High Court of KeralaDivision BenchDisposed of with directions (final disposition ...
WA No. 1340 of 2021 & connected cases
Case / Petition Number:WA No. 1340 of 2021 & connected cases
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- Alexander Thomas
- Shoba Annamma Eapen
- Judgment Date
- 2022-08-31
- Court Decision / Holding
- The writ appeals are disposed of with directions. The Joint Registrar must proceed in accordance with the Full Bench principles laid down in Kudayathoor Service Co-operative Bank Ltd. (FB). Copies of Section 65/66 reports and the Section 68(1) report, plus all materials, should be provided to affected persons at the correct stage (and upon request when applicable), and reasonable opportunity of hearing must be given before any adverse order under Section 68(2). The process should be completed within two months from receipt of this judgment. All contentions remain open for later proceedings.
- Final Disposition
- Disposed of with directions (final disposition following Full Bench principles)
Parties to the Case
Appellants / Petitioners
- The Managing Committee, Chethakkal Service Co-operative Bank Limited No. 3864
Respondents
- Joint Registrar of Co-operative Societies (General)
- The Assistant Registrar of Co-operative Societies (General)
- The Enquiry Officer
- The State of Kerala represented by the Chief Secretary
Legal Representation & Advocates
Counsels for Petitioners
- • George Poonthottam (Sr.)
- • Arun Chandran
- • Anshin KK
Counsels for Respondents
- • V. Sethunath
- • G. Hariharan
- • Praveen H.
- • T.K. Vipindas (Sr. GP)
Case Synopsis & Summary
This batch of writ appeals before the Kerala High Court (Division Bench of Justice Alexander Thomas and Justice Shoba Annamma Eapen) concerns challenges to orders and notices issued under the Kerala Co-operative Societies Act, including proposed surcharges and supersession of committees. The core legal framework comprises Sections 65 and 66 (inquiries/inspections), 68(1) and 68(2) (penal measures and actions on reports), and 32(1) (powers of supersession), with Rule 66(5) of the KCS Rules and Section 83(1)(e) of the KCS Act referenced for remedies. The Full Bench reference in Kudayathoor Service Co-operative Bank Ltd. v. Joint Registrar (FB) has been the guiding decision, clarifying that adverse findings under 65/66 reports and the 68(1) inquiry are provisional and must be shared with affected persons at the 68(2) stage, with opportunity for hearing and written submissions, before any penalty under 68(2) can be imposed. The court also notes that the Karunakar principle from MD ECIL v. Karunakar does not apply at 68(1) but is analogously importable at 68(2). The judgment categorizes the matters into three groups: at 68(1) stage, at 68(2) stage, and at 32(1) stage, and directs the Joint Registrar to implement the Full Bench principles, furnish necessary reports to parties, allow submissions, and complete the process within a tight timeframe. The appeals are disposed with these directions.
Provisions of Law Cited
Section 65 of the Kerala Co-operative Societies ActSection 66 of the Kerala Co-operative Societies ActSection 68(1) of the Kerala Co-operative Societies ActSection 68(2) of the Kerala Co-operative Societies ActSection 32(1) of the Kerala Co-operative Societies ActSection 67 of the Kerala Co-operative Societies ActSection 83(1)(e) of the Kerala Co-operative Societies ActRule 66(5) of the Kerala Co-operative Societies Rules (KCS Rules)
Legal Doctrines & Maxims
- Audi alteram partem (principle of natural justice)
- Reports under Sections 65/66 and 68(1) are provisional and must be treated as such until 68(2) stage
- Full Bench decisions (Kudayathoor) uphold scope of hearing and copy-provision at 68(2) stage
- Karunakar principle (MD ECIL v. Karunakar) applied with limits at 68(2) stage
Submissions & Arguments
Contentions of Appellants / Petitioners
The appellants contended that adverse reports (65/66) and the 68(1) inquiry report, along with all materials on which findings are based, should be provided to affected persons to enable effective written submissions and hearing at the 68(2) stage. They urged that fairness requires access to the reports early and that interim/provisional findings cannot be treated as final without due process. They also pointed to extenuating circumstances surrounding loan recoveries to be considered in submissions.
Contentions of Respondents
The respondents argued for adherence to the statutory framework, emphasizing that 68(2) stage requires supply of reports and fair hearing, while 68(1) reports are provisional and not final. They urged that the Registrar must independently apply mind before taking penal action and that remedies under Section 83(1)(e) of the KCS Act are available if an adverse order is issued. They highlighted that full bench principles should guide the proceedings and that 32(1) stage may be involved where applicable.
Cited Precedents (4)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| Kudayathoor Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies (General) | 2022 (3) KLT 222 (FB) | Positive | Full Bench decision affirming the need for hearing and copying reports at 68(2) and the proper procedure in 68(2) stage. |
| State of Kerala v. Aravindakshan Nair | 2010 (3) KLT 11 | Positive | Dictum upheld by Full Bench; does not require reconsideration. |
| Managing Director (MD) Electronic Corporation of India Ltd. (ECIL) v. B.Karunakar | 1993 (4) SCC 727 | Partly Overruled / Limited | Karunakar dictum not applicable at 68(1) stage; applies in 68(2) stage, per Full Bench. |
| E.T Abdul Jabbar and others v. Joint Registrar of Co-operative Societies (G), Malappuram and others | W.A.No.1500 of 2021 | Positive | Division Bench decision cited to support 68(2) stage fairness principles. |
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Extracted Judgment Text
Exact text extracted from official judgment records.
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
## **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS**
## **&**
**THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 31[ST] DAY OF AUGUST 2022 / 9TH BHADRA, 1944**
**WA NO. 1340 OF 2021**
**AGAINST THE DATED 07.10.2021 IN WP(C).NO.21371/2021 OF HIGH**
## **COURT OF KERALA**
## **APPELLANT/PETITIONER:**
**THE MANAGING COMMITTEE, THE CHETHAKKAL SERVICE CO-OPERATIVE BANK LIMITED NO. 3864, R-EDAMON P.O, PATHANAMTHITTA DISTRICT, PIN CODE-689 676, REPRESENTED BY ITS PRESIDENT SHRI. JOHN MATHEW.**
**BY ADVS. GEORGE POONTHOTTAM (SR.) ARUN CHANDRAN ANSHIN K.K**
## **RESPONDENTS/RESPONDENTS:**
**1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF COOPERATIVE SOCIETIES, 3RD FLOOR, MINI CIVILSTATION, KOZHENCHERRY, THIRUVALLA-KUMBAZHA HIGHWAY, PATHANAMTHITTA DISTRICT, PIN CODE-689 645 2 THE ENQUIRY OFFICER, THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE ASSISTANT REGISTAR OF COOPERATIVE SOCIETIES (GENERAL), MALLAPPALLY WEST P.O, MALLAPPALLY, PATHANAMTHITTA DISTRICT, PIN CODE-689 585.**
## ***ADDITIONAL R3 TO R6 IMPLEADED.**
**ADDL.R3 LEELAMMA N.D., AGED 53 YEARS,W/O.LATE ANIL KUMAR, ANIL BHAVAN, CHETTHACKAL P.O.,RANNY TALUK, PATHANAMTHITTA DISTRICT, PIN-689677.**
**WA NO. 1340 OF 2021 & CONNT. CASES**
**ADDL.R4 KRISHNA KUMARI AMMAL, W/O.GOPINATHA PILLAI C.K.,MAYA BHAVAN, THOMPIKANDAM P.O., EDAMURY, RANNY TALUK, PATHANAMTHITTA DISTRICT,PIN-689676.**
**ADDL.R5 GOPINATHA PILLAI C.K., AGED 70 YEARS, MAYA BHAVAN,THOMPIKANDAM P.O., EDAMURY, RANNY TALUK, PATHANAMTHITTA DISTRICT, PIN-689676.**
**ADDL.R6 GOPALAKRISHNAN NAIR, AGED YEARS,S/O.LATE NADAMANGALATHU HOUSE, CHETTHACKAL P.O.,RANNY TALUK,PATHANAMTHITTA DISTRICT, PIN-689677.**
***ADDL.R3 TO R6 ARE IMPLEADED AS PER ORDER DATED 14/01/2022 IN I.A.NO.2/2021 IN WA NO.1340/2021.**
****ADDL.R7 IMPLEADED.**
**7 ADDL. DIVYA VIJAYAN, ATTENDER (UNDER SUSPENSION), THE CHETHAKKAL SERVICE CO-OPERATIVE BANK LIMITED NO.3864,**
**W/O.VIJAYAN,PICHANATTU HOUSE,CHETHACKAL VILLAGE, RANNI TALUK,PATHANAMTHITTA DISTRICT.**
***ADDL.R7 IS IMPLEADED AS PER ORDER DATED 14/01/2022 IN I.A.1/22 IN W.A.NO.1340/2021.**
**BY ADVS. SRI.V.SETHUNATH SRI.G.HARIHARAN SRI.PRAVEEN.H. SRI. T.K.VIPINDAS-SR.GP**
**THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON**
**31.08.2022, ALONG WITH WA.NO.1204/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
**WA NO. 1340 OF 2021 & CONNT. CASES**
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS**
**&**
**THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 31[ST] DAY OF AUGUST 2022 / 9TH BHADRA, 1944 WA NO. 1204 OF 2021**
**AGAINST THE JUDGMENT DATED 16.09.2021 IN WP(C).NO.19136/2021**
**OF HIGH COURT OF KERALA**
## **APPELLANT/PETITIONER:**
**THE MANAGING COMMITTEE, THE ITHITHANAM SERVICE COOPERATIVE BANK LTD. NO. 476, MALAKUNNAM P.O., CHANGANASSERY, KOTTAYAM DISTRICT-686535, REPRESENTED BY ITS PRESIDENT.**
**BY ADVS. GEORGE POONTHOTTAM (SR.) NISHA GEORGE**
## **RESPONDENTS/RESPONDENTS:**
- **1 JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL)**
- **OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, COLLECTORATE BUILDING, KOTTAYAM-KUMILY ROAD, COLLECTORATE, KOTTAYAM DISTRICT-686002.**
- **2 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL),**
- **OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, CHANGANASSERY, CIRCLE CO-OP UNION BUILDINGS, CHANGANASSERY, ARAMANAPPADY, CHANGANASSERY P.O., KOTTAYAM DISTRICT-686101.**
- **3 RESHMI M. K. ARBITRATION AND EXECUTION INSPECTOR - I, OFFICE OF**
**WA NO. 1340 OF 2021 & CONNT. CASES**
**THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, CHANGANASSERY, CIRCLE CO-OP. UNION BUILDINGS, CHANGANASSERY, ARAMANAPPADY, CHANGANASSERY P.O., KOTTAYAM DISTRICT-686101.**
**4 THE STATE OF KERALA REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001.**
**SRI. T.K.VIPINDAS-SR.GP**
**THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31.08.2022, ALONG WITH WA NO.1340 OF 2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
**WA NO. 1340 OF 2021 & CONNT. CASES**
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
# **PRESENT**
**THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS**
**&**
**THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 31[ST] DAY OF AUGUST 2022 / 9TH BHADRA, 1944**
**WA NO. 798 OF 2020**
**AGAINST THE JUDGMENT DATED 12.03.2020 IN WP(C).NO.32830/2019**
**OF HIGH COURT OF KERALA**
**APPELLANT/PETITIONER:**
**CHENKAL SERVICE CO-OPERATIVE BANK LTD.NO.1258 CHENKAL P.O., THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY.**
**BY ADVS. SRI.B.S.SWATHI KUMAR SMT.ANITHA RAVINDRAN SRI.HARISANKAR N UNNI SMT.P.S.BHAGYA SURABHI**
## **RESPONDENTS/RESPONDENTS:**
- **1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), THIRUVANANTHAPURAM, PIN - 695 001.**
**2 UNIT INSPECTOR, PARASSALA OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), MINI CIVIL STATION, NEYYATTINKARA - 695 021.**
**BY ADVS. SHRI.N.MANOJ KUMAR, STATE ATTORNEY SRI.P.G.PRAMOD, GOVERNMENT PLEADER(GP-50) SRI. T.K.VIPINDAS-SR.GP**
**THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31.08.2022, ALONG WITH WA.1340/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
**WA NO. 1340 OF 2021 & CONNT. CASES**
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
# **PRESENT**
# **THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS**
**&**
**THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 31[ST] DAY OF AUGUST 2022 / 9TH BHADRA, 1944**
**WA NO. 657 OF 2020**
**AGAINST THE ORDER DATED 06.02.2020 IN WP(C).NO.30171/2019 OF**
**HIGH COURT OF KERALA**
## **APPELLANTS/PETITIONERS:**
- **1 REJI K.JOSHY, AGED 50 YEARS MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD.NO.2047, EDAMULAKKAL P.O., KOLLAM-691 306. RESIDING AT THUNDUVILA PUTHENVEEDU, ANAPPUZHAYKKAL, ANCHAL P.O., KOLLAM DISTRICT.**
- **2 BABU GEORGE, MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD. NO.2047, EDAMULAKKAL P.O.,KOLLAM-691 306. RESIDING AT PALLATH HOUSE, VADAKKEKKARA HOUSE,OZHUKUPARAKKAL P.O., KOLLAM DISTRICT.**
**3 INDIRAKUMARI AMMA, MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD. NO.2047, EDAMULAKKAL P.O.,KOLLAM-691 306. RESIDING AT PUTHENVEEDU, EDAMULAKKAL P.O., KOLLAM-691 306.**
- **4 K.SUDHAKARAN, MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD. NO.2047,**
**EDAMULAKKAL P.O.,KOLLAM-691 306. RESIDING AT THADATHIVILA HOUSE, NEDUNGOTTUKONAM , EDAMULAKKAL P.O.,KOLLAM-691 306.**
**WA NO. 1340 OF 2021 & CONNT. CASES**
- **5 M.VASUDEVAN PILLAI, MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD. NO.2047, EDAMULAKKAL P.O.,KOLLAM-691 306. RESIDING ATCHARUVILA PUTHENVEEDU, PERINGALLOOR,AYUR P.O.,KOLLAM DISTRICT.**
- **6 ABHILASH S., MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD, NO.2047,EDANULAKKAL P.O.,KOLLAM-691 306,RESIDING AT ABU BHAVAN,PANACHAVILA,EDAMULAKKAL P.O.,KOLLAM691 306.**
- **7 SHINEY ALEX, MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD. NO.2047,EDAMULAKKAL P.O.,KOLLAM-691 306.RESIDING AT PANDAKASALA,OZHUKUPARAKKAL P.O.,AYUR,KOLLAM DISTRICT.**
- **8 M.S.SURESH KUMAR, MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD. NO.2047, EDAMULAKKAL P.O.,KOLLAM-691 306. RESIDING AT SOMAVILASAM, PADINJATTINKARA,,ANCHAL P.O.,KOLLAM .**
- **9 M.GOPINATHAN PILLAI, MEMBER,EDAMULAKKAL SERVICE CO-OPERATIVE BANK LTD. NO.2047, EDAMULAKKAL P.O.,KOLLAM-691 306.**
- **RESIDING AT RAKESH BHAVAN,EDAMULAKKAL P.O., KOLLAM DISTRICT- 691 306.**
- **10 ROOPESH UNNITHAN, INDIRA BHAVAN,PADINJATTINKARA,ANCHAL P.O.,KOLLAM DISTRICT.**
**BY ADVS. NISHA GEORGE SRI.GEORGE POONTHOTTAM (SR.)**
## **RESPONDENTS/RESPONDENTS:**
- **1 JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), KOLLAM-691 001.**
- **2 SMT.SEENIYA,**
**WA NO. 1340 OF 2021 & CONNT. CASES**
**JUNIOR INSPECTOR,OFFICE OF THE ASSISTANT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES,PUNALUR,KOLLAM DISTRICT-691 305.**
- **3 SRI.MADHAVAN PILLAI R., MADHAVA MANDIRAM,EDAMULAKKAL P.O.,KOLLAM-691 306.**
**4 STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF CO-OPERATION, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.**
**BY ADVS. SRI.N.ANAND SHRI.N.MANOJ KUMAR, STATE ATTORNEY SRI.P.G.PRAMOD, GOVERNMENT PLEADER(GP-50) SRI. T.K.VIPINDAS-SR.GP**
**THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31.08.2022, ALONG WITH WA.1340/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
**WA NO. 1340 OF 2021 & CONNT. CASES**
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
# **PRESENT**
**THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS**
**&**
**THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 31[ST] DAY OF AUGUST 2022 / 9TH BHADRA, 1944 WA NO. 1206 OF 2021**
**AGAINST THE JUDGMENT DATED 16.09.2021 IN WP(C) 15091/2021 OF**
**HIGH COURT OF KERALA**
## **APPELLANT/PETITIONER:**
**THE MANAGING COMMITTEE**
**THE CHETHAKKAL SERVICE CO-OPERATIVE BANK LIMITED NO.3864, R-EDAMON P.O., PATHANAMTHITTA DISTRICT, PIN CODE-689676, REPRESENTED BY ITS PRESIDENT SHRI. JOHN MATHEW.**
**BY ADVS. GEORGE POONTHOTTAM (SR.) ARUN CHANDRAN**
## **RESPONDENTS/RESPONDENTS:**
- **1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL),**
- **OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, 3RD FLOOR, MINI CIVIL STATION, KOZHENCHERRY, THIRUVALLA-KUMBAZHA HIGH WAY, PATHANAMTHITTA DISTRICT, PIN CODE-689645.**
- **2 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL),**
**OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), BLOCK PADI, VADASSERIKKARA, RANNI, PATHANAMTHITTA DISTRICT, PIN CODE-689672.**
***ADDITIONAL R3 TO R6 IMPLEADED.**
**3 LEELAMMA N.D.,**
**WA NO. 1340 OF 2021 & CONNT. CASES**
**AGED 53 YEARS,W/O.LATE ANIL KUMAR,ANIL BHAVAN, CHETTAKKAL P.O.,RANNY TALUK,PATHANAMTHITTA DISTRICT-689677.**
- **4 KRISHNA KUMARI AMMAL, W/O.GOPINATHA PILLAI C.K.,MAYA BHAVAN , THOMPIKANDAM P.O.,EDAMURY,RANNY TALUK, PATHANAMTHITTA DISTRICT,PIN-689676.**
- **5 GOPINATHA PILLAI.C.K., AGED 70 YEARS,MAYA BHAVAN,THOMPIKANDAM P.O.,EDAMURY, RANNY TALUK,PATHANAMTHITTA DISTRICT,PIN-689676.**
- **6 GOPALAKRISHNAN NAIR, AGED YEARS,S/O.LATE NADAMANGALATHU HOUSE,CHETTHACKAL P.O., RANNY TALUK,PATHANAMTHITTA DISTRICT,PIN-689677.**
***ADDITIONAL R3 TO R6 ARE IMPLEADED AS PER ORDER DATED 14/01/2022 IN I.A.2/2021 IN WA 1206/2021.**
****ADDITIONAL R7 IMPLEADED.**
- **7 ADDL.R7.**
**DIVYA VIJAYAN, ATTENDER (UNDER SUSPENSION), THE CHETHAKKAL SERVICE CO-OPERATIVE BANK LIMITED NO.3864.**
**W/O.VIJAYAN,PICHANATTU HOUSE,CHETHACKAL VILLAGE,RANNI TALUK, PATHANAMTHITTA DISTRICT.**
****ADDITIONAL R7 IS IMPLEADED AS PER ORDER DATED 14/01/2022 IN I.A.3/2021 IN WA 1206/2021.**
**BY ADVS. SRI.V.SETHUNATH SRI.G.HARIHARAN SRI.PRAVEEN.H. SRI. T.K.VIPINDAS-SR.GP**
**THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31.08.2022, ALONG WITH WA.1340/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
**WA NO. 1340 OF 2021 & CONNT. CASES**
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
# **PRESENT**
**THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS**
**&**
**THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 31[ST] DAY OF AUGUST 2022 / 9TH BHADRA, 1944 WA NO. 1751 OF 2020**
**AGAINST THE JUDGMENT DATED 03.12.2020 IN WP(C).NO.2435/2020**
**OF HIGH COURT OF KERALA**
**APPELLANT/PETITIONER:**
**THE PRESIDENT, MANAGING COMMITTEE, THE KUDAYATHOOR SERVICE CO-OPERATIVE BANK LIMITED NO.3316, KUDAYATHOOR POST, THODUPUZHA, IDUKKI DISTRICT, PIN CODE-685590.**
**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 (GENERAL), PAINAVU, IDUKKI DISTRICT, PIN CODE-685603.**
- **2 V.S.KURUVILLA, AGED 77 YEARS S/O.DEVASIA, R/A VERUNKAL HOUSE, KUDAYATHOOR P.O., IDUKKI DISTRICT-685590.**
**BY ADVS. SHRI.N.MANOJ KUMAR, STATE ATTORNEY() SRI.P.G.PRAMOD, GOVERNMENT PLEADER(GP-50) SRI. T.K.VIPINDAS-SR.GP**
**THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON**
**31.08.2022, ALONG WITH WA.1340/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
**WA NO. 1340 OF 2021 & CONNT. CASES**
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS**
**&**
**THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN WEDNESDAY, THE 31[ST] DAY OF AUGUST 2022 / 9TH BHADRA, 1944 WA NO. 1766 OF 2020 AGAINST THE JUDGMENT DATED 22.12.2020 IN WP(C).NO.27880/2020 OF HIGH COURT OF KERALA**
## **APPELLANTS/PETITIONERS:**
- **1 PAVITHRAN C. NAIR AGED 50 YEARS**
- **S/O.KUNHIKKANNAN NAIR.A,MEMBER,KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD.NO.F.F.91,**
**KUTTKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT, RESIDING AT PLAVILAKAYA HOUSE,KARIVEDAKAM, KUTTIKKOL.P.O,KASARAGOD DISTRICT.**
- **2 SHEEBA JOSEPH, W/O.SANTHOSH.A.V,MEMBER,KUTTIKKOL SERVICE COOPERATIVE BANK LTD.NO.F.F.91, KUTTIKKOL.P.O,CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT AMMANA,SANKARAMPADI.P.O, KASARAGOD DISTRICT.**
- **3 RUKKYA.P,**
- **W/O.K.MUHAMMED,MEMBER,KUTTIKKOL SERVICE COOPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT PARAKKUNNU,KUTTIKKOL.P.O, KASARAGOD DISTRICT.**
- **4 RAMACHANDRAN.C, S/O.RAMAN NAIR,,MEMBER,KUTTIKKOL SERVICE COOPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT KALLAKKAPPU,SANKARAMPADI.P.O,KASARAGOD DISTRICT.**
- **5 GOPINATHAN.A.K, S/O.KORANGAN,MEMBER,KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O,**
**WA NO. 1340 OF 2021 & CONNT. CASES**
**CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT AALAKKATTADUKKAM,MAANIMOOLA.P.O,KASARAGOD DISTRICT.**
**6 MUHAMMED HANEEFA, S/O.M.H.UMMAR,MEMBER,KUTTIKKOL SERVICE COOPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT ENIYAADI HOUSE,BANTHADUKKA.P.O,KASARAGOD DISTRICT.**
- **7 LAYONSA.A.V, W/O.THOMAS,MEMBER,KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT ARIMANNIL HOUSE,MALAAMKUNDU,BANTHADUKKA.P.O, KASARAGOD DISTRICT.**
- **8 ALOSIOUS.A.T, S/O.THOMAS,MEMBER,MEMBER,KUTTIKKOL SERVICE COOPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT AKKATTUYILU,MAANADUKKAM.P.O,KASARAGOD DISTRICT.**
- **9 NARAYANAN.K, S/O.H.KANNAN,MEMBER,KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT BANDANKAI HOUSE,KARIVEDAKAM.P.O, KASARAGOD DISTRICT.**
- **10**
## **NARAYANAN NAIR.E,**
- **S/O.KUNJIRAMAN NAIR,MEMBER,KUTTIKKOL SERVICE COOPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT,AALATHIYUKADAVU HOUSE,KARIVEDAKAM.P.O, KASARAGOD DISTRICT.**
- **11 ULLAS JOSEPH, S/O.JOSEPH,MEMBER,KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD.NO.F.F.91,KUTTIKKOL.P.O, CHENGALA VIA,KASARAGOD DISTRICT,RESIDING AT ANDUKUNNEL,KARIVEDAKAM.P.O, KASARAGOD DISTRICT.**
**BY ADVS. GEORGE POONTHOTTAM (SR.) SMT.NISHA GEORGE**
**WA NO. 1340 OF 2021 & CONNT. CASES**
## **RESPONDENTS/RESPONDENTS:**
- **1 THE JOINT REGISTRAR OF COOPERATIVE SOCIETIES (GENERAL)**
- **OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), CIVIL STATION, HBNVIDYA NAGAR POST OFFICE, KASARAGOD DISTRICT,PIN CODE-671123. E-MAIL JRGKSGD.COOP@ KERALA.GOV.IN**
- **2 THE ASSISTANT REGISTRAR OF COOPERATIVE SOCIETIES(GENERAL), OFFICE OF THE ASSISTANT REGISTRAR OF COOPERATIVE SOCIETIES(GENERAL), KASARAGOD DISTRICT,PIN CODE-671 123.**
- **3 *ADDL.R3 IS IMPLEADED K.N.RAJAN NAMBIAR S/O.KANNAN NAIR, AGED 60 YEARS, RESIDING AT THAVANAM HOUSE, SANKARAMPADI P.O., VIA CHENGALAM, KASARAGOD *ADDL.R3 IS IMPLEADED AS PER ORDER DATED**
**BY ADVS.**
**SRI.P.N.MOHANAN SRI. T.K.VIPINDAS-SR.GP**
**THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31.08.2022, ALONG WITH WA.1340/2021 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
# **ALEXANDER THOMAS & SHOBA ANNAMMA EAPEN, JJ.**
==================
## **W.A.No.1340 of 2021**
_[arising out of the impugned judgment dated 07.10.2021 in W.P.(C).No.21371 of 2021]_
_&_
## _**W.A.No.1204 of 2021**_
_[arising out of the impugned judgment dated 16.09.2021 in W.P.(C).No.19136 of 2021]_
_&_
## _**W.A.No.798 of 2020**_
_[arising out of the impugned judgment dated 12.03.2020 in W.P.(C).No.32830 of 2019]_
_&_
## _**W.A.No.657 of 2020**_
_[arising out of the impugned judgment dated 06.02.2020 in W.P.(C).No.30171 of 2019]_
_&_
## _**W.A.No.1206 of 2021**_
_[arising out of the impugned judgment dated 16.09.2021 in W.P.(C).No.15091 of 2021]_
_&_
## _**W.A.No.1751 of 2020**_
_[arising out of the impugned judgment dated 03.12.2020 in W.P.(C).No.2435 of 2020]_
_&_
## _**W.A.No.1766 of 2020**_
_[arising out of the impugned judgment dated 22.12.2020 in W.P.(C).No.27880 of 2020]_
================== Dated this the 31[st] day of August, 2022
## **J U D G M E N T**
## ALEXANDER THOMAS, J.
These cases are now only at the show cause notice stage in terms of Sec.68(1) or Sec.68(2) or Sec.32(1), as the case may be. The issues referred to the Full Bench of this Court have already been
W.A.No.1340 of 2021 & cont. cases
- : 2 :-
answered. So these appeals need not be kept pending, any longer and are to be disposed in the light of the legal principles laid down by the Full Bench, etc.
2. These matters are inter related in so far as the issues already decided by the Full Bench of this Court as per the order dated 07.04.2022, answering the reference in the matters raised in W.A.Nos.657 of 2020, 798 of 2020 and 1751 of 2020, reported in the case in _**Kudayathoor Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies (General)**_ [ 2022
(3) KLT 222 (FB)], wherein majority of two Judges of the three Judges Full Bench has held that the dictum laid down by the Division Bench of this Court in the case in _**State of Kerala v. Aravindakshan Nair**_ [2010 (3) KLT 11] is correct and does not require any re-consideration. In **Aravindakshan Nair** 's case (supra) [2010 (3) KLT 11], the Division Bench of this Court has held that after the conduct of the Section 65 inquiry/Section 66 inspection, there is no legal obligation for the notified Registrar to provide copies of those reports to the affected parties concerned before the Registrar decides as to whether further action is required either under Section
W.A.No.1340 of 2021 & cont. cases
- : 3 :-
32(1) for proposed supersession measures or under Section 68(1), for proposed surcharge measures and for issuing notices at that stage in terms of Section 32(1) or Section 68(1) as the case may be, unless, after the conclusion of the Section 65/Section 66 process, cost is proposed to be apportioned from the parties concerned in terms of Section 67 of the Kerala Co-operative Societies Act (KCS Act) r/w. Rule 66(5) of the Kerala Co-operative Societies Rules (KCS Rules) etc.
3. Moreover, it has been held therein that the said obligation to provide copies of such adverse report and for opportunity of hearing etc occurs at the Section 68(2) stage in the case of surcharge or before passing final adverse orders at the Section 32 process. The correctness of the abovesaid dictum laid down by the Division Bench of this Court in **Aravindakshan Nair** 's case (supra) [2010 (3) KLT 11] was referred to and decided by the Full Bench in the aforesaid **Kudayathoor Service Co-operative Bank** 's case (supra) [2022 (3) KLT 222 (FB)]. In consonance with the dictum laid down by the Division Bench of this Court in **Aravindakshan Nair** 's case (supra) [2010 (3) KLT 11], the Full Bench has also held that, where the
W.A.No.1340 of 2021 & cont. cases
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authorities concerned proceed to apportion the cost, after the conclusion of Section 65 inquiry or Section 66 inspection process, then Rule 66(5) of the KCS Rules r/w Section 67 of the KCS Act would stipulate that at that stage, certainly, the affected parties will have to be heard, after providing copies of such reports. The Full Bench of this Court in **Kudayathoor Service Co-operative Bank** 's case (supra) [2022 (3) KLT 222 (FB)] has held, in para 17 thereof, that opportunity of hearing is required to be given in terms of Section 68(2) of the KCS Act, before a person is called upon to repay or restore the money or other property, as found recoverable from him. Further, it has also been held by the Full Bench, in the latter part of para 17 that if a committee of a society is superseded, under Section 32, based on the factual findings rendered in such an inquiry or inspection without providing, to the party concerned, a copy of the report of the inquiry inspection, then the order of supersession would be plainly illegal. So also, it has been reiterated by the Full Bench therein that, if any person, mentioned in Section 68(1) of the Act, is surcharged, based on the findings, in an order of inquiry under Section 65 or inspection under Section 66, without giving him a copy
W.A.No.1340 of 2021 & cont. cases
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of the said report of inquiry or inspection as also a report of inquiry under Section 68(1), then the surcharge order would be illegal. However, it has been _inter alia_ held by the Full Bench, in the concluding portion of the para18 of the above said reference order, that the dictum laid down by the Constitution Bench of the Apex Court in _**Managing Director (MD) Electronic Corporation of India Ltd. (ECIL) v. B.Karunakar**_ [1993 (4) SCC 727] has no application at the Section 68(1) stage.
4. These writ appeals have been adjourned only to await the decision of the Full Bench in the referred matters, and in view of the abovesaid decision of the Full Bench, further aspects in relations to these cases, which are either at the Section 68(1) stage or at Section 68(2) stage or at Section 32(1) stage, will have to be decided by the notified Registrar in accordance with law and in the light of the legal principles laid down by the Full Bench of this Court in **Kudayathoor Service Co-operative Ban** k's case (supra) [ 2022 (3) KLT 222 (FB)].
5. Some of the aspects, in relation to a similar matter which was at the Section 68(2) stage, was considered by the Division Bench
## W.A.No.1340 of 2021 & cont. cases
- : 6 :-
of this Court, as per the judgment dated 22.07.2022 in W.A.No.1500 of 2021 in the case in _**E.T.Abdul Jabbar and others v. the Joint Registrar of Co-operative Societies (G), Malappuram and others**_ . The Division Bench of this Court in W.A.No.1500 of 2021 has _inter alia_ held, in para 8 of the said judgment, that as held by the Full Bench, in para 18 of the reference order in **Kudayathoor Service Co-operative Bank** 's case (supra) [2022 (3) KLT 222 (FB)], the dictum laid down by the Constitution Bench of the Apex Court in **B.Karunakar** 's case (supra) [1993 (4) SCC 727] will have no bearing or application at the Section 68(1) stage. However, it has been held by the Division Bench therein that the dictum laid down by the Apex Court in **B.Karunakar** 's case (supra) [1993 (4) SCC 727] would certainly apply at the Section 68(2) stage. It was so held because as it has been found by the Full Bench in para 17 that, if any person mentioned in Sec.68(1) stage is proposed to be surcharged at Sec.68(2) stage, without giving the affected party copy of the reports of the Sec.65 inquiry or Sec.66 inspection and Sec.68(1) inquiry report, then the surcharge order would be plainly illegal and ultravires so only for that reason. So, in other words, the dictum laid down
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in **B.Karunakar** 's case (supra) [1993 (4) SCC 727] would apply with full vigour at the Sec.68(2) stage.
6. It will be pertinent to refer to the contents of para 8 of the judgment dated 22.07.2022, rendered in W.A.No.1500 of 2021, which reads as follows:
_8. The Full Bench in the afore decision has taken the perspective therein, more particularly in para 18 thereof, that the dictum laid down by the Constitution Bench of the Apex Court in Managing Director (MD), Electronic Corporation of India (ECIL) V. B.Karunakar [1993 (4) SCC 727], has no application at the completion of Sec. 65/ Sec. 66 inquiry/inspection process or at the commencement of further action at Sec. 68(1) stage. However, we are of the view that the dictum laid in B.Karunakar's case supra will be analogously importable to the extent discussed hereinafter at the Sec. 68(2) stage, in view of the legal position categorically laid down in para 17 of the above Full Bench decision. In para 17, the Full Bench has clearly laid down that, if any person mentioned in Sec. 68(1) stage is proposed to be surcharged at Sec. 68(2) stage, without giving the affected party copy of the report of the Sec. 65 inquiry or Sec. 66 inspection, then the surcharge order would be illegal and ultra-vires. So, in other words, the dictum laid down in B.Karunakar's case supra will apply with full vigour at the Sec. 68(2) stage. In our considered opinion, at the Sec. 68(2) stage, the matter could be analogously compared to a scenario where the disciplinary authority and the inquiry authority are two different functionaries, in disciplinary proceedings. In such a case, it is by now, well established by the Constitution Bench decision of the Apex Court in B.Karunakar's case supra, that, where the inquiry Officer and the Disciplinary Authority are two distinct_
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_functionaries, in a case where the Disciplinary Authority entrusts or delegates the process of conduct of inquiry by such inquiry officer, then, after completion of the inquiry process, the inquiry officer will have to draw up the inquiry report and submit the same to the disciplinary authority and if the disciplinary authority proposes to act upon such an adverse inquiry report, then a copy of the inquiry report should be given in advance by the disciplinary authority to the delinquent and he has to be given full and effective opportunity by the disciplinary authority, on the issue as to whether the fact findings of guilt, made in the said inquiry report, are correct or not and only after that process can the disciplinary authority decide as to whether the delinquent concerned is guilty of all or any other charges made out against him. Only after this finding, regarding guilt, will the question of considering the imposition of penalty arise. Hence, where the final decision maker and the inquiry officer are two distinct separate functionaries, then the abovesaid dictum would apply with equal force, in a case like the present one, at the Sec. 68(2) stage. In other words, the inquiry reports submitted, either in terms of Sec. 65 or Sec. 66 and Sec. 68(1), can only be inquiry reports in terms of Sec. 65/Sec. 66 and Sec. 68(1), which would be a relevant and crucial piece of material. But the said reports cannot be mechanically acted upon by the final decision maker, who proposes to take adverse decisions at the Sec. 68 (2) stage, as if the adverse fact findings in those reports are final and binding._
7. It has also been _inter alia_ held therein that at the Section
68(2) stage, the notified Registrar, who is the competent authority, will have to give copies of the adverse reports, drawn up in terms of Sec. 65/Sec.66, as the case may be, as well as the Sec.68(1) inquiry
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report and then should also give all materials, on the basis of which the adverse findings in such reports have been drawn up, to the affected persons and should also give opportunity to the affected persons to furnish written submissions, to present their case, as to why, according to them, the alleged irregularities, noted in such reports, are not reliable or cannot be acted upon and also thereafter to afford reasonable opportunity of being heard to such affected persons, through their authorised representatives/counsel, if any, and then to take a considered decision as to whether the case called for penal measures, in terms of Sec.68(2). Further, it has already made clear that if an adverse order is passed thereafter, at Sec. 68(2) stage, then the affected persons will have the right to challenge such an adverse order in appropriate remedies, including statutory appeal in terms of Section 83(1)(e) of the KCS Act, before the State Government.
8. From the submissions of the parties, it appears that the present 7 writ appeal cases before us would fall into 3 broad categories. We are told that the cases in W.A.Nos.1340/2021, 1204/2021 and 798/2020 are cases which are now at Section 68(1)
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stage i.e., after the issuance of notice at the Section 68(1) stage.
9. W.A.No.657 of 2020 is at the 2[nd] category of the stage, wherein Section 68(1) inquiry process has been completed and the Section 68(1) inquiry report has been drawn up and further, it also appears that copies of the adverse reports, as per Section 65 inquiry report and Section 68(1) inquiry report, have been given to the appellants, who are the affected persons concerned and Ext.P5 notice dated 27.09.2019 has been issued by respondent-Joint Registrar Cooperative Societies, intimating the parties concerned as to why the adverse orders for surcharge, as envisaged in terms of Section 68(2) shall not be rendered against them, in view of the facts and circumstances disclosed in the said show cause notice. In other words, W.A.No.657 of 2020 is a case said to be pending at the Section 68(2) stage.
10. W.A.Nos.1206/2021, 1751/2020 and 1766/2020 would come into the 3[rd] category of cases, which are at the Sec.32(1) stage, proposing supersession measures. It is seen that in all these 3 cases, Sec.32(1) notice have been issued, in pursuance of Sec.65 enquiry reports conducted in those cases.
## W.A.No.1340 of 2021 & cont. cases
- : 11 :-
Now, we would take up the 3 categories of cases separately.
**W.A.Nos.1340/2021, 1204/2021 and 798/2020**
11. W.A.Nos.1340/2021, 1204/2021 and 798/2020, as indicated herein above, are the 3 cases which are at the Section 68(1) stage, after the submission of Section 65 inquiry report. In view of the abovesaid dictum laid down by the Full Bench of this Court and as held by the Division Bench of this Court in the judgment rendered on 22.07.2022 in W.A.No.1500 of 2021, the matters will have to proceed further and for that purpose the respondent- the Joint Registrar will have to serve copies of the respective Section 65 inquiry reports to the affected persons in these cases, if the same has not already been served. Thereafter, it is for the authority concerned to complete the Sec. 68(1) inquiry process, and to draw up the inquiry report at the conclusion of Sec.68(1) stage. Submission has been made by the learned Senior Counsel in these appeals that fairness would demand that a copy of the adverse reports as in Section 65/Section 66, as the case may be, will have to be given to the affected persons concerned, even at the commencement of the Section 68(1) stage, in order to facilitate the affected persons to know the nature of the allegations
W.A.No.1340 of 2021 & cont. cases
**==> picture [234 x 9] intentionally omitted <==**
that they will have to face in the Section 68(1) inquiry process. In view of the dictum laid down by the Division Bench of this Court in **Aravindakshan Nair** 's case (supra) [2010 (3) KLT 11], as reiterated by the Full Bench in **Kudayathoor Service Co-operative Bank** 's case (supra) [ 2022 (3) KLT 222 (FB)], the authority concerned is under a legal obligation to give such adverse reports, only at the Section 68(2) stage. However, if any of the affected persons are of the view that they require a copy of such Section 65 inquiry/Section 66 inspection report, as the case may be, at the commencement of the Section 68(1) stage, it is for them to make an application, demanding a copy of the same and thereupon, the respondent-Joint Registrar will ensure that a copy of such Sec.65 enquiry report should be given to the party concerned, who has been issued Section 68(1) stage notice. 12. After completing the necessary formalities, it is for the inquiry officer concerned to complete the Section 68(1) inquiry process in accordance with law and to draw up the inquiry report at the conclusion of Section 68(1) stage. Thereafter, if the respondentJoint Registrar intends to proceed to the Section 68(2) stage, then he will be under a legal obligation to ensure that copies of Sec.65/ Sec.66
## W.A.No.1340 of 2021 & cont. cases
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reports, as the case may be (if not already given), and Section 68(1) inquiry report should necessarily be given to the affected persons concerned, before proceeding further in relation to the steps contemplated under Section 68(2). So also, all materials, on the basis of which the adverse findings are made against the affected persons, as per the Section 65/ Section 66 reports and Section 68(1) inquiry report, should also be given to the affected persons concerned. This process may be completed without any further delay.
13. Thereafter, the affected persons shall be given an opportunity to submit detailed written submissions of the matter, along with supporting documents, if any, explaining their stand as to why the alleged irregularities, noted in the abovesaid adverse reports, are not correct or cannot be relied upon or as to why the proposed surcharge measures are not justified or warranted, in the facts and circumstances of the case. It has to be borne in mind that such adverse reports as per Section 65/ Section 66 reports, as the case may be, as well as Section 68(1) inquiry report, are only provisional fact findings and cannot be treated as final and binding on the respondent-Joint Registrar who is the ultimate decision maker at the
## W.A.No.1340 of 2021 & cont. cases
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Section 68(2) stage. The respondent-Joint Registrar, is legally obliged to independently apply his/her mind on the issue, as to whether the alleged irregularities and wrongs, found out in those adverse reports, are correct and whether the facts and circumstances of the case would demand and warrant taking of adverse penal measures, in terms of surcharge. Opportunity of hearing should also be given by the respondent-Joint Registrar to the affected persons concerned, either in person or through their authorised representatives or authorised counsel of their choice, if any, and after such hearing, the respondentJoint Registrar will take a decision as to whether the allegations of alleged irregularities etc., noted against the affected persons, are correct and tenable and whether the facts and circumstances of the case would warrant and justify the invocation of penal measures of surcharge. Thereafter, it is for the respondent-Joint Registrar to take a decision concluding the Section 68(2) stage and to render decision thereon. If an adverse order of surcharge is passed against the affected persons concerned, then they will have liberty to work out the remedies, in the manner known to law, especially the statutory remedy, in terms of Section 83(1)(e) of the KCS Act, which provides
## W.A.No.1340 of 2021 & cont. cases
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for a statutory appeal before the competent authority-State Government in Co-operation Department. The abovesaid process of completing and concluding the process at the Section 68(2) stage as above should be duly finalised by the respondent-Joint Registrar, without much delay, preferably within two months from the date of receipt of a copy of this judgment. Needless to say, all contentions available in law to the parties concerned are left open to be raised and decided in appropriate proceedings, in the manner known to law. No other orders and directions are called for in these cases.
With these observations and directions, the above writ appeals will stand finally disposed of.
## **W.A.No.657/2020**
14. W.A.No.657/2020, as indicated herein above from the submissions of both sides, it appears that Section 65 inquiry report was initially conducted and thereafter Section 68(1) inquiry proceedings was completed. Further, copies of the adverse reports, at Section 65 inquiry report, has been served to the parties. From the submission of the official respondents, it appears that a copy of Section 68(1) inquiry report has also been given to the
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appellants/affected persons concerned. Whereas, the submissions of the appellants/affected persons concerned is that a copy of Sec.68(1) inquiry report has not been given, but they could secure a copy of the said report otherwise.
15. Hence, in this case the respondent-Joint Registrar will ascertain as to whether the adverse report, in terms of Section 65 inquiry report and Section 68(1) inquiry report, has already been served to the appellants/affected persons concerned and if not already served, both those reports shall be served on the appellants within one week from the date of receipt of a copy of this judgment. So also, all materials, on the basis of which the adverse findings have been made against the appellants in those adverse reports, should also be given to the appellants. Thereafter, the appellants may furnish their written submissions of the matter, as stated in other cases, explicating their stand a to why the factual findings of the alleged irregularities are not correct and tenable or as to why those allegations cannot be relied upon and also as to why the facts and circumstances do not warrant the imposition of penal measure of surcharge etc. Thereafter, the respondent-Joint Registrar shall afford
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reasonable opportunity of being heard to the appellants, through their authorised representatives/counsel, if any, and then take a considerable decision as to whether the alleged irregularities, mentioned in the adverse report, are correct and tenable and as to whether the facts and circumstances warrant penal measures, in terms of surcharge or not etc. As stated hereinabove, all the findings in the adverse reports, at Sec.65 inquiry and Sec.68(1) inquiry, should be treated only as provisional fact findings and the same cannot be treated as final and binding on the respondent-Joint Registrar. In other words, there should be independent application of mind by the respondent-Joint Registrar, as to whether those allegations or irregularities, as noted in those inquiry reports, are correct and sustainable and whether the factual aspects justify and warrant recourse to adverse penal measures of surcharge etc. Thereafter, it is for the respondent-Joint Registrar to pass final order, for concluding Section 68(2) stage and to take a decision as to whether or not penal measure of surcharge is made out in the instant case. If any such adverse order is passed against the appellants, they will have the liberty to work out the remedies, in the manner known to law, as
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indicated herein above.
16. Learned Senior Counsel, appearing for the appellants, would urge that one of the allegations against the appellants is that some of the loans sanctioned by them were not recovered from the borrowers concerned in time etc., and that most of the loans have already been duly cleared by the borrowers concerned and that such extenuating circumstances should also be duly considered by the respondent-Joint Registrar before he takes a decision in the matter. It is made clear that it is for the appellants to urge those contentions in their written submissions as well as in the submission that they make during the time of hearing of the case. If any such factual submissions are made, regarding due repayment of the alleged loans, by the borrowers concerned, the respondent-Joint Registrar may ascertain, from the Co-operative Society concerned, as to the correctness or otherwise of such submission.
17. Needless to say, all contentions available in law to the parties concerned are left open to be raised and decided in appropriate proceedings, in the manner known to law. No other orders and directions are called for in these cases.
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With these observations and directions, the above writ appeal will stand finally disposed of.
## **W.A.Nos.1206/2021, 1751/2020 and 1766/2020**
18. In these 3 cases, Section 65 inquiry process have been completed and thereafter, in view of the allegations disclosed in those inquiry reports, the impugned notices have been issued, proposing supersession measures at the Section 32(1) stage. So, the respondentJoint Registrar will be at liberty to proceed further with the matter, in accordance with law. It is urged before us by the learned Senior Counsel appearing for the appellants, that the copy of the adverse inquiry reports, at Section 65 stage, was never served by the respondent-Joint Registrar and the appellants could secure it otherwise and the same was produced only in these writ appeals by the respondents concerned. As held herein above, the respondentJoint Registrar was under the legal obligation to provide copies of such Section 65 inquiry reports, since copies of the inquiry reports have already been served to the appellants, in these writ appellate proceedings to obviate further delay, there may not be any necessity to again serve them copies. Thus, we say so, as on being queried, the
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learned Senior Counsel appearing for the appellants, would fairly submit that though there is a breach of legal obligation, on the part of the respondent-Joint Registrar, there may not be any necessity to again serve copies of this reports, as such copies of such reports were served at this writ appellate stage.
19. Further, it is also ordered that all materials, on the basis of such adverse findings, that have been made in the Section 65 inquiry report should be evenly given by the respondent-Joint Registrar to the appellants and it should be duly completed within one week from the date of receipt of a copy of this judgment. Thereafter, it is for the appellants to give written submissions on the matter as to why the alleged allegations and irregularities, noted in Section 65 inquiry report, are wrong and not reliable and as to why the extreme measure of supersession of the managing committee of the society, is not warranted or justified in the facts and circumstances of the case. Thereafter, the the respondent-Joint Registrar will afford reasonable opportunity being heard to the appellants either in person or through their authorised representatives/counsel, if any, and then should take a considerable
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decision as to whether the conditions enumerated in Clauses (a) to (d) of Section 32(1) are made out in these cases and also as to whether the facts and circumstances of the case would justify the serious measure of supersession of the Society etc. Decision in that regard may be duly taken by the respondent-Joint Registrar, after completing the hearing process.
20. Further, as held in the other cases, the adverse findings in Section 65 inquiry report shall not be treated as final and binding on the respondent-Joint Registrar and the same can only be provisional fact findings and the correctness or otherwise of those adverse findings will have to be evaluated and decided by the respondentJoint Registrar in the decision making process, as above.
21. Shri.V.Sethunath, the learned counsel appearing for the addl. respondents 3 to 6 in W.A.No.1206 of 2021, would submit that, though the stay orders in these cases were related only in relation to the proposed Sec.68(1) stage and Sec.32(1) stage, as the case may be, it is learned that the beneficiaries of such stay orders have created a wrong impression, as if such stay orders as against Sec.68(1) stage and Sec.32(1) stage, even have the result of interdicting with the
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criminal investigation by the Police into the allegations of misappropriation, in relation to the very same irregularities and that the Police authorities have thus kept the criminal investigation in cold storage and that even some of the beneficiaries could secure interim orders in bail matters, for keeping in abeyance coercive steps and arrest etc. The above said submission made by Shri. V.Sethunath, the learned counsel appearing for the contesting respondents, are strongly denied by the appellants. Without getting into the correctness of the submissions, we fail to understand as to how the stay order granted by this Court, at Section 68(1) stage and Section 32(1) stage, can have the effect of interdicting with criminal investigation by the Police or in bail matters by the criminal courts.
22. Shri.T.K.Vipindas, the learned Senior Government Pleader appearing for the official respondents, would submit that his instructions is that the criminal investigation in these matters are proceeding in accordance with law. We would also make it clear that in case the abovesaid parties represented by Shri.V.Sethunath, the learned Advocate, or any other such similarly situated persons, have any grievances in such matters, it is for them to work out the
W.A.No.1340 of 2021 & cont. cases
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remedies in appropriate proceedings, in the manner known to law, including the option of giving their written representations before the competent Police authorities, like the District Police Chief or the higher Police authorities etc. The learned Senior Government Pleader may ascertain those aspects and if necessary, give necessary instructions to the investigation officer and the prosecution wing.
Needless to say, all contentions available in law to the parties concerned are left open to be raised and decided in appropriate proceedings in the manner known to law. No other orders and directions are called for in these cases.
With these observations and directions, the abovesaid writ appeals will stand finally disposed of.
Sd/- **ALEXANDER THOMAS, JUDGE**
Sd/- **SHOBA ANNAMMA EAPEN, JUDGE**
AS
## **APPENDIX OF WA 1340/2021**
## **PETITIONER ANNEXURES:**
|**ANNEXURE A1**|**TRUE COPY OF THE INTERIM ORDER DATED**|
|---|---|
||**02.08.2021 IN W.A. NO. 657 OF 2020 PASSED BY**|
||**THIS HON'BLE COURT.**|
|**ANNEXURE A2**|**TRUE COPY OF THE INTERIM ORDER DATED**|
||**10.09.2021 IN W.A. NO. 638 OF 2020 PASSED BY**|
||**THIS HON'BLE COURT.**|
|**ANNEXURE A3**|**TRUE COPY OF THE INTERIM ORDER DATED**|
||**10.09.2021 IN W.A. NO. 1444 OF 2020 PASSED BY**|
||**THIS HON'BLE COURT.**|
|**ANNEXURE A4**|**TRUE COPY OF THE INTERIM ORDER DATED**|
||**09.09.2021 IN W.A. NO. 493 OF 2021 PASSED BY**|
||**THIS HON'BLE COURT.**|
|**ANNEXURE A5**|**TRUE COPY OF THE INTERIM ORDER DATED**|
||**13.09.2021 IN W.A. NO. 1766 OF 2020 PASSED BY**|
||**THIS HON'BLE COURT.**|
|**ANNEXURE A6**|**TRUE COPY OF THE LOAN APPLICATION RECORDS**|
||**PERTAINING TO THE LOAN.**|
|**ANNEXURE A7**|**TRUE COPY OF THE DOCUMENTS SUBMITTED BY**|
||**PETITIONERS 2 AND 3 FOR AVAILING THE LOANS.**|
|**ANNEXURE A8**|**TRUE COPY OF THE DOCUMENTS SUBMITTED BY THE**|
||**4TH PETITIONER INCLUDING THE GAHAN.**|
|**RESPONDENT'S ANNEXURES:**||
|**ANNEXURE R3(A)**|**TRUE COPY OF THE ENQUIRY REPORT PREPARED BY**|
||**OFFICE OF THE ASST. REGISTRAR OF CO-OPERATIVE**|
||**SOCIETIES RANNI DATED 15.03.2021.**|
## **W.A.No.1340 of 2021 & cont. cases**
## **APPENDIX OF WA 1204/2021**
## **PETITIONER ANNEXURES**
|**ANNEXURE**|**1**|**TRUE COPY OF THE INTERIM ORDER DATED**|
|---|---|---|
|||**02.08.2021 IN W.A.NO.657 OF 2020 PASSED BY**|
|||**THIS HON'BLE COURT.**|
|**ANNEXURE**|**2**|**TRUE COPY OF THE INTERIM ORDER DATED**|
|||**10.09.2021 IN W.A.NO.638 OF 2020 PASSED BY**|
|||**THIS HON'BLE COURT.**|
|**ANNEXURE**|**3**|**TRUE COPY OF THE INTERIM ORDER DATED**|
|||**10.09.2021 IN W.A.NO.1444 OF 2020 PASSED BY**|
|||**THIS HON'BLE COURT.**|
|**ANNEXURE**|**4**|**TRUE COPY OF THE INTERIM ORDER DATED**|
|||**09.09.2021 IN W.A.NO.493 OF 2021 PASSED BY**|
|||**THIS HON'BLE COURT.**|
|**ANNEXURE**|**5**|**TRUE COPY OF THE INTERIM ORDER DATED**|
|||**13.09.2021 IN W.A.NO.1766 OF 2020 PASSED BY**|
|||**THIS HON'BLE COURT.**|
## **W.A.No.1340 of 2021 & cont. cases**
## **APPENDIX OF WA 1206/2021**
## **PETITIONER ANNEXURES**
|**ANNEXURE A1**|**TRUE COPY OF THE INTERIM ORDER DATED 2.8.2021**|
|---|---|
||**IN W.A.NO.657 OF 2020 PASSED BY THIS HON'BLE**|
||**COURT.**|
|**ANNEXURE A2**|**TRUE COPY OF THE INTERIM ORDER DATED**|
||**10.9.2021 IN W.A.NO.638 OF 2020 PASSED BY**|
||**THIS HON'BLE COURT.**|
|**ANNEXURE A3**|**TRUE COPY OF THE INTERIM ORDER DATED**|
||**10.9.2021 IN W.A.NO.1444 OF 2020 PASSED BY**|
||**THIS HON'BLE COURT.**|
|**ANNEXURE A4**|**TRUE COPY OF THE INTERIM ORDER DATED 9.9.2021**|
||**IN W.A.NO.493 OF 2021 PASSED BY THIS HON'BLE**|
||**COURT.**|
|**ANNEXURE A5**|**TRUE COPY OF THE INTERIM ORDER DATED**|
||**13.9.2021 IN W.A.NO.1766 OF 2020 PASSED BY**|
||**THIS HON'BLE COURT.**|
|**ANNEXURE A6**|**TRUE COPY OF THE LOAN APPLICATION RECORDS**|
||**PERTAINING TO THE LOAN.**|
|**ANNEXURE A7**|**TRUE COPY OF THE DOCUMENTS SUBMITTED BY**|
||**PETITIONERS 2 AND 3 FOR AVAILING THE LOANS.**|
|**ANNEXURE A8**|**TRUE COPY OF THE DOCUMENTS SUBMITTED BY THE**|
||**4TH PETITIONER INCLUDING THE GAHAN.**|
|**RESPONDENT'S ANNEXURES:**||
|**ANNEXURE R3(A)**|**TRUE COPY OF THE ENQUIRY REPORT PREPARED BY**|
||**OFFICE OF THE ASST. REGISTRAR OF CO-OPERATIVE**|
||**SOCIETIES RANNI DATED 15.03.2021.**|
**W.A.No.1340 of 2021 & cont. cases**
## **APPENDIX OF WA 1751/2020**
## **PETITIONER ANNEXURES**
## **ANNEXURE I**
**TRUE COPY OF THE R.P.NO.971 OF 2020 FILED BY THE APPELLANT BEFORE THIS HON'BLE COURT, WITHOUT IMPUGNED JUDGMENT.**
**ANNEXURE II TRUE COPY OF THE ORDER IN R.P.NO.971 OF 2020 DATED 17.12.2020 PASSED BY THIS HON'BLE COURT.**