1. Heard the learned counsel for the petitioner.
2. Learned counsel for the caveator-respondent No.1-Smt Pallavi Srinand Pachhapure is present before this Court.
3. Notice to respondent Nos.2 and 3 are not issued in view of the urgency of subject matter involved in this case with regard to the questioning of Annexure-J issued by the 1st respondent and prayer sought with regard to a direction to the 2nd and 3rd respondents to include the name of petitioner-Bank in the voters list and permit the petitioner-Bank to participate in the election which is scheduled to be held on 24.07.2022.
4. The matter is taken up as the calendar of events produced by the 1st respondent shows that the last date of filing of nomination is 16.07.2022 i.e., tomorrow.
5. Petitioner is an Urban Co-operative Bank registered under the Karnataka Souharda Sahakari Act, 1997 (hereinafter referred to as ‘the Act, 1997’). The petitioner is doing banking business under the umbrella of Reserve Bank of India and has its branches across the North Karnataka. The petitioner- Bank amended its bylaw by its amendment of 1997, which was placed before the Registrar for approval and same came to be approved. The bylaw came to be amended. The bylaw prescribes for contribution towards Federal Co-operative Fund and the constitution various funds for their purposes under Section 10(XXI)(b) of the Act, 1997.
6. The petitioner-Bank while amending its bylaw has specifically amended stating that 2% contribution of educational fund is to be given to the Karnataka State Federal Co-operative after deducting the 25% of the profit towards reserve fund. As per the statute, 25% of the profits has to be given towards reserve fund and 2% of contribution is to be given to the educational fund, which has to be given to Karnataka State Souharda Federal Co-operative, respondent No.1. It is submitted by learned counsel for the petitioner that he has been following the said contribution of 25% and 2% to the 1st respondent.
7. Respondent No.1 issued a notice dated 18.09.2021 stating that petitioner-Bank was due in contribution to fund of 2% as educational fund to the 1st respondent. Pursuant to receipt of notice, the petitioner-Bank replied by stating that Bank is not due towards 2% of educational fund for the year 2017-18 and 2018-19. He further states that the petitioner is due educational fund of 2% for the year 2020-2021. But in view of the circular issued by the RBI due to uncertainty on account of Covid-19 pandemic, whereby a circular was issued to all the Urban Banks shall not make any dividend payment on equity shares on the profits for the financial year 2020-2021, the petitioner did not make the payment. The said fact was stated to the 1st respondent by way of reply by the petitioner-Bank, which was not considered and accordingly Annexure-F came to be issued by the 1st respondent.
8. Being aggrieved by the Annexure-F dated 04.11.2021 for disqualification, the petitioner filed Writ Petition No.104413/2021 before this Court. By the order dated 19.11.2021, this Court passed an interim order ”the further proceedings pursuant to the communication dated 04.11.2021 issued by the respondent is stayed until further orders”, which is also produced along with this petition as per Annexure-G. Pursuant to the interim order granted by this Court, respondent without considering the representation of petitioner-Bank and the interim order passed by this Court in Writ Petition No.104413/2021, issued the present impugned order at Annexure-J stating that the earlier order of this Court only pertains to Section 25(2)(d) of the Act, 1997 and therefore that will not effect or bind the 1st respondent from issuing Annexure-J restraining the petitioner from casting his vote and contest in the elections. Aggrieved by the issuance of Annexure-J, the petitioner-Bank is before this Court.
9. Learned counsel for the petitioner contends that the 1st respondent has failed to adhere to orders passed by this Court in the afore stated writ petition, wherein an interim order was passed until further orders vide its order dated 19.11.2021. hence, he is perforced to approach this Court for redressing his grievances and he further contends that he is ready and willing to pay the 2% of profits towards the educational fund to the 1st respondent as contemplated under the Act, 1997. But in view of the circular issued by the RBI, he could not pay, now he is willing to pay the same today itself and he may be permitted to cast his vote and contest in the elections for which last date of filing of nomination is 16.07.2022 i.e., tomorrow.
10. Per contra, learned counsel Smt.Pallavi S. Pachhapure has filed detailed statement of objection and vehemently contends that the writ petition itself is not maintainable in view of the fact that there is alternative efficacious remedy available under law by virtue of Section 39 of the Act, 1997. Despite having knowledge of the same, the petitioner has not approached the appropriate forum and rushed to this Court to seek remedy. She contends that this is the habitual attitude and conduct of the petitioner as he has time and again not deposited the educational fund and even on the earlier occasion also, for which, he has filed a writ petition. Since he had defaulted for non payment of educational fund, the earlier order was issued which was taken up in the writ petition as afore stated. Learned counsel further contends that this is not the first time that such a default has been committed by the petitioner. This shows the character and the conduct of the petitioner. Hence, she seeks for dismissal of the petition as it is not maintainable when there is alternative efficacious remedy available under the Act 1997.
11. Having heard the learned counsel for the petitioner and respondents. Section 39 of the Act, 1997 reads as under :
“39. Disputes which may be referred to the Registrar for decision.- (1) Notwithstanding anything contained in any law for the time being in force, if any dispute, touching the constitution, management or the business of a Co-operative or the Federal Co-operative, relating to the election of the board and the election of the office-bearers, arises,-
(a) among members, past members and persons claiming through members, past members and deceased members; or
(b) between a member, past member or person claiming through a member, past member or deceased member and the Co- operative or the Federal Co-operative, its board or any office bearer, agent or employee of the Co-operative or the Federal Co- operative; or
(c) between the Co-operative or the Federal Co-operative or its board and any past board, any office bearer, agent or employee, or any past office bearer, past agent or past employee, or the nominee, heirs or legal representatives of any deceased office bearer, deceased agent, or deceased employee of the Co-operative or the Federal Co-operative; or
(d) between the Co-operative or the Federal Co-operative and any other Co- operative or a credit agency, such dispute shall be referred to the Registrar for decision.
(2) For the purposes of subsection (1), the following shall be deemed to be disputes touching the constitution, management or the business of a Co-operative or Federal Co-operative, namely:-
(a) a claim by the Co-operative or the Federal Co-operative for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor where the Co-operative or the Federal Co-operative has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor, as a result of the default of the principal debtor whether such debt or demand be admitted or not;
(c) any dispute arising in connection with the election of a President or Chairperson, Vice-President or Vice Chairperson or director of the Co-operative or the Federal Co- operative.
(d) any dispute between a Co-operative or Federal Co-operative and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a Co-operative or Federal Co-operative, notwithstanding anything contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947);
(e) a claim by a Co-operative or Federal Co-operative for any deficiency caused in the assets of the Co-operative or Federal Co- operative by a member, past member, deceased member or deceased office bearer, past agent or deceased agent or by any servant, past servant or deceased servant or by its board, past or present whether such loss be admitted or not.
(3) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the constitution, management or the business of a Co-operative or the Federal Co- operative, the decision of the Registrar thereon shall be final and shall not be called in question in any court.”
12. Admittedly, the petitioner herein has not approached the alternative efficacious forum provided under Section 39 of the Act, 1997. It is no more res integra that when there is alternative efficacious remedy is available in law, the petitioner is bound to approach the appropriate forum before knocking at the doors of this Court. Under normal circumstances, this Court would have rejected the claim of petitioner for approaching this Court when there is a clearly available alternative remedy as contemplated under Section 39 of the Act, 1997. However, having gone through the interim order passed by this Court vide order dated 19.11.2021 vide Annexure-G, wherein this Court had passed an order of stay of further proceedings pursuant to communication dated 04.11.2021 and constrained to entertain this writ petition and to consider the grievances of the petitioner despite there being alternative remedy. It appears that the respondent has tried to over reach the orders of this Court.
13. Vide Annexure-F dated 04.11.2021, a similar order was passed that disqualification process would be initiated against the petitioner for non payment of educational fund of 2%, which came to be stayed and further proceedings came to be stayed by this Court.
14. Pursuant to issuance of Annexure-F, respondent No.1 has got issued Annexure-J dated 30.06.2022, wherein an intimation is given that he shall not permit him to cast vote and contest in the upcoming elections.
15. This being the state of affairs, the petitioner has earlier narrated the circumstances, due to which he did not deposit the 2% of educational fund due to the circular issued by the RBI under the Covid-19 pandemic situation. However, even on the previous date of hearing as well as today the learned counsel for the petitioner makes categorical statement that he would make payment of 2% of educational fund within end of the day. Submission is placed on record.
16. Under Section 62 of the Act, 1997 reads as under :
“62. Funds of the Federal Co-operative.-
(1) The Federal Co-operative shall constitute a fund called "Federal Co-operative Fund".
(2) The Federal Co-operative Fund shall consist of,-
(i) interest free initial loan of a sum of rupees ten lakhs made by the Government which is repayable within a period of ten years by the Federal Co-operative to Government; and
(ii) contributions made by each member Co- operative every year at such rates specified in the bye-laws of the Federal Co-operative.
(3) The Federal Co-operative shall also maintain a Co-operative Education Fund.
(4) If any member Co-operative fails to make the contribution towards the Federal Co-operative Fund without prejudice to any action to which such member Co-operatives is liable under section 68, such Co-operative shall not have a right to vote and contest for any office in the general body meeting of the Federal Co-operative.”
17. Having perused the above provisions, Clause (4) of Section 62 of the Act, 1997, which says that if any member of co-operative Society fails to make a contribution, then he shall not have right to vote and contest for any office in the general body meeting of the Federal Co-operative. This aspect is not disputed much by the counsel for petitioner. Admittedly, the petitioner has not deposited the educational fund of 2%, hence, the 1st respondent got issued Annexure-J. In view of the fact that the petitioner has undertaken that he will deposit the educational fund of 2%. I am of the opinion that the respondents be ordered to consider the case of the petitioner if he deposits the amount to the 1st respondent. Therefore, under these circumstances, the writ petition deserves to be allowed. Accordingly, I pass the following :
ORDER
Petition is allowed.
If the amount is deposited by the petitioner to the 1st respondent, he shall be permitted to cast vote and contest in the elections by submitting his nomination by last date i.e., on 16.07.2022, if he is otherwise entitled to as per the Act, 1997 and the rules, if any.
In case, the petitioner does not make the payment by 16.07.2022, the 1st respondent shall proceed with the calendar of events and conducting of elections.
