The Managing Committee, The Thumboor Service Co-operative Bank Limited No.359, Thumboor P.O., Thrissur District, Kerala State-680662 represented by its President vs The Joint Registrar of Co-Operative Societies (General), Office of the Joint Registrar of Co-Operative Societies (General), Thrissur District-680001; ADDL.R2 Anvar A.A., Aluvakkaran House, Pattepadem, Kottamallur P.O., Mukundapuram Taluk, Thrissur-680662; ADDL.R3 Mini, W/o. Ajayan, Member No. 9017, Thumboor Service Co-Operative Bank Ltd., No.359, Thumboor, residing at Tharayil House, Thumboor P.O., Kottellenellur, Thrissur.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **WEDNESDAY,THE 16TH DAY OF JANUARY 2019 / 26TH POUSHA, 1940** ## **WP(C).No. 20804 of 2017** ## **PETITIONERS:** **1 THE MANAGING COMMITTEE, THE THUMBOOR SERVICE CO-OPERATIVE BANK LIMITED NO.359, THUMBOOR P.O., THRISSUR DISTRICT, KERALA STATE-680662 REPRESENTED BY ITS PRESIDENT.** - **2 JOHNY KACHAPPILLY, PRESIDENT, THE THUMBOOR SERVICE CO-OPERATIVE BANK LIMITED NO.359,THUMBOOR P.O., THRISSUR DISTRICT, KERALA STATE-680662.** **BY ADVS. SRI.GEORGE POONTHOTTAM (SR.) SMT.NISHA GEORGE** ## **RESPONDENTS:** - **1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL),** **OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), THRISSUR DISTRICT-680001.** *** ADDL.R2 ANVAR A.A ALUVAKKARAN HOUSE, PATTEPADAM, KOTTAMALLUR P.O., MUKUNDAPURAM TALUK, * THRISSUR-680662.** **(ADDL.R2 IS IMPLEADED AS PER ORDER DATED 09.10.2017 IN IA 15469/17)** **WP(C).No. 20804 of 2017** -2- *** ADDL.R3 MINI, W/O. AJAYAN, MEMBER NO. 9017, THUMBOOR SERVICE CO-OPERATIVE BANK LTD.NO.359, THUMBOOR, RESIDING AT THARAYIL HOUSE, THUMBOOR P.O., KOTTENELLUR, THRISSUR.** *** (ADDL.R3 IS IMPLEADED AS PER ORDER DATED 16.01.2019 IN IA 1/18)** **BY ADVS.SRI.P.C.SASIDHARAN SRI.M.SASINDRAN** **SMT C.S.SHEEJA,SENIOR GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No. 20804 of 2017** -3- ## **JUDGMENT** The 1[st] petitioner is the Managing Committee of Thumboor Service Co-operative Bank Limited, which is a Society registered under the Kerala Co-operative Societies Act, 1969 and the Rules made thereunder and the 2[nd] petitioner is the President of that Society. The petitioners have filed this writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P1 notice dated 08.06.2017 issued by the 1[st] respondent Joint Registrar, whereby the petitioners have been asked to show case why proceedings under Section 32 of the Kerala Co-operative Societies Act shall not be initiated against the Managing Committee of the Society, based on the findings in the report dated 08.03.2017, submitted under Section 66 of the said Act, pursuant to the order dated 09.11.2016 of the 1[st] respondent. The petitioners have also sought for a declaration that the very issuance of Ext.P1 is without regard to the provisions as contained in Section 32(1) of the Act and therefore, bad in law; and there exists no **WP(C).No. 20804 of 2017** -4- warranting circumstances in the petitioner's Society for initiating any action under Section 32 of the Act and hence the issuance of Ext.P1 is noting but an abuse of the statutory power. 2. On 22.06.2017, when this writ petition came up for admission, the learned Government Pleader sought time to get instructions and for filing statement. It was ordered that, in the meanwhile, the hearing proposed in accordance with Ext.P1 notice dated 08.06.2017 can go on, taking note of the objections submitted by the petitioners, with respect to the same. However, further action pertaining to the same shall be taken only after securing orders from this Court. 3. During the pendency of this writ petition, Anvar A.A., a member of the Society got himself impleaded as additional 2[nd] respondent, by the order dated 09.10.2017 in I.A.No.15469 of 2017. One Mini, another member of the Society is impleaded as additional 3[rd] respondent by an order dated this date in I.A.No.1 of 2018. 4. A counter affidavit has been filed by the 1[st] **WP(C).No. 20804 of 2017** -5- respondent Joint Registrar, opposing the reliefs sought for in this writ petition. 5. Heard the learned counsel for the petitioner, the learned Senior Government Pleader appearing for the 1[st] respondent Joint Registrar, the learned counsel for the additional 2[nd] respondent and also the learned counsel for the additional 3[rd] respondent. 6. The challenge made in this writ petition is against Ext.P1, which is only a notice issued by the 1[st] respondent Joint Registrar, based on a report dated 08.03.2017 filed under Section 66 of the Act, pursuant to the order dated 09.11.2016 of the 1[st] respondent, whereby the petitioners are asked to show-cause why proceedings under Section 32 of the Act shall not be initiated against the Managing Committee, taking note of the findings in the said report dated 08.03.2017. The order dated 09.11.2016 of the 1[st] respondent, ordering inspection under Section 66 of the Act is not under challenge in this writ petition. Placing reliance on Exts.P2 to P3(b), the petitioners would contend that **WP(C).No. 20804 of 2017** -6- various findings in the report under Section 66 of the Act, enclosed along with Ext.P1 show-cause notice, are factually incorrect. The petitioners would also contend that the alleged defects noted in the said report are only curable defects, which does not warrant an action under Section 32 of the Act. On receipt of Ext.P1 show-cause notice, the 2[nd] petitioner has already submitted Ext.P7 explanation before the 1[st] respondent. 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 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. **WP(C).No. 20804 of 2017** -7- 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 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 **WP(C).No. 20804 of 2017** -8- 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 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 **WP(C).No. 20804 of 2017** -9- 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 petitioner has not made out a case warranting interference on Ext.P1 show cause notice, in exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India. It is for the petitioner to show cause to Ext.P1 notice by submitting a proper explanation, so as to enable the 1[st] respondent Joint Registrar to take a final decision on the matter. 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 **WP(C).No. 20804 of 2017** -10- 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. 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 **WP(C).No. 20804 of 2017** -11- 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. In the instant case, on receipt of Ext.P1 notice, the 2[nd] petitioner has already submitted Ext.P7 explanation before the 1[st] respondent Joint Registrar. Since, by the interim order dated 22.06.2017, this Court permitted the 1[st] respondent to go on with the personal hearing scheduled on 23.06.2017, in accordance with Ext.P1 notice, a personal hearing was conducted on that date, as stated in the counter affidavit filed by the 1[st] respondent. However, no orders are passed by the 1[st] respondent, in view of the pendency of this writ petition. In the counter affidavit, it has also been stated that the petitioners were personally present in the personal hearing conducted on 23.06.2017. 15. In such circumstances, it is for the 1[st] respondent to take an appropriate decision as to the further course of action to be taken, based on Ext.P7 explanation offered **WP(C).No. 20804 of 2017** -12- by the petitioners, after conducting a fresh hearing. 16. The learned Senior Government Pleader would submit that the 1[st] respondent shall issue a notice to the petitioners requiring them to appear for personal hearing, in terms of Ext.P1 notice. The learned counsel for the petitioners would submit that, on receipt of such notice, the petitioners shall appear before the 1[st] respondent and raise appropriate contentions, with reference to the explanation already offered vide Ext.P7. 17. Having considered the submission made by the learned counsel on both sides, this writ petition is disposed of with the following directions; i) The 1[st] respondent shall issue notice to the petitioners and others referred to in Ext.P1 notice requiring them to appear for a personal hearing, in terms of Ext.P1 notice. ii) On receipt of such notice, the petitioners and others referred to in Ext.P1 notice shall appear before the 1[st] respondent and offer their explanations, based on Ext.P7 explanation. iii) After considering the explanation, the 1[st] respondent shall take an appropriate decision as to the further course to be taken in the matter, taking note of **WP(C).No. 20804 of 2017** -13- 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 two weeks from the date of such personal hearing. All legal and factual contentions raised by the petitioners are left open to be raised before the 1[st] respondent at appropriate stage. Sd/- **ANIL K. NARENDRAN JUDGE** bpr **WP(C).No. 20804 of 2017** -14- ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE COMMUNICATION NO.C.R.P.5427/2016 DATED 08.06.2017 ISSUED BY THE RESPONDENT ALONG WITH REPORT EXHIBIT P2 TRUE COPY OF THE ORDER NO.C.R.P.9452/2015/K.DIS DATED 13.05.2016 PASSED BY THE RESPONDENT EXHIBIT P3 TRUE COPY OF THE NEWSPAPER REPORT PUBLISHED IN MALAYALA MANORAMA DAILY DATED 08.04.2013 EXHIBIT P3(A) TRUE COPY OF THE NEWSPAPER REPORT PUBLISHED IN MALAYALA MANORAMA DAILY DATED 25.09.2013 EXHIBIT P3(B) TRUE COPY OF THE NEWSPAPER REPORT PUBLISHED IN MALAYALA MANORAMA DAILY DATED 05.03.2014** **EXHIBIT P4 TRUE COPY OF THE FIR IN CRIME NO.0403/2016 OF IRINJALAKUDA POLICE STATION EXHIBIT P5 TRUE COPY OF THE ORDER NO.C.R.P.6200/2012/K.DIS DATED 16.05.2013 PASSED BY THE RESPONDENT EXHIBIT P6 TRUE COPY OF THE QUICK VERIFICATION REPORT EXHIBIT P6(A) TRUE COPY OF THE QUICK VERIFICATION REPORT EXHIBIT P7 TRUE COPY OF THE REPLY TO EXT-P1 SUBMITTED BY THE PETITIONER TO THE JOINT REGISTRAR** **RESPONDENTS' EXHIBITS: NIL** **//TRUE COPY// P.A. TO JUDGE**