IN THE HIGH COURT OF KERALAATERNAKULAM
DAMA SESHADRI NAIDU, J.
INDIAN CO-OPERATIVE CREDIT SOCIETY LTD. - PETITIONER
Vs.
JOINT REGISTRAR OF CO-OP. SOCIETIES (GENERAL), CIVIL STATION, KANNUR & ANR. - RESPONDENTS
WP(C).No. 20985 of 2015
Decided on : 19-08-2015
Inspection - Multi-State Co-operative Society - MSCS Act 2002, Section 108 - The court held that the first respondent, as a delegate under Section 108 of the MSCS Act, has the power to inspect the books of account and other activities of the society and submit a report to the Central Government. The court emphasized that the first respondent must act within the four corners of the said provision and urged the government to take immediate remedial measures if the society's affairs are suspicious or in violation of any statutory provision.
Fact of the Case:
The petitioner, a Multi-State Co-operative Society, sought a declaration to carry on its operations in the State of Kerala and filed an interlocutory application after the first respondent seized the society's registers and computers and closed down its branch.
Finding of the Court:
The court found that the first respondent, as a delegate under Section 108 of the MSCS Act, has the power to inspect the society's activities and submit a report to the Central Government. The court directed the first respondent not to obstruct the petitioner's business activities and to hand over the keys of the branch to the society's personnel.
Issues: The issues involved the authority of the first respondent to inspect and take action against the petitioner society's operations in the State of Kerala.
Ratio Decidendi: The court held that the first respondent, as a delegate under Section 108 of the MSCS Act, has the power to inspect the society's activities and submit a report to the Central Government. The court emphasized that the first respondent must act within the four corners of the said provision and urged the government to take immediate remedial measures if the society's affairs are suspicious or in violation of any statutory provision.
Final Decision: The court declared that the petitioner society is entitled to carry on its business operations in the State of Kerala and directed the first respondent not to obstruct the petitioner's business activities further. The first respondent was also directed to hand over the keys of the branch to the petitioner society's personnel.
The petitioner, the Multi-State Co-operative Society having its Head Office in Bangalore, State of Karnataka, has its operations in four states, which include the State of Kerala as well. Initially, the petitioner filed the present writ petition seeking a declaration that it is entitled to carry on its operations in the State of Kerala as per Exhibit P1 registration certificate. It has also sought a further direction against the alleged adverse media briefing said to have been indulged in by the respondent officials as regards the legitimacy of its operations.
2. This Court on 13.07.2015 issued a direction restraining the respondents 1 and 2 from issuing any press or other media communication concerning the state or legitimacy of the petitioner Society.
3. Once again the petitioner approached this Court by filing I.A. No.12046/2015. The grievance of the petitioner is that on 13.08.2015, on or about 2.00 p.m., the first respondent, without any notice or intimation, came to the office of the petitioner society at Kannur along with a platoon of press persons, some political activists, and also two jeep loads of Police personnel. It is the specific contention of the petitioner society that the first respondent intimidated the office staff present in the branch and illegally seized the registers and computers kept at the office, apart from closing down the very branch. Seeking judicial intervention, the petitioner filed the said interlocutory application.
4. The learned Government Pleader initially took time for instructions and today came up with counter affidavit justifying the action of the first respondent.
5. A reading of the counter affidavit, which is elaborate, reveals that the first respondent has only acted on the basis of the complaints filed by certain persons of the locality. At any rate, it is the specific plea of the first respondent, as has been persistently submitted by the learned Government Pleader, that he has been authorized by the Government of India, through Exhibit R1(g) Circular, dated 29.05.2013, under Section 108 of the Multi-State Co-operative Societies Act, 2002 (`the MSCS Act' for brevity), to inspect the operations of the petitioner society.
6. Though not part of the record, the learned Government Pleader has also submitted that the first respondent acted in compliance with the direction given on 17.07.2015 by the Registrar of Co-operative Societies, the second respondent, to inspect the petitioner society and report.
7. The learned counsel for the petitioner, in reply, has submitted that the second respondent acting under the Kerala Co-operative Societies Act does not have any power of superintendence over the societies established under the MSCS Act. He has also further contended that even under Section 108 of the MSCS Act, the first respondent does not have the power to seize any material, much less close down the business of the society.
8. Heard the learned counsel for the petitioner and the learned Government Pleader for the respondents, apart from perusing the records.
9. The first respondent may have, I believe, a genuine concern about the legality of the operations carried on by the petitioner society. It is, however, axiomatic that bona fide intentions cannot transform themselves into a statutory mandate. Unless an authority has been clothed with power by any provision of law, he cannot justify his action merely on the premise that the action has got a salutary purpose behind it; to wit, the public interest. Incontrovertible is the fact that the petitioner has Ext.P1 licence to carry on its banking business in this State as well.
10. In the present instance, if we examine Exhibit R1 (g) circular issued on 29.05.2013 by the Ministry of Agriculture, Government of India, the Registrar of Co-operative Societies of the States/Union territories has been delegated the power under Section 108 of the MSCS Act to carry out fact-finding enquiry to ascertain the operational status of the society, coverin
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