Naranamoozhi Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies (G), Pathanamthitta and K.V. Sasikumar (Added Respondent)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** # **MONDAY,THE 17TH DAY OF SEPTEMBER 2018 / 26TH BHADRA, 1940 WP(C).No. 7913 of 2016** ## **PETITIONER:** **NARANAMOOZHI SERVICE CO-OPERATIVE BANK LTD.NO.3910, REPRESENTED BY PRESIDENT, NARANAMOOZHI P.O., PERINTHALMANNA - 689 711.** **BY ADV. SRI.P.N.MOHANAN** ## **RESPONDENTS:** **1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G) PATHANAMTHITTA - 689 645. ADDL. 2 K.V.SASI KUMAR AGED 59 YEARS S/O.VASU, KOLINCHI PATHALIL, KAKKKUDUMON P O., KANNAMPALLY, RANNI, PATHANAMTHITTA - 689 711. (IMPLEADED AS PER ORDER DATED 28.3.2016 IN I.A.NO.4066/2016) BY ADVS.SMT.MABLE C.KURIAN, GOVERNMENT PLEADER SRI.T.R.HARIKUMAR SRI.V.G.ARUN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17.09.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **W.P.(C)No.7913 of 2016** ## **:-2-:** ## **J U D G M E N T** The petitioner, which is a Co-operative Society registered under the Kerala Co-operative Societies Act, 1969, represented by its President, has filed this writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P7 notice dated 25.1.2016 issued by the 1[st] respondent Joint Registrar and also Ext.P10 notice dated 24.2.2016 issued by the said respondent under Section 32 of the said Act. The further relief sought for is a declaration that the petitioner is entitled to get a copy of the documents demanded in Ext.P6, which are relied on in Ext.P10 notice issued for superseding the Managing Committee. 2. On 2.3.2016 when this writ petition came up for admission, this Court ordered that, in terms of Ext.P10 show-cause notice issued under Section 32 ## **W.P.(C)No.7913 of 2016** ## **:-3-:** of the Act, the authorities shall proceed further. It is entirely upto the members of the Managing Committee of the petitioner Society to submit their explanation in the meanwhile. It was however made clear that the respondent authority shall not give effect to the order to be passed, for two weeks from the date of the order. 3. Heard the learned counsel for the petitioner Society, the learned Government Pleader appearing for the 1[st] respondent and also the learned counsel for additional 2[nd] respondent, who is a member of the petitioner Society and also a former member in the Managing committee. 4. Exts.P7 and P10, which are under challenge in this writ petition, are notices issued by the 1[st] respondent Joint Registrar in exercise of his powers under the Kerala Co-operative Societies Act. By Ext.P7 notice dated 25.1.2016, the petitioner ## **W.P.(C)No.7913 of 2016** ## **:-4-:** was informed that, though a copy of the inquiry report under Section 66(2) of the Act was forwarded along with Ext.P5 communication dated 8.1.2016, the petitioner has not chosen to cure the defects noted in the said report and therefore, the petitioner was requested to submit a report regarding rectification of the defects pointed out in that report, within three days. Thereafter, the petitioner Society submitted Ext.P8 reply dated 17.2.2016. Even before submission of Ext.P8 reply, Ext.P9 surcharge proceedings under Section 68 of the Act was initiated, by issuing Ext.P9 order dated 29.1.2016. Thereafter, vide Ext.P10 notice dated 24.2.2016, the petitioner Society was asked show-cause as to why, based on the findings in the inquiry report under Section 66 of the Act, proceedings to supersede the Managing Committee shall not be taken under Section 32 of the Act. ## **W.P.(C)No.7913 of 2016** **:-5-:** 5. The interim order of this Court dated 2.3.2016 is only to the effect that, on explanation being offered by the members of the Managing Committee, the 1[st] respondent Joint Registrar shall proceed with the matter. However, the order passed shall not be given effect to for a period of two weeks from the date of that order. 6. For reasons best known to the 1[st] respondent Joint Registrar, further proceedings pursuant to Ext.P10 notice has been kept in abeyance. 7. Learned counsel for the petitioner would submit that the term of the Managing Committee had expired and the present Managing Committee took charge on 6.9.2013. 8. Ext.P7 is only a notice issued by the 1[st] respondent Joint Registrar, whereby the petitioner Society was asked to submit a report regarding rectification of the defects pointed out in the ## **W.P.(C)No.7913 of 2016** ## **:-6-:** inquiry report under Section 66(2) of the Act. In terms of the said notice, the petitioner has already submitted Ext.P8 reply. Ext.P10 is another notice issued by the 1[st] respondent, whereby the petitioner Society was asked to show-cause why proceedings under Section 32 of the Act shall not be initiated. 9. In **State of U.P v. Brahm Datt Sharma** **[(1987) 2 SCC 179]** the Apex Court held that, when the show cause notice was issued under a statutory provision calling upon to show cause, the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. The purpose of issuing show cause notice is to afford an opportunity of hearing and once cause is shown it is open to the authority to consider the matter in the light of the facts and submission placed ## **W.P.(C)No.7913 of 2016** ## **:-7-:** before it and only thereafter a final decision in the matter could be taken. Therefore, interference by the Court before that would be premature. 10. In **Seimens Ltd v. State of Maharashtra** **[(2006) 12 SCC 33]** the Apex Court held that ordinarily, a writ court may not exercise its discretionary jurisdiction to entertain a writ petition questioning a notice to show cause unless the notice appears to have been without jurisdiction. 11. In **Union of India v. Vicco Laboratories** **[(2007) 13 SCC 270]** the Apex Court held that, normally, the writ court should not interfere at the stage of issuance of show cause notice by the authorities. In such a case, the parties get ample opportunity to put forth their contentions before the authorities concerned and satisfy the authorities concerned about the absence of case for ## **W.P.(C)No.7913 of 2016** ## **:-8-:** proceeding against the person against whom the show cause notices have been issued. Abstinence from interference at the stage of issuance of show cause notice in order to relegate the parties to the proceedings before the authorities concerned is the normal rule. However, the said rule is not without exceptions. Where a show cause notice is issued either without jurisdiction or in an abuse of process of law, certainly, in that case, the writ court would not hesitate to interfere even at the stage of issuance of the show cause notice. The interference at the show cause notice stage should be rare and not in a routine manner. The mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out. **W.P.(C)No.7913 of 2016** ## **:-9-:** 12. In view of the law laid down in the decisions referred to supra, no interference under Article 226 of the Constitution of India is warranted on a show cause notice issued under a statutory provision unless the notice is shown to have been issued palpably without any authority of law or that it is an abuse of process of law. The mere assertion in the writ petition that the show cause notice has been issued without any authority of law or that it is an abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, no interference of this Court in exercise of the extraordinary jurisdiction under Article 226 of the Constitution is warranted. 13. Having considered the averments and also the grounds raised in this writ petition, this Court finds that the petitioner has not made out a ## **W.P.(C)No.7913 of 2016** ## **:-10-:** case warranting interference on Exts.P7 or P10 notices, in exercise of the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. It is for the petitioner to show-cause to Ext.P10 notice by submitting a proper explanation, so as to enable the 1[st] respondent Joint Registrar to take a final decision in the matter. ## 14. In **State of M.P. v. Sanjay Nagayach [(2013)** **7 SCC 25]** the Apex Court, in the context of Section 53 of the Madhya Pradesh Co-operative Societies Act, 1960 held that, the Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with preconceived notion and shall not speak his masters' voice, because the formation of opinion ## **W.P.(C)No.7913 of 2016** ## **:-11-:** must be his own, not somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. In paragraph 42 of the judgment (SCC @pages 44 & 45), the Apex Court laid down the general directions in the matter of supersession of the elected committee. 15. In **Sanjay Nagayach's case (supra)** , the order of supersession was passed by the Joint Registrar after a period of two and a half years of the issuance of show cause notice and most of the charges levelled against the Board of Directors were related to the period when the previous committee was in office and even the charges based on the audit report dated 25.9.2008 were also ## **W.P.(C)No.7913 of 2016** ## **:-12-:** rectified by the Board of Directors by addressing the primary societies. Based on the decision of the Apex Court In **Sanjay Nagayach's case** , the Registrar of Co-operative Societies has issued Circular No.45/13 dated 12.07.2013. 16. In such circumstances, the challenge made in this writ petition against Exts.P7 and P10 notices can only be repelled as the petitioner failed to make out a case warranting interference, in exercise of the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. In the result, this writ petition stands dismissed, without prejudice to the right of the petitioner to show-cause to Ext.P10 notice by submitting a proper explanation, within three weeks from the date of receipt of a certified copy of this judgment. The 1[st] respondent Joint Registrar ## **W.P.(C)No.7913 of 2016** ## **:-13-:** shall consider the same and pass appropriate orders thereon, strictly in accordance with law, with notice to the petitioner Society and also the then members of the Managing Committee, taking note of the law laid down by the Apex Court in **Sanjay Nagayach's case (supra)** , as expeditiously as possible, at any rate within a further period of one month. The legal and factual contentions raised by the petitioner are left open to be raised before the 1[st] respondent Joint Registrar at appropriate stage. Sd/- **ANIL K.NARENDRAN JUDGE** ami/17.9.18 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1** **A TRUE COPY OF THE INTERIM ORDER DATED 21.6.2013 IN WPC NO.15676/2013** **EXHIBIT P2** **A TRUE COPY OF THE JUDGMENT DATED 11.11.2014 IN WPC NO.15676/2013** ## **W.P.(C)No.7913 of 2016** ## **:-14-:** **EXHIBIT P3 A TRUE COPY OF THE JUDGMENT DATED 3.2.2015 IN WPC NO.2451/2014 EXHIBIT P4 A TRUE COPY OF THE NOTICE DATED 14.9.2015 ALONG WITH ENGLISH TRANSLATION EXHIBIT P5 A TRUE COPY OF THE LETTER DATED 8.1.2016 ALONG WITH THE ENQUIRY REPORT EXHIBIT P6 A TRUE COPY OF THE REQUEST DATED 22.1.2016 MADE BY THE PETITIONER EXHIBIT P7 A TRUE COPY OF THE ORDER DATED 25.1.2016 OF THE JOINT REGISTRAR ALONG WITH POSTAL COVER WITH ENGLISH TRANSLATION EXHIBIT P8 A TRUE COPY OF THE REPLY DATED 17.2.2016 FURNISHED BEFORE THE JOINT REGISTRAR EXHIBIT P9 A TRUE COPY OF THE NOTICE OF SURCHARGE DATED 29.1.2016 EXHIBIT P10 A TRUE COPY OF THE NOTICE DATED 24.2.2016 WITH ENGLISH TRANSLATION //TRUE COPY// P.A.TO JUDGE ami/**