P.V. Scaria v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **TUESDAY, THE 3[RD] DAY OF OCTOBER 2023 / 11TH ASWINA, 1945** ## **WP(C) NO. 30625 OF 2023** ## **PETITIONER:** P.V. SCARIA PRESIDENT, KERALA STATE CO-OPERATIVE RUBBER MARKETING FEDERATION LIMITED NO. 4331, (RUBBER MARK), GANDHI NAGAR, KADAVANTHRA, ERNAKULAM, KOCHI, PIN – 682020. BY ADVS. NISHA GEORGE GEORGE POONTHOTTAM (SR.) KAVYA VARMA M. M. ## **RESPONDENTS:** 1 STATE OF KERALA REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF COOPERATION, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001 2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES JAWAHAR SAHAKARANABHAVAN 8TH FLOOR, DPI JUNCTION, THYCAUD P.O., THIRUVANANTHAPURAM, PIN - 695014 3 JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) [ENQUIRY OFFICER], OFFICE OF THE JOINT REGISTRAR OF COOPERATIVE SOCIETIES (GENERAL), KAKKANAD, ERNAKULAM, PIN - 682030 ## **OTHER PRESENT:** SPL. GOVT. PLEADER SRI. THAJUDEEN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **SATHISH NINAN, J.** **= = = = = = = = = = = = = = = = = = W.P(C) No. No.30625 of 2023** **= = = = = = = = = = = = = = = = = = Dated this the 3[rd] day of October, 2023** ## **J U D G M E N T** The writ petition, as amended, challenges the reports on inspection and enquiry under Sections 66 and 68 respectively of the Co-operative Societies Act (herein after referred to as “the Act”), and also the notice for hearing under Section 68(2) of the Act. The petitioner is the president of the Kerala State Cooperative Rubber Marketing Federation Limited (RUBBERMARK). 2. I have heard the learned senior counsel Sri.George Poonthottam on behalf of the petitioner and the learned Special Government Pleader Sri.Thajudeen on behalf of the respondent. 3. The grounds of challenge inter alia are: _(i)_ The basis for initiation of the proceedings under Sections 66 and 68 is the investment and deposit made by RUBBERMARK in a private Company, RUBEK Balloons, W.P(C) No. No.30625 of 2023 **==> picture [34 x 9] intentionally omitted <==** allegedly without sanction from the Registrar or the Government. However, the materials on record prove that the allegation is baseless. _(ii)_ The investment in RUBEK Balloons was the subject matter of an earlier Section 66 inspection and Section 68 proceedings. But the Section 68 proceedings were finally closed since the investment was with due sanction and no action was called for. The same issue cannot be attempted to be reopened again. 4. The respondent would contend that, the scope of the earlier proceeding was different from the present one and that, the petitioner has sufficient opportunity to urge all contentions at the time of hearing under Section 68(2) of the Act. 5. In the Section 68(1) report, under the head point for enquiry number(1), at the beginning portion it is stated thus: “1956 se I¼-\n B-Îv {]-Imcw 22.04.2002 ð c-Pn-ÌÀ sN-¿s¸-« Øm-]-\-am-Wv dq_-¡v _-eq¬ ss{]h-äv en-an-ä-Uv. (A-\p-_- W.P(C) No. No.30625 of 2023 **==> picture [34 x 9] intentionally omitted <==** Ôw 2) s^-U-tdj-sâ Io-gnð C-{]-Im-cw H-cp I¼-\n cq-]o-I-cn-¡pó-Xn-\v kÀ-¡m-cnð \ntóm k-lI-c-W kw-Lw c-Pn-kv-{Sm-dnð \ntóm A-\p-hm-Zw e-`n-¨-Xm-bn-«p-Å tc-J-IÄ Hópw ]cn-tim-[-\mth-f-bnð e-`n-¨n-«nñ. Iq-Sm-sX Sn I-¼-\n-bnð Hml-cn F-Sp-¡póXn-t\m, \n-t£-]-§Ä \-S-¯p-óXnt\m Un-¸mÀ-«v-saânð \nópw _-lp k-l-I-c-W-kw-Lw c-Pn-kv-{Sm-dp-sS A-\p-hm-Zw hm-§n-b-Xmbn I-sï-¯n-bn-«nñ. . . . . . ” In the closing portion of the report, under the head “Conclusion” it is stated thus: “4331þmw \-¼À tI-c-f kwØm-\ k-lI-c-W d-ºÀ amÀ-¡änw-Kv s^-U-td-j-\nð _lp. k-lI-c-W kw-Lw c-Pn-kv-{Sm-dp-sS 05.07.2003þse BÀ. kn. F-Êv 6485/2022 Fw.]n.(3) \¼-À D-¯c-hv A-\p-k-cn-¨v k-lI-c-W \nb-aw h-Ip-¸v 68(1) {]-Im-cw \-S-¯n-bn-«pÅ A-t\z-j-W-¯nð s^-U-td-j³ dq_-Iv _-eq¬-kv ss{]h-äv en-anä-Uv F-ó Øm-]-\-¯nð \n-t£-]w \-S-¯nb-Xv N-«-{]-Im-c-asñópw A-{]-Im-cw N-«-ew-L-\-¯n-eq-sS \-S¯n-b \n-t£-]-§Ä h-gn s^-U-tdj-\v \-ãw kw-`-hn-¨n-«p-sïó-v \n-kwÈ-bw hy-à-amb-Xn-sâ A-Sn-Øm-\-¯nð A-{]-Im-cw \-ãw kw-`-hn-¨-Xn-sâ \-tãm-¯-c-hm-Zn-¯w e-`yam-b sX-fn-hp-I-fp-sSbpw D-¯-a hn-izm-k¯n-sâbpw A-Sn-Øm-\-¯nð _-Ô-s¸-«-hÀ-¡v \nÀ-®-bn-¨v \ðIn h-Ip-¸v 68(1) {]-Im-c-ap-Å A-t\z-j-W dn-t¸mÀ-«v ]qÀ-¯n-bm-¡nbn-cn-¡p-óp.” Therefore, it appears that the basis for the proceedings were the investment in the private limited Company without sanction from the authorities. W.P(C) No. No.30625 of 2023 -: 4 :- 6. The learned senior counsel would refer to Ext.P4 communication dated 12.03.2004 from the Regional Director of the National Co-operative Development Corporation to the Managing Director of RUBBERMARK regarding the sanction of financial assistance being granted for the setting up of a Joint Venture Company through the State Government, and Ext.P5 communication dated 22.01.2005 from the Registrar of Co-operative Societies to the Secretary to Government, with a copy to RUBBERMARK, regarding the sanctioning of the assistance. He also drew the attention of the Court to Ext.P16 Government Order dated 31.01.2014 according sanction to the Managing Director of RUBBERMARK to function as the Managing Director of RUBEK also. Ext.P16 refers to the fact that RUBBERMARK is the major shareholder in RUBEK. Referring to these documents it is contended that, evidently all the investments were with due sanction from the authorities and the same was recognised by them. Therefore, the allegations levelled are baseless, W.P(C) No. No.30625 of 2023 -: 5 :- it is urged. 7. The learned senior counsel also referred to Ext.P8 notice of enquiry dated 05.09.2014 under Section 68(1) of the Act and also Ext.P9 whereunder the proceedings were finally closed. The attempt is to convince the Court that, in that round of proceedings also the subject matter of enquiry was the same as in the present proceedings. 8. Referring to Ext.P12 and P13 Government Orders dated 20.08.2011 and 21.08.2013 granting subsidy to RUBBERMARK, the learned senior counsel would contend that the another count on which loss was caused was that RUBBERMARK was required to purchase rubber at a high rate when the price had gone drastically low. There could not be any proceeding under Section 68 of the Act under the said head, it is contended. 9. The documents referred to by the petitioner seems to suggest that the incorporation, investment etc. in connection with RUBEK was with sanction from the W.P(C) No. No.30625 of 2023 -: 6 :- authorities. What exactly was the scope of the earlier proceedings and the present proceedings, what was the sanction given, whether there is any overlapping in the proceedings and if at all there is, to what extent, are all factual aspects. In _**Reji K. Joshy and others v. Joint Registrar**_ _**of Co-operative Societies (General), Kollam and others, 2022 (3) KHC 317**_ _**(F.B),**_ a Full Bench of this Court held that all objections to the report of inspection under Sections 66 and 68 of the Act are open to be urged at the time of hearing under Section 68(2) of the Act. All the contentions of the petitioner including the ones noticed supra are to be raised before the concerned at the time of hearing. 10. Ext.P14 is the notice for hearing under Section 68(2) of the Act. It is for the petitioner to urge the contentions at the time of hearing before the statutory forum. The apprehension of the petitioner is that the hearing before the authority would be a mere farce and that there would not be any consideration of the merits. I am sure that the statutory authority will duly W.P(C) No. No.30625 of 2023 **==> picture [34 x 9] intentionally omitted <==** consider the contentions/objections of the petitioner with specific reference to the documents and circumstances relied on by the petitioner and pass reasoned order. An interference at this stage by this Court, is not called for. Ext.P14 notice requires the petitioner to appear on 04.10.2023 (tomorrow) at 11.00 a.m. The date for appearance before the authority will stand refixed as 12.10.2023. The writ petition is disposed of as above. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## **APPENDIX OF WP(C) 30625/2023** PETITIONER EXHIBITS |EXHIBIT-P1|TRUE COPY OF THE STATEMENT FILED BY THE| |---|---| ||REGISTRAR OF CO-OPERATIVE SOCIETIES BEFORE| ||THIS HON'BLE COURT ON 15TH JULY 2023 IN| ||CONTEMPT OF COURT CASE (C) 2343/2018 IN W.P.| ||(C) NO. 6520/2017, EXCLUDING THE ANNEXURES.| |EXHIBIT-P2|TRUE COPY OF THE CIRCULAR NO. 11/97 DATED| ||22.03.1997 ISSUED BY THE REGISTRAR OF CO-| ||OPERATIVE SOCIETIES| |EXHIBIT-P3|COPY OF THE BYLAWS OF THE KERALA STATE CO-| ||OPERATIVE RUBBER MARKETING FEDERATION LIMITED| ||IN ITS ENTIRETY| |EXHIBIT-P4|A TRUE COPY OF THE COMMUNICATION NO.NCDC(T)3-| ||1(21)/2002-PC GIVEN BY NCDC TO THE MANAGING| ||DIRECTOR OF THE FEDERATION ON 12TH MARCH 2004| |EXHIBIT-P5|COPY OF THE LETTER NO.MP(5) 19977/2002 DATED| ||22.01.2005 ISSUED BY THE 2ND RESPONDENT TO| ||THE SECRETARY TO GOVERNMENT AGRICULTURE (IFA)| ||DEPARTMENT| |EXHIBIT-P6|TRUE COPY OF THE CERTIFICATE OF INCORPORATION| ||NO. U25194KL2002PTCO15370 DATED 22ND APRIL| ||2002 ALONG WITH THE MEMORANDUM OF ASSOCIATION| ||OF RUBEK BALLOONS PRIVATE LIMITED| |EXHIBIT-P7|TRUE COPY OF THE GOVERNMENT ORDER BEARING| ||G.O.(MS)NO.219/2001/AD DATED 20.10.2001.| |EXHIBIT-P8|TRUE COPY OF THE NOTICE NO. H.M.4465/11 DATED| ||05.09.2014 ISSUED BY THE ENQUIRY OFFICER, WHO| ||WAS AUTHORISED TO CONDUCT THE PROCEEDINGS| ||UNDER SECTION 68(1)| |EXHIBIT-P9|TRUE COPY OF THE COMMUNICATION NO.M.P(5)| ||39086/2011(2) DATED 11.05.2015 ISSUED FROM| ||THE OFFICE OF THE REGISTRAR OF CO-OPERATIVE| ||SOCIETIES| |EXHIBIT -P10|TRUE COPY OF THE REPORT OF THE INSPECTION| ||DATED 29.04.2023 CONDUCTED BASED ON THE| ||AUTHORISATION OF EMPOWERMENT OF THE REGISTRAR| APPENDIX- **WP(C) 30625/2023** -2- ||.| |---|---| |EXHIBIT-P11|TRUE COPY OF THE ORDER NO. RCS/6485/2022-| ||MP(3) ISSUED ON 05.07.2023 BY THE 2ND| ||RESPONDENT<br>REGISTRAR<br>OF<br>CO-OPERATIVE| ||SOCIETIES| |EXHIBIT-P12|TRUE COPY OF THE GOVERNMENT ORDER BEARING| ||G.O.(MS)NO.204/2011/AD ISSUED ON 20.08.2011| |EXHIBIT-P13|TRUE COPY OF THE GOVERNMENT ORDER BEARING| ||G.O.(MS) NO. 255/2013/AGRI. DATED 21.08.2013| |EXHIBIT P14|TRUE COPY OF THE NOTICE RECEIVED BEARING NO.| ||RCS/6485/2022-MP(3) DATED 16.09.2023 ISSUED| ||BY THE 2ND RESPONDENT.| |EXHIBIT P15|TRUE COPY OF THE REPORT WHICH IS ENCLOSED| ||WITH THE COVERING LETTER NO. E.171/2023 DATED| ||14.09.2023<br>ISSUED<br>BY<br>THE<br>INQUIRY| ||OFFICER/JOINT REGISTRAR OF CO-OPERATIVE| ||SOCIETIES.| |EXHIBIT P16|TRUE COPY OF THE SAID GOVERNMENT ORDER| ||BEARING G.O.(RT) NO.102/2014/CO-OP DATED| ||31.01.2014.| -----