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IN THE HIGH COURT OF KERALA AT ERNAKULAM
M.A. ABDUL HAKHIM, J.
The Mulavoor Urban Co-operative Society Ltd. & Ors. - Petitioners
Versus
The Joint Registrar of Co-operative Societies (General) Ernakulam & Ors. - Respondents
WP(C) No. 16290 of 2018
Decided On : 09-07-2024
Enquiry Order - Kerala Cooperative Societies Act - Section 65, Section 66, Section 68 - The court discussed the validity of Ext.P13 order appointing an Enquiry Officer under Section 68(1) of the Kerala Cooperative Societies Act. It considered the legal provisions and interpretations under Section 68(1) and the requirement for specific findings regarding the involvement of individuals. The court emphasized that the enquiry under Section 68(1) can only be against persons and not a committee, and the intention of the legislature is to avoid erring persons from the management of the Society. It concluded that the Ext.P13 order appointing the Enquiry Officer is perfectly valid and legal.
Fact of the Case:
The petitioner challenged Ext.P13 order appointing an Enquiry Officer under Section 68(1) of the Kerala Cooperative Societies Act, along with other related notices and proceedings. The court had previously quashed an order for enquiry into the affairs of the Society due to non-compliance with the requirements of Rule 66 of the Rules. The petitioner raised contentions regarding the legality of Ext.P13 order, specifically the lack of disclosure of ingredients under Section 68(1) and the absence of findings of personal liability.
Finding of the Court:
The court found that the enquiry under Section 68(1) can only be against persons and not a committee, emphasizing the legislative intention to protect the Society from erring individuals in management. It concluded that the Ext.P13 order appointing the Enquiry Officer is perfectly valid and legal, dismissing the writ petition.
Issues: The issues revolved around the legality of Ext.P13 order appointing an Enquiry Officer under Section 68(1) of the Act, including the disclosure of ingredients and findings of personal liability.
Ratio Decidendi: The court's decision was based on the interpretation of Section 68(1) of the Act, emphasizing that the enquiry can only be against individuals and not a committee, and the legislative intention to protect the Society from erring persons in management.
Final Decision: The court dismissed the writ petition, holding that the Ext.P13 order appointing the Enquiry Officer is perfectly valid and legal.
JUDGMENT :
1. The petitioner, Mulavoor Urban Co-operative Society Limited (‘the Society’ in short)represented by its Secretary and its Managing Committee members have filed this writ petition challenging Ext.P13 order dated 29.01.2018 passed by the 1st respondent, Ext.P14 Notice issued by the 2nd respondent to the President/Secretary of the petitioner Society to produce records before him on 19.03.2018 at 11.00 A.M and Ext.P15 Notice dated 02.05.2018 issued by the 2nd respondent addressed to the 2nd petitioner to appear on 16.05.2018 at 11.00 A.M for hearing. The other reliefs sought in the writ petition are for three declarations that an enquiry on an inspection under the Kerala Cooperative Societies Act (‘the Act’ in short) without following the principles of natural justice and intimating the affected parties the material on which enquiry is concluded is a nullity in the eye of law and the said report cannot be acted upon any purposes under the Act; that acceptance of the report under Section 65 or Section 66 of the Act without following procedure under Rule 66 (5) of the Kerala Cooperative Societies Rules, (‘the Rules’ in short) is bad in law and the actions taken thereunder are illegal and unauthorised; that the proceedings initiated under Section 68(1) of the Act against the members of the managing committee are bad in law as the materials do not discloses ingredients for action under Section 68 and because of the facts that the amounts alleged to have been recovered in full and therefore there is no justification for the action under Section 68 of the Act.
2. While admitting this writ petition, this Court passed an interim order 13.05.2018 staying all further proceedings pursuant to Ext.P13 for a period of three months and the said interim order was extended lastly for a period of one month as per order dated 22.12.2020.
3. The 1st respondent has filed a Counter affidavit dated 18.06.2020 opposing the prayers in the writ petition contending, inter alia, that on 06.06.2016 a Mass Petition against the working of the Society was submitted by certain members of the Society under the leadership of Mr. Sunil T.R and signed by other 75 members alleging very serious allegations against the working of the Society before the Vigilance and Anti Corruption Bureau, Ernakulam. The said petition was forwarded to the 1st respondent on the basis of which the enquiry under Section 65(1) was ordered that Ext.P13 order issued by the 1st respondent under S.68(1) is perfectly legal and valid that; Ext.P14 was issued to the President and Secretary of the Society to get ready with the records and it is a routine procedure of enquiry; that Ext.P15 that is a notice issued to one of the members of the Society to appear in person on a particular day as a part of enquiry; that the copies of Day book produced by the petitioners showing that the amount recovered from some members is incorrect because the Enquiry Report shows only lump amount and not the described defaulters; that the 1st respondent is unable to accept such explanation before conducting the enquiry under S.68(1); that Ext.R1(d) Quick Verification Report submitted by the Vigilance and Anti Corruption Bureau shows serious irregularities; that Rs.2 crore 8 lakhs has been paid as MDS advance on 12.02.2016 and 10.03.2016 to 52 persons with Rs.4 lakh each; that all the beneficiaries are the near relatives of the President and Committee Members; that the property pledged for these loans are the same and owned by the president and even the persons with no membership in MDS are allowed to avail advance; that 22 relatives of the president are allowed to avail Rs.7 lakh each without proper narration in the loan records; that even though all these loans are repaid there was criminal conspiracy in availing these loans; that Mulavoor Vanitha Society is permitted to avail Rs.65 lakhs as MDS advance even though has no connection with the petitioner Bank; that there are allegations against its President
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