P.N. Damodaran Pillai v. The Joint Registrar (General), Office of the Joint Registrar of Co-Operative Societies (General), Collectorate, Kottayam and others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **MONDAY, THE 15[TH] DAY OF NOVEMBER 2021 / 24TH KARTHIKA, 1943** ## **WP(C) NO. 8081 OF 2021** ## **PETITIONER:** P.N.DAMODARAN PILLAI AGED 75 YEARS RESIDING AT PARAMPUKATTIL HOUSE, CHIRAKKADAVU P.O, KOTTAYAM - 686520, PRESIDENT, THE CHIRAKKADAVU SERVICE CO-OPERATIVE BANK LTD, NO. 2057, H.O, CHIRAKKADAVU, CHIRAKKADAVU P.O, KOTTAYAM - 686520(UNDER SUSPENSION) BY ADVS. S.ANANTHAKRISHNAN MANOJ RAMASWAMY ## **RESPONDENTS:** 1 THE JOINT REGISTRAR (GENERAL) OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), COLLECTORATE P.O, KOTTAYAM - 686002. 2 THE ASSISTANT REGISTRAR (GENERAL) OFFICE OF THE ASSISTANT REGISTRAR(GENERAL), KANJIRAPALLY, KOTTAYAM - 686507. 3 PARTIME ADMINISTRATOR PONKUNNAM UNIT, OFFICE OF THE ASSISTANT REGISTRAR (GENERAL), KANJIRAPALLY, KOTTAYAM - 686507 4 JOINT DIRECTOR (AUDIT) OFFICE OF THE JOINT DIRECTOR(AUDIT), CO-OPERATIVE DEPARTMENT, KOTTAYAM - 686002. **ADDL. R5** THE PART TIME ADMINISTRATOR, THE CHIRAKKADAVU SERVICE COOPERATIVE BANK LTD., NO.2057, H.O.CHIRAKKADAVU, CHIRAKKADAVU PO, KOTTAYAM-686520, ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), KOTTAYAM. ## ***[THE ADDITIONAL 5TH RESPONDENT IS IMPLEADED IN THIS WRIT PETITION AS PER ORDERS OF THIS COURT IN IA 4/2021 DATED 11.11.2021]** BY ADVS. BY SRI.BIMAL K. NATH, SR. GOVT. PLEADER BY SRI.C.P.SABARI THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **SATHISH NINAN, J.** **= = = = = = = = = = = = = = = = = = W. P. (C) No.8081 of 2021** **= = = = = = = = = = = = = = = = = = Dated this the 15[th] day of November, 2021** ## **J U D G M E N T** Challenging Ext.P7 order suspending the Managing Committee of the Chirakkadavu Service Co-operative Bank Ltd., the President of the Committee is before this Court. Under Ext.P7, the period of suspension was for three months from 24.03.2021. The suspension still continues, as extended. 2. Heard learned Senior Counsel Sri.S.Sreekumar on behalf of the petitioner, Sri.Bimal K. Nath, the learned Senior Government Pleader and Sri.C.P.Sabari for the additional 5[th] respondent. 3. The Registrar, on being satisfied on the report of the Assistant Registrar dated 27.02.2021 regarding misappropriation and irregularities in the functioning of the Society, as per Ext.P2 dated 01.03.2021 ordered an inquiry under Section 65 of the Co-operative Societies Act. In the course of the inquiry it was found **W. P. (C) No.8081 of 2021** -: 2 :- that there has been large scale misappropriation in the Bank. The entries in the computer were seen as not tallying with that in the relevant books. The computer data base was found manipulated. Several pages in the Day Book were found missing and new sheets were found incorporated and the book recently bound. It was reported that the present Managing committee did not make available the relevant records in spite of request, and that their attempt was to conceal the irregularities and misappropriation. In spite of the large scale misappropriation by the then Secretary, who retired on the 31[st] of July 2019, on the very next day viz. the 1[st] of August 2019, his entire pensionary benefits were sanctioned and granted by the Managing Committee. It was noticed that, the continuance of the Managing committee in office would result in further destruction and loss/corrections/interpolations of and in the important documents and materials. On the said report, the Joint Registrar passed Ext.P7 order suspending the Managing **W. P. (C) No.8081 of 2021** -: 3 :- Committee for a period of three months and appointed an Administrator. 4. The power of the Registrar to suspend the Managing Committee pending the proceedings is not disputed. According to the learned Senior Counsel, the order of suspension could have been passed only after affording an opportunity of hearing. Relying on the judgment of the Division Bench of this Court in _**Rajeevan T.V. and others v. K.A.Sukumaran and others [2013 (3) KHC 46]**_ , the learned Senior Counsel would contend that, the dispensation of opportunity of hearing could only be in cases where there is practical difficulty in the service of notice on the committee. 5. As per Ext.P7, while suspending the Committee for a period of three months, a part-time Administrator was appointed. The Administrator was directed to forthwith take possession/custody of all relevant, valuable records, and to keep it in safe custody. The records were directed to be made available on the ## **W. P. (C) No.8081 of 2021** -: 4 :- request of the officer conducting the Section 65 inquiry. Grave allegations have been made against the Managing committee including, attempt to cover up/conceal the irregularities, failure to make available the relevant books/records, grant of retirement benefits to the former Secretary, who is stated to be the kingpin behind the misappropriation, immediately on the very next day of his retirement and in total violation of Rule 198(8) of the Co-operative Societies Rules. These are all matters to be looked into and reported in the 65 inquiry. It might or might not pave way for a proceeding under Section 32 of the Act for supersession of the committee or a Surcharge proceeding under Section 68. The statute contemplates a procedure for all this. The immediate necessity for suspension of the Committee under Ext.P7 was, the non-co-operative with the inquiry, the non-providing of the relevant records, the noted tampering with the records and the apprehension that the records would be further tampered with or destroyed. **W. P. (C) No.8081 of 2021** -: 5 :- While the said circumstances would justify the suspension of the committee, as noted supra as per Ext.P7 order, the Part-time Administrator was directed to take possession of all the relevant records and keep it in safe custody. Necessarily, the said directions must have been complied with by the Administrator. It is reported that the Centre for Development of Advanced Computing (C-DAC) has taken a cloned copy of the hard disk of the computer for report on the alleged tampering in the system. The report is awaited. Matters being so, I do not think that the suspension of the Managing Committee should further continue at this stage. The Society is to function through its elected Committee rather than by an Administrator. Of course, proceedings under the Act need to be taken to its logical conclusion in accordance with law. However, the immediate necessity for suspension of the Committee being, safe custody of the records and it having already been taken care of, I do not think that the suspension of the Managing **W. P. (C) No.8081 of 2021** -: 6 :- Committee should continue. 6. As regards the contention based on Rajeevan's case (supra) regarding dispensation of notice prior to suspension, since I have found that the suspension is not liable to be continued any further, the said question loses its significance in this case. However I may incidentally notice that, even in Rajeevan's case it was noticed that, where an immediate seizure of all the books of the Bank is required for verification, such an extreme course could be adopted. 7. Accordingly it is ordered that, the Joint Registrar shall forthwith pass orders ceasing the suspension of the Managing Committee and put the committee back in office. The Administrator shall be recalled. The materials/records taken possession of and kept in custody of by the Administrator, shall be handed over to the Joint Registrar for safe custody. If any further documents or copies thereof are also to be taken from the office of the Society, the same shall also be **W. P. (C) No.8081 of 2021** **==> picture [34 x 10] intentionally omitted <==** done before the Managing Committee assumes office. The Managing Committee shall co-operate with further proceedings in inquiry and make available all the materials as may be sought for by the inquiry officer. Writ petition is ordered as above. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## **APPENDIX OF WP(C) 8081/2021** PETITIONER EXHIBITS |EXHIBIT P1|TRUE COPY OF THE ORDER OF ATTACHMENT ISSUED| |---|---| ||BY THE JOINT REGISTRAR DATED 3.3.21 IN ARC| ||1/21| |EXHIBIT P2|TRUE COPY OF THE ORDER DATED 1.3.21 ISSUED BY| ||THE 1ST RESPONDENT.| |EXHIBIT P3|TRUE COPY OF THE NOTICE DATED 8.3.2021 ISSUED| ||BY THE 2ND RESPONDENT.| |EXHIBIT P4|TRUE COPY OF THE LETTER DATED 17.3.2021| ||SUBMITTED BY THE PETITIONER TO THE 2ND| ||RESPONDENT.| |EXHIBIT P5|TRUE COPY OF THE REPORT DATED 27.02.2021 OF| ||THE 2ND RESPONDENT SUBMITTED TO THE 1ST| ||RESPONDENT.| |EXHIBIT P6|TRUE COPY OF THE MINUTES DATED 23.5.2018.| |EXHIBIT P7|TRUE COPY OF THE ORDER DATED 24.03.2021| ||PASSED BY THE 1ST RESPONDENT.| -----