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Jt. Registrar Of Cooperative Societies, Kerala v. T.A Kuttappan And Others
Factual and Procedural Background
The Registrar of Cooperative Societies, exercising powers under Section 32 of the Kerala Cooperative Societies Act, 1969 (“the Act”), superseded the elected Committees of Management of several cooperative societies and appointed administrators in their place. When these administrators sought to enrol new members, objections were raised. Multiple original petitions were filed in the Kerala High Court under Article 226 of the Constitution challenging the administrators’ authority to admit members. A Full Bench of the High Court held that administrators lacked such power. The present appeals were filed in the Supreme Court by special leave to contest that ruling.
Legal Issues Presented
- Whether an administrator (or committee) appointed under Section 32 of the Kerala Cooperative Societies Act, 1969, during the period of supersession of an elected committee, possesses the power to enrol new members to the cooperative society.
- Whether the Supreme Court’s earlier decision in K. Shantharaj v. M.L. Nagaraj (1997 6 SCC 37), rendered under the Karnataka Cooperative Societies Act, applies to the Kerala statute despite textual differences between the two enactments.
Arguments of the Parties
Appellants’ Arguments
- They relied on linguistic differences between Section 32(4) of the Kerala Act and Section 30 of the Karnataka Act, contending that the phrase “have power to exercise all or any of the functions” in the Kerala statute is broader than “exercise all or any of the functions” in the Karnataka provision, thereby conferring authority to enrol new members.
- They cited portions of a Division Bench judgment that distinguished between the powers of an “administrator” and a “special officer” under the Karnataka Act, arguing that such distinctions were absent in the Kerala Act.
Respondents’ Arguments
- They relied on the Supreme Court’s pronouncement in K. Shantharaj, asserting that administrators are limited to day-to-day management and conducting elections, and by implication cannot alter membership rolls.
- They supported the Full Bench view that admission of members is a “power,” not a mere “function,” and therefore remains exclusively with an elected committee.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| George v. Joint Registrar, 1985 KLT 836 | Earlier Kerala decision on powers of administrators. | Considered by the High Court; its continuing validity was questioned in light of later Supreme Court authority. |
| K. Shantharaj v. M.L. Nagaraj, 1997 6 SCC 37 | Held that an administrator/special officer under the Karnataka Act cannot enrol new members; elections must be held with existing rolls. | Treated as binding; Supreme Court applied its ratio to the Kerala Act and affirmed that administrators lack power to admit new members. |
| Cherthala Agricultural Rural Development Bank v. Joint Registrar, 2000 1 KLJ 291 (FB) | Kerala Full Bench decision giving prospective effect to the bar on administrators enrolling members. | Mentioned; Court stated that its scope was not required to be examined in the present appeals. |
Court's Reasoning and Analysis
The Supreme Court observed that Section 32(4) authorises an administrator to “have power to exercise all or any of the functions” of the committee, yet emphasised that the determinative factor is the nature of the act, not the semantics of “function” versus “power.” Enrolment of new members alters the very composition of a cooperative society and is therefore a substantive power best exercised by an elected body in keeping with the democratic character of cooperatives.
Drawing on its earlier reasoning in K. Shantharaj, the Court held that an administrator’s role is remedial—“to bring on an even keel a ship which was in doldrums.” His primary duties are to rectify defaults and facilitate fresh elections, not to undertake structural changes such as admitting new members. The Court rejected the appellants’ linguistic distinction between the Kerala and Karnataka statutes, stating that the practical effect of the two provisions is “in substance one and the same.”
Accordingly, the Court affirmed the High Court’s conclusion, albeit with additional reasoning focused on the democratic foundations of cooperative societies.
Holding and Implications
APPEALS DISMISSED.
Administrators or committees appointed under Section 32 during supersession of an elected committee in a Kerala cooperative society do not have the power to enrol new members. The immediate consequence is that the membership rolls must remain unaltered until a duly elected committee assumes office. The judgment reinforces the principle that substantive changes to cooperative societies’ composition are reserved for democratically elected bodies; no new legal precedent beyond this clarification was created.
S. Rajendra Babu, J.— These appeals by special leave are against a common order made in OPs Nos. 12184, 14840, 14886, 15700, 17258, 18396 and 20913 of 1997. Section 32 of the Kerala Cooperative Societies Act, 1969 (hereinafter referred to as “the Act”) enables the Registrar of Cooperative Societies to supersede the Committee of Management under the circumstances set forth in sub-section (1) thereto. After supersession of the Committee of Management, the Registrar can appoint an administrator or administrators or a committee as provided in Section 32(1)(a) and (b) of the Act. Such committee or administrator or administrators so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have power to exercise all or any of the functions of the committee or of any officer of the society and take all such action as may be required in the interests of the society. When the administrator appointed on supersession of the Committee of Management of certain cooperative societies wanted to enrol new members to the society the same was objected to and the original petitions under Article 226 of the Constitution were filed before the High Court on the ground that the Registrar is only expected to carry on day-to-day functions of the society and see that election is conducted and a new committee in accordance with the Act, rules and bye-laws of the society is constituted. It was contended before the Court that the earlier decision in George v. Jt. Registrar 1985 KLT 836 is no longer good law in the light of the decision of this Court in K. Shantharaj v. M.L Nagaraj (1997) 6 SCC 37. The Full Bench of the High Court, after referring to the earlier decision of the High Court and the decision of this Court in K. Shantharaj (1997) 6 SCC 37 held that the admission of a member is not mere “function” of the committee, but is a “power” of the committee to admit members or not as provided in bye-laws of the society. The committee can exercise only certain functions and not any powers and, therefore, the administrator or a committee appointed as aforesaid has no power to enrol new members. This order is in challenge in these appeals.
2. It is now brought to our notice that subsequent to the decision of the High Court, the provisions of Section 32 have been amended so that the administrator or the committee will have power to exercise all or any of the powers and functions of the committee. It is further brought to our notice that in Cherthala Agricultural Rural Development Bank v. Jt. Registrar (2000) 1 KLJ 291 (FB) it has been held that the decision in the case before us holding that the administrator has no power to enrol new members would have prospective and not retrospective effect. The scope of neither the amended Section 32 of the Act nor the decision in Cherthala Agricultural Rural Development Bank v. Jt. Registrar (2000) 1 KLJ 291 (FB) is required to be considered by us in these proceedings.
3. The question whether an administrator appointed during supersession of a Committee of Management of a cooperative society can enrol new members is no longer res integra. When an identical question came up before this Court for consideration in K. Shantharaj case (1997) 6 SCC 37 this Court held that from the language of Section 30 [which is similar to Section 32(4) of the Act] and Section 30-A of the Karnataka Cooperative Societies Act, 1959, it would be clear that the administrator, subject to control of Registrar exercise all or any of the functions of the society, and the Special Officer, subject to control of the State Government and the Registrar exercise and perform all the powers and functions of the committee of the society and in the interest of the society can take such action as is necessary for proper functioning of the society as per law. He should conduct elections as is enjoined thereunder, that is, he is to conduct election with the members as on the rolls and by necessary implication, he is not vested with the power to enrol new members of the society. In the light of this clear enunciation of law the view taken by the High Court appears to be correct.
4. However, the learned Additional Solicitor General appearing for the appellants submitted that there is difference in language between the provisions of the Karnataka Cooperative Societies Act and the Act which was, in fact, noticed by the Karnataka High Court and, therefore, submitted that the decision in K. Shantharaj case (1997) 6 SCC 37 is not applicable to the facts of this case. For the purpose of appreciation of this submission, it is necessary to set out the relevant provisions of the Karnataka Act and the Kerala Act:
Section 30(2) of the Karnataka Act Section 32(4) of the Act “30. (2) The administrator so appointed shall, subject to the control of 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 cooperative society and take such action as he may consider necessary in the interest of the society.” “32. (4) The committee or administrator or administrators so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have power to exercise all or any of the functions of the committee or of any officer of the society and take such action as may be required in the interests of the society.” Section 30-A of the Karnataka Act “30-A. Appointment of Special Officer.—(1) Where the State Government, on a report made to it by the Registrar or otherwise, is satisfied that any cooperative 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 or circular issued by the State Government or the Registrar, it may notwithstanding anything in this Act, by order, appoint a Special Officer for such cooperative 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. (2) * * * (3) The Special Officer shall, subject to the control of the State Government and the Registrar, exercise and perform all the powers and functions of the committee of the cooperative society or any officer of the cooperative society and take all such actions as may be required in the interest of the cooperative society.”
5. The learned Additional Solicitor General relied on that portion of the judgment of the Division Bench which affirmed the view of the learned Single Judge where a comparison between the Act and the Karnataka Act was considered and we may set out what was stated by the Division Bench:
“Accordingly, he is not entitled to enrol new members. But it has to be noted that the wording of Section 32(4) of the Kerala Cooperative 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 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 the Kerala High Court, cannot have any application while determining the comparative authority of an administrator and a Special Officer appointed under Sections 30 and 30-A of the Karnataka Act respectively.”
6. This very aspect was also brought to the notice of the Full Bench of the Kerala High Court.
7. If we carefully analyse the provisions of the Act, it would be clear that the administrator or a committee appointed while the Committee of Management of the society is under supersession cannot have the power to enrol new members and such a question ought not to be decided merely by indulging in an exercise on semantics in ascertaining the meaning of the expression “have power to exercise all or any of the functions …”. Whether an authority is discharging a function or exercising a power will have to be ascertained with reference to the nature of the function or the power discharged or exercised in the background of the enactment. Often we do express that functions are discharged or powers exercised or vice versa depending upon the context of the duty or power enjoined under the law if the two expressions are interchangeable. What is necessary to bear in mind is that nature of function or power exercised and not the manner in which it is done. Indeed this Court, while considering the provisions of Section 30-A of the Karnataka Act, which enabled a Special Officer appointed to exercise and perform all the powers and functions of the Committee of Management or any officer of the cooperative society (and not merely functions), took the view that the administrator or a Special Officer can exercise powers and functions only as may be required in the interests of the cooperative society. In that context, it was stated that he should conduct elections as enjoined under law, that is, he is to conduct elections with the members as on the rolls and by necessary implication, he is not vested with power to enrol new members of the society. We may add that a cooperative society is expected to function in a democratic manner through an elected Committee of Management and that Committee of Management is empowered to enrol new members. Enrolment of new members would involve alteration of the composition of the society itself and such a power should be exercised by an elected committee rather than by an administrator or a committee appointed by the Registrar while the Committee of Management is under supersession. This Court has taken the view, it did, bearing in mind these aspects, though not spelt out in the course of the judgment. Even where the language of Section 30-A of the Karnataka Act empowering a Special Officer to exercise and perform all the powers and functions of the Committee of Management of a cooperative society fell for consideration, this Court having expressed that view, we do not think, there is any need to explore the difference in the meaning of the expressions “have power to exercise all or any of the functions of the committee” in the Act and “exercise all or any of the functions of the committee” in the Karnataka Act as they are not different and are in substance one and the same and difference in language will assume no importance. What is of significance is that when the Committee of Management of the cooperative society commits any default or is negligent in the performance of the duties imposed under the Acts, rules and the bye-laws, which is prejudicial to the interest of the society, the same is superseded and an administrator or a committee is imposed thereon. The duty of such a committee or an administrator is to set right the default, if any, and to enable the society to carry on its functions as enjoined by law. Thus, the role of an administrator or a committee appointed by the Registrar while the Committee of Management is under supersession, is, as pointed out by this Court, only to bring on an even keel a ship which was in doldrums. If that is the objective and is borne in mind, the interpretation of these provisions will not be difficult.
8. Thus, we are of the view that this Court in K. Shantharaj case (1997) 6 SCC 37 took the view that an administrator or a Special Officer in the Karnataka Act is not vested with the power to enrol new members of the cooperative society in this context. While reiterating that view in regard to the Kerala Act, we afford further reasons to support the said view and dismiss these appeals, though for reasons different from those expressed by the High Court. However, in the circumstances of the case, there shall be no orders as to costs.
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