The Managing Committee of the Thudayannoor Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies (General), Civil Station, Kollam; The Assistant Registrar of Co-operative Societies (General), Kottarakkara; Sri Mannoor Babu

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.SURENDRA MOHAN WEDNESDAY, THE 25TH DAY OF JUNE 2014/4TH ASHADHA, 1936 WP(C).No. 15883 of 2014 (I) ---------------------------- ## PETITIONER : -------------------------- THE MANAGING COMMITTEE OF THE THUDAYANNOOR SERVICE CO-OPERATIVE BANK LTD. NO. Q 371, THUDAYANNOOR.P.O, KADAKKAL REPRESENTED BY ITS PRESIDENT. BY ADVS.SRI.M.K.DAMODARAN (SR.) SRI.P.K.VIJAYAMOHANAN SRI.ALAN PAPALI SRI.GILBERT GEORGE CORREYA SRI.NISHIL.P.S. SMT.O.V.BINDU SRI.J.VIMAL RESPONDENTS : ---------------------------- 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) CIVIL STATION, KOLLAM-691001. 2. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), KOTTARAKKARA-691506. 3. SRI. MANNOOR BABU, 'SABARMATHI', VELUMTHARA, CHARIPPARAMBU.P.O. KADAKKAL-691536, KOLLAM DISTRICT. R BY SPL.GOVERNMENT PLEADER SRI.D.SOMASUNDARAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25-062014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 15883 of 2014 (I) ---------------------------- ## APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXT.P1. TRUE COPY OF THE ORDER NO. CRP 2 7266/13 DATED 8-10-2013 OF THE 1ST RESPONDENT. EXT.P2.TRUE COPY OF THE JUDGMENT DATED 1-4-2014 IN WPC NO. 29583 OF 2013 OF THIS HON'BLE COURT. EXT.P3. TRUE COPY OF THE REPORT NO. NIL DATED NIL OF THE 2ND RESPONDENT ON THE ENQUIRY HELD UNDER SECTION 65 OF THE ACT. EXT.P4. TRUE COPY OF THE NOTICE NO. C.R.P. (2) 7266/13 DATED 2-6-2014 OF THE 1ST RESPONDENT. EXT.P5. TRUE COPY OF THE EXPLANTION DATED 20-6-2014 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT TO EXT.P4 SHOW CAUSE NOTICE. EXT.P6. TRUE COPY OF THE ORDER NO. CRP (2) 1826/13 DATED 29-3-2013 OF THE 1ST RESPONDENT. EXT.P7. TRUE COPY OF THE FIXED DEPOSIT RECEIPT UNDER ACCOUNT NOS. 1049, 1050 AND 1051 DATED 26-5-2014 OF THE KOLLAM DISTRICT CO-OPERATIVE BANK LIMITED KADAKKAL BRANCH. EXT.P8. TRUE COPY OF THE CHALAN NO. 29 DATED 23-10-2013 FOR REMITTANCE OF GOVERNMENT INCOME ON G.D.S. EXT.P9. TRUE COPY OF THE ORDER NO. O.4742/09/K. DIS DATED 24-9-2009 OF THE 1ST RESPONDENT APPROVING THE SUB RULES FOR VIDYA JYOTHI DEPOSIT SCHEME. EXT.P10. TRUE COPY OF THE COMMUNICATION NOS. 527/2013/V DATED 26-6-2013 OF THE 2ND RESPONDENT. EXT.P11. TRUE COPY OF THE COMMUNICATION NO. 528/2013/V DATED 5-7-2013 OF THE 2ND RESPONDENT. EXT.P12. TRUE COPY OF THE COMMUNICATION NO. 529/2013/V DATED 5-7-2013 OF THE 2ND RESPONDENT. EXT.P13. TRUE COPY OF THE NOTICE ON THE INAUGURAL FUNCTION OF THE HEAD OFFICE BUILDING OF THE PETITIONER BANK. EXT.P14. TRUE COPY OF THE COMMUNICATION DATED 23-11-13 OF THE PETITIONER TO THE 1ST RESPONDENT. EXT.P15. TRUE COPY OF THE CIRCULAR NO. 45/13 DATED 12-7-2013 OF THE REIGSTRAR OF CO-OPERATIVE SOCIETIES. RESPONDENT(S)' EXHIBITS : NIL --------------------------------------- /TRUE COPY/ P.A TO JUDGE AV **K.SURENDRA MOHAN, J. ------------------------------------** W.P.(C)No.15883 of 2014 **-----------------------------------** Dated this the 25[th ] day of June, 2014 ## **J U D G M E N T** The Managing Committee of a Service Co-operative Bank registered under the Kerala Co-operative Societies Act, 1969 and the Kerala Co-operative Societies Rules, 1969 (hereinafter referred to as 'the Act and the Rules' for short) is the petitioner. The petitioner has filed this writ petition challenging Ext.P3 report of an enquiry conducted pursuant to the orders of the 1[st] respondent, under Section 65 of the Act and Ext.P4 notice issued on the basis thereof. 2. According to the learned Senior Counsel Sri.M.K.Damodaran all the charges levelled against the petitioner in Ext.P4 are either baseless or non existent. Charge No.1 alleges that the petitioner had started a Deposit Scheme without obtaining necessary permission from the 1[st] respondent. The learned Senior Counsel places reliance on Ext.P6 to contend that, the 2[nd] respondent himself has granted sanction for starting the Deposit Scheme on 29.03.2013, Ext.P6 being a copy of the said proceedings. Pursuant to Ext.P6, the petitioner had made deposits as evident from Ext.P7 and P8. Therefore, it is contended that no objection could be raised regarding the Deposit Scheme. 3. The second charge against the petitioner is that it had not retained the required amount of margin money. According to the W.P.(C)No.15883 of 2014 2 learned Senior Counsel, the petitioner has margin money far in excess of what is required. 4. The third charge is regarding a Scheme for the benefit of students, by name “Vidhyajyothi”, which is meant for school students. For the purpose of the said Scheme, it is alleged that collection agents have been appointed without getting permission from the Joint Registrar. The said allegation is also factually incorrect, according to the Senior Counsel. 5. The fourth charge against the petitioner is that, funds far in excess of the sanctioned limit totalling `34,16,674/- had been spent for the construction of the Bank building. There is a further allegation that an amount of `83,804/- has been spent for the inauguration function of the building. According to the learned Senior Counsel, the excess expenditure was on account of enhancement in the PWD rates effected by the authorities. For the purpose of meeting the said enhancement, sanction has already been sought for from the 1[st] respondent. It is without passing any orders on the said request that the present charge has been raised. 6. In view of the above, it is contended that Ext.P4 shows a total non-application of mind on the part of the 1[st] respondent. He has, before issuing Ext.P4 not even taken note of the fact that, he himself had issued Ext.P6 proceedings to the petitioner. It is also contended that, the proposed action is initiated on political W.P.(C)No.15883 of 2014 3 considerations, with the only object of superseding the present Managing Committee. The Bank is an institution that is running in profit. It is properly managed and efficiently administered. Though the petitioner has submitted Ext.P5 objections to Ext.P4, they apprehend that the hearing that is scheduled on the basis of the same would only be an empty formality and that an order of supersession under Section 32 of the Act would be the certain outcome. For the above reasons, it is contended that, an order interdicting the 1[st] respondent from implementing any order that is passed by him under Section 32 of the Act for a short period is necessary to be issued. It is contended that, such an order is absolutely necessary to prevent misuse of power and unreasonable supersession of the elected Managing Committee of the Society. Reliance is placed on the dictum of the Honourable Supreme Court in _**State of M.P. v. Sanjay Nagayach [2013 (2) KLT 733 (SC)]**_ and the decision reported in _**Vallappuzha Service Co-operative Bank Ltd. v. Joint Registrar [2009 (3) KLT 838]**_ . The decision in _**Ellakkal Service Co-operative Bank v. State [1997 (2) KLT 85]**_ is relied upon to contend that the recommendation made by the enquiry officer in Ext.P5 that the committee should be superseded, is beyond the power of the enquiry officer. According to the learned Senior counsel, supersession of an elected Managing Committee could be resorted to only in exceptional cases, as laid down by the W.P.(C)No.15883 of 2014 4 Hon'ble Supreme Court in the decision reported in _**2013 (2) KLT 733 (SC) (supra)**_ and ordered by the first respondent as per Ext.P15 Circular. 7. The learned Special Government Pleader Sri.D.Somasundaram opposes the contentions of the counsel for the petitioner. According to the learned Special Government Pleader, no decision has been taken in the matter by the 1[st] respondent till date. Since there were allegations against the manner of functioning of the petitioner, an enquiry had been ordered into the allegations, pursuant to which an enquiry under Section 65 of the Act was conducted. Ext.P5 is the report of the enquiry. There is no obligation on the part of the 1[st] respondent to conduct a hearing on the basis of the findings contained in Ext.P5 report. What is expected of the 1[st] respondent is to consider the report and to decide on the further course of action. Accordingly, Ext.P4 notice has been issued to the petitioner. The same is only a notice requiring the petitioner to show cause why action should not be taken under Section 32 of the Act. The petitioner has already submitted Ext.P5 objections to Ext.P4. The said objections would be duly considered. The petitioner would also be heard and only thereafter would any decision in the matter being taken. The Special Government Pleader further assures that Ext.P15 Circular would be scrupulously obeyed. The learned Special Government W.P.(C)No.15883 of 2014 5 Pleader places reliance on the decision of a Division Bench of this Court dated 05.02.2014 in Writ Appeal No.236/2014 to contend that, an interference with a similar show cause notice as Ext.P4, declined by a learned Single Judge of this Court has been held to be in order. Reliance is also placed on the decision of _**Joint Registrar of Co-**_ _**operative Societies v. Krishnan Nair [2010(1) KLT SN 15 (C.No.17)]**_ to contend that, the practice of issuing orders anticipating an unfavourable order and staying implementation of the same, is not advisable. 8. Heard. It is necessary to notice at the outset that, no decision adverse to the petitioner has been taken by any authority, as on date. Ext.P4 is only a notice issued directing the petitioner to show cause why action should not be initiated under Section 32(1) of the Act. Admittedly, the petitioner has submitted Ext.P5 objections. The petitioner has not yet been heard on the objections that has been submitted. Therefore, no final orders have been passed by the 1[st] respondent. Since no decision adverse to the petitioner has been taken by Ext.P5, I am not satisfied that this writ petition requires to be entertained at this stage. 9. It is no doubt true that, the learned Senior Counsel has raised serious objections regarding the charges that are levelled against the petitioner in Ext.P4. As already noticed above, Ext.P6 proceedings are relied upon to contend that the first charge is W.P.(C)No.15883 of 2014 6 absolutely baseless for the reason that Ext.P6 has granted sanction for the Deposit Scheme in question. The said objection would be one that the 1[st] respondent would have to consider. The answer relating to the second charge, that the petitioner already has sufficient margin money, in excess of the stipulated limit is also a matter that would have to be examined with reference the records of the Society by the 1[st] respondent. Whether the appointment of collection agents for the Deposit Scheme for school students, by name “Vidhyajyothi” is proper or not and whether amounts in excess of the sanctioned limit have been spent for the construction of the Bank building are all matters on which, the explanation of the petitioner would have to be considered by the 1[st] respondent. This Court is not possessed of the records necessary to enter into a consideration of the said question. Such an exercise is also not advisable for the reason that, as per the statute it is the 1[st] respondent who has been entrusted with the duty of considering the objections to the show cause notice Ext.P4. For the above reasons, I do not consider it necessary or expedient to enter into the correctness or sustainability of the contentions raised before me on the merits of the charges in Ext.P4. As already noticed above, the petitioner is at liberty to challenge any order that may be passed by the 1[st] respondent, if the same is adverse to them. Any order passed in violation of the provisions of law, could be challenged W.P.(C)No.15883 of 2014 7 before this Court. This Court also has sufficient powers to grant a stay of any such order in order to ensure that the _status quo_ is maintained until the challenge is finally decided. 10. The learned Senior Counsel has sought for the issue of a direction that any order that may be passed by the 1[st] respondent shall not be implemented for a short period of time, so as to enable the petitioner to challenge the same in appropriate proceedings. The above question was considered by a Division Bench of this Court in the decision reported in _**Joint Registrar of Co-operative Societies v. Krishnan Nair [2010(1) KLT SN 15 (C.No.17)]**_ . This Court has considered the issue in the following words : “This court will issue a writ of mandamus to the appellant, if the respondent has got a right to have the order passed by the appellant kept in abeyance for two weeks and the appellant owes a corresponding duty to him. The appellant has failed to bring to our notice any statutory provision which confers a right on him to have the order, passed under S.32 of the Act, kept in abeyance for two weeks. None of the provisions of the Co-operative Societies Act mandates that the appellant shall keep in abeyance an order passed by him for a period of two weeks after serving the same on the respondent. The respondent, as stated earlier, does not have any right conferred by any statutory provision, to claim such a relief. Therefore, this Court has no jurisdiction under Art.226 of the Constitution of India to direct the appellant to keep in abeyance the order to be passed by him under S.32 of the Act for a period of two weeks. This Court has no power to grant stay of an order which is yet to be passed. We notice that this Court is entertaining Writ Petitions against notices. This Court has definitely power to do that, provided the notice is issued without jurisdiction. If it is found that the notice is ultra vires of the provisions of the Act, this court can quash the notice and issue a writ of prohibition against the authority concerned not to proceed further in the matter. But, if the allegations in the notice are unrebutted, a case is made out for supersession, this Court is normally not justified in entertaining any challenge against such a notice and grant stay of the same or grant stay W.P.(C)No.15883 of 2014 8 of the order that may be passed pursuant to the notice. Further, if the order of supersession is bad, this Court has ample powers to stay that order and issue further directions in a Writ Petition challenging the same. Therefore, it is unnecessary for this court to undertake the exercise of granting anticipatory stay and give room for criticism that this Court is acting without jurisdiction.” In view of the above dictum, I am not satisfied that any interim order as sought for could be granted in this case. For the foregoing reasons, I do not find any grounds to entertain this writ petition or to grant any of the reliefs sought for. This writ petition fails and is accordingly dismissed. Sd/- **K.SURENDRA MOHAN, JUDGE.** AV