process of law and the

same was approved by the 1st respondent which reflects non-

application of mind and the 4th respondent Society has not been

providing reservation in conducting elections for SC, ST &

women in delegates and directors, which prescrbed under

Section 15 of the 2023 Act. It is submitted that when the whole

process is vitiated, this Court is having ample power under

Article 226 to strike down the same, as was held by the Apex

Court in Vasavi Engineering College Parents Association v.

State of Telangana 4. Para 18 reads as under:

(2019) 7 SCC 172

18. Judicial restraint in exercise of judicial review was considered in the State (NCT of Delhi) v. Sanjeev [State (NCT of Delhi) v. Sanjeev, (2005) 5 SCC 181 : 2005 SCC (Cri) 1025] as follows : (SCC p. 191, para 16)

"16. ... One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is "illegality", the second "irrationality", and the third "procedural impropriety". These principles were highlighted by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service [Council of Civil Service Unions v. Minister for the Civil Service, 1985 AC 374 : (1984) 3 WLR 1174 (HL)] (commonly known as CCSU case). If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated."

According to learned counsel, as per the amended

bye-laws, dated 28.01.2023, clause 24(viii) does not speak

about sub judice before the Central Registrar, New Delhi

whereas the amended bye-laws dated 04.02.2022 shows clause

24(viii) as sub judice before the Central Registrar, New Delhi. It

is never mentioned in the amended bye-laws, 2023, when this

matter has been heard before the Central Registrar, New Delhi,

hence irregularities and illegalities took place in the ameded

bye-laws, in the 4th respondent Society, when it is being acted in

arbitrary an discriminatory and also illegally and where the

members of the Society do not get any benefit in fair manner in

providing welfare schemes and conducting elections delegates

and directors and also the 4th respondent Society does not have

power to act illegal, arbitrary.

5. Heard Sri Gade Praveen Kumar, learned Deputy

Solicitor General on behalf of Respondents 1 and 4 and learned

Government Pleader for Cooperation on behalf of Respondents

2 and 3.

6. In this writ petition, the question which arises as a

preliminary objection is:

" Whether a writ remedy can be availed in so far as the alleged illegalities in the conduct of elections to the South Central Railway Employees Co-operative Credit Society Limited which is incorporated under the provisions of the Multi-State Co-operative Societies Act, 2002."

7. Learned counsel for petitioners contended that

elections to Railway Employees Co-operative Credit Society,

which is a Multi-State Co-operative Society, is governed by the

provisions of the Act and the Rules framed thereunder,

particularly Rule 19 of the relevant rules.

The relevant statutory provisions ie. the provision of

statute in Section 84 and Rule 19 are extracted below:

84. Reference of disputes.-(1) Notwithstanding anything contained in any other law for the time being in force, if any dispute (other than a dispute regarding disciplinary action taken by a multi-

State co-operative society against its paid employee or an industrial dispute as defined in clause (k) of Section 2 of the Industrial Disputes

Act, 1947 (14 of 1947)) touching the constitution, management or business of a multi-State co-operative society arises-

(a) among members, past members and persons claiming through members, past members and deceased members, or

(b) between a member, past members and persons claiming through a member, past member or deceased member and the multi-State co- operative society, its board or any officer, agent or employee of the multi-State co-operative society or liquidator, past or present, or

(c) between the multi-State co-operative society or its board and any past board, any officer, agent or employee, or any past officer, past agent or past employee, heirs or legal representatives of any deceased officer, deceased agent or deceased employee of the multi- State co-operative society, or

(d) between the multi-State co-operative society and any other multi- State co-operative society, between a multi-State co-operative society and liquidator of another multi-State co-operative society or between the liquidator of one multi-State co-operative society and the liquidator of another multi-State co-operative society, such dispute shall be referred to arbitration.

(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or business of a multi-State co-operative society, namely:-

(a) a claim by the multi-State co-operative society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not,

(b) a claim by a surety against the principal debtor where the multi-

State co-operative society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not,

(c) any dispute arising in connection with the election of any officer of a multi-State co-operative society (3) If any question arises whether a dispute referred to arbitration under this section is or is not a dispute touching the constitution, management or business of a multi-State co-operative society, the

decision thereon of the arbitrator shall be final and shall not be called in question in any court.

(4) Where a dispute has been referred to arbitration under sub-section (1), the same shall be settled or decided by the arbitrator to be appointed by the Central Registrar (5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996.

Rule 19 of the Multi-State Co-Operative Societies Rules, 2002

provides as under:

19. Procedure for conduct of elections.(1) The election of members of the board shall be conducted by a returning officer appointed by the board in its meeting The returning officer so appointed shall not be a member or an employee of the society.

(2) The election of the members of the board referred to in sub-rule (1) shall be conducted by secret ballot in the manner as specified in the Schedule attached with these rules.

20. Election of the Office bearers (1) The election of the office bearers of the board shall be conducted as per the programme given in the election schedule

(2) The eligibility of the candidates for the election of office bearers shall be subject to the provisions contained in sections 43 and 44 of the Act.

Sec. 45. Elections of members of the Board:-

(4) The elected members of the board shall, if the bye laws of such society permit, be elegible for re-election.

(5) The term of office of the elected members of the board shall be such, not exceeding five years from the date of elections, as may be specified in the bye-laws of a Multi State co- Operative Society.

It is vehemently contented that the Act has

undergone an amendment which is called the Multi State Co-

Operative Societies (Amendment) Act, 2023 No. 11 of 2023

issued by the Government of India dated 03.08.2023, but a

perusal of the said notification would show that the amended

provisions in rules/act would come into force from the date the

gazette notification has been issued stipulating the date of

coming into force of the amended provisions. Petitioners are

unable to place any gazette notifications that particular

provisions in the amended act/rules have been gazetted and

therefore it has to be concluded that the amended provisions for

non-publication in the official gazette, have not yet come into

force and those provisions would come into force only as and

when relevant gazette notifications are issued as per section 1

(2) of the amended provisions of the Act.

Section 1 (2): It shall come into force on such date as the

central government may, by notification in the official gazete,

appoint; and different dates may be appointed for different

provisions of this Act and any reference in any such provision to

the commencement of this Act shall be construed as a reference

to the coming into force of that provision.

It is settled law that a Writ Court would not

entertain the Election disputes, since the remedy is in the form

of Election Petition under Section 84 (2) of the Multi-State Co-

operative Societies Act. However, it has been argued that certain

reservations are provided by the amended provisions of the

statue and without abiding by the reservations in favour of

SC/ST, the present election notification dated 12.05.2023, has

been issued, hence the entire election of the delegates onwards

is vitiated.in Sruthi Venkatesh Vs. Election Committee, Sri

Somavamsha Shasatrarjuna Kshatriya Mutually Aided Co-

Operative Thrift Society Ltd. Rep By Its Committee

Members And Others 5 held as under:

" 13. It is settled principle of law that once election process is set in motion Courts of law should not interject the process. All issues relating to elections, including drawing up voters list is part of election process. A person aggrieved by any aspect relating to elections has to wait till the entire process is completed and results are announced and can agitate only in the form of election dispute. It is the consistent view of this Court that once election process is set in motion, the High Court should not interfere and stall the elections. In election matters, no remedy is provided at intermediate stage and only remedy is Election Petition after the election is over. [Kalla Ramakrishna v. State Election Commission : (2005) 1 AP LJ 11 (HC)(FB); Prattipati Bhagyamma v. Election officer : (2005) 6 ALD 350; Dhulipaka Narendra Kumar v. A.P. Coop Tribunal : (2011) 1 ALD 292].

8. The question relating to maintainability of writ

remedy against a Co-operative Society is no longer res integra. A

Full Bench of this composite High Court of Andhra Pradesh in

AIR 1990 AP 171, clearly ruled that a writ is not maintainable

(2021) 3 ALD 105

against the co-operative Society incorporated under the

provisions of the A.P. Co-operative Societies Act, 1964. The ratio

laid down in the said judgment applies to the Co-operative

Societies which are incorporated under the Multi-State Co-

operative Societies Act also. In view of the settled position and

also on the ground that there is an effective alternate remedy

available under the Multi-State Co-operative Societies Act, in

Section 84, it is to be held that this Writ Petition is not

maintainable, since the 3rd respondent Society is not a State

within the meaning of Article 12 of the Constitution of India.

The remedy under Article 226 of the Constitution can be

invoked against any authority which is discharging statutory

functions. In Andi Mukta Sadguru Shree Muktajee Vandar

Swami Suvarna Jayanti Mahostav Smarak Trust vs. V. R.

Rudrani 6 , it has been held as:

" 14. But here the facts are quite different and, therefore, we need not go thus far. There is no plea for specific performance of contractual service. The respondents are not seeking a declaration that they be continued in service. They are not asking for mandamus to put them back into the college. They are claiming only the terminal benefits and arrears of salary payable to them. The question is whether the trust can be compelled to pay by a writ of mandamus?

15. If the rights are purely of a private character no mandamus can issue. If the management of the college is purely a private body with no public duty mandamus will not lie. These are two

AIR 1989 SC 1607

exceptions to mandamus. But once these are absent and when the party has no other equally convenient remedy, mandamus cannot be denied. It has to be appreciated that the appellants trust was managing the affiliated college to which public money is paid as government aid. Public money paid as government aid plays a major role in the control, maintenance and working of educational institutions. The aided institutions like government institutions discharge public function by way of imparting education to students. They are subject to the rules and regulations of the affiliating University. Their activities are closely supervised by the University authorities. Employment in such institutions, therefore, is not devoid of any public character. [ See The Evolving Indian Administrative Law by M.P. Jain (1983), p. 226] So are the service conditions of the academic staff. When the University takes a decision regarding their pay scales, it will be binding on the management. The service conditions of the academic staff are, therefore, not purely of a private character. It has super-added protection by University decisions creating a legal right-duty relationship between the staff and the management. When there is existence of this relationship, mandamus cannot be refused to the aggrieved party."

In the present case, the Society is only a credit Society

providing credit facilities to the members of the South Central

Railways Employees. It does not discharge any public and/or

statutory functions, hence either from the point of view of

Article 12 or from the extended meaning given to the authorities

under Article 226, this Court is of the view that the Writ Petition

is misconceived.

9. The view of this Court is further fortified by the

judgment in Sruthi Venkatesh Vs. Election Committee, Sri

Somavamsha Shasatrarjuna Kshatriya Mutually Aided Co-

Operative Thrift Society Ltd. Rep By Its Committee

Members (supra). Once Election notification was issued, Courts