Venad Co-operative Society Ltd No.1762 (Managing Committee) v. Joint Registrar of Co-operative Societies (General), Thiruvananthapuram and Assistant Registrar (SC/ST), Enquiry Officer, Office of the Joint Registrar (General), Thiruvananthapuram

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **MONDAY,THE 21ST DAY OF JANUARY 2019 / 1ST MAGHA, 1940 WP(C).No. 36793 of 2018** ## **PETITIONER:** **THE MANAGING COMMITTEE OF VENAD CO-OPERATIVE SOCIETY LTD NO.1762 REPRESENTED BY PRESIDENT, VAZHUTHAKKAD P.O., THIRUVANANTHAPURAM.** **BY ADVS. SRI.P.N.MOHANAN SMT.AMRUTHA SURESH SRI.C.P.SABARI** ## **RESPONDENTS:** - **1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) THIRUVANANTHAPURAM - 695 001.** - **2 THE ASSISTANT REGISTRAR (SC/ST) ENQUIRY OFFICER OFFICE OF THE JOINT REGISTRAR (GENERAL), THIRUVANANTHAPURAM - 695 001.** ## **SRI K.P.HARISH, SENIOR GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **W.P.(C)No.36793 of 2018** ## **:-2-:** ## **J U D G M E N T** The petitioner, who is the President of the Managing Committee of Venad Co-operative Society, which is a Society registered under the Kerala Co- operative Societies Act, 1969, and the rules made thereunder, has filed this writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P4 notice dated 17.10.2018 issued by the 1[st] respondent Joint Registrar. **==> picture [400 x 13] intentionally omitted <==** up for admission, the learned Senior Government Pleader sought time to file counter affidavit of the 1[st] respondent. **==> picture [400 x 10] intentionally omitted <==** petitioner and also the learned Senior Government Pleader appearing for respondents 1 and 2. 4. The petitioner who is the President of the ## **W.P.(C)No.36793 of 2018** **:-3-:** Managing Committee of the Venad Co-operative Societies Ltd. (for brevity 'the Society') has filed this writ petition feeling aggrieved by Ext.P4 notice dated 17.10.2018 issued by the 1[st] respondent Joint Registrar, in exercise of his powers under sub-section (2) of Section 68 of the Kerala Co-operative Societies Act, read with Rule 66 of the Kerala Co-operative Societies Rules. By the said notice, the members of the Managing Committee of the Society (including members of previous Managing Committee) were asked to offer their explanation to the inquiry report submitted by the 2[nd] respondent Assistant Registrar, who is the Inquiry Officer who has conducted an inquiry under sub-section (1) of Section 68 of the Act. In the writ petition, it is contended by the petitioner, who is the President of the present Managing Committee, who came into office on ## **W.P.(C)No.36793 of 2018** ## **:-4-:** 25.8.2017, that on the basis of Ext.P2 audit report of the year 2012-13, surcharge proceedings are initiated under sub-section (2) of Section 68 of the Act on certain vague charges. It is also contended that the defects noted in the audit report for the year 2012-13 were rectified in the subsequent audit and in Ext.P3 audit defect for the year 2015-16, no such objections are raised. It is contended further that the surcharge proceedings proposed in Ext.P4 is a highhanded action of the 1[st] respondent Joint Registrar and such power has to be used very sparingly. 5. On receipt of Ext.P4 notice dated 17.10.2018, some of the members of the Managing Committee have moved Exts.P5 to P7 requests before the 1[st] respondent Joint Registrar seeking extension of time for submitting explanation, since they require some documents for the purpose of ## **W.P.(C)No.36793 of 2018** ## **:-5-:** submitting a proper explanation. Therefore, a request was made in Exts.P5 to P7 for adjournment of the date of hearing proposed in Ext.P4. 6. 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. Therefore, interference by the Court before that would be premature. 7. In **Seimens Ltd v. State of Maharashtra** ## **W.P.(C)No.36793 of 2018** ## **:-6-:** **[(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. 8. 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 ## **W.P.(C)No.36793 of 2018** ## **:-7-:** proceedings before the authorities concerned is the normal rule. However, the said rule is not without 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. 9. 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, ## **W.P.(C)No.36793 of 2018** ## **:-8-:** while exercising powers of supersession has to form an opinion and that opinion 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. 10. In **Sanjay Nagayach's case (supra)** , the order of supersession was passed by the Joint ## **W.P.(C)No.36793 of 2018** ## **:-9-:** 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 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. 11. 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 ## **W.P.(C)No.36793 of 2018** ## **:-10-:** mere assertion in the writ petition that the show cause notice has been issued without any authority of law or that it is an 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. 12. In the instant case, the power of the 1[st] respondent Joint Registrar to issue notice invoking the provisions of Section 68 of the Act is not in dispute. If there are no sufficient grounds to initiate surcharge proceedings against the members of the Managing Committee of the Society, under Section 68 of the Act, based on the findings in the report submitted under sub-section (1) of Section 68 of the Act, it is for the petitioner and other members to raise such contention before the 1[st] ## **W.P.(C)No.36793 of 2018** ## **:-11-:** respondent Joint Registrar, by submitting a proper explanation. The grounds raised in the writ petition are no at all sufficient for this Court to invoke writ jurisdiction under Article 226 of the Constitution of India to interfere with Ext.P4 notice issued by the 1[st] respondent Joint Registrar. 13. Learned counsel for the petitioner would submit that the petitioner and other members of the Managing Committee (including members of the previous Managing Committee) against whom allegations are levelled in Ext.P4 notice, shall submit their explanation before the 1[st] respondent Joint Registrar within a period of three weeks from the date of receipt of a certified copy of this judgment and the 1[st] respondent may be directed to consider the same and pass appropriate orders, taking note of the legal and factual contentions raised therein, after affording the persons ## **W.P.(C)No.36793 of 2018** ## **:-12-:** concerned an opportunity of being heard. 14. Learned Senior Government Pleader would submit that if any such explanation is received, within the time limit stipulated as above, the 1[st] respondent shall consider the same with notice to the petitioner and other affected parties, and thereafter take an appropriate decision as to the further course to be taken in the matter. 15. In such circumstances, I find absolutely no grounds to interfere with Ext.P4 notice issued by the 1[st] respondent Joint Registrar, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India. 16. It is for the petitioner and other members of the Managing Committee, against whom allegations are levelled in Ext.P4 notice, to offer their explanation, if any, before the 1[st] respondent Joint Registrar, which shall be made within a period of ## **W.P.(C)No.36793 of 2018** ## **:-13-:** three weeks from the date of receipt of a certified copy of this judgment. Thereafter, the 1[st] respondent Joint Registrar shall consider the same and take a decision as to further course to be taken in the matter in accordance with law, with notice to the petitioner and others, after affording them an opportunity of being heard, as expeditiously as possible, at any rate, within a period of two months from the date of receipt of such explanation, taking note of the law laid down by the Apex Court in **Sanjay Nagayach's case (supra)** . All legal and factual contentions raised by the petitioner are left open to be raised before the 1[st] respondent Joint Registrar at appropriate stage. Sd/- **JUDGE** **ANIL K.NARENDRAN JUDGE** ami/25.1.19 ## **W.P.(C)No.36793 of 2018** ## **:-14-:** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 A TRUE COPY OF THE ORDER DATED 03/02/2015 ISSUED BY THE FIRST RESPONDENT.** **EXHIBIT P2 A TRUE COPY OF THE AUDIT NOTE OF THE YEAR 2012-2013.** **EXHIBIT P3 A TRUE COPY OF THE RELEVANT PORTION OF THE AUDIT DEFECT OF THE YEAR 2015-2016.** **EXHIBIT P4 A TRUE COPY OF THE NOTICE DATED 17/10/2018 OF THE FIRST RESPONDENT.** - **EXHIBIT P5 A TRUE COPY OF THE PETITION DATED 07/11/2018 FILED BY THE PETITIONER AND MANAGING COMMITTEE MEMBERS BEFORE THE FIRST RESPONDENT.** **EXHIBIT P6 A TRUE COPY OF THE PETITION DATED 07/11/2018 FILED BY SMT.GIRIJA.T BEFORE THE FIRST RESPONDENT.** **EXHIBIT P7 A TRUE COPY OF THE PETITION DATED 07/11/2018 FILED BY THE SRI.RAMACHANDRAN.B BEFORE THE FIRST RESPONDENT.**