Poruvazhy Service Co-operative Bank Limited v. Kerala Lok Ayukta and Others

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ## **`THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR`** ## **`&`** ``` THE HONOURABLE MR. JUSTICE SHAJI P.CHALY ``` ``` WEDNESDAY, THE 20[TH] DAY OF JULY 2022 / 29TH ASHADHA, 1944 ``` ``` WP(C) NO. 8853 OF 2021 ``` ## **`PETITIONER:`** ``` PORUVAZHY SERVICE CO-OPERATIVE BANK LIMITED NO.1132, PORUVAZHY P.O., KOLLAM DISTRICT, REPRESENTED BY ITS SECRETARY. ``` ``` BY ADVS. SUBHASH CYRIAC SRI.S.SREEJITH (S-3453) SMT.SHEEBA JOSEPH ``` ## **`RESPONDENTS:`** ``` 1THE KERALA LOKAYUKTA VIKAS BHAVAN, LEGISLATURE COMPLEX, THIRUVANANTHAPURAM-695033, REPRESENTED BY THE REGISTRAR AND COMPETENT AUTHORITY. ``` ``` 2THANKACHAN.G, S/O.GEORGE, MANGATTUPUTHEN VEEDU, KUNNATHOOR, CHATHAKULAM P.O., KOLLAM DISTRICT-690 520. ``` ``` 3THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, KOLLAM COLLECTORATE BUILDING, KOLLAM-691 013. ``` ``` 4E.KOSHY, PARATHUNDIL VEEDU, VADAKKEMURI, PORUVAZHY, KUNATHOOR, CHAKKAKULAM P.O., KOLLAM DISTRICT-690 520. ``` ``` BY ADVS. S.S.ARAVIND K.C.SANTHOSHKUMAR M.V.AMARESAN K.K.CHANDRALEKHA V.TEKCHAND, SR. GP ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.P.(C)No.8853 of 2021** **2** ## **JUDGMENT** Dated this the 20[th] day of July, 2022 ## **S.Manikumar, C.J.** Before the Lok Ayukta, Complaint No.72 of 2019 has been made by respondent No.2, Mr.Thankachan G., seeking the following reliefs: - “1. Directions or orders be given to the 1[st] respondent to release the fixed deposit amount of Rs.3,00,000/- (Three lakhs) to the complainant in respect of F.D.No.3550 dated 12.10.2017 with interest. 2. Direction or orders to be given to the Respondent 1 and 2 to take immediate action to realise the misappropriate amount from the responsible employees.” ## 2. Considering the prayers sought for and the material on record, Lok Ayukta, on 02.12.2020, has passed the following order: “The complainant who is present in person has submitted that State Bank of India, Poruvazhi Branch has threatened revenue recovery action against him and his daughter for recovery of the amount due under a loan account. He has shown me the statement of account issued by the Bank which shows that a huge sum of Rs. 11,61,537.60/- is due towards the loan account as on November 25, 2020. Complainant submits that the loan **W.P.(C)No.8853 of 2021** **3** was taken for the educational purpose of his daughter Ms Diji Thankachan. 2. Mr.G. Somasekharan Pillai, Assistant Registrar / Arbitrator cum Sale Officer, Co-operative Department is present. He submits that Joint Registrar could not appear today in person because of election duty though there was such a direction to him to appear. 3. Mr. Somasekharan Pillai has orally explained the action taken so far, pursuant to the receipt of S.65 Enquiry Report. He further submits that further action is being taken u/s 68(1) on a war footing. The above oral submissions are recorded. However, respondent no.2 shall file an affidavit indicating the action taken so far pursuant to the receipt of S.65 Enquiry Report and also as to what further action is proposed to be taken to expedite the findings in the Enquiry Report. It shall also be made clear as to what is the position of the Criminal Cases registered against the erstwhile employees as well as the departmental action against them. 4. Mr.Somasekharan Pillai also submits that in his capacity as Arbitrator cum Sale Officer, earnest efforts are being made to effect recovery from the creditors of the Bank and there is some reasonable inflow of cash to the Bank. It is also pointed out by him that several depositors like the complainant are being given part payments periodically towards the Fixed Deposits made by them. Sri.Harilal, Learned Senior Government Pleader undertakes that a sum of Rs.1,50,000/- will be released to the complainant by way of part payment within an outer **W.P.(C)No.8853 of 2021** **4** limit of one month. The above submission is recorded. Call on 04.01.2021.” 3. Being aggrieved, Poruvazhy Service Co-operative Bank Limited, the petitioner herein, has filed W.P.(C)No.3849 of 2021. After considering the rival submissions, vide judgment dated 12.02.2021, in W.P.(C)No.3849 of 2021, we passed the following order: “5. As discussed above, there is no direction issued against the petitioner bank in the pending matter from the year 2019. Apparently learned Upa Lok Ayukta only recorded the submission made by the Senior Government Pleader that an amount of Rs.1,50,000/- would be paid to the complainant, and therefore, the submission made by learned counsel for petitioner that the directions issued by the Lok Ayukta would prejudice the bank cannot be sustained at all. Moreover, it is quite clear that it is an interim order passed by the learned Upa Lok Ayukta and therefore, it is always open to the petitioner to approach the Upa Lok Ayukta and file suitable objections.” ## 4. Thereafter, Lok Ayukta, on 19.03.2021, has passed the following order in the said complaint: “It was repeatedly submitted before the Court that all earnest efforts are being made to effect recovery from the creditors of the Bank and that there is some **W.P.(C)No.8853 of 2021** **5** reasonable inflow of cash to the Bank. The Secretary of the 1[st] respondent Bank is present. She submits before the Court that there is an inflow of an average of Rs.30,000/- to 40,000/- per day. There will be a direction to the Secretary not disburse amount to any person for any purpose till the payment of Rs.1,50,000/- (one lakh fifty thousand only) is made to the complainant. Going by the details, I am satisfied that Rs.1,50,000/- can be paid within a period of ten days. There will be a direction to Secretary to collect inflow of fund and pay the amount in lump sum within ten days from today. Post on 31.03.2021.” 5. Material on record discloses that Poruvazhy Service Co-operative Bank Ltd., petitioner herein, has filed objections by way of written comments on 27.03.2021. Being aggrieved by the interim order dated 19.03.2021 in Complaint No.72 of 2019, instant writ petition is filed inter alia on the following grounds: - A) The Honourable Upa Lokayukta did not grant enough opportunity to the Petitioner bank to file written objections to the allegations set out in the Complaint filed by the 2[nd] Respondent. **W.P.(C)No.8853 of 2021** **6** B) Exhibit P4 order directs the Petitioner bank to disburse Rs.1,50,000 to the 2[nd] Respondent and not to disburse amount to any other person for 10 days. Hon’ble Upa Lokayukta has no power to issue such a direction as Section 12 (1) of the Lokayukta Act 1999 states that the Lokayukta can only issue recommendations. This Honourable Court in **Sudha Devi Vs. District Collector TVM** (2017 (2) KHC 850), held that Lokayukta can only make a report to the concerned authority with recommendations. But no positive directions much less peremptory in nature can be issued by Upa Lokayukta or Lokayukta as they are not such a statutory authority. C) In **Assistant Excise Commissioner, TVM v. Elias Kunju** , (2017 (1) KHC 654), this Honourable Court held that Lokayukta does not have the jurisdiction to issue positive orders. Hence, the Hon’ble Lokayukta has no power to direct the Petitioner bank to stop disbursing funds to any other person and to release finds in lumpsum to the 2[nd] Respondent. D) Exhibit P4 order is passed without considering the merits of the case and also the arguments raised by the Petitioner Bank. The Petitioner bank is facing financial problems and at present, it is disbursing the available funds (as per the inflow) **7** ## **W.P.(C)No.8853 of 2021** to depositors by issuing tokens to the depositors. So, the Petitioner bank cannot give preference to the 2[nd] Respondent, if preference is given to the 2[nd] Respondent, the other depositors will suffer. 6. We have heard Mr.S.Sreejith, learned counsel for the petitioner; Mr.S.S.Aravind, learned counsel for respondent No.2, Mr.K.C.Santhoshkumar, learned counsel for respondent No.4 and Mr.V.Tekchand, learned Senior Government Pleader and perused the pleadings and the material available on record. 7. Earlier, when the petitioner approached this court challenging the interim order dated 02.12.2020 of the Lok Ayukta, by filing W.P.(C)No.3849 of 2021, we disposed of the writ petition stating that there is no direction as against the bank and further directed the petitioner therein to approach the Upa Lok Ayukta, to file suitable objections. 8. No doubt, objections were filed only on 27.03.2021. In the present impugned interim order dated 19.03.2021 in Complaint No.72 of 2019, there is a positive direction to the **8** ## **W.P.(C)No.8853 of 2021** Secretary of the petitioner bank not to disburse amount to any person until Rs.1,50,000/- is paid to the complainant. Prima facie, such a direction would adversely affect the interests of the depositors. That apart, the bank has filed a detailed objection to the complaint. 9. In the light of the above discussion, it will be desirable that the objections of the bank as to whether the respondent No.2 is entitled, on the aspect of misappropriation, recovery of the money due to the bank from the asset of the respondent No.4 in the complaint and other tenable objections be considered by the Lok Ayukta before issuing any interim direction as stated supra. 10. Though Mr.S.S.Aravind, learned counsel for the 2[nd] respondent submitted that an amount of Rs.3,00,000/- is payable by the bank to the respondent and on the grounds, prayed to sustain the interim order, we are not inclined to accept the said contention, for the reasons stated supra. 11. Inasmuch as the objections by way of written comments have already been filed, we are inclined to set **9** ## **W.P.(C)No.8853 of 2021** aside the impugned interim order dated 19.03.2021 passed by the Lok Ayukta. As the complaint is stated to be pending from 2019, we request the Lok Ayukta to dispose of the same as expeditiously as possible, in accordance with law after providing an opportunity of hearing to the parties therein. The writ petition is allowed. Pending interlocutory applications, if any, shall stand closed. Sd/- **S.Manikumar Chief Justice** Sd/- **Shaji P.Chaly Judge** **vpv** **W.P.(C)No.8853 of 2021** **10** ## **`APPENDIX OF WP(C) 8853/2021`** ## `PETITIONER EXHIBITS` - `EXHIBIT P1 A TRUE COPY OF THE COMPLAINT NO.72/2019D DATED 12.02.2019 FILED BY THE 2ND RESPONDENT BEFORE THE 1ST RESPONDENT KERALA LOKAYUKTA.` - `EXHIBIT P2 A TRUE COPY OF THE JUDGMENT DATED 02.12.2020 BY THE HONOURABLE UPA LOKAYUKTA, THIRUVANANTHAPURAM IN COMPLAINT NO.72/2019D.` - `EXHIBIT P3 A TRUE COPY OF THE ORDER OF THE HONOURABLE HIGH COURT OF KERALA DATED 12.02.2021 IN W.P. (C)NO.3849/2021.` - `EXHIBIT P4 A TRUE COPY OF THE ORDER DATED 19.03.2021 OF THE HONOURABLE UPA LOKAYUKTA IN COMPLAINT NO.72/2019D.` - `EXHIBIT P5 A TRUE COPY OF THE INTERIM ORDER DATED 13.12.2019 IN WP(c)NO.26495/2019 BEFORE THE HONOURABLE HIGH COURT OF KERALA.` - `EXHIBIT P6 A TRUE COPY OF THE STATEMENT DATED 27.03.2021 FILED BY THE PETITIONER IN COMPLAINT NO.72/2019 BEFORE THE 1ST RESPONDENT (WITHOUT EXHIBITS).` //TRUE COPY// P.A. TO JUDGE