KOLLAYIL MILK PRODUCERS CO-OPERATIVE SOCIETY LTD (APCOS) v. DIRECTOR, DAIRY DEVELOPMENT DEPARTMENT; DEPUTY DIRECTOR, DAIRY DEVELOPMENT DEPARTMENT; BINDU K.L.; SIVAKUMAR

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR** ## **&** **THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS** **FRIDAY, THE 22ND DAY OF MAY 2020 / 1ST JYAISHTA, 1942** ## **WA.No.513 OF 2020** **AGAINST THE JUDGMENT IN WP(C) 24085/2018 OF HIGH COURT OF KERALA** ## **APPELLANTS/PETITIONERS:** **1 KOLLAYIL MILK PRODUCERS CO-OPERATIVE SOCIETY LTD NO.T. 253 D (APCOS), REPRESENTED BY ITS SECRETARY, DIVYA, D/O.SOBHANAKUMARI, AGED 35, DHANUVACHAPURAM, THIRUVANANTHAPURAM-695 503. 2 PRESIDENT, THE MANAGING COMMITTEE, KOLLAYIL MILK PRODUCERS CO-OPERATIVE SOCIETY LTD NO.T. 253 D (APCOS) DHANUVACHAPURAM, THIRUVANANTHAPURAM-695 503.** **BY ADVS. SRI.R.T.PRADEEP SMT.M.BINDUDAS SRI.K.C.HARISH** ## **RESPONDENTS/RESPONDENTS 1 TO 4:** **1 DIRECTOR, DAIRY DEVELOPMENT DEPARTMENT, PATTOM, THIRUVANANTHAPURAM-695 004.** **-:2:-** WA No.513/20 **2 DEPUTY DIRECTOR, DAIRY DEVELOPMENT DEPARTMENT, PATTOM, THIRUVANANTHAPURAM-695 004. 3 BINDU.K.L., D/O.LEELA, GOKULAM, DHANUVACHAPURAM, THIRUVANANTHAPURAM-695 503. 4 SIVAKUMAR, S/O.KRISHNA PILLAI, KRISHNA, MEKKOLLA, DHANUVACHAPURAM P.O., THIRUVANANTHAPURAM-695 503.** **SRI.MOHAMMED HASHIM, SPL. GOVT. PLEADER** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 20-052020, THE COURT ON 22-05-2020 DELIVERED THE FOLLOWING:** WA No.513/20 ## **-:3:-** ## **JUDGMENT** ## **Dated this the 22[nd] day of May, 2020** ## _**Bechu Kurian Thomas, J.**_ While rejecting the challenge against Ext.P14 order directing the conduct of an inquiry under Section 65 of the Kerala Co-operative Societies Act, 1969 (for short "The Act") into the affairs of the 1[st] appellant, the learned Single Judge protected the appellants by giving an opportunity to raise all contentions, including the deficiencies or shortfalls or requests of any report prepared or relied upon by the Registrar. Still, the appellants are dissatisfied. 2. Judgment of the learned Single Judge is assailed contending that the protection that had been given in the concluding paragraph of the impugned judgment is not sufficient, since, the very basis for issuing Ext.P14 itself is absurd and perverse and also that the 2[nd] respondent could never have ordered an inquiry in the facts of the case. It is the case of the appellants that the situation does not warrant even an inquiry to **-:4:-** WA No.513/20 be conducted, since the subjective satisfaction required to order an inquiry under Section 65 of The Act was done in an illegal manner without any application of mind and purely based on irrelevant aspects. 3. We have heard Sri.R.T.Pradeep, learned counsel for the appellants and Sri.Mohammed Hashim, learned Special Government Pleader appearing for respondents 1 and 2. 4. Appellants would contend that on 18.6.2018 the 2[nd] respondent had issued Ext.P9 notice as well as Ext.P14 order. Ext.P9 notice was issued by the 2[nd] respondent, in which, after referring to a prior letter dated 25.4.2018, it was mentioned that since an explanation to the letter dated 25.4.2018 had not yet been received from the appellants, another opportunity of seven days more, from 18.6.2018, is being granted to the appellants to file their explanation. It was argued that though Ext.P9 was issued on 18.6.2018 granting an opportunity of seven days time to give an explanation, ignoring the said notice, Ext.P14 was issued, ordering an inquiry under Section 65 of The Act on the very same date. Though various other contentions were raised by the learned counsel for the appellants including the one that the 2[nd] respondent could not have ordered an inquiry on the WA No.513/20 ## **-:5:-** basis of audit objections, without there being a report under Section 63 of The Act, the same are not being dealt with since they may not be relevant for the purpose of disposal of this appeal. 5. The learned Special Government Pleader submitted that Ext.P9 and the letter preceding that, dated 25.4.2018, were caused to be issued not on account of any legal requirement but by some oversight and that the same will not render Ex.P14 illegal. He vehemently contended that before ordering an inquiry under Section 65 of The Act, it was not essential for the 2[nd] respondent to have issued a notice as Ext.P9 and hence the writ appeal only deserves dismissal. 6. It is true that a prior notice is not necessary before ordering an inquiry under Section 65 of The Act. It is also true that the appellants will certainly be entitled to an opportunity if the inquiry is completed and the same reveals any major defect or even any defects that require remedial measures as provided under Section 65 of The Act. Though such a notice is not required prior to ordering an inquiry under Section 65 of The Act, this Court had held in **Melukkara Service Co-operative Bank Ltd. v. Joint Registrar (General), District Co-operatie** WA No.513/20 ## **-:6:-** **Society** (2018 (2) KLT 640) that while ordering an inquiry by the Registrar, his subjective satisfaction is contemplated and that he cannot act mechanically. It was also held by this Court that while ordering an inquiry under Section 65 of The Act, the Registrar has to discharge his statutory obligation after assessing whether it was necessary for doing so in the facts and circumstances after taking into account all relevant factors. The following observations in the aforesaid judgment are relevant. “17. xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx Therefore, when the mandate of section 65 itself is that the Registrar can act only on the application by the majority of the members of the committee of the society or by not less than one-third of the quorum for the general body meeting, whichever is less, then it becomes luculent that a complaint by an individual member or by a disgruntled person will not be sufficient reason for the Registrar to cause an inquiry simplicitor. The requirement here is that the Registrar will, thereafter, have to be satisfied that such a course is inevitable and that it is absolutely necessary to act suo motu. 18. The responsibility cast upon the Registrar, while he acts suo motu or on his own motion, is, according to us, greater than the responsibility imposed on him while he acts under the provisions of section 65(1)(b) to (f) of the Act. xxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx However, when he acts suo motu, which is to say, when he acts without any of such inquiry reports or applications, then the responsibility will have to be discharged by him with greater circumspection and circumscription. “ WA No.513/20 ## **-:7:-** 7. With the aforesaid principle in mind, when we appreciate the facts of this case, what catches our attention is the fact that though a notice is not contemplated under the provisions of the statute prior to ordering an inquiry under Section 65 of The Act, the 2[nd] respondent deemed it fit to call for an explanation from the appellants by notice dated 25.4.2018. Still further, when a response was not received by 18.6.2018, he deemed it fit to give one more opportunity to the appellants to submit their explanation. This obviously indicates that for the purpose of arriving at a subjective satisfaction, before ordering an inquiry under Section 65 of The Act, the 2[nd] respondent felt that certain inputs were required to be obtained from the appellants rather than merely proceeding on a complaint filed by an individual member. 8. In this context a reference to the counter affidavit filed by the 2[nd] respondent is relevant. The 2[nd] respondent has in the counter affidavit stated that inquiry was ordered under Section 65 of The Act since there was no response for the notice issued on 25.4.2018 and that he had issued Ext.P9 on 18.6.2018 as a WA No.513/20 ## **-:8:-** reminder to the notice of 25.4.2018. 9. It fails all comprehension and logic, that, an officer who thought it fit to issue a notice calling for an explanation and subsequently grants further time to give that explanation suddenly turns around and issues an order, directing an inquiry that too on the very same day itself. The said procedure is intriguing and raises eyebrows. 10. After having granted an opportunity to respond to the notice of 25.4.2018 by Ext.P9, it was incumbent upon the 2[nd] respondent to have waited at least for the completion of seven days mentioned in Ext.P9 before issuing Ext.P14 order, ordering an inquiry under Section 65 of The Act. In such circumstances, we feel that the 2[nd] respondent has acted illegally and the same is liable to be interfered with. 11. In the result, the judgment of the learned Single Judge is set aside and Ext.P14 order is quashed for the purpose of enabling consideration of the explanation offered by the appellants to Ext.P9 notice. The 2[nd] respondent shall consider the explanation submitted by the appellants to Ext.P9 notice and all relevant factors to arrive at the subjective satisfaction as to whether an inquiry is needed or not. The steps as directed WA No.513/20 **-:9:-** above shall be carried out without undue delay. This writ appeal is allowed as above. **Sd/-** **C.T.RAVIKUMAR JUDGE Sd/-** **BECHU KURIAN THOMAS JUDGE** vps