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1995 Supreme(Ker) 144

Judges : V.V.KAMAT
Rajagopalan Nair - Appellant
Versus
State of Kerala - Respondent
Case No : O.P.No. 2493 of 1994
Decided On : 06/14/1995
Advocates Appeared :
Or. Janardana Kurup For Petitioners Govt. Pleader (K. Thankappan) & M. Rajasekharan Nair For Respondents

Headnote:

Registrar of Co-operative Societies Act - Powers of Registrar under S.32 - [Co-operative Bank, Removal of Board of Directors] - S.32 of the Kerala Co-operative Societies Act, 1969 - The court discussed the statutory provisions and emphasized the exceptional character of the powers of the Registrar, which should be exercised sparingly and only under exceptional circumstances. The court highlighted the key words 'persistent', 'negligent', 'wilful', and 'lawful' as guiding factors for the exercise of power by the Registrar. The judgment emphasized the need for the Registrar to exercise discretion independently and uninfluenced by any extraneous considerations. The court found that the impugned order lacked jurisdiction and was passed at the behest of someone else, making it unsustainable on its own merits. The court also noted the failure of the Registrar to provide a reasonable opportunity for hearing and the lack of seriousness in the proceedings. The petition succeeded, and the impugned order was quashed and set aside.

Fact of the Case:

The petitioners, members of the Co-operative Bank and elected members of the Board of Directors, challenged an order of the Joint Registrar of Co-operative Societies, which removed the Board of Directors and appointed a part-time administrator. The petitioners alleged mala fides and irregularities in the proceedings, including a farcical personal hearing and an order passed at the behest of a political leader.

Finding of the Court:

The court found that the impugned order lacked jurisdiction and was passed at the behest of someone else, making it unsustainable on its own merits. The court also noted the failure of the Registrar to provide a reasonable opportunity for hearing and the lack of seriousness in the proceedings. The petition succeeded, and the impugned order was quashed and set aside.

Ratio Decidendi: The judgment emphasized the exceptional character of the powers of the Registrar, which should be exercised sparingly and only under exceptional circumstances. The court highlighted the need for the Registrar to exercise discretion independently and uninfluenced by any extraneous considerations. The court found that the impugned order lacked jurisdiction and was passed at the behest of someone else, making it unsustainable on its own merits.

Final Decision: The petition succeeded, and the impugned order was quashed and set aside. All further proceedings in pursuance of the impugned order were stayed, and any pending proceedings were to be quashed and set aside as a necessary consequence of the situation.

Judgment :-

This is a petition by five petitioners who are, in addition to being the members of the Co-operative Bank (Ayiroorpara Farmers Bank), elected members of the Board of Directors in pursuance of the election held on February 13,1994. Along with these five petitioners eight others were also elected to constitute what is known as the Board of Directors. They approached this court for a challenge to Ext. P1 which is an order of the Joint Registrar of Co-operative Societies, Thiruvananthapuram (respondent No. 2) acting under S.32 of the Kerala Co-operative Societies Act, 1969, proceeding to remove the Board of Directors in the said society and as a consequence appointing part-time administrator, obstensibly for a period of three months, till the newly elected committee is in a position to take charge. There is no dispute that the joint Registrar passed the impugned order (Ext. P1) on February 11, 1994 (Saturday) appointing the administrator in pursuance thereof almost only for a day (February 12,1994 - Sunday) because the factual matrix shows mat the newly elected committee was ready to assume charge in pursuance of the order. In regard to this certain averments are placed on record which would be considered at the appropriate stage.

2. Since the impugned order (Ext. P1) is passed under the provisions of S.32 of the Act, it would be really necessary and relevant in the first instance to refer to the concerned statutory provisions for the purpose of setting at rest finally legal and statutory limits of the authority of the Joint Registrar under the said provision. These limits would be more convenient to set down to facilitate further examination of the activities in the context as are sought to be placed through the material on record.

3. Section 32 empowers the Registrar to proceed with the supersession of the committee of a Co-operative Society. The committee in this context would be the Board of Directors in function 'in accordance with the provisions of the Act, Rules and the concerned bye-laws. This supersession requires the existence of the satisfaction of the Registrar. The satisfaction is referable to certain situations. If the committee makes persi stent defaults or if the committee is negligent in the performance of the duties, then in regard thereto the Registrar requires satisfaction in the context. This persistency in defaults or negligence in the performance relates to the duties under the Act or the Rules or Bye-laws. It also refers to the commission of the acts of the committee, in regard to which satisfaction is required that the concerned acts are prejudicial to the interests of the society. In addition, if the committee wilfully disobeys or wilfully fails to comply with any lawful order or direction, on satisfaction the Registrar can supersede the concerned committee. However, it is required that this wilful disobedience or compliance of a similar character of orders or directions need be referable only to those issues under the Act or the Rules.

4. Reading the requirements specified above, correct and proper jurisdiction of the Registrar would depend on the satisfaction. The satisfaction is relatable to a situation of persistency in the matter of defaults or negligence in regard to the performance of duties by the concerned committee. Additionally it is also a requirement that these defaults or duties should be referable to the Act or the Rules or the Bye-laws. Additionally also acts have to be prejudcial to the interests of the society showing wilful disobedience or failure of a similar character in the matter of lawful orders or directions issued by the Registrar, additionally requiring the issuance of these orders and directions also to be falling in some of the provisions of the Act or the Rules. It is only on the satisfaction of these requirements, the Registrar may proceed to think of giving an opportunity to the concerned members of the committee by an order in writing.

5. In the process of apprecia
















































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