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IN THE HIGH COURT OF KERALA AT ERNAKULAM
Raja Vijayaraghavan V, C. Jayachandran, C.Pratheep Kumar, JJ.
The Board Of Directors, The Kozhippally Service Co-Operative Bank Limited And Ors. – Petitioner
Versus
The Joint Registrar Of Co-Operatives (General) And Ors. – Respondents
I.C.R (W.A) No.2 of 2025 in W.A.No.745 of 2019, W.A.Nos.745 of 2019, 2104 of 2023 and W.P.(C) No.40794 of 2023
Decided On : 04-08-2025
| Table of Content |
|---|
| 1. introduction to the case and legal reference (Para 1) |
| 2. role of the registrar in initiating inquiries (Para 2 , 10) |
| 3. court's procedure for hearing arguments (Para 3 , 4) |
| 4. arguments in favor of registrar's personal satisfaction (Para 5 , 6 , 7 , 8) |
| 5. counterarguments against melukkara's interpretation (Para 9) |
| 6. court's analysis of responsibility under section 65 (Para 11 , 12 , 13 , 14 , 15) |
| 7. distinction of powers and delegation of authority (Para 16 , 17) |
| 8. conclusion and reiteration of court's stance (Para 19 , 20) |
ORDER
C. Jayachandran , J.
The scope, ambit and interpretation of Section 65 (1) of the Kerala Co-operative Societies Act, as elucidated in the Melukkara Service Co-operative Bank Ltd.No.PT.152, Pathanamthitta and Another v. Joint Registrar (General), District Co-operative Society, Pathanamthitta District - 689 [ 2018 (2) KHC 143 (DB)], has been doubted by a Division Bench in the above Writ Appeal, and accordingly, the matter has been placed before this Full Bench, as per the Orders of the Hon'ble the Chief Justice.
2. Interpreting Section 65 (1), the Division Bench in Melukkara (supra) held that the responsibility cast upon the Registrar, when he acts 'on his own motion' as per Section 65 (1)(a), is greater than the responsibility, when he acts as per the provisions of Section 65 (1)(b) to (f) of the Co-operative Societies Act. Culling out the nature of cases covered by Section 65 (1)(b) to (e), the learned Judges went on to hold that while acting under those sub Sections, the Registrar will generally have to act, subject to arriving at a prima facie satisfaction; but when he acts, suo moto, without any such inquiry report or application - as is available in cases covered by Section 65 (1)(b) to (f) - the responsibility will have to be discharged by the Registrar with greater circumspection. Secondly, the Division Bench in Melukkara (supra) held that, even when the Registrar is within the limits of law to look into the report of the Assistant Registrar and to take that into account, the Registrar should have caused an inspection of all the relevant records and documents maintained by the society and should have personally satisfied, by evaluation and assessment of such records, of the requirement to conduct an inquiry under Section 65 of the Act. These dicta in Melukkara (supra) have been doubted by the Division Bench and the above aspects are the specific points of reference in the Reference Order dated 02.11.2022.
3. When this matter was posted before the then Full Bench, an Order was passed on 16.02.2024, taking into account the general importance of the question, which arise for consideration in this reference, and directing the Registry to give notice in the website of the High Court, calling upon the counsel, who wish to address arguments on the point before the Full Bench. Accordingly, the learned counsel appearing for the appellant in W.A.No.2104/2023 and the petitioner in W.P.(C) No.40794/2023 have also addressed arguments before us.
4. Heard Sri.George Poonthottam, learned Senior Counsel, duly instructed by Smt.Nisha George, learned counsel for the appellant in W.A.No.745/2019; Sri.P.N.Mohanan, learned counsel for the appellant in W.A.No.2104/2023 and Sri.Swathi Kumar B.S, learned counsel for the petitioner in W.P.(C) No.40794/2023; and Sri.P.P.Thajudheen, learned Special Government Pleader (Co-op) on behalf of the official respondents.
5. Sri.George Poonthottam, learned Senior Counsel for the appellant in W.A.No.745/2019 would submit that, under Section 65 , the Registrar 'may' hold an inquiry into the constitution, working and financial conditions of the Society, if he is satisfied that it is necessary to do so. Learned Senior Counsel emphasised on the terms 'may' and 'he', to contend that the satisfaction required is that of a personal nature, inasmuch as the term employed is 'he'. Learned Senior Counsel would seek to juxtapose the situation to the language employed in the proviso to S
The court established that the Registrar's responsibility under Section 65(1) is uniform across sub-sections, requiring satisfaction based on available materials, without necessitating personal inspe....
The court emphasized that inquiries under Section 25 must reflect the Registrar's independent reasoning, not merely follow complaints from less than 1/3rd of society members.
compliance of Rule 66(2) of the Rules is required only for an inspection in terms of sub-section (2) of Section 66 of the Act.
Procedure for conduct of inquiry and inspection - A person can be proceeded against and vested with liability only if an objective assessment of evidence and materials available on record leads to ir....
Petitioners must raise their contentions before the competent authority upon issuance of show cause notice under the Kerala Co-operative Societies Act, 1969, as they cannot contest the inquiry report....
S.66A gives due authority/power to the Registrar to give such directions. The Section empowers the Registrar to give general directions for furtherance of the purposes of the Act.
The court established that parties must wait for further actions based on inquiry reports before raising objections, promoting procedural fairness under the Kerala Co-operative Societies Act.
The Registrar has the discretion to order an inquiry into the affairs of a society based on a complaint by a non-member, as per the provisions of the Maharashtra Cooperative Societies Act 1960.
Point of Law : Materials disclosed in an inquiry report of the Vigilance Officer can certainly be used for the purpose of surcharging a person after due inquiry as provided for under Section 68(1).
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