Kunnamkulam Primary Co-operative Agricultural & Rural Development Bank Ltd. v. Kerala State Co-operative Agricultural and Rural Development Bank Ltd. and Others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL & THE HONOURABLE MRS. JUSTICE C.S. SUDHA TUESDAY, THE 4[TH] DAY OF APRIL 2023 / 14TH CHAITHRA, 1945 WA NO. 1913 OF 2022** ## **AGAINST THE ORDER/JUDGMENTWP(C) 28191/2022 OF HIGH COURT OF KERALA** ## **APPELLANT/S:** KUNNAMKULAM PRIMARY CO-OPERATIVE AGRICULTURAL & RURAL DEVELOPMENT BANK LTD.NO.R.155 KUNNAMKULAM, THRISSUR DISTRICT - 680 503. REPRESENTED BY ITS SECRETARY, PIN - 680503 BY ADVS. ARUN CHANDRAN HARIMOHAN ANJALY T.A ## **RESPONDENT/S:** 1 KERALA STATE CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD, THIRUVANANTHAPURAM.695 001 REPRESENTED BY ITS MANAGING DIRECTOR., PIN - 695001 2 THE ADMINISTRATOR KERALA STATE CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD., THIRUVANANTHAPURAM ., PIN - 695001 3 THE REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) THIRUVANANTHAPURAM, PIN - 695014 4 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) THRISSUR., PIN - 680003 5 ADDL R5: STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF COOPERATION, THIRUVANANTHAPURAM, PIN - 695014 BY ADVS. M.A.ASIF GOVERNMENT PLEADER ## **OTHER PRESENT:** sri Jimmy George GP THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 04.04.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WA NO. 1913 OF 2022** **2** ## **JUDGMENT** Present writ appeal is directed against the judgment of the Single Bench whereby the writ petition filed by the appellant challenging the order Ext.P6 dated 27.7.2022 rejecting the membership with the Apex Society has been disposed of with a direction to the petitioner to submit an application for nominal membership under Section 45 of the Kerala State Co-operative Agricultural and Rural Development Bank Act, 1984. 2. Appellant is a Primary Co-operative Agricultural and Rural Development Bank, which was initially a part of Thalappally Primary Co-operative Agricultural and Rural Development Bank. In view of the amendment caused in the Co-operative Society Act by insertion of Section 2(oc) vide Act No.1 of 2000 with effect from 1.1.2000, all Primary Co-operative Agricultural and Rural Society as per the proviso were required to be registered without bifurcation of the assets and liabilities of the existing society. In view of the aforementioned provisions, Thalappally Primary Co-operative Agricultural and Rural Development Bank vide resolution No.3 dated 16.3.2019 decided to bifurcate the society and constitute separate society in two Taluks. Application for bifurcation was submitted to the competent authority vide Ext.P2 in the writ petition and **WA NO. 1913 OF 2022** **3** thereafter the Special Officer initiated the proceedings for bifurcation. After the bifurcation an application was submitted before the competent authority for issuance of registration certificate which was registered vide certificate dated 23.2.2022, Ext.P4. Petitioner submitted an application dated 24.5.2022 to seek affiliation in the Apex Society of Primary Agricultural Rural Development Bank, which was received in the office on 25.5.2022. But the said application vide impugned order dated 27.7.2022, Ext.P6 was rejected. 3. Learned counsel appearing on behalf of the appellant submitted that the prayer in the petition was not for obtaining a nominal membership as per the provisions of Section 45 of the Kerala State Co-operative Agricultural and Rural Development Bank Act, 1984 as has been noticed in the impugned judgment and therefore the present appeal has been filed. The whole purpose of affiliation is for obtaining certain rights. Availment of remedy of appeal under sub Section 3 of Section 8A would have been a farcical exercise as the order rejecting affiliation has been passed only by the Managing Director as the Apex Society by that time had already been dissolved and Administrator had been appointed, thus the order was totally without jurisdiction. Even the respondent in the counter affidavit supported the impugned order by taking plea that **WA NO. 1913 OF 2022** **4** only the Board is competent to issue the affiliation and not the Administrator, which is not the correct position of law and in this regard, relied upon the judgment of the Single Bench of this Court in **Shaji v. State Co-operative Elections (2004 (2) KLT 1084)** . It was further contended that this Court had already interdicted the directions given by the Single Bench while admitting the writ appeal. 4. On the contrary, learned counsel appearing on behalf of the respondent supported the impugned order as well as the judgment of the single bench on the ground that the order of the single bench was passed on the concession given by the appellant/petitioner before the Single Bench and as well as by the respondent, so as to bring some relief for the purpose of taking certain benefits. There is no illegality or arbitrariness in the order of the Single Bench giving cause to file the writ appeal. It is only the Board, competent to pass the order and Administrator would not have any such power to issue the order of affiliation under the provisions of law. Writ petition was not maintainable as the appellant/petitioner did not avail the remedy of appeal as per sub Section 3 of Section 8A of the Kerala Co-operative Societies Act. 5. We have heard the learned counsel for the parties and appraised the paper book. Before appreciating respective **WA NO. 1913 OF 2022** **5** arguments as well as the judgment of the Single Bench, it would be expedient to extract the provisions of Section 2(o)(c) and 8A of the the Kerala Co-operative Societies Act as well as Section 45 of the Kerala State Co-operative Agricultural and Rural Development Bank Act, 1984. The same reads as under: **2[(oc)** “Primary Co-operative Agricultural and Rural Development Bank” means a society having its area of operation confined to a taluk and the principal object of which is to provide for long term credit for agricultural and rural development activities: 5b[Provided that no Primary Co-operative Agricultural and Rural Development Bank shall be registered without the bifurcation of assets and liabilities of the existing societies having the area of operation in more than one taluk and the societies shall restrict their operation in the area of the respective society on such bifurcation;] **8A.** Affiliation to apex Society.-(1) Every Primary Co-operative Society or Central Co-operative Society may, within such time and in such manner, as may be prescribed, apply for affiliation to the concerned apex society or Central Society, as the case may be. (2)Where the apex society or central society does not, within sixty days from the date of receipt of the application for affiliation, determine whether such affiliation should be given or not, such affiliation shall be deemed to have been given to the applicant society from the date on which the said period of sixty days expires. (3)When the apex or central society, as the case may be, rejects an application for affiliation under sub-section (1), the aggrieved society may file an appeal before the Registrar against such rejection within thirty days from the date of receipt of the order of rejection and the Registrar shall dispose of the appeal within sixty days from the date of appeal.] **45.** Power of Board to admit members:- (1) The Board may admit any primary bank or the Government as a member of the Agricultural and Rural Development Bank on application made in that behalf to that bank, (2) The Board may also admit any Company or Corporation or **WA NO. 1913 OF 2022** **6** any body of persons, whether incorporated or not and whether or not established by or under any law or a co-operative society as a nominal or associate member of the Agricultural and Rural Development Bank on application made in that behalf to that bank: Provided that the previous approval of the Government shall be obtained for the admission of any company or corporation or body of persons. Explanation:- In this section "nominal or associate member" means a member who possess only such privileges and rights of a member and who is subject only to such liabilities of a member as may be specified in the regulations made by the Board. 6. On juxta position of the aforementioned provisions Section 2(o)(c) and 8A were inserted by Act No.1 of 2000 whereas Section 45 was under the different provisions of 1984 Act. If a person obtains a nominal membership under the provisions of Kerala State Co-operative Agricultural and Rural Development Bank Act, 1984 Act would not have certain rights as would be available on affiliation under Section 8A of the Act. 7. On perusal of the impugned order, it is evident that the order has been passed by the Managing Director. It does not disclose that it is only a communication on the basis of some decision taken by the Administrator. Section 33 of the Act does not restrict Administrator to discharge the duties what the Board could do under the provisions of the Act. By noticing the aforementioned provisions, in the cited judgment **Shaji** (supra) it was held as under: 20. **The Act** prescribes that on an application, a decision has to be taken within two months thereof. If not, the Department and Government have been conferred with jurisdiction to issue **WA NO. 1913 OF 2022** **7** appropriate direction. Also, being a movable property, a share is transferable property as spoken to by **Section 23** of the Act, subject to restrictions. When the administrator is in office for over two years, it is not conceivable that for years together, every such operation has to be kept in hibernation. The learned counsel was not able to point out that receipt of application, and grant of membership amounts to policy decision. These are regular and routine business transactions, and does not amount to any matter of policy. In fact the indication of the Act is quite the otherwise. The parameters have been laid down by **Section 16** of the Act, and so long as a person satisfies it, and satisfy the conditions of the bye law, the decision is administrative in character. To impact a colour of policy to these areas are only self serving statements. Only in specified cases, coming under **Section 16** (1) (d) of the Act, if at all there is an element of discretion. As rightly pointed out by the counsel for the petitioner, we cannot see any absolute principles laid down by the Full Bench of this Court or the Supreme Court. Exceptions can always be there and a prayer for declaration that the proceedings for grant of membership is void, is presumptuous and plainly self serving. We have to see the decision vis-a-vis, the objectives of the Society. To allege that it may change the character of a committee to be elected in future is pure absurdity, totally irrelevant and cannot be countenanced. One should not miss the woods by only noticing trees. Accepting the case of the petitioner, would push down the Institution to disrepute and litigation, especially when the administrator is not guilty of any indiscretion, and has exercised his discretion while dealing with the application. On noticing the aforementioned provisions, we are of the view that the impugned order before the Single Bench dated 27.7.2022, Ext.P6 could not have been passed by the Managing Director as it was without jurisdiction. This aspect has totally been ignored by the learned Single Judge while directing the petitioner to submit an application for nominal membership under different provisions of the Act of 1984. In such circumstances, objection of maintainability of writ petition in the absence of appeal under sub Section (3) of **WA NO. 1913 OF 2022** **8** Section 8A, in our considered view, would definitely be an exercise in futility, thus do not merit acceptance. Accordingly, the impugned order dated 27.7.2022, Ext.P6 as well as the judgment of the Single Bench are set aside. Writ Appeal is allowed. The Administrator of the Apex Society, respondent No.2 is directed to consider and decide the application for affiliation submitted under Section 8A of the Act, in accordance with law after affording an opportunity of hearing within a period of fifteen days (15) from the date of receipt of a certified copy of this judgment. Sd/- **AMIT RAWAL JUDGE** Sd/- sab **C.S. SUDHA JUDGE**