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TMI Blog2014 (4) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... e writ petitions from which these appeals arise is set-aside. The elected boards of the societies shall continue to hold office till expiry of the period of five years from the date of their elections and till then, no administrator shall be appointed and the elected board shall take charge only on expiry of the term of office of the members of the board. In view thereof, the communication dated 29.01.2014, impugned in the writ petitions is rendered ineffective. The writ appeals are accordingly disposed of in terms of the opinion expressed by us in this judgment. X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case, has taken a view that it is a case of substitution which cannot be given effect to mechanically from the date of the statute itself. Then the Division Bench proceeded to observe that "even if the legislature amends the existing provision in a statute by way of substitution and the substituted provision comes into effect from the date of the Act, it is not an invariable rule". It was further observed that "in certain situations, the Court having regard to the purport and object sought to be achieved by the legislature may construe the word 'substitution' as an amendment having a prospective effect. If the amendment expressly states that the substituted provision shall come into force from the date of the amendment coming into force, the said provision is prospective in nature. Then, there is no scope for interpretation whether the said amendment is prospective or retrospective. The legislature had made its intentions clear by such express words, which is to be followed by the Courts. However, if such an express provision is not there in the amendment, it does not necessarily mean that it has to be retrospective in nature". The Division Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive sector shall be run and maintained by the elected representatives elected from amongst shareholders. On account of the default committed by the Government, the Administrator cannot be appointed to the first appellant-Federal Society". Having so observed, the Division Bench, as aforementioned, framed the questions with a request to the Hon'ble Chief Justice for constitution of a larger Bench and restrained the respondents-State from appointing an Administrator. 6. This group of writ appeals arise from the order dated 6th March 2014 passed by learned single Judge disposing of several writ petitions filed by individual members of the committees/boards as well as by the Hassan Milk Union. Challenge in all the writ petitions and the prayers made therein being similar, the petitions were disposed of by the common order. The learned Judge dismissed all the writ petitions in terms of the judgment of the Division Bench in S. M Kelageri case. 6.1. In order to understand and to deal with the referred questions we would like to state in brief the background facts in Writ Appeal No. 734/2014 arising from the order of the learned single Judge dated 6th March 2014 in Writ Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the legislature intended the substituted provisions to have retrospective operation. He submitted that it is the amended provisions that have to be applied and not the old provisions which have ceased to exist. He submitted that substitution combines repeal and fresh enactment. The substitution therefore has the effect of just deleting the old provision and making the new provision operative right from inception. He then submitted that the process of substitution consists of two steps as observed by the Supreme Court: first, the old provision is made to cease to exist and, next, the new provision is brought into existence in its place. In view thereof, the election of next Managing Committee are being conducted in accordance with the amended provisions and that being so, as contemplated by the amended sub-sections (4) and (5) of Section 28-A of the Act, the existing Managing Committee, would continue till their term of five years is completed from the date of their election and so also till the new Managing Committee is elected and takes over. In support of his submission, he invited our attention to sub-section (5) of Section 28-A of the Act and so also Section 28-B(2) which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicate that it was made retrospective, either expressly or by necessary intendment or implication and that there is no such indication in the amending Act No. 3 of 2013. He submitted, by amendment new rights are created and therefore, it should be construed to be prospective in operation unless otherwise provided, either expressly or by necessary implication. 8. Before we look into the relevant provisions and advert to the submissions advanced by learned counsel for the parties, it would be advantageous to refer to the judgments relied upon by learned counsel for the parties in support of their contentions. 8.1. The Supreme Court in Zile Singh (supra) was dealing with Haryana Municipal (Amendment) Act, 1994 (Act No. 3 of 1994) whereby, Section 13A in Chapter III of the Principal Act was inserted. Section 13A provided disqualification for being chosen as and for being a member of Municipality if he has more than two living children provided that a person having more than two children on or after expiry of one year of the commencement of the amendment Act, shall not be deemed to be disqualified. In this backdrop, the Supreme Court stated the principles of construction and interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion that fell for the consideration of the Supreme Court was as to what would be the effect of subsequent notification, 'substituting' the list of places specified in the original notification. The Supreme Court in this judgment in paragraphs-15 and 16 considered the word substitute and observed thus : "15. The word "substitute" ordinarily would mean "to put (one) in place of another", or "to replace". In Black's Law Dictionary, 5th Edn., at p. 1281, the word "substitute" has been defined to mean "to put in the place of another person or thing", or "to exchange". In Collins English Dictionary, the word "substitute" has been defined to mean "to serve or cause to serve in place of another person or thing"; "to replace (an atom or group in a molecule) with (another atom or group)"; or "a person or thing that serves in place of another, such as a player in a game who takes the place of an injured colleague". 16. By reason of the aforementioned amendment no substantive right has been taken away nor any penal consequence has been imposed. Only an obvious mistake was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sundar, (supra) the question that fell for the consideration of the Supreme Court was, what was the effect of substituted Section 15 introduced by Haryana Amendment Act 1995, in the parent Act i.e. the Punjab Pre-emption Act, as applicable to the State of Haryana whereby, the right of a co-sharer to pre-empt a sale had been taken away during the pendency of an appeal filed against a judgment of the High court affirming the decree passed by the trial Court in a pre-emption suit. The Supreme court in this case considered the effect of substituted Section 15 introduced by Amendment Act 1995 on the substantive rights of the parties and after considering the judgments in Hitendra Vishnu Thakur v. State of Maharashtra, (1994) 4 SCC 602; Garikapati Veeraya v. N. Subbaiah Choudhary, AIR 1957 SC 540; Dayawati v. Inderjit, AIR 1966 SC 1423 and K.S. Paripoornam v. State of Kerala, (1994) 5 SCC 593, in paragraph 28 observed thus : "From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a fresh legislation, such legislation does not affect the substantive rights of the parties on the date of the suit or adjudication of the suit u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operative Society or each of the Co-operative Societies formed after amalgamation or reorganization or division in accordance with Section 14 for a period of three months and the administrator so appointed shall arrange for holding elections to a Committee of such Co-operative Society or Societies as the case may be." 9.3. From bare perusal of sub-section (4), it is clear that subject to the provisions of Section 29-A and 39-A, the term of office of the members of the Committee was "five co-operative years" and they were deemed to have vacated office as such members of the Committee on the date of completion of said term. Sub-section (5) provided if the new committee was not constituted under Section 29-A, on the date of expiry of the term of the out-going committee, the Registrar or any other officer, authorised by the Registrar was deemed to have assumed charge as Administrator. In short, sub-section (4) and sub-section (5) provided that under any circumstances, the outgoing committee would not continue on expiry of "five cooperative years". 9.4. Section 28-A was amended by Act No. 6/2010 with effect from 30-03-2010. By this amendment, the words "t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the words, "The term of office of the elected members of the committee" in sub-section (1) were substituted by the words "The term of office of the members of the committee". The amendment by Act No. 6/2010, for our purpose, is insignificant. 10.2. Section 29-A was then amended by the amending Act No. 3 of 2013, by which, only the word 'committee' occurring at all places in this provision was substituted by the word 'board'. 10.3. Thus, the amendments made from time to time, insofar as Section 29-A is concerned, for our purpose, are insignificant. Under this provision, the term of office of the members of the Board commences on the date on which the majority of the elected members of the board assume office or the term of the outgoing board expires, whichever is later. In other words it means, if the election is held before expiry of the term of the office of board as contemplated under Section 28-A(4) of the Act, the newly elected members of the board shall assume office on expiry of the term of the outgoing board and not before that. 11. Next we would like to consider the provisions contained in 39-A of the Act. Before its amendment by Act N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months prior to the expiry of the term of office of the board of the co-operative society and till the elections are conducted the incumbent board shall continue in their respective office. Similarly under sub-section (2) of Section 28-B, the election of a board shall be conducted before expiry of the term of the board so as to ensure that the newly elected members of the board assume office immediately on the expiry of the term of office of the members of the outgoing board. If for any reason, the elections are not held before expiry of the term, the consequences, as provided for under sub-sections (4) and (5) of Section 28-A and sub-section(2) of Section 28-B shall follow. 14. It is not in dispute and there cannot be any cavil that the election of members of the board shall now (after the amending Act No. 3 of 2013 was brought into force on 11.2.2013) be conducted as per the amending Act No. 3 of 2013. Sub-section(5) of Section 28A provides that if a new committee is not constituted under Section 29-A, on the date of expiry of the term of the office of the board, or if the elections are not held within the time limits specified under Section 39-A, the consequences provided ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trol of the management of the affairs of a society is entrusted to; Clause (2) of Article 243ZJ states that the term of office of elected members of the board and office-bearers shall be five years from the date of election and the term of office-bearers shall be co-terminus with the term of the board. Article 243ZK deals with election of members of board, which reads thus: "243ZK. Election of members of board.- (1) Notwithstanding anything contained in any law made by the Legislature of a State, the election of a board shall be conducted before the expiry of the term of the board so as to ensure that the newly elected members of the board assume office immediately on the expiry of the office of members of the outgoing board. (2) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to a cooperative society shall vest in such an authority or body, as may be provided by the Legislature of a State, by law: Provided that the Legislature of a State may, by law, provide for the procedure and guidelines for the conduct of such election." 15.2. Article 243ZT speaks of continuance of existing laws in the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order to prescribe the term of office of the board of the Cooperative Society in consonance with the constitutional prescription, sub-section (4) of Section 28-A was amended to the effect that the term of office of the Board would be five years from the date of election. 16. The Act was introduced in 1959 to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies in the State of Karnataka. The object of the Act is to provide good and efficient management of cooperative societies through the elected members of the board. Election as members of the board, is not a substantive right of the members and it is only a right of being a member of the Managing Committee for the term specified under the Act. 17. As to the effect of the amending Act No. 3/2013, the language will have to be examined to find out the intendment of the legislature. Every statute is prima facie prospective unless it is expressly or by necessary implications or intendment made to have retrospective operation. This rule, however, is applicable where the object of the statute is to affect vested rights or to impose new burden or to impair existi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution) we are satisfied that by necessary implication/intendment the amended provision would operate retrospectively and as a result thereof, term of all the boards shall stand extended till expiry of the period of five years from the date of their election. 21. We would also like to examine the effect of amendment by way of substitution and to find out whether amendment by Act No. 3 of 2013, by way of substitution would have retrospective operation. It is true that substitution of a provision results in repeal of the earlier provision and its replacement by the new provision. When the legislature amends the old provision by way of substitution it intends to keep alive the old provision. The Supreme Court in Zile Singh (supra) while dealing with such situation observed that having regard to the totality of the circumstances centered around the issue the Court can hold that the substitution has the effect of just deleting the old provision and making the new provision operative. The Supreme Court in State of Rajasthan vs. Mangilal Pindwal, AIR 1969 SC 2181 upheld the legislative practice of an amendment by substitution being incorporated in the text of a statute which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court in Shyam Sunder, in our opinion, is of no avail to the respondents since the elected members of the board do not have any substantive/vested right in continuing as members of the board or to make any grievance even about curtailment of their right to continue as such. Their term is governed by the provisions of the Act. 24. We, accordingly in answer to the first question referred to the Full Bench hold that Section 28-A(4) of the Act is retrospective in nature and that an administrator cannot be appointed under Section 28-A(5) of the Act, till expiry of the period of five years from the date of their election as contemplated by sub-section (4) of Section 28-A of the Act. 25. Insofar as the second question is concerned, in our opinion, in the facts and circumstances of the case, prayers made in the writ petitions by the appellants and so also our opinion on the first question, it does not arise for our consideration. We say so, because it would not be necessary for this Court to consider the situation where the elections are not conducted even till after expiry of the term of five years from the date of election as per the amended provisions of the Act. Apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly.
28. After answering the reference, it would have been more appropriate to direct the Registry to place all the writ appeals before appropriate Bench for their disposal, in light of the opinion expressed in this judgment. However, in view of the ensuing summer vacation which is starting from 5th May 2014 and holidays prior thereto and considering that the appeals pertain to the elections of co-operative societies, we deem it appropriate to dispose of the writ appeals by the following order :
The order of the learned single Judge dated 6th March 2014 disposing of the writ petitions from which these appeals arise is set-aside. The elected boards of the societies shall continue to hold office till expiry of the period of five years from the date of their elections and till then, no administrator shall be appointed and the elected board shall take charge only on expiry of the term of office of the members of the board. In view thereof, the communication dated 29.01.2014, impugned in the writ petitions is rendered ineffective. The writ appeals are accordingly disposed of in terms of the opinion expressed by us in this judgment. X X X X Extracts X X X X X X X X Extracts X X X X
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