Sri. Dasharatha Vs the State of Karnataka

SRI. DASHARATHA S/O LATE RAMAKRISHNA AGED ABOUT 54 YEARS DIRECTOR OF KASABA PRIMARY AGRICULTURE CREDIT CO OPERATIVE SOCIETY LTD, KASABA VILLAGE H D KOTE TALUK MYSORE DISTRICT 571125

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…. PETITIONER

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(BY SRI. D.R. RAVISHANKAR SR. ADVOCATE FOR SRI. VIJAYA RAGHAVA SARATHY H.M., ADVOCATE)

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AND

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Digitally signed by GIRIJA A. BYAHATTI Location: High Court of Karnataka, Dharwad Bench, Dharwad

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1 . THE STATE OF KARNATAKA REP BY ITS PRINCIPAL SECRETARTY DEPARTMENT OF CO OPERATION VIKAS SOUDHA BENGALURU 560001

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2 . THE REGISTRAR OF CO-OPERATIVE SOCIETIES NO1, ALI ASKER ROAD BENGALURU 5600052

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3 . THE STATE CO-OPERATIVE ELECTION AUTHORITY REP BY ITS SECRETARY 3^RD FLOOR TTMC A BLOCK K H ROAD, SHANTHINAGAR BENGALURU 560027

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4 . THE DISTRICT ELECTION OFFICER MYSORE AND CHAMARAJANAGAR DISTRICT CO-OPERATIVE CENTRAL BANK LIMITED AND ALSO DEPUTY COMMISSIONER OF MYSORE DISTRICT, MYSORE 570001

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5 . THE RETURNING OFFICER MYSORE AND CHAMARAJNAGAR DISTRICT CO-OPERATIVE CETNRAL BANK LIMITED AND ASSISTANT COMMISSIONER OPP LAHSKAR POLICE STATION IRWIN ROAD, MYSORE 570001

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6 . THE MYSORE AND CHAMARAJANGAR DISTRICT CO-OPERATIVE CENTRAL BANK LTD REP BY ITS MANAGING DIRECTOR OPP LAHSKAR POLICE STATION IRWIN ROAD, MYSORE 570001

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7 . THE KASABA PRIMARY AGRICULTURE

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CREDIT CO-OPERATIVE SOCIETY LTD REP BY ITS CHIEF EXECUTIVE OFFICER KASABA VILLAGE, H D KOTE TALUK MYSORE DISTRICT 571125

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SRI. K.G. LAKSHMI PRASAD S/O G.K. KARIGOWDA DIRECTOR OF ANTHARASANTHE PRIMARY AGRICULTURE CREDIT

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CO-OPERATIVE SOCIETY LTD.

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H.D. KOTE TALUK, MYSORE-571114

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SRI. ANIL KUMAR.C. S/O LATE CHIKKAMADHU, AGED ABOUT 45 YEARS, R/AT NAGANAHALLI VILLAGE, H.D. KOTE TALUK, MYSORE-571114.

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…. RESPONDENTS

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(BY SRI. K. SHASHIKIRAN SHETTY., AG A/W SMT. PRATHMA HONNAPUR., AAG A/W SRI. YOGESH D. NAIK., AGA FOR R1, R2 & R4, R5 & R7; SRI.T.L.KIRAN KUMAR., ADVOCATE FOR R3;

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SRI. K. ANAND., ADVOCATE FOR R6;

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SRI. JAYAKUMAR S. PATIL., SR. ADVOCATE FOR SRI. SANDESH T.B., ADVOCATE FOR R8; SRI. ASHOK HARANAHALLI., SR. ADVOCATE FOR SRI. ANOOP HARANAHALLI., ADVOCATE FOR R9)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE AN APPROPRIATE WRIT ORDER OR DIRECTION, DIRECTING THE 4^TH RESPONDENT ELECTION OFFICER AND 5^TH RESPONDENT RETURNING OFFICER TO INCLUDE THE NAME OF THE PETITIONER IN THE VOTERS LIST OF 6^TH RESPONDENT MYSORE CHAMARAJANAGAR DISTRICT CO-OPERATIVE CENTRAL BANK VOTERS LIST AND ALLOW HIM TO EXERCISE HIS VOTE AS DELEGATE OF THE R7 SOCIETY IN THE ENSUING ELECTIONS TO BE GOING ON HELD ON 29^TH JUNE 2025, VIDE ANNEXURE-J AND ETC.

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THIS WRIT PETITION COMING ON FOR ORDERS AND HAVING BEEN RESERVED FOR ORDERS ON 18.07.2025, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

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CAV ORDER

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The Petitioner is before this Court seeking for the following reliefs:

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i. Issue an appropriate writ order or direction, directing the 4^th Respondent Election officer and 5^th Respondent Returning Officer to include the name of the Petitioner in the voters list of 6^th Respondent Mysore Chamarajanagar District Co-operative Central Bank Voters List and allow him to exercise his vote as delegate of the R7 Society in the ensuing elections to be going on held on 29^th June 2025, vide Annexure-J.

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ii. Grant such other reliefs as this Hon’ble Court deems fit in the facts and circumstances of the case in the interest of justice and equity.

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The Petitioner is a Director of respondent No.7, namely Kasaba Primary Agriculture Credit Co-Operative Society, which is registered under the Karnataka Co-operative Societies, Act 1959 (hereafter referred to as “ KCS Act, 1959 ”) which caters to the requirements coming within its area of operation.

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The earlier Board of Directors was elected on 18.03.2020, whose term came to an end on 18.03.2025. Before the term of the Board came to an end, the Board of Directors, in its meeting held on 15.07.2024, had passed a resolution requesting the Co-operative Development Officer (“ CDO ”) of HD Kote for the appointment of an election officer for the conduct of the election. The Co-operative Society had issued a notice to the ineligible members under Rule 13B(2-A)(ii) of the Karnataka Co-operative Society Rules, 1960 (herein after referred to as “ KCS Rules, 1960 ”), as regards defaults under Section 20(2)(aiv) and Section 20(2)(a-v) of the KCS Act, 1959.

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The Co-operative Society had given a representation to the District Register of Co-operative Society, Mysore ( DRCS ), informing that the Co-operative Society had issued notices to all the ineligible members through Registered Post and requested an election officer to be appointed. However, the DRCS did not take any steps, the petitioners apprehending that an administrator would be appointed on the ground that elections had not been held had approached this Court in WP No.7815 of 2025 in Dasharatha Vs. The State of Karnataka & Ors., which came to be disposed of vide order dated 04.04.2025, holding that there is a default on the part of the Co-operative Society in the compliance of Rule 13-D of the KCS Rules 1960.

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The earlier interim order restraining the respondents from appointing an administrator was recalled, and liberty was granted to the respondent to appoint an administrator who was directed to hold elections

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after compliance with Rule 13-D of the KCS Rules, 1960.

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Immediately thereafter, the Managing Committee held a meeting on 09.04.2024, wherein the Petitioner was chosen to be a delegate of the Co-operative Society to the election to be held for Respondent No.6-Federal Bank, namely the Mysore and Chamarajanagar District Co-operative Central Bank Limited, and the said delegation Form was submitted to the Federal Bank on 16.04.2025. Thereafter, Respondent No.5-Returning Officer had issued a calendar of events on 10.06.2025 notifying the elections for the Federal Co-operative Bank to be held on 26.06.2025. The name of the Petitioner was

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not included in the said list, despite a delegation having been furnished, and it is in that background that the Petitioner had approached this Court, seeking for the aforesaid reliefs.

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The Co-ordinate Bench of this Court vide its order dated 24.06.2025 permitted the Petitioner to cast his vote in the election of Respondent No.6 scheduled on 26.06.2025. However, the Court directed the election authority to maintain the said vote in a separate ballot box and not to count the vote of the Petitioner without seeking leave of the Court. Hence, IA Nos.1 and 2 of 2025 have been filed by persons who had contested in the elections, contending that any order passed in the present matter would affect them and as such sought to come on record as partyrespondents. Accepting the reasons stated therein, the said applications were allowed, and the matter was taken up for hearing of all the counsels.

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Sri.D.R.Ravishankar., learned Senior counsel for the Petitioner, submits that;

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8.1. The elections having been held, the Petitioner

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having cast his vote, the vote could be counted, results declared and if at all anyone has any

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grievance as regards the vote, a dispute could be raised under Section 70 of the KCS Act 1959.

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8.2. His submission is that the Society having taken necessary steps for the purpose of holding an election, there is no default on the part of the Co-operative Society. Default, if any, is on the part of the DRCS in appointing an election officer; such appointments not having been made, the elections could not be held and as such neither the Co-operative Society nor the Petitioner who is delegate of the Co-operative Society can be blamed for the said delay.

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8.3. His submission is that, though the term came to an end on 17.03.2025, this Court had granted an interim order restraining the appointment of an administrator vide order dated 04.04.2025 in WP No.7815 of 2025, this Court vacated the interim order and permitted the respondents to appoint an administrator. The Administrator

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was appointed only on 29.04.2025; even before such appointment of an administrator, a meeting of the Board of Directors of Respondent No.7 was held on 09.04.2025. A resolution was passed on 16.04.2025 in pursuance of which the delegation Form was submitted to Respondent No.6 on 19.04.2025.

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8.4. Thus, he submits that once a delegation Form had been submitted, the subsequent appointment of an administrator on 29.04.2025 would not negate the delegation already made. The delegation, when made was properly made which was required to be given due credence to by respondents and as such the Petitioner's name was to be included in the electoral roll.

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8.5. Moreso, when there is no ineligibility on the part

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of the respondent No.7-Co-operative Society, not including the name of the delegate, respondent No.7-Co-operative Society and its members have been deprived of being

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represented at the elections to the Federal Society.

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8.6. He submits that in terms of Section 18-B of the

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KCS, Act 1959, cessation of a directorship of a Secondary Society or a Federal Society could occur only if the Board of a Co-operative Society of which he is a member has been removed under Section 30 KCS, Act 1959 or a Special Officer has been appointed under Section of the 31 KCS, Act 1959.

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8.7. Apart from this, the other grounds of cessation of directorship do not apply to the petitioner and/or respondent No. 7-Co-operative Society. He therefore submits that Respondent No.7Co-operative Society being an eligible voter, the name of the delegate ought to have been entered into the electoral roll; not having so entered, the Petitioner had approached this Court. This Court, having granted protection by permitting the Petitioner to vote, if the

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respondents are aggrieved, they ought to file a dispute relating thereto under Section 70 of the KCS, Act 1959 and they cannot come in the way of the vote being counted and the election results declared.

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8.8. The submission of Sri.D.R.Ravishankar., learned Senior counsel for the Petitioner, is also that once a delegate has been appointed, neither can a delegate be changed, nor the delegation cancelled. Since the Co-operative Society to which the delegate has been nominated continues to function, and as such, so long as the Secondary Society or Federal Society continues to function, the delegate would be entitled to represent the Primary Co-operative

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Society of which he is a delegate.

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8.9. On the basis of all the above arguments he

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submits that the vote cast by the Petitioner is required to be counted, and results announced.

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Sri.Ashok Haranahalli., learned Senior counsel who appears for Respondent No.9 supports the submission of Sri.D.R.Ravishankar., learned Senior counsel for the Petitioner and additionally submits that;

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9.1. In terms of Sub-section (5) of Section 28 of the KCS Rules 1960, an administrator was appointed on 29.4.02025. As on the date on which the resolution was passed, there was no administrator who was in office, as such, Subsection (5) of Section 28A became applicable only on 29.04.2025 and not before.

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9.2. He submits that the restriction under 20(2)(b)(1) of the KCS Act, 1959 would not be applicable inasmuch as the same applies only when the Board stands superseded or to which a Special Officer is appointed under Section 31 of the KCS Act 1959. His submission is that supersession can only occur in terms of Section 30 of the KCS Act, 1959, and any such order of

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supersession can be made only after issuance of notice.

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9.3. Insofar as appointment of Special Officer is concerned, the same would be under Section 31 of the KCS Act 1959 and such a Special Officer cannot be equated to be an administrator under Sub-section (5) of Section 28-A of the KCS Act, 1959. Thus, he submits that embargo or restriction under Section 22(B)(1) of the KCS, Act 1959 would not be applicable to a situation where an administrator has been appointed under Sub-section (5) of Section 28-A of the KCS Act, 1959 and on that ground he submits that the vote of the Petitioner which is in a separate ballot box is required to be counted and election results announced.

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Learned Advocate General submits that there is a mistake which has been committed by the officers

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inasmuch as the delegation having been received prior to the appointment of the Administrator, the said delegation ought to have been acted upon and the name of the Petitioner ought to have been included in the electoral roll. As such, he also submits that the vote of the Petitioner could be counted, and the election results announced.

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Sri.Jayakumar.S.Patil., learned Senior counsel appearing for Respondent No.8 submits that;

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11.1.The Respondent No.7-Co-operative Society’s name was published in the ineligible voter list due to the appointment of an administrator on 29.04.2025, this aspect has been suppressed by the Petitioner when the above petition was filed on 24.06.2025 when interim orders were passed by this Court.

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11.2.His submission is that, if the aspect of appointment of an Administrator had been brought to the notice of this Court, the

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Co-ordinate Bench would probably not have passed an order permitting the Petitioner to vote at the election.

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11.3.Term of the Board of Directors having come to an end on 17.03.2025, in terms of Sub-section (5) of Section 28A of the KCS, Act 1959 an administrator is deemed to have taken charge of the affairs of the Co-operative Society, no formal orders are required for appointment of an administrator.

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11.4.In terms of Sub-section (5) of Section 28-A of

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the KCS Act, 1959 the Registrar within whose jurisdiction the Society is situated shall be deemed to have assumed charge as an administrator and for all purposes function as such Board of Management or Board of Directors and as such he submits that the Joint Registrar in whose jurisdiction the above Society fell would be deemed to have assumed charge on 17.03.2025 and as such no meeting could be

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held on 09.04.2025 and a resolution passed, the

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Board not having any power to do so.

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11.5.The interpretation of the other counsel to

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Section 22(B)(1) of the KCS, Act 1959 is not correct. So long as the Board is superseded, the embargo under Section 22(B)(1) of the KCS Act, 1959 would apply. Supersession cannot be taken into account only with reference to Section 30 of the KCS Act, 1959. Even Subsection (5) of Section 28-A of the KCS Act, 1959 has the effect of Supersession of the Board. Since the Board shall cease to function and it is the Administrator who will function as the Board of Directors.

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11.6.His submission is that there is a significant distinction between the Supersession of the Board and the appointment of a Special Officer. A Special Officer can be appointed under Section 31 of the KCS Act, 1959, which has been clearly categorised under Section 22(B)(1) of the KCS,

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Act 1959 to be an embargo. However, supersession cannot be limited to an order under Section 30 of the KCS, Act 1959.

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11.7.Sub-section (5) of Section 28-A of the KCS, Act 1959 clearly mandates that if a new Board is not constituted under Section 29-A, on the date of expiration of the term of the Office of the Board, Or if elections are not held within the time limit specified under Section 39A of the KCS, Act 1959, the Registrar shall be deemed to assume charge as an Administrator who is to function as the Board of Management.

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11.8.Such functioning of the Administrator as the Board of Management would amount to the Supersession of the Board of Directors. Once the Administrator is deemed to have been appointed, the existing Board cannot function as a Board. In this regard, he also refers to Section 28-B of the KCS Act, 1959 to contend that the election of the Board is to be conducted

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before the expiry of the term of the Board which is 17.03.2025, failing which Section 28(A5) of the KCS Act, 1959 would become operational.

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11.9.The supersession or suspension of the Board under Section 30 of the KCS, Act 1959 is similar to the effect of appointment of an administrator under Section 28(A5) of the KCS, Act 1959 viz., the Board ceases to function and as such, his submission is that no resolution could be passed by the Board, which has ceased to function.

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11.10. On that ground, he submits that no elections have been held prior to 17.03.2025 and the Board of Directors not having been constituted as on that date whether a formal order for the appointment of an administrator had been made or not, the Joint Registrar is deemed to have assumed the office of Administrator of the said Society, discharging the role of the Board of Management.

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11.11. As such, he submits that neither could the resolution be passed nominating the Petitioner as a delegate nor could the Petitioner as a delegate cast any vote. The vote cast by the Petitioner has to be eschewed and the results of the election directed to be declared.

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Sri.D.R.Ravishankar., learned Senior counsel for the Petitioner in reply, would submit that;

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12.1.The effect of Sub-section (5) of Section 28-A of

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the KCS, Act 1959 has been interceded with by this Court when orders were passed in WP No.7815 of 2025. When this Court had directed that no administrator can be

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appointed. Which, of course, came to be vacated on 04.04.2025, reserving liberty to respondent to appoint an Administrator, which liberty was exercised only on 29.04.2025, hence the deeming fiction under Sub-section (5) of Section 28-A of the KCS Act, 1959 would

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not be attracted in the present matter, due to the interceding proceedings before this Court and any appointment of an Administrator was to be by way of a specific order, which appointment was made on 29.04.2025, by which time a resolution had been passed and a delegate nominated, as also the delegation Form submitted to Respondent No.6-Federal Co-operative Society on 19.04.2025 and as such he reiterates that in terms of Sub-section (3) of Section 20 of the KCS, Act 1959 once a delegate has been nominated, no change could happen, the delegate will continue to represent the Co-operative Society which has delegated him.

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Heard Sri.D.R.Ravishankar., learned Senior counsel appearing for the Petitioner, Sri.Ashok Haranahalli., learned Senior counsel appearing for Respondent No.9, learned Advocate General for Respondents No.1, 2, 4, 5 and 7, Sri.Jayakumar.S.Patil., learned

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Senior counsel appearing for respondent No.8. Perused papers.

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The points that would arises for consideration of in the present matter are;

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1. Whether on the expiry of the term of office of the Board of Directors, a Joint Registrar would automatically assume the role of an administrator and function as the Board of Management without the requirement of any particular separate/formal order?

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2. Whether in the present case the deeming fiction under Sub-section (5) of Section 28 (A) of the KCS Act, 1959 would be attracted in view of the interlocutory orders passed by this Court in WP No.7815/2025?

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3. Whether an appointment of an Administrator would also amount to the Supersession of the Board in terms of Section 20 (2)(b)(i) of the KCS Act, 1959?

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4. Whether the vote cast by the Petitioner is required to be counted while announcing the results of the election?

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5. What Order?

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I answer above points as under;

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Answer to point No.1: Whether on the expiry of the term of office of the Board of Directors, a

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Joint Registrar would automatically assume the role of an administrator and function as the Board of Management without the requirement of any particular separate/formal order?

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16.1 The submission of Sri.Jayakumar.S.Patil.,

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learned Senior counsel is that the appointment of an administrator under Sub-section (5) of Section 28A of the KCS Act 1959 is automatic

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and such appointment is deemed. On the coming to an end of the term of office of the elected directors, if the elections were not to be held before that date, then in terms of Subsection (5) of Section 28A, the Registrar within whose jurisdiction the Society is situated, shall be deemed to have assumed charge as an administrator, and for all purposes function as such Board of management or Board of directors.

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16.2 It is on that basis, it is contended that in the

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present case the term of office of the directors having come to an end on 17.03.2025, the

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Joint Registrar within whose jurisdiction the Society comes under has assumed charge as the Administrator. Sub-section (5) of Section 28A is reproduced hereunder for easy

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reference;

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Section 28A(5) in Karnataka Co-Operative Societies Act, 1959

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(5) If the new Committee is not constituted under section 29A, on the date of expiry of the term of office of the Committee, the Registrar or any other officer within whose jurisdiction the Society is situated, and who is authorised by the Registrar, shall be deemed to have assumed charge as Administrator and he shall, for all purposes function as such Committee of management. The Administrator shall, subject to the control of the Registrar, exercise all the powers and perform all the functions of the Committee of the co-operative Society or any office bearer of the co-operative Society and take all such actions as may be required, in the interest of the co-operative Society.

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[Provided that the Registrar shall appoint an administrator to a Co-operative Society or each of the co-operative Societies formed after amalgamation or reorganisation or division in accordance with section 14 for a period of three months and the Administrator so appointed shall arrange for holding elections to a Committee of such Co-operative Society or Societies as the case may be] [Inserted by Act 13 of 2004 w.e.f. 22.03.2004.]

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16.3 A perusal of the said provision would indicate

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that if a new committee is not constituted

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under Section 29A on the date of expiry of the term of office of the Committee, the Registrar or any other officer within whose jurisdiction the Society was situated and who is authorised by the Registrar shall be deemed to assume charge as Administrator and he shall for all purposes function as such Committee of management.

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16.4 The Administrator shall subject to the control of

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the Registrar, exercise all the powers and perform all the functions of the Committee of the Co-operative Society or any office bearer of the Co-operative Society and take all such action as may be required in the interest of the Co-operative Society.

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16.5 Section 29A is reproduced hereunder for easy reference;

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29A. [Commencement of term of office. [Sections 29A to 29D Inserted by Act 39 of 1975 w.e.f. 23.09.1975.]

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[(1)] [The term of office of the elected members of the Committee shall commence on the date on

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which the majority of the elected members of the Committee assume office or the term of the out going Committee expires, whichever is later.] [Substituted by Act 25 of 1998 w.e.f. 15.08.1998.]

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(2)[ Notwithstanding anything contained in this Act or the rules or the bye-laws of a co-operative society, the Committee shall be deemed to be duly constituted when [the majority of the elected members of the Committee are available] [Inserted by Act 19 of 1976 w.e.f. 20.01.1976.] to function as members of the Committee after the [***] [Omitted by Act 25 of 1998 w.e.f. 15.08.1998.] election.

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(3)The Committee deemed to be constituted under sub-section (2) shall be competent to exercise all the powers and perform all the functions of the Committee of the co-operative Society.

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(4)[ ***

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(5)***

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(6)***] [Omitted by Act 25 of 1998 w.e.f. 15.08.1998.]]

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16.6 In terms of Section 29A, it is clear that the term

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of office of the elected members of the Committee shall commence on the date on which the majority of the elected members of

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the Committee assume office or the term of the

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outgoing Committee expires, whichever is later.

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16.7 Thus, in terms of Sub-section (1) of Section

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29A, if an election to the office bearers is held

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prior to the expiry of the term and they assume office, then the term shall commence on the date on which they assume office. In the event of no assumption of office having taken place, an election being held, and the process completed, the term would commence from the date on which the term of the earlier Committee expired.

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16.8 Thus, in terms of Section 29A, it is required that an election to the office of directors or the Committee of management is to be held before the expiry of the term of the earlier Committee, or earlier Board of Directors. It is in that background that if no such election has been held under Sub-section (5) of Section 28A, there is a deeming provision which would come into effect.

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16.9 Insofar as a situation where there is no other intervention by any Court like grant of an order of stay or the like as that granted in the

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present matter in terms of Sub-section (5) of Section 28A there is a deeming fiction that on the expiry of the term of the Committee of management or Board of Directors, the Joint Registrar or Registrar under whose jurisdiction the said Society comes would have assumed the role as an administrator.

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16.10 The reasons for the same are not far to see, inasmuch as the Board of Directors whose term has come to an end cannot thereafter function as a Board of Directors, nor can any individual director function as a director of the Society, even the office bearers like the President, Vice President, Secretary, etc., who have been so elected, would cease to operate as the President, Vice President, Secretary, etc.

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16.11 The deeming provision also comes into effect, so that no action is taken by the Board after the expiry of the term, thereby protecting the interests of the members of the Society.

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However, in my considered opinion, there would also be a formal order required to be passed in this regard, nominating such a person to be an administrator of the Society as the Registrar may deem fit.

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16.12 Since, the provision of Sub-section (5) of Section 28A is very wide, the Registrar or any other officer within whose jurisdiction the Society was situated and who is authorised by the Registrar shall be deemed to assume charge as an administrator, is wide enough to include several officers. Therefore, it would become difficult to assess and ascertain as to which officer would be the Administrator of the Society unless so specifically appointed by the Registrar.

¶206

16.13 It would therefore be required, that the Registrar of the Co-operative Societies maintain a suitable register in this regard to ascertain as to when the term of office of the Board of

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Directors/Committee of management would come to an end and immediately thereafter pass necessary orders appointing the concerned person as the Administrator of the Society.

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16.14 The Registrar could also be proactive by passing proactive orders indicating as to who would be an administrator of particular set of societies by way of jurisdiction, location or the like, categorically passing a peremptory order indicating that the officer who would be the Administrator, if elections are not held to the Co-operative Society prior to the expiry of the term of office.

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16.15 Be that as it may, in both the above situations, I am of the considered opinion that the deeming fiction is not absolute without there being a specific person who is named to be an administrator of a society on elections not being completed within the term.

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16.16 Hence, I answer point No.1 by holding that on the expiry of the term of office of the Board of Directors, an administrator would not automatically assume the role of an administrator and function as the Board of Management without there being a specific person who is named to be an administrator of a society on elections not being completed within the term.

¶215

Answer to point No.2: Whether in the present case the deeming fiction under Sub-section (5) of Section 28 (A) of the KCS Act, 1959 would be attracted in view of the interlocutory orders passed by this Court in WP No.7815/2025?

¶216

17.1 In the present case, there is a peculiarity inasmuch as the term of Board of Directors came to an end on 18.03.2025. The directors, apprehending that an administrator would be appointed, had approached this Court in WP No.7815 of 2025. Wherein initially this Court had restrained the respondent from

¶217

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appointing an administrator, thus interdicting the deeming provision under Sub-section (5) of Section 28A. So long as the interim orders passed by this Court continued to be in force, the deeming provision under Sub-section (5) of Section 28A would not take effect.

¶220

17.2 It is only on 04.04.2025 that this Court vacated

¶221

the interim order and granted liberty to the respondents to appoint an administrator by directing such Administrator to hold elections after compliance with Rule 13D of the KCS Rules. Thus, this Court, while disposing WP No.7815 of 2025, did not state that an administrator is deemed to have taken over the Society and/or an administrator is deemed to have been appointed. To the contrary, this Court directed the respondents therein to appoint an administrator who was in turn directed to hold elections.

¶222

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17.3 Thus, by way of the order dated 04.04.2025, this Court had directed the respondents to appoint an administrator, thereby indicating that until such an appointment were to be made, the deeming fiction under Sub-section (5) of Section 28A would not come into effect.

¶225

17.4 It is thereafter that on 09.04.2024, the Managing Committee held a meeting and appointed a delegate, which delegation Form was submitted to the Federal Bank and when the name of the Petitioner was not included in the list of eligible voters, the Petitioner had approached this Court and this Court had permitted the Petitioner to cast his vote at the election of respondent No.6 scheduled from 26.06.2025 by directing the respondents to maintain the vote in a separate ballot box and not to count the vote of the Petitioner without

¶226

seeking leave of this Court.

¶227

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17.5 From a perusal of the above, it is seen that it is on account of the interdiction of this Court on two occasions, i.e., firstly, permitting the respondents to appoint an administrator who was not so appointed until 29.04.2025, and it is on account of the second interdiction of this Court permitting the Petitioner to vote that the Petitioner voted at the election held on 26.06.2025.

¶230

17.6 The delegation was made in pursuance of the meeting of the Managing Committee held on 09.04.2025, which had been submitted to the Federal Bank on 16.04.2025, and the calendar of events came to be issued on 10.06.2025. Thus, as on the date on which the calendar of events was published, the delegation Form, insofar as the Petitioner was concerned, had already been submitted and was on the record of the Returning Officer of the Federal Bank.

¶231

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17.7 Such being the case, when this Court had reserved liberty to the respondent to appoint an Administrator vide its order dated 04.04.2025, the Administrator having been appointed only on 29.04.2025, any action taken by the Board until 29.04.2025 cannot be faulted with. The matter would have been different if not, for the interim orders which had been passed by this Court in such a situation, the Board of the Cooperative Society could not have taken any decision post the expiry of the term of office.

¶234

17.8 In the present case on account of the orders passed in WP No.7815 of 2025 postponing the appointment of an administrator, the Administrator having been finally appointed on 29.04.2025, there could not be a vacuum in the administration of the Society, as such the Managing Committee having nominated its delegate for the election to the Federal Bank.

¶235

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17.9 Hence, I answer point No.2 by holding that the deeming fiction under Sub-section (5) of Section 28A, would not be applicable in view of the interlocutory orders passed by this Court in WP No.7815 of 2025, as also in the present writ petition.

¶238

Answer to point No.3: Whether an appointment of an Administrator would also amount to the Supersession of the Board in terms of Section 20 (2)(b)(i) of the KCS Act, 1959?

¶239

18.1 Sri.Jayakumar.S.Patil., learned Senior counsel

¶240

appearing for respondent No.8 has contended that an appointment of Administrator would also amount to supersession of the Board coming within the purview of Section 20 (2)(b)(i) of the KCS Act 1959. The said provision is reproduced hereunder for easy reference;

¶241

20. [Votes of members. [Substituted by Act 71 of 1976 w.e.f. 3.11.1976.]

¶242

(2) The following shall not have the right to vote at a meeting of the co-operative Society in which they are members, namely:-

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(b) a co-operative society,-

¶246

(i) the Committee of which stands superseded or to which a special officer is appointed under [section 31] [Substituted by Act 25 of 1998 w.e.f. 15.8.1998.] of the Act;

¶247

18.2 A perusal of said provision would indicate that

¶248

in terms of Sub-section (2) of Section 20, the persons enumerated therein would have a right to vote at a meeting of the Co-operative Society in which they are members. In terms of Clause (b) of Sub-section (2) of Section 20, a Co-operative Society, the Committee of which stands “superseded” or to which a special officer is appointed under Section 31 of the Act would not have a right to vote at the meeting of the Co-operative Society.

¶249

18.3 It is the word “superseded” which is sought to be interpreted by Sri.Jayakumar.S.Patil.,

¶250

learned Senior Counsel it is also contended that an appointment of Administrator would amount

¶251

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to supersession within the purview of Section 20 (2)(b)(i) of the KCS Act 1959.

¶254

18.4 Submission of Sri.D.R.Ravishankar and

¶255

Sri.Ashok Haranahalli., learned senior counsels is that the word “supersession” in the aforesaid provision has been used with reference to Section 31 and not with regard to Sub-section (5) of Section 28A. Therefore, even if an administrator were to be appointed under Sub-section (5) of Section 28A, the same would not amount to supersession within the meaning

¶256

of Section 20 (2)(b)(i) of the KCS Act 1959.

¶257

18.5 It is this distinction that is sought out to be

¶258

made out by both the sets of senior counsels that this Court would have to decide the matter. Section 20 is reproduced hereunder for

¶259

easy reference;

¶260

20. [Votes of members. [Substituted by Act 71 of 1976 w.e.f. 3.11.1976.]

¶261

(1)No member of a society shall have more than one vote in the affairs of the co-operative Society.

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[Provided that where the State Government is a member of a co-operative society, each person nominated or deemed to have been nominated by the State Government on the Committee of such co-operative Society shall have one vote.]

¶265

(2)The following shall not have the right to vote at a meeting of the co-operative Society in which they are members, namely:-

¶266

(a)[ a nominal or associate member; [Substituted by Act 5 of 1984 w.e.f. 9.1.1984.]

¶267

(a-i) an individual member who is a defaulter;(a-ii) members admitted as per [clauses (d), (e), (f) and (g) of sub-section (1) of section 16,] who are defaulters;][(a-iii) [a person] [Inserted by Act 25 of 1998 w.e.f. 15.8.1998.] who has become member of a society not later than [twelve months] [Substituted by Act 24 of 2001 w.e.f. 5.9.2001.] prior to the date of such meeting:

¶268

Provided that nothing in this clause shall apply to [a person] [Substituted by Act 13 of 2004 w.e.f. 22.3.2004.] of a society participating in the first general body meeting of such Society held immediately after its registration;]

¶269

(b)a co-operative society,-

¶270

(i)the Committee of which stands superseded or to which a special officer is appointed under [section 31] [Substituted by Act 25 of 1998 w.e.f. 15.8.1998.] of the Act;

¶271

(ii)which is [ordered to be wound up] [Substituted by Act 25 of 1998 w.e.f. 15.8.1998.] under section 72;

¶272

(iii)which has not commenced working or has ceased to work;

¶273

(iv)[ whose principal object is to advance loans and whose percentage of recovery is less than seventy five percent of the total demand for the co-operative year immediately preceding the cooperative year during which the meeting is held and which has failed to pass on to the financing

¶274

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bank or the credit agency, as the case may be, to which it is indebted,- [Substituted by Act 25 of 1998 w.e.f. 15.8.1998.]

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(a)seventy five percent of the demand of the Society, if the demand of the Society is less than the demand of the financing bank or credit agency, or

¶278

(b)the actual demand of the financing bank or credit agency, if the demand of the Society is more than the demand of the financing bank or credit agency, not later than fifteen days of the close of the said co-operative year.]

¶279

(v)[ other than the society referred to in sub- clause (iv), which is a defaulter;] Inserted by Act 25 of 1998 w.e.f. 15.8.1998.[ ***] [Omitted by Act 25 of 1998 w.e.f. 15.8.1998.]Explanation. - A member shall be deemed to be a defaulter if he has failed to pay the arrears of any kind due by him to the Society [as borrower] [Substituted by Act 5 of 1984 w.e.f. 9.1.1984.], [or has failed to pay any other amount due by him to the Society] [Inserted by Act 25 of 1998 w.e.f. 15.8.1998.] at least fifteen days before the date of such meeting after a notice of not less than [fifteen days] [Substituted by Act 5 of 1984 w.e.f. 9.1.1984.] in this behalf has been issued to him.]

¶280

(3)[ An Agricultural Credit Society which is a member of the concerned District Central Cooperative Bank, but has been permitted by the Registrar to raise loan from another financing agency for the purpose of financing its members shall not have a right to vote at a meeting of such District Central Co-operative Bank.] [Inserted by Act 25 of 1998 w.e.f. 15.8.1998.]

¶281

18.6 Section 20 relates to votes of members. In

¶282

terms of Sub-section (1) of Section 20, no member of a society shall have more than one

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vote in the affairs of the

¶286

Co-operative Society, subject to the proviso thereto.

¶287

18.7 It is Sub-section (2) of Section 20 which makes it clear that the person named there under shall not have a right to vote at a meeting of the Co-operative Society in which they are members. That is to say, even if a particular person or a society is a member, if the conditions under Sub-section (2) of Section 20 are not satisfied, they would not have a right to cast a vote.

¶288

18.8 Clause (b) of Sub-section (2) of Section 20 deals with the conditions which are attached to a Co-operative Society. In terms of Clause (i) of Clause (b) of Sub-section (2) of Section 20, a committee which stands superseded or to which a special officer is appointed under Section 31 would not be entitled to vote. Section 31 is reproduced hereunder for easy reference;

¶289

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[Appointment of Special Officer [by the Registrar] [Section 31 Omitted by Act 19 of 1976 w.e.f. 20.01.1976 and Sections 31 and 31A inserted by Act 25 to 1998 w.e.f. 15.08.1998.].

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(1) Where the Registrar is of the opinion that a co- operative society is not functioning in accordance with the provisions of the Act, rules or bye-laws on account of the number of members of the Committee falling short of the required number to form a quorum due to disqualification, resignation or death or removal of a member or for any other reason, the Registrar may, notwithstanding anything contained in this Act, rules or bye-laws, by order appoint a Special Officer for such cooperative Society, for such period not exceeding six months. [The Registrar may [***] [Inserted by Act 24 of 2001 w.e.f. 05.09.2001.] for the reasons to be recorded in writing extend the period of such appointment for a further period of six months at a time and in any case such extension shall not exceed one year in the aggregate]

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(2) Before making an order under sub-section (1), it shall not be necessary for the Registrar to give any co-operative society or person likely to be affected by such order, an opportunity to state its or his objection, if any.

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(3) On the issue of the order under sub-section (1),-(a) the members of the Committee of the cooperative Society, if any, shall vacate and shall be deemed to have vacated their offices; and

¶296

(b) the Special Officer shall be deemed to have assumed charge of the affairs of the co-operative Society.

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(4) The Special Officer shall, subject to the control of the Registrar, exercise and perform all the powers and functions of the Committee of the cooperative Society or any office bearer of the cooperative Society and take all such actions as may be required in the interest of the co-operative Society.

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(5) The Special Officer shall, before the expiry of his term, arrange for constitution of a new committee for the co-operative Society in accordance with its bye-laws.

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18.9 A perusal of Section 31 would indicate that where a Registrar is of the opinion that a Co-operative Society is not functioning in accordance with the provisions of the Act, Rules

¶302

or Bylaws. On account of the number of members of the Committee falling short of the required number, to form a quorum due to disqualification, resignation or death or removal of a member or for any other reason, the Registrar may not withstanding anything contained in the Act, Rule or Bylaws by order appoint a Special Officer for such Co-operative Society for such period not exceeding six months.

¶303

18.10 Thus, Section 31 though confers powers on the

¶304

Registrar to appoint a Special Officer, which is

¶305

predicated by the grounds stated therein, i.e., if

¶306

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the required number to form a quorum is not available on account of disqualification, resignation or death or removal of a member or for any other reason, the Registrar may appoint

¶309

a Special Officer.

¶310

18.11 Thus, the appointment of a Special Officer can only be made in terms of Section 31 of the KCS Act 1959 and not otherwise.

¶311

18.12 Insofar as supersession is concerned, Section 30 of the KCS Act 1959 deals with it. The said Section 30 is reproduced hereunder for easy reference;

¶312

30. Supersession of Committee. [Section 30 substituted by Act 5 of 1984 w.e.f. 09.01.1984.]

¶313

(1) If, in the opinion of the Registrar,-

¶314

(a) the Committee of a co-operative society persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the rules or the bye-laws or commits any act which is prejudicial to the interests of the Society or its members, or is otherwise not functioning properly; or

¶315

(b) a co-operative society is not functioning in accordance with the provisions of this Act, the rules or bye-laws or any order or direction issued by the State Government or the Registrar, [including the

¶316

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direction of issued under section 30B]the Registrar may, after giving the Committee an opportunity to state its objections, if any, by order in writing, remove the said Committee, and appoint an administrator to manage the affairs of the Society for such period, not exceeding [six months] [Substituted by Act 25 of 1998 w.e.f. 15.08.1998.], as may be specified by the Registrar. [The Registrar may [***] [Substituted by Act 24 of 2001 w.e.f. 05.09.2001.] for the reasons to be recorded in writing extend the period of such appointment for a further period of six months at a time, and in any case such extension shall not extend one year in aggregate.]

¶320

(2) The Administrator so appointed shall, subject to the control of the Registrar and such instructions as he may give from time to time, exercise all or any of the functions of the Committee or of any [office bearer] [Substituted by Act 25 of 1998 w.e.f. 15.08.1998.] of the co-operative Society and take such action as he may consider necessary in the interest of the Society.

¶321

(3) The Administrator shall, before the expiry of his term of office arrange for the constitution of a new committee after holding the election in accordance with this Act, the rules and the bye-laws of the co- operative Society:

¶322

[Provided that in such an election, no member of the Committee removed under subsection (1) shall, notwithstanding anything contained in this Act, the rule or the bye-laws, be eligible for being elected as a member of the Committee, for a period of four years from the date of Supersession of the Committee under said subsection] [Inserted by Act 24 of 2001 w.e.f. 05.09.2001.][Provisos ***] [Omitted by Act 25 of 1998 w.e.f. 15.08.1998.]

¶323

(4) Before taking any action under sub-section (1) in respect of a co-operative society, the Registrar shall consult the financing banks to which it is indebted.

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(5) Notwithstanding anything contained in this Act, the Registrar shall, in the case of a co-operative bank, if so required in writing by the Reserve Bank of India, in public interest or for preventing the affairs of the co-operative bank being conducted in a manner detrimental to the interest of the depositors or for securing the proper management of the co-operative bank, by order in writing, remove the Committee of that co-operative bank and appoint an administrator to manage the affairs of the co-operative bank for such period [***] [Omitted by Act 25 of 1998 w.e.f. 15.08.1998.] as may, from time to time, be specified by the Reserve Bank of India.]

¶327

18.13 In terms of Sub-section (1) of Section 30, if in the opinion of the Registrar, the Committee of a Co-operative Society persistently makes default or is negligent in the performance of duties imposed on it by the KCS Act or the Rules or the bylaws or commits any act which is prejudicial to the interests of Society or its members or is otherwise not functioning properly or a Co-operative Society is not functioning in accordance with the provisions of the KCS, the Act, Rules or Bylaws for any order or direction issued by the State Government or the Registrar. The Registrar may, after giving

¶328

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the Committee an opportunity to state its objections, if any, by order in writing, remove the said Committee and appoint an Administrator to manage the affairs of the Society for such period, not exceeding six months, as may be specified by the Registrar.

¶331

18.14 Thus, it is only when there is a default or negligence in the performance of duties and/or the Society is not functioning in accordance with the provisions of the Act, the Rules and the Bylaws, that the Registrar may after giving the Committee an opportunity to state its objections, passed an order to removing the Committee from the Registrar's, it is these actions which would amount to supersession under Section 30 of the KCS Act 1959.

¶332

18.15 In the present case, neither is a Special Officer under Section 31 appointed, nor is the Board superseded in terms of Section 30 of the Act of 1959. At the most, an Administrator could be

¶333

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said to be appointed under Sub-section (5) of Section 28A, which has been reproduced hereinabove, which would indicate that by the appointment of an Administrator, there is no supersession which can be made. However, what would have to be taken note of also is that the Administrator is appointed after the term of the Board comes to an end and as such, there is no need of a supersession to have occurred.

¶336

18.16 Again, though that may be a case, if this Court had not interceded in view of the orders passed in WP No.7815 of 2025 and that passed in the present matter, the embargo under Section 20 (2)(b)(i) of the KCS Act 1959 would not be applicable to the present case.

¶337

18.17 Thus, I answer point No.3 by holding that though Sub-section (5) of Section 28A has not been mentioned in Section 20 (2)(b)(i) of the KCS Act 1959 relating to. The term

¶338

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of the Committee having come to an end, there will be no requirement to supersede a committee whose term has come to an end and as such in normal circumstances appointment of an administrator would come within the purview of Section 20 of the KCS Act 1959.

¶341

Answer to point No.4: Whether the vote cast by the Petitioner is required to be counted while announcing the results of the election?

¶342

19.1 The Petitioner has been nominated as a delegate in pursuance of the meeting held on 09.04.2024 which was in pursuance of the order dated 04.04.2025 in WP No.7815 of 2025. The delegation Form was submitted to the Federal Bank on 16.04.2025, the calendar of events was announced on 10.06.2025 and by virtue of the interim order passed in the present matter i.e. WP No. 18249 of 2025, the Petitioner was permitted to cast his vote in the elections of the Federal Co-operative Bank held

¶343

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on 26.06.2025. Thus, all the actions which

¶346

have been taken, are in pursuance of orders passed by this court from time to time, thus in my considered opinion the vote of the Petitioner which has been kept in a separate ballot box is required to be counted, however any dispute as regards the right of the Petitioner to cast his vote, if at all agitated, could be agitated under Section 70 of the KCS Act 1959.

¶347

19.2 Hence, I answer point No.4 by holding that

¶348

the vote cast by the Petitioner would be counted while announcing the results of the election, the said result of the election would however be subject to any dispute that may be raised by any aggrieved party

¶349

under Section 70 of the KCS Act 1959.

¶350

20. Answer to point No.5: What order?

¶351

20.1 In view of my findings on all the points above, I

¶352

pass the following;

¶353

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ORDER

¶357

i. The writ petition is partly allowed, the reliefs sought for are moulded.

¶358

ii. A mandamus is issued, Respondent No.5 is directed to count the vote of the Petitioner cast in pursuance of the interim orders passed by this Court and announce the results within a period of 10 days of the receipt of a copy of this order.

¶359

iii. The said result of the election shall however be subject to any dispute that may be raised by an aggrieved party under Section 70 of the KCS Act 1959.

¶360

Sd/(SURAJ GOVINDARAJ) JUDGE

¶361

SR

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List No.: 19 Sl No.: 2

Sri. Dasharatha v. the State of Karnataka

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Sri. Dasharatha v. the State of Karnataka

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