The Trichur Urban Co-operative Bank Ltd. v Joint Registrar, Co-operative Societies (General), The Registrar of Co-operative Societies, Thiruvananthapuram, and The General Manager, Iringalakuda Town Co-operative Bank Ltd.

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **WEDNESDAY, THE 11TH DAY OF APRIL 2018 / 21ST CHAITHRA, 1940** **WP(C).No. 22438 of 2015** **------------------------** ## **PETITIONER:** **-----------** **THE TRICHUR URBAN CO-OPERATIVE BANK LTD. NO.87, MISSION QUARTERS, THRISSUR - 680 001, REPRESENTED BY ITS GENERAL MANAGER IN CHARGE V.SATHY DEVI.** **BY ADV.SRI.WILSON URMESE** ## **RESPONDENT(S):** - **-------------** **1. THE JOINT REGISTRAR, CO-OPERATIVE SOCIETIES (GENERAL), AYYANTHOLE PO, THRISSUR , PIN - 680 003.** **2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM, PIN - 695 001.** **3. THE GENERAL MANAGER, IRINGALAKUDA TOWN CO-OPERATIVE BANK LTD. NO.55, TANA SOUTH, IRINGALAKUDA PO, PIN- 680 121.** **R1 & R2 BY GOVERNMENT PLEADER SMT.MABLE C. KURIAN R3 BY ADV. SRI.GEORGE POONTHOTTAM** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22-03-2018, THE COURT ON 11-04-2018 DELIVERED THE FOLLOWING:** **mbr/** ## **WP(C).No. 22438 of 2015 (D)** ## **---------------------------** ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** ## **---------------------** **EXHIBIT P1TRUE COPY OF THE RESOLUTION NO.11 DATED 27.7.13 OF THE ANNUAL GENERAL BODY MEETING OF THE PETITIONER BANK. EXHIBIT P2TRUE COPY OF THE FORWARDING LETTER DATED 14.8.13 WITH BYE LAW AMENDMENT PROPOSAL, SUBMITTED BY THE PETITIONER BANK. EXHIBIT P3TRUE COPY OF THE CERTIFICATE NO.200/13 DATED 28.12.2013 OF THE 1ST RESPONDENT. EXHIBIT P4TRUE COPY OF THE BYE LAW AMENDMENT CERTIFICATE NO.357/14 ISSUED TO 3RD RESPONDENT BANK BY THE 1ST RESPONDENT WITH COVERING LETTER DATED 21.5.2015. EXHIBIT P5TRUE COPY OF THE COMPLAINT /REPRESENTATION DATED 1.7.2015 TO THE 2ND RESPONDENT BY THE PETITIONER BANK WITH ITS ENGLISH TRANSLATION. EXHIBIT P6TRUE COPY OF THE RELEVANT PAGE OF THE ANNUAL REPORT 2013-14 OF THE 3RD RESPONDENT BANK. EXHIBIT P7TRUE COPY OF THE PAPER PUBLICATION IN 'MATHRUBHUMI' DAILY DATED 11.9.2017, BY THE 3RD RESPONDENT BANK. EXHIBIT P8TRUE COPY OF THE PAPER PUBLICATION IN 'MALAYALA MANORAMA' DAILY DATED 13.9.2017. RESPONDENTS' EXHIBITS: --------------------EXHIBIT R3A: TRUE COPY OF THE COMMUNICATION NO.DCBS(T)NO.906/07.02.1583/2017-18 DATED 12.2.2018. /TRUE COPY/ P.S.TO JUDGE mbr/ 12.04.2018.** ## **ANU SIVARAMAN, J.** ## **----------------------------------------------W.P(C).No. 22438 of 2015** **----------------------------------------------Dated this the 11[th] day of April, 2018** ## **JUDGMENT** This writ petition is filed with the following prayers: - “ _i. call for the records leading to this case._ - _ii. issue a writ of certiorari quashing Exhibit P3, to the extent it is challenged._ - _iii. issue a writ of certiorari quashing Exhibit P4 and all proceedings thereon._ - _iv. issue a writ of mandamus or any other appropriate writ, order or direction directing the 2[nd] respondent to consider Exhibit P5 and pass orders thereon, taking into account all the relevant aspects highlighted therein, till then stay all further proceedings/actions pursuant to Exhibit P4.”_ 2. Heard learned counsel for the petitioner, learned Government Pleader and the learned counsel appearing for the 3[rd] respondent Bank. 3. It is submitted by learned counsel for the petitioner that the petitioner Society was functioning with its area of operation limited to the Taluk of Thrissur. The annual general body meeting of the Society held on 27.7.2013 had decided to amend the bye-laws by extending the area of operation to the 2 _**WP(C).22438/15**_ Taluk of Thalappilly as well. The amendment to the bye-laws, as resolved by the General Body, was sent up for approval to the 1[st] respondent. The 1[st] respondent by Exhibit P3 approved the amendment proposed and registered the same on 28.12.2013. However, it is stated that a hand written endorsement was included in Exhibit P3 stating that the third amendment with regard to extending the area of operation was rejected in terms of Section 7(1)(c) of the Kerala Co-operative Societies Act, 1969 (for short, 'the Act'). 4. It is stated that thereafter, the petitioner Society came to understand that by Exhibit P4 certificate dated 30.12.2014, the 1[st] respondent had registered the bye-law amendment of the 3[rd] respondent Society permitting extension of area of operation of the 3[rd] respondent to Thalappilly Taluk as well. The petitioner obtained copy of the orders registering the amendment. Exhibit P4 is produced to contend that the amendment of the bye-law extending the area of operation of the 3[rd] respondent to Pazhayannur Block Panchayat and Wadakkanchery Block Panchayat has been permitted by the 1[st] respondent. The petitioner immediately approached the 1[st] respondent filing Exhibit P5 representation, but no orders are passed thereon. 3 _**WP(C).22438/15**_ 5. The learned counsel for the petitioner relies on the decision of a learned single Judge of this Court in **Kalpetta Co-operative Urban Society Ltd. v.Joint Registrar of Cooperative Societies** [2016 (4) KLT 802] by which Section 7(1) (c) of the Act was found to be unconstitutional and invalid in terms of the Constitution of India (Ninety seventh Amendment) Act, 2011. However, the learned Government Pleader would submit that the said decision has been taken in appeal by the State and there is a stay of the judgment of the learned single Judge. It is contended that the legality of an order of rejection by a statutory authority is to be considered on the basis of what is stated in the order itself and that the additional reasons stated in the counter affidavit have absolutely no relevance at all. The decision of the Apex Court in **Whirlpool Corporation v. Registrar of Trade Marks Mumbai and others** [AIR 1999 SC 22] is relied on to contend that the existence of the alternate remedy of appeal does not affect the jurisdiction of this Court to consider the writ petition. A decision of this Court in **Padmanabhan v. Kerala State Handloom Development Corpn.** [ 1991 (2) KLT 55 is also relied on. 6. A counter affidavit has been filed on behalf of the 1[st] respondent contending that Section 7(1)(c) of the Act provides that the area of operation of the proposed Society and the area _**WP(C).22438/15**_ 4 of operation of another Society of a similar type should not overlap. It is stated that the Thalappilly Co-operative Union had objected to the extension of the area of operation of the petitioner Society. It is further pointed out that there are other reasons for rejection of the request of the petitioner for registration of the amendment of bye-laws. The reasons are stated to be as under: “ _a. The Thrissur Urban Co-operative Bank did not specify in its application for registration of amendment of bye-law how extension of area of operation would advantageously affects its functioning._ _b. Material reason for extension was not specified in their application._ _c. Extension of area covering different circles should hampered the administrative control of the bank.”_ 7. It is stated that the 1[st] respondent had approved the bye-law amendment of the 3[rd] respondent Society, since it had been recommended favourably by the Thalappilly Co-operative Union. It is further stated that since the petitioner and the 3[rd] respondent had sought for extension of area of operation over Thalappilly Taluk, the opinion of the Thalappilly Co-operative Union had been taken note of and the application for registration was approved in respect of the 3[rd] respondent. 5 _**WP(C).22438/15**_ 8. The 3[rd] respondent Society has also filed a counter affidavit, wherein it is contended that the petitioner had an alternative remedy of appeal under Section 83(1)(d) of the Act. It is stated that the area of operation of the 3[rd] respondent Society was originally the Mukundapuram Taluk excluding Athirapally Panchayat. When the Mukundapuram Taluk was divided into Mukundapuram and Chalakkudi Taluk, the entire area was given as the area of operation of the 3[rd] respondent. Thereafter, the 3[rd] respondent proposed amendment to include Pazhayannur and Wadakkanchery Block of Thalappilly Taluk area of operation. It is stated that the deposit of the Bank as revealed through the latest balance sheet is Rs.1,100 Crores and that the Bank is an extremely successful business enterprise. It is stated that the area of operation sought to be included in the area of the 3[rd] respondent Bank did not form part of the area of operation of any other Urban Co-operative Bank. It is stated that since the petitioner Society had sought the inclusion of the entire area of the Thalappilly Taluk in its area of operation, the rejection by Exhibit P3 was perfectly legal and valid. 9. Learned counsel for the 3[rd] respondent contended that no grounds have been raised as against Ext.P4 order in the writ petition and that the writ petition is not maintainable in view of 6 _**WP(C).22438/15**_ the existence of an efficacious alternate remedy. The learned counsel relied on the decisions of this Court in **Kasaragod Cooperative Land Mortgage Bank v. State of Kerala and others** [1976 KLT 437] and **Pantheerankavu Service Cooperative Bank Ltd. v.State of Kerala** [2016 (3) KLT SN 72] to contend that and existing society has no locus standi to challenge the registration of a bye-law amendment permitting extension of area of operation of the 3[rd] respondent Society. 10. I have considered the contentions advanced on either side at considerable length. I have also perused the original files made available by the learned Government Pleader pursuant to an interim order of this Cout. The petitioner's application for extension of area of operation of the petitioner Society to Thalappilly Taluk was on the basis of the resolution taken by the General Body in 2013. It appears from Exhibit P3 that the bye-law amendments were approved and registered. However, there is an interpolation in Exhibit P3 which is seen to be written after the preparation of the typed order approving the amendments. The interpolation is to the effect that the reason for rejection of approval of clause 3 of the proposed amendment is that it violates Section 7(1)(c) of the Act. It is clear that the request made by the 3[rd] respondent Bank for extension of the area of operation to portions of the Thalappilly 7 _**WP(C).22438/15**_ Taluk had been considered favourably without reference to Section 7(1)(c) of the Act. The request made by the 3[rd] respondent Society initially as per the resolution of the General Body held on 30.9.2014 was for extending the area of operation to Thalappilly Taluk. This amendment was considered by the 1[st] respondent and by Exhibit P4, the area of operation was permitted to be extended to the Pazhayannur and Wadakkanchery Block of Thalappilly Taluk as well. It appears from the files produced that a revised proposal for limiting the area of operation to the Pazhayannur and Wadakkanchery Block Panchayats of Thalappilly Taluk had been received from the 3[rd] respondent Society by the 1[st] respondent and the same had been ordered. The files do not disclose any fresh resolution by the general body of the 3[rd] respondent Society. 11. The learned counsel for the petitioner contends that the bye-law amendment proposal by the General body of the 3[rd] respondent being for extension of area of operation to the whole of Thalapally Taluk, the 3[rd] respondent was competent only to consider the said amendment as proposed and any departure from the proposed amendment would require a fresh resolution from the General body before it could be approved. The decisions in **Mohanan v. Sulthan Batheri Service Cooperative Bank Ltd.** [2014(1) KLT 425 and Janardhanan v. 8 _**WP(C).22438/15**_ Joint Registrar [1990 (1) KLT 530] is relied on in support of the contention. 12. I find from a perusal of the documents produced that the petitioner's request for extension of area of operation which was earlier in point in time has been summarily rejected on the ground of Section 7(1)(c) of the Act while the later request made by the 3[rd] respondent for othe very same purpose was allowed limiting the extension to Pazhayannur and Wadakkanchery Blocks. It appears that the financial condition and professional competence of the 3[rd] respondent has been taken into account by the respondents while considering the requests. 13. Section 12 of the Act provides as follows: ## “ _**12. Amendment of bye-law of society:-**_ _(1) No amendment of any bye-law of a society shall be valid unless such amendment has been registered under this Act._ _(2) The provisions of section 7 specifying the conditions to be satisfied before registration of the bye-laws of a society by the Registrar shall mutatis mutandis, apply also to the registration of amendments to bye-laws:_ **==> picture [163 x 9] intentionally omitted <==** 14. Section 7(1)(e) of the Act reads as under: _“_ _**Registration:-** (1) If the Registrar is satisfied-_ _xx xx xx_ 9 _**WP(C).22438/15**_ _(e) that the proposed society complies with the requirements of sound business; he may register the society and its bye-laws within a period of ninety days from the date of receipt of the application.”_ 15. A joint reading of Sections 7 and 12 of the Act would reveal that the requirements of sound business is also an aspect which can be taken into account while considering a request for amendment of bye-laws, especially one seeking extension of area of operation. 16. However, the reasons stated in the counter affidavit including the unfavourable recommendations by the Circle Cooperative Union or the Financing Bank find no place in Exhibit P3 order of rejection. The only reason stated in Exhibit P3 is the violation of Section 7(1)(c) of the Act. I am of the opinion that the rejection of the proposal for extension of the area of operation of the petitioner Society on the ground of violation of Section 7(1)(c) of the Act was illegal and unsustainable especially in view of the later permission granted for the amendment of bye-laws to the 3[rd] respondent Society. The resolutions passed by the general bodies of both the Societies being for extension of area of operation to Thalappilly Taluk, the action of the respondents in rejecting the request of the petitioner Society while permitting the registration of the amendment proposed by the general body of the 3[rd] 10 _**WP(C).22438/15**_ ## respondent with modification was unwarranted. 17. Exhibits P3 and P4 orders are, therefore, set aside. There will be a direction to the 1[st] respondent to take up, consider and pass orders on the request made by the petitioner Society as well as the 3[rd] respondent for registration of the amendment of bye-laws as proposed by the respective General bodies and to pass appropriate orders in accordance with law on the same within three months from the date of receipt of a copy of this judgment. The petitioner as well as the 3[rd] respondent Society will be free to make further proposals for amendment to the bye-laws by convening a General Body meeting for the above purpose. Orders as directed above shall be rendered with notice to the representatives of the petitioner as well as the 3[rd] respondent Society. The writ petition is ordered accordingly. Sd/- **ANU SIVARAMAN JUDGE** _vgs_