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
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
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
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
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
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
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
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
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,
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
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
2004(3) ALD 1(FB)
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.
2003 (1) KLT 321
AIR 1968 SC 5
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
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.
12. The Writ Petition is accordingly, dismissed. No
costs.
13. Consequently, the miscellaneous Applications, if
any shall stand closed.
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NAGESH BHEEMAPAKA, J
20th March 2024
ksld
