The Nalgonda And Ranga Reddy Milk ... vs The State Of Telangana

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