M.ARUMUGAM Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) The batch of Writ Petitions before this Court are filed by the members of different Co-operative Societies seeking a Writ of Declaration to declare the provisions of the Tamil Nadu Co-operative Societies (Third Amendment) Ordinance 2012, as unconstitutional and ultra vires the Constitution, particularly Part IXB of the Constitution of India. Subsequent to the filing of the Writ Petitions, the Ordinance had become an Act and accordingly, the petitioners have filed petitions before this Court, amending the prayer to declare the amended Act as unconstitutional. Accordingly, the amendment petitions filed in the Writ Petitions are ordered. On notice, the State has filed a common counter in all these Writ Petitions.

(2.) It is a matter of record that approximately for about 11 years, there had been no election in the Co-operative Societies for some reason or other to elect the members of the Board of Directors/Governing Body of the cooperative societies. In the wake of the above-said fact, in the place of the Board/governing body, Special Officers were appointed by the Registrar for a specified period not exceeding six months, to manage the affairs of the registered society, pending constitution of a new Board. The term of office of the Special Officer was extended from time to time. As of today, in the place of the Board/governing body, we have only Special Officers managing the affairs of the society. In this background, Section 89A was inserted by the Tamil Nadu Cooperative Societies (Amendment) Act of 2001 (Tamil Nadu Act 12 of 2001), effective from 12th June 2001. Through this provision, powers were conferred on the Special Officer appointed under Section 88 of the Tamil Nadu Cooperative Societies Act, 1989 and the Administrator appointed under Section 33 to admit any individual eligible for admission as a member of the society. The validity of the said provision came up for consideration before the Full Bench of this Court. The decision of the Full Bench is (K.Nithyanandam Vs. State of Tamil Nadu, 2006 1 CTC 1).

(3.) This Court struck down the provisions as violative of Article 19(1)(c) and not saved by any of the grounds under Clause (4) of Article 19. In so holding, this Court followed the decisions of the Apex Court (K.Shantharaj V. M.L.Nagaraj, 1997 6 SCC 37) and (Joint Registrar of Co-operative Societies Kerala V. T.A.Kuttappan, 2000 6 SCC 127). In the above-said decisions, the Apex Court held that enrolment of new members in the cooperative society by the Special Officers would be detrimental to the democratic process of the society and as the cooperative society is expected to function in a democratic manner, such a power should be exercised by an elected committee only. Thus, following the decision of the Apex Court, this Court pointed out that the admission of new members and the examination with regard to the eligibility to be the member of a society are entirely in the discretion of the Board of Directors elected by the general body. A Special Officer or an Administrator, appointed temporarily to manage the affairs of the society, cannot be allowed to alter the composition of the society by conferring power on the Special Officer for enrolling new members. This Court further pointed out "the admission of members is a primary right of the society. In a democratic set up, it is the general body/ executive committee which would alone have the power to admit new members who satisfy the required criteria as per the bye-laws of the society. The Special Officer cannot enter into any conflicting policy decision by admitting new members without the consent of other members. The Special Officer is assigned with a duty to administer the day-to-day administration for a limited period with a limited purpose. Thus holding, this Court declared Section 89A of the Act as arbitrary, unreasonable, ultra vires and unconstitutional, as it would be detrimental to the democratic process and disturbance to the democratic set up, affecting the democratic right of the general body of the society, which would amount to a declaration by the Legislature making the early judicial declaration in the decision (Joint Registrar of Co-operative Societies V. T.A.Kuttappan, 2000 AIR(SC) 2378) ineffective and invalid. Thus as of today, all the cooperative societies' affairs are managed only by the Special Officers and there are no new members inducted into the society on account of the absence of a governing body, who alone were empowered to admit a person as a member of the society as per the unamended Section 21(2) of the Act.