Supreme Court of India
K. SHANTHARAJ AND ANRversusM.L. NAGARAJA AND ORS.
- Citation
- 1997 INSC 514
- Decided
- 9 May 1997
- Disposal
- Dismissed
Holding
An Administrator under Section 30 of the Karnataka Co‑operative Societies Act has no power to enrol new members; his authority is limited to conducting elections as prescribed by the Act, Rules and Bye‑laws.
Summary
The Committee of a Karnataka cooperative society was superseded and an Administrator was appointed under Section 30 of the Karnataka Co-operative Societies Act, 1959. During his tenure the Administrator enrolled new members and issued a schedule for elections to a new Committee, which the respondents challenged. The High Court Single Judge held that the Administrator has no authority to enrol new members, though he may conduct elections, and the Division Bench affirmed this view. On appeal, the Supreme Court rejected the appellant's contention that the Administrator’s power to conduct elections implied the power to update the electoral roll, emphasizing that the statutory power is confined to conducting elections in accordance with the Act, Rules and Bye‑laws. The Court dismissed the appeal and confirmed the direction that any enrollment of new members must be done by the Board or Board of Directors as per Bye‑law No. 15.
Issues considered
- Whether an Administrator appointed under Section 30 of the Karnataka Co-operative Societies Act has the power to enrol new members of the society.
- Whether the power to conduct elections implicitly includes the power to update the electoral roll by enrolling new members or substituting legal representatives.
- Whether the direction for enrollment of new members by the Board/Board of Directors under Bye‑law No. 15 is valid.
Legislation cited
- Karnataka Co-operative Societies Act, 1959s. 30, s. 30-A, s. 33(2)
Subjects
cooperative societyadministratorsupersessionenrollment of memberselectionstatutory interpretationKarnataka Co-operative Societies Act
Judgment
K. SHANTHARAJ AND ANR. A
v.
M.L. NAGARAJA AND ORS.
I MAY 9, 1997
[K. RAMASWAMY AND D.P. WADHWA, JJ.] B
Kamataka Co-operative Societies Act, 1959.
, Ss. 30 and 30-A-Committee of Co-operative Society-Super-
seded-Administrator-Enrolling new members and giving schedule of C
programme for conducting elections to the Committee-Held, Single Judge of
High Court was right in holding that the Administrator has no power to enrol
new members: but he has power to organise election process in accordance
with provisions of Ac~ the Rules and bye-laws of the Society-Directions
issued by Single Judge for enrollment of new members by the Board or the
Board of Directors, as the case may be, in accordance with bye-law No. 115 D
confinned.
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4271-73
of 1997.
From the Judgment and Order dated 17.3.97 of the Karnataka High E
Court in W.A. No. 1464-66 of 1994.
N. Santosh Hegde, Dayan Krishnan, Nikhil Nair and B. Sunita Rao
for the Appellants.
J_
F
Salman Khursheed, Vivek Reddy and E.C. Vidya Sagar for the
Respondents.
The following Order of the Court was delivered :
Leave granted. G
We have heard learned counsel on both sides.
These appeals by special leave arise from the judgment of the
Division Bench of the Karnataka High Court, made on March 17, 1997 in
Writ Appeal Nos. 1464-66/94. H
389
390 SUPREME COURT REPORTS [1997] SUPP. lS.C.R ..
A The indisputable facts are that the Committee was superseded by the
Administrator who has been appointed by the Government to manage the
affairs of the Society, pending further action. During the period of the
administration, the Administrator had enrolled new members and given
schedule of programme for conducting the elections to the Committee. The
B respondents challenged the order of appointment of the Administrator.
The learned single Judge, while setting aside the order of appointment,
held that the Administrator has no power to enrol new members; but he
could conduct elections to the Committee of the Society as per the
schedule of the programme. That was confirmed by the Division Bench.
The material provisions in that behalf are contained in Sections 30 and
C 30-A of the Karnataka Cooperative Societies Act, 1959 (for short, the
'Act'). They read as under :
"30. Supersession of Committee :
(1) If, in the opinion of the Registrar -
D
(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 interest of the society or its members
E or is otherwise not functioning properly; or
(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, the
Registrar may, after giving the Committee an opportunity to state
F its objections, if any, order in writing remove the said Committee,
and appoint an administrator to manage the affairs of the society
for such period, not exceeding one year, as m(l.y be specified by
the Registrar.
(2) The administrator so appointed shall subject to the control of
G 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 officer of the co-operative society and take such action as he
may consider necessary in the interest of the society.
H (3) The administrator shall, before the expiry of his term of office
K. SHANTHARAJ v. M.L. NAGARATA 391
arrange for the constittit!on of a new committee after holding the A
election in accordance with this Act, the rules and the bye-laws of
the co-operative society;
Provided that in such an election no member of the Committee
removed under sub-section (1) shall, not~thstanding anything
contained in this Act, the rules or the bye-laws, be eligible for being B
--t elected as a member of the committee, for a period of four years
from the date of supersession of the Committee under the said
sub-section.
-
""'
Provided further that if the Committee elected in accordance with
this sub-section is also superseded within a period of one year from
the date of its election, such supersession may extend to a period
c
not exceeding three years.
30A. Appointment of Special Officer:
D
(1) Where the State Government on a report made to it by the
Registrar or otherwise, is satisfied that any co-operative society is
not functioning in accordance with the provisions of this Act or
the rules made thereunder or its bye-laws or any order, direction
circular issued by the State Government or the Registrar it may,
notwithstanding anything in this Act, by order, appoint a Special E
Officer for such co-operative society for such period not exceeding
two years:
Provided that the State Government may, if it considers it
necessary extend the said period of two years by such further
period not exceeding one year. F
(3) The Special Officer subject to the control of the State Govern-
J ment and the Registrar, exercise and perform all the powers and
functions of the Committee of the co-operative society or any
officer of the co-operative society and take all such actions as may
G
be required in the interest of the co-operative society."
It would be clear from the language of these provisions that the
Administrator or special officer, subject to control of any of the functions
of the society, and in the interest of the society take such action as is
necessary for proper functioning of the society as per law. He should H
392 SUPREME COURT REPORTS [1997] SUPP.1 S.C.R.
A conduct elections as is enjoined thereunder. In other words, he is to
conduct election with the members as on the roles and by necessary
implication, he is not vested with power to enrol new members of the
Society.
The learned single hdge in his judgment has held thus :
B
"The new members enrolled by the Administrator is without
authority of law and in utter disregard to the bye-laws of the society
-and they have no right to participate in the election. Since the
order of supersession is declared invalid, the election has to be
conducted from the stage it was intercepted at the earliest oppor-
c tunity. The members who are enrolled during the pendency of the
writ petition shall not participate in the election and the Ad-
ministrator shall notify the election with fresh calendar of events
and hold the election with the members who were then in existence
when W.P. No. 16378/92 was filed. The General Body or the Board
D of Directors elected by the General Body shall consider the ap-
plication of the new members enrolled by the Administrator keep-
ing in view the criteria or the eligibility contemplated under
bye-law 15 and dispose of their application in accordance with the
bye-law after due consideration.
E
The Division Bench after elaborate consideration has agreed with the
above conclusion reached by the learned single Judge and held thus :
"Accordingly, he is not entitled to enrol new members. But it has
to be noted that the wording of Section 33(2) of the Kerala
F Co-operative Societies Act is slightly different from the wording
of Section 30 of the Act. In the Kerala Act, the Administrator has
.power to exercise all or any of the functions of the Committee,
whereas in the Karnataka Act, the Administrator can only exercise
all or any of the functions of the committee. Moreover, as stated
earlier, the difference in the authority vested in an Administrator
G ·and a Special Officer, as is made in the Karnataka Act is not
considered in the Kerala decision. The difference in the authority
vested in an Administrator and a Special Officer in the Karnataka
Act, is very significant which is absent in the Kerala Act. In that
view of the matter, the dictum laid down by the Division Bench of
H the Kerala High Court, cannot have any application while deter-
K. SHANTHARAJ v. M.L. NAGARAJA 393
mining the comparative authority of an Administrator and a Spe- A
cial Officer appointed under Section 30 and 30A of the Karnataka
Act respectively.
In view of what is stated above, we confirm the decision of the
learned single Judge and dismiss these Appeals. The direction
regarding election· given by the learned single Judge shall be B
carried out by the concerned respondent within two month$ from
the date of receipt of a copy of this Judgment."
Shri Santosh Hegde, learned senior counsel, contends that since the
Administrator has power to conduct elections, by necessary implication, he C
has power to update the electoral lists by either enrolling the new members
or substituting the legal representatives of the members in accordance with
the bye-laws; therefore, he has power to enrol the members. We find that
there is no force in the contention. The power of Administrator given
under the statute to conduct elections should be confined within the
parameters set under the relevant provisions of the Act, Rules and Bye- D
laws. The Division Bench has minutely and carefully gone into all the
questions and agreed with the learned single Judge that the Administrator
has no power to enrol new members; but he has the power to organise
election process in accordance with the provisions of the Act, the rules and
the bye-laws of the Society. In that view of the matter, we think that the E
High Court has not committed any error of law warranting interference.
The appeal is accordingly dismissed. However, we confirm the direc-
tion issued by the learned single Judge for enrollment of new members by
the Board or the Board of Directors, as the case may be, in accordance
with the bye-law No.15 and dispose them of. No costs. F
R.P. Appeal dismissed.
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