High Court of KeralaSingle JudgeWrit Petition disposed of as above.

Prabha Prasad and Others v. State of Kerala and Others

Case / Petition Number:WP(C).No.12222 of 2020(C)

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • Sathish Ninan, J.
Judgment Date
2020-07-21
Court Decision / Holding
Writ Petition disposed of as above: the order of disqualification under Rule 44 is set aside; the part-time administrator’s appointment is interfered with; the managing committee is to manage day-to-day affairs but not to take policy decisions; the petitioners may file an appeal under Section 83(1)(e) within one month, deemed timely, with merits to be heard within three months; the Registrar may initiate fresh Rule 44(3) proceedings if required.
Final Disposition
Writ Petition disposed of as above.

Parties to the Case

Appellants / Petitioners

  • Prabha Prasad
  • P. Sasi
  • K. Raju
  • Ajikumaran R.
  • Sathyanathan C.
  • Jaya G.

Respondents

  • State of Kerala represented by the Secretary to Government, Co-operative Department, Government of Kerala
  • The Registrar of Co-operative Societies (General), Thiruvananthapuram
  • The Joint Registrar of Co-operative Societies (General), Office of the Joint Registrar of Co-operative Societies, Kollam
  • The Arbitrator/The Assistant Registrar of Co-operative Societies (General), Office of the Assistant Registrar of Co-operative Societies, Punalur
  • The Punalur Scheduled Caste/Scheduled Tribe Service Co-operative Society Ltd., No. Q 489, Chemmanthoor, Punalur P.O., Kollam District, represented by its Secretary
  • The Enquiry Officer (Office Inspector), Office of Assistant Registrar (General), Kollam

Legal Representation & Advocates

Counsels for Petitioners

  • • K.C. Santosh
  • • K.K. Chandralekha

Counsels for Respondents

  • • Smt. Sheeja C.S.

Case Synopsis & Summary

This writ petition challenges Ext.P11 surcharge under Section 68 of the Kerala Co-operative Societies Act and Ext.P12 appointment of a part-time administrator, which affected the President and five members of the Managing Committee of the Punalur Scheduled Caste and Scheduled Tribes Service Co-operative Society Ltd. The petitioners contend that the surcharge and the concomitant disqualification under Rule 44 of the Co-operative Societies Rules were bad in law because Rule 44(3) requires an opportunity of hearing prior to disqualification, which was not afforded. They rely on Abdulla Haji A. v. Joint Registrar of Co-op. Societies (G), Kannur, and Another to urge that even for surcharge, an order of disqualification cannot be issued without a hearing. The judgment holds that the mere fact of surcharge by the Registrar does not dispense with the hearing requirement, and the court may set aside the disqualification but permits fresh Rule 44(3) proceedings if needed. The court also notes the availability of an appellate remedy under Section 83(1)(e) within 60 days and, in the alternative, relegates the petitioners to that forum, directing disposal on merits within three months. Consequently, the disqualification is set aside, the part-time administrator is vacated, and the managing committee is to manage day-to-day affairs without taking policy decisions until further orders. The petition is disposed of accordingly.

Provisions of Law Cited

Section 68 of the Co-operative Societies ActRule 44 of the Co-operative Societies RulesRule 44(3) of the Co-operative Societies RulesSection 83(1)(e) of the Co-operative Societies ActSection 65 of the Kerala Co-operative Societies ActSection 33 of the Kerala Co-operative Societies Act

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that the surcharge order under Section 68 and the subsequent disqualification under Rule 44(1) are invalid for want of an opportunity of hearing, as mandated by Rule 44(3). Relying on Abdulla Haji A., they submit that disqualification cannot be issued without hearing, and the Registrar cannot bypass Rule 44(3) by merely passing the surcharge. They urge that the petition be relegated to the statutory appellate remedy under Section 83(1)(e) and seek setting aside the disqualification and the administrator’s appointment, so that the elected committee can resume-day-to-day management. They argue for protection against sweeping policy decisions until fresh proceedings are completed.

Contentions of Respondents

The respondents contend that surcharge is subject to the statutory remedy under Section 83(1)(e) and that a writ petition can be relegated to that forum. They argue that the proper procedure was or can be followed under Rule 44(3) and that the appointment of a part-time administrator is legally tenable. They rely on the existing statutory framework to ensure proper governance and accountability during the proceedings.

Cited Precedents (1)

Case NameCitationTreatmentExplanation
Abdulla Haji A. v. Joint Registrar of Co-op. Societies (G), Kannur and Another2009 (4) KLT SN 16PositiveThe judgment cites Abdulla Haji A. to reinforce that disqualification cannot be ordered without an opportunity of hearing, aligning with Rule 44(3); thus the court sets aside the disqualification and allows for fresh proceedings if needed.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **TUESDAY, THE 21ST DAY OF JULY 2020 / 30TH ASHADHA, 1942** ## **WP(C).No.12222 OF 2020(C)** ## **PETITIONERS:** - **1 PRABHA PRASAD, W/O. PRASAD, AGED 46 YEARS,PRESIDENT, THE PUNALUR SCHEDULED CASTE/SCHEDULED TRIBE SERVICE CO-OPERATIVE SOCIETY LTD. NO.Q-489, CHEMMANTHOOR, PUNALUR P.O., KOLLAM DISTRICT-691305. (RESIDING AT VISHNU VILASAM, PLACHERY P.O., KALAYANAD, PUNALUR, KOLLAM DISTRICT-691331).** - **2 P.SASI, S/O PODIYAN, AGED 47, MEMBERSHIP NO.1181, CHARUVILA HOUSE, KARYARA P.O., KOLLAM DISTRICT-691332.** - **3 K. RAJU, S/O CHELLAPPAN, AGED 52 YEARS** **MEMBERSHIP NO.1661, LISSY VILASAM, KINATTINMUKKU, MANALIL P.O., KOLLAM DISTRICT.** - **4 AJIKUMAR R., S/O. RAGHAVAN, AGED 44 YEARS, MEMBERSHIP NO.1965, AKSHAY BHAVAN, NEDIYARA P.O., KOLLAM DISTRICT-691306.** - **5 SATHYANATHAN C., S/O. P.CHELLAPPAN, MEMBERSHIP NO.1725, 'NAVAMI', PLACHERRY P.O., KALAYANAD, KOLLAM DISTRICT-691331.** - **6 JAYA G., D/O THANKAPPAN, MEMBERSHIP NO.1900, AJAY BHAVAN, KURIYOTTUMALA P.O., VETTITHITTA, KOLLAM DISTRICT-689696.** **BY ADVS. SRI.K.C.SANTHOSH SMT.K.K.CHANDRALEKHA** **WP(C).No.12222 OF 2020(C) -2-** ## **RESPONDENTS:** - **1 STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, CO-OPERATIVE DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM-695001.** - **2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), THIRUVANANTHAPURAM-695001.** - **3 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL),** - **OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, KOLLAM-691001.** - **4 THE ARBITRATOR/THE ASSISTANT REGISTRAR OF COIPERATIVE SOCIETIES (GENERAL),** - **OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, PUNALUR-691305.** - **5 THE PUNALUR SCHEDULED CASTE/SCHEDULED TRIBE SERVICE CO-OPERATIVE SOCIETY LTD., NO. Q 489, CHEMMANTHOOR, PUNALUR P.O., KOLLAM DISTRICT-691305, REPRESENTED BY ITS SECRETARY.** - **6 THE ENQUIRY OFFICER (OFFICE INSPECTOR), OFFICE OF ASSISTANT REGISTRAR (GENERAL), KOLLAM-691001.** - **R1-4 BY SR. GOVERNMENT PLEADER SMT.SHEEJA C.S.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21.07.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **SATHISH NINAN, J.** ## **= = = = = = = = = = = = = = = = = = W.P.(C) No.12222 of 2020 = = = = = = = = = = = = = = = = = = Dated this the 21[st] day of July, 2020** ## **JUDGMENT** The President and 5 out of the 11 members of the Managing Committee of the Punalur Scheduled Caste and Scheduled Tribes Service Co-operative Society, are the petitioners in this writ petition. They challenge Ext.P11 order whereunder, the petitioners along with others were surcharged under Section 68 of the Co-operative Societies Act (hereinafter referred to as “the Act”) and were disqualified under Rule 44 of the Co-operative Societies Rules (hereinafter referred to as “the Rules”). They also challenge Ext.P12 order whereunder, consequent to Ext.P11 order, a parttime Administrator was appointed. 2. Heard Sri.K.C.Santhosh Kumar learned counsel for the petitioners and Senior Government Pleader Smt.Sheeja C.S. on behalf of the respondents. 3. On 02.02.2018, the Joint Registrar initiated Section 65 enquiry. The present Committee assumed W.P.(C) No.12222 of 2020 :- 2 :- office only on 28.05.2018. Ext.P3 report of the Joint Registrar in the Section 65 enquiry, which is dated 01.10.2018, refers to financial irregularities for the first half of the financial year ending on 30.09.2018. Pursuant thereto, surcharge proceedings under Section 68 of the Cooperative Societies Act were initiated. The said proceedings culminated in Ext.P11 order dated 12.06.2020. Under Ext.P11 the liabilities were fixed on the petitioners among others. In the very same order, they were further held to be disqualified to continue as committee members in terms of Rule 44(l) of the Co-operative Societies Rules. On the very same day Ext.P12 order is passed appointing a part-time administrator. 4. The order of disqualification under Rule 44 incorporated in Ext.P11 order of surcharge, is bad in law for reasons more than one. Rule 44(3) mandates an opportunity of hearing prior to the passing of an order of disqualification. Admittedly the same has not been followed in the case at hand. W.P.(C) No.12222 of 2020 :- 3 :- In _**Abdulla Haji A. v. Joint Registrar of Co-op. Societies (G), Kannur and Another [2009 (4) KLT SN 16],**_ it was held that even in the case of a person surcharged, an order declaring disqualification cannot be issued without an opportunity of hearing which is the mandate of Rule 44(3). The mere fact that the Registrar himself passed the order of surcharge is of no consequence. The rule does not stipulate or contemplate any distinction between a suo motu proceeding by Registrar and a proceeding initiated by a member. The said distinction sought to be drawn by the respondents is unsustainable. Therefore, the order of disqualification is liable to be interfered with and I do so. However, it will be open for the Registrar to initiate fresh proceedings in terms of Rule 44(3) of the Rules. 5. As regards the order of surcharge, the same is appealable under Section 83(1)(e) of the Cooperative Societies Act; the appeal is to be filed within a period of 60 days from the date of the order. The petitioners claim service of the order W.P.(C) No.12222 of 2020 :- 4 :- on them on 17.06.2020. Immediately thereafter on 19.06.2020, the present writ petition is filed. In view of the efficacious statutory remedy available, it is only appropriate that the petitioners be relegated to the said forum. Accordingly it is ordered that, if the petitioners prefer an appeal in terms of Section 83(1)(e) within a period of one month from today the same shall be deemed to have been filed within the time stipulated and the same shall be heard and disposed of on merits, within a period of three months therefrom. 6. The order of disqualification having been set aside, the consequential order of appointment of part-time administrator under Ext.P12 is liable to be interfered with and I do so. The part-time administrator shall hand over charge to the elected managing committee forthwith. Taking note of the quantum of the amounts involved in the financial irregularities/misutilisation of funds alleged, it is ordered that the managing committee shall not take any policy decisions, but shall be entitled to W.P.(C) No.12222 of 2020 :- 5 :- manage the day to day affairs. Writ Petition is disposed of as above. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge **WP(C).No.12222 OF 2020(C)** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE RELEVANT PAGES OF THE AMENDED BYE LAW OF THE SOCIETY. EXHIBIT P2 TRUE COPY OF THE LETTER DATED 18/10/2019 ALONG WITH THE ENCLOSURES SUBMITTED BEFORE THE 4TH RESPONDENT.** **EXHIBIT P3 TRUE COPY OF THE RELEVANT PAGES OF REPORT DATED 01/10/2018 SUBMITTED UNDER SECTION 65 OF THE KERALA CO-OP. SOCIETIES ACT. EXHIBIT P4 TRUE COPY OF THE NOTICE DATED 11/10/2019 UNDER SECTION 68(2) OF THE ACT ISSUED BY THE 3RD RESPONDENT. EXHIBIT P5 TRUE COPY OF THE REPLY DATED 29/10/2019 SUBMITTED BY THE PETITIONERS BEFORE THE 3RD RESPONDENT. EXHIBIT P6 TRUE COPY OF THE 2ND SHOW CAUSE NOTICE DATED 19/05/2020 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P7 TRUE COPY OF THE REPLY SUBMITTED BY THE 1ST PETITIONER TO THE 2ND 68(2) NOTICE. EXHIBIT P7(A) TRUE COPY OF THE REPLY SUBMITTED BY THE 2ND PETITIONER TO THE 2ND 68(2) NOTICE. EXHIBIT P7(B) TRUE COPY OF THE REPLY SUBMITTED BY THE 3RD PETITIONER TO THE 2ND 68(2) NOTICE. EXHIBIT P7(C) TRUE COPY OF THE REPLY SUBMITTED BY THE 4TH PETITIONER TO THE 2ND 68(2) NOTICE. EXHIBIT P7(D) TRUE COPY OF THE REPLY SUBMITTED BY THE 5TH PETITIONER TO THE 2ND 68(2) NOTICE. EXHIBIT P7(E) TRUE COPY OF THE REPLY SUBMITTED BY THE 6TH PETITIONER TO THE 2ND 68(2) NOTICE. EXHIBIT P8 TRUE COPY OF THE RESOLUTION NO.1/2020 DATED 01/06/2020. EXHIBIT P9 TRUE COPY OF THE MEMORANDUM OF WRIT PETITION BEARING WPC 32028/2019.** APPNENDIX- **WP(C).No.12222 OF 2020(C)** -2- **EXHIBIT P10 TRUE COPY OF THE COUNTER AFFIDAVIT FILED BY THE 4TH RESPONDENT HEREIN. EXHIBIT P11 TRUE COPY OF THE ORDER DATED 12/06/2020 (SERVED ON THE SOCIETY ON 17/06/2020) ISSUED BY THE 3RD RESPONDENT. EXHIBIT P12 TRUE COPY OF THE ORDER DATED 12/06/2020 PASSED UNDER SECTION 33 OF KERALA COOPERATIVE SOCIETIES ACT ISSUED BY THE 3RD RESPONDENT.** **-----**