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IN THE HIGH COURT OF KERALA AT ERNAKULAM
RAJA VIJAYARAGHAVAN V, J.
The Managing Committee Pala Marketig Co-Operative Society Limited No.4214, Represented By Its President - Appellant
Versus
State of Kerala Represented By The Secretary To Government, Co-Operative Department, Secretariat, Thiruvananthapuram and Ors - Respondent
WP(C).No.15206 OF 2018(A)
Decided On : 17-02-2021
Co-operative Societies Act and the Rules - Sections 65, 66 and 68 - Invocation of surcharge proceedings - Notice - Whether any interference is warranted - According to petitioner, Government has failed to apply its mind to contentions advanced by petitioner while assailing proceedings initiated by Registrar. It is contended that valid contentions raised by petitioner was ignored and order was passed on irrelevant considerations. Enquiry officer has proceeded to enquire into matters which were not even referred, and this has resulted in grave failure of justice. Enquiry officer has travelled much beyond scope of enquiry and delved on matters which were not even referred to him. According to petitioner, on each and every independent point which was referred to enquiry officer, petitioner had furnished proper explanations to bring out that there was no wrongdoing. However, all these relevant aspects were ignored while submitting report. Though all these aspects were highlighted in the appeal preferred before the Government and interference was sought, same was dismissed without even a proper consideration of the submissions - Seeking to quash the report under Section 65 as well as notice calling for appearance issued under section 68 (1) of the Act and for a declaration that there were no circumstances warranting the initiation of proceedings under Section 68 of the Act and for incidental reliefs.
Finding of the court: When notice is issued under a statutory provision, Courts should be reluctant to interfere with the notice at that stage unless notice is shown to have been issued without jurisdiction or palpably without any authority of law. No such circumstances are brought out in this case. Furthermore, when the provisions of statute entitles the party with an opportunity to put forth his contentions before authorities, this Court would not be justified in interfering with the same under writ jurisdiction - Mere routine, mechanical chanting of the section or of the acts mentioned, without anything more, is not sufficient in law to sustain an order of surcharge. It should be based on relevant and adequate materials on which a court could satisfy itself that the person concerned was guilty of breach of trust, wilful negligence, misappropriation or fraud. This has been held so in A.K. Francis (supra). Registrar shall also do well to remember that should he decide to proceed with inquiry on strength of report, then he shall follow procedure contemplated under Section 68(2), hear objections of petitioner on merits of the inquiry and thereafter pass orders as contemplated under Section 68(2) of Act. Petitioner may at that stage raise all their objections including the objections that they have raised with respect to non-compliance of Rules.
Result: Writ petition dismissed
JUDGMENT :
1. The Pala Marketing Co-operative Society Ltd No.4214 is a society registered under the provisions of the Co-operative Societies Act and the Rules framed thereunder. An enquiry under Section 65 of the Act was ordered by the Joint Registrar into the constitution, working and financial condition of the society after being satisfied that it was necessary to do so. The Assistant Registrar (Planning) was appointed as the enquiry officer. The said officer conducted an enquiry and submitted Exhibit P2 report before the Registrar. The Registrar on being satisfied that the incidents for invocation of surcharge proceedings under section 68 of the Act was made out from the report, proceeded to pass an order to enquire into the conduct of the persons mentioned in the report and appointed the 3rd respondent with a further direction to conclude the enquiry and submit a report within a period of two months. Being aggrieved by the above order, the petitioner herein, as the President of the managing committee preferred Exhibit P3 appeal before the Government invoking Section 83 of the Co-operative Societies Act. While so on 28.6.2017, the Joint Registrar issued Exhibit P5 order by which the enquiry officer was ordered to enquire into some additional aspects. On being served with the order, the petitioner approached this Court and filed W.P.(C) No. 23606 of 2017 and by order dated 18.7.2017, this Court directed the State to consider the appeal and take a decision in an expeditious manner. The appeal was considered and by Exhibit P8 order, the same was rejected holding that the petitioner failed to make out any ground to interfere either with the report under Section 65 of the Act or the notice issued under Section 68(1) of the Act.
2. According to the petitioner, the Government has failed to apply its mind to the contentions advanced by the petitioner while assailing the proceedings initiated by the Registrar. It is contended that the valid contentions raised by the petitioner was ignored and the order was passed on irrelevant considerations. The enquiry officer has proceeded to enquire into matters which were not even referred, and this has resulted in grave failure of justice. Furthermore, before proceeding to order an enquiry under Section 68(1) of the Act, the enquiry officer ought to have been satisfied that such an action was warranted, and that decision could have been taken only after hearing the petitioner as well as the other managing committee members. It is pointed out that the proceedings are vitiated for noncompliance of Rule 66 of the Rules as the enquiry officer failed to append the latest balance sheet and limited to the points in respect of which enquiry was ordered. However, the enquiry officer has travelled much beyond the scope of the enquiry and delved on matters which were not even referred to him. According to the petitioner, on each and every independent point which was referred to the enquiry officer, the petitioner had furnished proper explanations to bring out that there was no wrongdoing. However, all these relevant aspects were ignored while submitting the report. Though all these aspects were highlighted in the appeal preferred before the Government and interference was sought, the same was dismissed without even a proper consideration of the submissions. It is in the above circumstances that this writ petition is filed seeking to quash the report under Section 65 as well as the notice calling for the appearance issued under section 68 (1) of the Act and for a declaration that there were no circumstances warranting the initiation of proceedings under Section 68 of the Act and for incidental reliefs.
3. A counter affidavit has been filed by the second respondent. It is stated that the report under Section 65 of the Act is complete in all respects and it contains detailed evaluation of all the points referred to the enquiry officer. The report contains the last audited balance sheet and the latest tentative
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