IN THE HIGH COURT OF KERALA AT ERNAKULAM
V. CHITAMBARESH, SATHISH NINAN, JJ.
Hameed Kutty M.S. and Ors. - Appellants
Vs.
The Joint Registrar of CO-OP. Societies (General), Ernakulam and Ors. - Respondents
W.A. Nos. 14 of 2017 & 66 of 2018
Decided On : 26-06-2018
Chitambaresh, J.
1. Orders suspending the Board of Co-operative Society for a period of six months issued by the Joint Registrar (General) under Section 32(1) of the Kerala Co-operative Societies Act, 1969 ['the Act' for short] are impugned. The statutory provision is as follows:
“32. Super-session of Committee.- (1) If the Registrar, after an inquiry by himself or through his subordinates or on a report of the financing bank, or the Vigilance and Anticorruption Bureau of the Government or the Vigilance Officer or otherwise, is satisfied that the committee of any society,-
(a) persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the rules or bye-laws or does anything which is prejudicial to the interests of the society; or
(b) wilfully disobeys or fails to comply with any lawful order or direction issued under this Act or the rules; or
(c) makes any payment contrary to this Act or the rules or the bye-laws or causes any loss or damage to the assets of the society, by breach of trust of wilful negligence; or
(d) misappropriates or destroys or tampers with the records or causes the destruction of records to cover up any misconduct or malpractice, he may, after giving the committee an opportunity to state its objections, if any, by order in writing, remove the committee and appoint in its place, one administrator or an administrative committee consisting of not more than three individuals, one among them as convener, who need not be members of the society, to manage the affairs of the society for a period of not exceeding six months.
Provided that in the case of Co-operative Society, carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 (Central Act 10 of 1949) shall also apply;
Provided further that in the case of a Cooperative Society, carrying on the business of Banking, appointment of Administrator/administrative committee shall not exceed one year in the aggregate:
Provided also that the Board of Co-operative Society shall not be superseded or kept under suspension where there is no Government share holding or loan or financial assistance or any guarantee by the Government or any Board or Institutions constituted by the Government.
Explanation I.- For the purposes of this proviso, financial assistance includes any financial assistance from the Kerala Co-operative Development and Welfare Fund Board, Deposit Guarantee Scheme implemented by the Kerala Cooperative Deposit Guarantee Fund Board, Kerala Co-operative Risk Fund Scheme implemented by the Kerala Co-operative Development and Welfare Fund Board, National Bank for Agriculture and Rural Development, National Co-operative Development Corporation and any other financial institution under the control of the State or Central Government and also any financial assistance guaranteed by the said institutions.
Explanation II.-A notice and an order given as per this clause to the President, in his absence to the Vice President or any committee members who is holding charge of President or Vice President or to the Chief Executive of a society shall be treated as an order given to the committee of the society.
(e) Every member of the committee superseded under this section shall from the date of order of such super-session stand disqualified to contest in the election to or to be nominated to the committee of any Society or to be appointed as an administrator in any society for two consecutive terms.” (emphasis supplied)
The grounds under which the Registrar can remove the managing committee in office and appoint in its place one administrator or an administrative committee are explicitly spelt out above. The removal of the managing committee can either be by way of super-session or suspension which in the former case is permanent and in the latter case is temporary capable of reinstatement. The term 'remove' in the section means 'abolish' or 'eliminate' which takes within its fold both super-session as
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