Service Co-Operative Bank Ltd No. F 583 Abdu Rahiman Nagar P.O, Malappuram District 676 305 v. Joint Registrar of Co-operative Societies (General), Malappuram; Assistant Registrar of Co-operative Societies (General), Tirurangadi, Malappuram; Enquiry Officer/Unit Inspector, Vengara Office of the Assistant Registrar of Co-operative Societies (General), Tirurangadi, Malappuram

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **FRIDAY, THE 05TH DAY OF JULY 2019 / 14TH ASHADHA, 1941** ## **WP(C).No.17646 of 2019** ## **PETITIONER:** **SERVICE CO-OPERATIVE BANK LTD NO. F 583 ABDU RAHIMAN NAGAR P.O, MALAPPURAM DISTRICT 676 305 REPRESENTED BY ITS PRESIDENT** **BY ADVS. SRI.B.S.SWATHY KUMAR SMT.ANITHA RAVINDRAN** ## **RESPONDENTS:** - **1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), MALAPPURAM PIN 676 505** - **2 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), TIRURANGADI, MALAPPURAM PIN 676 306** - **3 THE ENQUIRY OFFICER/UNIT INSPECTOR, VENGARA OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), TIRURANGADI, MALAPPURAM PIN 676 306.** ## **SMT. C.S SHEEJA-SR.GP.** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.17646 of 2019 2** ## **JUDGMENT** The petitioner which is a Service Cooperative Bank registered under the provisions of the Kerala Co-operative Societies Act (hereinafter referred to as 'the KCS Act' for short) has filed this writ petition challenging Ext.P1 order, which is stated to have been issued by the Joint Registrar of Co-operative Societies under the provisions of Section 65 of the said Act. 2. The petitioner's singular allegation is that this order has been issued in blatant violation of the directions of a Division Bench of this Court in _**Melukkara Service Co-operative Bank Ltd.**_ _**No. PT.152 and Another v. Joint Registrar**_ _**(General), District Co-operative Society**_ _[2018(2)KHC143_ DB] and that none of the ingredients, as was found imperative by the said Bench to be present in an order under **WP(C).No.17646 of 2019 3** Section 65, is available in this order. 3. I have heard Shri.B.S.Swathi Kumar, appearing for the petitioner-Co-operative Bank, and the learned Senior Government Pleader, Smt.C.S.Sheeja, appearing on behalf of the official respondents. 4. Even though Smt.C.S.Sheeja made a valiant attempt to support Ext.P1 order, it is clear from even a bare reading, that it has been issued in complete violation of the directions in **Melukkara** (supra) **.** The personal satisfaction of the Joint Registrar, before issuing such an order, is not even visible in the said order and it being so laconic and cryptic, one cannot even understand the reasons that has impelled the said Authority in having issued it, except recording that he has gone through some reports placed before him by the other officers. 5. Smt.C.S.Sheeja, however, points out that there are very serious allegations ## **WP(C).No.17646 of 2019 4** against the petitioner in Ext. P1 order and therefore, that action pursuant to it be not interdicted. Even if this is true, unfortunately, nothing is visible from Ext.P1, except that the Registrar has followed the report of the Assistant Registrar, which is referred to as Item No.3 in the said order. 6. Even when the learned Senior Government Pleader says as above, it is indubitable that the most important observations of the Division Bench in **Melukkara** (supra), which are extracted as under, would certainly cut at the root of the validity of the order impugned herein: “17. As we have already indicated above, for the Registrar to order an inquiry under S.65 of the Act, he should be first satisfied that it is necessary to do so. These words, though innocuous, are of great import. Therefore, the issue is as to the nature of the satisfaction the Registrar will have to first enter into and if he can act mechanically upon the complaint of an individual or upon the report of an inferior officer. We are certain that this will not be enough because, as is clear from S.65(1)(a) to (f), the nature of the reports and the nature of the complaints, on which the Registrar can act, are specified. For instance, under S.65(1)(b), the Registrar can act only on the inquiry report of the Vigilance Officer appointed under S.68A and under S.65(1)(d), he can act on the application of the members of the society only if such application is ## **WP(C).No.17646 of 2019 5** made by the majority of the members of the committee of the society or by not less than one third of the quorum for the general body meeting whichever is less. Obviously, therefore, what is intended under S.65 is that a complaint which is frivolously made cannot automatically lead to any further action, except after the Registrar satisfies himself as to the essentiality of an inquiry under S.65, since what is contemplated under that section is a serious inquiry which goes into the working of the society itself and which can lead to other corollary actions under the Act. This consequential action is not quotidian but one that can cause major consequences. Therefore, when the mandate of S.65 itself is that the Registrar can act only on the application by the majority of the members of the committee of the society or by not less than one-third of the quorum for the general body meeting, whichever is less, then it becomes luculent that a complaint by an individual member or by a disgruntled person will not be sufficient reason for the Registrar to cause an inquiry simplicitor. The requirement here is that the Registrar will, thereafter, have to be satisfied that such a course is inevitable and that it is absolutely necessary to act suo motu. 18. The responsibility cast upon the Registrar, while he acts suo motu or on his own motion, is, according to us, greater than the responsibility imposed on him while he acts under the provisions of S.65(1)(b) to (f) of the Act. This is because, under the statutory prescriptions, when the Registrar receives an inquiry report from the Vigilance Officer or a report of the Director of the Cooperative Audit or an application of the majority of the members or an application of the apex society, then he will generally have to act, subject to a satisfaction being prima facie arrived at. However, when he acts suo motu, which is to say, when he acts without any of such inquiry reports or applications, then the responsibility will have to be discharged by him with greater circumspection and circumscription. 22. What was required for the Registrar to have done was to take into account all relevant factors and circumstances and to have caused at least an inspection of the records and materials maintained by the society before recording his satisfaction as to whether an inquiry under S.65 of the Act was required. It was not proper on his part to merely rely upon the report of the Assistant Registrar and then to say that he is prima facie satisfied, when it is obvious from Ext.P1 that there **WP(C).No.17646 of 2019 6** was nothing before him, except that report, which could have led him to such a satisfaction and obviously going by the provisions of the statute, the satisfaction of the Assistant Registrar cannot be in lieu of the satisfaction to be personally arrived at by the Registrar, who is vested with the powers to cause an inquiry under S.65 of the Act. 23. We are certain that since the officer with whom the power is vested under S.65 of the Act is the Registrar of Co-operative Societies, it was not permissible for him to merely rely upon the report of the Registrar to record his “personal satisfaction”, but he could have entered into the necessity of an inquiry under S.65 of the Act only after first discharging the statutory burden upon him, to subjectively assess whether it was necessary for doing so in the circumstances and facts presented. What we mean to say is that even assuming that the Registrar had taken into account the report of the Joint Registrar, he should have entered into a subjective satisfaction of the requirement of an inquiry personally and not be solely and perforce be guided by the recommendations in the said report. We do not say that the report of the Assistant Registrar ought not to have been looked into but only that even if that was taken into account, the Registrar should have then personally gone forward to satisfy himself, in terms of the statutory rigour, by an evaluation and assessment of all the relevant records and documents maintained by the society, which would have certainly guided him to a valid conclusion as to the requirement of an inquiry under S.65 of the Act.” 7. In the afore circumstances and since I notice that this Court has already stayed all further proceedings pursuant to Ext.P1, I set it aside; however, leaving full liberty to the Registrar/Joint Registrar to take fresh action in terms of law, adverting to the observations in ## **WP(C).No.17646 of 2019 7** **Melukkara** (supra) and to complete proceedings in terms of the KCS Act and Rules implicitly thereafter. This writ petition is thus ordered. **Sd/-** **DEVAN RAMACHANDRAN** **JUDGE** MC/6.7.19 **WP(C).No.17646 of 2019 8** ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE ORDER NO. GRMPM/3055/2019/ CRP2 DATED 19-06-2019 OF THE 1ST RESPONDENT** **RESPONDENT'S/S EXHIBITS:** ## **NIL** **MC** **(TRUE COPY) PA TO JUDGE**