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2008 Supreme(Ker) 553
Judgename : THOTTATHIL B.RADHAKRISHNAN
Managing Committee of Kandalloor - Appellant
Versus
Joint Registrar of Co-Operative Societies - Respondents
Case No : WP(C).No. 4661 of 2008 (E) & 7339 OF 2008-W
Decided On : 10/17/2008
The main legal point established in the judgment is that the Registrar must distinguish between minor and major defects in the constitution, working, or financial condition of a society before initiating action under Section 32(1) of the Kerala Co-operative Societies Act, 1969, and must ensure that the decision-making process is based on a reasoned consideration of relevant materials.
Headnote:
CR - Co-operative Bank - Kerala Co-operative Societies Act, 1969, Section 32(1) - Summary of the acts and sections referenced and discussed by the court: The court discussed the provisions of Section 32(1) of the Kerala Co-operative Societies Act, 1969, which empowers the Registrar to supersede the managing committee of a co-operative bank. The court emphasized the distinction between minor and major defects in the constitution, working, or financial condition of the society as per Section 65(5) and (6), and highlighted the Registrar's duty to conclude whether there are any defects and the nature of such defects before initiating action under Section 32(1). The court found that the impugned order lacked jurisdictional support and was arbitrary, leading to the quashing of the orders.
Fact of the Case:
The managing committee of a Co-operative Bank filed writ petitions challenging the notice and order issued under Section 32(1) of the Kerala Co-operative Societies Act, 1969. The petitioners contended that the issuance of the notice and order lacked jurisdictional foundation and was arbitrary and mala fide. They argued that their objections were not considered, and the impugned decision was made without adverting to relevant materials.
Finding of the Court:
The court found that the impugned notice and order lacked jurisdictional support and were arbitrary, leading to their quashing.
Issues: The issues revolved around the jurisdictional foundation of the notice and order issued under Section 32(1) of the Kerala Co-operative Societies Act, 1969, and the consideration of the petitioner's objections.
Ratio Decidendi: The court emphasized the distinction between minor and major defects in the constitution, working, or financial condition of the society as per Section 65(5) and (6), and highlighted the Registrar's duty to conclude whether there are any defects and the nature of such defects before initiating action under Section 32(1). The court found that the impugned order lacked jurisdictional support and was arbitrary, leading to the quashing of the orders.
Final Decision: The court quashed the impugned orders issued under Section 32(1) of the Kerala Co-operative Societies Act, 1969, and allowed the writ petitions accordingly.
"CR"
1. These writ petitions are by the managing committee of a Co-operative Bank. That committee was superseded as per order dated 20-2-2008 which is marked Ext.P11 in WP(C).7339/2008. WP(C). 4661/2008 was filed challenging the notice dated 29-1-2008 issued under Section 32(1) of the Kerala Co-operative Societies Act, 1969, hereinafter referred to as the "Act". That document is Ext.P4 in WP(C).7339/2008. Noticing the different contentions in WP(C).4661/2008, an interim order was issued on 8-2-2008 in that case. It was thereafter that the order impugned in WP(C).7339/2008, Ext.P11 therein, was issued by the Joint Registrar exercising the powers of the Registrar. The implementation and all further proceedings pursuant to that order stand stayed as per interim order dated 3-3-2008 granted at the stage of admission of WP(C).7339/2008.
2. Having regard to the pleadings, materials and the issues arising for decision, these writ petitions are heard jointly and are being decided as per this common judgment by making reference to the documents as are placed in WP(C).7339/2008.
3. In the gist, the contentions of the petitioner are that the issuance of Ext.P4 notice and Ext.P11 order under Section 32 lacks jurisdictional foundation and is arbitrary and mala fide. It is contended that in answer to Ext.P2 notice under Section 65(5) of the Act, the petitioner submitted Ext.P3 reply and no decision was rendered thereon; but what ultimately followed was Ext.P4 notice under Section 32 and that the same cannot be the outcome of a proceedings under Section 65(5). It is further contended that the specific objections placed as per Ext.P10, with reference to the ten enumerated grounds in Ext.P4, have not been considered, while issuing Ext.P11 as is expected of an administrative authority, bestowed with statutory power. It is submitted that the impugned decision has been made without adverting to and considering relevant materials.
4. The official respondents have placed counter affidavits. The additional respondent, impleaded at his instance, also contests.
5. Heard.
6. It is argued that Ext.P4 notice under Section 32 has been issued without jurisdiction in so far as the proceedings were not concluded after the enquiry in terms of Section 65(5) on the basis of Ext.P3 objections to Ext.P2 notice under Section 65 and still further, that the impugned order has been passed even when the Circle Co-operative Union, a consultant in terms of Section 32, has recommended against supersession, while the other consultant, the District Co-operative Bank, going by Ext.P11, did not provide any opinion. It is argued on behalf of the petitioner that the committee superseded as per Ext.P11 had come into office only in November, 2003 and though none of the members of that committee was member of the previous committee, Ext.P4 notice has been issued levelling seven allegations therein as regards conducts attributable exclusively to the previous committee.
7. Onbehalf of the respondents, in particular, on behalf of the impleaded respondent, it is argued that having regard to the scope of the jurisdiction under Article 226, this Court is not to sit in appeal on the findings contained in Ext.P11 which have been rendered on the basis of the materials and in the absence of any situation of lack of jurisdiction or absence of materials, the visitorial jurisdiction of this Court would not extend to erase the impugned order passed under Section 32.
8. In considering the rival contentions, it needs to be noticed at the outset that Ext.P2 notice was issued for an enquiry under Section 65(5) of the Act. This is beyond dispute in view of the statements in the opening paragraph of Ext.P4. Ext.P3 is the reply given by the petitioner to that notice. Going by Ext.P4, it appears that after Ext.P3 reply dated 30-11-2007, the Joint Registrar had obtained report dated 22-1-2008 from the Assistant Registrar (General) Karthikappally which, on a reading of the first paragraph of
