Orders under Section 68(1) of Kerala Co-operative Societies Act cannot be challenged; objections raised at show cause notice stage under Section 68(2).

J U D G M E N T

This writ petition has been filed by the Managing Committee of the Mallappally Co-operative Agricultural and Rural Development Bank (hereinafter referred to as the Bank), challenging Ext.P25 order initiating proceedings underSection 68of theKerala Co-operative Societies Act, 1969(hereinafter referred to as the “1969 Act”). It is submitted that the allegations which led to the initiation of proceedings under of the 1969 Act are that the Bank had made payments for the repair of its vehicle and that certain persons had been appointed temporarily without regard to the approved staff pattern. According to the petitioner, the said order cannot be sustained in law, as the order does not take into consideration certain orders issued by this Court in W.P.(C)No.42058 of 2024. It is submitted that, by Ext.P24 interim order of this Court in W.P. (C)No.42058 of 2024, the bank was directed to pay the amount for the repair of the vehicle. It is also submitted that the allegation of appointment of persons temporarily by the bank cannot be sustained, as the staff pattern of the bank had been revised as per Ext.P11 and the order sanctioning the new staff pattern was subsequently cancelled by Ext.P15 without any just cause or reason. Therefore, it is submitted that, on both the grounds mentioned in Ext.P25, the said order cannot be sustained in law. 2. The learned Government Pleader submits that an order initiating proceedings underSection 68of the 1969 Act cannot be challenged, in view of the law laid down by the Full Bench of this Court inKudayath00r Service Co operative Bank Ltd. v.Joint Registrar of Co-operative Societies(General), 2022(3) KLT 222 (F.B.), wherein it has been held that the contentions, if any, against such proceedings have to be taken at the stage when a show cause notice is issued under sub-section (2) of of the

1969 Act.

3. Having heard the learned counsel for the petitioner and the learned Government Pleader, I am of the view that there is considerable merit in the contention taken by the learned Government Pleader that the petitioner cannot, at this stage, challenge Ext.P25 order, as it is only an order directing initiation of proceedings under Section 68 of the 1969 Act. Sub-section (2) of of the 1969 Act contemplates that a show cause notice be issued before the issuance of an order of surcharge. At that stage, it is open to the noticees to take up all contentions, including those now taken before this Court, in objection to the proposed imposition of surcharge. The law laid down by the Full Bench is categorical in holding that orders under (1) of the 1969 Act cannot be challenged, and that any objections to the said proceedings have to be raised as and when a show cause notice is issued under sub-section (2) of of the

1969 Act. I see no reason to take a different view in this matter.