Thiruvalla East Co-Operative Bank Ltd. & The Part Time Administrator v. K.J. Amminikutty & Reserve Bank of India (WA No.1510 of 2021)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS** ## **&** **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM** **WEDNESDAY, THE 17[TH] DAY OF NOVEMBER 2021 / 26TH KARTHIKA, 1943** **WA NO. 1510 OF 2021** **AGAINST THE ORDER IN WP(C) NO.25123/2021 DATED 12.11.2021 OF HIGH COURT OF KERALA, ERNAKULAM** ## **APPELLANTS/RESPONDENTS 1 & 2 IN W.P.(C) 25123/2021:** 1 THE THIRUVALLA EAST CO-OPERATIVE BANK LTD.NO.3260, REPRESENTED BY ITS GENERAL MANAGER, ERAVIPEROOR P.O., PATHANAMTHITTA DISTRICT, PIN-689 542. 2 THE PART TIME ADMINISTRATOR, THIRUVALLA EAST CO-OPERATIVE BANK LTD.NO.3260, ERAVIPEROOR P.O., PATHANAMTHITTA DISTRICT, PIN-689 542. BY ADVS. RANJITH THAMPAN (SR.) SURIN GEORGE IPE ## **RESPONDENTS/PETITIONER & RESPONDENT NO.3 IN W.P.(C) 25123/2021:** 1 K.J.AMMINIKUTTY, AGED 68 YEARS, W/O.LATE ABRAHAM GEORGE PACHAYAIL, CHIEF EXECUTIVE OFFICER (UNDER SUSPENSION), THIRUVALLA EAST CO-OPERATIVE BANK LTD.NO.3260, ERAVIPEROOR P.O., THIRUVALLA, PATHANAMTHITTA DISTRICT, RESIDING AT PACHAYUIL HOUSE, OONNUKAL P.O., PATHANAMTHITTA DISTRICT, PIN-689 647. 2 THE RESERVE BANK OF INDIA, REPRESENTED BY ITS REGIONAL DIRECTOR, NO.6507, BAKERY JUNCTION ROAD, NANDAVANAM, PALAYAM, THIRUVANANTHAPURAM, KERALA-695 033. BY ADV ARJUN RAGHAVAN ## **OTHER PRESENT:** R1 BY SRI.SANTHOSH MATHEW THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 17.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A. No.1510 of 2021 2 # **ALEXANDER THOMAS & VIJU ABRAHAM, JJ.** **------------------------------------------------------------------** W.A. No.1510 of 2021 _[arising out of the impugned interim order dated 12.11.2021 in W.P.(C) No.25123/2021]_ **------------------------------------------------------** Dated this the 17[th] day of November, 2021 ## **JUDGMENT** ## **Alexander Thomas , J.** The 1[st] respondent herein has filed the instant writ petition, W.P.(C) No.25123/2021, seeking quashment of the impugned Ext.P8 order dated 09.11.2021, issued by the appellant herein in his capacity as the Administrator of the 1[st] appellant Urban Cooperative Bank, whereby the 1[st] respondent herein (the writ petitioner) was ordered to be suspended from service on account of the allegations raised therein. 2. The learned Single Judge at the admission stage, without hearing the other side, has passed an _ad-interim exparte_ order on 12.11.2021, wherein it has been ordered that in view of the _prima facie_ case made out by the writ petitioner and for the purpose of protecting the subject matter of the lis, there shall be an interim stay of the impugned Ext.P8 suspension 3 W.A. No.1510 of 2021 order dated 09.11.2021 and consequently that the petitioner shall be permitted to continue and discharge her duties as CEO (Chief Executive Officer) of the respondent Bank, etc. 3. Being aggrieved by the impugned interim order passed by the learned Single Judge on 12.11.2021, the appellants herein who have been arrayed as respondents 1 & 2 in the said W.P.(C) have instituted the present _intra court_ appeal under Section 5 (i) of the Kerala High Court Act. 4. Heard Sri.Ranjith Thampan, learned Senior counsel instructed by Sri.Surin George Ipe, learned counsel appearing for the appellants in the W.A./respondents 1 & 2 in the W.P.(C), and Sri.Santhosh Mathew, learned counsel appearing for the 1[st] respondent in the W.A./the writ petitioner. In the nature of the orders proposed to be passed by us in this appeal, notice to respondent No.2 in the W.A./the 3[rd] respondent in the W.P.(C) will stand dispensed with. 5. The 2[nd] appellant herein/the 2[nd] respondent in the writ petition was appointed as the part time Administrator, in supersession of the Managing Committee of the 1[st] appellant Urban Co-operative Bank, after the expiry of the term of the office and the 1[st] appellant had taken charge as Administrator of the said primary urban Bank (which has been registered as a W.A. No.1510 of 2021 4 Co-operative Society in terms of the Kerala Co-operative Societies Act, 1969) on 04.11.2021. 6. The 1[st] respondent in the writ appeal/the writ petitioner is the Chief Executive Officer of the 1[st] appellant Bank. The 1[st] appellant had issued Ext.P5 proceedings dated 05.11.2021 directing the writ petitioner Chief Executive Officer, to take immediate action to deal with the scenario of three of the Senior Clerks having gone on leave so that alternate staff should be posted in their place, etc. 7. Further it appears that the stand of the writ petitioner, as is discernible from her Anx.II letter dated 05.11.2021 is that the said three incumbents are deliberately absenting themselves from the workplace which amounts to a case of unauthorised absence and that she has been made to face certain disturbing events, etc. It was also stated in Anx.II that going by the provision contained in Clause 39 of Anx.I Bye Laws of the appellant Bank, the matters in relation to allotment of work among the bank staff, taking of disciplinary action against them, issuance of transfer orders, posting orders and passing orders on leave applications, etc. would come within the domain and province allotted to the CEO, etc. Further it appears that the writ petitioner had, thereafter filed a writ petition (civil) before W.A. No.1510 of 2021 5 this Court which resulted in Ext.P7 interim order dated 08.11.2021, rendered by the learned Single Judge in W.P.(C) No.24500/2021, ordering that since the writ petitioner therein/1[st] respondent herein is a CEO, she should be allowed to function as per law, without being physically obstructed, threatened or intimidated by any person including contesting respondents 4 to 10 therein. Further that if the writ petitioner chooses to disregard Ext.P2 therein (Ext.P5 herein), then it is for her to face the consequences thereof, as per law, etc. 8. On the next day the 2[nd] appellant in his capacity as Administrator, has issued Ext.P8 order dated 09.11.2021 ordering that the writ petitioner/CEO will stand suspended from service, on account of the events mentioned in Ext.P8, which appears to be in connection with the events mentioned in Exts.P5 & P7, etc. 9. Incidentally we are now told that the main matter in relation to Ext.P7 W.P.(C) No.24500/2021, in regard to the main plea therein for protection therein made at the behest of the present writ petitioner CEO has been allowed by making the interim order absolute and ordering the final disposal of the W.P.(C) as per judgment dated 16.11.2021, etc. (We need not get into those aspects, for reasons more than one particularly W.A. No.1510 of 2021 6 because the copy of judgment in W.P.(C) No.24500/2021, is not now before us and we need to deal in this case only with the aspects borne out from Ext.P7 interim order passed by the learned Single Judge in that writ petition). 10. On being aggrieved by the Ext.P8 suspension order issued by the 2[nd] appellant herein on 09.11.2021, the writ petitioner herein has instituted the present writ petition civil, W.P.(C) No.25123/2021, seeking the following prayers:- - _“i) to issue a writ of certiorari calling for the records leading to the issuance of Exhibit-P8 and quash the same;_ - _ii) to decide that the 2[nd] respondent does not have the power to issue an order in nature of Exhibit-P8, in wake of Exts.-P1 and P2 as also the amendments carried out in Banking Regulation Act, 1956;_ - _And_ - _iii) to grant such other reliefs as this Honourable Court may deem fit in the circumstances of this case.”_ 11. It is in the present W.P.(C) that the present impugned interim order has been rendered by the learned Single Judge on 12.11.2021, which is the subject matter of challenge in this _intra court_ appeal. 12. Both sides have made arguments _in extenso_ on various aspects including the merits of the matter. 13. After hearing both sides we are of the firm view that we need not get into the task of resolving those controversy of issues on merits for the simple reason that going by a reading of the impugned order dated 12.11.2021, rendered by the learned 7 W.A. No.1510 of 2021 Single Judge in the present W.P.(C), the essence and substance of the same is only an _ad-interim_ order, that too _ex-parte_ , passed by the learned Single Judge on that day, taking note of the _prima facie_ case made out and mainly for protecting the subject matter of the lis. 14. It is by now well established after the celebrated decision of the larger bench of 5 judges of this Court in the case in _**K.S. Das V. State of Kerala** [1992 (2) KLT 354 (FB)]_ , wherein it has been held that where the impugned order is essentially an _interlocutory_ passed in the writ petition pending disposal of stay application of the interim relief application, then such an order may not be amenable for appellate challenge by way of _intra court_ appeal as envisaged in Sec.5(i) of the Kerala High Court Act. Further that, it may be profitable to refer the majority opinion in the said case, which reads as follows:- _“46. We are of the view that the order appealed against in State of Kerala v. Thankamma & ors., 1968 KLT 390 (FB) under S.5(i) was a 'preliminary judgment' dealing with the vires of the relevant provisions and the decision of the Full Bench was correct on facts. The observations of the Division Bench in P.K. Kunju v. State of Kerala, 1970 KLT 644 against orders as going to the 'root' are rather too wide. So far as the decision in Mohammed Haji v. Ayamma,1976 KLT 326 (FB) is concerned, it related to S.5(iii) and has no relevance. The decision of the Full Bench in State of Kerala v. Sudarsan Babu, 1983 KLT 764 (FB) dealt with an appeal refusing to review an order directing issue of notice to the Speaker of the Legislative Assembly and the ultimate conclusion that the order is not appealable is, in our view, correct, but with great respect, we do not agree that the word 'order' in S.5(i) takes its colour from the word 'judgment' in S.5(i). We also do not agree, with great respect, with the view in State of Kerala v. Krishnankutty, 1985 KLT 201 holding that 'order' in S.5(i) is in the nature of a 'final order'. We also do not agree with the obiter observations in Damodaran v. Sankaran, 1985 KLT 153 in so_ W.A. No.1510 of 2021 8 _far as they related to S.5(i), and we are not concerned with the conclusions therein relating to S.5(ii)._ _**Conclusion:** (1) The word 'order' in S.5(i) of the Kerala High Court Act, 1958 includes, apart from other orders, orders passed by the High Court in Miscellaneous Petitions filed in the Writ Petitions provided the orders are to be in force pending the Writ Petition. An appeal would lie against such orders only if the orders substantially affect or touch upon the substantial rights or liabilities of the parties or are matters of moment and cause substantial prejudice to the parties. The nature of the 'order' appealable belongs to the category of 'intermediate orders' referred to by the Supreme Court in Madhu Limaye's case, AIR 1978 SC 47. The word 'order' is not confined to 'final order' which disposes of the Writ Petition. The 'orders' should not however, be ad-interim orders in force pending the Miscellaneous Petition or orders merely of a procedural nature._ _(2) But this does not mean that the Division Bench hearing the appeal against such 'orders' will have to admit the appeal or have to modify the impugned order or set it aside the same in every case. There is difference between the questions whether an appeal lies to a Division Bench and as to the scope of interference. Normally, discretionary orders are not interfered with unless the impugned orders are without jurisdiction, contrary to law, or are perverse, and they also cause serious prejudice to the parties in such a manner that it might be difficult to restore the status quo ante or grant adequate compensation. The idea is to provide an internal remedy in such cases without compelling the parties to go all the way to the Supreme Court under Art. 136 of the Constitution of India or increase the burden of that court unnecessarily._ _(3) It will, however, be incumbent upon the appellant to serve the counsel who has appeared before the Single Judge for the opposite party (unless of course the counsel's authority has been revoked or he is dead) a admission before the Division Bench, it will be open to the Bench to treat such service as mentioned above as sufficient service on the parties (unless the court, in the circumstances of the case, thinks otherwise) and to dispose of the appeal either at the stage of admission or soon thereafter, after considering the facts of the case or subsequent events. This would generally obviate admission of the Writ Appeals, issue of notice and the passing of interim orders pending Writ Appeals.”_ ## 15. Further, it may also be relevant to take note of the observations in the concurrent judgment in para No.116 of ## _**K.S. Das**_ **’** s case (supra), which reads as follows:- _“116. To sum up, I agree with the conclusions of the learned Chief Justice and hold that an appeal is maintainable against an interlocutory order provided it is a final order on the miscellaneous petitions in the sense that it is not an ad interim order if the order substantially affects of touches upon substantial rights and liabilities of the parties or are matters of moment or matters which would cause real legal prejudice to the parties, even though the_ W.A. No.1510 of 2021 9 _parent original proceedings is alive. The nature of the order appealable can be classified in the category of “intermediate orders”, within that frame in which the Supreme Court has used that term in Madhu Limaye's case (AIR 1978 SC 47). It is not necessary that to attract S.5(i) to maintain an appeal that the order should have the label of a final order in the sense that it disposes of the original proceedings under Art.226 of the Constitution.”_ 16. The abovesaid aspects borne out from the decision of the larger Bench of this Court in _**K.S. Das’** s_ case (supra) have also been considered in detail by a Division Bench of this Court in the decision in the case in _**Bharat Petroleum Corporation Ltd. And Another v. Saju A. R. and Others** [2021 (5) KHC 398 (DB)]_ , wherein it has been held that since the impugned interim order therein was only an _ad-interim_ order passed pending disposal of the stay application, the said order is not amenable for appellate challenge in terms of Sec.5(i) of the Kerala High Court Act. Similar view has been reiterated by yet another Division Bench of this Court in a recent verdict rendered in the case in _**P.T. Thomas v. Bijo Thomas** [2021 (6) KLT 196 (DB)]_ , wherein their Lordships of the Division Bench have also dealt with the various aspects flowing out from the celebrated decision of the Apex Court in _**Madhu Limaye v. State of Maharashtra** [(1977) 4 SCC 551]_ to examine the meaning of the word _‘interlocutory_ ’ in depth, particularly the substance and effect of _interlocutory_ order. It may be profitable to refer to para No.7 & 9 thereof, which read as follows:- W.A. No.1510 of 2021 10 _“para 7. The expression 'ad interim' only means 'in the meantime' or 'temporarily'. The expression 'ad interim order' is understood in legal parlance as an order which would operate till the hearing of the matter. Usually, ad interim orders are passed ex parte in interlocutory applications, pending disposal of the main proceedings, though it can also be passed when the opposite side is present, if the court does not have time to hear the matter and feels that it is necessary to grant an interim order pending hearing of the matter to protect the interest of one of the parties to the proceedings. The question falls for consideration, therefore, is whether the order impugned in the appeal is an ad interim order or an intermediate order against which an appeal is provided for under Section 5(i) of the Act.”_ _“para 9. Before considering the question, it is worth referring to the relevant passage in the order in_ _**K.S.Das** dealing with the decision of the Apex Court in_ _**Madhu Limaye** and the concept of intermediate orders. The relevant passage reads thus:_ _The above decision in Amarnath’s case was followed and explained by Untwalia, J. in Madhu Limaye v. State of Maharashtra, AIR 1978 SC 47 = 1977 (4) SCC 551. That case also arose in the context of S.397 (2) of the Criminal Procedure Code. Untwalia, J. referred to the following passage in Halsbury’s Laws of England (3rd Edn.,para.!608,pp. 744745):_ _“An interlocutory order, though not conclusive of the main dispute, may be conclusive as to the subordinate matter with which it deals.” (emphasis supplied)_ _After adverting to the meaning of the words ‘final order’ in certain cases (to which we shall refer in due course), it was observed in the context of S.397(2) of the Cr.P.C., that although the words occurring in the particular statute are plain and unambiguous, they have to be interpreted in a particular manner which could fit in the context of other provisions of the state and bring about the real intention of the Legislature (R.M.D. Chamevrbangwalla v. Union of India, AIR 1957 SC 628): The River Wear Commissioners v. William Adamton, (1876-77) 2 AC. 743). Orders revisable under S.397(2) need not be either final orders which dispose of a case nor can they be every procedural order, pure and simple; The revisable orders were ‘intermediate orders’ which affect or touch upon rights of parties or are mallets of moment, even though the main case is pending in the same Court which passed the order. Untwalia, J. observed (in Madhu Limaye’s case):_ _“In such a situation, it appears to us that the real intention of the Legislature was not to equate the expression ’interlocutory order’ as invariably being the converse of the words ‘final order’. There may be an order passed during the course of a proceeding which may not be final..... but vet it may not be an - interlocutory order pure or simple. Some kinds of order may fall in between the two. By a rule of_ W.A. No.1510 of 2021 11 _harmonious construction, we think that the bar in subsection (2) of S.397 is not meant to be attracted for such kinds of intermediale orders.”_ Thus, ‘interlocutory orders’ may mean purely procedural orders and not orders which affect or, touch upon rights of parties or matters of moment, though the main case is not disposed of. In that sense, they are not final. But they are interlocutory orders which are not mere orders of a procedural nature, but can be treated as a kind of intermediate orders which affect or touch upon rights of parties or are matters of moment. It all depends upon the context of the words in the Act taken as a whole and the intention of the Legislature. In such a case word ‘order’ or ‘interlocutory order’ cannot be given its plain or grammatical meaning. The orders appealable in Central Bank of lndia v. Gokul Chand, AIR 1987 SC 799, and those held revisable in Amarnath’s case, AIR 1977 SC2185 = 1977(4) SCC 137; and **Madhu** Limaye’s case, AIR 1978 SC 47= 1977 (4) SCC 551 are, therefore, of the ’intermediate category’. _**Madhu Limaye** was a case dealing with the scope of Section 397(2) of the Code of Criminal Procedure. As discernible from the extracted passage, it was held in the said case that the bar under sub-section (2) of Section 397 in entertaining revision against interim order does not apply to the category of orders which are not mere orders of a procedural nature, but can be treated as a kind of intermediate orders which affect or touch upon the rights of parties or are matters of moment. If the decision of the Apex Court in Madhu Limaye is understood in the light of the passage from Halsbury’s laws of England quoted in the said judgment, it is clear that in order to be qualified to be impugned in a proceedings under Section 397(2), the order need not be conclusive as to the main dispute and it is sufficient that it is conclusive at least as to the subordinate matters with which it deals. In other words, if the decision of the Larger Bench in_ _**K.S.Das** is understood in the light of the decision of the Apex Court in_ _**Madhu Limaye** , it can be seen without any doubt that in order to be qualified for a challenge under Section 5(i) of the Act, the order shall be conclusive at least as to any of the subordinate matters with which it deals.”_ 17. As indicated hereinabove a reading of the present impugned interim order rendered by the learned Single Judge on 12.11.2021 would clearly show and manifest that it is only an _ad-interim_ order passed at the admission stage and on an _exparte_ basis as it has been rendered before service of notice on the other side, and essentially for protecting the subject matter of the lis and taking note of the _prima facie_ case disclosed. W.A. No.1510 of 2021 12 18. True that the said impugned order rendered on 12.11.2021 does not explicitly say in so many words that it is an interim order passed pending disposal of the stay application or that it is passed only for a specific period, etc. 19. We need not be searching for the terminology of the language used therein, but we should be examining the pith and substance of the said order. The substance of the order is one of an _ex-parte ad-interim_ order. Therefore, in such cases, the aggrieved party has the right to file their counter affidavit or affidavit in the matter seeking for vacating of the said impugned interim order and all contentions available to them in law both on maintainability as well on the merits could be urged by them and it is for the learned Single Judge to deal with any such application in accordance with law and after affording reasonable opportunity of being heard to both sides. Needless to say that in such cases, the learned Single Judge has the discretion to ensure the final disposal of the main W.P.(C), if so deemed fit and proper. In other words, as of now, we are not in a position to hold that the appellants herein have a cause to institute an _intra court_ appeal in terms of Sec.5(i) of the Kerala High Court Act. Hence, we have not entered into the resolution of the rival pleas made before us by the rival parties both on the W.A. No.1510 of 2021 13 point of maintainability as well as on merits. However, we are told that the election to the Managing Committee of the 1[st] appellant Society is now scheduled to be held on 28.11.2021. But the indisputable aspects of this matter is that the present _intra court_ appeal is not maintainable, for the above said reasons. 20. We also note from Anx.I document produced before us by the appellants that the duties, responsibilities, functions and powers of both the Board of Directors and the Chief Executive Officer are delineated with clarity, as can be seen from a reading of Clause 35 of Anx.I Bye Laws, which deals with the Powers of the Board of Directors as well as Clause 39 of Anx.I Bye Laws, which deals with the powers and duties of the Chief Executive Officer. 21. Of course, we are told by Sri.Ranjith Thampan, learned Senior Counsel appearing for the appellants that the Administrator can discharge the duties, functions and powers of not only the Board of Directors but also of the Chairman or President of the 1[st] appellant Bank and the powers, duties and functions assigned to the Chairman of the 1[st] appellant Bank as per Clause 38 of Anx.I would also come within the province of the 2[nd] appellant Administrator. 22. Sri.Santhosh Mathew, learned counsel appearing for W.A. No.1510 of 2021 14 the writ petitioner/1[st] respondent in the writ appeal would point out that the duties in relation to allotment of work among the Bank Staff, supervision of their work, taking of disciplinary action against them, issuance of orders of transfer, passing of orders on leave applications etc. would come within the province and domain of the Chief Executive Officer as can be seen from items (xi) to (xiv) of Clause 39 of Anx.I guidelines. 23. In that regard, Sri.Ranjith Thampan, learned Senior Counsel would point out that the powers and duties of the Chief Executive Officer will be responsible to the Board of Directors going by the opening sub clause of Clause 39 and that the power of supervision of the general working of the Bank is also vested with the Chairman of the Bank as per Clause 38(ii) of Anx.I Bye Laws, etc. 24. Before parting with this case, we would point out that both sides may focus on their main duties and responsibilities shall be in relation to the better functioning of the 1[st] appellant Bank and to exercise the duties and functions strictly in a manner as envisaged in the provinces allotted to them in terms of the specific provisions in Anx.I Bye Laws or any other applicable norms and Rules in that regard. 25. The upshot of the above discussion is that the prayers W.A. No.1510 of 2021 15 in this _intra court_ appeal stand rejected, as the appeal is not maintainable. With these observations and directions, the above writ appeal stand dismissed. Sd/- **ALEXANDER THOMAS, JUDGE** Sd/- **VIJU ABRAHAM, JUDGE** Skk//16112021