W.P.(C).7037/2024, 7796/2024 and 8345/2024 (Chengalam Service Co-operative Bank Ltd. cases)

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V TUESDAY, THE 19[TH] DAY OF MARCH 2024 / 29TH PHALGUNA, 1945 WP(C) NO. 7037 OF 2024`** ``` PETITIONERS: ``` ``` 1K.K.RAJU AGED63YEARS ``` ``` PRESIDENT,CHENGALAMSERVICECO-OPERATIVEBANKLTD. CHENGALAMP.O,KOTTAYAM.RESIDINGATMAVELIVETTATH HOUSE,CHENGALAMP.O,KOTTAYAM.,PIN-686585 ``` ``` 2DINTO.M.JOY AGED41YEARS ``` ``` MANAGINGCOMMITTEEMEMBEROFCHENGALAMSERVICE CO-OPERATIVEBANKLTD.,CHENGALAMP.O,KOTTAYAM. RESIDINGATNJANDUPARAP.O,KOTTAYAM.,PIN-686585 ``` - **`3 SHAJI JOSEPH AGED 54 YEARS`** ``` MANAGINGCOMMITTEEMEMBEROFCHENGALAMSERVICE CO-OPERATIVEBANKLTD.,CHENGALAMP.O,KOTTAYAM. RESIDINGATKANIKKATHODU,CHENGALAMP.O,KOTTAYAM.,PIN - 686585 ``` ``` 4GOPY.P.K AGED55YEARS ``` ``` MANAGINGCOMMITTEEMEMBEROFCHENGALAMSERVICE CO-OPERATIVEBANKLTD.,CHENGALAMP.O,KOTTAYAM. RESIDINGATPATHISSERIYIL,CHENGALAMP.O,KOTTAYAM., PIN-686585 ``` ``` 5JAYAMOLPRADEEP AGED51YEARS MANAGINGCOMMITTEEMEMBEROFCHENGALAMSERVICE CO-OPERATIVEBANKLTD.,CHENGALAMP.O,KOTTAYAM ,RESIDINGATKUZHIMATTATHIL,CHENGALAMP.O,KOTTAYAM., PIN-686585 ``` ``` 6BABITHAJOSE AGED50YEARS MANAGINGCOMMITTEEMEMBEROFCHENGALAMSERVICE CO-OPERATIVEBANKLTD.,CHENGALAMP.O,KOTTAYAM. RESIDINGATKALLORATHU,CHENGALAMP.O,KOTTAYAM,PIN- ``` W.P.(C).7037, 7796 & 8345 of 2024 2 ``` 686585 ``` ``` BYADVS. P.N.MOHANAN C.P.SABARI AMRUTHASURESH GILROYROZARIO ``` ``` RESPONDENT: ``` ``` THEJOINTREGISTRAROFCO-OPERATIVESOCIETIES (GENERAL),OFFICEOFTHEJOINTREGISTRAROF CO-OPERATIVESOCIETIES,COLLECTORATEPOST,KOTTAYAM, PIN-686001 ``` ## **`SMT RESMI THOMAS, GP.`** ``` THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSIONON 19.03.2024,ALONGWITHWP(C).7796/2024,8345/2024,THECOURTON THESAMEDAYDELIVEREDTHEFOLLOWING: ``` W.P.(C).7037, 7796 & 8345 of 2024 3 # **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V TUESDAY, THE 19[TH] DAY OF MARCH 2024 / 29TH PHALGUNA, 1945 WP(C) NO. 7796 OF 2024`** ## **`PETITIONER/S:`** ``` RENYJOSEPH AGED50YEARS ``` ``` S/OJOSEPH,CHAKKALAYILHOUSE,CHENGALAMP.O, KOTTAYAM,PIN-686585 ``` ``` BYADVS. P.N.MOHANAN C.P.SABARI AMRUTHASURESH GILROYROZARIO ``` ``` RESPONDENTS: ``` - **`1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF`** - **`CO-OPERATIVE SOCIETIES, COLLECTORATE POST, KOTTAYAM., PIN - 686001`** - **`2 THE MANAGING COMMITTEE OF CHENGALAM SERVICE CO-OPERATIVE BANK`** ``` LTD.,REPRESENTEDBYITSPRESIDENT,CHENGALAMP.O, KOTTAYAM,PIN-686585 ``` ## **`OTHER PRESENT:`** ## **`SMT RESMI THOMAS, GP.`** ``` THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSIONON 19.03.2024,ALONGWITHWP(C).7037/2024ANDCONNECTEDCASES,THE COURTONTHESAMEDAYDELIVEREDTHEFOLLOWING: ``` W.P.(C).7037, 7796 & 8345 of 2024 4 ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V TUESDAY, THE 19[TH] DAY OF MARCH 2024 / 29TH PHALGUNA, 1945 WP(C) NO. 8345 OF 2024`** ## **`PETITIONERS:`** ``` 1K.K.RAJU AGED62YEARS EX-PRESIDENT,CHENGALAMSERVICECO-OPERATIVEBANKLTD. CHENGALAMP.O,KOTTAYAM,RESIDINGATMAVELIVETTATH HOUSE,CHENGALAMP.O,KOTTAYAM,PIN-686585 ``` - **`2 DINTO.M.JOY AGED 41 YEARS`** ``` EX-MANAGINGCOMMITTEEMEMBEROFCHENGALAMSERVICE CO-OPERATIVEBANKLTD.,CHENGALAMP.O,KOTTAYAM, RESIDINGATNJANDUPARAP.O,KOTTAYAM,PIN-686585 ``` - **`3 SHAJI JOSEPH AGED 54 YEARS EX-MANAGING COMMITTEE MEMBER OF CHENGALAM SERVICE CO-OPERATIVE BANK LTD., CHENGALAM P.O, KOTTAYAM, RESIDING AT KANIKKATHODU, CHENGALAM P.O, KOTTAYAM, PIN - 686585`** ``` 4JAYAMOLPRADEEP AGED51YEARS EX-MANAGINGCOMMITTEEMEMBEROFCHENGALAMSERVICE CO-OPERATIVEBANKLTD.,CHENGALAMP.O, KOTTAYAM,RESIDINGATKUZHIMATTATHIL,CHENGALAMP.O, KOTTAYAM,PIN-686585 ``` ``` 5BABITHAJOSE AGED50YEARS EX-MANAGINGCOMMITTEEMEMBEROFCHENGALAMSERVICE CO-OPERATIVEBANKLTD.,CHENGALAMP.O,KOTTAYAM RESIDINGATKALLORATHU,CHENGALAMP.O,KOTTAYAM,PIN- 686585 ``` W.P.(C).7037, 7796 & 8345 of 2024 5 ``` 6RENYJOSEPH AGED50YEARS (EX-MEMBERNOMINATED)S/OJOSEPH,AGED50YEARS, CHAKKALAYILHOUSE,CHENGALAMP.O,KOTTAYAM,PIN- 686585 ``` ``` BYADVS. P.N.MOHANAN C.P.SABARI AMRUTHASURESH GILROYROZARIO ``` ## **`RESPONDENTS:`** ``` 1THEJOINTREGISTRAROF CO-OPERATIVESOCIETIES (GENERAL), OFFICEOFTHEJOINTREGISTRAR OFCO-OPERATIVESOCIETIES, COLLECTERATEPOST,KOTTAYAM, PIN-686001 ``` - **`2 THE ADMINISTRATOR CHENGALAM SERVICE CO-OPERATIVE BANK LTD., CHENGALAM P.O, KOTTAYAM, PIN - 686585`** ## **`SMT RESMI THOMAS, GP.`** ``` THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSIONON 19.03.2024,ALONGWITHWP(C).7037/2024ANDCONNECTEDCASES,THE COURTONTHESAMEDAYDELIVEREDTHEFOLLOWING: ``` W.P.(C).7037, 7796 & 8345 of 2024 6 ## **J U D G M E N T** W.P.(C.) No. 7037 of 2024 is filed by the President and Managing Committee members of the Chengalam Service Cooperative Bank Ltd. challenging Ext.P5 notice issued under Section 32(1) of the Kerala Cooperative Societies Act, 1969, (for short, ‘KCS Act’) proposing to supersede the committee and for a declaration that the supersession of the committee for the reasons mentioned in Ext.P5 notice cannot be a reason for supersession. 2. W.P.(C.) No. 7796 of 2024 is filed by Sri. Reny Joseph, challenging Ext.P5 order by which the Joint Registrar has rescinded the resolution passed by the committee nominating the petitioner under Section 28(1J) of the KCS Act to fill up the casual vacancy that had arisen. 3. W.P.(C.) No. 8345 of 2024 is filed by the former committee members challenging Ext.P4 order by which the Joint Registrar proceeded to invoke section 33 of the KCS Act to hold that an administrative vacuum had arisen for lack of quorum and to appoint a part-time Administrator for managing the affairs of the bank. W.P.(C).7037, 7796 & 8345 of 2024 7 4. As the issues raised in these writ petitions are closely interconnected, all these writ petitions are taken up and disposed of by a common judgment. 5. The petitioners in W.P.(C.) No. 7037 of 2024 and 8345 of 2024 are one and the same. While in the first writ petition, they had approached this Court challenging the notice of supersession 32(1) of the Act, in the second writ petition, they have challenged the order passed by the Joint Registrar, invoking the powers under Section 33 and in appointing a part time Administrator. 6. The short point raised by Sri. P.N.Mohanan to assail Ext.P4 order passed in W.P.(C.) No. 8345 of 2024 is the failure of the Joint Registrar to issue a notice as contemplated under the first proviso to section 33(1) of the Act. His contention is that as per the proviso before proceeding to appoint a new committee or Administrator, the Registrar was bound to publish a notice on the notice board of the Head Office of the Society inviting objections to the making of the order within a period specified in the notice and consider such objections. The learned counsel would point out that the Registrar has been granted the discretion to W.P.(C).7037, 7796 & 8345 of 2024 8 waive the publishing of the notice, however, to adopt such a course, he should be satisfied that it is not reasonably practical to do so. It is submitted by the learned counsel that in the impugned order, there is no mention that it was not reasonably practicable to do so. Insofar as W.P.(C.) No. 7037 of 2024 is concerned, Sri. P.N.Mohanan would refer to the observations made by a learned Single Judge of this Court in **Rajagopalan Nair[1]** , and it is argued that the provision of the supersession is an exceptional and rare action and the power of the Registrar to supersede a committee is an extraordinary power which is to be resorted to only if the situation is extraordinary. According to the learned counsel, the Registrar was required to bear in mind that the cooperative societies should have greater autonomy in their functioning and the control over them should not culminate in virtually depriving them of their democratic and autonomous character. Relying on the law laid down in **Urukunnu Service Cooperative Bank Ltd.**[2] , it is submitted that mere default of failure to comply with the provisions of the Act, even if found to be true, cannot be a ground for supersession unless it is shown > 1 Rajagopalan Nair v. State of Kerala [1995 (2) KLT 184] > 2 Urukunnu Service Cooperative Bank Ltd. v. State of Kerala [2012 (4) KLT 941] W.P.(C).7037, 7796 & 8345 of 2024 9 that there is persistent wilful negligence and disobedience. It is submitted by the learned counsel that since during the pendency of the notice issued under Section 32(1) of the KCS Act, the Registrar proceeded to invoke Section 33 of the Act, the petitioners are pressing for relief only in W.P.(C.) No. 8345/2024. Insofar as W.P.(C.) No. 7796 of 2024 is concerned, it is submitted by the learned counsel that the managing committee has a term up to 23.11.2024 and it was during the term of the committee that Sri. Reny Joseph was nominated in the managing committee meeting held on 2024, as is evident from Ext.P1. However, the nomination was rescinded by the Joint Registrar invoking Rule 176 of the KCS Rules by the impugned order without considering the fact that the decision which was taken on 1.2.2024 was approved by the later committee meeting held on 12.2.2024 as is evident from Ext.P2. It is submitted by the learned counsel that before issuing the resolution, neither the committee nor the petitioner was afforded an opportunity of being heard. It is submitted that the order was passed with mala fide intent to invoke the powers under Section 33(1) of the Act. Relying on the law laid down in **Purushothaman v. Registrar** [1996 (2) KLT 26], it is submitted by the learned counsel that the principles of natural justice W.P.(C).7037, 7796 & 8345 of 2024 10 must be taken as inbuilt in the power of the Registrar and the persons affected by the order passed by the Registrar are entitled to an opportunity of being heard. 7. In response, it is submitted by the learned counsel that as per the provisions of clause 38(a) of the bye-laws, before the convening of an urgent meeting of the committee, three days advance notice is to be given. Relying on the records produced before this Court, it is submitted that the committee has lost its quorum, a meeting was constituted on 1.2.2024. Though as per the bye-laws, the minimum quorum is six, only five persons participated in the meeting. It is submitted that Sri. Josey Bastin and Sherly Anto had resigned from the committee, however, her signature was affixed in the minutes of the meeting to make it appear that she was personally present. Stating all thse aspects, a complaint was lodged by Sri. Sherly Anto and it was after finding that there was manipulation in the minutes of the meeting constituted to nominate Sri. Reny Joseph that the impugned order was issued to rescind the resolution nominating the member. The learned government pleader would point out that Exts.P1 and P3 copies of the minutes book produced before this W.P.(C).7037, 7796 & 8345 of 2024 11 Court are manipulated documents and a casual perusal of the same would disclose that out of seven persons who are stated to have participated in the meeting, the signature of Sri. Sherly Anto has been erased, and Josy Bastin has not even signed, leaving only five persons. It is submitted that the petitioners are not entitled to any of the reliefs prayed for in the writ petition. 8. I have carefully considered the submissions advanced. I have detailed the sequence of events above. W.P.(C) No.7037/2024 was filed challenging the notice issued under Section 32 (1) of the Act. This Court did not interdict the proceedings but directed the petitioner to cooperate with the proceedings. However, it is specifically ordered that final order shall be passed only after securing orders from this Court. It appears that during the pendency of the writ petition, the Registrar decided to invoke Section 33 of the Act on the ground that the committee had lost its quorum and there was an administrative vacuum. I have gone through the order impugned. It is not disputed that the Registrar has not chosen to publish the notice on the notice board of the Head office of the Society, inviting objections to the making of the order. The W.P.(C).7037, 7796 & 8345 of 2024 12 order also does not disclose that the Registrar was satisfied that it was not reasonably practicable to publish such a notice. It would be appropriate to refer to the statutory provisions. Section 33 deals with the appointment of a new committee or Administrator to constitute a committee etc. The said provision reads as under: ## **Section 33. Appointment of new committee or administrator on failure to constitute committee, etc.-** (1) Where the term of office of a committee has expired, and a new committee has not been constituted, or 54[where a no-confidence motion is passed by the general body against the existing committee or where the existing committee resigns enbloc or where vacancies occur in the committee either by resignation or otherwise and the number of remaining members cannot constitute the quorum for the meeting of the committee, or where the committee fails to hold its regular meeting consecutively for six months or where the Registrar is satisfied. (a) that a new committee cannot be constituted before the expiry of the term of office of the existing committee; or (aa) there is stalemate in the constitution or functions of the committee. (b) that a new committee is prevented from entering upon office or a new committee fails to enter upon office, on the date on which the term of office of the existing committee expires, the Registrar may, either suo motu or on the application of any member of the society, W.P.(C).7037, 7796 & 8345 of 2024 13 after intimating the Circle Cooperative Union, appoint one administrator or an administrative committee consisting of not more than three individuals,[55A] [who need not be members of the society, one among them as convener,] to manage the affairs of the society, for a period not exceeding six months as may be specified in the order, which period may, at the discretion of the Registrar and for reasons to be recorded in writing, be extended, from time to time, so, however, that the aggregate period shall not, in any case, exceed one year or till a new committee enters upon office, whichever is earlier. (i) a new committee consisting of not more than three members of the society; or (ii) not more than three Administrators who need not be] members of the society to manage the affairs of the society[57] [for a period not exceeding six months as may be specified in the order, which period may at the discretion of the Registrar and for reasons to be recorded in writing, be extended, from time to time, so, however, that the aggregate period shall not, in any case, exceed one year or till a new committee enters upon office, whichever is earlier. Provided that before making such order, the Registrar shall publish a notice on the notice board of the head office of the society inviting objections to the making of the order within a period specified in the notice and consider such objections. Provided further that it shall not be necessary to publish such notice in cases where the Registrar is satisfied that it is not reasonably practicable to do so. (emphasis supplied) 9. In other words, only in cases where it is shown that the issue of a notice under the first proviso is reasonably not practicable a notice W.P.(C).7037, 7796 & 8345 of 2024 14 can be dispensed with. In **Thomas[3]** , it was held by this Court that liberal interpretation of the proviso may lead to nullifying the effect of the first proviso and may lead to arbitrary action, which is detrimental to the democratic functioning of the society. The very same view was taken by a learned Single Judge in **P Mohammed and Ors.[4]** . In that view of the matter, Ext.P4 order issued by the Joint Registrar has been passed in clear violation of the provisions of law. 10. Insofar as W.P.(C) No.7796/2024 is concerned, the Registrar has rescinded the resolution based on very emphatic materials. Prima facie, I find considerable force in the submission of the learned Government Pleader that there has been some manipulation in the minutes. The typed copies of Ext.P1 and P3 produced before this Court does not appear to reflect the true picture. However, I find that before passing orders, an explanation ought to have been sought from the committee. To that limited extent, I remit the matter back to the Registrar to pass fresh orders in accordance with law. ## 11. As the Registrar has proceeded to invoke the powers under > 3 Thomas v. Jaihind Power Loom Industrial Cooperative Societies Ltd. [2001 KHC 232] > 4 P Mohammed and Ors. v. the Joint Registrar of Cooperative Societies, Cannonore [1985 KHC 369] W.P.(C).7037, 7796 & 8345 of 2024 15 Section 33 without proceeding under Section 32(1) of the Act, I am of the view that no further orders are required to be passed in W.P.(C) No.7037/2024. 12. Resultantly, these writ petitions are disposed of as under: a) Ext.P4 order passed in W.P.(C) No.8345/2024 and Ext.P4 order in W.P.(C) No.7096/2024 are quashed. The matter is remitted back to the Joint Registrar to pass fresh orders in accordance with law in the light of the observations above. b) If the Registrar proposes to initiate proceedings under Section 32(1) of the Act for violation of Section 32(1)(d), it shall be in full adherence to the observations in **Rajagopalan Nair** and **Urukunnu** (supra). sd/- **RAJA VIJAYARAGHAVAN V, JUDGE** PS/12/3/24 W.P.(C).7037, 7796 & 8345 of 2024 16 ## **`APPENDIX OF WP(C) 7037/2024`** ## **`PETITIONER EXHIBITS`** ``` ExhibitP1ATRUECOPYOFTHEORDERDATED17.02.2024OF THEJOINTREGISTRAR ExhibitP2ATRUECOPYOFTHEAWARDDATED07.10.2022IN ARC.NO.3039/2021OFTHEARBITRATOR ExhibitP3ATRUECOPYOFTHEAPPEALNO.155/2023DATED 12.06.2023FILEDBYTHEEMPLOYEES ExhibitP4ATRUECOPYOFTHEMEMODATED19.02.2024 ISSUEDBYTHEPRESIDENT ExhibitP5ATRUECOPYOFTHENOTICEDATED16.02.2024OF THEJOINTREGISTRAR ExhibitP6ATRUECOPYOFTHEJUDGMENTOFRAJAGOPALAN NAIRV.STATEOFKERALAREPORTEDIN1995(2) KLT184 ExhibitP7ATRUECOPYOFTHEJUDGMENTOFORUKUNNUSCB V.STATEOFKERALAREPORTEDIN2012(4)KLT 941 ExhibitP8ATRUECOPYOFTHEJUDGMENTSIEMENSLTD.V. STATEOFMAHARASHTRAREPORTEDIN2007(1)KLT 88 ExhibitP9ATRUECOPYOFTHEJUDGMENTOFJAMESVS. JOINTREGISTRARREPORTEDIN1997(2)KLTSN1 (CASENO.1) ``` W.P.(C).7037, 7796 & 8345 of 2024 17 ## **`APPENDIX OF WP(C) 7796/2024`** ## **`PETITIONER EXHIBITS`** ``` ExhibitP1TRUECOPYOFTHERELEVANTPORTIONOFTHE RESOLUTIONNO.20DATED01.02.2024AFTER TAKINGDTP,(ASITISNOTLEGIBLETOREAD) ALONGWITHCOPYOFTHERESOLUTIONOFTHE MANAGINGCOMMITTEE ``` ``` ExhibitP2TRUECOPYBYRESOLUTIONNO.6DATED09.02.2024 OFTHEMANAGINGCOMMITTEE,NOMINATINGTHE PETITIONERINTHECASUALVACANCY ``` ``` ExhibitP3TRUECOPYOFTHERELEVANTPORTIONOFTHE RESOLUTIONNO.21DATED12.02.2024ALONGWITH DTPOFRELEVANTPORTION(WHICHARENOT LEGIBLETOREADALONGWITHTHECOPYOFTHE ORIGINAL) ``` ``` ExhibitP4TRUECOPYOFTHEORDERDATED17.02.2024OF THEJOINTREGISTRAR ExhibitP5TRUECOPYOFTHEJUDGMENTOFPURUSHOTHAMANV. REGISTRARREPORTEDIN1996(2)KLT26 ``` ``` ExhibitP6TRUECOPYOFTHEJUDGMENTOFSATWATIDESWAL V.STATEOFHARIYANAREPORTEDIN2010(1)SCC 126 ``` W.P.(C).7037, 7796 & 8345 of 2024 18 ## **`APPENDIX OF WP(C) 8345/2024`** ``` PETITIONEREXHIBITS ExhibitP1ATRUECOPYOFTHENOTICEDATED16.02.2024OF THEJOINTREGISTRAR ExhibitP2ATRUECOPYOFTHEINTERIMORDERDATED 22.02.2024INW.P.(C).NO.7037/2024 ExhibitP3ATRUECOPYOFTHEORDERDATED17.02.2024OF THEJOINTREGISTRAR ExhibitP4ATRUECOPYOFTHEORDERDATED27.02.2024OF THEJOINTREGISTRAR ExhibitP5ATRUECOPYOFTHEJUDGMENTINMOHAMMEDV. JOINTREGISTRARREPORTEDIN1995KLJ335 ExhibitP6ATRUECOPYOFTHEJUDGMENTOFTHOMASV.JAI HINDHANDLOOMINDUSTRIESREPORTEDIN2001KHC 232 ExhibitP7ATRUECOPYOFTHEJUDGMENTOFSTATEM.PV. SANJAYREPORTEDIN2013KHC4422 ExhibitP8ATRUECOPYOFTHEJUDGMENTOFEX-RECRUIT BABANNAMACHCHEDV.UNIONOFINDIAREPORTED IN2024SCCON-LINE121 ```