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S.S. Subramani, J.—In W.P.13744 of 1997, Petitioner seeks issuance of Writ of Mandamus or any other appropriate Writ or order or direction directing the Respondents 1 and 2 to take action in the matter of allotment of 80,000 Sq.ft. belonging to the third Respondent-Society and to cancel the same and pass such further orders.
In the affidavit filed in support of the Writ petition, Petitioner being the member of the third Respondent-Society, has come to this Court with a grievance that the board of management of third Respondent-Society is mismanaging the affairs and unless it is checked immediately, the entire assets of the Society will be swindled by the board. It is said that the society has got immovable properties of its own and without convening General body in accordance with Law, documents have been created as if there had been general body meeting and on that basis, properties have been sold and the close relations of the directors are benefited by such transactions. Para 4 of the affidavit deals with the beneficiaries.
It is said even with regard to the sale, the purchase price is too low compared to open market value. General body meeting was held after enrolling new members. It is said that most of the new members are not weavers of the Society, who alone are entitled to be the members. It is seen that the first Respondent issued show-cause notice for removing the board and the Petitioner also moved representation for cancelling the sale as well as the lease. It is said that on the basis of the invalid sale deed, the beneficiaries are taking steps to develop construction work in the sites and make it impossible for the society to resume possession. It is on these circumstances, Petitioner come to this Court for the relief stated above.
A detailed counter affidavit has been filed by the second Respondent wherein it has mostly admitted that the allegations of the Petitioner are true. It is said that various documents are executed on the basis of resolution alleged to have been passed in the General Body meeting dated 13.8.1997. It is said in the counter affidavit that eventhough general body held on 13.8.1997, the sale of the properties was not included in the agenda nor it was discussed or decided. In para 6 of the counter affidavit, it is said that the Board of Directors deliberately acted in violation of the procedures. It is also said that earlier writ petition No. 18020 of 1995 wherein this Court has directed not to alienate the properties and third party should not be inducted into the land. Violating the said interim orders of the Court, documents have been executed and the second Respondent is taking hasty steps and the Directors'' Board was superseded on 28.9.97 and Special Officer has been appointed to manage the affairs of the society. It is said that on the basis of the resolution dated 13.8.1997, more than 81 documents have been executed, and the properties of the society have been taken possession by the third parties. It is also said that the documents are executed without taking into consideration the real market value and the society suffered loss of huge amount.
It is also said for the general body meeting dated 13.8.1997, no notice was given to many of the members and the subject matter of the outright sale or leasing of properties was also not included in the agenda of the general body meeting. When it is not included in the agenda, the same cannot be the subject matter for discussion in the General body meeting. All the members are entitled to be heard regarding the leasing out and sale of vacant land of the society. That opportunity wis denied by the society. It is also said that alter supercession, an enquiry was ordered with regard to the sale by the third Respondent. It prayed for proper orders from this Court.
The third Respondent also filed counter affidavit disputing the claim of the Petitioner. According to the third Respondent, it is only the Board of Directors decided to sell away the properties retained by the society in excess of its requirement. It is said that the prohibitory order in W.P.18020 of 1995 prevents only not to induct any third party and when the sale of society is amongst the members of the society, there is no prohibition. According to the third Respondent their actions are bona fide and it is prayed for the dismissal of the Writ Petition.
Writ Petition No. 15090 of 1997 is filed by the Society against the Registrar of Co-operative Societies to quash the order of the first Respondent dated 25.9.1997 which decided the supercession of the board. The reason for supercession is the mis-management of the assets of the society and various documents executed.
I heard the counsel in detail, and I think that this is a fit case where certain directions will have to be given to Respondents 1 and 2 for immediate action.
All the transactions of the board of management are based on the general body meeting dated 13.8.1997. It is the specific case of the first Respondent that even though a general body was held on 13.8.1997, regarding the sale or lease of the land belonging to the Society was not the matter for discussion and the possibility of passing the resolution was remote. It is further said that regarding the transaction, the matter was not included in the agenda and the members were kept on dark and even they came to know only after the transaction was completed.
The Respondents 1 and 2 have already initiated action u/s 81 of the Co-operative Societies Act. The entire Board has been removed and in their place, a Special officer has been appointed. W.P.15090 of 1997 is challenging the proceedings of the Respondents 1 and 2 in removing the board of management. From the counter affidavit of the Government, it is clear that there is utter confusion of the management of the Society and 81 documents have been executed either in the nature of sale or permanent lease, without considering the benefit of the Society. It is also brought to the notice of this Court that on earlier Writ petition, the Society was prohibited from inducting the third parties in the properties of the Society. The said order is still in force. Ignoring the said interim order, the third Respondent has sold properties and 81 documents have been executed. Their justification is, the sale is not prohibited and what was prohibited is third party should not be allowed to enter the property or given benefit of the assets of the Society. It is their further case that if the transaction is within the members, the same is not prohibited. According to the Government Pleader, it is the transaction that is prohibited and where members are third party, the transaction is only to be rejected. The learned Counsel further submitted that when the court says that third party shall not interfere it means that the properties of the Society must be kept in tact and no transaction should take place regarding the same. I find force in the said contention. The ignenuous argument that the sale or lease in favour of the members of the society is not prohibited by the impugned order is only wild cry, which cannot be accepted.
It is also contended by the Government Pleader and also by the Writ Petitioner that these documents have been executed on the basis of the resolution alleged to have been passed on 13.8.1997. It is contended that there is no Agenda regarding the sale or lease of the immovable properties in the General body meeting nor a decision was taken. The learned Counsel for the third Respondent, who is the Writ Petitioner in the connected case has failed to produce the documents to show that there is legal authority in the Board of Directors to sell the property or execute the documents of the lease. If there is no Agenda in the meeting; the same also would not have been discussed. The settled law is, to discuss an item in the General body meeting, it must be provided in the Agenda itself. All the members of the Board also will have to agree for discussing with prior notice to them. No evidence have been produced by the third Respondent in that regard. It is the further case of the Petitioner as well as the Government that even regarding the so-called general body, notice to the members were also not given. The third Respondent, who is in possession of the records alone can produce the documents to show in what way the notices were issued and how the members were informed about the general body in the agenda. Evidence on the point is also lacking.
An enquiry has been ordered u/s 81 of the Co-operative Societies Act and the Government is awaiting the report. The board of management also been removed and I do not find illegality in that order when serious allegations have been made against the Board.
In view of the earlier Writ Petition, the question to be considered is whether any direction to be given to initiate action against the third Respondent? The Government has now stated that the proceedings have already been initiated and that it is only pursuant to the information given by them, the Board is superseded. Apart from the same, an enquiry has also been ordered against the Directors. In the above circumstances, I do not think that any further direction is required except to direct Respondents 1 and 2 to complete the enquiry and submit the report as to the proposed action to be taken, within the two months from today. I further direct Respondents 1 and 2 that on filing the report, they are bound to take immediate action on the same and every step must also be taken to recover the property and amount due from the Directors, if they are found to be liable under the enquiry. I direct Respondents 1 and 2 to maintain the time schedule stated above and see that the matter is finally settled and after taking necessary action and loss sustained by the Society is recovered.
W.P.15090 of 1997 is filed by the Society challenging the appointment of the Special Officer after supersession of the Board. Both these writ petitions were taken for orders on 7.9.1998 and at that time, counsel for Petitioner in W.P.15090 of 1997 submitted that his Writ Petition was not posted for arguments and he wanted the matter to be reposted. On verifying records, I found that the submission was correct and therefore I reposted both the Writ Petitions. When it was taken up for the second time, I doubted the maintainability of Writ petition in W.P.15090 of 1997, on the ground that the Writ petition is filed by the Society, and not filed by the Board of management. When I expressed my doubt about the maintainability of the Writ petition, before the matter could be disposed of, Petitioner in W.P.15090 of 1997 filed an application to implead Petitioners 2 to 8 therein as additional Petitioners to the Writ Petition. Office refused to number the same since it doubted maintainability of such an application. In the office note, it is stated that if Petitioner wanted to implead any person, they can be impleaded only as Respondents and not as additional Petitioners. It will amount to substitution of Writ Petitioner and Petitioner also has not stated under which provision such an application is filed. The same is also seriously opposed by the Respondents in the Writ Petition.
After going by various provisions of Tamil Nadu Co-operative Societies Act, I do not think that a Co-operative Society can be said to be an aggrieved person, when the Board is superseded u/s 88 of the Act. From the various provisions of the Act, authorities under Co-operative Societies Act are proceeding only against the individual members or against the Board and no action is taken against the Society except in the case of winding up.
Chapter IX of the Tamil Nadu Co-operative Societies Act deals with Audit, Inquiry, Inspection and Investigation, Surcharge and Supersession. Section 80 deals with Audit of the accounts of the Society. Section 81 deals with Inquiry, which may be initiated by the Registrar of his own motion and shall, on the application of the majority of the board or of not less than one-third of the members or on the request of the financing bank or of the District Collector in regard to the financial condition of the registered Society or any alleged misappropriation, fraudulent retention of any money or property, breach of trust, corrupt practice, or mismanagement in relation to that society or into any particular aspect of the working of that society. Section 81 also proceeding against the members of the Society or Board of Management, except when it relates to the constitution aspect, financial condition of the Society.
Section 85 of the Act is also a similar provision consequent to the inquiry. In this case, we are concerned about Section 88 of the Act. It deals with supersession of the Board of the Society. The registrar is empowered if he is of the opinion that the board of any registered society is not functioning properly or wilfully disobeys or wilfully fails to comply with any order or direction issued by the Registrar under this Act or rules and under certain other circumstances supersede the board after giving an opportunity to make representation by order in writing to supersede the board and appoint a government servant as special officer. Section 89 deals with Appointment of Special Officer in certain circumstances.
From these provisions, it is clear thatt it is not the action against the Society but the action against the mismanagement and misappropriation of funds of the Society. So the persons who are aggrieved are the persons in management. The Society by itself cannot come as a Petitioner since the action is to protect the interest of the Society.
It is to overcome this difficulty, Petitioner has filed an application to implead the members of the Board as additional Petitioners.
In paragraph 3 of the affidavit in support of application, it is stated thus, "I respectfully stated that the above Writ Petition as filed against the illegal action passed by the Respondent u/s 88 of the Tamil Nadu Co-operative Societies Act, 30 of 1983. Initially, the Writ Petition had been filed only by the Society represented by its President. However, we were advised later to implead ourselves parties to the Writ petition, since it is our Board which has been superseded by the orders of the Respondents herein."
Counsel for Petitioner justified the petition and said that the application is maintainable under Order 1 Rule 10 of Code of Civil Procedure. Additional Petitioners also could be impleaded in a Writ Petition. I do not think that the said submission of the learned Counsel is correct.
u/s 141 of the Code of Civil Procedure, as amended, under Act 104 of 1976, it is now made clear that Writ proceeding is not a proceeding to which CPC could be made applicable. Section 141 of CPC read thus, "Miscellaneous proceedings: The procedure provided in this Code in regard to suits shall be followed, as far as it can be made applicable, in all proceedings in any Court of Civil Jurisdiction.
Explanation:
In this section, the expression "proceedings" includes proceedings under Order IX, but does not include any proceeding under Article 226 of the Constitution.
Before 1976, there were differences of opinion among various High Courts whether the provision of CPC could be made applicable to Writ proceedings. In view of the amendment to Section 141, by adding explanation, it is now clear that CPC cannot be made applicable unless the rules framed by the High Court enables the applicability of the Procedure.
Durga Das Basu in his book on Shorter Constitution of India, 1996 Edition, commenting on Article 226 and applicability of CPC at page 559 said that after the amendment to CPC in 1976, it is no longer open to contend that the orders in the Schedule to the Code would have any direct application to proceedings under Article 226. Even though, CPC may not be directly made applicable, the principles of which could be applied under certain circumstances.
In Babubhai Muljibhai Patel Vs. Nandlal Khodidas Barot and Others, , their Lordships considered the applicability of CPC to a Writ proceeding under Article 226. That is the case before amendment of CPC In that case, their Lordships held thus, "The words ''as far as it can be made applicable'' in Section 141, CPC make it clear that, in applying the various provisions of the code to proceedings other than those of a suit, the Court must take into account the nature of these proceedings and the relief sought. The object of Article 226 is to provide a quick and inexpensive remedy to aggrieved parties. If the procedure of a suit had also to be adhered to in the case of writ petitions, the entire purpose of having a quick and inexpensive remedy would be defeated. A writ petition under Article 226 is essentially different from a suit and it would be incorrect to assimilate and incorporate the procedure of a suit into the proceedings of a petition under Article 226." (Emphasis supplied) If this was the law before 1976, naturally after amendment, it is clear that there cannot be any direct application of CPC after its amendment.
In AIR 1978 Himachal Pradesh 63, (Hans Raj v. State), the effect of amendment to Section 141 was considered by a Bench of that Court. After extracting the section, it was held thus, "It is obvious that what the above explanation says is merely that the proceedings under Article 226 of the Constitution do not amount to ''proceedings'' within the meaning of Section 141, In other words, it would mean that so far as the proceedings under Article 226 of the Constitution are concerned, the procedure provided in the code in regard to the suits would not apply. However, that does not run counter to exercise of this Court''s extraordinary jurisdiction under Article 226 of the Constitution. It may be noticed here that for the purpose of exercise of its jurisdiction under Article 226 of the Constitution, the High Court does not depend on the provisions of the CPC The procedure prescribed by the CPC is followed by the High Court in the exercise of its inherent jurisdiction under Article 226 of the Constitution not because of any legal compulsion to do so but because that procedure complies with the rules of natural justice. Under the circumstances, even if this Court is not bound by the procedure contemplated by the CPC in writ applications, the Court can use its inherent jurisdiction to remedy certain wrongs and, therefore, if it is found that a particular Writ Petittion has been dismissed for default, and the default in question was occasioned on account of some reasonable cause, there is nothing to prevent the High Court in the exercise of its extraordinary jurisdiction under Article 226 of the Constitution to order restoration."
The question now arises is, if the principle of Order 1, Rule 10 can be applied? Whether the Court under its extraordinary original jurisdiction could invoke that power to implead these Petitioners as additional Petitioners in writ petition? I have already extracted the relevant statement in the affidavit. In this case, the principle under Order 1 Rule 10(1) is to be applied because what Petitioner wants is to implead the Petitioners as additional Petitioners in Writ Petitions and not Sub rule (2). If we are to apply that principle of Sub-rule (1) to Order 1, Rule 10, it is for the Petitioner to plead and state that due to bona fide mistake Society became the Petitioner and these Petitioners were omitted to be impleaded as parties to the Writ Petition as Petitioners. None of the Petitioners have a case that the omission to implead these Petitioners was a bona fide mistake. In the affidavit, it is clear that it is not due to bona fide mistake that they were not made parties. Extraordinary original jurisdiction itself is exercised only on the ground of bona fide of the parties. When the impleading application is found to be not bona fide, or Petitioners have no case of bona fide mistake, there cannot be any question of impleading them as Petitioners even if the principle of Sub-rule (1) of Order 1 Rule 10 could be applied to a Writ proceedings.
The office note is therefore correct and I do not find any ground to implead the proposed Petitioners. Hence, the S.R. 82015 of 1998 is rejected.
Coming to W.P. 15090 of 1997, once it is found that Society is not aggrieved person, it cannot invoke the extraordinary original jurisdiction of this Court. Apart from the same, impugned order is also an appealable order u/s 152 of Tamil Nadu Co-operative Societies Act. Both on maintainability and there is an effective alternate remedy, I dismiss W.P.15090 of 1997.
In the result, W.P.13744 of 1997 is disposed of on the above terms. W.P.15090 of 1997 is dismissed and W.M.P.SR.82015 of 1998 is rejected. No costs. Consequently, connected WM Ps are also dismissed.