Akalakkunnam Village Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies and another

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE V.CHITAMBARESH & THE HONOURABLE MR. JUSTICE SATHISH NINAN MONDAY ,THE 20TH DAY OF AUGUST 2018 / 29TH SRAVANA, 1940 WA.No. 1450 of 2018 IN WP(C). 695/2013 AGAINST THE JUDGMENT IN WPC 695/2013 OF HIGH COURT OF KERALA DATED 24-10-2017** ## **APPELLANT/1ST RESPONDENT IN WP(C)** **JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, KOTTAYAM P.O. - 686 001.** **BY SENIOR GOVERNMENT PLEADER SMT. DEEPA K.R.** ## **RESPONDENTS/PETITIONER & 2ND RESPONDENT IN WP(C)** **1 THE AKALAKUNNAM VILLAGE SERVICE CO-OPERATIVE BANK LTD NO.3857, REPRESENTED BY PRESIDENT, MANJAMATTAM, MOOZHOOR P.O., KOTTAYAM - 686 503. 2 M.S. RAJU, S/O. SIVARAMAN, MULLOOR, PADUVA P.O., MATTACKARA, KOTTAYAM DISTRICT - 686 564. BY ADV. SRI. P.N.MOHANAN FOR R1 BY ADV. SRI.LIJI.J.VADAKEDOM FOR R2** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 20.08.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** “C.R.” ## JUDGMENT ## Chitambaresh, J. 1.The Joint Registrar of Co-operative Societies (General) is in W.A. No. 1450/2018 2 appeal against the judgment in Akalakkunnam village Service Co-operative Bank Ltd. v. Joint Registrar of Cooperative Societies and another [2017 (4) KLT 628]. 2.The second respondent who is a member of the first respondent Co-operative Bank filed Ext.P2 representation to the appellant complaining that about 1225 named persons are ineligible to be members. The second respondent followed it up by filing WP(C) No. 19789/2012 on the file of this Court which was disposed of directing an expeditious consideration of Ext.P2 representation. An inquiry on Ext.P2 representation necessarily involved issuing individual notices to the members complained about and hearing them before an order is passed. It was in this context did the appellant issue Ext.P6 notice to the first respondent to meet W.A. No. 1450/2018 3 the expenses in that regard and it is stated that a sum of - `31,250/- was demanded orally. Ext.P6 notice has been quashed at the instance of the first respondent on the ground that neither the Kerala Co-operative Societies Act, 1969 nor the Rules support the demand. 3.We heard Mrs. K.R. Deepa, Special Government Pleader on behalf of the appellant, Mr. P.N. Mohanan, Advocate on behalf of the first respondent and Mr. Liji K. Vadakkedom, Advocate on behalf of the second respondent. 4.The appellant relied on Section 67 of the Kerala Cooperative Societies Act, 1969 ('the Act' for short) as regards the apportionment of the cost of enquiry or inspection which is as follows: W.A. No. 1450/2018 4 ## “ 67. Cost of inquiry or inspection :- Where an inquiry is held under S.65, or an inspection is held under S.66 on the application of a creditor, the Registrar may, by order, apportion the cost, or such portion of the cost, as he may deem fit, between the society to which the society concerned is affiliated, the society, the member or creditor demanding an enquiry or inspection, and the officers or former officers of the society: Provided that:- (a) no order of appointment of the cost shall be made under this section unless the society or the person sought to be made liable to pay the costs thereunder has had a reasonable opportunity of being heard.” The question of apportionment of cost arises only where an inquiry is held under Section 65 of the Act or an inspection is held under Section 66 of the Act on the application of a W.A. No. 1450/2018 5 creditor and not otherwise. The apportionment of cost is between the affiliator Society, the Society, the member or creditor demanding an enquiry or inspection and the officers or former officers of the Society. The Registrar in such circumstances may by order apportion the cost stating the grounds after affording the Society or the person sought to be made liable an opportunity of being heard. 5.But Rule 16 (4) of the Kerala Co-operative Societies Rules, 1969 ('the Rules' for short) under which a member of the Society is declared to be disqualified is silent as regards the apportionment of cost. It reads: “16(4) Where a member of a society becomes ineligible to continue as such, the Registrar may of his own motion or on a representation made to him by any W.A. No. 1450/2018 6 member of the society or by the financing Bank, by an order in writing declare that he has ceased to be a member of the society from the date of his order. The Registrar shall give such person an opportunity to state his objection, if any, to the proposed action and if the person wishes to be heard, he shall be given an opportunity to be heard before passing an order as aforesaid.” The Registrar can exercise jurisdiction to declare that a person has ceased to be a member of the Society either on his own motion or on a representation made by any member of the Society or by the financing Bank. The jurisdiction vested in the Registrar is triggered by a representation made either by a member or the financing Bank for which they cannot be mulcted with costs. The representation is only to bring to the notice of the Registrar about the W.A. No. 1450/2018 **==> picture [7 x 9] intentionally omitted <==** existence of facts which enable him to declare that a person has ceased to be a member of the Society. 6.It is true that expenses may have to be incurred for issuing notices to the members complained of since the Registrar is obliged to give them an opportunity to file objections or of being heard before passing an order. But that by itself may not be a justification to demand expenses from the member of the Society or the financing Bank on whose representation was the inquiry initiated by the Registrar. The learned single Judge is correct in quashing Ext.P6 notice issued by the Joint Registrar demanding expenses from the first respondent even before an inquiry. But we hasten to add that the expenses incurred can be recovered from the second respondent who filed Ext.P2 representation if his complaint is found to be ill-founded. The second W.A. No. 1450/2018 8 respondent can be so saddled with the liability only after the completion of the inquiry and if it is found that Ext.P2 representation is bereft of bonafides. The valuable time and energy of the Registrar would otherwise go waste in disposal of the frivolous representations put in by any member of the Society or the financing Bank. The writ appeal is disposed of. No costs. Sd/- V. CHITAMBARESH, JUDGE Sd/SATHISH NINAN, JUDGE ncd