High Court of KeralaSingle Judge2017-11-24Writ petitions disposed of accordingly, with di...

Marangattupilly Service Co-operative Bank Ltd. v Gandhigram Agro Based Industrial Co-operative Society Ltd, The General Manager, District Industries Centre, and The Registrar of Co-operative Societies

Case / Petition Number:WP(C).No. 29293 of 2017 (J); WP(C).No. 29294 of 2017

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Shaji P. Chaly
Judgment Date: 2017-11-24
Court Decision / Holding: Writ petitions disposed of accordingly. There will be a direction to the respective respondents to pay the amounts due to the petitioner under the matured fixed deposit receipts within a period of four months from the date of receipt of a copy of this judgment.
Final Disposition: Writ petitions disposed of accordingly, with directions to pay the matured fixed deposit amounts within four months from receipt of a copy of this judgment.

Parties to the Case

Appellants / Petitioners

Marangattupilly Service Co-operative Bank Ltd., represented by its Secretary, Marangattupilly PO, Kottayam PIN-686635

Respondents

The Gandhigram Agro Based Industrial Co-operative Society Ltd, No.5 IND(K) 191, Kuravilangad PO., Kottayam PIN-686633
The General Manager, District Industries Centre, Ozhathil Lane, Nagampadam PO., Kottayam PIN-686001
The Registrar of Co-operative Societies (General) Thiruvananthapuram-14

Legal Representation & Advocates

Counsels for Petitioners

• Sri. Sunil Cyriac

Counsels for Respondents

• Sri. J. Julian Xavier
• Sri. Firoz K. Robin
• Ms. Mable C. Kurian

Case Synopsis & Summary

Marangattupilly Service Co-operative Bank Ltd., represented by its Secretary, filed W.P. (C) Nos. 29293 and 29294 of 2017 seeking a writ under Article 226 of the Constitution to compel the first respondent to release amounts already matured under fixed deposit receipts. The first respondent, Gandhigram Agro Based Industrial Co-operative Society Ltd, along with the General Manager of the District Industries Centre and the Registrar of Co-operative Societies, contested the petitions, arguing that the first respondent is a body corporate under Section 9 of the Kerala Co-operative Societies Act, 1969, with final authority resting in the general body and subject to supervision by the Registrar; that the issue implicates questions of cooperative law, banking regulation, and constitutional classification under Article 12. The petitioner asserted that the matured deposits are due and payable, and that public-law remedies under Article 226 are available where the banking activity is conducted under Registrar’s permission; reliance was placed on this court’s earlier decision in W.P.(C) No.18243/2015 (relating to 5 July 2017). The court observed that the present facts align with prior determinations that there is no inhibition in directing payment of matured deposits where the deposits were originally made by the petitioner and the bank’s liability is not in dispute. Distinguishing earlier apex-court precedents on different facts, the learned judge held the petitioners are entitled to relief and directed payment within four months from receipt of this judgment.

Provisions of Law Cited

Section 9 of the Kerala Co-operative Societies Act, 1969Section 27 of the Kerala Co-operative Societies Act, 1969Section 28 of the Kerala Co-operative Societies Act, 1969Article 12 of the Constitution of IndiaBanking Regulation Act, 1949

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner bank argued that the matured fixed deposits are due and payable and that the writ petition under Article 226 is a proper and effective remedy. It contended that the Registrar’s oversight and the bank’s licensing status under cooperative and banking regulations permit judicial directions for payment of matured deposits, particularly where there is no dispute about the entitlement to repayment. It relied on an earlier decision (W.P.(C) No.18243/2017) recognizing the maintainability of the petition against the first respondent and the possibility of directing payment of matured deposits. The bank also asserted that if banking activity proceeds with the Registrar’s permission, a public-law remedy remains available to enforce repayment. respondents:The respondents contended that the first respondent is a cooperative society governed by the Kerala Co-operative Societies Act and that final authority rests in the general body, not the Registrar; they invoked constitutional and statutory authorities (including Article 12 and case-law such as Thalappalam Service Co-operative Bank Ltd. v. State of Kerala) to argue that the regulatory structure frames the remedy and that writ relief may not be automatically available against the society without considering the facts and regulatory regime.

Contentions of Respondents

The respondents contended that the society is a body corporate under Section 9 of the Kerala Co-operative Societies Act, with final authority in the general body; they argued that Article 12 questions apply and that the Registrar’s authority is supervisory rather than final; they relied on judgments from the Supreme Court and this Court to emphasize that the nature of cooperative societies under the Act requires judicial restraint in directing payment; they also emphasized licensing/regulatory issues under the Banking Regulations Act and RBI norms; they contended that the bank’s claims related to deposits should be approached within the proper regulatory framework and not by direct writ relief in this context.

Cited Precedents (7)

Case Name	Citation	Treatment	Explanation
Thalappalam Service Co-operative Bank Limited and others v. State of Kerala and others	(2013) 16 SCC 82	Distinguished	Cited regarding Article 12/statehood of cooperative societies but distinguished on the facts of this case; not controlling in the present context.
Federal Bank Ltd. v. Sagar Thomas	(2003) 10 SCC 733	Mentioned Only	Cited among authorities on related issues but not central to the judgment’s ratio here.
Ajay Hasia v. Khalid Mujib Sehravardi	(1981) 1 SCC 722	Mentioned Only	Cited as a leading authority on state/non-state status; not a linchpin in the present decision.
U.P. State Co-operative Land Development Bank Ltd. v. Chandra Bhan Dubey and others	(1999) 1 SCC 741	Mentioned Only	Cited among authorities on cooperative bodies; no direct application here.
Nivedita Sharma v. Cellular Operators Association of India and others	(2011) 14 SCC 337	Mentioned Only	Cited in general constitutional/cooperative context; not central to the disposition.
Ext.R1(a) judgement, W.A. No.1202/2007, dated 24.5.2007	W.A. No.1202/2007	Mentioned Only	Noted as a precedent considered by counsel; not directly followed or distinguished in this decision.
W.P.(C) No.18243/2015	Judgment dated 5.7.2017	Positive	The court agrees with the proposition that the Registrar’s regulatory powers permit directing payment of matured fixed deposits under Article 226; this case supports the present relief.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **FRIDAY, THE 24TH DAY OF NOVEMBER 2017/3RD AGRAHAYANA, 1939** ## **WP(C).No. 29293 of 2017 (J)** ## **----------------------------** ## **PETITIONER:** ## **-----------** **MARANGATTUPILLY SERVICE CO-OPERATIVE BANK LTD.NO.3556 REPRESENTED BY ITS SECRETARY, MARANGATTUPILLY PO, KOTTAYAM PIN-686635** **BY ADV. SRI.SUNIL CYRIAC** **RESPONDENT(S):** **--------------** **1. THE GANDHIGRAM AGRO BASED INDUSTRIAL CO-OPERATIVE SOCIETY LTD, NO.5 IND(K) 191, KURAVILANGAD PO., KOTTAYAM PIN-686633** **2. THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, OZHATHIL LANE, NAGAMPADAM PO., KOTTAYAM PIN-686001** **3. THE REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) THIRUVANANTHAPURAM -14** **R1 BY ADVS. SRI.J.JULIAN XAVIER SRI.FIROZ K.ROBIN** **R2,R3 BY GOVERNMENT PLEADER SMT MABLE C.KURIAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10-11-2017, ALONG WITH WPC. 29294/2017, THE COURT ON 24.11.2017, DELIVERED THE FOLLOWING:** **K.V.** ## **WP(C).No. 29293 of 2017 (J)** ## **----------------------------** ## **APPENDIX** **PETITIONER(S)' EXHIBITS ----------------------EXHIBIT P1: TRUE COPY OF THE ORDER BEARING NO.G.11532/96 DATED 11.06.1996 ISSUED BY THE 3RD RESPONDENT EXHIBIT P2: TRUE COPY OF THE RECEIPT NO.2988 DATED 01.02.2010 IN FD NO.3048 ISSUED BY THE 1ST RESPONDENT EXHIBIT P3: TRUE COPY OF THE RECEIPT NO.3008 DATED 24.03.2010 IN FD NO.3303 ISSUED BY THE 1ST RESPONDENT EXHIBIT P4: TRUE COPY OF THE RECEIPT NO.3055 DATED 01.07.2010 IN FD NO.3834 ISSUED BY THE 1ST RESPONDENT EXHIBIT P5: TRUE COPY OF THE NOTICE BEARING NO.335/16-17 DATED 25.10.2016 SENT BY THE PETITIONER TO THE 1ST RESPONDENT RESPONDENT(S)' EXHIBITS NIL -----------------------** **/TRUE COPY/ K.V. P.S.TO JUDGE** ## **SHAJI P. CHALY, J.** ----------------------------------------------- **W.P.(C) Nos.29293 & 29294 of 2017 ----------------------------------------------Dated this the 24[th] day of November, 2017** ## **J U D G M E N T** Petitioner is a Co-operative Bank registered under the Kerala Co-operative Societies Act, 1969. Both the writ petitions are filed by the very same Bank, seeking direction to the 1[st] respondent to release the amounts due under the matured Fixed Deposits. 2. First respondent in W.P.(C) No.29294/2017 has filed a detailed counter affidavit refuting the allegations and claims and demands raised in the writ petition. The paramount contention advanced by the 1[st] respondent is that, 1[st] respondent society is only a body Corporate within the meaning of section 9 of the Kerala Co-operative Societies Act, 1969 having perpetual succession and common seal and hence have the power to hold property, enter into contract, W.P.(C) 29293 & 29294 of 2017 2 institute and defend suits and other legal proceedings and to do all things necessary for the purpose, for which 1[st] respondent society was constituted. It is also stated that, section 27 of the Kerala Co-operative Societies Act , 1969 states that, final authority of a society vests in the general body of its members and every society is managed by the Managing Committee constituted in terms of the bye-laws as provided under section 28 of the Kerala Co-operative Societies Act. The final authority of the respondent society is the general body of the members of the society and not the Registrar of Co-operative Societies or State Government. 3. According to the 1[st] respondent, the issue as to whether the Co-operative Societies registered under the provisions of Act, 1969 will fall within the meaning of Article 12 of the Constitution of India was considered by the Apex Court in **Thalappalam Service Co-operative Bank Limited and others v. State of Kerala and others** [(2013) W.P.(C) 29293 & 29294 of 2017 3 16 SCC 82], **Federal Bank Ltd. v. Sagar Thomas** [(2003) 10 SCC 733], **Ajay Hasia v. Khalid Mujib Sehravardi** [(1981) 1 SCC 722], **U.P.State Co-operative Land Development Bank Ltd. v. Chandra Bhan Dubey and others** [(1999)1 SCC 741] and **Nivedita Sharma v. Cellular Operators Association of India and others** [(2011)14 SCC 337] . It is also submitted that, this court had occasion to consider the identical issue in a writ appeal filed by the State Co-operative Rubber Marketing Federation and has rendered Ext.R1(a) judgment, in W.A. No.1202/2007 dated 24.5.2007. Therefore, according to the learned counsel for the 1[st] respondent, petitioner is not entitled to maintain the writ petition against the 1[st] respondent bank. 4. I have heard learned counsel for the petitioner, learned Government Pleader, respective counsel appearing for the 1[st] respondent in the writ petition and perused the pleadings and the documents on record. W.P.(C) 29293 & 29294 of 2017 4 5. The sole question to be considered is whether the direction as sought for by the petitioner in the writ petition to release matured fixed deposit amount can be granted invoking the power of discretionary remedy under Article 226 of the Constitution of India. The said issue was considered by a learned Single Judge of this court in W.P.(C) No.18243/2015 filed against the 1[st] respondent society, in W.P(C) No.29294/2017, and held as per the judgment dated 5.7.2017 that, the nature of the provisions and the regulatory powers conferred on the Registrar under the Cooperative Societies Act and Rules, 1969, makes it clear that, there is no inhibition created in directing to release the matured fixed deposit, and further held that, the writ petition is maintainable against the 1[st] respondent society. 6. First respondent has raised contentions relying upon the judgments of the Apex Court and this court quoted above. However, I am of the considered opinion that, they W.P.(C) 29293 & 29294 of 2017 5 are rendered under different factual circumstances, which may not have much bearing to the subject matter of this writ petition. Moreover, I am in respectful agreement with the proposition of law laid down by the learned Single Judge in the judgment in W.P.(C) No.18243/2017, supra. Be that as it may, during the course of the arguments, a query was put by me with respect to the power of the 1[st] respondent society to carry on with the banking business without securing licence from the RBI in accordance with the Banking Regulations Act. To the said query, learned counsel for 1[st] respondent submitted that, the amounts are received on the basis of permission granted by the Registrar of Co-operative Societies. 7. I am of the considered opinion that, if the 1[st] respondent is carrying on with the banking business based on the permission granted by the Registrar of Co-operative Societies, then the public law remedy is available to the W.P.(C) 29293 & 29294 of 2017 6 petitioner since the banking business is carried on by the 1[st] respondent under the supervision and control of the Registrar of Co-operative Societies. Even though petitioner has approached the Registrar of Co-operative Societies seeking appropriate directions, no direction was issued. In that view of the matter also, it can be seen that, the writ petition is perfectly maintainable against the 1[st] respondent society. 8. Moreover, the amount due under the fixed deposit receipts are not under dispute. The sole dispute raised during the course of the argument is that, the said amount covered under the fixed deposit receipts are actually received by the 1[st] respondent as a loan. In the counter affidavit filed by the 1[st] respondent, I do not find any such contentions raised. Moreover, from the fixed deposit receipts, it is evident that, same are amounts deposited in fixed deposits by the petitioner bank and the 1[st] respondent W.P.(C) 29293 & 29294 of 2017 7 bank has undertaken to repay the same on its maturity. The findings rendered above is applicable in the other captioned writ petition also, operating under similar circumstances. 9. Having regard to the facts and circumstances of the case and hearing the respective counsel, I am of the considered opinion that, petitioner is entitled to succeed in the writ petitions. Consequentially there will be a direction to the respective respondents to pay the amounts due to the petitioner under the matured fixed deposit receipts within a period of four months from the date of receipt of a copy of this judgment. Writ petition is disposed of accordingly. Sd/- **SHAJI P. CHALY JUDGE** smv 21.11.2017