2015 Supreme(Ker) 672
IN THE HIGH COURT OF KERALA AT ERNAKULAM
DAMA SESHADRI NAIDU, J.
Trivandrum District Mini Industrial Estate Co-Operative – Petitioner
Vs.
General Manager, District Industries Centre & Ors. – Respondents
W.P.(c) No. 18752 of 2015
Decided On : 03-07-2015
For the Petitioners: SRI. K.M. FIROZ, SMT. M. SHAJNA, SRI. S. KANNAN, SMT. UMMUL FIDA
For the Respondent: GOVERNMENT PLEADER SRI. K.C. VINCENT
Headnote:
Kerala Co-operative Societies Act - Enquiry under Section 66 - Sections 65 and 66 discussed - The court examined the statutory significance of Sections 65 and 66 of the Act and concluded that the scope of Section 66 is limited to the financial condition of the society, while Section 65 allows for a broader inquiry into the affairs of the society. The court also clarified that the first respondent's order was issued under Section 65, not Section 66. The court further addressed the issue of acting suo motu and concluded that the first respondent had acted on his own. The court found no infraction of the principles of natural justice and dismissed the writ petition.
Fact of the Case:
The petitioner, a Co-operative Society, challenged an order authorizing an enquiry under Section 66 of the Kerala Co-operative Societies Act, alleging that it was based on an anonymous complaint and vitiated by mala fides. The petitioner contended that the scope of the alleged inspection was beyond the provisions of the Act and that the first respondent's action was actuated by mala fides.
Finding of the Court:
The court found that the first respondent's order was issued under Section 65, not Section 66, and that the first respondent had acted on his own. The court also concluded that there was no infraction of the principles of natural justice and dismissed the writ petition.
Issues: 1. Whether the first respondent's order was issued under Section 65 or Section 66 of the Act. 2. Whether the first respondent acted suo motu or on an anonymous complaint. 3. Whether there was any infraction of the principles of natural justice.
Ratio Decidendi: The court clarified the statutory significance of Sections 65 and 66 of the Act, addressing the scope of each provision and the first respondent's authority to order an enquiry. The court also discussed the meaning of acting suo motu and the application of precedents in similar cases.
Final Decision: The court dismissed the writ petition, finding it meritless and requiring no order as to costs.
The petitioner, a Co-operative Society registered under the provisions of the Kerala Co-operative Societies Act, has a grievance that Exhibit P1 order, dated 10.06.2015, issued by the first respondent authorizing the second respondent, the Manager of District Industries Centre, to conduct enquiry under Section 66 of the Kerala Co-operative Societies Act is ultra vires of the first respondent and also is vitiated by mala fides.
2. The learned counsel for the petitioner has strenuously contended that law has been very much well settled that no enquiry or even inspection could be ordered based on an anonymous complaint. In support of his submissions, the learned counsel has placed reliance on Thiruvalla East Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies and Another, 2006 (4) KLT 959. According to him, the very Exhibit P1 amply shows that the enquiry was ordered based on an anonymous complaint.
3. The learned counsel has submitted that though Exhibit P1 is said to have been issued under Section 66 of the Kerala Co-operative Societies Act (the 'Act' for brevity), the scope of alleged inspection is beyond the said provision. According to him, the first respondent is clothed with the power to order an enquiry only under Section 65 of the Act, but to exercise the said power, no proper grounds have been shown by the first respondent.
4. It is the further contention of the learned counsel that the action of the first respondent, who has also been arrayed eo nominee as fifth respondent, has been vitiated by mala fides, because, all along, he has been threatening that he would dislodge the Chairman of the petitioner society. As the Chairman of the petitioner society had not been amenable to the illegal demands of the first respondent, Ext.P1 order, contends the learned counsel, was issued in a vindictive manner.
5. In the alternative, the learned counsel would submit that, assuming there were to be any preliminary enquiry before issuing Exhibit P1, at no point of time prior to or during the course of enquiry, had the petitioner Society been put on notice.
6. Summing up his submissions, the learned counsel has urged this Court to interdict Exhibit P1 and issue further consequential directions.
7. Per contra, the learned Government Pleader has strenuously opposed the claims and contentions of the petitioner. To begin with, the learned Government Pleader would contend that the pleadings as contained in paragraphs 9 and 10 of the writ petition are not sufficient to establish that the action of the first respondent, arrayed eo nominee as fifth respondent, has been vitiated by any mala fides.
8. On the issue of suo motu action the learned Government Pleader, placing reliance on Sadasivan K.G. v. Joint Registrar and others, 2008 (1) ILR Kerala 64, has contended that once the first respondent receives information from whichever source, he may form his own opinion in that regard and later act further on his own satisfaction. According to him, instead of straight away acting on the basis of a complaint, the first respondent has gathered further information, formed prima facie opinion and proceeded further to issue Ext.P1; it does not amount to acting on an anonymous complaint.
9. Eventually, the learned Government Pleader has submitted that it is always open for the petitioner Society to defend itself in an enquiry, during course of which it will be given ample opportunity. In sum and substance, it is the contention of the learned Government Pleader that no prejudice is caused to the petitioner Society in terms of Exhibit P1 order.
10. Heard the learned counsel for the petitioner and the learned Government Pleader for the respondents, apart from perusing the record.
ISSUES:
1. Does either Section 65 or Section 66 of the Kerala Co-operative Act, 1969 exclude any complaint from any other sources than those that have been enumerated in the said Sections?
2. Under which provision—either Section 65 or Section 66 of the Act has the f