Anadjayan and Others v. Joint Registrar of Co-operative Societies (General) and Others

``` INTHEHIGHCOURTOFKERALAATERNAKULAM PRESENT THEHONOURABLEMR.JUSTICERAJAVIJAYARAGHAVANV FRIDAY,THE2[ND]DAYOFFEBRUARY2024/13THMAGHA,1945 WP(C)NO.4089OF2024 ``` ``` PETITIONERS: ``` ``` 1ANADJAYAN AGED57YEARS S/OBHASKARAPILLAI,RESIDINGATBHASKARAVILASAM,ANAD, - THIRUVANANTHAPURAM,PIN695541. 2G.SUNILKUMAR AGED57YEARS S/OBHASKARAPILLAI,RESIDINGATBHASKARAVILASAM,ANAD, - THIRUVANANTHAPURAM,,PIN695541. 3VIJAYAKUMARI AGED62YEARS W/OSASIDHARANNAIR,RESIDINGATIDAVILAKATHHOUSE, NETTICHIRA,NEDUMANGADP.O.,THIRUVANANTHAPURAM, - PIN695541. 4SHEENARANIL AGED45YEARS W/OSATHEESHANRESIDINGATANJANABHAVAN,PANAVILA, - PACHAVEEDU,ANADP.O.,THIRUVANANTHAPURAM,PIN695541. 5T.LETHA AGED47YEARS W/OTHULASIDHARANNAIR,RESIDINGATSURESH - BHAVAN,KULAPPADA,THIRUVANANTHAPURAM.,PIN695542. 6BINDUSURESH AGED46YEARS W/OSURESHKUMARRESIDINGATROHINIBHAVAN.MANNAYAM, - NEDUMANGADP.O.,THIRUVANANTHAPURAM.,PIN695541. 7M.N.GIRI AGED63YEARS S/OMADHAVANPILLAI,RESIDINGATPERINGAVOORHOUSE, - ANADP.O.,THIRUVANANTHAPURAM,,PIN695541. 8G.PRABHATHKUMAR AGED56YEARS S/OGANGADHARANPILLAI,RESIDINGATSUBHAVILASAM,PERAYAM, - PERAYAMP.O.,THIRUVANANTHAPURAM.,PIN695562. 9ANADSURESH AGED49YEARS S/OSADASIVANNAIR,RESIDINGATSREEBHAGAVATHY, - PULLEKKONAM,ANAD,THIRUVANANTHAPURAM,,PIN695541. ``` ``` WP(C)NO.4089OF2024 ``` ``` 2 ``` ``` 10R.J.MANJU AGED43YEARS W/OANILKUMAR,RESIDINGATLAVANYA,SAKTHIPURAM,ANAD, - THIRUVANANTHAPURAM.,PIN695541. 11K.B.SUMESHKUMAR AGED52YEARS S/OBALAKRISHNAPILLAI,KATTAYKKALHOUSE,KARIYODE, KOKKOTTELA,KOKKOTTELAP.O.,THIRUVANANTHAPURAM., - PIN695542. 12ANITHAKUMARID AGED50YEARS W/OKUMARANNAIRRESIDINGATSUKRITHAM,MOTTALMOODU, - KARIPOORUP.O.,THIRUVANANTHAPURAM.,PIN695541. 13KLATHA AGED54YEARS W/OKUTTAPPAN,AYANIMOODUHOUSE,MARATHINCHIRA,ANAD, - THIRUVANANTHAPURAM.,PIN695541. 14S.A.RAHIM AGED65YEARS S/OSAINULABHDHEEN,SONYVILLA,PAZHAKUTTY,PAZHAKUTTY - P.O.,THIRUVANANTHAPURAM.,PIN695561. BYADVS. ARUNCHANDRAN HARIMOHAN ANJALYT.A ASWATHYSMENON ``` ## **`RESPONDENTS:`** ``` 1THEJOINTREGISTRAROFCOOPERATIVESOCIETIES[GENERAL] OFFICEOFTHEJOINTREGISTRAROFCOOPERATIVESOCIETIES [GENERAL],RAJAJINAGARMARKETROAD,STATUE,THYCAUD, - THIRUVANANTHAPURAMDISTRICT,PIN695001. 2THEENQUIRYOFFICER/UNITINSPECTOR [APPOINTEDFORTHEPURPOSEOFCONDUCTINGSECTION68[1] ENQUIRYINTHEREGIONALURBANCOOPERATIVESOCIETYLIMITED NO.T1555],KATTAKKADAUNIT,OFFICEOFTHEASSISTANT REGISTRAROFCOOPERATIVESOCIETIES,NEDUMANGAD, - THIRUVANANTHAPURAMDISTRICT.,PIN695541. 3THEREGIONALURBANCOOPERATIVESOCIETYLIMITEDNO.T1555 NEDUMANGAD,THIRUVANANTHAPURAMDISTRICT.REPRESENTEDBYITS ``` ``` WP(C)NO.4089OF2024 ``` ``` 3 ``` ``` - SECRETARY,PIN695541. ``` ``` SMT.C.SSHEEJA,SR.GP THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSIONON 02.02.2024,THECOURTONTHESAMEDAYDELIVEREDTHEFOLLOWING: ``` ``` WP(C)NO.4089OF2024 ``` ``` 4 ``` ## **JUDGMENT** The petitioners herein are the members of the Regional Urban Co-operative Bank Ltd. No.T 1555. The aforesaid Society is registered under the Kerala Co-operative Societies Act and is governed by the Rules framed thereunder. They have approached this Court challenging Ext.P9 report of enquiry under Section 68(1) of the Kerala Co-operative Societies Act and the consequent notice, which is produced as Ext.P10 and also for quashing all consequential proceedings under Section 68(2) of the Act. They have also sought for a direction to the respondents to conduct the enquiry proceedings strictly in tune with Section 68(1) of the Act. 2. Sri. Arun Chandran, the learned counsel appearing for the petitioners, points out that this is the third round of litigation. Earlier, when surcharge proceedings were initiated against the petitioners and they were served with notice under Section 68(2), they rushed to this Court and preferred W.P.(C) No.27343 of 2019, and this Court taking note of the fact that the notice was issued during Covid and that sufficient opportunity was not granted had quashed the proceedings with a further direction to the Joint Registrar to issue fresh notice and conclude the proceedings. It is submitted that without complying with the statutory formalities and without furnishing a copy of the enquiry report prepared under Section 68(1), fresh ``` WP(C)NO.4089OF2024 ``` ``` 5 ``` orders were passed. 3. The petitioners had to again approach this Court and prefer W.P.(C) No.1193/2023. When the said writ petition was taken up for consideration, the learned Government Pleader submitted before this Court that the copy of the enquiry report was not furnished to the petitioners. This Court, taking note of the aforesaid aspect, proceeded to quash the proceedings. It is urged that while disposing of the matter by Ext.P8, this Court had quashed the surcharge proceedings and ordered the concerned respondents to consider the matter afresh after providing a copy of the enquiry report along with the documents they have been relied on with the enquiry report. 4. The learned counsel submits that thereafter, the petitioners were served with Ext.P10 notice calling upon them to appear before the Joint Registrar and raise their objections. The learned counsel submits that the directions issued by this Court in Ext.P8 have not been strictly complied with by the respondents, and copies of the reports accompanying the report under Section 66 or 68(1) have not been served. The learned counsel relying on the observations of this Court in **Board of Management of** **Kandala Service Co-operative Bank Ltd. and Ors. v. Joint Registrar of Co-operative Societies (G) and Ors** (ILR 2023 (2) Ker. 785], and submitted that this Court has emphatically held that the provisions of Rule 66(5) of the Rules are to be strictly complied with and the annexures, ``` WP(C)NO.4089OF2024 ``` ``` 6 ``` including the tentative balance sheet, ought to have been served to the petitioners. According to the learned counsel, a Division Bench of this Court in the interim order dated 6.10.2023 in W.A No.1748/2023 is in seisin of a matter to determine the question as to whether a notice is required under Section 68(1) of the KCS Act. He contends that the issue raised in this writ petition is identical to the questions raised before the Division Bench. 5. While countering the submissions advanced by the learned counsel appearing for the petitioner, Smt C.S. Sheeja, the learned Senior Government Pleader points out that in Ext.P10 hearing notice issued to the petitioners, they have been asked to appear on 2.2.2024 at 2.30 p.m. She would refer to the notice, and it is submitted that it has been clearly mentioned therein that the report under Section 66 and report under Section 68(1) and all documents mentioned there have already been served on them. The recipients have also been informed that if the petitioners require any additional documents, they can request copies after appearing before the said authority, and all such documents can be furnished. The learned counsel submits that the attempt of the petitioners is to raise technical contentions with a view to evade the proceedings. According to the learned Government Pleader, the contention in the writ petition that the respondent is proceeding with the matter without furnishing the records is plainly incorrect. 6. I have considered the submissions advanced and have ``` WP(C)NO.4089OF2024 ``` ``` 7 ``` perused the records made available. What has been issued to the petitioners is a notice under Section 68(2) of the Act. In the notice, it has been specifically stated that the inspection report under Section 66 of the Act and the enquiry report under Section 68(1) of the Act have already been forwarded as per communication dated 4.7.2023, referred to as item No. 7 in that communication. The petitioners have also been informed that if they require any additional documents over and above the documents already furnished, copies of the same can be handed over on request. The petitioners have not produced before this Court the communication dated 4.7.2023 and the documents which were supplied to the petitioners. 7. The statutory scheme under the Act envisages that the Registrar has to be satisfied with regard to the necessity for conducting an inquiry as contemplated under Section 68 of the Act. Such subjective satisfaction of the Registrar has to be based on material that is brought to his notice in the course of an audit, inquiry, inspection or the winding up of a society, and if it is found that any person who is or was entrusted with the organization or management of the society or who is or has at any time been an officer or employee of the society, has made any payment contrary to the Act and Rules, or has caused any loss or damage to the assets of the society by breach of trust, willful negligence, mismanagement or misappropriation or fraudulently retained any money or other property belonging to such society or has destroyed or caused destruction of the ``` WP(C)NO.4089OF2024 ``` ``` 8 ``` records of the society. It is necessary to note at this stage that, up to the stage when a notice is issued to the societies concerned after the subjective satisfaction of the 1st respondent Registrar is arrived at, the society cannot be said to be an aggrieved person since there is no action initiated against the society which could prejudicially affect the society. The stage at which the petitioners are called upon to offer their comments or prefer their objections with regard to the drawing up of any report that is relied upon against them or to comment upon the conduct of the inquiry itself, is when the notice is issued to them in terms of Section 68(1) of the Act. 8. A reading of Section 68 in its entirety would indicate that after the Registrar is satisfied that an inquiry is necessary into the conduct of the persons, in the circumstances described in Section 68(1) of the Act, he may, by an order in writing, inquire into the conduct of such person, and the order to be passed after the inquiry must be preceded by an opportunity to the affected person to raise his objections and voice the same before the Registrar. It is only thereafter, and when an adverse order is passed against him under Section 68(2) of the Act, that the petitioner can be said to be aggrieved by the order for the purposes of pursuing his remedies, either under the Statute or before the writ court. 9. In the instant case, the subjective satisfaction of the 1st respondent is borne out by Ext.P10 proceedings. The petitioners apprehend that the proceedings under Section 68(2) would be a mere empty formality ``` WP(C)NO.4089OF2024 ``` ``` 9 ``` on account of various reasons. To allay the apprehension of the petitioners and to provide a temporary respite against the same, I direct that the petitioners may prefer their objections to Ext.P10 proceedings that have now been served on them, and such objections need not be only in respect of the contents of Ext.P10 proceedings but also with regard to the legality of any supporting material, such as the report under Section 65/66 or other material, relied upon by the 1st respondent while issuing the proceedings. The 1st respondent shall, on his part, examine the said objections and satisfy himself of the necessity or otherwise of proceeding with the inquiry, in the face of the objections raised by the petitioners. The 1st respondent shall follow the procedure contemplated under Section 68(2), hear the objections of the petitioners on the merits of the inquiry and thereafter pass orders as contemplated under Section 68(2) of the Act. The 1st respondent shall keep in mind that any adverse order to be passed against the petitioners under Section 68(2) could visit the petitioners with adverse consequences under the Act, and hence while passing the orders as aforesaid, the 1st respondent shall specifically advert to the objections raised by the petitioners to the proceedings under Section 68 of the Act and give clear reasons as to why the objections of the petitioners do not merit consideration. The said order, as already observed, shall be passed after hearing the petitioners. I also make it clear that the final order under Section 68(2), if any, shall be passed within an outer time limit of 45 days ``` WP(C)NO.4089OF2024 ``` ``` 10 ``` from the date of receipt of a copy of this judgment. The writ petition is disposed of as above. ``` Sd/- ``` **RAJA VIJAYARAGHAVAN V JUDGE** ``` Sru ``` ``` WP(C)NO.4089OF2024 ``` ``` 11 ``` ## **`APPENDIX OF WP(C) 4089/2024`** |`PETITIONER EXHIBITS`|| |---|---| |`Exhibit P1`|`TRUE COPY OF THE REPORT ON INSPECTION DATED`| ||`28.06.2017.`| |`Exhibit P2`|`TRUE COPY OF THE REQUEST SUBMITTED BY THE 5TH`| ||`PETITIONER DATED 28.05.2020 TO THE JOINT`| ||`REGISTRAR.`| |`Exhibit P3`|`TRUE COPY OF THE PROCEEDINGS ISSUED BY THE`| ||`JOINT REGISTRAR OF COOPERATIVE SOCIETIES`| ||`[GENERAL], THIRUVANANTHAPURAM DISTRICT, DATED`| ||`29.05.2020.`| |`Exhibit P4`|`TRUE COPY OF THE JUDGMENT OF THIS COURT IN WRIT`| ||`PETITION NO. 11375 OF 2020 DATED 17.02.2021.`| |`Exhibit P5`|`TRUE COPY OF THE PROCEEDINGS OF THE 1ST`| ||`RESPONDENT DATED 20.09.2021 SURCHARGING THE`| ||`PETITIONERS.`| |`Exhibit P6`|`TRUE COPY OF THE STATUTORY APPEAL, WHICH WAS`| ||`RECEIVED AT THE OFFICE OF THE 2ND RESPONDENT ON`| ||`01.12.2021.`| |`Exhibit P7`|`TRUE COPY OF THE GOVERNMENT ORDER BEARING`| ||`NUMBER G.O. [RT] NO. 712/ 2022/CO-OP DATED`| ||`31.10.2022.`| |`Exhibit P8`|`TRUE COPY OF THE JUDGMENT DATED 24.02.2023, IN`| ||`WRIT PETITION [CIVIL] NO. 1193 OF 2023.`| |`Exhibit P9`|`TRUE COPY OF THE REPORT ON INSPECTION DATED`| ||`05.12.2018, UNDER SECTION 68 [1] OF THE KCS`| ||`ACT.`| |`Exhibit P10`|`TRUE COPY OF THE NOTICE BEARING DATE`| ||`23.01.2024, ISSUED BY THE RESPONDENT JOINT`| ||`REGISTRAR.`| |`Exhibit P11`|`TRUE COPY OF THE INTERIM ORDER DATED`| ||`06.10.2023, IN WA NO. 1748 OF 2023.`| |`Exhibit P12`|`TRUE COPY OF THE INTERIM ORDER DATED`| ||`24.01.2024, IN WA NO. 1748 OF 2023.`|