R. Vasudevan and K. Mohanan v. State of Kerala and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** ## **THURSDAY,THE 07TH DAY OF FEBRUARY 2019 / 18TH MAGHA, 1940** ## **WP(C).No. 42663 of 2018** ## **PETITIONERS:** **1 R. VASUDEVAN, AGED 77 YEARS, PRESIDENT, MANAGING COMMITTEE OF PERUVEMBA SERVICE CO-OPERATIVE BANK LTD. NO.F-1648, P.O. PERUVEMBA-678531, PALAKKAD. 2 K. MOHANAN, MEMBER, MANAGING COMMITTEE OF PERUVEMBA SERVICE CO-OPERATIVE BANK LTD. NO.F-1648, P.O. PERUVEMBA-678531, PALAKKAD. BY ADVS. SRI.MATHEW B. KURIAN SRI.K.T.THOMAS** ## **RESPONDENTS:** **1 STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, CO-OPERATION DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-1.** - **2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM -1.** - **3 THE JOINT REGISTRAR, CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, PALAKKAD - 678582.** - **4 THE ASSISTANT REGISTRAR (GENERAL), CO-OPERATIVE SOCIETIES, PALAKKAD - 678582.** **WP(C).No. 42663 of 2018** -2- - **5 PERUVEMBA SERVICE CO-OPERATIVE BANK LTD., NO. F 1648, P.O. PERUVEMBA-678501, PALAKKAD, REPRESENTED BY ITS SECRETARY.** **6 M.K. BABU, THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, PALAKKAD - 678582.** **R1-R4 SRI K.P. HARISH, SENIOR GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No. 42663 of 2018** -3- ## **JUDGMENT** The 1[st] petitioner is the President of the Managing Committee of the 5[th] respondent Bank, which is a Society registered under the Kerala Co-operative Societies Act, 1969 and the Rules made thereunder and the 2[nd] petitioner is a member of the Managing Committee of the said Society. The petitioners have filed this writ petition under Article 226 of the Constitution of India, seeking a declaration that there is no circumstance or ground warranting or justifying action under Section 32 of the Act against the Managing Committee of the 5[th] respondent Society. The petitioners have also sought for a writ of certiorari to quash Ext.P16 show-cause notice dated 15.12.2018 issued by the 3[rd] respondent Joint Registrar, whereby the Managing Committee has been asked to show-cause why proceedings under Section 32(1)(b) of the Act shall not be initiated against it for not rectifying the irregularities noted in Ext.P15 report submitted under Section 65 of the Act. The petitioners have also sought for a writ of certiorari to quash Ext.P20 show-cause notice dated 15.12.2018 issued by the 3[rd] respondent, whereby the **WP(C).No. 42663 of 2018** -4- Managing Committee has been asked to show-cause why proceedings shall not be initiated against it for not rectifying the irregularities noted in Ext.P16 report submitted under Section 66 of the Act. 2. On 28.12.2018, when this writ petition came up for admission, this Court has ordered as follows; “Petitioners shall respond to Exts.P16 and P20 within a period of two weeks. The final order shall be passed thereafter within a further period of two weeks.” 3. On 07.01.2019, when this writ petition came up for consideration, it was submitted by the learned counsel for the petitioners that, in terms of the order of this Court dated 28.12.2018, the petitioners have already submitted their explanations to Exts.P16 and P20. 4. Thereafter, along with I.A.No.1 of 2019, the explanations offered by the petitioners to Ext.P16 and P20 show-cause notices are placed on record as Exts.P23 and P24. The document marked as Ext.P22 is the resolution dated 29.12.2018 taken by the Managing Committee, whereby three employees are terminated from the service, for the irregularities pointed out in Ext.P16 report **WP(C).No. 42663 of 2018** -5- under Section 66 of the Act. 5. Heard the learned counsel for the petitioners and also the learned Senior Government Pleader appearing for respondents 1 to 4. Considering the nature of reliefs proposed to be granted, service of notice on respondents 5 and 6 is dispensed with. 6. The sole issue that arises for consideration in this writ petition is as to whether any interference is warranted on Exts.P16 and P20 show-cause notices issued by the 3[rd] respondent Joint Registrar. Though, it is averred in the writ petition that Exts.P16 and P20 are orders issued by the 3[rd] respondent, which are liable to be interfered by this Court under Article 226 of the Constitution of India, a mere perusal of the said documents would show that Exts.P16 and P20 are only show-cause notices issued by the 3[rd] respondent Joint Registrar, invoking his powers under Section 32 of the Act. 7. In **State of U.P v. Brahm Datt Sharma [(1987) 2 SCC 179]** the Apex Court held that, when the show-cause notice was issued under a statutory provision calling upon to show-cause, the courts should be reluctant to interfere with **WP(C).No. 42663 of 2018** -6- the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. The purpose of issuing show-cause notice is to afford an opportunity of hearing and once cause is shown it is open to the authority to consider the matter in the light of the facts and submission placed before it and only thereafter a final decision in the matter could be taken. Therefore, interference by the Court before that would be premature. 8. In **Seimens Ltd v. State of Maharashtra [(2006) 12 SCC 33]** the Apex Court held that ordinarily, a writ court may not exercise its discretionary jurisdiction to entertain a writ petition questioning a notice to show-cause unless the notice appears to have been without jurisdiction. 9. In **Union of India v. Vicco Laboratories [(2007) 13 SCC 270]** the Apex Court held that, normally, the writ court should not interfere at the stage of issuance of show-cause notice by the authorities. In such a case, the parties get ample opportunity to put forth their contentions before the authorities concerned and satisfy the authorities concerned about the absence of case for proceeding against **WP(C).No. 42663 of 2018** -7- the person against whom the show-cause notices have been issued. Abstinence from interference at the stage of issuance of show-cause notice in order to relegate the parties to the proceedings before the authorities concerned is the normal rule. However, the said rule is not without exceptions. Where a show-cause notice is issued either without jurisdiction or in an abuse of process of law, certainly, in that case, the writ court would not hesitate to interfere even at the stage of issuance of the show-cause notice. The interference at the show-cause notice stage should be rare and not in a routine manner. The mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out. 10. In view of the law laid down in the decisions referred to _supra_ , no interference under Article 226 of the Constitution of India is warranted on a show-cause notice issued under a statutory provision unless the notice is shown to have been issued palpably without any authority of law or **WP(C).No. 42663 of 2018** -8- that it is an abuse of process of law. The mere assertion in the writ petition that the show-cause notice has been issued without any authority of law or that it is an abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, no interference of this Court in exercise of the extraordinary jurisdiction under Article 226 of the Constitution is warranted. 11. Having considered the averments and also the grounds raised in this writ petition, this Court finds that the petitioners have not made out a case warranting interference on Ext.P16 and P20 show-cause notices, in exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India. Now the petitioners have submitted Exts.P23 and P24 explanations to Exts.P16 and P20 showcause notices. By Ext.P22 resolution dated 29.12.2018 taken by the Managing Committee, for the irregularities pointed out in Ext.P16 report under Section 66 of the Act, three employees are terminated from service. Therefore, it is for the 3[rd] respondent Joint Registrar to take a decision as to **WP(C).No. 42663 of 2018** -9- the further course to be taken in the matter, after considering Exts.P23 and P24 explanations offered by the petitioners. 12. In **State of M.P. v. Sanjay Nagayach [(2013) 7 SCC 25]** the Apex Court, in the context of Section 53 of the Madhya Pradesh Co-operative Societies Act, 1960 held that, the Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with preconceived notion and shall not speak his masters' voice, because the formation of opinion must be his own, not somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. In paragraph 42 of the judgment (SCC @pages 44 & 45), the Apex Court laid down the general directions in the matter of supersession of the elected committee. **WP(C).No. 42663 of 2018** -10- 13. In **Sanjay Nagayach's case (supra)** , the order of supersession was passed by the Joint Registrar after a period of two and a half years of the issuance of show-cause notice and most of the charges levelled against the Board of Directors were related to the period when the previous committee was in office and even the charges based on the audit report dated 25.9.2008 were also rectified by the Board of Directors by addressing the primary societies. Based on the decision of the Apex Court In **Sanjay Nagayach's case** , the Registrar of Co-operative Societies has issued Circular No.45/13 dated 12.07.2013. 14. The learned Senior Government Pleader would submit that the 3[rd] respondent shall consider Exts.P23 and P24 explanations offered by the petitioners to Exts.P16 and P20 show-cause notices, before taking a decision as to the further course to be taken in the matter. 15. The learned counsel for the petitioners would submit that the petitioners may be afforded with an opportunity of being heard by the 3[rd] respondent while considering Exts.P23 and P24 explanations to Exts.P16 and **WP(C).No. 42663 of 2018** -11- P20 show-cause notices. Having considered the submissions made by the learned counsel on both sides, this writ petition is disposed of with the following directions; i) The challenge made by the petitioners against Exts.P16 and P20 which are only show-cause notices stands repelled as the petitioners have not made out a case warranting interference in exercise of the writ jurisdiction of this Court under Article 226 of the Constitution of India. ii) Exts.P23 and P24 explanations offered by the petitioners shall be considered by the 3[rd] respondent Joint Registrar, with notice to the petitioners and other members of the Managing Committee and after affording them an opportunity of being heard. iii) Thereafter, the 3[rd] respondent shall take a decision as to the further course to be taken in the matter, taking note of the law laid down by the Apex Court in **Sanjay Nagayach's case (supra)** . iv) A decision in this regard shall be taken as expeditiously as possible, at any rate, within a period of one month from the date of receipt of a certified copy of this judgment. Sd/- **ANIL K. NARENDRAN JUDGE** bpr **WP(C).No. 42663 of 2018** -12- ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE ORDER DATED 25/02/2016 ISSUED BY 3RD RESPONDENT.** **EXHIBIT P2 TRUE COPY OF THE EXTRACT OF THE MINUTES BOOK OF THE BANK.** - **EXHIBIT P3 TRUE COPY OF THE MATHRUBHUMI DAILY DATED 09/09/2016.** **EXHIBIT P4 TRUE COPY OF THE VEEKSHANAM DAILY DATED 10/09/2016.** - **EXHIBIT P5 TRUE COPY OF THE EXTRACT OF THE DECISION NO.11 DATED 24/03/2017 OF MANAGING COMMITTEE.** **EXHIBIT P6 TRUE COPY OF THE EXTRACT OF THE DECISION NO.16 DATED 05/05/2017 OF MANAGING COMMITTEE.** **EXHIBIT P7 TRUE COPY OF APPLICATION DATED 31/05/2017 SUBMITTED BY BANK. EXHIBIT P8 TRUE COPY OF THE COMMUNICATION DATED 12/07/2017 ISSUED BY ASSISTANT REGISTRAR (GENERAL), PALAKKAD.** - **EXHIBIT P9 TRUE COPY OF THE ORDER DATED 21/03/2014 ISSUED BY 3RD RESPONDENT.** - **EXHIBIT P10 TRUE COPY OF THE LETTER DATED 30/01/2017 ALONG WITH COPY OF REPORT.** - **EXHIBIT P11 TRUE COPY OF THE EXPLANATION DATED 06/02/2017 SUBMITTED BY PRESIDENT.** **EXHIBIT P12 TRUE COPY OF THE REPORT DATED 03/08/2017 SUBMITTED BT ASSISTANT REGISTRAR (GENERAL), PALAKKAD. EXHIBIT P13 TRUE COPY OF THE ORDER DATED 27/09/2017 ISSUED BY 3RD RESPONDENT. EXHIBIT P14 TRUE COPY OF THE EXPLANATION DATED 20/10/2017 SUBMITTED BY PRESIDENT.** **WP(C).No. 42663 of 2018** -13- - **EXHIBIT P15 TRUE COPY OF THE REPORT DATED NIL SUBMITTED BY ASSISTANT REGISTRAR (GENERAL), PALAKKAD.** - **EXHIBIT P16 TRUE COPY OF THE ORDER DATED 15/12/2018 ISSUED BY 3RD RESPONDENT.** - **EXHIBIT P17 TRUE COPY OF THE ORDER DATED 25/09/2017 ISSUED BY THE 3RD RESPONDENT.** - **EXHIBIT P18 TRUE COPY OF THE ORDER DATED 26/02/2018 ALONG WITH ENQUIRY REPORT.** - **EXHIBIT P19 TRUE COPY OF THE EXPLANATION DATED 09/03/2018 SUBMITTED BY THE 1ST PETITIONER.** - **EXHIBIT P20 TRUE COPY OF THE ORDER DATED 15/12/2018 ISSUED BY 3RD RESPONDENT.** - **EXHIBIT P21 TRUE COPY OF THE AUDIT REPORT OF THE BANK FOR THE YEAR 2017-18.** - **EXHIBIT P22 TRUE COPY OF RESOLUTION NO.3 DATED 29.12.2018 OF MANAGING COMMITTEE.** - **EXHIBIT P23 TRUE COPY OF THE EXPLANATION DATED 29.12.2018 SUBMITTED BY THE PETITIONERS.** - **EXHIBIT P24 TRUE COPY OF THE EXPLANATION DATED 29.12.2018 SUBMITTED BY THE PETITIONERS.** ## **RESPONDENTS' EXHIBITS: NIL** **//TRUE COPY//** **P.A. TO JUDGE**