Disposed

P.Liyakahat v. Deputy Registrar/Divisional Cooperative Officer

Telangana HC8 Oct 2012WP/12081/2012

Case brief

AI extract

What is this about?

The court disposed of two writ petitions concerning the validity of resignations by purported directors and subsequent elections in a cooperative society. The bench directed the Registrar to conduct a detailed inquiry into the identities of the petitioners and the alleged real directors, nullify subsequent elections if petitioners are verified, and maintain status quo.

What did the court decide?

Direction to Registrar/Principal Secretary to hold a detailed inquiry into director identities; nullification of elections if petitioners verified; stay on management affairs pending inquiry.

P.Liyakahat Vs Deputy Registrar/Divisional… — Company and Corporate | Telangana HC (2012)

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The Hon'ble Sri Justice C.V.Nagarjuna Reddy

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Writ Petition Nos.12081 & 13649 of 2012

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Date: 08.10.2012

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W.P.No.12081 of 2012: P. Liyakahat and others … Petitioners And Deputy Registrar/Divisional Cooperative Officer, Cooperative Societies, Madanpalli, Chittoor District and others … Respondents Counsel for the petitioners : Mr. Sitaram Chaparla Counsel for respondent No.1 : GP for Cooperation Counsel for respondent No.2 : None appeared Counsel for respondent No.3 : Mr. N. Pramod W.P.No.13649 of 2012: P. Liyakahat and others … Petitioners And The Principal Secretary to Government, Agriculture and Cooperation Department, Secretariat, Hyderabad and others … Respondents Counsel for the petitioners : Mr. Sitaram Chaparla Counsel for R.1 to R.5 : GP for Cooperation

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Counsel for respondent No.6 : Mr. N. Pramod

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The Court made the following :

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Common Order:

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These two Writ Petitions pertain to a common dispute between the same parties. Hence, they are heard and being disposed of together.

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I have heard Mr. Sitaram Chaparla, learned counsel for the petitioners, learned Government Pleader for Cooperation appearing for respondent Nos.1 to 5 and Mr. N. Pramod, learned counsel for respondent No.6. For convenience, the parties are referred as they are arrayed in W.P.No.13649 of 2012.

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The petitioners claim to be the four of seven Directors of respondent No.6 Society. It is their pleaded case that the whole Society was conceived by its President Mr. Y. Gopal Reddy with a view to serve his personal interests and that the petitioners were used by him by showing them as Directors to fulfill his oblique motives. The petitioners tried to send their resignations to the President of the Society. As the President of the Society allegedly declined to receive the same, they have sent their resignations to respondent No.5, while handing over the original records, such as, Minutes Book, Admission Register, etc. On receipt of the purported resignation letters, respondent No.5 issued a show-causenotice under Section 34(1) of the Andhra Pradesh Co-

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operative Societies Act, 1964 (for short “the Act”) on 22.02.2012 to the Managing Committee to explain why the Managing Committee of the Society shall not be superceded as the majority members have tendered their resignations and that, therefore, no Committee existed to manage the affairs of the Society. The petitioners have submitted their replies reiterating their stand taken in their resignation letters. Respondent No.5 vide his proceedings in Rc.No.175/2012-C dated 11.04.2012 dropped further action. Questioning the same, the petitioners filed W.P.No.12081 of 2012. This Court has ordered notice in the said writ petition.

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In the meantime, proposals appeared to have been sent by respondent No.5 for holding fresh elections. Questioning the intra-departmental correspondence relating to the conduct of elections, the petitioners filed W.P.No.13649 of 2012 for a Mandamus to declare the action of respondent No.4 in recommending respondent No.3 to appoint an Election Officer for conducting elections to the Managing Committee of the Society as illegal and arbitrary. The petitioners sought for a consequential direction to the respondents not to issue any election notification for conducting elections to the Managing Committee of the Society without deciding as to who are the original Directors and who are the persons responsible for tampering and forging the original records of the Society. This Court by order dated 16.05.2012 directed that any election to the Managing Committee of the Society shall be subject to the result of the writ petition. At the hearing, it has come out that elections

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were already held to the Managing Committee of the Society and a new Managing Committee has been constituted.

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The learned counsel for the petitioners submitted that the action of respondent No.5 in not superceding the Managing Committee of the Society following the resignations submitted by the petitioners is wholly arbitrary a n d mala fide. He has further submitted that instead of holding the inquiry and deciding whether the petitioners are the genuine Directors and, if not, who are the genuine Directors and taking a decision finally on the show-causenotice, respondent No.5 facilitated the President of the Society to get a new Managing Committee elected under his supervision and control. The learned counsel further submitted that since the whole elections were held under the aegis of the previous Managing Committee of the Society, which should have been superceded had the petitioners’ resignations been accepted, they have to be declared as illegal.

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The learned Government Pleader for Cooperation and Mr. N. Pramod, learned counsel for respondent No.6, submitted that as the very identity of the petitioners itself was in doubt, respondent No.5 has dropped the further action in pursuance of the show-cause-notice. They have also submitted that W.P.No.12081 of 2012 has become infructuous, as the term of the Managing Committee of the Society has already come to an end by 10.06.2012 and that W.P.No.13649 of 2012 is also liable to be dismissed, as the

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elections have already been held and if the petitioners feel aggrieved by such elections, the only remedy for them is to file an election petition.

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I have carefully considered the respective submissions of the learned counsel for the parties.

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The whole genesis of the dispute is traceable to the resignations of the petitioners. If the identity of the petitioners was inquired into and established, their resignations deserve to be accepted and in such a case, there was no option to the Registrar except to hold elections to the new Managing Committee, as envisaged under Rule 23-AAA (5) of the Andhra Pradesh Co-operative Society Rules, 1964. Under the said provision, in the event of resignation of the entire Managing Committee or a majority of the Managing Committee, the Registrar of Co-operative Societies shall hold elections and till the new Managing Committee takes charge, the Registrar may appoint person in-charge or direct the Managing Committee to continue to discharge their functions till the elections are held and the new Managing Committee takes charge.

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The grievance of the petitioners, as noted above, is that instead of making a full-fledged inquiry into the identity of the petitioners and taking a final decision as to whether they are the genuine Directors and, if so, whether the Managing Committee of the Society automatically ceases with their resignations, respondent No.5 has skirted the issue and given scope to the President of respondent No.6 Society to

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get a new Managing Committee elected under his control. A perusal of the order passed by respondent No.5 would show that he entertained suspicion on the claim of the petitioners that they are the four of the seven Directors of the Society. After discussing various aspects in support of his suspicion, he has finally stated as under:

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“It needs detailed enquiry to find out original Directors and to find out person(s) responsible for tampering/altering records. The said enquiry may take more than 3 months. Hence all the four resignations have not been accepted as the resigned persons failed to produce evidences to show that they are the original Directors.

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Moreover, the term of the Managing Committee will be expired on 10.06.2012 (less than two months). It may not be possible to complete the enquiry within two months to trace out the persons responsible for tampering of records.

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Under the afore-mentioned circumstances, the notice issued u/s 34(1) of the A.P.C.S. Act, 1964 proposing to supercede the Managing Committee of the Gurramkonda Co-operative House Building Society is hereby dropped.”

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In my opinion, it would not have been difficult for respondent No.5 to verify the genuineness or otherwise of the claim of the petitioners that they are the real Directors by asking them to be present personally and establishing their identity with reference to the photographs of the Directors available on record. Instead of undertaking this exercise, respondent No.5 has chosen an easy option by postponing the issue. In the meantime, the President of respondent No.6

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Society appeared to have got the elections to the new Managing Committee held. As noted above, this Court has directed that any elections to be held to the Managing Committee of the Society shall be subject to the result of W.P.No.13649 of 2012.

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As discussed above, if the petitioners were the genuine Directors, their resignations ought to have been accepted which would have automatically led to the supercession of the Managing Committee of the Society by respondent No.5 under Section 34 of the Act. As a result of the failure of respondent No.5 to decide the issue relating to the genuineness or otherwise of the claim of the petitioners that they are the Directors, a new Managing Committee was elected while the previous Managing Committee was in Office. This, in my opinion, has affected the interests of the petitioners, as all through it has been their claim that the President of respondent No.6 Society has been stagemanaging the whole affairs of the Society and using the Society to serve his personal interests. In the above fact situation, it is appropriate that the writ petitions are disposed of in the following terms:

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1) Respondent No.4 is directed to hold a detailed inquiry into the aspect relating to the identity of the petitioners with reference to the available record,

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2) Since it is the case of the President of respondent No.6 Society that the petitioners are

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impersonating the real Directors, a notice shall be issued to him to produce the purported real Directors. Respondent No.4 shall make physical verification of the identity of the petitioners vis-avis the alleged original Directors and render a finding as to which of the two sets of persons are the real Directors,

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3) If the petitioners’ identity is established as Directors, respondent No.4 thereafter shall issue a notice to the petitioners, the President of respondent No.6 Society and other interested parties and take a final decision as to whether the petitioners were the genuine directors and, if not, who were the genuine Directors. If it is held that the petitioners were the genuine Directors, the entire election held subsequently under the supervision and control of the previous Managing Committee shall stand nullified and respondent Nos.3 to 5 shall take steps for holding fresh elections,

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4) Conversely, if the petitioners’ identity is not established and they feel aggrieved by the order that may be passed by respondent No.4, they shall be free to question such order by invoking the remedy of appeal before the Andhra Pradesh Co-operative Tribunal, and

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5) The above-mentioned exercise shall be completed by respondent No.4 within three months from the date of receipt of this order. Till then, status quo as on today shall be maintained with regard to the Management of respondent No.6 Society.

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Both the Writ Petitions are, accordingly, disposed of.

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As a sequel to disposal of the writ petitions, W.P.M.Ps. filed for interim reliefs are disposed of as infructuous.

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__________________________ (C.V.Nagarjuna Reddy, J)

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8^th October, 2012 cbs

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The Hon'ble Sri Justice C.V.Nagarjuna Reddy

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Writ Petition Nos.12081 & 13649 of 2012

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8^th October, 2012

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cbs

P.Liyakahat v. Deputy Registrar/Divisional Cooperative Officer

Case brief

What is this about?

What did the court decide?

P.Liyakahat v. Deputy Registrar/Divisional Cooperative Officer

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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