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PETITIONER: JT.  REGISTRAR OF COOPERATIVE SOCIETIES, KERALA

       Vs.

RESPONDENT: T.A.KUTTAPPAN & ORS.

DATE OF JUDGMENT:       09/05/2000

BENCH: Y.K.Sabharwal, S.R.Babu

JUDGMENT:

     RAJENDRA BABU, J.  :

     These  appeals  by special leave are against a  common order  made  in O.P.Nos.12184, 14840, 14686,  15700,  17258, 18398  and  20913/97.  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  vs.   Joint Registrar,  1985 KLT 836, is no longer good law in the light of  the decision of this Court in K.  Shantharaj & Anr.  vs. M.L.Nagaraj  & Ors., 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’s  [supra] 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.

     It is now brought to our notice that subsequent to the decision  of  the High Court, the provisions of  Section  32

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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 &  Ors.  vs.  Joint Registrar & Ors., 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 amended Section 32 of the Act nor  the decision  in Cherthala Agricultural Rural Development Bank & Ors.  vs.  Joint Registrar & Ors.  (supra) is required to be considered by us in these proceedings.

     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’s case [supra], this  Court held that from the language of Sections 30 (which is similar to  Section  32(4)  of  the Act) and 30A  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 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.

     However,  the learned Addl.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’s case [supra] 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

     "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."

     Section 30-A of the Karnataka Act

     "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,

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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."

     "The  Committee or administrator or administrators  so appointed shall, subject to the control of the Registrar and to  such  instructions as he may be from time to time  give, have  power  to exercise all or any of the functions of  the Committee or of any officer the society and take such action as may be required in the interests of the society."

     The  learned  Addl.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."

     This very aspect was also brought to the notice of the Full Bench of the Kerala High Court.

     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  function.".  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

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exercised  or  vice versa depending upon the context of  the duty  or power enjoined under the law if the two expressions are  inter-changeable.  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 empowered  a special officer to exercise and perform all the powers  and  functions  of  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.

     Thus,  we  are  of  the view that  this  Court  in  K. Shantharaj’s   case   [supra]   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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