The judgment established that invoking Section 32 of the Act requires persistent negligence and a culpable mind, and emphasized the need for strict compliance with the mandatory provisions of Section 32 (2) before superseding a managing committee.

Siri Jagan, J.

1. By this Writ Appeal, the State of Kerala, the Registrar of Co-operative Societies, Thiruvananthapuram, the Joint Registrar of Co-operative Societies (General), Kollam and the Assistant Registrar (General), Punalur, who were the respondents 1 to 4 in W.P. (C) No. 13874 of 2012, have come up in appeal against the judgment of a learned single Judge in that writ petition. The writ petition was filed by the first and second respondents herein, who are the Board of Directors of Urukunnu Service Co-operative Bank Ltd. and its president challenging Ext.P7 order passed by the third appellant, under Section 32 of the Kerala Co-operative Societies Act (hereinafter referred to as the 'Act') superseding the Board of Directors of the first respondent bank, on certain allegations contained in Ext.P7 order. According to them, since the reasons stated in Ext.P7 order related to actions of the previous Board of Directors, they are not answerable for the said allegations and no proceedings can be initiated against the present Board of Directors under Section 32 on the basis of those allegations. The appellants herein took the stand that the allegations found against the Board of Directors of the bank were very serious allegations, which are sufficient to invoke Section 32 of the Act and consequently Ext.P7 order is perfectly valid and proper. The learned single Judge after considering the rival contentions of the parties, examined each and every allegation against the Board of Directors of the bank and found that except one, the others are not relating to the present Board of Directors of the bank and therefore in respect thereof the appellants were wrong in invoking Section 32 of the Act against the present Board of Directors. The learned single Judge found that the only sustainable allegation as regards the members of the present Board of Directors is that they failed to convene the general body meeting yearly. The learned Single Judge held that non-convening of the meeting is a matter which could have been remedied by issuing necessary instructions to the Board and that the present Board had taken urgent steps to convene the general body on 13-6-2012 and 12-8-2012. Therefore, according to the learned single Judge that could not have been a valid reason to supersede the present Board of Directors by invoking Section 32 of the Act. The said judgment of the learned single Judge is under challenge in this writ appeal.

2. The main contention of the appellants is that although some of the allegations contained in Ext.P7 order relate to the actions of the previous Board of Directors, admittedly the present Board of Directors, after taking charge on 2-2-2010, did not convene an Annual General Body Meeting as mandated by Section 29 of the Kerala Co-operative Societies Act. It is submitted that the last general body meeting of the Society was convened on 23-8-2009 and thereafter no general body meeting had been convened. According to the appellants, Section 29 of the Kerala Co-operative Societies Act mandates that every Co-operative Society shall convene an Annual General Body Meeting every year. According to them, it is not merely a question of non-convening of annual general meeting alone. But the Director Board has to get the budget for each year passed by the General Body in the Annual General Body Meeting, which has not also been done by the present Board of Directors. When statute mandates that every year a Co-operative Society shall convene an Annual General Body Meeting and get the budget for the year passed in that meeting, non-convening of the general body meeting and non-passing of the budget for the year are very serious lapses on the part of the Director Board for which the third respondent is legally empowered to supersede the Director Board.

3. It is further submitted that the finding of the learned single Judge that the proceedings are unsustainable since the third appellant had not complied with the mandatory