Holding

An administrator appointed under Section 32 cannot enrol new members; that power resides solely with the elected Committee of Management.

Summary

The Supreme Court considered appeals against a Kerala High Court order that restrained an administrator, appointed under Section 32 of the Kerala Cooperative Societies Act, 1969, from enrolling new members in a cooperative society whose managing committee had been superseded. The petitioners argued that the administrator, who exercises all functions of the committee, also possessed the power to admit members. The Court held that enrolment of new members is a substantive power that alters the society's composition and is vested exclusively in an elected committee of management, not in an administrator appointed during supersession. It emphasized that the distinction between a function and a power must be examined in the context of the statute, and that democratic principles require member admission to be decided by the elected body. Relying on K. Shantharaj v. M.L. Nagaraja (1997) and other precedents, the Court dismissed the appeals, confirming that the administrator cannot enrol new members.

Issues considered

Whether an administrator appointed under Section 32 of the Kerala Cooperative Societies Act, 1969, during supersession of the Committee of Management, has the power to enrol new members of the cooperative society.

Legislation cited

Karnataka Cooperative Societies Act, 1959s. 30, s. 30A
Kerala Cooperative Societies Act, 1969s. 32, s. 32(4)

Subjects

cooperative societyadministratorSection 32enrolment of memberspower vs functiondemocratic governancesupersessioncooperative law

Judgment

A IT. REGISTRAR OF COOPERATIVE SOCIETIES, KERALA
v.
T.A. KUITAPPAN AND ORS. ETC.

MAY9, 2000

B [S. RAJENDRABABU AND Y.K. SABHARWAL, JI.]

Kerala Cooperative Societies Act, 1969-Section 32-Administrator
appointed Superseding Managing Committee who sought to enroll new
members-Writ Petition filed before High Court to restrain Administrator-
C High Court allowed writ petition holding that there was no power to enrol
new members-On appeal Held, Administrator perfonns all powers and
functions of the managing committee in the interest of society and should
conduct elections with the members on rolls, but cannot enrol new members-
Enrolment of new members alters composition of society and such power
D should be exercised by an elected committee-Duty of an Administrator is to
set right the default or negligence, if any, on part of the society and to enable
it to carry its functions as enjoined by law.

An administrator was appointed under Section 32 of the Kerala
~ooperative Societies Act, 1969 superseding the Committee of Manage-
E ment of a Society. The administrator sought to enrol new members. Writ
Petitions were filed before the High Court in order to restrain the adminis-
trator from enrolling new members. High Court allowed the writ petitions
holding that the admission of a member is not mere ''function'' of the ·
Committee, but is a power, which cannot be taken over by an Administra-
F tor. Hence these appeals.

Dismissing the appeals, the Court

HELD : 1. The Administrator, subject to control of Registrar of
Cooperative Societies exercises all or any of the functions of the society,
G and the Special Officer subject to control of the State Government and the
Registrar exercises and performs 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 -
H
1204
JT. REGISTRAR OF CO-OPER. SOCIETIES v. T.A. KUTTAPPAN 1205
is not vested with power to enrol new members of the society. (1207-E-F] A

KL Shantharaj & Am: v. M.L Nagaraja & Ors., [1997] 6 SCC 37,
relied on.

George v. Joint Registrar, (1985) KLT 836 and Clze1tlzala Agricultural
Rural Development Bank & Ors. v. Joint Registrar & Ors., (2000) 1 KLT 291 B
FB, referred to.

2. The Administrator or a Committee appointed while the Commit-
tee 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 mean- c
ing of the expression ''power to exercise all or any of the functions".
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. The
functions are discharged or powers exercised or vice versa depending upon D
the conte:Xt of the duty or power enjoined under the law if the two expres-
sions 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. [1209-F-G]

3. A Cooperative Society is expected to function in a democratic E
matter 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 tJte 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 F
Committee of Management is under supersession. When the Committee of
Management of the Cooperative Society commits any default or is negli-
gent 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.
G
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. (1210-C-D; F-G]

KL Shantharaj & Am: v. M.L Nagaraja & Ors., [199_7] 6 SCC 37,
relied on. H
1206 SUPREME COURT REPORTS [2000] 3 S.C.R.
A CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1930-1936
of 1999 Etc. Etc.

From the Judgment and Order dated 28.8.98 of the Kerala High Court
in O.P. Nos. 12184, 14840, 14886, 15700, 17258, 18396 and 20913 of 1997.

B Mukul Rohtagi, Additional Solicitor General, V.R. Reddy, C.S.
Vaidhyanathan, P.P. Rao, G. Prakash, Mrs. Beena Prakash, G.N. Shree Kumar,
P. Sureshan, Ms. Deepa S. Monappan, Vmod, M.P., Dilip Pillai, Ramesh Babu
M.R., L. Nageshwara Rao, Roy Abraham, Ms. Baby Krishnan, A. Raghunath
and E.M.S. Anam for the appearing parties.

C The Judgment of the Court was delivered by

RAJENDRA BABU, J. These appeals by special leave are against a
common order made in O.P.Nos.12184, 14840, 14886, 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
·D Societies to supersede the ~ommittee of Management under the circum-
stances set forth in sub-Section (1) thereto. After supersession ·of the Com-
mittee of Management, the Registrar can appoint an administrator or admin-
istrators 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
E to tjme 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 thf Committee of Management of certain Cooperative
Societies wanted to enrol new members to the society the same was objected
F 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 v. Joint Registrar, 1985 KLT 836, is no longer good law
G in the light of the· decision of this Court in K Shantharaj & Am: v.
M.LNagaraj & 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
H to admit members or not as provided in Bye Laws of the Society. The
(

IT. REGISTRAR OF CO-OPER. SOCIETIES v. T.A. KUTTAPPAN [RAJENDRABABU, J.] 1207
Committee can exercise only certain functions and not any powers and, A
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 have been amended so that the
administrator or the Committee will have power to exercise all or any of the B
powers and functions of the Committee. It is further brought to our notice
that in Cherthala Agricultural Rural Development Bank & Ors. v. 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 C
of neither amended Section 32 of the Act nor the decision in Chertlzala
Agricultural Rural Development Bank & Ors. v. Joint Registrar & Ors.
(supra) is required to be considered by us in these proceedings.

The question whether an adminisu·ator appointed during supersession
of a Committee of Management of a Cooperative Society can enrol new D
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 Kamataka 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 E
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 F
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 appel-
lants, submitted that there is difference in language between the provisions G
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 : H
1208 SUPREME COURT REPORTS (2000] 3 S.C.R.
A Section 30(2) of the Kamataka Act Section 32(4) of the Act
''The administrator so appointed "The Committee or administra-
shall subject to the control of the tor or administrators so appointed
Registrar and such instructions as he shall, subject to the control of the
may give from time to time, exercise Registrar and to such instructions as
all or any of the functions of the he may be from time to time give,
B Committee or of any officer of the have power to exercise all or any of
Cooperative Society and take such the functions of the Committee or of
action as he may consider necessary any officer of the society and take
in the interest of the society." such action as may be required in the
Section 30-A of the Kamataka Act interests of the society."
c "Appointment of Special Of-
ficer. - (1) Where the State Govern-
ment. on a report made to it by the
Registrar or otherwise, is satisfied that
any Cooperative Society is not func-
tioning in accordance with the provi-
D sions of this Act or the rules made
thereunder or its bye-laws or any
order,. direction or circular issued by
the State Government or the Regis-
trar, it may notwithstanding anything
in this Act, by order, appoint a Spe-
E cial Officer for such Cooperative
Society for such period not exceeding
two years :
Provided that the State Govern-
ment may, if it considers it necessary
F 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 Govern-
G ment and the Registrar, exercise and
perform all the powers and functions
of the Committee of the Cooperative
.,
Society or any officer of the Coop-
erative Society and take all such ac-
tions as may be required in the inter-
H est of the Cooperative Society."
JT. REGISTRAR OF CO-OPER. SOCIETIES v. T.A. KUITAPPAN [RAJENDRA BABU, J.] 1209
> The learned Addl. Solicitor General relied on that portion of the A
judgment of the Division Bench which affirmed the view of the learned Single
Judge where a comparison between the Act and the Kamataka 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 B
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 Kamataka
Act, the Administrator can only exercise all or any of the functions
of the committee. Moreover, as stated earlier, the difference in the c
authority vested in an Administrator and a Special Officer, as is made
in the Kamataka Act is not considered in the Kerala decision. The
)..
difference in the authority vested in an Administrator and a Special
Officer in the Kamataka Act, is very significant which is absent in
the Kerala Act. In that view of the matter, the dictum laid down by
D
the Division Bench of the Kerala High Court, cannot have any
application while determining the comparative authority of an Ad-
ministrator and a Special Officer appointed under Sections 30 and 30-
A of the Kamataka Act respectively."

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

If we carefully analyse the provisions of the Act, it would be clear that
tbe administrator or a Committee appointed while the Committee of Manage-
ment of the Society is under supersession cannot have the power to enrol new
F
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 G
functions are discharged or powers 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 Comt, while considering the provisions of Section 30-A of the Kamataka H
1210 SUPREME COURT REPORTS [2000] 3 S.C.R.
A 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,
B 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 demo-
cratic manner through ~elected Committee of Management and that Com-
mittee of Management is empowered to enrol new members. Enrolment of
c 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 .anadministrator or a Committee appointed by the Registrar while the
Commit1ee 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
D of the judgment. Even where the language of Section 30-A of the Karnataka
Act empowered a special officer ~o 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
E
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
F 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 C!UIY on its functions
as enjoined by law. Thus, the role of an administrator or a .Committee
G 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 inK. Shantharaj's case [supra]
H took the view that an administrator or a special officer in the Kamataka Act
·\
l

IT. REGISTRAR OF CO-OPER. SOCIETIES v. T.A. KUTTAPPAN [RAJENDRA BABU, I.] 1211
is not vested with the power to enrol new members of the Cooperative Society A
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.

A.Q . Appeals dismissed. B

. j
'