The court clarified that suspensions under cooperative society laws can occur pending inquiry, without requiring completion of the inquiry under Section 65, emphasizing immediate action when necessary.

ORDER :

1. This matter has been placed before the Full Bench on a reference from a Division Bench formulating two questions for answers by the Full Bench:

“(i) Whether Reji K. Joshi, the Full Bench decision requires a reconsideration insofar as the finding that before a notice is issued under Section 67 , there should be a notice and hearing under Rule 66(5)?

(ii) Whether the declaration in Bose E.S. as to a suspension or a temporary supersession under Sub-Section (3) of Section 32 can be made only after completion of an inquiry under Section 65 is correct?”

ON REFERENCE NO.(i):

2. A Division Bench of this Court in State of Kerala v. M. Aravindakshan Nair , 2010 KHC 545 took the view that Rule 66(5) of the KERALA CO-OPERATIVE SOCIETIES RULES , 1969 does not contemplate any opportunity of hearing to be given to any Society or any person, except with regard to the proposal of the Registrar for ordering cost of inspection, whether it be in terms of the report or in variation with recommendation contained in the report.

3. The correctness of the proposition of law laid down by the Division Bench in Aravindakshan Nair (supra) was doubted by a co-ordinate Division Bench and referred to the Full Bench. The Full Bench in Reji K. Joshi v. Joint Registrar of Co-operative Societies , 2022 (3) KHC 317 (FB) affirmed the judgment in case. A Division Bench of Aravindakshan Nair’s this Court in its reference affirmed and followed the proposition of law laid down by the Full Bench on questions relating to the non requirement of hearing on acceptance of the report by the Registrar before leading to any proceedings contemplated under Section 32 or Section 68 of the Co- operative Societies Act, 1969. An attempt was made by the learned Senior Counsel, Shri George Poonthottam appearing for the party to canvass a proposition that the report referred to under Rule 66(5) would result in dire consequences and therefore, before initiating any action based on the report, referable under Rule 66(5), an opportunity should be given to the Society, or the person concerned to discredit the report. We are afraid that this argument does not arrive for answer as the reference order does not cover this aspect. On the other hand, the order passed by the Division Bench in the reference clearly indicates that the Division Bench accepted the order of the Full Bench negativing this argument raised. In the absence of specific reference to us, we cannot enlarge the scope of reference. Therefore, based on reference we only have to answer whether there should be a separate notice of hearing under Rule 66(5) or not for the purpose of Section 67 , since Section 67 proviso itself contemplates for providing reasonable opportunity of being heard before passing an order. In other words, for a matter for inquiry under Section 67 , for which the report is relied, the further hearing contemplated under Rule 66(5) is superfluous or not, as Division bench was of the view that two hearings for the same purpose were not envisaged under law.

4. Rule 66 generally lays down only the procedure for inquiry, inspection, suspension, investigation and surcharge. Rule 66(5) states that the report by the authorized person shall be placed before the Registrar with reasons and recommendation, in regard to the manner in which the entire cost or a part thereof may be apportioned among the parties specified in Section 67 . It is further stated that an order shall be passed after affording them an opportunity. The proviso to Section 67 states that no order of apportionment of cost shall be made under this Section unless the Socie