K.S Radhakrishnan, J.:— Question that has come up for consideration in these cases is whether the Administrator or Administrative Committee appointed by the Registrar of Co-operative Societies under S. 32 or 33 of the Kerala Co-operative Societies Act has get power to effect appointment in a co-operative society.
2. The Kerala Co-operative Societies Act, 1969 was enacted to provide for the orderly development of the co-operative movement in the State of Kerala in accordance with the relevant directive principles of State policy enunciated in the Constitution of India. Various provisions of the Act disclose that the object and purpose of the Act is to permit a society registered under the Act to function as a body corporate having perpetual succession. Co-operative Societies functioning under the Act and Rules are not bodies created by the Act or under the Rules. They are bodies which owe their origin to their members, and that they are functioning only in accordance with the provisions of the Act, Rules and bye-laws framed. Full Bench of this Court in P. Bhaskaran v. Additional Secretary, 1987 (2) KLT 903 (FB) stated those bodies have got legal existence de hors the Act and Rules. Eventhough Act and Rules have given certain powers to the Registrar of Co-operative Societies to regulate the affairs of the societies, the control is not deep and pervasive. The managing committee of a society is not functioning under the Registrar or Government or the representatives appointed by them. The management of a society is under the effective control of a committee elected by the members of a society, and members in turn constitute a general body. The registration of a society shall render it a body corporate by the name under which it is registered, having perpetual succession and a common seal and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was constituted. Under S. 27 of the Act, the final authority of a society shall vest in the general body of its members, subject to the provisions of the Act, Rules and bye-laws. The general body of a society shall constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee. S. 80 of the Act enables the Government to classify societies in the State according to their type and financial position. Government can also regulate qualification, remuneration, allowances and other conditions of service of the officers and servants of different classes of societies. In exercise of the powers conferred under S. 80(1) of the Act, Government can classify the societies under R. 182 of the Rules as per Appendix III. In the matter of appointment, age limit has been fixed under R. 183. R. 185 deals with promotions, which says that appointments to higher categories of service in a society shall ordinarily be made by promotion from among members eligible for appointment to such category in accordance with Rules on the basis of seniority in the feeder category. Qualifications have been laid down in R. 186 of the Rules and staff pattern has been provided under R. 188. Service benefits such as employment assistance to dependents, remuneration and allowances, leave rules, etc., have also been prescribed under the Rules. Provisions for initiating disciplinary action against the employees of the societies have also been dealt with under the Rules. As per R. 198 of the Rules, the authority who imposes punishment in certain categories of employment is the President/Chairman, and certain punishment could be imposed by the Sub-Committee/Executive Committee. With regard to certain employees, penalties also could be imposed by the Secretary/Manager or other Chief Executive Officer, or President. Appeals have also been provided under the Rules to the managing committee or Board of Management, and in certain cases to the President. R. 198(6) also says that an authority competent to appoint an employee may suspend him pending enquiry into serious charges against such employee. But if the period of suspension exceeds one year, prior approval of the Registrar is necessary.
3. All the above mentioned provisions of the Act and Rules would indicate that the supreme authority in the matter of appointment as well as to take disciplinary proceedings is vested in the managing committee of a society. Registrar of Co-operative Societies is a person appointed by the Government Government may by general or special order confer on any person all or any of the powers of the Registrar under the Act Powers to be exercised by the Registrar of Co-operative Societies are dealt with in the Act and Rules. Power is vested on him to register a co-operative society. So also to change the name of the society and to amend the registered bye-laws. For amalgamation, transfer of assets and liabilities and division of society, prior approval of the Registrar is necessary. Rules also enumerate various powers of the Registrar of Co-operative Societies. Powers to be exercised by the Government in the matter of framing of rules, classifying societies, etc., are also enumerated under the Act and Rules. However, statute has never given any power either to the Government or to the Registrar or Joint Registrar of Co-operative Societies to effect appointment in a society.
4. Management of co-operative societies is dealt with in Chapter IV of the Act. S. 27 says that subject to the provisions of the Act, the Rules and the bye-laws, the final authority of a society shall vest in the general body of its members. S. 28 of the Act says that the general body of a society shall constitute a committee for a period not exceeding three years in accordance with the bye-laws and entrust the management of the affairs of the society to such committee. Therefore statute has recognised the general body of members as the final authority of the society, of course, subject to the provisions of the Act, Rules and bye-laws. S. 28 also recognised the fact that it is that final authority to entrust the management of a co-operative society to a committee. In other words, even in the matter of appointment and allied matters, final authority is the general body of a society. In order to manage the affairs of a society, general body constitutes a committee and entrusts the management of the affairs of the society to that committee.
5. Statute has however given power to the Registrar of Co-operative Societies to supersede a committee in case the committee of any society persistently makes default or is negligent in the performance of the duties imposed on it by the Act or the Rules or bye-laws or commits any act which is prejudicial to the interests of the society or wilfully disobeys or wilfully fails to comply with any lawful or direction issued under the Act or Rules. Under the said circumstances under S. 32 of the Act, Registrar may appoint a new committee consisting of not more than three members of the society in its place, or appoint one or more administrator or administrators who need not be a member or members of the Society to manage the affairs of the society. In this connection, it is relevant to extract the said provision for easy reference:
“32. Supersession of committee:— (1) If the Registrar is satisfied that the committee of any society persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the Rules or bye-laws or commits any act which is prejudicial to the interests of the society or wilfully disobeys or wilfully fails to comply with any lawful order or direction issued under this Actor the Rules, the Registrar may, after giving the committee an opportunity to state its objections, if any, by order in writing remove the committee, and—
(a) appoint a new committee consisting of not more than three members of the society in its place; or
(b) appoint one or more administrator or administrators who need not be a member or members of the society,
to manage the affairs of the society for a period not exceeding one year as may be specified in the order, which period may at the discretion of the Registrar bebe extended from time to time so however that the aggregate period does not exceed two years.
(2) …….
(3) …….
(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.”
6. Power is also given to the Registrar of Co-operative Societies to appoint a new committee or administrator on failure to constitute a committee under certain circumstances vide S. 33 of the Act Relevant provisions of the Section read as follows:
“33. Appointment of new committee or administrator on failure to constitute committee etc. (1) Where the terms of office of a committee has expired and a new committee has not been constituted, or where a no-confidence motion is passed by the general body against the existing committee or where the existing committee resigns enbloc or where vacancies occur in the committee either by resignation or otherwise and the number of remaining members cannot constitute the quorum for the meeting of the committee, or where the committee fails to hold its regular meeting consecutively for six months or where the Registrar is satisfied:
(a) that a new committee cannot be constituted before the expiry of the term of office of the existing committee: or
(b) that a new committee is prevented from entering upon office or a new committee fails to enter upon office, on the date on which the term of office of the existing committee expires, the Registrar may, either suomotu or on the application of any member of the society after (intimating) the Circle Co-operative Union, appoint:—
(i) a new committee consisting of not more than three members of the society; or
(ii) one or more administrator or administrators who need not be a member or members of the society.
(3) The committee or administrator or administrators shall arrange for the constitution of anew committee or for the entering upon office of the new committee as the case may be”.
7. Above mentioned provisions enable the Registrar on certain contingencies to remove an elected committee and appoint one or more administrator or administrators to manage the affairs of the society for a period and the committee or administrator or administrators so appointed to manage the affairs of the society shall subject to the control of the Registrar and such instructions as he may give from time to time, 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. The Government or the Registrar of Co-operative Societies has no power to effect appointment in a co-operative society under Ss. 32 and 33. Registrar has got the power to remove the committee and appoint administrator or administrators of administrative committee. In other words, the Registrar is exercising powers through the officers appointed by him. The statute has not delegated the power to effect appointment in a society to the Registrar. Administrator is only a delegate appointed by the Registrar. A sub-delegate cannot exercise powers which even the delegate does not possess.
8. As per the Act, as already mentioned, the final authority, so far as the society is concerned, is the general body, which entrusts the management of the “affairs of the society” to an elected committee. The committee so elected has to manage the affairs of the society and has got power to effect appointments. Adminsitrator or administrators or a administrative committee is or are appointed by the Registrar and not by the general body. A committee, or administrator or administrators appointed by the Registrar is or are entrusted with the management of affairs of the society by the Registrar and not by the general body.
9. Powers of the administrator or administrators appointed by the Registrar to enrol members in a society have come up for consideration before a Full Bench of this Court in O.P Nos. 12184 of 1997 and connected cases. Full Bench held that power to enrol members in a co-operative society is vested in the managing committee. Full Bench considered the expression “exercise all or any of the functions of the committee”. Full Bench noted the difference between the expression ‘power’ and ‘function’. It was held as per S. 32 of the Act, an administrator can only perform ‘functions’ of the committee and cannot exercise ‘powers’ vested in the committee. Referring to Back Law Dictionary, Full Bench quoted the meaning ‘of power’ as the right, ability, authority, or faculty of doing something, and an ability on the part of a person to produce a change in a given legal relation by doing or not doing a given act The word ‘function’ means to perform, execute, administer. Reference was also made to Salmond on Jurisprudence, and also to the decision of the Supreme Court in K. Shantharaj v. M.L Nagaraja, JT (1997) 5 S.C 680.
10. As already mentioned, the power to effect appointment in a co-operative society is vested in the general body. When it constitutes an elected body, the same is vested in the elected body, which owe its existence to the general body. Administrator or administrators is or are only expected to manage the affairs of the society and to exercise the functions of the committee and not expected to exercise ‘powers’ of the elected committee. Therefore, the principle laid down by the Full Bench is squarely applicable to the case of appointment as well during the tenure of the administrator or administrators or committee. Therefore, since Registrar of Co-operative Societies has no power to effect appointment, administrator or administrators appointed by the Registrar of Co-operative Societies cannot exercise the power which even the appointing authority does not possess. Therefore, if an administrator or administrators effects regular appointment in a society that appointment will be without jurisdiction, ultra vires and void.
11. However, in this connection I may add that there may be situations where society comes under the management of the administrator or administrators, or committee, for considerably a long period. There may be situations where due to dearth of staff society may experience difficulties even to manage day-to-day affairs. In such situations, it may be possible for an administrator or administrators or committee with prior permission of the Registrar to appoint employees on a temporary basis. Needless to say, such appointments will cease to have effect once the administrator or administrators or committee vacates office. In other words their continuance will coexist with the term of office of the administrator or administrators. It is therefore, declared that an administrator or administrators or administrative committee appointed by the Registrar under Ss. 32 and 33 of the Co-operative Societies Act have no power to effect regular appointment in a co-operative society.
12. We may examine the cases on hand following the principle laid down. In O.P No. 8904 of 1998 a part-time administrator was appointed by the Joint Registrar of Co-operative Societies after superseding an elected Board of Directors. The appointment order itself states that the part-time administrator should conduct election within a period of three months from the date of taking charge of the society. When the managing committee was in office a notification was published inviting applications for filling up the post of Junior Clerk. Society received various applications. Accordingly a written test and interview were conducted, and a rank list was prepared. Petitioner in the O.P was second rank holder and one K.M Molly was the first rank holder. K.M Moly was selected and appointed as per circular No. 18/94 issued by the Registrar. Rank list was valid for a period of two years, and vacancies would be filled up from the said rank list Committee was free to extend the period for another year. Rank list was published on 6.1.1994 and the list expired on 5.1.1996 Earlier committee did not take steps to extend the period of the rank list Consequently by the time, part time administrator took charge, rank list had already expired. Part-time administrator then took steps to sanction two more posts of Junior Clerk in the bank. Joint Registrar of Co-operative Societies vide his order dated 12.9.1997 sanctioned two posts of Junior Clerks. Order itself stated that post will be filled up only in accordance with the provisions of the Act Rules and bye-laws and also observing the instructions issued by the department.
13. The part-time administrator, however, contrary to the directions appointed the petitioner from the time expired rank list Appointments were objected to by certain persons, and the matter was considered by the Joint Registrar of Co-operative Societies, who issued Ext. R3(g) order dated 10.12.1997 rescinding the decision of the administrator under R. 176 of the Co-operative Societies Rules. Order was challenged by the petitioner before the Government and the Government issued Ext. P6 order dated 14.5.1998 confirming the order passed by the Joint Registrar. Government found that administrator appointed by the Joint Registrar has no jurisdiction to effect appointment since he was appointed only for the purpose of conducting election. Part-time administrator was later suspended from service vide Ext. R3(c) order dated 19.11.1997 and a new part-time administrator was appointed by order dated 27.11.1997 Joint Registrar conducted an enquiry with regard to the manna: in which part-time administrator effected appointments, which led to the issuance of Ext. R3(g) order, which was later confirmed by the Government vide Ext P6 order dated 14.5.1998 Those orders are also challenged in this Writ Petition. I am of the view that Joint Registrar and Government are right in taking the view that part-time administrator has no power to effect appointment in the society. Part-time administrator was appointed specifically for conducting election. By effecting appointments, the administrator has exceeded his jurisdiction. The order passed by the Joint Registrar, confirmed by the Government is accordingly upheld.
14. O.P No. 22508 of 1997 was filed by a member of the managing committee. Managing Committee was elected to office on 3.3.1996 Arbitrator passed an award setting aside the election on 5.12.1997 and an administrator was appointed under S. 33 of the Act and he took charge on 6.12.1997 Aggrieved by the award, the elected Board of Directors filed appeal No. 191 of 1997 before the Co-operative Tribunal, and the appeal is pending consideration. Petitioner then filed this Writ Petition complaining that administrator is enrolling new members, and he is taking steps to make appointments in the society. A direction was also sought for to dispose of the appeal by the Tribunal at an early date. This Court in C.M.P No. 40351 of 1997 directed the administrator not to enrol any new members. Administrator then filed C.M.P No. 10551 of 1998 for a direction to allow him to enrol new members. The said petition was dismissed by this Court on 26.3.1998 While the administrator was in charge he took steps to effect appointments in the society. Permission to conduct written test and interview so as to fill up the post of three Junior Clerks, and one post of typist was also sought for. Eventhough this Court permitted the administrator to complete the selection process, administrator was directed not to effect any appointment. I have already found that administrator has no power to make appointment in a co-operative society. Therefore, all steps taken by the administrator to effect appointments have no legal validity. A Full Bench of this Court in O.P No. 12184 of 1997 and connected cases held that administrator has no jurisdiction to enrol new members. Eventhough this Court has restrained the administrator from enrolling new members, according to petitioner, administrator has admitted members during the tenure of his office. Needless to say that action will be illegal and without jurisdiction. It is so declared. Counsel for the petitioner submitted that a direction may be given to the Tribunal to dispose of the appeal at the earliest Since the elected committee was ousted from office, and administrator is in charge, I am of the view that the request of counsel for the petitioner is justified. Consequently, there will be a direction to the Tribunal to pass final orders on the appeal petition within a period of two months from the date of receipt of a copy of this judgment
15. O.P No. 8141 of 1997 was filed by one elected member of the managing committee. Election was held on 9.4.1996 Majority of the members were found to be disqualified under R. 44(1)(j) of the Rules and consequently the committee was superseded and a part-time administrator was appointed under S. 33(1) and 33(b)(ii) of the Act for a period of six months vide order dated 9.10.1996 Orders disqualifying some of the members of the Board of Directors and the order appointing administrator were challenged before this Court in O.P Nos. 13836 of 1996 and 16191 of 1996. Both the Original Petitions were disposed of by a common judgment dated 14.11.1996 Appeals were preferred against those judgments as W.A Nos. 1780 and 1793 of 1996. Appeals were disposed of by a Division Bench of this Court permitting the aggrieved persons to file statutory appeals. Appeals were subsequently filed before the Government, and they ware disposed of confirming the earlier order, against which O.P No. 12650 of 1996 was filed, which was dismissed by this Court. Complaint of the petitioner in this case is with regard to the steps taken by the part-time administrator to effect various appointments in the society. According to counsel, part-time administrator was appointed only for the purpose of conducting day-to-day administration and not to effect appointments in the bank. It is seen due to dearth of staff in the society, administrator took up the matter before the authorities. Joint Registrar of Co-operative Societies accorded sanction by Ext. R2(a) to effect appointment to the post of Secretary, two Junior Clerks, and one peon for a period of one year purely on temporary basis. According to respondents those staff are necessary for carrying out the day-to-day administration. After obtaining necessary permission, Ext. P7 advertisement was given and it is after following statutory procedures appointments were effected. This Court in C.M.P No. 18582 of 1997 granted permission to the administrator to effect appointment. However, it was made clear that appointment will be on a provisional basis. I have already found that administrator has no jurisdiction to effect appointment in a bank on a regular basis. At times necessity may arise to effect appointments on a temporary basis, so as to manage the day-to-day affairs. In such circumstances I have already found that administrator could effect appointments with the prior permission of the department However, the appointees would not get any right to have permanent absorption. Their term will cease to exist as soon as the term of the administrator expires. Accordingly, as is evident from the order of the Joint Registrar, Administrator was given permission to effect appointment only on temporary basis. As soon as the term of the administrator is over, and a new managing committee assumes office, those appointees will have to give way. Under such circumstances, I sustain the order Ext. R2(a) dated 26.4.1997 Original Petitions are disposed of as above.
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