Board of Directors of Chorode Service Co-operative Bank Ltd. No. LL 139 (Under Order of Superession) v. Joint Registrar of Co-operative Societies, Kozhikode; Narayanan K., Joint Registrar of Co-operative Societies (General), Kozhikode; State of Kerala; Chorode Service Co-operative Bank Ltd. No. LL 139; C. Soman; P. T. K. Najmal; Kalathil Peethambaran

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **THURSDAY, THE 23RD DAY OF OCTOBER 2014/1ST KARTHIKA, 1936** ## **WP(C).No. 23906 of 2014 (K)** **---------------------------------------** ## **PETITIONER(S): ----------------------** **1. THE BOARD OF DIRECTORS OF CHORODE SERVICE CO-OPERATIVE BANK LTD.NO. L L 139 (UNDER ORDER OF SUPERSESSION), CHORODE , KOZHIKODE DISTRICT - REPRESENTED BY ITS PRESIDENT.** ## **2. P. KUNHIKRISHNAN,** - **PRESIDENT OF THE BOARD OF DIRECTORS OF CHORODE SERVICE CO-OPERATIVE BANK LTD.NO. L L 139 (UNDER ORDER OF SUPERSESSION), CHORODE, KOZHIKODE DISTRICT.** **BY ADVS.SRI.M.SASINDRAN SRI.V.VENUGOPAL** ## **RESPONDENT(S):** **-------------------------** **1. THE JOINT REGISTRAR, KOZHIKODE - 673 001.** ## **2. NARAYANAN K.,** - **JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), KOZHIKODE - 673 001.** ## **3. STATE OF KERALA,** - **REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF CO-OPERATION, SECRETARIAT, THIRUVANANTHAPURAM - 695 001.** **4. THE CHORODE SERVICE CO-OPERATIVE BANK LTD. NO. L L 139, CHORODE- 673 106, KOZHIKODE DISTRICT, REPRESENTED BY ITS SECRETARY.** ## **5. C. SOMAN,** - **CONVENER, ADMINISTRATIVE COMMITTEE, CHORODE SERVICE CO-OPERATIVE BANK LTD. NO. L L 139, CHORODE, RESIDING AT CHERUVAMBRA, MUTTAMMAL P.O. - 673 106, KOZHIKODE DISTRICT.** **msv/** **-2-** **-2-** **WP(C).No. 23906 of 2014 (K) ---------------------------------------** ## **6. P.T.K. NAJMAL, MEMBER,** **ADMINISTRATIVE COMMITTEE, CHORODE SERVICE CO-OPERATIVE BANK LTD. NO. L L 139, CHORODE, RESIDING AT KALIYATH HOUSE, MUTTAMMAL WEST P.O. - 673 106, KOZHIKODE DISTRICT.** **7. KALATHIL PEETHAMBARAN, MEMBER, ADMINISTRATIVE COMMITTEE, CHORODE SERVICE CO-OPERATIVE BANK LTD. NO. L L 139, CHORODE, RESIDING AT PURANKARA P.O., VATAKARA - 673 101, KOZHIKODE DISTRICT.** **R1& R3 BY GOVERNMENT PLEADER SRI.R.RENJITH R4-R7 BY ADVS. SRI.B.S.SWATHY KUMAR SRI.REMYA MURALI SRI.A.K.RAJESH SRI.VENKATESH GOPI** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23-10-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **msv/** **WP(C).No. 23906 of 2014 (K)** ## **---------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS: -------------------------------------** - **EXT.P1 - A TRUE COPY OF THE ORDER DATED 23-2-2012 ISSUED BY THE FIRST RESPONDENT.** - **EXT.P2 - A TRUE COPY OF THE JUDGMENT DATED 7-10-2013 IN WPC.NO.7465 OF 2012.** - **EXT.P3 - A TRUE COPY OF THE NOTICE DATED 30-7-2014 ISSUED BY THE FIRST RESPONDENT TO THE 2ND PETITIONER.** - **EXT.P4 - A TRUE COPY OF THE REPLY DATED 6-8-2014 SUBMITTED BY THE PRESIDENT OF THE SOCIETY TO THE FIRST RESPONDENT JOINT REGISTRAR.** - **EXT.P4(a) - A TRUE COPY OF THE ACKNOWLEDGMENT EVIDENCING RECEIPT OF THE EXT.P4 BY THE FIRST RESPONDENT ON 8-8-2014.** - **EXT.P5 - A TRUE COPY OF THE ORDER NO.CRP (2) 4927/11 DATED 8-8-2014.** - **EXT.P6 - A TRUE COPY OF THE FIRST MEETING OF THE EXISTING COMMITTEE ON 16-6-2013.** - **EXT.P7 - A TRUE COPY OF THE ORDER DATED 12-06-2008, OF THE CONVENER OF THE DISCIPLINARY ACTION COMMITTEE.** - **EXT.P8 - A TRUE COPY OF THE ORDER DATED 31-12-2008 ISSUED BY THE FIRST RESPONDENT WRITING OFF RS.45,580/- THAT IS THE BALANCE AMOUNT AFTER RECOVERY RS.7,75,180/- FROM THE SALESMAN.** - **EXT.P9 - TRUE COPIES OF THE ORDER DATED 21-10-2011 OF THE PUNISHMENT IN RESPECT OF P.P.PRAJITH AND M.SURESH.** - **EXT.P9(a) - A TRUE COPY OF THE ORDER IMPOSED PUNISHMENT DATED 21-10-2011 UPON V.DINESHAN.** - **EXT.P10 - A TRUE COPY OF THE ORDER DATED 31-1-2013 OF THE APPEAL COMMITTEE IN THE APPEALS FILED BY P.P.PRAJITH, V.DINESAN AND A.SURESH.** - **EXT.P11 - A TRUE COPY OF THE ORDER DATED 30-12-2011 OF THE DISCIPLINARY ACTION COMMITTEE IMPOSING PUNISHMENT UPON DIVAKARAN.** - **EXT.P11(a) - A TRUE COPY OF THE ORDER DATED 20-12-2011 IMPOSING PUNISHMENT UPON SRI.N.K.BABU, ASSISTANT SECRETARY.** - **EXT.P11(b) - A TRUE COPY OF THE ORDER OF THE APPEAL COMMITTEE IN THE APPEAL FILED BY N.K.BABU.** - **EXT.P11(c) - A TRUE COPY OF THE RECEIPT SHOWING PURCHASE OF THE LOCKER CABINET DATED 1-6-2005.** **msv/** **-2-** **-2-** ## **WP(C).No. 23906 of 2014 (K)** ## **---------------------------------------** ## **EXT.P11(d) - TRUE COPY OF THE RECEIPT SHOWING PURCHASE OF THE LOCKER CABINET DATED 18-8-2008.** ## **EXT.P11(e) - A TRUE COPY OF THE RECEIPT DATED 22-5-2007 EVIDENCING PURCHASE OF THE INSTRUMENTS FOR INSTALLATION OF CC TV.** - **EXT.P12 - A TRUE COPY OF THE NOTICE NO. CRP(2) 4927/11 DATED 16-8-2014 OF THE FIRST RESPONDENT.** - **EXT.P13 - A TRUE COPY OF THE OBJECTION SUBMITTED BY THE PRESIDENT OF THE SOCIETY TO THE EXT.P12 NOTICE.** - **EXT.P13(a) - A TRUE COPY OF THE REPORT DATED 25-7-2014 OF THE ASSISTANT REGISTRAR (GENERAL), VADAKARA.** **EXT.P14 - A TRUE COPY OF THE CIRCULAR NO.45/13 DATED 12-7-2013.** - **EXT.P15 - A TRUE COPY OF THE JUDGMENT OF THE SUPREME COURT BASED ON WHICH THE EXT.P11 CIRCULAR WAS ISSUED THAT IS THE JUDGMENT IN CIVIL APPEAL NO.4691/2013 AND CONNECTED CASES.** - **EXT.P16 - A TRUE COPY OF THE ORDER NO.CRP(2)/4927/11 DATED 11-9-2014 ISSUED BY THE FIRST RESPONDENT.** - **EXT.P17: A TRUE COPY OF THE RELEVANT EXTRACT OF THE AUDIT CERTIFICATE OF THE YEAR 2012 - 2013.** **RESPONDENT(S)' EXHIBITS** **---------------------------------------** ## **NIL** ## **//TRUE COPY//** **P.S.TO JUDGE.** Ms **v/** ## **K. VINOD CHANDRAN, J. ===================== W.P.(C) No.23906 of 2014 - K ====================== Dated this the 23[rd] day of October, 2014** ## **J U D G M E N T** The petitioner is aggrieved with Ext.P16 order of supersession, pursuant to which the elected Managing Committee was removed from office and three administrators were appointed. The learned Counsel appearing for the petitioner, in fact, raises three grounds to challenge Ext.P16. Primarily, it is urged that there is no consultation with the financing Bank as per Section 32 of the Kerala Co-operative Societies Act 1969 (for brevity, 'the Act'). The learned Counsel places reliance on the decisions reported in **Sahadevan** v. **Padmanabhan [2004(1) KLT 192]** and **Krishnan Nair** v. **Joint Registrar of Cooperative Societies [2014(1) KLT 116]** to buttress the said contention, which according to him would vitiate the proceedings as such. W.P.(C) No.23906 of 2014 - K **2** 2. The next contention is with respect to the allegations levelled in Ext.P16 being against the members of a Managing Committee, which was earlier in office. Some of the allegations are with respect to instances in which the employees had committed some default, against which the Managing Committee is alleged to have initiated no proceedings. The petitioners contend that proceedings were initiated in all the said instances and punishment was also imposed on such employees. The specific allegations regarding purchase of safe deposit locker, file racks and installation of CCTV were during the term of the earlier committee and not when the present committee was in office. The last contention is with respect to the 3[rd] proviso to Section32(1) of the Act, which reads as under:- “Provided also that the board of a co-operative society shall not be superseded or kept under suspension where there is no Government share holding or loan or financial assistance or any guarantee by the Government or any Board or Institutions constituted by the Government. The petitioner society being one in which Government does W.P.(C) No.23906 of 2014 - K **3** not have any share holding nor having availed a loan or financial assistance, supersession cannot be sustained. The petitioner also relies on Ext.P18 audit report to advance the contention of no assistance having been availed from the Government. 3. With respect to the factual allegations and the contentions raised to controvert the same, it may not be proper for this Court to consider the same under Article 226 of the Constitution of India. In any event, it is to be noticed that there is a provision for appeal wherein such contentions could be effectively urged. The reliance on the 3[rd] proviso to Section32(1) also cannot be looked into by this Court, since that has not been raised before the original authority. When proceedings are initiated, the petitioners would be entitled to raise such contention before the original authority and it would be improper for this Court to consider it at this stage, especially looking into the audit reports and other factual aspects, which would result in W.P.(C) No.23906 of 2014 - K **4** pre-empting the original authority. The grounds raised on the above counts against Ext.P16 will be left open. 4. However, with respect to the consultation, a reading of the order would indicate that there is no consultation made, with the financing Bank nor has any communication with respect to such consultation referred to in the order. The learned Counsel appearing for the respondent would submit that the respondents have documents to prove that consultation was in fact made. The aforesaid precedents would clearly indicate that not only such consultation should be made, it should also be disclosed in the order, passed under Section 32 of the Act. 5. In such circumstance, on the short ground of the illegality with respect to lack of consultation being one, fundamental in nature, Ext.P16 is set aside. The department would be reserved its right to proceed, if the department has such powers, as the provisions now stands. While initiating such proceedings, necessarily the W.P.(C) No.23906 of 2014 - K **5** contentions raised by the petitioner herein which are referred to earlier should be met before passing an order under Section 32 of the Act. Ext.P16 would stand set aside with the above reservation. The writ petition would stand allowed. The Managing Committee which was validly elected to office shall be put back to office within a period of two weeks from today. Writ petition allowed, leaving the parties to suffer their respective costs. Sd/- **K. VINOD CHANDRAN, JUDGE** SB // True Copy // P.A To Judge.