C.K. Moideenkooya Master & others v. The VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **MONDAY, THE 12TH DAY OF MARCH 2018 / 21ST PHALGUNA, 1939** **WP(C).No. 15681 of 2017** ## **----------------** ## **PETITIONER(S)** **-------------** - **1 C.K. MOIDEENKOYA MASTER, EX-PRESIDENT, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** - **2 ABOOBACKER MANGALASSERY, EX-VICE PRESIDENT, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** - **3 PADMANABHA NADUPPOYIL, EX-COMMITTEE MEMBER, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** - **4 ABDURAHIMAN T.P., EX- COMMITTEE MEMBER, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** - **5 VASU NAMBIAR T.K., EX-COMMITTEE MEMBER, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** - **6 GOPALAN ECHINGAPOYIL, EX-COMMITTEE MEMBER, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** - **7 AMINA ONAMVAYAL, EX-COMMITTEE MEMBER, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** - **8 SAROJINI KAITHACHAL, EX-COMMITTEE MEMBER, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** - **9 MADHAVI AMMA PUTHIYOTTIL.** - **EX-COMMITTEE MEMBER, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** **BY ADV.SRI.P.P.JACOB.** **WP(C).No. 15681 of 2017** ## **RESPONDENT(S):** **--------------** **1. THE VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612, REPRESENTED BY ITS SECRETARY.** **2. THE DEPUTY DIRECTOR,** **DIARY DEVELOPMENT DEPARTMENT, KOZHIKODE.** **3. THE DIARY DEVELOPMENT OFFICER, DIARY EXTENSION OFFICE, BALUSSERY/ADMINISTRATOR, VATTOLI BAZAR KSHEEROLPADAKA SAHAKARANA SANGHAM LTD. NO.D 26(D) APCOS, P.O. VATTOLI BAZAR, PIN- 673 612.** **R2 & R3 BY SR. GOVT. PLEADER SRI.BIMAL K.NATH.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12-03-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **rs. 06/04/2018.** **WP(C).No. 15681 of 2017 (I)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** |**EXHIBIT P 1**|**TRUE PHOTOCOPY OF THE LETTER DATED 21-08-2013**| |---|---| ||**ISSUED BY THE SECOND RESPONDENT TO THE**| ||**PRESIDENT OF THE SOCIETY.**| |**EXHIBIT P2**|**TRUE PHOTOCOPY OF THE LETTER DATED 31-08-2013**| ||**ISSUED BY THE PRESIDENT OF THE SOCIETY.**| |**EXHIBIT P3**|**TRUE PHOTOCOPY OF THE LETTER DATED 10-06-2014**| ||**ISSUED BY THE SECRETARY TO THE SOCIETY.**| |**EXHIBIT P4**|**TRUE PHOTOCOPY OF THE LETTER DATED 30-05-2016**| ||**ISSUED BY THE PRESIDENT OF THE SOCIETY**| |**EXHIBIT P5**|**TRUE PHOTOCOPY OF THE NOTICE DATED 14-07-2016**| ||**ISSUED BY THE 2ND RESPONDENT TO THE PRESIDENT**| ||**OF THE SOCIETY.**| |**EXHIBIT P6**|**TRUE PHOTOCOPY OF THE LETTER DATED 14-07-2016**| ||**ISSUED BY THE PRESIDENT OF THE SOCIETY TO THE**| ||**SECRETARY.**| |**EXHIBIT P7**|**TRUE PHOTOCOPY OF THE ORDER DATED 27-07-2016**| ||**ISSUED BY THE PRESIDENT OF THE SOCIETY TO THE**| ||**SECRETARY.**| |**EXHIBIT P8**|**TRUE PHOTOCOPY OF THE LETTER DATED 30-07-2016**| ||**ISSUED BY THE PRESIDENT OF THE SOCIETY TO THE**| ||**SECOND RESPONDENT.**| |**EXHIBIT P9**|**TRUE PHOTOCOPY OF THE NOTICE DATED 27-01-2017**| ||**ISSUED BY THE PRESIDENT OF THE SOCIETY TO THE**| ||**SECRETARY.**| |**EXHIBIT P10**|**TRUE PHOTOCOPY OF THE REPLY DATED 06-02-2017**| ||**ISSUED BY THE SECRETARY OF THE SOCIETY TO THE**| ||**PRESIDENT.**| |**EXHIBIT P11**|**TRUE PHOTOCOPY OF THE NOTICE DATED 09-02-2017**| ||**ISSUED BY THE 2ND RESPONDENT.**| |**EXHIBIT P12**|**TRUE PHOTOCOPY OF THE REPLY DATED 07-03-2017**| ||**EXPLANATION SUBMITTED BY THE COMMITTEE TO THE**| ||**2ND RESPONDENT.**| |**EXHIBIT P13**|**TRUE PHOTOCOPY OF THE NOTICE DATED 10-02-2017**| ||**ISSUED BY THE PRESIDENT OF THE SOCIETY TO THE**| ||**SECRETARY.**| |**EXHIBIT P14**|**TRUE PHOTOCOPY OF THE NOTICE DATED 15-02-2017**| ||**ISSUED BY THE SECRETARY TO THE PRESIDENT.**| |**EXHIBIT P15**|<br>**TRUE PHOTOCOPY OF THE ORDER DATED 22-02-2017**| ||**ISSUED BY THE PRESIDENT OF THE SOCIETY TO THE**| ||**SECRETARY.**| **....2/-** **WP(C).No. 15681 of 2017** **EXHIBIT P16 TRUE PHOTOCOPY OF THE LETTER DATED NIL ISSUED BY THE PRESIDENT OF THE SOCIETY TO THE SECOND RESPONDENT. EXHIBIT P17 TRUE PHOTOCOPY OF THE LETTER DATED 20-03- 2017 ISSUED BY THE PRESIDENT OF THE SOCIETY TO THE THIRD RESPONDENT. EXHIBIT P18 TRUE PHOTOCOPY OF THE ORDER DATED 10-04-2017 ISSUED BY THE SECOND RESPONDENT.** **RESPONDENT'S EXHIBITS: NIL.** **//TRUE COPY// P.S. TO JUDGE** **rs. 06/04/2018.** ## **ANU SIVARAMAN, J.** ## **---------------------------------------** ## **W.P.(C). No. 15681 OF 2017** ## **----------------------------------------** Dated this the 12[th] day of March, 2018 ## **JUDGMENT** The writ petition is filed with the following prayers:- - “i. Issue a writ of certiorari or any other writ order or direction calling for the records leading to the issue of Ext.P18 and quash the same. - ii. Issue a writ of mandamus or other writ or direction directing the third respondent Administrator not to take any policy decision relating to the affairs of the society reducing the area of operation permitting to register new societies and other such matters since the Administrator has no such power as per law. - iii. Issue a writ of mandamus or other writ or order directing the second respondent to handover the charge of the committee of the society to the petitioners/committee members by removing the Administrator. - iv. Issue such other reliefs which may be deem fit and proper in the facts and circumstances of the above writ petition.” 2. The petitioners, who are members of the Managing Committee of the first respondent Society had assumed W.P.(C). No. 15681 OF 2017 2 charge in August, 2012. The term of the committee was to expire in August, 2017 and election was to be conducted. However, it is stated that an inspection was conducted in the society and notice was issued by the second respondent stating that documents are not being properly maintained in the society and that appropriate action is to be taken against the Secretary of the Society. It is stated, pursuant thereto, the Secretary was suspended from service. But he had submitted a representation pointing out certain financial and other difficulties and he was thereafter re-instated in service. Later, it is stated that action was taken to terminate the service of the Secretary and the Secretary had agreed that an amount of Rs. 1,98,814/- found due from him, could be deducted from his PF and Gratuity amounts and he may be permitted to retire voluntarily without prejudice to his claims to draw pensionary benefits. It is stated that the said request was accepted and the service of the Secretary was terminated by Ext.P15 order, dated 22.02.2017. 3. It is contented that thereafter, show cause notice was issued by the second respondent requiring the petitioners to show cause, why the committee should not be W.P.(C). No. 15681 OF 2017 3 superceded. Petitioners had submitted their reply to the show cause pointing out that there were no allegations raised against the members of the committee as such, and that they had taken all possible steps to see that the defects noted by the authorities had been rectified. Thereafter, it is stated that without considering the reply submitted by the petitioners and relying on the findings of the inspection report, the committee had been superseded by Ext.P18 order. 4. Learned counsel for the petitioners contend that there was no proper consultation with the Circle Cooperative Union or the District Co-operative Bank, as provided under Section 32 of the Co-operative Societies Act, 1969. It is contended that this Court as well as the Apex Court has clearly held that where there is a requirement for consultation, such consultation has to be a proper and meaningful one and the modalities of such consultation had also been laid down by this Court. It is stated that the impugned order does not even refer to any such consultation. It is also contended that a reading of the impugned order would reveal that there were no allegations W.P.(C). No. 15681 OF 2017 4 of misfeasance or malfeasance as against the members of the committee, which would enable an action in the nature of Ext.P18. It is contended the only allegation made is that the committee had not taken steps to see that all required documents including the day books had been prepared and updated. It is contended that the very allegation was to the effect that the records were not been maintained right from 1997 and petitioners had been taken all possible steps to rectify the defects. But the preparation of the entire records from 1997 was an impossibility and the petitioners could not be fastened with the liability for the inaction on the part of earlier committees. It is also contended that the reply furnished by the petitioners had not been properly considered, which is also evident from Ext.P18. 5. A detailed counter affidavit is filed on behalf of the second respondent. It is stated therein that though the Secretary was suspended by the society pursuant to Ext.P1, the committee had reinstated him after few months and no legal action had been taken against him. It is contended that the attempt of the petitioners to fasten the entire liability for the non-maintenance of the accounts on the Secretary W.P.(C). No. 15681 OF 2017 5 cannot be countenanced in view of Rule 47(b) of the Kerala Co-operative Societies Rules, 1969, since the Managing Committee is expected to see that all records of the society are maintained in a proper manner and the committee has the supervisory control over all employees of the members of the society as well. It is stated that proper notice had been given to the petitioners before the order of supercession was issued. It is also contended that Ext.P15 order of termination of the Secretary would show that it was taken without conducting any enquiry and was only intended to give the Secretary a chance to challenge the termination and to get a re-instatement. It is stated that in the case of the first respondent society, no consultation with the Circle Cooperative Union or the Financing Bank is required. 6. Having considered the contentions advanced, I am of the opinion that the only issue to be considered is whether there are grounds warranting an order of suspension and whether the prescribed procedure has been complied with while issuing Ext.P18 order. The allegations raised in the show cause notice issued to the petitioners as well as the findings in Ext.P18 are confined to allegations of W.P.(C). No. 15681 OF 2017 6 incompetence of the Secretary and the action taken by the committee. I find that there is absolutely no charge of any misappropriation of amounts or any misfeasance by the petitioners, who are the committee members. The consequence of an order in the nature of Ext.P18 is that the petitioners, who are the committee members of the superceded committee would be disabled from contesting the elections for two consecutive terms. 7. In the facts and circumstances of the instant case and in the nature of allegations made against the petitioners and which are found in Ext.P18, I am of the opinion that petitioners, who are members of the society, have not even faced allegations of misfeasance or malfeasance of the nature, which could justify their exclusion from the election process. 8. The ' **Apex Court in State of M.P. v. Sanjay Nagayach [2013(2) KLT 733 (SC)]'** has clearly issued general directions as follows:- - “35. Further, we are inclined to give the following general directions in view of the mushrooming of cases in various Courts challenging orders of supersession of elected Committees; W.P.(C). No. 15681 OF 2017 7 1) Supersession of an elected managing Committee/Board is an exception and be resorted to only in exceptional circumstances and normally elected body be allowed to complete the term for which it is elected. 2) Elected Committee in office be not penalised for the short-comings or illegalities committed by the previous Committee, unless there is any deliberate inaction in rectifying the illegalities committed by the previous committees. ## 3) Elected Committee in Office be given sufficient time, say at least six months, to rectify the defects, if any, pointed out in the audit report with regard to incidents which originated when the previous committee was in office. 4) Registrar/Joint Registrar are legally obliged to comply with all the statutory formalities, including consultation with the financing banks/Controlling Banks etc. Only after getting their view, on opinion be formed as to whether an elected Committee be ousted or not. - 5) Registrar/Joint Registrar should always bear in mind the consequences of an order of supersession which has the effect of not only ousting the Board out of office, but also disqualify them for standing for election in the succeeding elections. Registrar/Joint Registrar therefore is duty bound to exercise his powers bona fide and not on the dictation or direction of those who are in power. - 6) Registrar/Joint Registrar shall not act under W.P.(C). No. 15681 OF 2017 8 political pressure or influence and, if they do, be subjected to disciplinary proceedings and be also held personally liable for the cost of the legal proceedings. 7) Public money not to be spent by the State Government or the Registrar for unnecessary litigation involving disputes between various factions in a co-operative society. Tax payers money is not expected to be spent for settling those disputes. If found necessary, the same be spent from the funds available with the concerned Bank.” 9. In the above view of the matter, I am of the considered opinion that the requirements for a valid order of supercession are absent in the instant case, since there are no clear allegation of misfeasance or malfeasance against the petitioners in the writ petition. Ext. P18 order cannot, therefore, be sustained. Therefore, Ext.P18 order is set aside. 10. Petitioners will be free to contest the election to the Managing Committee of the society, in view of the fact that the term of the office of the committee in which the petitioners were elected has already expired and in the election which has already been notified to the society. It is made clear that the committee shall not be entitled to any W.P.(C). No. 15681 OF 2017 9 re-instatement and petitioners will only be permitted to contest the election. The writ petition is ordered accordingly. Sd/- **ANU SIVARAMAN JUDGE** DCS