P.K. Aboobacker and others v. Joint Registrar of Co-operative Societies (General), Thrissur District; Assistant Registrar of Co-operative Societies (General), Muthuvattoor, Chavakkad; Registrar of Co-operative Societies (General), Office of the Registrar of Co-operative Societies, Thiruvananthapuram

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V** **FRIDAY, THE 09TH DAY OF OCTOBER 2020 / 17TH ASWINA, 1942** ## **WP(C).No.21238 OF 2020(D)** ## **PETITIONER(S) :** |**1**|**P.K.ABOOBACKER,**| |---|---| ||**AGED 54 YEARS,**| ||**S/O.MOIDHU, PUTHANPURAIL KALEERAKATH HOUSE,**| ||**KADAPPURAM VILALGE, MADU DESAM, POST MADU, CHAVAKKAD**| ||**TALUK, THRISSUR DISTRICT AND PRESIDENT IN CHARGE, THE**| ||**CHAVAKKAD FIRKA CO-OPERATIVE RURAL BANK F 1250,**| ||**CHAVAKKAD OF THRISSUR DISTRICT.**| |**2**|**P.V.BADHRUDHEEN,**| ||**AGED 50 YEARS,**| ||**S/O.MUHAMMEDKUTTY, PANIKKAVEEIL HOUSE,**| ||**MUMMIYOOR P.O., GURUVAYOOR,**| ||**THRISSUR DISTRICT-680 101.**| |**3**|**C.A.GOPAPRATHAPAN,**| ||**AGED 44 YEARS,**| ||**CHOZHIRAKATH HOUSE, THIRUVATHARA POST,**| ||**CHAVAKKAD TALUK, THRISSUR DISTRICT-680 512.**| |**4**|**K.J.CHACKO,**| ||**AGED 54 YEARS,**| ||**KAKKASSERY HOUSE, ORUMANAYUR VILLAGE,**| ||**POST ORUMANAYUR, CHAVAKKAD TALUK,**| ||**THRISSUR DISTRICT-680 512.**| |**5**|**BINDU NARAYANAN,**| ||**AGED 49 YEARS,**| ||**CHAKYAR PARAMBU, BINDU NIVAS, NORTH NADA,**| ||**GURUVAYUR POST, CHAVAKKAD TALUK,**| ||**THRISSUR DISTRICT-680 101.**| |**6**|**MEERA GOPALAKRISHNAN,**| ||**AGED 56 YEARS,**| ||**VEETTIKKIZHI HOUSE, GANDHI NAGAR,**| ||**GURUVAYUR POST, CHAVAKKAD TALUK,**| ||**THRISSUR DISTRICT-680 101.**| **7 DEVIKA NARAYANAN, AGED 51 YEARS, VENKIDA HOUSE, KOZHIKULANGARA, POST CHAVAKKAD, CHAVAKKAD TALUK, THRISSUR DISTRICT-680 506.** **WP(C).No.21238 OF 2020(D) 2** **8 NIYAZ HAMMED, AGED 46 YEARS, S/O.A.V.MOIDHU, AMBALATHU VEETTIL HOUSE, ORUMANAYUR VILLAGE, THIKKADAVU DESAM, POST ORUMANAYUR, CHAVAKKAD TALUK, THRISSUR DISTRICT-680 512.** **9 ABDUL SALAM, AGED 54 YEARS, S/O.HUSSIN MUZALIYAR, MUZALIYAR MANZIL, PAVARATTI VILLAGE, PUVATHOOR DESAM, POST PUVATHUR, CHAVAKKAD TALUK, THRISSUR DISTRICT.** **BY ADVS. SRI.RAJIT SMT.LEKSHMI P. NAIR** **RESPONDENT(S) :** - **1 THE JOINT REGISTRAR OF CO OPERATIVE SOCIETIES (GENERAL), THRISSUR DISTRICT-680 003.** - **2 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), MUTHUVATOOR, CHAVAKAKD, THRISSUR DISTRICT-680 506.** - **3 THE REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM-695 001.** **SRI BIMAL K NATH, SENIOR GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.10.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.21238 OF 2020(D) 3** ## **JUDGMENT** The petitioners herein are the elected members of the Board of Directors of the Chavakkad Firka Co-operative Rural Bank. On 14.6.2020 , they were served with Exhibit P10 notice issued by the 1st respondent under Section 66(2) of the Kerala Co-Operative Societies Act, 1969 ordering an inspection by the Unit Inspecting Officer of the books of the society. On receipt of the notice, the petitioners have rushed to this Court seeking the following reliefs. - a. To call for the records leading to Exhibit P10 and quash Exhibit P10 by issuance of a writ of certiorari or any other appropriate writ or direction. - b. To issue a Writ of Mandamus or any other appropriate writ or order, directing the respondents to not take any further steps to supersede the existing committee during the period of investigation. - c. To issue a writ of mandamus or any other appropriate writ or order, directing the respondents to put the petitioner and the society to notice before taking any steps against the duly elected committee. 2. Sri.Rajit, the learned counsel appearing for the petitioners submitted that Exhibit P10 notice is issued with malafide intent and at the instance of the **WP(C).No.21238 OF 2020(D) 4** erstwhile President of the society who was removed based on a no confidence motion. Reliance is placed on R.66 (5) of the Cooperative Rules and it was argued that none of the requirements of the Rules has been complied with. The learned counsel for the petitioners places reliance on the decision of this Court in T **hiruvalla East Co - operative Bank Ltd. v. Joint Registrar** [2009 (4) KLT 37] and it is argued that as and when the report of enquiry is received by the Registrar, he is obliged to hear the society and the members of the Board of Directors. 3. Sri. Bimal K. Nath, the learned Government Pleader submitted that the enquiry under S.66 is only a fact finding enquiry and no order prejudicial to the interests of the petitioners has been passed till date. He would rely on a decision of a Division Bench of this Court in **State of Kerala v. Aravindakshan Nair** [2010 (3) KLT 11] and it was argued that the hearing contemplated under R.66(5) is for the determination of the costs of the enquiry and fixing of the liability to bear the costs and nothing more. It is pointed out that, R.66 deals with the procedure to be followed while conducting an enquiry, inspection, suspension, investigation and surcharge. Each of the above are to be initiated, by following the procedure stipulated by R.66. The fact that R.66(7) deals with an enquiry under S.66(1) does not justify a conclusion that the hearing contemplated by R.66(5) has to be a necessary precondition for any action to be initiated on the basis of a report. **WP(C).No.21238 OF 2020(D) 5** 4. I have considered the submissions. Sri Rajit has raised two fold contentions against his challenge to Exhibit P10 notice. His first contention is that Exhibit P10 notice does not satisfy the requirement of Rule 66 of the Kerala Cooperative Rules as there are no specific points of reference in the said notice. His second contention is that the petitioners are entitled to previous notice before any action is taken by the 1st respondent on the basis of the inspection report that would be submitted by the 2nd respondent before the said authority after completing the inspection. 5. I am afraid I am not able to agree with the fervent submissions of the learned counsel. Admittedly Exhibit P10 is a notice issued to the petitioners informing them of the ordering of an inspection under Section 66 (2) of the Act. The supervision and inspection contemplated under S.66 deals with the working of every society and includes an inspection of the books of the society. Such inspection can be carried on by the Registrar on his own motion or on an application and empowers the Registrar, by sub-section (5) to direct the society or its officers to take such action as may be specified in the order within the time stipulated therein. What is indicated in S.66 definitely is an overall supervision of the working of the society, for which inspection can be conducted and any irregularities noticed therein can be directed to be rectified. After inspection under Section 66 (2) of the Act, a separate order has to be passed by the Registrar as provided in sub-section (5) of Section 66. Having gone through Exhibit P10 notice **WP(C).No.21238 OF 2020(D) 6** in the light of Rule 66 of the Rules, I find no reason to accept the contention of the petitioners that the notice is wanting in any respect. 6. Insofar as the second contention is concerned, the above provisions do not contemplate the grant of an opportunity to any Society or person except with regard to a proposal to order the costs of inspection. A Division Bench of this Court has considered the issue in **State of Kerala v. Aravindakshan Nair** (Supra) and had observed thus: "In our view, R.66(5) does not contemplate any opportunity to be given to any society or any person, except with regard to the proposal of the Registrar for ordering cost of inspection, whether it be in terms of the report or in variation with the recommendation contained in the Report." 7. I am of the considered opinion that if the contention advanced by the learned counsel is admitted, it would result in a situation where immediately on receipt of a report under S.66, the petitioner would have to be afforded an opportunity of being heard even if what is contemplated is only to order a further enquiry as contemplated under S.68 of the Act. If after considering the report under S.66, what is contemplated is to proceed under S.68, the petitioner gets sufficient opportunity under sub-S.2 of the said provision of being heard. (See **Santhosh V v Assistant Registrar (General) , Co-operative Societies, TVM** **WP(C).No.21238 OF 2020(D) 7** **and others** [2014 (4) KLJ 397) Even under Section 66, if an inspection rivals major defects with respect to the working or financial conduction of the society, and if the Registrar is satisfied that the committee of the society is involved in any of the defects noted in sub-clauses (a) to (d) of sub section (1) of section 32, further action can be initiated, but after giving the committee to raise its objections (See **Krishnan Nair v Joint registrar** (2014 (1) KLT 116). Therefore, R.66(5) has to be understood as being applicable only to the matters that are dealt with in the said provision. It is not the law that a right of hearing is necessarily to be afforded before any action is contemplated on the basis of a report. This Court in ## **Santhosh V v Assistant Registrar (General) , Co-operative Societies, TVM** **and others** [2014 (4) KLJ 397) has held that in the light of the law laid down by this Court in **Aravindan** (supra), the principles laid down in **Thiruvalla East Co - operative Bank Ltd. v. Joint Registrar** [2009 (4) KLT 378] can no longer be held as good law. 8. The petitioners have not been able to make out any ground for interference at this stage. I make it clear that in the event of any notice being issued to the petitioners under Section 32 or under Section 68 of the Act and if the petitioners are asked to file their objections thereto, it would be open to them to submit their objections not only to the averments in the notice served upon them but also to the documents or other materials relied upon against them. The 1st respondent shall advert to those contentions as well and give reasons for his decision on the said objections. **WP(C).No.21238 OF 2020(D) 8** 9. This writ petition is accordingly dismissed, reserving the liberty of the petitioners as aforementioned and with a further direction to the 1st respondent to take note of the observations above while continuing the proceedings under the Act. **SD/-** ## **RAJA VIJAYARAGHAVAN V** **JUDGE** **//TRUE COPY// P.A. TO JUDGE** NS **WP(C).No.21238 OF 2020(D) 9** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE NOTICE DATED 10.07.2020 ISSUED BY THE 2ND RESPONDENT.** **EXHIBIT P2 A TRUE COPY OF THE ORDER DATED 17.07.2020.** **EXHIBIT P3 A TRUE COPY OF THE JUDGMENT DATED 07.08.2020 OF THE HON'BLE HIGH COURT OF KERALA.** - **EXHIBIT P4 TRUE COPY OF THE NOTICE DATED 11.08.2020.** - **EXHIBIT P5 TRUE COPY OF THE JUDGMENT DATED 21.08.2020 IN WA NO.1100/2020 OF THIS HON'BLE COURT.** - **EXHIBIT P6 TRUE COPY OF THE RESOLUTION NO.ID T01/09/20 DATED 26.08.2020 OF THE CHAVAKKAD FIRKA CO-OPERATIVE RURAL BANK F-1250, CHAVAKKAD OF THRISSUR DISTRICT.** - **EXHIBIT P7 TRUE COPY OF THE ORDER NO.E(1)2336/2020 SCEC DATED 17.09.2020 ISSUED BY THE STATE CO-OPERATIVE ELECTION COMMISSION.** - **EXHIBIT P8 TRUE COPY OF THE NOTICE DATED 22.09.2020 ISSUED BY THE PRESIDING OFFICER.** - **EXHIBIT P9 TRUE COPY OF THE NOTICE DATED 23.09.2020. EXHIBIT P10 TRUE COPY OF THE ORDER DATED 14.09.2020 OF THE 1ST RESPONDENT.** ## **RESPONDENT'S/S EXHIBITS: NIL**