Dismissed

G.Bakkaiah v. The State of Telangana and 7 Others

Telangana HC5 Jun 2023WA/93/2023

Case brief

AI extract

What is this about?

The High Court dismissed a writ appeal challenging the conduct of elections at a Cooperative Bank following the amalgamation of the sponsoring Andhra Bank with Union Bank of India. The court rejected the notion that membership ceased upon the name change, holding that the transferor bank's operations continued via the transferee.

What did the court decide?

The writ appeal was dismissed without costs as there was no jurisdictional error or impropriety in the order dismissing the petition.

G.Bakkaiah Vs The State of Telangana and 7… — Pension and Retirement Benefits | Telangana HC (2023)

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[3311 ]

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HIGH COURT FOR THE STATE OF^{TELANGANAAT HYDERABAD}

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IVONDAY ,THE FIFTH DAY OF JUNE TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE UJJAL^BHUYAN AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI

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WRIT APPEAL NO: 93 OF 2023

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Writ Appeal under clause¹⁵ of the Letters^{Patent Prefened against Order} Dated 3011212022 Passed^{in WP. No.2251 5 of 2020, on the file of the High Court.}

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Between

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years, G.Bakkaiah, S/o.G.Ramachandram, Aged about⁵⁷ Occ. Assistant Manager, Union Bank^{of lndia, Vikas Nagar Branch, Fyo.Flat No} 504, Venkateswara Residency,^{Ramnagar Gundu, Vidyanagar,Hyderabad-} 500044

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...AppELLANT/pETtrtoNER

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AND

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The State of Telangana, Rep. by its^{Principal Secretary Departmentof} Cooperation, Secretariat, Hyderabad.

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The Joint Secretary^{(Cooperation)and CentralRegistrar, Governmentof} lndia,Department of Agriculture, Cooperation^{and FarmersWelfare, Krishi} Bhavan, New Delhi-1^10001.

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The Commissioner of Cooperation, Government^{of Telangana' Gruha Kalpa'} Exhibition Grounds Road, Hyderabad.

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The Deputy Registrar of Cooperative^{Societies, Governmentof Telangana'} Mithila Complex, 3rd Floor, H.No.4-4-2961^{297, BankStreet, Hyderabad.}

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The Andhra Bank Employees Cooperative^{BankLtd., Mithila Complex,3rd} Floor, H.No. 4-4-2961 297 Bank Street.^Hyderabad

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Samad Khan, S/o.Yousuf Khan,^{Aged about 40 years,Rl/o.Flat No.202,2nd} Floor, Gharonda Pancham Aprt. Beside^{lndian OverseasBank,} Padamaraonagar, Secunderabad-500025.

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7 A.Jagannath, Sio.Late Sri^{A.Kashinath,Aged about 57 years, Rl/o.FlatNo.} 1 07, Sandhya Block,Medha^{RejoiceApartments, Attapur,F{yderabad-500048.}

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8 Srinivasa Rao Kale, S/o.Rama^{Rao, Agedabout 54 years, R/o.D.No.6-72'} Veenayaka Nagar, Chetaparru^{Road, Venkatapuram Panchayat, Eluru,} Andhra Pradesh-534001

...RES'.NDENTS

?t{""-

lA NO: 1 OF 2023

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to dispense with the certified copy of order dated 3011212022 passed in WP No. 22515 of 2020.

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lA NO: 2 OF 2023

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Petition under Section^'l 5'l CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Fourth Respondent to not to resort to counting of votes and declaration of results pursuant to the election conducted on 1311212020 to the Fifth Respondent pursuant to the election notice dated 2511112020, pending disposal of the writ appeal.

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Counsel for the Appellant : SRl. V HARIHARAN Sr. Counsel REP SRI SRIKANTH HARIHARAN

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Counsel for the Respondent Nos.1,3 & 4: GP FOR COOPERATION

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Counsel for the Respondent No.2 : SRI GADI PRAVEEN KUMAR, DEPUW SOLICITIOR GENERAL OF INDIA

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Counsel for the Respondent No.5 : SRI R N HEMEDRANATH REDDY SR.COUNSEL REP SRI M PRATHEEK REDDY

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Counsel for the Respondent Nos.6,7&8 :SRl KEETHI KIRAN KOTA

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The Court made the following: ORDER

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THE HON'BLE THE CHIEFJUSTICE UJJAI BHUYAN AND THE HON'BLE SRIJUSTICE N. TUKARAMJI

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WRTT APPEAL No.93 of2023

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UDGMENT : (Per Hon'ble Si Jatice N. Tukaramji)

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Hcard Mr./. Ilariharan, leamed Senior Counsel lor Mr.Srikanth Haiharan, Iearncd counsel fot the appellant and NIr.R.N. Hemcndranath Reddy, learncd Senior Counscl flor Mr.

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l{.Prathcck Rcddy, lcarned counsel for 5rh respondent.

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'I'his intra-Courr Writ Appeal is directed agahst rhe order of

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the lcarned single J udge dated 30.'l 2.2022 rn the W. p. No. 225 1 5 of 202(\

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3.^'l'hc appellant as petitioncr filed thc writ petition seeking issuance of a writ of mandamus to declare the action of thc Deputy Regrsuar of Cooperat.rvc Sociery/4d, respondent in issuing oF the notificarion dated 25.11.2016 ([or shorr^.the notificat_ion) flor conducting electrons to the Board of Directors of the Andhra llank Employees Cooperativc Bank Lrd./5,h respondent (for shorr

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'the Coopcratrve Bank) undcr the provisions of Muki-State (iooperatrvc Socieucs l(ules, 2002 as illcgal and by serring aside⁽ l.

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lia .<sup>.tRl \^{.</sup> 91 -,01l}

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1 I !

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the noriilcauon. dircct rhe .Joirr r Sccr-crar.r. ((.o operation) and tlrc Central Registrar/2*i rcsponclcnr ro appoint pcrson-in charge to run thc Coopcratir,c Bank till rhe Bvc_larv is arnendcd rr_, iqcl,rclc thc ernployces of Llnron Bank of Indta ro lxrcome thc mernbers oI the^(-oopcrativc Ilank.

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'l'he appellant/pctitioncr is thc member o[ thc Cooperativc Bank and his casc in bric[ is rhat, thc (.ooperativc Bank was ongrnallv rcgistercd as Coopcraur.e Crcdir Sociery urrder the Act VI of 1932 (X{adras) r,ide Rcgistration No. 2NN, dated 31.08.19-51. Subsccluentlv, on issuance of liccnce datccl 16.12.19g6 by the Ilcserve Bank of India, thc Cooperative Credrt Socrerv was converted as the Coopcrativc Rank under the Multi State Cooperatrve Socictics Act, 19U,1, deemed to be regisrered under the provisions of thc Multr-Sratc (-ooperauve Societies t\ct,2002. 5. T'he Cooperarive Bank was formed with an ob jective to ptomote thrift, sclf help and cooperation among its mcmbers i.e. the employees of the Andhra Bank and ro accepr dcposits of money from the mcmbers.

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r{ci & .tRJ wA 9l lr)2,1

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6 I n thc r car 202U, rhc^{(lr.rvcrnment} of India had introduced a schemc o[ amalgamauon of thc Andhra l]ank and Corpotation Bank undcr rhe Union of India Scheme, 2020 in exercise of its powers under Sectton 9 of thc lSanking Oompanres (Acquisitron and^'l'ransfer of L]ndcrtakrngs) Act, 1970. Consequendy, the Andhra Bank has been amalgamated with the Union Bank o[ Indra with eflcct from 01.04.2020.^'l'hus the appellant^as petrtioncr contendcd that lrom the datc o[ amalgamatiofl the Andhra Bank lost its cxistence .

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In the aforcsaid setting, the learned counsel for the appellant pleadcd that as thc membership of the Coopetative Bank is cxclusivcly for the conhrmed employees of the Andhra Bank residing within the area of operation of the bank and Clause 10 of the ByeJaws ordains that a mcmbet ceases to be the member of the Cooperative Bank, if he/she ceases to be in service of the Andhra Bank, on amalgamation, all the conFtmed employees of the Andhra Bank have become the employees of the Union Bank of India, as such by operatron of Clause 10 (5) of the Brre-laws their mcmbcrship in the Coopcratrve Bank had ceased. (

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(

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jl( i& \lRr \ <sup>q. I lr

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lror that rcason, thc gencrirl brlch of^{thc CoopcrativcBank} resolvlng to c()ncluct clections^ar-rd thc^{}Joarcl o[ l)irccrors on} 21.06.2022 appolnling the Dcpuw^{Rcgistrar/4'hresponCentas} ileturning Officer lor conductlng^{clcc[onsis puse Lrad and against} the Bye-laws. Hcncc al.l the proceedings^{for cr,,nducting clcctions} and the notification are liabie to^{bc set aside.}

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Per contra, thc Cooperatrvc^{Bank/5'h tespondcntrvould} submit that the Coopetarive^{Bank is conclucung banl<ing affairs} with crores of rupces inr,estcd^b1' the^{mcrnbersand nomrnal} members. Irurther in an amalgamation,^{the assets, liabiliticsand} receivablcs oI the transfctor alrd^{transfcree entities wc,uld} continue to stand in thc^name of^{the transfcreeentrty'. 'l'herefore,} in the amalgamauon the^{r\ndhrallank has not been ceded in} entrrety.^'lhat apart, the^{CooperativeBank is an independent} entity and even by the Bye-laws^{excePtthc membcrship,the} existence or otherwise of thc^{Andhra Bank will not have any} effect in its governance.^{Hence, the propositionof thc appellant} that post amalgamauon the Coopcrativc^{Bank is lcft wrth no} mernbcr is without anv substancc.^{Addiuonally,as} PCr^Section

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I1CJ & N IRI \A^gl 20I

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)

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33(5) r/rv^.15(5) ol thc N4ulustate^{Ooopctativc Socicn'Act thc} elected board shall bc continucd in thc^{office tillthc} e lccted/nomrnated successors assutnc ofltce.^{lrurthermore,aftcr} thc amalgamation, thc Union Bank of^{India instructed the} Cooperative Bank to updatc their 'l(now^{Your Customer (KYC)'} details for operaring the accounts^{and alsoagreedto provide} uninterrupted services.^'l'his position is clarilying^{that the} Cooperativc Bank is an indcpendent entiry^{and it is in existence.} Thus the contention oI the appellant has^{no merit.}

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(). 'fhe official re spondents 1, 3 and 4 pleaded that as per the prescribed procedure of elccuons aud^as Per^{the Muiti-State} Cooperative Socieues Rules^{2020,on receiving the resolutionsof} the general body and'the board of^{directors, the notification has} been issued with the schedule.^{However, due to Covid the} elections welre delayed and held on^{1.3.12.2020and there is no} impropriery in the proceedtngs.

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The respondcnts 6 to 8 subm-tned^{that the claim of the} appellant that the membership o[^{the CooperativcBank/5'h} respondent is only restricted to the^{employeesof Andhra Bank is} \

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\ ,ri lr,ll <br>

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clcccptivc and rntsleacltng as^(-lausc 6 ol thc bvc-lau,s allou s rht: n()lrrinal mcrnbcrs. In acldidon rl-rc Cooperauvc Bank is a separarc boclv corporatc, rndepcndent io the cxlstcncc of Andh ra Bank arrd \,ould bc govcrncd bt' the Byc larvs.^'l he amalgamarion has rror affectcd the^(-ooperative llank's opcratlons 1n anv rnanner.

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1 1-^'I'l-rc learncd single J udge ()n apprcciarinn rhc n\ral contcntrons and the Bve,laws in dcrar], obsen,cd that thc membcrship of the Cooperative Bank is not assurcd fcrr cr,cry cmpioyec of thc Andhra Bank and rvould be sublcct lo an appl-ication and acccptance by the board of dircctors. l,urthcr, rrn cvaluatron of the terms of cmploymcnt rn rhe scheme ol amalElamation and the Clause (5) of ByeJaw 10, opincd that the rvords 'ceased to be in seft.icc of Andhra Bank' shall nor be rnterpreted suicdy and rf there is any anomaly, purposivc intcrprctauon of the provision is required and a reading of Clause 10 (5) oi Bye-law is grving an impression that thc provision is limited to an rndrvidual's act but not to statutory regulauons such as amalgamation, which would not havc been even visualized by the draftsmen o[ the Bve laws. Even otherwisc without thcrc V

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rlcJ & \ rRl \A 9:i tr)ll

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being any real changc in c<-rnstrtution oi thc r\ndhra^{Bank and bv} merc changc in nomcnclature rvould not rcsult in termrnarion o[ mcmbership in the Cooperauve Rank. As such, the words^'ceascd to bc in service of Andhra Bank' trt thc Rvc-larv cannot bc implausibly reasoned as it would be absu rd and affe ct thc cnt.ire funcuoning of the Cooperative Bank. Irurther, as therc are two categories of membcrs in thc Cooperauvc Ilank, iF the appcllant's proposed interpretatron 1S accepted, it would^jeopardise thc interests o[ nomrnal members as the^(]ooperative Bank cannot function without a propcr board 1n placc. By itsel( the proposition that the Cooperadve Bank is left with no mcmbers^is inconceivable. Futthermore, by amalgamation, if the transferor bank loses identiry, no proceedings of rccovery or of any dues including statutory dues can be initiated against it and this would result in anomaly. In addirion, the appointment of person-incharge can be invoke d only when there is a stalemateⁱⁿ conduccing the affats of the sociery and as pcr the provisions o[ the Act until new elected body assumes chargc, the board of directors can continue to manage, thcrc fore, no predicament^is

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'-.6 \ ::'r4 ll( I.'.ii an

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fotrnrl, ir.r effect the praycr' for appointmcnt of person tn charrc car]lr()t l)c acccprcd, ,\ccr>rdinglv, bV concludrr1g that the clarnr of thc appcllant is of no substancc, dismissed thc writ peuu,rn

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\,'c Irave carefully considcred rhe submissions of thc lcartrcd cor-rnscl and perused the materials on record

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r\ rcadrng of the byc laws of the Cooperauvc Bank rs rcndcrtng that apart frorn the membcrs there are nc>nrinal mcrnbcrs and clause 10 (5) of the Bve larv does not affcct thcrr posiuon. Nonethcless Clausc 7 of the Bye-laws stipulates that thc nominal rncmbers are not entrtled to shares, to receive the audrted acc()unts, annual reports, anv interest in the management, right tcr votc, c()ntest electrons as director ol the bank and participatc ln

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thr: gencral body meetrngs o[ the bank

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1,4. Pertrnendy, Clause 24 of the Bye-laws is speciS,ing that none o[ the BycJaws shall be added, amended, alrcred or rescindcd, except by a vote of the majoriry consisting o[ not lcss than two rhirds of thc members preseflt and with 15 days advancc notlcc^'fhe amendmeot, i[ any, shall take effect from thc darc oi rccerpr of the Central Registrar's approval in wriung or as pet rhc

HCJ & NTRJ w 9i l0tl

I I I

- --.::al^" t^' ./ '/

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pro\risions of thc Mukistatc Coopcradvc Sr;cicrics ,\ct. Sub clause (c) clarifies thar any doubr arise rcgarding consrrucrion of the Act or Bye law, the Board of Directors shall rcfler the same to thc .(lcntral Rcgistrar and shall act as per his aclvicc lnd in absencc of any particular provision, circulars or orders issued bv the Central Rcgisuar are applicable.

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1-5. In this position, if the appellant,s proposition is conceived o[ as it is, then from the effectuaung date oF scheme of amalgamation, all the members excluding thc nominal mcmbers shall lose their membership in the Cooperativc Bank. In abscncc of any member or management, thc Cooperative Bank should stand defunct. In absence of management thcrc would be none even to communicate wlth the Central Regrstrar lor clarificat_ion and t}le en tire business of the Cooperative Bank which is being conducted since the last six decades including the interests o[ nominal members shall vanish. Therefore, this pedantic and unworkable interpretation would be absurd and beyond logrc.

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It is relevant to note that the amalgamation in thc nature of

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merger affects two or more cooperadve entiues to form an

ll( 'r''ii

l(l

intr:gratcd cstablislrrncnt ',r,1-rich [ry opcratron oI law tlrc rransil:rcc cn n' ac(lLr|cs all rhc asscts, contracts, gralrts clf thc transfcrr,r enritv and bc decrncd to ha\rc bccn vcsted in thc translcrce cntit\ 'l hc translcrcc cntin, is cntitlcil to cxcrcise all rights, pr:ivile,qcs antl lirbL]rues oI rhe translcror cnutv. Slnilarly thc sen icc c()ncllti()ns of the cmpkrvees^()f ihe transfcror entity will remain unaltcred and continue in scrwicc wrthout any brcak or interruprron wrth thc transferec cntin' arrcl in casc the cmployees does n()t wa11t to continuc rn sen,icc rn the tlansferee bank, they arc deemed tcr havc bccn supcrannuated on the date prcceding tl-re datc of amalgalnatir.,rr and they would be enrided to all supcrannuan' )n bcncfits as rvould lre admissible from the trans f-eror entity, lrom the translcrere enury. For these reasons, amalgamation canflot be equated u,ith wounding up/dissolutron process wherc the cnury closes its opcration o[ busincss by selling off its assets to pay off thc creditors and distribute the remaining assets

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In conscquencc, we are of the considercd opinion that thc scheme of arnalgamation hacl only affected the nomenclature and the ransfcr o[ the rolls of the employees to the translctee bank

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IICJ&\II{J !\ .\ 9r lnt i

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L,pon dccmed vesung of all aspe cts includrnir rhc cmpkrvccs ttf

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thc trans[eror enflfy in thc transferce enflty, a constructi.c and

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pumosivc rcading o[ the Bye-laivs is imperativc. Vhcrefrrre thc u,ord Andhra Bank in the relevant Bve law shall be consrructed in

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the name of its transferee bank i.e., Union Bank of India

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For the aforesaid reasons, we do not find any jurisdicrional crror or lmproprlcty or afly reason flecessitating intcrference ol thrs^(-ourt, in the order passed by the learned Single J udgc

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7(). In the result, the wrir appeai [ails and it is accordingly

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dismrsscd. No costs

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i\s a sequel, miscellaneous petirions pending i[ any, shall

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s rand closed

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//TRUE COPY//

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sD/- B. SAWAVATHT DEPUW REGIStrRAR ;/ SECTION oFFICER