WP(C).Nos. 19420 of 2018 & 19462 of 2018, High Court of Kerala at Ernakulam

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **MONDAY, THE 10TH DAY OF JUNE 2019 / 20TH JYAISHTA, 1941** ## **WP(C).No. 19420 of 2018** ## **PETITIONERS:** - **1 K.J.THOMAS, S/O. JOSEPH, EX-PRESIDENT, THE ARALAM SERVICE CO-OPERATIVE BANK, RESIDING AT KUDAKASSERIL HOUSE, ARALAM P.O., KANNUR DISTRICT.** - **2 DR.K.J.THRESSIAMMA, W/O.GEORGE EX-MANAGING COMMITTEE MEMBER, THE ARALAM SERVICE COOPERATIVE BANK, RESIDING AT KONGOLA HOUSE, PAYAM P.O., KANNUR DISTRICT.** - **3 P.K. MAMMU HAJI, S/O.MAMEY EX-MANAGING COMMITTEE MEMBER, THE ARALAM SERVICE COOPERATIVE BANK,RESIDING AT PALLIPPATU KUNNUMPURATH HOUSE,ARALAM P.O., KANNUR DISTRICT.** - **4 SEBASTIAN PUTHENPURAKKAL S/O.CHACKO EX-MANAGING COMMITTEE MEMBER, THE ARALAM SERVICE COOPERATIVE BANK, RESIDING AT PUTHENPURAKKAL HOUSE,ARALAM P.O., KANNUR DISTRICT.** - **5 JESSY PANNIKKOTTIL W/O.CHACKO EX-MANAGING COMMITTEE MEMBER, THE ARALAM SERVICE COOPERATIVE BANK,RESIDING AT PANNIKKOTTIL HOUSE,P.O.VEERPAD, KANNUR DISTRICT.** - **6 VALSON ATHIKKAL S/O.KANNAN EX-MANAGING COMMITTEE MEMBER, THE ARALAM SERVICE COOPERATIVE BANK,RESIDING AT ATHIKKAL HOUSE, P.O.VELIMANAM, KANNUR DISTRICT.** - **7 IBRAHIM MANGALODAN S/O.MAMMU EX-MANAGING COMMITTEE MEMBER, THE ARALAM SERVICE COOPERATIVE BANK,RESIDING AT MANGALODAN HOUSE,P.O.ARALAM, KANNUR DISTRICT.** - **8 SCARIA V.F.VARIKKAMAKKAL S/O.FRANCIS,EX-MANAGING COMMITTEE MEMBER, THE ARALAM SERVICE CO-OPERATIVE BANK,RESIDING AT VARIKKAMAKKAL HOUSE, P.O.KEEZHPALLY, KANNUR DISTRICT.** WP(C) 19420 & 19462/2018 2 - **9 THULASI MURIKKOLI W/O.PADMANABHAN** **EX-MANAGING COMMITTEE MEMBER, THE ARALAM SERVICE CO-OPERATIVE BANK,RESIDING AT MURIKKOLI HOUSE, P.O.VEERPAD, KANNUR DISTRICT.** **BY ADV. SRI.P.N.MOHANAN** ## **RESPONDENTS:** - **1 JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G) KANNUR-670 001.** - **2 THE ADMINISTRATOR ARALAM SERVICE CO-OPERATIVE BANK,KEEZHPALLY P.O., KANNUR -670 704.** - **3 ARALAM SERVICE CO-OPERATIVE BANK, KEEZHPALLY P.O. KANNUR -670 704. REPRESENTED BY ITS SECRETARY.** ## **SRI.M.SASINDRAN SRI.MUHAMMAD HASHIM-SPL.GP** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10.06.2019, ALONG WITH WP(C).19462/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C) 19420 & 19462/2018 3 # **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **MONDAY, THE 10TH DAY OF JUNE 2019 / 20TH JYAISHTA, 1941** ## **WP(C).No. 19462 of 2018** ## **PETITIONERS:** - **1 ATHIKKAL VALSON, S/O.KANNAN, ATHIKKAL HOUSE, VELIMANAM P.O., KANNUR, DIRECTOR, ARALAM SERVICE CO-OPERATIVE BANK.** **2 SEBASTIAN PUTHANPURAKKAL PUTHENPURAKKAL HOUSE, ARULAM P.O., KANNUR, DIRECTOR, ARALAM SERVICE CO-OPERATIVE BANK.** **BY ADV. SRI.P.N.MOHANAN** ## **RESPONDENTS:** - **1 JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), KANNUR-670 001.** - **2 ARALAM SCB, KEEZHPALLY P.O., KANNUR-670 704, REPRESENTED BY ITS SECRETARY/ADMINISTRATOR** - **3 JOSHY MATHEW KUZHIKKOMBIL, PAYAM P.O.** - **4 PAYAM SERVICE CO-OPERATIVE BANK REPRESENTED BY ITS SECRETARY, PAYAM P.O., KANNUR-670 704.** **SRI.MUHAMMAD HASHIM-SPL.GP SRI.CIBI THOMAS SRI.M.SASINDRAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10.06.2019, ALONG WITH WP(C).19420/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C) 19420 & 19462/2018 4 ## **JUDGMENT** I am considering these two cases together because the factual factors and circumstances impelled therein are connected with each other, the reliefs sought for in one becoming thus completely dependent and axiomatic to the reliefs to be granted in the other. 2. The petitioners in W.P.(C) No.19462/2018 claimed to be the members of the Managing Committee of the Aralam Service Co-operative Bank (for short, 'the Aralam SCB') and they say that they have been removed from such membership by the Joint Registrar of Co-operative Societies through Ext.P5 order, alleging that at the time when they offered nominations for being so elected, they were also members of the Payam Service Cooperative Bank (for short, 'the Payam SCB') and therefore, that their membership in the Managing Committee of Aralam SCB is hit by Rule 27(1) of the Kerala Co-operative Societies Rules (for short, 'KCS Rules'), consequently, liable for disqualification under Rule 44(1) of the KCS Rules. 3. Sri.P.N.Mohanan, the learned counsel for the petitioners in these cases alleges that Ext.P5 order is wholly incompetent and untenable because, even assuming that the afore facts are true, his clients cannot be disqualified from the membership of the Managing Committee of the Aralam SCB, since Rule 27(2) of the WP(C) 19420 & 19462/2018 5 KCS Rules provide that in such event, they will only be liable for expulsion from membership of the latter Society, namely Payam SCB. He further asserts that even assuming that his clients concede to dual membership, as is alleged against them, they are not liable for disqualification from the Managing Committee of the Aralam SCB under Rule 44(1) of the KCS Rules, since the enumerated types of disqualification therein does not take in the acquisition of dual membership by any person. 4. Sri.P.N.Mohanan further says that consequent to Ext.P5 in W.P.(C) No.19462/2018, since the petitioners therein were found disqualified under Rule 44 of the KCS Rules, the Joint Registrar made a consequential order, removing the Managing Committee of the Aralam SCB, finding that it has lost its quorum, a copy of which order has been produced on record as Ext.P4 along with W.P.(C) No.19420/2018. He prays that this order be also set aside, since it has been issued solely pursuant to Ext.P5 order. 5. Sri.Mohammed Hashim, the learned Special Government Pleader appearing on behalf of the official respondents in both these cases, supported the impugned orders by saying that Rule 27(1) of the KCS Rules makes it indubitable that no person shall apply as a member of a credit society if he is already a member of a similar society, without the previous sanction of the Registrar of Co-operative Societies. He contends, therefore, that once the WP(C) 19420 & 19462/2018 6 petitioners concede that they had acquired the membership of Payam SCB, their position as members of the Managing Committee of the Aralam SCB would certainly be hit under Rule 27(1) of the KCS Rules. He thus asserts that the consequential order under Section 44(1) is only logical and therefore, that the removal of the Managing Committee, in which they were earlier members, would also be inevitable, leading to the appointment of a Part Time Administrator/Administrative Committee. He thus prays that the impugned orders in these writ petitions be left undisturbed and be allowed to operate. 6. Sri.M.Sasindran, the learned standing counsel for the Part Time Administrator of Aralam SCB, adopts most of the submissions of Sri.Mohammed Hashim; adding that the orders impugned are without fault because the petitioners concede that at the time when they filed their nominations for elections to the Managing Committee of the Aralam SCB, they were members of the Payam SCB. He says that this is without doubt because even according to the petitioners, their membership in Payam SCB was discontinued much after the elections to the Managing Committee of Aralam SCB had been completed. He, therefore, submits that the petitioners cannot obtain any locus to challenge the impugned orders in these writ petitions. 7. Sri.Cibi Thomas, the learned standing counsel for the WP(C) 19420 & 19462/2018 7 Payam SCB submits that the petitioners had ceased to be the members of the said society with effect from 09.12.2014, but concedes that their shares were returned only on 16.09.2017. He says that his client has nothing more to comment on the various allegations in these writ petitions. 8. I have considered the various submissions made as afore by the learned counsel for the parties very carefully and I am of the view that I cannot offer imprimatur to the impugned order in W.P.(C) No.19462/2018, as per which the petitioners therein were found disqualified under Rule 44(1) of the KCS Rules, for the reasons I will presently state. 9. The factual narration above takes it beyond doubt that the petitioners were members of the Payam SCB at the time when they had offered themselves as candidates for elections to the Managing Committee of the Aralam SCB. The submissions of Sri.Cibi Thomas that the petitioners therein were returned their share capital in Payam SCB only in the year 2017 would cement this position. However, the axiomatic question is whether this by itself would disqualify the petitioners in W.P.(C) No.19462/2018, from continuing as the members of the Managing Committee of the Aralam SCB and the answer to this question would then decide the fate of the subsequent order removing the Managing Committee of the said Society, since it is admitted that the said WP(C) 19420 & 19462/2018 8 order was issued only because the Managing Committee lost its quorum on account of the disqualification of these two members. 10. I have examined the provisions of law, as are relied upon by the various parties, particularly Rules 27 and 44 of the KCS Rules. While it is indubitable that Rule 27(1) prohibits a person to even apply for membership of another credit society if he is already a member of a similar society, except with the prior permission of the Registrar, the consequences of such an action is dealt with under Rule 27(2), which stipulates that such membership will be terminated and that the latter society will remove him from its membership upon the written requisition from the Registrar. Similarly, going by Rule 44, under the enumerated event of disqualification from a Managing Committee, I am unable to find dual membership to be one among them. Hence, prima facie Ext.P4 order in W.P.(C) No.19420/2018 may not find favour in law. I hasten to add that I am not answering these aspects affirmatively at this time, because I am of the view that these issues will require to be reconsidered by the competent Authority in terms of the specific stipulations of these two provisions, adverting to two judgments of this Court in **Natarajan v. Returning Officer** [1997 (2) KLT 253] and **Ambatt Asokan v. Oochira Service Co-op. Bank Ltd.** [2008 (3) KLT 645]; the former of which deals with Rule 27 of the KCS Rules while the WP(C) 19420 & 19462/2018 9 latter deals with Rule 44 of the said Rules. 11. Since I am firm in my mind that the whole issue will have to be reconsidered by the competent Joint Registrar of Cooperative Societies, it is needless to say that the order impugned in W.P.(C) No.19420/2018 would, as of now, have no legs to stand since it is only a consequential order. That said, I make it clear that I do not propose to alter the status quo with respect to the management of the society at this time and deem it apposite to allow the Part Time Administrator to continue until such time as the Joint Registrar completes the reconsideration in terms of this judgment. In the afore circumstances, I order these writ petitions and set aside Ext.P5 order in W.P.(C) No.19462/2018; with a consequential direction to the Joint Registrar of Co-operative Societies to reconsider all the issues in terms of the observations in this judgment and adverting to the afore two cited precedents, as also after affording necessary opportunity to all parties and to complete such process as early as possible but not later than two months from the date of receipt of a copy of this judgment. Consequently, even though I am not setting aside Ext.P4 order in W.P.(C) No.19420/2018 which has been passed as a consequential order under Section 33 of the KCS Act, I make it clear that the decision to be taken by the Joint Registrar with WP(C) 19420 & 19462/2018 10 respect to the disqualification of the petitioners in W.P.(C) No.19462/2018 would then regulate and modulate this order and if the disqualification is found untenable, then naturally this order will also fail and the Managing Committee will stand restored to complete its term. However, until such time as the afore exercise is completed, the status quo with respect to the management of the Aralam SCB will continue and the Part Time Administrator, now in office, will remain in its charge, subject to the orders to be issued by the Joint Registrar in terms of this judgment. **Sd/- DEVAN RAMACHANDRAN** Stu **JUDGE** WP(C) 19420 & 19462/2018 11 ## **APPENDIX OF WP(C) 19420/2018** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 A TRUE COPY OF THE COMMITTEE MEETING HELD ON 30-122017 TO NOMINATE MR.IBRAHIM MANGALODAN.** - **EXHIBIT P2 A TRUE COPY OF THE LIST OF COMMITTEE MEMBERS OF THE BANK FURNISHED BY THE SECRETARY ON 05-06-2018.** - **EXHIBIT P3 A TRUE COPY OF THE ORDER DATED 25-05-2018 OF THE FIRST RESPONDENT.** **EXHIBIT P4 A TRUE COPY OF THE ORDER DATED 08-06-2018 OF THE FIRST RESPONDENT.** - **EXHIBIT P5 A TRUE COPY OF THE JUDGMENT DATED 02/03/2018 IN WPC NO.1585/2018.** **EXHIBIT P6 A TRUE COPY OF THE JUDGMENT DATED 10/07/2018 IN WPC NO.28522/2017.** ## **RESPONDENT'S EXHIBITS:** **EXHIBIT R2 A** A TRUE COPY OF THE ORDER NO.675/2018/CRP DATED 06/06/2018. **EXHIBIT R2 B** A TRUE COPY OF THE ORDER NO.5808/2017/CRP DATED 11/01/2018. **EXHIBIT R2 C** A TRUE COPY OF THE MINUTES OF THE COMMITTEE DATED 22/01/2018. **EXHIBIT R2 D** A TRUE COPY OF THE ORDER NO.6955/CRP/K.DIS. DATED 11/01/2018. //True copy// P.A to Judge. WP(C) 19420 & 19462/2018 12 ## **APPENDIX OF WP(C) 19462/2018** ## **PETITIONER'S EXHIBITS:** - **EXT.P1 A TRUE COPY OF THE COMMUNICATION OF THE PAYAM SERVICE CO-OPERATIVE BANK DATED 26.12.2017** - **EXT.P2 A TRUE COPY OF THE ORDER DATED 11.01.2018 OF THE FIRST RESPONDENT** **EXT.P3 A TRUE COPY OF THE JUDGMENT DATED 2.3.2018 IN WPC NO.1585/2018** **EXT.P4 A TRUE COPY OF THE ARGUMENT NOTE DATED 18.5.2018** **EXT.P5 A TRUE COPY OF THE ORDER DATED 25.5.2018 OF THE JOINT REGISTRAR** RESPONDENT'S EXHIBITS : NIL //TRUE COPY// P.A TO JUDGE.