2014 Supreme(Ker) 432
High Court of Kerala
K. SURENDRA MOHAN, J.
Nedumon Service Co-Op Bank Ltd. represented by its President
Versus
Joint Registrar of Co-Op. Societies (G) & Others
WP (C). No. 17253 of 2014 (F)
Decided on : 24-07-2014
For the Petitioner:P.N. Mohanan, Advocate.
For the Respondents:R1, D. Somasundaram, Special Government Pleader, R2 & R3, V.G. Arun, T.R. Harikumar, Advocates.
Headnote:A. Kerala Co-operative Societies Rules, 1969, Rules 16(3) and 16(4) - Removal from membership - A person will come within the definition of a member only upon being admitted to the membership of the society.
B. Kerala Co-operative Societies Rules, 1969, Rule 176 - Power under Rule 176 of the Rules is available to the Registrar and the Joint Registrar to set aside such resolutions.
1. The Nedumon Service Co-operative Bank Ltd No.2720, Ezhamkulam, Pathanamthitta has filed this writ petition challenging Exhibit P3 order of the Joint Registrar who is the first respondent herein. The petitioner is a co-operative society registered under the provisions of the Kerala Cooperative Societies Act, 1969 and the Rules thereunder (hereinafter referred to as 'the Act' and 'the Rules' for short). As per Exhibit P3, the first respondent has rescinded a resolution adopted by the Managing Committee on 17.04.2014 deciding to enroll as the members of the society, as many as 485 persons. The order Exhibit P3 has been passed in exercise of the powers of the first respondent under Rule 176 of the Rules. The circumstances under which the impugned order came to be passed are summarised as under.
2. As per resolution dated 17.04.2014, which is produced as Exhibit P1, the Managing Committee of the petitioner decided to admit as the members of the Society, 485 persons. According to the petitioner, since there were complaints against the manner in which the said persons were decided to be admitted, the petitioner was issued with a show cause notice directing them to explain why the resolution should not be rescinded. The petitioner responded to the show cause notice by submitting Exhibit P2 objections. Thereafter, as per Exhibit P3 order, the first respondent Joint Registrar has rescinded the resolution of the petitioner. The contention of the petitioner is that, since the Managing Committee had decided to admit the said persons as members of the Society, the only way in which they could be removed is by following the procedure that is stipulated by Rule 16(3) and (4) of the Rules. The said provisions stipulate that each member should be issued with notice and afforded an opportunity of being heard before they are removed from the membership of the society. The said procedure not having been adopted in the present case, the indirect method of divesting them of their memberships, validly conferred on them, by rescinding the resolution, is absolutely uncalled for and unsustainable in law and fact. It is contended that, the power available to the Joint Registrar under Rule 176 of the Rules is not available in the matter of divesting the members of a society of their memberships, even if it is assumed that, they were not validly admitted to the membership of the society. Various decisions are also relied upon in support of the above contention. Inasmuch as the procedure prescribed by the Rules for removing a person from the membership of a society has not been adopted in the present case, it is contended that Exhibit P3 is wrong and liable to be set aside.
3. The contentions of the petitioner are opposed by the learned Special Government Pleader Sri. D. Somasundaram who appears for the first respondent. According to the learned Special Government pleader, the petitioner had admitted a large number of persons as members of the Society, without following the procedure stipulated by the Act and the Rules. The entire exercise was done with an eye on the election to the Managing Committee that was in the offing, at the fag end of the term of office of the Managing Committee. One of the Board Members, the third respondent had complained to the Joint Registrar alleging that most of the persons who had been admitted were not eligible to be made members of the society. It was also alleged that, the Managing committee had not considered the applications properly and that, the members had been admitted en masse, solely on political considerations.
4. On such complaint being received, the Assistant Registrar was directed to conduct an enquiry and to submit a report. Accordingly, the Assistant Registrar conducted an enquiry and submitted a report finding that there were a number of irregularities in the manner in which the members were admitted. The first respondent thereupon ordered an inspection under Section 66(2) of the Act on 22.04