Naranamoozhi Service Co-Operative Bank Ltd. v. The Joint Registrar Co-Operative Societies (G), Pathanamthitta & V.J. Babykutty

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.SURENDRA MOHAN** **TUESDAY, THE 27TH DAY OF MAY 2014/6TH JYAISHTA, 1936** ## **WP(C).No. 13214 of 2014 (B)** **----------------------------** ## **PETITIONER :** **-----------------------** **NARANAMOOZHI SERVICE CO-OPERATIVE BANK LTD.NO.3910, REPRESENTED BY PRESIDENT, NARANAMOOZHI P.O., PATHANAMTHITTA - 689 711.** **BY ADVS.SRI.P.N.MOHANAN SRI.K.N.AJAYAN SMT.I.VINAYAKUMARI SRI.K.S.ARUNDAS** ## **RESPONDENT(S):** **----------------------------** **1. THE JOINT REGISTRAR CO-OPERATIVE SOCIETIES (G), PATHANAMTHITTA - 689 645** ## **2. V.J.BABYKUTTY, VADAKKEDATHU HOUSE,** **NARANAMOOZHI P.O., MUKKANUR, ADICHIPUZHA, PATHANAMTHITTA -689 711** **R1 BY SPL.GOVERNMENT PLEADER SRI.D.SOMASUNDARAM R2 BY ADVS. SRI.V.G.ARUN SRI.T.R.HARIKUMAR** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27-05-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** **WP(C).No. 13214 of 2014 (B) ----------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS -------------------------------------** **EXT.P-1: A TRUE COPY OF THE RESOLUTION DATED 31.8.2013 OF THE MANAGING COMMITTEE. EXT.P-2: A TRUE COPY OF THE DECISION OF THE MANAGING COMMITTEE DATED 11.10.2013 EXT.P-3: A TRUE COPY OF THE ACKNOWLEDGEMENT DATED 28.3.2014 OF MR.V.J.BABYKUTTY HANDING OVER THE DOCUMENTS RELATING TO THE RECRUITMENT.** - **EXT.P-4: A TRUE COPY OF THE ORDER DATED 7.5.2014 OF THE MANAGING COMMITTEE** - **EXT.P-5: A TRUE COPY OF THE CHARGE MEMO DATED 15.5.2014 EXT.P-6: A TRUE COPY OF THE ORDER DATED 16.5.2014 IN WPC NO.12660/2014 EXT.P-7: A TRUE COPY OF THE ORDER DATED 20.5.2014 OF THE JOINT REGISTRAR** - **EXT.P-8: A TRUE COPY OF THE REPORT AND PHOTOGRAPH IN THE MALAYALA MANORAMA DAILY DATED 10.5.2014** - **EXT.P-9: A TRUE COPY OF THE REPORT AND PHOTOGRAPH IN THE MALAYALA MANORAMA DAILY DATED 15.5.2014** - **EXT.P-10: A TRUE COPY OF THE REPORT AND PHOTOGRAPH IN THE MALAYALA MANORAMA DAILY DATED 14.5.2014** ## **RESPONDENT(S)' EXHIBITS: NIL** ## **/TRUE COPY/** ## **P.A.TO.JUDGE** **sts** ## **K.SURENDRA MOHAN, J. --------------------------------------------W.P.(C) No.13214 of 2014-B ---------------------------------------------Dated this the 27[th] day of May, 2014** ## **J U D G M E N T** An inspection ordered by the first respondent under Section 66 of the Kerala Co-operative Societies Act, 1969 ('the Act' for short) by Exhibit P7 proceedings is under challenge in this writ petition. The petitioner is a society registered under the provisions of the Act and Rules thereunder. 2. According to the petitioner, as per Exhibit P4, the second respondent, an employee of the society was placed under suspension. He is an activist of the Congress party and the Secretary of the Ranni Block Congress Committee. He is also a member of the Naranamoozhi Grama Panchayat and a leader of the Employees Front, a trade union of employees under the Cooperative Sector. Using his political influence, it is alleged that he has commenced a Dharna in front of the office of the bank. The petitioner had ## -:2:- ## W.P.(C) No.13214 of 2014-B thereupon moved this Court and obtained Exhibit P6 order for Police Protection. 2. The second respondent had also submitted a complaint to the first respondent. On the basis of the complaint, the first respondent has issued Exhibit P7 proceedings directing an enquiry to be conducted into, among other things, the circumstances under which the second respondent was suspended also. 3. According to Advocate Sri.P.N. Mohanan, who appears for the petitioner, Section 66 does not confer any power or authority on the first respondent to order an enquiry into the suspension of an employee. The matters relating to service, disciplinary proceedings etc. are to be resolved in exercise of the jurisdiction under Section 69 of the Act. It is also contended that, after the establishment of the Arbitration Court, it has been held by this Court that all the powers for determination of the various issues in Section 69 have been conferred on the Arbitration Court. Thereby, the first respondent has been denuded of all the ## -:3:- ## W.P.(C) No.13214 of 2014-B powers in the said regard. The present attempt of the first respondent is to do indirectly, what has been prohibited to be done directly. Relying on the dictum of the Apex Court in the decision reported in **State of Tamil Nadu and others v. K.Shyam Sunder and others** [(2011) 8 SCC 737], it is contended that what has been prohibited from being done directly cannot be done indirectly. In view of the above, according to the counsel for the petitioner, Exhibit P7 is liable to be set aside. 4. The learned Special Government Pleader Sri D. Somasundaram opposes the contentions of the counsel for the petitioner. According to the learned Special Government Pleader, Sub section 11 of Section 66 confers sufficient powers on the first respondent to enquire into the matters that are directed to be enquired into by Exhibit P7. Though it is true that action was initiated on the basis of a complaint made by the second respondent, the enquiry has been ordered only for the purpose of ascertaining the facts. No action prejudicial to the interests of the bank has been -:4:- ## W.P.(C) No.13214 of 2014-B initiated. After the report is obtained, the petitioner would be afforded with ample opportunity for objecting to the same. And if at all, any action is necessary to be taken, such action would be initiated only after complying with all the legal formalities. 5. Advocate V.G.Arun who enters appearance for the second respondent points out that the allegations made against him are absolutely without any basis. The Unit Inspector who inspected the society seeking documents for the purpose of filing counter affidavit in a writ petition that was pending before this Court had sought for the production of certain documents. Since the documents were available in the society, the petitioner had made them available to the said authority. The said action has been taken as the basis for issuing Exhibit P4 suspension order. The second respondent is a person who has 27 years of unblemished service to his credit and therefore he had complained to the first respondent setting out his grievances. The action initiated by Exhibit P7 has ## -:5:- ## W.P.(C) No.13214 of 2014-B emanated on the basis of his complaint. According to the counsel, the second respondent is only made a scapegoat for no fault of his. 6. Heard. The question that arises for consideration is whether the first respondent has the necessary powers to issue Exhibit P7 order. Sub Section 1 and 2 of Section 66 read as follows:- **66.Supervision and Inspection.-** - (1) The Registrar shall supervise or cause to be supervised by a person authorised by him by general or special order in writing in this behalf, the working of every society as frequently as he may consider necessary. The supervision under this sub-section may include an inspection of the books of the society. (2). The Registrar may, on his own motion, or on the application of a creditor of a society, inspect or direct any person authorised by him by order in writing in this behalf to inspect the books of the society: Provided that no such inspection shall be made on the application of a creditor unless the applicant- (a) satisfies the Registrar that the debt is a sum then due and that he has demanded payment thereof and has not received satisfaction within a reasonable time and (b) deposits with the Registrar such a sum as security for the costs of the proposed inspection as the Registrar may require ## -:6:- ## W.P.(C) No.13214 of 2014-B A perusal of the above provisions show that the first respondent has sufficient powers under Sub Section 1 to supervise or caused to be supervised by a person authorised by him by general or special order in writing in that behalf, the working of every society as frequently as it may be considered necessary. It is clarified that the supervision under Sub Section 2 may include an inspection of the books of the society. Sub Section 2 relates to an inspection either on the own motion of the Registrar or on an application of the creditor. The said provision has no application to the facts of the present case as there is no creditor involved herein. However, the Registrar has power to order an inspection on his own motion also. It is trite that, an enquiry ordered on his own motion may be based on a complaint received from a third party also. The learned Special Government Pleader has drawn my attention to Sub Section 11 of Section 66 which reads as under:- 11. Notwithstanding anything contained in subsection (1) and (2) above, the Registrar or his subordinate officers aurhorised by him under sub section (1) shall have ## -:7:- ## W.P.(C) No.13214 of 2014-B power to hold an enquiry with necessary records of a society, on any petition received, and to inspect the affairs of the society periodically, in such cases the inspecting officers shall have the same powers as specified in subsection(4). Explanation 1.- The “affairs of a society” for the purpose of this sub section includes, among other things, matters relating to administration, management and the business of a society. Explanation 2. The duty of the officers and chief executive of a society and the nature of offences and penalties mentioned in sub-section 4(A) shall be applicable to this sub section also. The above provision specifically confers powers on the Registrar and his subordinate Officers to hold an enquiry with necessary records of the society on any petition received and to inspect the affairs of the society periodically. ' The affairs of a society' for the purpose of the Section includes matters relating to administration, management and business of the society. 7. A perusal of the three items that are required to be enquired into stated in Exhibit P7 shows that they are all matters relating to the administration and management of the society. Therefore, the first respondent has sufficient ## -:8:- ## W.P.(C) No.13214 of 2014-B powers to issue Exhibit P7. What is worth noticing is that, no action prejudicial to the interests of the petitioner has been initiated by Exhibit P7. What has been ordered is only to conduct an enquiry. If the affairs of the petitioner society are being carried on properly and in accordance with law, there is no need for any apprehension. However, if there are illegalities in the manner of functioning of the petitioner society, then certainly, they require to be identified and rectified by proper follow-up action. However, nothing could be said at this stage. It is true that Exhibit P7 has been issued on the basis of a petition submitted by the second respondent. It is not in dispute that the second respondent is an activist of the Congress party which is the main constituent in the ruling collation. However, for the said reason alone, it cannot be presumed that the issue of Exhibit P7 is vitiated by extraneous or illegal considerations. As already noticed above, no action has been taken against the petitioner till date. Only an enquiry has been ordered. No action ## -:9:- W.P.(C) No.13214 of 2014-B pursuant to a report submitted by the Enquiry Officer would be pursued without putting the petitioner on notice thereof and complying with the other procedural formalities stipulated by law. The petitioner would get ample opportunities to challenge the report of the Enquiry Offficer, if the same is in any manner prejudicial to the interests of the society. For the above reasons, I do not find no grounds to interfere with Exhibit P7 at this stage or to grant any of the reliefs sought. This writ petition is therefore dismissed. **Sd/K.SURENDRA MOHAN, JUDGE** kkj