Nedumon Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies (G) and others

IN THE HIGH COURT OF KERALA AT ERNAKULAM THE HONOURABLE MR. JUSTICE V.CHITAMBARESH & THE HONOURABLE MR. JUSTICE SATHISH NINAN MONDAY, THE 16TH DAY OF JULY 2018 / 25TH ASHADHA, 1940 W.A.No.1545 of 2014 IN WPC.No.17253/2014 AGAINST THE JUDGMENT DATED 11-08-2014 IN WP(C).NO.17253/2014 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: NEDUMON SERVICE CO-OPERATIVE BANK LTD. NO.2720, EZHAMKULAM, PATHANAMTHITTA-691 556, REPRESENTED BY ITS PRESIDENT. BY ADV.SRI.P.N.MOHANAN RESPONDENTS/RESPONDENT & ADDITIONAL RESPONDENTS: 1. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), PATHANAMTHITTA-691 556. 2. BINU S. VARGHESE, CHAKKALAYIL HOUSE, NEDUMON P.O., EZHAMKULAM, ADOOR. 3. P.K.MURALI, KAVINTEKIZHAKKETHIL HOUSE, NEDUMON P.O., EZHAMKULAM, ADOOR. R1 BY SPECIAL GOVERNMENT PLEADER SRI.K.S.MOHAMAD HASHIM THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 12.07.2018, THE COURT ON 16.07.2018 DELIVERED THE FOLLOWING: WA1545/2014 ## APPENDIX APPELLANT'S ANNEXURES: ANNEXURE A1 A TRUE COPY OF THE JUDGMENT DATED 11.8.2014 IN WP(C).NO.17253/2014. -TRUE COPY- PS TO JUDGE “C.R.” ## V. CHITAMBARESH & SATHISH NINAN, JJ. = = = = = = = = = = = = = = = = = = = = = = = = ## W.A.No. 1545 of 2014 = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 16[th] day of July, 2018 ## Judgment ## Chitambaresh, J. - We confirm the judgment in Nedumon Service Co operative Bank Ltd. v. Joint Registrar of Co-operative Societies and others [2014 KHC 5024] for altogether different reasons as enumerated below. 2. Ext.P3 order of the Joint Registrar rescinding the resolution dated 17.04.2014 of the managing committee deciding to enroll 485 persons as members of the bank was impugned in the writ petition. The same was on the basis of an enquiry conducted under Section 65 of the Kerala Co- W.A.No.1545/2014 -: 2 :- operative Societies Act, 1969 ('the Act' for short) by the Assistant Registrar as directed. The enquiry was followed by an inspection under Section 66(2) of the Act and the report therein revealed that there were irregularities in the decision to admit members in the bank. The allegation was that the decision to enroll 485 persons was taken without receiving proper application forms or making due enquiries regarding their eligibility as members. It is a fact conceded that only 255 out of the 485 persons enrolled as members and no explanation was forthcoming about the non enrollment of the remaining. The learned single Judge held that even they were not validly admitted and that the exercise on the eve of the expiry of the term of the managing committee was with an eye on the forthcoming election. 3. Ext.P3 order rescinding the resolution has evidently been passed under Rule 176 of the Kerala Co-operative Societies Rules, 1969 ('the Rules' for short) by the Joint Registrar exercising the powers of the Registrar. The Joint W.A.No.1545/2014 -: 3 :- Registrar has found that the resolution dated 17.04.2014 is ultra vires of the object of the bank and is against the provisions of the Act, Rules and bye-laws. The same was preceded by a show cause notice and an opportunity of personal hearing to the bank who cannot therefore complain of violation of the principles of natural justice. We find that Ext.P3 order is rested on a report gathered after an enquiry conducted under Section 65 of the Act followed by an inspection under Section 66 of the Act. There arise many factual disputes on the report which can be gone into only in an appeal filed to the government under Section 83(1)(j) of the Act assailing Ext.P3 order of the Joint Registrar. The jurisdiction under Article 226 cannot be invoked by the bank challenging the findings of fact rendered by the Joint Registrar in exercise of the powers under Rule 176 of the Rules. 4. The bank heavily relied on Rule 16(4) of the Rules to contend that the persons found ineligible to be members should have been afforded a personal opportunity to state W.A.No.1545/2014 -: 4 :- their objection about the proposed action. The statutory provision is as follows: “(4) Where a member of a society becomes ineligible to continue as such, the Registrar may of his own motion or on a representation made to him by any member of the society or by the financing bank, by an order in writing declare that he has ceased to be a member of the society from the date of his order. The Registrar shall give such person an opportunity to state his objection, if any, to the proposed action and if the person wishes to be heard, he shall be given an opportunity to be heard before passing an order as aforesaid.” (emphasis supplied) The infraction of the above rule will certainly entitle a member as defined under Section 2(l) of the Act to maintain a writ petition under Article 226 of the Constitution of India on the ground of violation of principles of natural justice. But none of the 255 members who were admitted to the bank or the remaining who were decided to be enrolled had filed the writ petition from which the writ appeal arises. The members are W.A.No.1545/2014 -: 5 :- persons who joined in the application for the registration of the bank or admitted to membership thereafter and are distinct from the bank or a Society. The bank cannot bypass the statutory remedy under Section 83(1)(j) of the Act alleging infraction of Rule 16(4) of the Rules which the members alone can urge in a writ petition directly. 5. It was finally contended that the general power to rescind a resolution under Rule 176 cannot be invoked when there is a specific power under Rule 16(4) of the Rules to remove a member of the bank. But what was rescinded by Ext.P3 order is the decision to enroll new members and not the removal of an existing member for which alone the procedure under Rule 16(4) of the Rules could be resorted to. The principle that special law will prevail over the general law - generalia specialibus non derogant - cannot have any application to the facts of this case. We do not find any ground to upset the judgment of the learned single Judge dismissing the writ petition filed challenging Ext.P3 order of the Joint W.A.No.1545/2014 -: 6 :- Registrar rescinding the resolution of the bank. The writ appeal is dismissed. No costs. Sd/- V. CHITAMBARESH, JUDGE Sd/SATHISH NINAN, JUDGE ncd-sha/120718