The Thuruthippuram Service Co-operative Bank Ltd. and The Managing Committee of The Thuruthippuram Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies (General), Assistant Registrar of Co-operative Societies (General) and Joseph P.O., S/O Ouseph

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR** **&** **THE HONOURABLE MRS. JUSTICE C.S. SUDHA THURSDAY, THE 16[TH] DAY OF DECEMBER 2021 / 25TH AGRAHAYANA,** ## **1943** ## **WA NO. 638 OF 2020** **AGAINST THE JUDGMENT DATED 06.03.2020 IN WP(C) 38050/2018** **OF HIGH COURT OF KERALA** ## **APPELLANTS/PETITIONERS:** - **1 THE THURUTHIPPURAM SERVICE CO-OPERATIVE BANK LTD.NO.1789, THURUTHIPPURAM P.O., ERNAKULAM DISTRICT, PIN CODE-680667, REPRESENTED BY ITS SECRETARY.** - **2 THE MANAGING COMMITTEE,** - **THE THURUTHIPPURAM SERVICE CO-OPERATIVE BANK LTD.NO.1789, THURUTHIPPURAM P.O., ERNAKULAM DISTRICT, PIN CODE-680667, REPRESENTED BY ITS PRESIDENT.** **BY ADVS.** **GEORGE POONTHOTTAM (SR.) SMT.NISHA GEORGE** ## **RESPONDENTS/RESPONDENTS:** - **1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF COOPERATIVE SOCIETIES, KAKKANAD, ERNAKULAM DISTRICT-682030.** - **2 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), (THE INQUIRY OFFICER APPOINTED TO CONDUCT THE INQUIRY), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, ALUVA, ERNAKULAM DISTRICT, PIN CODE-683101.** 2 Writ Appeal No.638 of 2020 **3 JOSEPH P.O., S/O.OUSEPH, PANACKAL HOUSE, THURUTHOOR, PUTHENVELIKKARA P.O., ERNAKULAM DISTRICT, PIN CODE-683594.** **BY ADV SRI.M.SASINDRAN** **SRI.V.K.SUNIL SR GP** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 16.12.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** 3 Writ Appeal No.638 of 2020 ## **P.B.SURESH KUMAR & C.S.SUDHA, JJ.** **----------------------------------------------Writ Appeal No.638 of 2020** **----------------------------------------------Dated this the 16[th] day of December, 2021** ## **JUDGMENT** ## **P.B.Suresh Kumar, J.** This appeal is directed against the judgment dated 06.03.2020 in W.P.(C) No.38050 of 2018. The appellants are the petitioners in the writ petition. 2. The first petitioner is a Co-operative Society registered under the Kerala Co-operative Societies Act, 1969 (the Act) and the second petitioner is the Managing Committee of the first petitioner Society. In terms of Ext.P1 order, the first respondent, the jurisdictional Joint Registrar exercising the powers of the Registrar under the Act in respect of the Society has ordered an inquiry into the constitution, working and financial condition of the Society under Section 65 of the Act. 4 Writ Appeal No.638 of 2020 The petitioners challenged Ext.P1 order in the writ petition on various grounds. The learned Single Judge took the view that the subjective satisfaction arrived at by the Joint Registrar for the purpose of ordering inquiry under Section 65 cannot be challenged in a proceedings under Article 226 of the Constitution and consequently, dismissed the writ petition without prejudice to the right of the petitioners to challenge the action, if any, taken based on the report of inquiry. The petitioners are aggrieved by the said decision of the learned Single Judge and hence, this appeal. 3. Heard the learned Senior Counsel for the appellants as also the learned Government Pleader. 4. The learned Senior Counsel for the appellants pointed out that Ext.P1 order is one issued by the Joint Registrar on a complaint lodged by a member of the Society. According to the learned counsel, an inquiry under Section 65 of the Act being a serious one contemplated by the statute to be made either _suo motu_ or on reports or applications specifically made mention of in sub-section (1) of Section 65, it Writ Appeal No.638 of 2020 5 cannot be ordered on a complaint at all. It was argued by the learned counsel that if in a given case, the competent authority wants to order an inquiry _suo motu_ on a complaint having regard to the gravity of the allegations levelled against the Society therein, it is obligatory for him to satisfy before ordering such an inquiry that it is necessary and essential to order an inquiry under the said statutory provision after due application of mind into the records of the Society. It was also argued by the learned counsel that Ext.P1 order does not indicate that the Joint Registrar is satisfied, based on the materials on record, that an inquiry under Section 65 of the Act is necessary and essential in the Society. The learned counsel has relied on the decisions of this Court in **Ellakkal Service Co-operative Bank v. State of Kerala,** 1997 (2) KLT 85 and **Melukkara Service Co-operative Bank Ltd. v. Joint Registrar (General), District Co-operative Society,** 2018 (2) KHC 143, in support of his contentions. 5. Per contra, the learned Senior Government Pleader argued that a reading of Ext.P1 order would indicate 6 Writ Appeal No.638 of 2020 beyond doubt that the same satisfies the requirements under Section 65. 6. In terms of Section 65, an inquiry thereunder can be ordered by the competent authority on his own motion or on reports or applications made mention of in sub-section (1) therein. In other words, an inquiry under the said provision cannot be ordered solely on a complaint. But that does not mean that a complaint cannot be the basis of an inquiry ordered by the competent authority under that provision on his own motion. No doubt, before ordering an inquiry under Section 65 on his own motion, it is obligatory for the competent authority to satisfy that it is necessary and essential to conduct such an inquiry in the Society. In other words, an inquiry under Section 65 cannot be ordered on the dictation of a superior authority or on the recommendation of an inferior authority, for the subjective satisfaction to order an inquiry under Section 65 shall be the subjective satisfaction of the competent authority himself. The question whether Ext.P1 order would satisfy the requirements of Section 65 needs to be considered in the light Writ Appeal No.638 of 2020 7 of the propositions aforesaid. 7. Ext.P1 order would show that a complaint disclosing serious irregularities and financial frauds has been received by the Joint Registrar and he has called for a report on the said complaint from the concerned Assistant Registrar of Co-operative Societies. Ext.P1 order would also show that the Assistant Registrar of Co-operative Societies thereupon inspected the records of the Society and submitted a report to the Joint Registrar on the various allegations levelled against the Society in the complaint along with supporting records and it is based on the said report of the Assistant Registrar and the supporting records that inquiry has been ordered by the Joint Registrar. The relevant portion of Ext.P1 order reads thus: “1789-ആ� നമർ തരത�പറ� സർവ�സ� സഹകരണ ബ�ങ� ക�പത�ന� പവർതനത�ൽ ഗരതരമ�യ കമക%ടകൾ, സ�മത�ക തട�പകൾ എന�വ ഉളത�യ� പര�മർശ� (1) പക�ര� അറ�യ�ച�ടണ�. കന�ട� ന�കര�ധന ക�ലയളവ�ൽ എല� ന�യമങള� ല�ഘ�ചനക�ണ� അ�ഗമ�യ ശ�മത�.ഷ **�** ന എനയ�ളന> എസ�.ബ� അ%?ണ� 5334 വഴ� കളപണ� മ�റ�നക�ടത. ആഡ�റ� റ�കപ�ർട�ൽ വന�ടള വ�%�ല� നഡകപ�സ�റ�ൽ ന�ന� ബ�ങ� പസ�ഡന� , നസകടറ�യ� കHർന� കള വ?ചർ എഴത� 1,91,701/-രപ എഴത�നയടത. മതLനത�ഴ�ല�ള� ക>�ശM�സ തക അനവദ�ചത� തങചൻ എന അ�ഗത�ന� നൽക�നത മ�റ�നയടത. 21.10.15-നല നപ�തകയ�ഗ റ�കപ�ർട� (500 എണ�) അ>�ചത�ന� 85,000/- രപയ�, 10 ഫനളക� കബ�ർഡ� പഴയ ഫനളക� കബ�ർഡ�ൽ തനന അ>�ചത�ന� 68,000/-രപയ� നHലവ� ക�ണ�ച. ഒര അ�ഗത�ന� 1000/- രപയന> ക�ർഷ�ക വ�യകപ�ല� അനവദ�%�നത ബ�ങ� പസ�ഡ�� 5,50,000/- രപ ന�യമവ�രദമ�യ� ക�ർഷ�ക വ�യ എടകകയ�, ജ�വന%�രന> കപര�ലള സMർണപണയ വ�യയന> പല�ശ സബസ�ഡ� 8 Writ Appeal No.638 of 2020 കകപറകയ�, വസ വ�യയ� അ�ഗങള�ൽ ന�ന� 1500/-രപ ല�ഗൽഫ�സ� വ�ങ� 300/-രപ രസ�ത�ല�നത വ%�ല�ന� നൽക� ബ�%� തക കകപറകയ� . നHയ കകവശ� സക�%�വന ന�%�യ�ര�പ� തകയ�ൽ അധ�കമ�യ തക ന�യമ�വല� വLവസയ� വ�രദമ�യ�, 20.5.17 മതൽ 19.6.17 വനര നസകടറ� കകവശ� വച� സMന� ഇഷപക�ര� പണമ�>പ�>� ന>ത� എന�വയ�ണ� പര�ത�യ�നല ഉള>%ങൾ. പറവർ അസ�സ�� രജ�സ�ർ (ജനറൽ) പര�മർശ� (2) പക�ര� റ�കപ�ർട�, അനബനകരഖകള� സമർപ�ച�ടണ�. >� റ�കപ�ർട�, കരഖകള� പര�കശ�ധ�ചത�ൽ ഇത� സ�ബന�ച� വ�ശദമ�യ ഒര അകനMഷണ� ആവശLമ�നണന� ക�ണന. ബ�ങ�ൽ ന�ലന�ന�രന വ�%�ല� നഡകപ�സ�റ� എന ന�കകപ പദത�യന> വLക�ഗത രജ�സർ, സബpൾ എന�വ പര�കശ�ധനയ� ലഭ�ച�ട�ല�തത�ന�ൽ ആർന%ല�മ�ണ� ന�കകപങൾ ഉണ�യ�രനത� എന� പര�കശ�ധ�കവ�ൻ സ�ധ�ച�ല�നയന�, വർഷങള�യ� യ�നത�ര ഇ>പ�ട� ഇല�ത വ�%�ല� ന�കകപ� 31.3.13-നല കണ%� പക�ര� 2,47,710/-രപ ബ�%� ന�ൽപളത�, ന�കകപ ഈ>�ൻകമൽ വ�യ നൽക�യ ഇനത�ൽ 12,98,065/-രപ വകരണ� അഡM�ൻസ� കണ%�ല�, കമൽപറഞ വ�യകള�ൽ 8,91,551,66/-രപ ബ�ങ�കല%� ത�ര�നക വന വകയ�ൽ ബ�ങ�ൽ ന�ന� ' നക�ടക%ണവയന> കണ%�ല� ഉൾനപടത�യ�ടണ�. '2012 ഉണർവ� പദത�യ�ൽ ഭരണസമ�ത�യന> 19.12.13-നല 10-ആ� നമർ ത�രമ�ന പക�ര� >� ന�കകപവ�, >� ന�കകപത�ന� കമൽ നൽക�യ�ടള വ�യകള�, അത�ൻ കമൽ ത�ര�നക വന�ടള തകയ� 2013-14 വർഷനത കണകകൾ ആഡ�റ� നHയ അവസരത�ൽ ഒഴ�വ�%�യ�ടണ�. ഇപക�ര� ന�കകപ കണകകള�ൽ ന�ന� എടത�ടള വ�യകൾ എഴത� തള�യത�ന� കശഷ� പല ദ�വസങള�ല�യ� 1,91,701/-രപ 2015-16, 2016-17, 2017-18 എന� വർഷങള�ൽ ത�ര�നക നക�ടത�ടണ�. എന�ൽ, വ?ചറകള�ൽ തക കകപറ�യവരന> കമൽവ�ല�സകമ�, ത�ര�ചറ�യൽ വ�വരങകള� കരഖനപടത�യ�ട�ല�തത� 26.5.15, 27.5.15, 29.6.15 എന� ത�യത�കള�നല വ?ചറകൾ പര�കശ�ധനയ�യ� നൽക�യ�ട�ല�തതമ�ണ�. വർഷങള�യ� യ�നത�ര ഇ>പ�ട� ന>%�നത ക�>കന ന�കകപങള�ൽ ന�ന� ന�കകപ� ത�ര�നക നക�ടകകമ�ൾ സM�കര�ക%ണ യ�നത�ര ജ�ഗതയ� ബ�ങ� സM�കര�ച�ട�ല എനളത� വLകമ�ണ�. കന�ട� ന�കര�ധന ദ�വസമ�യ 8.11.16-ൽ ആദL� എഴത� തയ�റ�%�യ ഡ�കന�മ�കനഷൻ വ�വരങൾ കL�ൻസൽ നHയ�, അടത കപജ�ൽ പസത ത�യത�യ�നല മനറ�ര ഡ�കന�മ�കനഷൻ വ�വരങൾ എഴത� തയ�റ�%�യ�ടളത�, ന�കര�ധ�ത കന�ടകള�യ 1000/- ,500/- എന�വയന> എണത�ൽ 1064, 115 വ�ത� കടതൽ വന�ടളത�, 100/- രപയന> കന�ട�ൽ 1215 എണത�ന� കറവ� വന�ടളതമ�ണ�. ബ�ങ�, കന�ട� ന�കര�ധന ഉതരവകനള മറ�ക>ന� കരഖകള�ൽ കത�മ� ക�ണ�ച� ന�കര�ധ�ത കന�ടകള�ൽ (1000/-, 9 Writ Appeal No.638 of 2020 500/-) ഇ>പ�>� ന>ത�യ�ടകണ� എന� പര�കശ�ധ�%ണനമങ�ൽ ബ�ങ�ന� അ%?ണ��ഗ� കസ�ഫ� നവയർ സ�ബന�ച� പകതLക� അകനMഷണ� ന>കതണതമ�ണ� എന� ക�ണന. ഭരണസമ�ത�യന> 5.6.15-നല 261-ആ� നമർ ത�രമ�ന പക�ര� 39, 868 എന� നമരകള�ൽ ഉൾനപടന 24/5 നസ�� സലത�ന� ഈ>�ൻകമൽ 5,50,000/-രപ ദ�ർഘക�ല ക�ർഷ�ക വ�യ 7% പല�ശയ� 120 മ�സകതയ� ന�ലവ�ലളള ബ�ങ� പസ�ഡ�� ആയ ശ�.പ�.വ�.ല�ജവ�ന� അനവദ�ച� . . നൽക�യ�ടണ� എന�ൽ അകപകയ�ൽ വLകമ�യ ത�യത� കരഖനപടത�യ�ട�ല ന�യമ�വല�%� വ�രദമ�യ� ദ�ർഘക�ല ക�ർഷ�ക വ�യ പസ�ഡ��ന� മ�തമ�യ� നൽക�യ�ര�കനത� അധ�ക�ര ദർവ�ന�കയ�ഗമ�നണന� ക�ണന. കന�ട� ന�കര�ധന ദ�വസമ�യ 8.11.16-നല ന�ൾവഴ�യ�ൽ 5534ആ� നമർ അ�ഗമ�യ ശ�മത�.ഷ **�** ന എനയ�ളന> കപര�ൽ ഒര എസ�.ബ� അ%?ണ� ആര�ഭ�ച� 10 ലക� രപ ന�കകപ�ച�ടണ�. എന�ൽ, >�യ�ള�ൽ ന�ന� ഒര ന�കകപ കണ%� ആര�ഭ�കകമ�ൾ വ�കങണത�യ നക.കവ.സ� കരഖകൾ . ഒന� വ�ങ�യ�ട�ല�തത�യ� ക�ണന ബ�ങ�ന� മതLനത�ഴ�ല�ള� ക>�ശM�സമ�യ� 2.6.15-ൽ 3,97,928/-രപ ലഭ�ച�ടണ�. 216-ആ� നമർ അ�ഗ� ശ�.തങചൻ 4196ആ� നമര�യ� എടത�രന ഒര ലക� രപയന> വ�യയ�ൽ മതല�ൽ ബ�%�ന�ൽപണ�യ�രന തകയ�യ 98,330/-രപയ�, പല�ശയ� 13.8.15 ന� ത�ര�നക വരവ� വച� മതLനത�ഴ�ല�ള� ക>�ശM�സ� നHലവ� എഴത� വ�യ കണ%� അവസ�ന�പ�ച�ത�ന� കശഷ� 30.3.16-ൽ 36,486/-രപ മതLനത�ഴ�ല�ള� ക>�ശM�സമ�യ� വ�യ�%�രന� ത�ര�നക നക�ടത�ടണ�. കരഖകൾ കത�മമ�യ� തയ�റ�%� പണ�പഹരണ� ന>ത�യ�ടകണ� എന� പര�കശ�ധ�%ണനമങ�ൽ പകതLക� അകനMഷണ� ന>കതണതണ� എന� ക�ണന. ന�യമ�വല� വLവസകൾ%� വ�രദമ�യ� കടതൽ തക ന�%�യ�ര�പ�യ� സക�ച�ടനണന�, ആയത� അത�ത� ക�ലനത ഭരണസമ�ത�യ�ൽ ക�രണ . സഹ�ത� സമർപ�ച� സ�ധകര�കനത�യ� ക�ണന�ല എന� അറ�യ�ച�ടണ� 21.10.15-നല ന�ൾവഴ�യ�ൽ പരസLനHലവ� ഇനത�ൽ 22,000/-, 89,900/-, 9,240/- എന� തകകൾ ഉണ� എന�ൽ, >� നHലവകൾ%�യ� പകതLക ഭരണസമ�ത� ത�രമ�നകമ�, കMകടഷൻ ന>പ>�കൾ സM�കര�കകകയ� നHയ�ട�ല എന� ക�ണന. 26.11.17-നല ന�ൾവഴ�യ�ൽ വർണ� പസ� എന സ�പനത�ന� 18,100 രപയ�, 66,800/-രപയ� നൽക�യ�ടണ�. എന�ൽ, >� നHലവകൾ%�യ� പകതLക ഭരണസമ�ത� ത�രമ�നകമ�, കMകടഷൻ ന>പ>�കൾ . സM�കര�കകകയ� നHയ�ട�ല എന� ക�ണന കമൽ സ�ഹHരLത�ൽ തരത�പറ� സർവ�സ� സഹകരണ ബ�ങ�ൽ വ�ശദമ�യ അകനMഷണ� ന>ത�, പര�മർശ� (2) പക�ര� സമർപ�ച റ�കപ�ർട�, അത�ന� ഉകപ�ൽബലകമ�യ എല� കരഖകള� ഞ�ൻ കനര�ട� കണ� 10 Writ Appeal No.638 of 2020 പര�കശ�ധ�ചത�ന� അ>�സ�നത�ല�, ബ�ങ�ന� പവർതനത�ൽ ഗരതരമ�യ കമക%ടകൾ ഉനണന� എന�%� ഉതമ കബ�ദLമളത�ന�ല�, ബ�ങ�ന� ഘ>ന, പവർതന�, സ�മത�ക സ�ത�, പര�മർശ� (2) പക�ര� കനണത�യ വ�വരങൾ എന�വ സ�ബന�ച� വ�ശദമ�യ അകനMഷണ� ന>കതണത� ” അന�വ�രLമ�നണന� ക�ണനത�ന�ൽ ത�നഴ പറയ� പക�ര� ഉതരവ�കന. A reading of the extracted portion of Ext.P1 order would however, show that inquiry has been ordered by the Joint Registrar based on the report of the Assistant Registrar and the various documents made available by the Assistant Registrar along with the report. It is not discernible from Ext.P1 order as to whether the Assistant Registrar has made any recommendation to the Joint Registrar in his report to order an inquiry in the Society under Section 65 of the Act. Be that as it may, it can be seen from the materials on record that the subjective satisfaction for ordering the inquiry has been arrived at by the competent authority himself on the basis of the report of an officer in the Department and the documents made available by the officer along with the report, and not based on the complaint referred to therein. Of course, the order does not indicate that the Joint Registrar has inspected the records of the Society personally. According to us, in order to ensure that it is 11 Writ Appeal No.638 of 2020 necessary and essential to conduct an inquiry under Section 65 in a Society, it is not necessary for the Joint Registrar to personally inspect the records of the Society. As indicated, the statutory requirement is only that the Joint Registrar shall satisfy that it is necessary and essential to order an inquiry under Section 65 in the Society and if it is established that the Joint Registrar has rendered the subjective satisfaction as to the essentiality and necessity to order such an inquiry in the Society based on the records made available to him along with the report by a subordinate officer, according to us, this Court would not interfere with the said discretion exercised by the Joint Registrar. In the said view of the matter, we do not find any merit in the writ appeal and the same is, accordingly, dismissed. Sd/- ## **P.B.SURESH KUMAR, JUDGE.** Sd/- ## **C.S.SUDHA, JUDGE.** YKB