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2013 Supreme(Ker) 754

High Court of Kerala
K. VINOD CHANDRAN, J.
G. Krishnan Nair
Versus
Joint Registrar of Co-Operative Societies & Others
W.P. (C). No. 2259 of 2013 (F)
Decided on : 20-12-2013

Advocates appeared:
For the Petitioner:P.C. Sasidharan, Advocate.
For the Respondents: R1 & R2, D. Somasundaram, Special Government Pleader.

Headnote:Co-operative Societies Act, 1969 (Kerala), Sections 65, 66 and 32 - Enquiry under section 66 and 66 do not influence the registrar on the basis of report.

Judgment :

1. The petitioner is a member of the Omallur Service Co-operative Bank Ltd., No.Q 228 (hereinafter referred to as “the Bank), who was elected to the Board of Directors and was occupying the post of President when the order impugned in this writ petition, Exhibit P5, was passed, superseding the elected Managing Committee under Section 32 of the Kerala Co-operative Societies Act, 1969 (for brevity “the Act”). The Managing Committee, of which the petitioner was the President, was elected on 24.12.2008 and has a term of 5 (five) years, which expires only on 24.12.2013. While the Managing Committee was in office, by Exhibit P1 an enquiry was instituted under Section 66 of the Act by the 2nd respondent, Assistant Registrar. The specific allegations, upon which the enquiry was initiated, need not be gone into. Suffice it to say that the enquiry ordered as detailed in Exhibit P2, was with respect to the cheque collection, certain malpractices which allegedly occurred in one of the Branches, the gold loan transactions, appointment of daily wage employees, division of labour between the existing employees, reason for stoppage of rubber preservation unit, internal audit measures and certain malpractices said to have occurred in the transactions of employees' accounts. On the basis of Exhibit P1 enquiry, a report was submitted to the Joint Registrar dated 9.11.2012 and it is based on the said report that Exhibit P2 notice was issued to the Managing Committee of which the petitioner was the President. The notice was replied to by Exhibit P3 and a further notice was issued by the Joint Registrar (General) fixing a date for hearing the objections of the Managing Committee, by Exhibit P4. Pursuant to this, Exhibit P5 order was passed, superseding the Managing Committee and appointing an Administrator. The writ petition essentially seeks for a declaration that the supersession is illegal and arbitrary.

2. The learned counsel for the petitioner Mr.P.C.Sasidharan assails Exhibit P5 on the following grounds: It is contended that no notice was issued under Section 32 of the Act and the notice issued under Section 66, being Exhibit P3, could not have concluded in an order under Section 32, since an enquiry under Section 66 does not contemplate such a proceeding. The learned counsel draws a distinction with respect to the enquiry contemplated under Section 65 and Section 66 and specifically points out sub-section (6) of section 65, which empowers the Registrar to initiate proceedings under Section 32 based on an enquiry report under Section 65. Such power not being conferred on the Registrar under Section 66, the learned counsel contends that Exhibit P3 notice, as one, which could not have led to an order under Section 32. It is also urged that the Deputy Registrar, who is named in Exhibit P3 objection as also in the writ petition, was not competent to pass any orders under Section 32 and it was that officer who heard the petitioner's objections to Exhibit P2 notice. The Joint Registrar, who has admittedly issued Exhibit P5, never had an occasion to hear the petitioner or any of the members of the Managing Committee and, hence, the order passed is vitiated, is the contention. Exhibit P5 order is also challenged in so far as the mandatory consultation with the Circle Co-operative Union and the Financing Bank was not effectively carried out by the Joint Registrar. The allegations raised in Exhibit P2 notice under Section 66 are all alleged to be that committed by the previous Managing Committee, for which the present Managing Committee cannot be held responsible. It is also asserted that even looking at the allegations, it does not reveal the necessary ingredients, which would enable the Registrar to proceed under Section 32 and supersede the Managing Committee. To canvass the position of absence of effective consultation, the petitioner relies on the decisions reported in Rajeevan v. Sukumaran [2013 (3) KLT 253], State of Kerala v. Board of



























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