GIGI GOERGE, S/O K V GEORGE, ZACHARIAH MATHEW, S/O MATHEW PAREL AND RAJEEV N , S/O NARAYANA GOPAN Vs. K JAYAVARMA, ADVOCATE, PRESIDENT AND ORS

JUDGEMENT

(1.) These Review Petitions are filed for reviewing our judgment in Writ Appeal No. 76/2010 dated 22.1.2010 whereunder we set aside election to the Board of Directors of the Thiruvalla East Co-operative Bank Ltd. (hereinafter called "the Bank") with direction to the State Co-operative Election Commission to hold fresh election at the earliest. We noticed that the Bank had 68000 members and 25000 of them had obtained photo identification cards for casting their votes in the election to the Board. Our specific finding in the judgment is that in the postponed election held without notice under orders of this Court only 4400 and odd members participated which accounts for less than 20% of those who have taken photo identification cards for voting. Since the election to the Board of Directors did not serve the purpose of constituting a representative body of the members of the Bank, we set aside the election with direction to hold the election at the earliest. However, since the Board of Directors of the Bank was constituted after election and they had taken over, we allowed them to continue to function with the prohibition against taking any policy decision. Even though the members of the Board of Directors challenged the judgment before the Honourable Supreme Court, the Supreme Court dismissed the S.L.P. Thereafter Review Petition was filed before us which was disposed of by order dated 8.4.2010 granting time for issuing photo identification cards to members in terms of Rule 35A(5) of the Kerala Co-operative Societies Rules with direction to the Joint Registrar to supervise the same. The need to hold fresh poll at the earliest was very clearly stated in the orders issued in the Review Petition also. Against the order in the Review Petition, S.L.P. was filed before the Honourable Supreme Court and the same was disposed of on 30.9.2010 with direction to hold fresh election within six months from the date of the said order. The Honourable Supreme Court also directed the State Government to appoint an Administrator to oversee the functioning of the managing committee which was allowed by us to continue though without right to take any policy decision. Pursuant to direction of the Honourable Supreme Court to hold election within six months, the State Co-operative Election Commission issued a notification for poll on 21.1.2011 fixing the polling on 12.2.2011. The poll so notified was challenged in a fresh writ petition, W.P.(C) No. 2940/2011 and by order dated 3.2.2011 the learned Single Judge granted stay against holding of the poll so notified. It is seen from the said order that the reason for staying the poll notified to be held pursuant to judgment of this Court in the Writ Appeal and order of the Honourable Supreme Court in the S.L.P. is that there is drastic amendment to the Co-operative Societies Act by Act 7 of 2010 which came into force on 28.4.2010 whereunder the number of members to be elected to the Board of Directors of the Bank was limited and refixed. Further, new provisions on reservations were introduced. Women's representation is increased from one to three. Two atleast have to be elected from members of the Bank who have expertise in banking or other professional fields and one member in the Board representing investors in the Bank with deposit over Rs. 10,000/- also is made compulsory. In fact, the above referred amendment to the Co-operative Societies Act was introduced after our judgment in the Writ Appeals and our orders in the Review Petitions. Even though the Honourable Supreme Court disposed of the SLPs. after the above referred amendment to the Co-operative Societies Act with effect from 28.4.2010, none of the parties brought to the notice of the Supreme Court the need to notify election consistent with the amended provisions of the Act providing for election of five more members to the Board in the above referred quotas. When the matter was brought to the notice of the learned Single Judge in the W.P.(C), the learned Single Judge felt that after the amendment there is no justification for constitution of the Board of Directors except in accordance with the amended provisions of the Act and hence the repoll fixed was stayed. The Writ Appeal filed against this interim order is pending before another Division Bench with one of us as a member (Justice C.N. Ramachandran Nair) and in fact the W.P.(C) filed challenging the election is also ordered to be posted along with the said Writ Appeal for early disposal. Since another Division Bench is considering the question whether repoll of previously notified election or an altogether fresh election in terms of the amended provisions of the Act is to be held pursuant to the judgment in Writ Appeal of this Court and the Honourable Supreme Court in the S.L.P., we do not propose to consider it in these R.Ps. However, since this Bench has issued the main judgment in the Writ Appeal, Review Petitions against the same have to be heard by us and accordingly we have heard counsel appearing for all the parties.

(2.) We have to proceed to consider the Review Petitions keeping in mind the finality achieved to our judgment through dismissal of the first round SLP and disposal of the second round SLPs. filed against Review orders by the Honourable Supreme Court upholding our direction to hold fresh election. Even after invalidating election to the Board of Directors vide our judgment in the Writ Appeal, we allowed the Board which was already constituted to continue to run the Bank without any right to take policy decisions. The Honourable Supreme Court did not interfere with this arrangement made by us. However, while disposing of the SLPs. on 30.9.2010 the Honourable Supreme Court directed the State to appoint an Administrator to oversee the functioning of the Board of Directors which was in fact done by the Government. Based on our judgment the Board has been functioning for the last one and a half years. Pursuant to our judgment as modified by the Honourable Supreme Court, election in any case has to be held without any delay. The only question being considered by the other Bench is whether the fresh election to be held should be only a repoll of election as originally notified or should be based on the amended provisions of the Act to elect also the additional five members from reserved quotas. Leaving this question open, we proceed to consider the R.Ps. on merits.

(3.) The main ground raised by the review Petitioners is against the management of the Bank by the present Board beyond the maximum period of one year as provided under Sections 32 and 33 of the Co-operative Societies Act. Senior counsel Sri. P. Ravindran appearing for the Respondents in the Review Petitions relied on judgment of the Honourable Supreme Court in Gangadhara Palo v. Reveneu Divisional Officer, 2011 4 SCC 602 and contended that this Court cannot consider the review because of the order of the Supreme Court in the SLPs. dated 30.9.2010. However, counsel for the review Petitioners contended that review is filed agianst original judgment of this Court in the Writ Appeal against which SLP filed was dismissed by the Honourable Supreme Court vide order dated 11.2.2010. According to counsel for the review Petitioners, the order in the second round SLPs. is passed against review orders issued by this Court on 8.4.2010, wherein the Supreme Court has not modified our judgment in the Writ Appeals permitting the members of the Board to continue until fresh election which was ordered to be held without any delay. In fact, the two round SLPs. were filed by the Respondents only to delay the election and to continue to manage the Bank. We have clearly found in the judgment in the Writ Appeals that the election by which members of the Board of Directors got elected was not a proper election and, therefore, the elected directors could not be called true representatives of the members of the Bank. The permission to hold office as members of the Board of Directors was only an adhoc arrangement made by this Court which was not modified by the Supreme Court. In fact, the Honourable Supreme Court introduced a further control over the Board of Directors by directing the Government to appoint an Administrator and the Government has complied with the direction of the Supreme Court. The election is getting delayed on account of one reason or other and in view of the stay order granted by the learned Single Judge, the election cannot be held until the other Division Bench passes orders in the Writ Appeal permitting election, whether it be based on amended provisions of the Co-operative Societies Act or not. The question to be considered in the Review Petitions is whether this Court expected members of the Board of Directors who were not found to be elected in a proper election to continue to manage the affairs of the Bank indefinitely and beyond the maximum period provided in the above provisions of the Act which is one year. Admittedly the Board functioned for over one and a half years without taking any policy decision but by overseeing routine operations for which in fact no Board is required. If election was held without any further contest based on our judgment in the Writ Appeal and the order in the Review Petitions, probably duly elected members would have constituted new Board. Even though counsel appearing for the Respondents contended that review Petitioners also contributed in delaying the election by filing fresh writ petition in this Court, we do not think we can accept this contention because it is the Board of Directors of the Bank who delayed election by repeatedly filing SLPs. before the Honourable Supreme Court which met with no success. What we find from Section 32 and 33 of the Act is that pending election, the Board of Directors of the Society can be allowed to continue on an adhoc arrangement until constitution of the fresh Board of Directors for a period not exceeding one year. In this case the Board of Directors of the Bank continued for more than one and a half years after their election which was declared invalid by this Court and confirmed by the Supreme Court. Therefore, we do not think there is any justification for us to permit the Board of Directors to continue any longer. Further, pursuant to direction issued by the Supreme Court on 30.9.2010 in the SLPs., Government has already appointed an Administrator to the Bank who can exercise full control over the Bank until fresh election and handing over of charge to the new Board of Directors to be constituted after election. We declare that the Administrator so appointed shall be deemed to be the Administrator appointed by the Registrar in terms of Section 33 of the Act. The Board of Directors shall forthwith vacate their office and hand over full charge to the Administrator. Review Petitions are allowed modifying the judgment in the Writ Appeal as above. The pattern of election to be held to the Board of Directors under our judgment in the Writ Appeal confirmed by the Supreme Court will be subject to the judgment of the Division Bench in the Writ Appeal and Writ Petition referred above.