W.P. (C) No. 25444 of 2020

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SATHISH NINAN MONDAY, THE 27[TH] DAY OF SEPTEMBER 2021 / 5TH ASWINA, 1943** **WP(C) NO. 25444 OF 2020** ## **PETITIONERS:** 1 T.KOSHY AGED 61 YEARS S/O.THOMAS PANICKER, PARATHUNDIYIL VEEDU, PORUVAZHI NORTH, CHATHAKULAM P.O., KOLLAM-690520. 2 H.ABDUL HALEEL, AGED 49 YEARS S/O.HANEEFA RAWTHER, SAJITHA MANZIL, SOORANAD NORTH, THEKKEMURI, SOORANAD P.O., KOLLAM-690522. 3 AYANTHIYIL SHIHAB, AGED 40 YEARS S/O.HANEEFA RAWTHER, PORUVAZHI KAMBALADI, PORUVAZHI P.O., KOLLAM-690520. 4 A.ABABIYA BEEVI, AGED 55 YEARS D/O.SHAHUL HAMEED RAWTHER, KIZHAKKEVILAYIL, SOORANAD NORTH, THEKKEMURI, SOORANAD P.O., KOLLAM-690522. BY ADVS. K.C.SANTHOSHKUMAR SMT.K.K.CHANDRALEKHA ## **RESPONDENTS:** 1 STATE OF KERALA REPRESENTED BY THE SECRETARY TO GOVERNMENT, CO-OPERATIVE DEPARTMENT, GOVERNMENT OF KERALA, THIRUVANANTHAPURAM695001. 2 THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM-695001. 3 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), KOLLAM-691001. 4 PORUVAZHI SERVICE CO-OPERATIVE BANK LTD.NO.1132, PORUVAZHI, SASTHAMCOTTA, KOLLAM-691001, REPRESENTED BY CONVENOR, ADMINISTRATIVE COMMITTEE. **WP(C) NO. 25444 OF 2020 -2-** 5 THE ENQUIRY OFFICER (UNIT INSPECTOR), SASTHAMCOTTA UNIT, OFFICE OF THE ASSISTANT REGISTRAR OF COOPERATIVE SOCIETIES (GENERAL), SASTHAMCOTTA, KOLLAM DISTRICT-691001. 6 THE ENQUIRY OFFICER (UNIT INSPECTOR), SOORANAD UNIT, OFFICE OF THE ASSISTANT REGISTRAR OF COOPERATIVE SOCIETIES (GENERAL), SASTHAMCOTTA, KOLLAM DISTRICT-691001. BY SMT.SHEEJA C.S., SR. GOVT. PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **SATHISH NINAN, J.** **= = = = = = = = = = = = = = = = = = W. P. (C) No.25444 of 2020** **= = = = = = = = = = = = = = = = = = Dated this the 27[th] day of September, 2021** ## **J U D G M E N T** The members of the Managing Committee of the 4[th] respondent Society has approached this Court by way of this writ petition challenging Ext.P4 report on enquiry under Section 65 of the Kerala Co-operative Societies Act (hereinafter referred to as “the Act”), and Ext.P6 notice for hearing under Section 68(2) of the Act. 2. One of the grounds of challenge is that, by the time the enquiry under Section 65 of the Act was completed, the authority of the enquiry officer had ceased consequent on the expiry of the period fixed for enquiry. Pending the writ petition, the learned Senior Government Pleader as per memo dated 08.09.2021 placed on record a copy of Government Order bearing No.GO(P) No.120/2021/Co-op dated 02.08.2021. As per the order, the Government, in exercise of powers conferred under **W. P. (C) No.25444 of 2020** -: 2 :- Section 101 of the Act, extended the period for enquiry under Section 65 up to the date of Ext.P4 report. Thereupon the petitioners filed IA 3/2021 seeking amendment of the writ petition to incorporate a challenge against the Government order, a copy of which has been produced along with the application as Ext.P9. Along with the application, they also produced a copy of enquiry report under Section 68(1) of the Act as Ext.P8. 3. Ext.P9 order having been passed during the pendency of the writ petition, a challenge against the same could be entertained by this Court. Hence the challenge against Ext.P9 Government Order on the grounds urged by the petitioners are also being considered. 4. Heard Sri.K.C.Santhosh Kumar, learned counsel for the petitioners and Smt.C.S.Sheeja, the learned Senior Government Pleader. 5. As against Ext.P4 report on enquiry under Section 65, the first ground of challenge is that the report is a nullity in the eye of law since the **W. P. (C) No.25444 of 2020** -: 3 :- authority of the enquiry officer had ceased as on the date of submission of the report. The order for enquiry was issued on **17.04.2018** and the period of enquiry fixed was two months. Subsequently the period was extended by the Registrar on various occasions and finally up to **17.04.2019** which is the maximum period of one year up to which the Registrar has power to extend in terms of Section 65(5) of the Act. Ext.P4 report on enquiry was submitted by the officer on **31.07.2019.** As noticed first above, the Government, in exercise of powers under Section 101 of the Act, issued Ext.P9 Government Order extending the period up to **31.07.2019** . In the light of Ext.P9 Government Order extending the period, the challenge against Ext.P4 report on the ground of expiry of the period of enquiry and the consequent lack of authority, fails. 6. Now, the challenge is against Ext.P9 Government Order. The ground urged is that, the writ petition was filed on 18.11.2020 challenging Ext.P4 report, and **W. P. (C) No.25444 of 2020** -: 4 :- Ext.P9 Government Order was issued only on 02.08.2021. Therefore a right had accrued in favour of the petitioners. Though a Full Bench of this Court in _**Riji G. Nair (Dr.) v. State of Kerala and Ors. [2020 (6) KHC 633]**_ has upheld the power of the Government to grant retrospective extension, the Full Bench has cautioned that, vested rights cannot be divested. According to the petitioners, on the filing of the writ petition challenging Ext.P4 report, a right has accrued in favour of the petitioners. Therefore, the subsequent issuance of Ext.P9 Government Order under Section 101 of the Act interferes with the vested rights of the petitioners and hence is bad in law, is the contention. 7. In _**Riji Nair's**_ case (supra) the Full Bench, after an elaborate consideration held that the fixation of period for enquiry is only a matter of procedure. It was noticed that the mere conduct of an enquiry does not vest any right with any person. It is to be mentioned that, the mere lapse of an enquiry consequent on the **W. P. (C) No.25444 of 2020** -: 5 :- expiry of the time fixed does not vest any right with the members of the committee since a fresh enquiry could always be initiated. The Full Bench noticed that, in many cases, there will be voluminous evidence, both oral and documentary, requiring much time for completion of the enquiry. In view of the fact that fresh enquiry could always be held, it cannot be said any right has accrued to the Managing Committee by mere lapse of the period originally fixed. 8. In the present case, as is evident from the preface to Ext.P4 report, a request for extension of period was pending before the Government. Therefore, even as on date when Ext.P4 report was submitted, and when the writ petition was filed before this Court, the request for exercise of powers under Section 101 of the Act and for an order of extension was pending before the Government. Therefore, in any view of the matter, it could not be held that the filing of the writ petition has clothed the petitioner with any vested **W. P. (C) No.25444 of 2020** **==> picture [34 x 10] intentionally omitted <==** rights. As per Ext.P9 Government Order, the request was granted in exercise of the statutory powers. Therefore, it can only be held that no vested rights of the petitioners have been taken away by the issuance of Ext.P9 Government Order. 9. It is next contended by the petitioners that, the exercise of powers under Section 101 of the Act presupposes satisfaction of the Government that “public interest” is involved. In Ext.P9 Government Order it has been stated that various financial irregularities of vast extent are involved and that on a detailed consideration the Government is satisfied that it is necessary in public interest to extend the period of enquiry. In the course of the enquiry, which was yet to be completed, the employees involved in the irregularities were arrested and remanded, consequent to which the enquiry officer was unable to record the statements of the employees and to obtain required documents. This resulted in the delay in concluding the **W. P. (C) No.25444 of 2020** -: 7 :- enquiry. It is so mentioned in Ext.P9. As is evident from Ext.P4, one hundred and eleven(111) witnesses were examined and one hundred and twenty one(121) documents were marked in the enquiry. This justifies the reason stated in Ext.P9 and also the extension granted. Therefore, the challenge against Ext.P9 on the said ground fails. 10. It is next contended that, though Rule 66 of the Co-operative Societies Rules requires a copy of balance sheet to be annexed to the report, the same was not done in the present case. The mandatory requirement under Rule 66 having been violated, Ext.P4 report under Section 65 is bad in law, submits the learned counsel. To canvass the position that fulfillment of the requirements under Rule 66 is mandatory, learned counsel for the petitioner relies on a judgment of this Court in _**Ellakkal Service Co-operative Bank v. State of Kerala [1997 (2) KLT 85]**_ . Referring to Ext.P4, the learned Government Pleader points out that the report contains the balance sheet **W. P. (C) No.25444 of 2020** -: 8 :- also and that there is due compliance of Rule 65. At this stage there is no material to find any violation of Rule 66. 11. The next ground of challenge raised is that, the misappropriation reported in Ext.P4 enquiry report was committed by the Secretary in office and that prompt action was taken against him by the Managing Committee by filing Ext.P1 complaint, based on which Ext.P2 FIR was registered on 04.05.2018; therefore, the Managing Committee members could not be held liable. The contention is obviously unsustainable in view of Rule 47(d) of the Co-operative Societies Rules, which makes the Committee of the Society primarily responsible for the discharge of functions and duties by the officers, and also for maintenance and safety of accounts, records, cash and other assets of the Society. That the Managing Committee cannot shirk off their responsibilities and liability by contending that it was the Secretary in office who is responsible for the **W. P. (C) No.25444 of 2020** -: 9 :- misappropriation, has been held by this Court in _**Thrikkadavur Service Co-operative Societies Ltd. v. Sivasankarapillai [1990 (2) KLT 594]**_ and _**Rejeev Koshy @ Reji K. Koshy v. State of Kerala and Others [ILR 2018 (2) Kerala 999]**_ . That apart, the learned Senior Government Pleader has brought to my notice the findings numbered as 7, 12, 13, 14 and 15 in the report wherein the Managing Committee has been found to be responsible. The learned Senior Government Pleader submits that there are other findings also in the report finding the liability of the Committee. Be that as it may, it is not something to be considered by this Court and at this stage of the proceedings. Those are matters to be urged at the time of hearing under Section 68(2) of the Act and hence is left open. Suffice to notice that there is no scope for interference with the report at this stage. 12. The law as laid down by a Division Bench of this Court in _**State of Kerala v. Aravindakshan Nair [2010 (3) KLT 11]**_ that, the appropriate time for challenge against the **W. P. (C) No.25444 of 2020** **==> picture [40 x 10] intentionally omitted <==** report under Section 65 of the Act is in the ensuing proceeding under Section 68(2) of the Act, holds good as on today. In the light thereof, the challenge against Ext.P4 report under Section 65, on its merits, is left open to be urged at the appropriate stage. On the above discussions, the writ petition fails and is accordingly dismissed. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## **APPENDIX OF WP(C) 25444/2020** ## PETITIONER EXHIBITS |EXHIBIT P1|TRUE COPY OF THE SUSPENSION ORDER DATED| |---|---| ||02.05.2018.| |EXHIBIT P2|TRUE COPY OF THE COMPLAINT DATED 02.05.2018| ||SUBMITTED BY THE 1ST PETITIONER BEFORE THE| ||S.I OF POLICE SOORANAD.| |EXHIBIT P3|TRUE COPY OF THE FIRST INFORMATION REPORT WAS| ||REGISTERED IN CRIME NO.0749/2018 BY THE| ||SOORANAD POLICE STATION.| |EXHIBIT P4|TRUE COPY OF THE RELEVANT PAGES OF ENQUIRY| ||REPORT DATED 31.07.2019 SUBMITTED BY THE 5TH| ||RESPONDENT.| |EXHIBIT P5|TRUE COPY OF THE REPRESENTATION SUBMITTED BY| ||THE PETITIONER BEFORE THE 3RD RESPONDENT.| |EXHIBIT P6|TRUE COPY OF THE NOTICE DATED 14.10.2020| ||ISSUED TO THE 1ST PETITIONER.| |EXHIBIT P7|TRUE COPY OF THE REPLY DATED 19.10.2020| ||SUBMITTED BY THE PETITIONERS BEFORE THE| ||ENQUIRY OFFICER.| -----