Personal liability must be established in the Enquiry Report for surcharge proceedings under S.68(2) of the Kerala Cooperative Societies Act, and the opportunity of hearing does not include the right to cross-examine witnesses.

JUDGMENT :

1. These writ petitions arise from the very same subject matter and hence they are disposed by a common judgment. The parties and documents are referred to as per the description in W.P(C) No.3095/2021 unless otherwise specifically stated.

2. The petitioners 1 to 13 are Managing Committee members, the 14th petitioner is the Secretary, and the petitioners 15 to 18 are the former Managing Committee members of ‘Naruvamoodu Service Cooperative Bank Limited’ (for short ‘the Society'). The petitioners have filed this writ petition challenging Ext.P2 Enquiry Report under S. 65 of the Kerala Cooperative Societies Act,1969 (for short "the Act') and Ext.P17 Surcharge Order under S.68(2) of the Act. They have also sought declarations that no amount can be recovered from them on the basis of Ext.P17 Order without quantification under S.69 of the Act and that S.68(2)of the Act is violative of Article 14, 19(1)(g) and 21 of the Constitution of India as uncanalized power is vested with the administrative authority without any rule or regulation.

3. The facts relevant for this writ petition are: Enquiry under S.65 of the Act is ordered with respect to the affairs of the Society as per Ext.P1 order dated 17.10.2018 issued by the 1st respondent. It is seen from Ext.P1 that the Ext.P1 order was issued on the basis of a Report dated 03.05.2018 of the Assistant Registrar General Neyyattinkara on the basis of a complaint submitted by one Sri. Shajikumar C.R. who is the petitioner in W.P.(C) No.6179/2021. Ext.P2 is the Enquiry Report dated 14.03.2019 submitted by Senior Cooperative Inspector Balaramapuram Unit. In Ext.P2 Enquiry Report, the enquiry was made under five Points. Point No.1 relates to the appointments of Appraiser, Salesman, Peon, and Night Watchman made in the bank on 30.06.2017. Point No.2 relates to the permanent appointments and fixation of the salary scale in the post of appraiser without obtaining prior permission from the Department. Point No.3 relates to the appointment of the daughter of the Secretary of the Bank in the post of Peon while she was a member of the Bank who had several MDS in her name, who was given payments therefrom without sufficient security and who had arrears in the said MDS. Point No.4 relates to the irregularities in granting loan to the husband, son, and son-in-law of the Secretary and the deficiency of securities for the same. Point No.5 relates to the general enquiry with respect to the constitutional working and financial condition of the Bank. In Ext.P2, the names of the eleven members of the Managing Committee with their Membership numbers and addresses are stated.

4. After enquiry, the Enquiry Officer has arrived at four Findings. In Finding No.1, the Enquiry officer has stated that there are irregularities and illegalities in the appointments stated therein and recommended action against the Managing Committee and the Secretary who are responsible for the same. In Finding No.2, the Enquiry officer has stated that illegal appointments are made in the temporary posts of Appraiser granted by the Joint Registrar for 179 days; that salary enhancement and promotion were given without the approval of the Registrar; that the same affected the financial condition of the Society and that the Managing Committee members and the Secretary are responsible for the same. In Finding No.3, it is found that there are derelictions of duties and favoritism in the matter of appointment of the daughter of the Secretary of the Bank and it is found that the Managing Committee and the Secretary have committed serious irregularities. In Finding No.4 it is found that the Managing Committee and Secretary have committed irregularities and favoritism while discharging official functions with respect to the loan given to the husband of the Secretary of the Bank. In view of the said findings the Enquiry Officer arrived that there are irregularities in making appointments and in granting MDS without proper security in favour