Interpretation of Rule 54: The judgment establishes that if a society's bye-laws permit investments in land or construction, prior sanction from the Registrar may not be necessary under Rule 54 of the Kerala Co-operative Societies Rules.

JUDGMENT :

The petitioner is a Primary Agricultural Credit Society, with 13000 members, having its head office near Kozhikode-Balussery road. The office was functioning in an old building in 9 cents of land. An additional 22 cents of land, which is a hilly area, is also owned by the Society. It is stated that since the building was in a dilapidated condition and required reconstruction, the head office was shifted to a rented building in 2012. Ext.P3 is the Bye-laws of the Society, and it permits the purchase of property for the purpose of business. By Ext.P1 resolution dated 30.9.2019, the General Body of the society decided to construct a new building and, if necessary to purchase sufficient land for the said purpose. The petitioner invited tenders from persons interested in selling property by issuing a notification on 23.10.2019 in leading daily newspapers. Four persons submitted tenders. By Ext.P2 resolution dated 08.11.2019, it was resolved to purchase 8.75 cents of land adjacent to the head office for Rs.9,60,000/-per cent from Sri.Pariary, Kurumboyilmeethal. On 28.11.2019, the petitioner submitted Ext.P4 application before the 1st respondent for approval of Ext.P2, under Rule 54 of the Kerala Co-operative Societies Rules, along with relevant documents. The petitioner submits that no reply was received. Ext.P5 sale deed was executed on 16.6.2020. Thereafter, the petitioner received Ext.P6 communication dated 14.07.2020 from the Joint Registrar calling for certain details. The petitioner sent Ext.P7 reply on 29.07.2021. The petitioner has produced, along with the writ petition, the valuation certificate and other communications between the petitioner and the respondents. Since the petitioner could not make constructions on the property purchased, the writ petition was filed.

2. The prayers in the writ petition are for issuance of a writ of certiorari quashing Ext.P11; a writ of mandamus directing respondents 3 and 4 to issue valuation certificate for Ext.P5 property; and for a direction to the 1st respondent to approve the price of Ext.P5 sale deed based on Ext.P8. Ext.P11 is a letter issued by the 1st respondent stating that the application cannot be considered as it was submitted without following Circular No.26/18 issued by the Registrar of Co-operative Societies.

3. A statement has been filed by the 1st respondent stating that the Society is under the supervisory control of the 1st respondent. It is stated that the application submitted by the petitioner was examined under the provisions contained in Circular No.26/2018 dated 04.05.2018 of the Registrar of Co-operative Societies and that the petitioner has not complied with the requirements laid down in the Circular. It is stated that valuation certificates issued by approved valuers, though accepted by Nationalised Banks and certain Central Government agencies, the said practice is not approved by the Registrar of Co-operative Societies.

4. Heard Sri T.R.Harikumar, counsel for the petitioner and Smt.Mable C.Kurian, Senior Government Pleader.

5. Rule 54 of the Kerala Co-operative Societies Rules (hereinafter referred to as the 'KCS Rules') requires a society to get prior sanction from the Registrar for investing its funds for the purchase of land, construction, or renewal of any building that may be necessary to conduct its business. The proviso to the Rule says that no such sanction is required if the objects stated in the society’s bye-laws include such purchase or construction. The counsel for the petitioner pointed out that Ext.P2 bye-laws of the petitioner society authorise the purchase of movable and immovable property to meet the requirements of the Bank. Reliance is placed on the decisions of this court in T.K.Udayabhanu vs. State of Kerala & Ors.[WP(C)No.11158 of 2010], The Board of Directors of Chennamangalam Service Co-operative Bank vs. The Registrar of Co-operative Societies & Ors. [WP(C)No.21798 of 2008], Cochin Co-operative Hospital Society Limited v. State