Dismissed

M.S. Anil v. State Co-Operative Election Commission (Scec)

Kerala HC20 Mar 2023WP(C)/5593/2023

Case brief

AI extract

What is this about?

The Court held that a surcharge order against a person for affairs of one co-operative society disqualifies them from contesting elections in any society. A separate disqualification order is not mandated. The petition was dismissed with an observation that eligibility depends on staying the surcharge itself.

What did the court decide?

The writ petition is dismissed. It is observed that the petitioner can contest the election if they obtain a stay of the surcharge order itself, not just recovery proceedings.

M.S. Anil Vs State Co-Operative Election Commission… — Company and Corporate | Kerala HC (2023)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR. JUSTICE GOPINATH P.

¶4

MONDAY, THE 20^TH DAY OF MARCH 2023 / 29TH PHALGUNA, 1944

¶5

WP(C) NO. 5593 OF 2023

¶6

PETITIONER:

¶7

M.S. ANIL AGED 52 YEARS SANKARA VILASAM, MARAYAMUTTOM, NEYYATTINKARA, THIRUVANANTHAPURAM, PIN - 695121 BY ADVS. B.S.SWATHI KUMAR ANITHA RAVINDRAN HARISANKAR N UNNI SAMYUKTHA NAIR

¶8

RESPONDENTS:

¶9

1 STATE CO-OPERATIVE ELECTION COMMISSION (SCEC) 3RD FLOOR, CO-BANK TOWERS, VIKAS BHAVAN, THIRUVANANTHAPURAM., PIN - 695033

¶10

2 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES GENERAL JAWAHAR SAHAKARANA BHAVAN, DPI JUNCTION, JAGATHY, THIRUVANANTHAPURAM. PIN 695 014, PIN - 695014

¶11

3 THE RETURNING OFFICER NEYYATTINKARA PRIMARY CO-OPERATIVE AGRICULTURAL RURAL DEVELOPMENT BANK LTD.NO. T.417/ THE UNIT INSPECTOR, BALARAMAPURAM, OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), MINI CIVIL STATION, NEYYATTINKARA. THIRUVANANTHAPURAM, PIN - 695121 BY ADVS. C.M.NAZAR, SC, STATE CO-OPERATIVE ELECTION COMMISSION (SCEC) SMT. C.S. SHEEJA, SR. GOVT. PLEADER

¶12

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.03.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P (C) No.5593/2023

-2-

'C.R'

J U D G M E N T

The petitioner was the former President of Marayamuttom Service Cooperative Bank Limited. An order of surcharge was issued under Section 68 (2) of the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as 'the Act' for short) against the petitioner in respect of some issues relating to the Marayamuttom Service Co-operative Bank Ltd. It is not necessary to delve into the circumstances which led to an order of surcharge being issued, for the purposes of this case. The order imposing surcharge on the petitioner was the subject matter of an appeal before the Government. The Government did not interfere with the order. The petitioner and ten other members of the Managing Committee of Marayamuttom Service Co-operative Bank Ltd., filed W.P(C) No. 19204/2022 before this court and this court through Ext.P1 order dated 14-06-2022 in that writ petition has stayed recovery proceedings pursuant to the order of surcharge. It is to be noted that though the petitioner sought a stay of implementation of the impugned orders, this court through the interim order dated 14-06-2022 stayed only the recovery proceedings.

¶18

The petitioner has approached this court apprehending that the order of surcharge issued in respect of matters regarding the Marayamuttom Service Cooperative Bank Ltd., shall be treated as a disqualification for the purpose of contesting in the election to the Board of Directors/Managing Committee of the Neyyattinkara Primary Co-operative Agricultural Rural Development Bank Ltd., by virtue of the provisions contained in Rule 44 of the Kerala Co-operative Societies Rules, 1969 (hereinafter referred to as 'the Rules' for short).

¶19

W.P (C) No.5593/2023

¶20

-3-

¶21

Sri. B.S. Swathi Kumar, the learned counsel appearing for the petitioner vehemently contends that the provisions of Rule 44 of the Rules clearly indicate that the disqualification contemplated under Rule 44 (1) (l) will be attracted only in respect of an election to the Board of Directors/Managing Committee of the society in respect of which the order of surcharge has been issued. It is his contention that Rule 44 (1) uses the words 'the' committee and 'the' society clearly indicating that the order of surcharge cannot lead to disqualification for contesting the elections to another co-operative society. It is also contended that sub-rule (3) of Rule 44 indicates that there must be an order of disqualification and without such order, the petitioner cannot be held to have attracted any disqualification even if an order of surcharge has been issued against the petitioner. The learned counsel for the petitioner submits that the provisions of Rule 44 have to be strictly construed and in a manner that this Court would interpret a penal provision. It is submitted that the right of the petitioner to contest in the election is a valuable constitutional right which cannot be curtailed in a casual manner.

¶22

Smt. C.S. Sheeja, the learned Senior Government Pleader appearing for the respondents would refer to the provisions of Rule 44 (1) and states that there is nothing in the wording of that Rule which suggests that a person who has been surcharged under Section 68 (2) is disqualified in contesting the election only in respect of a society in relation to which the order of surcharge had been issued. It is submitted that the purpose of the said Rule is to keep away from the management of co-operative societies, a person, who has been found guilty of having caused loss

¶23

W.P (C) No.5593/2023

¶24

-4-

¶25

even if such loss was caused to another society. It is submitted that the procedure contemplated by sub-rule (3) of Rule 44 is only when the petitioner is continuing as a Managing Committee member and thereafter attracts a disqualification. It is submitted that, in the facts of the present case, the petitioner was not a member of any Board of Directors/Managing Committee at the time when an order of surcharge was issued and therefore, the question of following the procedure contemplated by sub-rule (3) of Rule 44 is not attracted. The learned Government Pleader also places reliance on the judgment of the Supreme Court in K. Prabhakaran v. P. Jayarajan; (2005) 1 SCC 754 to contend that the right to contest in an election is only a statutory right and in order to be eligible to contest in the election, the person concerned should be qualified in terms of the statue. It is also pointed out that the aforesaid judgment is authority for the proposition that a provision for disqualification cannot be termed as a penal provision and cannot be equated with provisions contained in a penal statute. It is submitted that the decision also holds that when there is a reasonable nexus between the provision providing for disqualification and the object sought to be achieved, the provision “should be interpreted with the flavour of reality bearing in mind the object for enactment.”

¶26

Having heard the learned counsel appearing for the petitioner and the learned Senior Government Pleader appearing for the respondents, I am of the view that the petitioner has not made out any case for grant of relief. Sub rule (1) of Rule 44 of the Rules to the extent it is relevant reads as follows;

¶27

‘(1) No member of the society shall be eligible for being elected, or appointed as a member of the committee of the society under Section 28 if he:-...’

¶28

W.P (C) No.5593/2023

¶29

-5-

¶30

A reading of Rule 44 (1) suggests that though the said Rule uses the terms 'member of the society' and 'the committee of the society' , these terms do not indicate that the disqualification contemplated by the Rule in the case of a surcharge would apply, only if, the order of surcharge is in relation to the society to which the person is seeking to get elected. Nothing actually turns on the use of the words 'member of the society' and 'the committee of the society' as only a member of the society can contest to the Board of Directors/Managing Committee of that society. More significantly in Rule 44 (1) (l), the only words used are ‘has been surcharged under Section 68’ . Therefore, the only interpretation possible is this:- a member of the society is disqualified to contest the election to the Board of Directors/Managing Committee, if an order of surcharge under Section 68 is issued in respect of him/her, even if that order of surcharge is in respect of affairs of another society. Moreover, the words used in Rule 44 (1 ) (l) do not use the words 'the society'. In other words, the disqualification contemplated by Rule 44 (1) (l) appears to be attracted the moment an order of surcharge is issued. The provision appears to have been incorporated to ensure that a person who is found guilty of having caused loss to a society should be disqualified not only for contesting in the election to the Board of Directors/Managing Committee of the society in respect of which an order of surcharge has been passed under Section 68 (2), but also to any other society. The judgment of the Supreme Court in K. Prabhakaran (supra) takes the view that while reading a provision relating to disqualification, the court must keep in mind the object sought to be achieved by providing for disqualification

¶31

W.P (C) No.5593/2023

¶32

-6-

¶33

and the provision must be interpreted keeping in mind the object of the enactment. Paragraph 59 of the judgment in K. Prabhakaran (supra) reads as follows;

¶34

“59. In Shibu Soren v. Dayanand Sahay (2001) 7 SCC 425, a three-Judge Bench of this Court was seized of the question of examining a disqualification on account of the person at that time holding an office of profit. The Court held that such a provision is required to be interpreted in a realistic manner having regard to the facts and circumstances of each case and the relevant statutory provisions. While "a strict and narrow construction" may not be adopted which may have the effect of "shutting off many prominent and other eligible persons to contest the elections" but at the same time

¶35

"in dealing with a statutory provision which imposes a disqualification on a citizen, it would be unreasonable to take merely a broad and general view and ignore the essential points".

¶36

What is at stake is the right to contest an election and hold office. "A practical view, not pedantic basket of tests" must, therefore, guide courts to arrive at an appropriate conclusion. The disqualification provision must have a substantial and reasonable nexus with the object sought to be achieved and the provision should be interpreted with the flavour of reality bearing in mind the object for enactment.”

¶37

Paragraphs 54 and 55 of the aforesaid judgment also indicate that a provision providing for disqualification should not be construed in the same manner as one would construe a provision in a penal statute. In order to understand the purpose for which a provision for surcharge has been provided in the Act, it is necessary to read the provisions of sub-section (1) and (2) of Section 68 of the Act, which reads as follows;

¶38

“68. Surcharge.- (1) If in the course of an audit, inquiry, inspection or the winding up of a society, it is found that any person, who is or was entrusted with the organization or management of such society or who is or has, at any time been an officer or an employee of the society, has made any payment contrary to the Act and the rules or the bye-laws, or has caused any loss or damage in the assets of the society by breach of trust, or wilful negligence or mismanagement or has misappropriated or fraudulently retained any money or other property belonging to such society or has destroyed or caused the destruction of the records, the Registrar may, of his own motion or on the application of the committee, liquidator of any creditor, inquire himself or

¶39

W.P (C) No.5593/2023

¶40

-7-

¶41

direct any person authorised by him by an order in writing in this behalf, to inquire into the conduct of such person.

¶42

(2) Where an inquiry is made under sub-section (1), the Registrar may, after giving the person concerned, an opportunity of being heard, by order in writing, require him to repay or restore the money or other property or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such extent, as the Registrar may consider just and equitable.”

¶43

A reading of the provision suggests that an order of surcharge is to be issued against a person entrusted with the organisation or management of a society or who has at any time been an officer or an employee of the society and where he/she has made any payment contrary to the Act and the rules or the bye-laws or has caused any loss or damage to the assets of the society by breach of trust or wilful negligence or mismanagement or has misappropriated or fraudulently retained any money or other property belonging to such society or has destroyed or caused the destruction of the records. In respect of such a person, the Registrar may, after the person concerned is given an opportunity of being heard, require him or her to repay or restore the money or other property or any part thereof or to pay contribution and costs or compensation to such extent as the Registrar may direct. Therefore, when read with the provisions of Section 68 of the Act, the purpose of sub-rule (l) of Rule 44 (1) of the Rules appears to be to create a disqualification even if the surcharge under Section 68 is in respect of the affairs of another society. It does not appear to be reasonable for this court to take the view that a person found liable to surcharge under Section 68 in respect of one society should be allowed to contest in the election to the Board of Directors/Managing Committee of another society.

¶44

-8-

¶45

W.P (C) No.5593/2023

¶46

The provisions of Rule 44 (3) of the Rules apply only if the person surcharged is at that time a member of the Board of Directors/Managing Committee of a society and the order of surcharge is treated as a disqualification for continuing as such. This is not the case here.

¶47

However, I must observe that, as in the case of a conviction which is stayed by the appellate court or the revisional court where an order of surcharge is itself stayed by the court, the disqualification under Rule 44 (1) (l) may not be attracted. In the facts of the present case, if the petitioner wishes to contest in the election to the Neyyattinkara Primary Co-operative Agricultural Rural Development Bank Ltd., pursuant to Ext.P2 notification, it will be always open to him to do so after obtaining a stay of the order of surcharge itself and not the recovery alone. With this observation, this writ petition will stand dismissed.

¶48

Sd/- GOPINATH P. JUDGE

AMG

W.P (C) No.5593/2023

-9-

APPENDIX OF WP(C) 5593/2023

¶53

PETITIONER EXHIBITS

¶54

Exhibit P1 TRUE COPY ORDER IN W.P.(C)NO. 19204/2022 DATED 14-62022 Exhibit P2 TRUE COPY OF THE NOTIFICATION NO. 01/34/2023/E(2)SCEC DATED 2-2-2023 OF THE 1ST RESPONDENT.

M.S. Anil v. State Co-Operative Election Commission (Scec)

Case brief

What is this about?

What did the court decide?

M.S. Anil v. State Co-Operative Election Commission (Scec)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

Similar cases

Rajkumar G Vs the State of Kerala Represented by the Secretary

Raveendran V.V. Vs the Tahsildar

T.Ponnuchandran Vs the Revenue Divisional Officer

Ksr Alankar Hotels and Resorts (P) Ltd. Vs the Deputy Director General

Ravichandran R. Vs .the Secretary Chalakudy Town Co. –Operative Bank

Annie George Vs Accountant General (Accounts and Entitlement )