Judgment :-

The petitioner, the Trissur District Co-operative Bank Employees Union represented by its Secretary, filed this O.P. for directing the 2nd respondent, the Registrar of Co-operative Societies, to consider Ext.P9 representation and to cancel Exts.P7 and P8 resolutions taken by the 4th respondent, the Administrator, Trissur District Co-operative Bank, and also for directing respondents 1 to 6 not to grant and disburse the loan amount sanctioned as per Exts.P7, P8 and P11 to the 7th respondent, Priyadarshini Co-operative Hospital Ltd. No.R.756.

2. The allegations in the petition briefly are as follows: The 5th respondent, the Trissur District Co-operative Bank was under the administration of the Administrator with effect from 4.5.2002. The 7th respondent Priyadarshini Co-operative Hospital Ltd. No.R 756 was a co-operative society registered as a Hospital Society in 1986. The objectives of the above society could not be achieved even after 16 years and the above society is in loss of about Rs.2 crores. The 7th respondent availed a bridge loan of Rs.25 lakhs from the Keecheri Branch of the Trissur District Co-operative Bank on 9.4.1994. They did not repay the amount. Accordingly the 7th respondent filed ARC 45/98 before the Joint Registrar of Co-operative Societies and a decree was passed for a sum of Rs.33,44,334/- and interest at 19% p.a. for the decree amount. Later the District Co-operative Bank filed E.P.209/99 for a total amount of Rs.49,68,502/-. The properties of the 7th respondent were attached. Even then no amount was paid. The Trichur District Co-operative Bank is now undergoing the worst crisis and the bank is in loss as the NABARD found that the loan granted to the Trichur Paddy Processing and Marketing Co-operative Society as lost asset and Trichur Co-operative Spinning Mill shall be classified as Class III and 30% reserves shall be maintained with respect to the above loan. Accordingly Rs.14.5 crores has to be maintained as reserves for the above said loan. In spite of the above circumstances the 4th respondent, the Administrator, had sanctioned a loan of Rs.1 crore to the 7th respondent society against the interest of the Co-operative Bank and the same was illegal and against the guidelines issued by the State Co-operative Bank, NABARD and the Reserve Bank of India. The Administrator had sanctioned a loan of Rs.1 crore to the 7th respondent based on a total unviable and unreasonable project for hospital with 52 beds. The Co-operative Bank made a study of the project and reported that the project was not viable and that the 7th respondent Society had an outstanding liability of nearly Rs.170 lakhs and the above society was not having sufficient assets too. But ignoring all the above, the 4th respondent had taken Exts.P7 and P8 resolutions on 19.9.02 sanctioning a loan of Rs.1 crore to the 7th respondent. The petitioner filed Ext.P9 representation before the Registrar of Co-operative Societies, the 2nd respondent, for quashing the above resolutions, but no action was taken. A similar petition was sent to the NABARD also, but the General Manager passed Ext.P11 order directing the issue of sanction order incorporating certain conditions in accordance with the decision of the Administrator. Aggrieved by the above orders, the Employees' Union represented by the Secretary filed this petition for quashing Exts.P7 and P8 resolutions and Ext.P11 order and also for directing the 2nd respondent to consider Ext.P9 representation and to pass orders.

3. Heard the learned counsel appearing for the petitioner and the respondents.

4. The 7th respondent Priyadarshini Co-operative Hospital Ltd. No.R756, Eranelloor, was registered as a society in 1986 under the Co-operative Societies Act and commenced functioning in April 1986. It purchased 295.5 cents of land in R.S.156/7 of Eranelloor Village by spending Rs.5.25 lakhs as evident from the counter filed by the 7th respondent. The area was low lying and an amount of Rs.3.88 lak