IMPORTANT POINT
Liability under Section 68(1) of the Kerala Co-operative Societies Act must be fixed individually, not jointly, ensuring compliance with statutory provisions.

JUDGMENT :

(AMIT RAWAL, J.)

The present Intra-Court appeal at the behest of the Joint Registrar, Co-operative Society and others is directed against the judgment of the Single Bench dated 19.12.2023 in WPC No.14402/2022, wherein the order dated 25.03.2022 under Section 68(1) of the Co-operative Societies Act passed by the Joint Registrar, Co-operative Society, Thiruvananthapuram, and notice dated 25.03.2022, Ext.P10 have been quashed by holding that it is not in compliance with the provisions of Section 68(1) of the Kerala Co-operative Societies Act and direction has been issued to fix the liability individually.

2. Before the arguments in the aforementioned appeal could be commenced, the learned counsel appearing on behalf of the writ petitioners, who were the ex-members of the committee in respect of the period 01.04.2013 to 31.03.2018, during which the alleged misappropriations and illegalities regarding the appointment and disbursal of loans with lessor interest have occurred, raised the objection qua maintainability of the appeal, in view of the order dated 18.01.2024 passed in WA No.95/2024 filed by the Arayoor Service Co-operative Bank against the same very judgment., which was permitted to be withdrawn with a further submission that the State counsel did not express any aversion in adhering to the directions of the identical judgment in the aforementioned writ appeal as well as in the present writ appeal. In other words, it is contended that the State is estopped from challenging the same, an attempt is being made to re-argue the matter.

3. On the other hand, Mr.Vipindas, learned Government Pleader, pointed out that the Arayoor Service Co- operative Bank had already been under the legal scanner in various proceedings, including Writ Appeal No. 226 of 2024, decided on 27.05.2024, wherein the show cause notice was issued to the Society regarding the proceedings for mismanagement and in the meantime, appointed a former District Judge as an interim Administrator, restraining the Managing Committee of the Co-operative Society from taking any decision to run the Co-operative society, noticing the fact that the Kerala Bank had also extended the loan facility of Rs.9,40,00,000/- and the Society had been in default in making the payment. It was further contended that ultimately, with the change of the counsel, the liability of the appellant therein was discharged, the interim order was complied with and the writ appeal was closed.

4. Even otherwise it is submitted that RP.No.296/2025 has been filed in the WA.No.95 of 2024 to expunge the following findings with regard to the contention of the State recorded in paragraph 4 of the order dated 18.01.2024:

“4. Learned Government Pleader submits that the Registrar would not be averse in adhering to any directions this Hon'ble Court deem it appropriate.”

5. In fact, it was an attempt to overcome the institution of the writ appeal by the State, and this fact is also brought to the notice of this Court in the hearing dated 24.02.2025, recorded by us, that it was an attempt to preempt the right of the State to assail the order.

6. It is settled law that the person who comes to the court with unclean hands such act cannot be ignored in any of the proceedings in view of the law laid down by the Supreme Court in S.P.Chengalvaraya Naidu v. Jagannath (1994 (1) SCC 1) and (1994 AIR 853). In this view of the matter, we overrule the aforementioned objections and proceed to decide the inter-court appeal on merits.

7. There had been a series of litigation prior to the institution of the writ petition in question. In the earlier round of litigation, when the proceedings were initiated under Section 68(1) of the Kerala Co-operative Society Act, writ petitioners had approached this Court vide Writ Petition No. 12783/2021. The Single Bench of this Court vide judgment dated 21.02.2022, Ext.P7, quashed the order under challenge of disqualification and appointment of the administrator with a direction to the Join