The Registrar's power under S.32(1) of the Kerala Co-operative Societies Act, 1969 could only be exercised to remove the entire body of the Committee as a whole and not individual members. The Registrar could not rely on inconclusive findings of the Kerala Public Men's Corruption Commission.

Headnote:
Registrar's Power - Supersession of Committee - Kerala Co-operative Societies Act, 1969 - S.32(1) - The court held that the Registrar's power under S.32(1) of the Act could only be exercised to remove the entire body of the Committee as a whole and not individual members. The Registrar's order removing 11 members and superseding the Committee was not justified in law. The court also found that the Registrar could not rely on the findings of the Kerala Public Men's Corruption Commission as the detailed inquiry had not commenced and the findings were not conclusive. The court allowed the Original Petition and quashed the Registrar's order.
Fact of the Case:

The petitioners, elected members of the Board of Directors of the Kerala State Co-operative Agricultural and Rural Development Bank, were issued a notice by the Registrar of Co-operative Societies under S.32(1) of the Kerala Co-operative Societies Act, 1969, based on allegations of corruption and irregularities in the selection and appointment of Assistants in the Bank by the previous Board of Directors. The Registrar removed 11 Directors and superseded the Committee, appointing an Administrator to manage the Bank's affairs.
Finding of the Court:

The court found that the Registrar's exercise of power under S.32(1) to remove individual members and supersede the Committee was not justified in law. The court also held that the Registrar could not rely on the findings of the Kerala Public Men's Corruption Commission as the detailed inquiry had not commenced and the findings were not conclusive.
Issues: The main issue was whether the Registrar's order removing 11 members and superseding the Committee under S.32(1) of the Act was legal and valid.
Ratio Decidendi: The Registrar's power under S.32(1) of the Act could only be exercised to remove the entire body of the Committee as a whole and not individual members. The Registrar could not rely on the findings of the Kerala Public Men's Corruption Commission as the detailed inquiry had not commenced and the findings were not conclusive.
Final Decision: The court allowed the Original Petition and quashed the Registrar's order.

Judgment :-

S. Sankarasubban, J.

The petitioners are the elected members of the Board of Directors of the Kerala State Co-operative Agricultural and Rural Development Bank, Trivandrum. It is an apex Bank. There are 44 primary Co-operative Agricultural Banks as its members. The present Board of Directors was elected in the election held on 2.3.1996 for a period of three years. The Board of Directors consisted of 14 elected Directors, 5 Government nominees, 2 nominated members as per S.28A of the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as "the act). The Additional Secretary to Government and the Director of Agriculture and the Registrar of Co-operative Societies were ex-officio members of the Board of Directors. The Managing Director of the Bank who was appointed by the Government was also an ex-officio member of the Board of Directors. Of the 14 elected Directors, 12 of them were Directors of the previous Board also.

2. First respondent, the Registrar of Co-operative Societies issued notice dated 22.10.1996 to 12 Directors of the Board, who were Directors of the previous Board also. The notice is produced as" Ext. P2. The notice is purported to be issued under S.32(1) of the Act. The notice is as follows: The previous Board of Directors on 9.2.1995 by its resolution No. 23 resolved to approve the rank list relating to the appointment of Assistants in the Bank. Accordingly, appointments were made for the said posts.

3. Serious complaints were received by the Registrar on irregularies and manipulations in the selection process. The Registrar conducted an enquiry into the matter, which revealed serious violation of statutory provisions under the Act and the Rules framed thereunder, Bye-laws and Circular instructions of the Registrar. Hence, the Registrar rescinded resolution dated 9.2.1995. Further the Kerala Public Men's Corruption (Investigation and Inquiries) Commission (hereinafter referred to as 'the Commission') Trivandrum had also found that the Selection Committee consisting of the Board of Directors were prima facie guilty of corruption. The complaint before the Commission were filed against the President, Vice President, Managing Director and Secretary. The Commission found prima facia case of corruption against the President, Vice President and the Managing Director and a detailed enquiry was ordered. According to the Registrar, there was a clear finding that the President, Vice President and the Managing Director were prima facie guilty of corruption, as envisaged under S.3(c) and (d) of the Kerala Public Men's Corruption (Investigations and Inquiries) Act, The Registrar further stated that it was clear from the definite finding that the Managing Committee Members who were responsible for selection and appointment were prima facie guilty of corruption. The Managing Committee had initiated all proceedings relating to selection and appointment. Earlier, the Additional Registrar of Co-operative Societies conducted an enquiry regarding the allegations of corruption and illegal appointments and reported on 24.3.1995 that the Committee Members were guilty of violation of the provisions of the Act and the Rules and the instructions of the Registrar of Co-operative Societies. It was also reported that the appointments were effected against the interest of the Society. Hence, resolution No. 23 of the Board of Directors was found to be void. Since now the Commission had also found that the President, Vice President and the Managing Director were prima facie guilty of corruption, it followed that all the members who were in the Committee as on 9.2.1995 were also prima facie guilty of corruption. Hence, according to the Registrar, he was satisfied that the Committee was persistently negligent in the performance of duties imposed on it by the Act, Rules and Bye-laws, which were prejudicial to the interest of the Society and that he was satisfied that there was corruption at large in the appointment of the empl

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