TaxTMI 
TaxTMI 
2012 (7) TMI 1092
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....o Managing committee in terms of Rule 34A(1) of the Kerala Co-operative Societies Rules (hereinafter called the 'Rules'). The Co-operative Election Commission notified the election for all the 11 members of the Managing committee representing different constituencies. The bye-law of the Society as on the date of declaration of election provided for election of 11 members to the Managing committee of which 3 are reserved for women and one for member of scheduled caste community. Even though the bye-laws of the Society did not reserve any seat in the committee to represent depositors constituency in terms of Section 28(1C) of the Act, the Election Commission felt that the non obstante clause contained in the said provision of the Act required to provide a seat in the Managing Committee to represent the depositors of the Society. On a perusal of the documents presented by the Assistant Registrar of Co-operative Societies the Co-operative Election Commission noticed that the Bank has public deposits above 22.22 crores and the non-agricultural loan given was 20.41 crores. Therefore the Co-operative Election Commission notified the election by reserving one seat in the Managing C....
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....g committee of the Society. Consequent upon the findings in favour of the writ petitioners the learned single Judge declared the appellant's election as invalid and ordered fresh election to one seat in the general quota. It is against this judgment separate writ appeals are filed by the appellant, for one and same relief i.e., to declare the society as Primary Credit Society falling under Section 2(ob) of the Act which is compulsorily required to have a member in the Managing committee representing depositors as provided under Section 28(1C) of the Act. The position canvassed by the appellant that the activities of the Society reflected in the accounts furnished to the Election Commission by the Joint Registrar clearly establish that the Society has ceased to be a "Primary Agricultural Credit Society" and has become a "Primary Credit Society" which by virtue of operation of Section 28(1C) should have a member of Managing committee representing depositors irrespective of whether the requirement is incorporated in the bye-law or not. We have heard Adv. B. Pramod appearing for the appellant, Adv. V.G. Arun and Adv. P. Gopal appearing for party respondents, Adv. K.N. Renjini for t....
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.... seat in the committee of each such society shall be reserved for the members having a deposit of ten thousand rupees and above. R. 34A Procedure regarding conduct of election to the Representative General Body. (1) The election of the members to the Representative General Body of the Societies shall be conducted by the State Co-operative Election Commission. (2) The Committee shall meet at least sixty days in advance of the date of expiration of its term and pass a resolution fixing the date, time and place for the conduct of the election to the new Representative General Body along with the election to the committee, if the society is having a Representative General Body. A copy of such resolution shall be sent to the State Co-operative Election Commission by registered post within a week through the Registrar as specified in the Explanation to sub-rule (2) of Rule 35. (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
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.... undertake agricultural credit activities and provide loans and advances for agricultural purposes. It is further stated in the second proviso to the said definition clause that if the society does not achieve it's objective i.e., to function like an Agricultural credit society it will loose it's identity by virtue of the operation of the said proviso. From the operations of the society as evident from the above figures, nobody can dispute that the society can by no stretch of imagination be treated as Primary Agricultural Credit Society. On the other hand it squarely answers the description of the "Primary Credit Society" as defined under Section 2(ob) of the Act, the principal objective of such society being raising funds to be lent to it's members. In this case the society has taken deposits above Rs. 22.22 crores and has made advances above Rs. 20.4 crores to non-agricultural sector and advances for agricultural purposes is only insignificant amounts compared to the total lending by the Society. Therefore as rightly contended by the appellant's counsel, the Society in this case has ceased to be a Primary Agricultural Credit Society at least in the previous year ....
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....r not. As noted by us above, the procedure to be followed is for the Registrar on information whether obtained by himself or through any other source about the operation of the Society disentitling it to continue to retain it's registration in the category obtained by it should change it and issue fresh certificate of registration which is not done in this case. 5. In view of the findings as above, we have to declare that the Society is required to have a member elected to the Managing committee from the constituency reserved for depositors under Section 28(1C) of the Act. The contention raised by the respondents and the Society that unless Registrar changes the classification of the Society and fresh certificate of registration issued and bye laws of the Society is amended providing for reservation of one seat to the Managing committee for depositors quota, the Election Commission is not entitled to notify the election to the depositors constituency. We are unable to accept this contention because Section 28(1C) starts with a non obstante clause which is to get over the bye-law of the Society to provide for election to the Managing Committee providing one seat in the deposito....
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....at to depositor's constituency. In our view, irrespective of whether there is compliance with the statutory provisions and the Rules by the Registrar in declassifying the society the character of the Society changes by operation of the second proviso to Section 2(oa) from Agricultural Credit Society to a Primary Credit Society to which Section 28(1C) is squarely applicable. We are therefore of the view Election commission rightly treated the society as a Primary Credit Society and reserved one post for depositor's constituency in terms of Section 28(1C) of the Act. 6. Another contention raised by the respondents is that election has to be notified and conducted by the Election Commission in terms of the resolution passed by the Managing committee under Rule 34A(2) of the Kerala Co-operative Societies Rules. It is further contended by them that the Managing committee also has to be elected and constituted in accordance with the bye-law of the society. However what the Election Commission did is only to allocate one seat from out of general seat for constituency allotted for depositors but subject to this he has notified election only to the total number of 11 seats to the M....