Judges : P.SHANMUGAM
Sudarsanan - Appellant
Versus
State - Respondent
Case No : O.P.No. 9225 of 1996 and Connected Cases
Decided On : 12/04/1996
Advocates Appeared :
George Poonthottam For Petitioners Government Pleader (A. Jayasankar) & P.C. Sasidharan For Respondents 1, 3 & 4 T.R. Ramachandran Nair & D. Somasundaram For Respondents 5 & 6
Supersession of Committee - Kerala Co-operative Societies Act - S.32, S.66, S.65 - The court examines the provisions of the Kerala Co-operative Societies Act, including S.32 which deals with supersession of committees, S.66 which authorizes the Registrar to supervise and inspect societies, and S.65 which allows for inquiries by the Registrar. The court also considers the Kerala Co-operative Societies Rules, including R.44(1)(k) which disqualifies members of superseded committees. The court concludes that the Assistant Registrar does not have the authority to recommend supersession under S.32, and that the enquiries and inspection under S.66 and S.65 do not empower the Assistant Registrar to recommend supersession. The court also examines the principles of natural justice and concludes that the failure to furnish copies of the enquiry reports violates natural justice.
Fact of the Case:
The President and members of the Board of Directors of a cooperative bank challenge the order of supersession. Enquiries were conducted regarding the general structure and financial status of the society and unauthorized appointments. The Assistant Registrar recommended supersession based on the enquiry reports. The petitioners argue that individual notices were not given to the members of the committee, the supersession order was passed without independent assessment, the financing bank was not consulted, and the order was made on malafide grounds. The government pleader argues that no individual notices are required, the financing bank was consulted, and the order was passed on merits. The court examines the provisions of the Act and Rules, and the principles of natural justice. It concludes that individual notices are not required, the Assistant Registrar does not have the authority to recommend supersession, the failure to furnish copies of the enquiry reports violates natural justice, and the Joint Registrar failed to independently consider the objections and explanation. The court quashes the order of supersession.
Finding of the Court:
The court analyzes the provisions of the Kerala Co-operative Societies Act and Rules, and the principles of natural justice. It examines the authority of the Assistant Registrar to recommend supersession, the requirement of individual notices, the consultation of the financing bank, and the consideration of objections and explanation by the Joint Registrar.
Ratio Decidendi: The Assistant Registrar does not have the authority to recommend supersession. Individual notices are not required for each member of the committee. The failure to furnish copies of the enquiry reports violates the principles of natural justice. The Joint Registrar must independently consider the objections and explanation before passing the order of supersession.
Result: The order of supersession is quashed. The Original Petitions are allowed.
Shanmugam, J.
These Original Petitions are filed by the President and the members of the Board of Directors challenging the order of supersession.
2. Pazhayakunnunnel Service Co-operative Bank Ltd. is one of the oldest and biggest Class II Service Co-operative Bank in Trivandrum District. Election to the managing committee was held on 29.12.1994 and the members have assumed charge on 1.1.1995. The term of the committee would expire on 31.12.1997. Two enquiries under S.66 of the Act were ordered by the Joint Registrar in May 1996 and July 1996 regarding the general structure and financial status of the society and against the unauthorised appointments, arrears of the executive committee members and rejection of the direction 1997(1) of the Registrar. On the basis of the enquiry reports submitted by the Asst Registrar a show cause notice under S.32 of the Kerala Co-operative Societies Act, hereinafter referred to as 'the Act', dated 5.8.1996 was issued to the President of the society. The request of the petitioners for the copy of the enquiry reports was not conceded. Petitioners submitted their reply on 19.8.1996. Not being satisfied with the explanation and the reply, Joint Registrar passed the impugned order of supersession dated 22.8.1996. The Original Petitions are against this order.
3. The main submissions made by learned counsel for the petitioners are as follows:
i) Show cause notice for supersession was issued only against the President of the society and not to the members of the committee individually Eight of the members of the managing committee have filed a separate Original Petition contending that the respondents have passed the supersession order without hearing and giving opportunity to the members of the managing committee and, therefore, the order is illegal.
ii) The supersession order was passed based on the recommendation of the Assistant Registrar contained in the report under S.66 copies of which were not furnished by the petitioners. The supersession order was passed without independent assessment of the Registrar and therefore, it is illegal.
iii) The financing bank was not consulted as required under S.32(2) of the Act
iv) The order of supersession was made on malafide and extraneous grounds. (v) No grounds are made out on merits warranting the extreme step of supersession.
4. Learned Government Pleader repelled the contentions of the counsel for the petitioners and submitted that no individual notices are required to the members of the committee. He further submitted that show cause notice along with the final order were furnished to the financing bank and their opinions were sought for. He submitted that serious allegations of mismanagement and financial irregularities were noticed in the enquiry and the committee was given full opportunity to explain which they have miserably failed to do so. Hence supersession order was passed purely on merits.
5.1 have heard counsel at length.
6. S.32 of the Act contemplates an opportunity to the committee to state its objection on the proposed action of supersession. The committee has been defined under S.2(e) of the Act. According to this definition, the committee means the governing body of a co-operative society by whatever name called, to which the management of the affairs of the society is entrusted. Thus the committee is an entity acting collectively. There is no scope for individual members of the committee functioning on behalf of the There is a collective responsibility and a joint action of the members through the committee. Therefore, no individual notice is required to each and every member of the committee to state their objections. A plain reading of S.32 of the Act does not make out such a requirement. It is true that R.44(1)(k) of the Kerala Co-operative Societies Rules, hereinafter referred to as 'the Rules', disqualifies a member of the committee which has been superseded. That is the consequence of collective responsibility. From that it ca
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