S. Shanmukha Sundaram Pillai vs The Meenachil Rubber Marketing ...
2022 Latest Caselaw 4046 Ker

                 IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
               THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
                                    &
               THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN
                                    &
                  THE HONOURABLE MRS. JUSTICE C.S. SUDHA
         Thursday, the 7th day of April 2022 / 17th Chaithra, 1944
                            WA NO. 1693 OF 2018

     AGAINST JUDGMENT DATED 14.06.2018 IN WPC 36425/2017 OF THIS COURT

                                   ---

APPELLANT/PETITIONER:

     S.SHANMUKHA SUNDARAM PILLAI, AGED 55,S/O.LATE P.SUBRAMANYA PILLAI,
     NEDUNJALIL HOUSE, VELLAPPAD, PALA P.O., KOTTAYAM DISTRICT-686 575.

BY ADV. SRI.V.PHILIP MATHEWS

RESPONDENTS/RESPONDENTS:

  1. THE MEENACHIL RUBBER MARKETING & PROCESSING CO-OPERATIVE SOCEITY
     LTD. NO.K 118, MARKET ROAD, PALA, KOTTAYAM DISTRICT-686 575,
     REPRESENTED BY ITS MANAGING DIRECTOR.
  2. THE MANAGING DIRECTOR, THE MEENACHIL RUBBER MARKETING & PROCESSING
     CO-OPERATIVE SOCEITY LTD. NO.K 118, MARKET ROAD, PALA, KOTTAYAM
     DISTRICT-686 575.
  3. THE SECRETARY, THE MEENACHIL RUBBER MARKETING & PROCESSING CO-
     OPERATIVE SOCEITY LTD. NO.K 118, MARKET ROAD, PALA, KOTTAYAM
     DISTRICT-686 575.
  4. *THE PRESIDENT, THE MEENACHIL RUBBER MARKETING & PROCESSING CO-
     OPERATIVE SOCEITY LTD. NO.K 118, MARKET ROAD, PALA, KOTTAYAM
     DISTRICT-686 575. *(DELETED)
  5. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, KOTTAYAM - 686 001.
  6. THE ASSISTANT REGISTRAR (GENERAL), OFFICE OF THE ASSISTANT REGISTRAR
     (GENERAL) OF CO-OPERATIVE SOCIETIES, MEENACHIL, PALA, KOTTAYAM
     DISTRICT - 686 575.

 *R4 IS DELETED AT THE RISK OF THE PETITIONER AS PER ORDER DATED 5/9/19

 IN IA 1/19 IN WA 1693/18.

BY ADVS.M/S. SHAJI THOMAS & JEN JAISON FOR R1 & R2.

SRI. P.P. THAJUDHEEN, SENIOR GOVERNMENT PLEADER FOR R5 & R6.

     This Writ Appeal having come up for orders on 07.04.2022 upon
perusing the appeal memorandum and this court's order dated 26.11.2019,
the court on the same day passed the following:

                                                                     P.T.O.
                                                                     "C.R."

 P.B. SURESH KUMAR, P.V. KUNHIKRISHNAN & C.S. SUDHA, JJJ.
              -----------------------------------------------
                   Writ Appeal No.1693 of 2018
              -----------------------------------------------
               Dated this the 7th day of April, 2022


                                 ORDER

C.S. Sudha, J.

Writ Petition No.36425/2017 was filed by the appellant herein

seeking a writ of mandamus to be issued directing respondents 1 to 4 to

release the amounts in the fixed deposits made by him. The learned Single

Judge relying on the Division Bench decision in Meenachil Rubber

Marketing & Processing Co-operative Society Ltd. v. Choondachery

Service Co-operative Bank Ltd., 2018(2) KHC 180 held that a writ as

sought for could not be granted as equally efficacious remedy under Section

69 of the Kerala Co-operative Societies Act, 1969 (the Act) is available and

hence dismissed the writ petition. Aggrieved, the petitioner filed Writ

Appeal No.1693/2018. When the matter came up for hearing before the

Division Bench, the attention of the Bench was drawn to the order dated

13.08.2018 of another Division Bench in W.A.Nos.128/2018, 137/2018, Writ Appeal No.1693 of 2018

143/2018 and 144/2018 wherein Meenachil (supra) was considered and

departed from on the basis of an order issued by the Registrar under Section

66A of the Act. The Division Bench in the present writ appeal held that the

subsequent Division Bench decision in the aforesaid writ appeals dated

13.08.2018 is in conflict with the decision in Meenachil (supra) and hence

directed the Registry to place the matter before the Hon'ble Chief Justice for

appropriate orders. Thus, the present reference order.

2. The point that we are called upon to answer is the scope of the

power of the Registrar under Section 66A and whether the Registrar under

the said Section has the power or jurisdiction to pass orders in contractual

matters or in individual cases, like, directing the Society to release the fixed

deposit amounts on maturity.

3. Meenachil (supra) was a case in which a Service Co-operative

Bank Limited deposited amounts in a Co-operative Society for a fixed

period. When the period was over, the amount was not repaid. A writ

petition was filed for issuing a direction to the Society to pay the amount

covered by the fixed deposit receipt to the petitioner Bank with future

interest. Though the Society admitted the liability to pay the amount to the

Bank, it contended that no writ petition is maintainable against a Co- Writ Appeal No.1693 of 2018

operative Society. A Single Bench of this Court directed the Society to repay

the amount with interest. In the writ appeal filed by the Society, this Court

held that the writ petition did not satisfy any of the conditions for invoking

the jurisdiction under Article 226 of the Constitution. The petitioner had no

case that the grievance fell within any of the well-defined exceptions. There

was no case that the Society had violated any statutory provisions or that

they had not acted in accordance with the provisions of the Statute or that

they had acted in total violation of the principles of natural justice. The writ

petitioner did not also have a case that the remedies provided under the Act

were entirely ill-suited to redress their grievances. When a statutory forum is

created by law for redressal of grievances, a writ petition cannot be

entertained ignoring the statutory remedies available to the aggrieved

person. The discretionary jurisdiction under Article 226 of the Constitution

is not absolute, but has to be exercised judiciously in the given facts of a

case and in accordance with law. It is the normal rule that if alternative

statutory remedies are available, a writ petition under Article 226 of the

Constitution should not be entertained. But there are exceptions to this rule,

like, where the statutory authority has not acted in accordance with the

provisions of the enactment in question or where the statutory authority acts Writ Appeal No.1693 of 2018

in defiance of the fundamental principles of judicial procedure or when it

acts in total violation of the principles of natural justice or where statutory

remedies are entirely ill-suited to meet the demands of extraordinary

situations. Further, the rule of exhaustion of alternative remedy is a rule of

discretion and not one of compulsion. Hence in view of the efficacious

remedy available to the writ petitioners under Section 69 of the Act, this

Court held that the petitioner is not entitled to the relief prayed for in the writ

petition.

4. The scope of the powers of the Registrar under Section 66A is

not seen considered in Meenachil (supra). Therefore, stricto sensu, there

seems to be no conflict between the decision of the Division Bench in

W.A.Nos.128/2018, 137/2018, 143/2018, 144/2018 and Meenachil (supra).

However, as the reference has been placed before us, we proceed to answer

the same.

5. Heard Shri.V.Philip Mathews, the learned counsel for the appellant,

Shri. Shaji Thomas, the learned counsel for respondents 1 and 2 and Shri. P.P.

Thajudheen, the Senior Government Pleader for respondents 5 and 6.

6. It was submitted on behalf of the appellant that the Registrar

has ample power under Section 66A to give general directions which include Writ Appeal No.1693 of 2018

the power to issue directions in individual cases as in the present case. It was

also submitted that since Section 66A confers a greater power to issue

general directions and guidelines, in the light of the maxim "Omne majus

continet in se minus", the said power includes power to issue specific

directions in individual cases as well, which is a lesser power in nature. He

has relied on the decisions of the Apex Court in Atma Ram v. State of

Punjab, AIR 1959 SC 519 and Santosh Kumar Jain v. State, AIR 1951

SC 201, in support of the said proposition. Reference was also made to the

following decisions in support in support of his arguments- Sunilkuttan v.

Ernakulam District Co-op. Bank - 2016 KHC 64; Aji v. State of Kerala

- 1995 KHC 59; Sambasivan Nair v. Kerala State Co-operative

Employees' Pension Board - 2012(3) KLT SN 129(C.No.134);

Abdurahiman Nagar Service Co-operative Bank Ltd. v. State of Kerala

- 2014(1)KLT 664; Saila Kumari G.K v. State of Kerala - 2014 KHC

685; Maranalloor Milk Producers Co-operative Society Ltd. v.

Directorate of Dairy Development - 2020(5) KLT 170; Jyothish M.S. v.

Registrar of Co-operative Societies, Tvm - 2021(1) KHC 138 and

Thiruvalla East Co-operative Bank Ltd. v. Joint Registrar of Co-

operative Societies - 2006 KHC 1783.

Writ Appeal No.1693 of 2018

7. There are specific provisions in the Act dealing with the powers

of the Registrar to be invoked in different contingencies, like, Section 65

dealing with the power of inquiry of the Registrar and Section 66 dealing

with the power of supervision and inspection. Section 66A, on the other

hand, is a provision dealing with the power of the Registrar to issue general

directions and guidelines. The general directions and guidelines that can be

given by the Registrar under Section 66A can only be for the purpose of

enforcing or implementing the purpose of the Act or for the purpose of

implementing the policies of the Government. Therefore, we will first

consider what the 'purpose of the Act' is, for which we turn to the Preamble

of the Act.

8. The Preamble expresses the scope, object and purpose of an

Act. The purpose of the enactment has to be gathered from its Preamble and

from its general scheme as deducible from a reading of all its provisions as a

whole. The Preamble to the statute is an admissible aid to construction. In

Union of India v. Elphinstone Spinning and Weaving Co. Ltd, AIR 2001

SC 724, the extent to which a Preamble of an Act can be referred to or relied

upon has been succinctly stated by the Hon'ble Supreme Court as:

"...The preamble of an Act, no doubt can also be read along with other provisions of the Act to find out the meaning of the words in enacting Writ Appeal No.1693 of 2018

provision to decide whether they are clear or ambiguous but the preamble in itself not being an enacting provision is not of the same weight as an aid to construction of a Section of the Act as are other relevant enacting words to be found elsewhere in the Act. The utility of the preamble diminishes on a conclusion as to clarity of enacting provisions. It is, therefore, said that the preamble is not to influence the meaning otherwise ascribable to the enacting parts unless there is a compelling reason for it. If in an Act the preamble is general or brief statement of the main purpose, it may well be of little value.... We cannot, therefore, start with the preamble for construing the provisions of an Act, though we could be justified in resorting to it nay we will be required to do so if we find that the language used by Parliament is ambiguous or is too general though in point of fact Parliament intended that it should have a limited application...."

9. Initially, the Preamble of the Act read -

"WHEREAS with a view to providing for the orderly development of the co-operative movement in the State of Kerala in accordance with the relevant directive principles of State policy enunciated in the Constitution of India, it is expedient to consolidate, amend and unify the law relating to co-operative societies in that State."

This was substituted by Act.No.1/2000 dated 01-01-2000, which reads -

"WHEREAS with a view to provide for the orderly development of the co-operative sector in the State, by organising the co-operative societies as self governing democratic institutions, to achieve the objects of equity, social justice and economic development, as envisaged in the directive principles of State Policy of the Constitution of India, it is expedient to consolidate, amend and unify the law relating to Co-operative Societies in the State."

In 2010 the Preamble was again amended and for the words "by organising Writ Appeal No.1693 of 2018

the Co-operative Societies as self governing" the words "it is essential to

organise the Co-operative Societies in accordance with Co-operative

principles as self governing" and after the words "Constitution of India" the

words "and to promote scientific and technological development, health

care, market intervention and management excellence in the co-operative

sector" were inserted. The present Preamble thus reads-

"WHEREAS with a view to provide for the orderly development of the co-operative sector in the State, it is essential to organise the co- operative Societies in accordance with Co-operative principles as self governing, democratic institutions, to achieve the objects of equity, social justice and economic development as envisaged in the Directive Principles of State Policy of the Constitution of India, and to promote scientific and technological development, health care, market intervention and management excellence in the co-operative sector, it is expedient to consolidate, amend and unify the law relating to co- operative societies in the State."

From the Preamble, it can be seen that the Act has been enacted with a view

to provide for the orderly development of co-operative movement in

accordance with the directive principles of State policy enunciated in the

Constitution of India and to promote scientific and technological

development, health care, market intervention and management excellence

in the co-operative sector.

10. Section 66A was first inserted by Act 1/2000 which came into Writ Appeal No.1693 of 2018

force from 27.09.2001. It read-

""66A. Powers of Registrar to give directions. -- Subject to the provisions contained in the Act and the rules made thereunder the Registrar may issue general directions and guidelines to the co-operative societies in furtherance of the purposes of the Act."

This was substituted by Act 7/2010 with effect from 28/04/2010 and the

present section 66A reads-

"66A. Powers of Registrar to give directions. -- Subject to the provisions of the Act and the rules made thereunder the Registrar may issue general directions and guidelines to any or all of the co-operative societies in furtherance of the purposes of the Act or for implementing government policies for the benefit of the members and the general public."

For the construction of a particular provision, we can seek the aid of the

statement of objects and reasons. The statement of objects and reasons can

be legitimately used for ascertaining the object which the legislature had in

mind, though not for construing the Act. (Sanghvi Jeevraj Ghewar Chand

v. Secretary, Madras Chillies, AIR 1969 SC 530). Reference to the State-

ment of Objects and Reasons is permissible for understanding the back-

ground, the antecedent state of affairs, the surrounding circumstances in re-

lation to the statute, and the evil which the statute sought to remedy. The

weight of judicial authority leans in favour of the view that Statement of Ob-

jects and Reasons cannot be utilized for the purpose of restricting and con- Writ Appeal No.1693 of 2018

trolling the plain meaning of the language employed by the Legislature in

drafting statute and excluding from its operation such transactions which it

plainly covers. (Bhaiji v. Sub-Divisional Officer, Thandla, 2003(1) SCC

692).

11. The proper and correct determination of the issue in question

calls for an interpretation and construction of section 66A so as to ascertain

the true intention of the legislature. This judicial exercise turns upon the text

and context of this Section. In this regard, the following pertinent

observation of Hon'ble Supreme Court made in Reserve Bank of India v.

Peerless General Finance and Investment Co. Ltd., (1987) 1 SCC 424:

AIR 1987 SC 1023 can be usefully recalled. It has been held-

"33. Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute Writ Appeal No.1693 of 2018

is looked at without the glasses provided by the context. With those glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place. ..."

12. In Poppatlal Shah v. State of Madras, AIR 1953 SC 274 it

has been held that it is a settled rule of construction that to ascertain the

legislative intent, all the constituent parts of a statute are to be taken together

and each word, phrase or sentence is to be considered in the light of the

general purpose and object of the Act itself.

13. In Chairman, Board of Mining Examination and Chief

Inspector of Mines v. Ramjee, AIR 1977 SC 965 it has been succinctly

stated:

"To be literal in meaning is to see the skin and miss the soul ...".

14. Keeping in view the above basic principles of interpretation, let

us now examine, what was the legislative intent in bringing Section 66A into

the statute book. The Statement of objects and reasons to the Kerala co-

operative Societies (Amendment) Bill, 1999 which led to Act 1/2000 does Writ Appeal No.1693 of 2018

not refer to the purpose for which Section 66A has been brought into the

statute book. The Statement starts of by saying that "the policy of the

Government is to re-organise the co-operative societies as self governing

democratic institutions. Government have, therefore, decided to bring

comprehensive amendments to the Kerala Co-operative Societies Act,

1969". Para 10 of the statement reads - "According to the existing

provisions, the power of audit, inquiry, inspection and surcharge is vested

with the Registrar. Government have decided to form a separate wing for

audit by appointing a Director of Co-operative Audit. Hence, provisions

relating to audit and inquiry, inspection etc. have been decided to be

incorporated as separate chapter. Provisions for suspension of the

committee, pending enquiry, has also been decided to be included therein."

There is no reference to the reason why S.66A has been brought in.

15. The Statement of objects and reasons to the Kerala Co-

operative Societies (Second Amendment) Bill, 2009 which led to Act 7/2010

by which amendment was brought to the Section, is also not of any help

because it merely says- "As per the provisions in section 66A of the Act,

Registrar has power to issue general directions and guidelines to the

Societies in furtherance of the purpose of the Act. Government have decided Writ Appeal No.1693 of 2018

to amend section 66A of the Principal Act with the object that the Registrar

shall have power to issue general or specific directions and guidelines to

societies in furtherance of the purpose of the Act or for implementing

Government Policies for the benefit of the members and the general public."

Since we do not find any ambiguity in the provision, let us understand the

scope of the power of the Registrar under 66A having regard to its text and

context.

16. The Act is a regulatory enactment brought into existence for the

orderly development of the co-operative movement in the State by

organising co-operative societies as self-governing democratic institutions to

achieve the objects of equity, social justice and economic development.

Among others, the Act provides for the manner in which co-operative

societies are to be established, defines their privileges as also the rights and

liabilities of their members, provides for the management of co-operative

societies, contains provisions to ensure that the co-operative societies are

functioning in accordance with the provisions therein, constitutes authorities

for implementing the provisions therein and so on and so forth. Chapter VIII

of the Act deals with the measures to ensure that co-operative societies are

functioning in accordance with the provisions therein, to achieve the object Writ Appeal No.1693 of 2018

of the enactment and to protect the interests of their members. Section 66A

is a provision contained in Chapter VIII of the Act. As noted, it empowers

the Registrar to issue general directions and guidelines to any or all of the

co-operative societies in furtherance of the purposes of the Act or for

implementing Government policies for the benefit of the members and the

general public. As evident from the text of the provision, the power

conferred is a power to issue "general directions and guidelines". The text

of the provision does not give scope for any doubt as to whom the Registrar

is empowered to issue general directions and guidelines. The provision is

clear that the empowerment is for issuing general directions and guidelines

to any or all of the co-operative societies. In other words, the general

direction or guidelines provided for in the provision need not be one to be

addressed to all or a group of co-operative societies and the same can be

issued even to an individual society. But, going by the provision, the same

shall be a general direction or guideline. Similarly, the text of the provision

does not give scope for any doubt as to the purpose for which such general

directions or guidelines can be issued. As explicit from the provision itself,

the general directions and guidelines provided for in the Section, if issued,

shall not only be in furtherance to the purposes of the Act or for Writ Appeal No.1693 of 2018

implementing Government policies, but also for the benefit of the members

and general public. Since the provision starts with the expression "subject to

the provisions of the Act and the rules made thereunder", the general

directions and guidelines provided for in the provision shall be issued

without offending the provisions of the Act and the rules made thereunder.

Although the power to issue general directions and guidelines in terms of the

provisions is subject to the various stipulations made mention of in the

provision as indicated above, all such stipulations are controlled by the

expression "general directions and guidelines", for the scope of the

stipulations is dependent on the meaning that is attributed to the expression

"general directions and guidelines". The pointed question therefore, is as to

how one should understand the expression "general directions and

guidelines" in a situation of the instant nature.

17. There cannot be any doubt that the provision is a piece of

delegated legislation. Even otherwise, where the power to be exercised by

an authority under a statute does not concern with the interest of an

individual and relates to public in general or concerns with a general

direction of a general character and not concerning an individual or to a

particular situation, the same is generally held to be legislative in character Writ Appeal No.1693 of 2018

[See State of Punjab v. Tehal Singh, (2002) 2 SCC 7]. As observed by the

Apex Court in Union of India v. Cynamide India Ltd., (1987) 2 SCC 720,

with the proliferation of delegated legislation, there is a tendency for the line

between legislation and administration to vanish into an illusion as

legislative activity tends to fade into and present an appearance of an

administrative activity. The distinction between a legislative and an

administrative activity has usually been expressed as "one between the

general and particular". A legislative act is the creation and promulgation of

a general rule of conduct without reference to particular cases, whereas an

administrative act is the making and issuance of a specific direction or the

application of a general rule to a particular case in accordance with the

requirements of policy. In other words, legislation is the process of

formulating a general rule of conduct without reference to particular cases

and usually operating in future; administration is the process of performing

particular acts of issuing particular orders or of making provisions which

apply general rules to particular cases [see H.W.R.Wade and C.F. Forsyth on

Administrative Law Ninth Edition, Chapter 22]. It can, therefore, be seen

that the provision being a delegated legislation, it cannot be equated with an

administrative act of making and issuing specific directions in a particular Writ Appeal No.1693 of 2018

case. In other words, the provision cannot be interpreted in such a fashion as

to confer power on the Registrar to issue specific directions in individual

cases.

18. In Mysore SRTC v. Babajan Conductor, (1977) 2 SCC 355,

the Apex Court has interpreted the scope of the expression "general

instructions" contained in Section 34 of the Road Transport Corporation

Act, 1950. Section 34 of the said statute empowers the State Government to

give general instructions to Road Transport Corporations. It has been held in

the said context that the State Government is empowered in terms of the said

provision only to give general directions, and the said provision cannot be

invoked for issuing a specific direction with regard to a particular case. The

relevant passage in the said judgment reads thus:

"In order to compel the Corporation to do anything, as already indicated, only a general direction under Section 34 of the Act, set out above, could be given by the Government. There neither could be a specific direction with regard to a particular case nor was any specific direction given by the Government for any such case. The High Court could not take upon itself the power to fill any gap in the provisions of the Act, even if we were to assume that there was one here, and compel the Government to perform a function which the Government was not under any kind of obligation to do. The High Court could not give a specific direction to make provision to meet Writ Appeal No.1693 of 2018

what it thought was required in a particular or individual case if such a case fell outside the provisions made by the Act and the rules. We can find no justification at all for such assumption of powers by the High Court."

The said judgment has been followed by the Apex Court in Chairman &

M.D., Kerala SRTC v. K.O.Varghese, (2007) 8 SCC 231.

19. The maxim "omne majus continet in se minus", meaning

the greater contains the less, cannot have any application in the context of

the present case where the statute by using the prefix "general" to the

expression "directions and guidelines" precludes the authority from issuing

directions and guidelines other than general directions and guidelines

including directions in individual cases.

20. We also make a brief survey of the decisions in which

Section 66A has been considered. In Thiruvalla East Co-operative Bank

(supra) a Single Bench of this court was dealing with a case in which the

petitioner bank challenged the order of the Joint Registrar rejecting the

request of the petitioner for sanction to purchase a new vehicle. On behalf of

the Government, it was contended that the order had been passed on the

basis of the report received from the Assistant Registrar and as per S.66 and

66A of the Act. It was held that the provisions of S.66 and 66 A of the Act Writ Appeal No.1693 of 2018

only empower the Registrar to issue general directions or guidelines to the

societies or banks in furtherance of the Act and the Rules. Relying on the

dictum in Aji (supra) it was held that the power under the aforesaid sections

ought to be exercised with due caution and circumspection and only in cases

where it is really called for. Holding so, the order passed by the Registrar

was held to be one beyond jurisdiction and hence liable to be set aside.

21. In Kodakara Farmers Service Cooperative Bank Ltd. v.

Neena K.K. - 2010 (1) KHC 540 a Division Bench of this court was

considering a writ appeal filed by the Appellant - Bank challenging the

judgment of a Single Judge vacating the order of the Government in appeal,

restoring the order of the Joint Registrar and directing the appellant to

appoint the first respondent in the Writ Appeal as Junior Clerk pursuant to

her inclusion in the select list prepared by the Appellant based on the

examination conducted by the Co - operative Service Examination Board.

The Bench disagreed with the contention of appellant Bank that the Joint

Registrar had no authority to issue direction to the appellant to appoint the

first respondent from out of the list prepared. It held that besides the specific

powers under S.66, it is pertinent to note that the Act as amended in 2000

incorporated S.66A giving general powers to the Registrar. The purpose of Writ Appeal No.1693 of 2018

Section 66A is to give supervisory power to Registrar to ensure that societies

are functioning in accordance with the provisions of the Act and Rules. The

direction issued by the Joint Registrar to the appellant bank to appoint the

first respondent was held only to ensure that Cooperative Societies Rules are

being followed by the appellant in regard to filling up of vacancies. On this

premise it was held that the Joint Registrar was well within his powers to

issue such a direction. The matter when taken up in appeal, the Hon'ble

Supreme Court referring to the order of the Government which was set aside

by the Single Bench, held that the former was right in holding that a

Corporate Bank could not be compelled to fill up posts even if posts are

permanent. There was nothing to show that the Bank had acted arbitrarily in

not filling up the posts. As per rules, even if the society framed feeder

category rules and got it approved from the Joint Registrar, there is

absolutely no rule or law compelling the Board of Directors of the society to

make appointments or promotion even in respect of any post that had been

prescribed in the feeder category rule. Even if posts are permanent, it is not

obligatory for the Board of Directors of a society to fill up all posts. It is an

absolute prerogative right of the Board of Directors not to fill up any

particular post even though the feeder category rules had sanctioned the post Writ Appeal No.1693 of 2018

and enable the Board of Directors to effect appointment to the post, but they

cannot be compelled to do so under any of the provisions of the Act or

Rules. Agreeing with the Government order it was held that the High Court

was not justified in upsetting the order passed by the Government and so set

aside the same.

22. In Kerala Co-operative Milk Marketing Federation Ltd. v.

State of Kerala - 2011(4) KHC 522 (Single Bench) the competence of the

State Government and the Registrar of Dairy Co-operatives to interfere with

the decision taken by the Kerala Co-operative Milk Marketing Federation

Limited, to increase the selling price of milk was the issue raised in the writ

petitions. It was contended that in exercise of the power conferred under S.9,

S.66(5) and S.66 A of the Act and R.176 of the Rules, the Government and

the Registrar of Dairy Co-operatives can control the working of the

Federation which is a co - operative society, for the economic and social

betterment of its members and the public and therefore the directions issued

by the Government and the Registrar of Dairy Co-operatives were perfectly

in order. It was held that the Government and the Registrar could regulate

and control the working of the Federation only for the economic and social

betterment of the members and the general public. The question whether Writ Appeal No.1693 of 2018

S.66A of the Act would empower the Registrar of Dairy Co-operatives to

issue a direction to the Federation to cancel the decision taken by it to

increase the selling price of milk was considered and it was held that from a

plain reading of the said provision it is evident that a direction under S.66A

can be issued only in furtherance of the purposes of the Act or for

implementing Government policies for the benefit of members and the

general public. There was no material on record to indicate that the Registrar

of Dairy Co-operatives had acted in furtherance of the purposes of the Act or

for implementing Government policies for the benefit of the members of the

Federation and the general public. Therefore, it was held that the Registrar

of Dairy Co - operatives could not invoke S.66A of the Act to sustain the

order.

23. In Abdurahiman Nagar Service Co-operative Bank (supra) a

Division Bench of this court held, based on Section 66A and S.74F, that the

Registrar has the power to write off agricultural or non - agricultural debts of

borrowers of any society.

24. In Sunilkuttan (supra) the question that arose for consideration

before a Single Bench was whether the Government or the Registrar has the

power to direct a co - operative bank or society to either appoint persons in Writ Appeal No.1693 of 2018

its ranks or regularise the services of the existing employees? The petitioners

referring to S.66 and S.66A of the Act contended that both the authorities

have the power. It was held that the power to be exercised or the directions

to be issued by the Registrar under Section 66A shall be subject to the

provisions of the Act and the Rules made thereunder. Further, the directions

and guidelines to be issued by the Registrar shall be for the purpose of

implementing the Government policies for the benefit of the members and

the general public. It further held that, it is indeed contentious whether a

direction to regularise the services of certain employees could be stated to be

for the benefit of the members or the general public. It was found that there

was no specific power available to the Government or the Registrar to

compel a co-operative institution to either employ any particular person or

regularise the services of an existing employee and that the same is entirely

within the administrative discretion of the managing committee, which is at

the helm of the affairs of the Bank or Society.

25. In Saila Kumari (supra) it has been held by a Single Bench of

this court that either the Government or the Registrar has the power to fix

the staffing pattern of a society. By extension, it has got the power to

sanction the posts as well. At any rate, filling up those posts based on the Writ Appeal No.1693 of 2018

need and necessity is in the domain of the management. It was further held

that without cavil it can be said that the manner and method of recruitment is

also required to be prescribed by the Government, but not the actual timing

of the recruitment. Such power is unavailable either from S.66 or S.66A or

even S.80 of the Act. The Government can guide, even lead, a society, but it

cannot take over the very administration of the society. There can be no

usurpation. Hence it was concluded that neither S.66 or S.66A clothes the

Government or the Registrar with the necessary powers to compel the

respondent Bank to regularise the petitioners' services.

26. In Jyothish (supra) sanction granted by the Joint Registrar, to

issue fresh identity cards to members on surrender of the existing identity

cards, was under challenge in the writ petition. It has been held by a Single

Bench that S.66A gives due authority / power to the Registrar to give such

directions. The Section empowers the Registrar to give general directions for

furtherance of the purposes of the Act. Conduct of fair election by the

issuance of proper identity cards is an act in furtherance of implementation

of the provisions of the Co - operative Societies Act and Rules, and the

Registrar has the authority to issue such directions as may be necessary for

the said purpose. Hence the challenge on the ground of absence of power / Writ Appeal No.1693 of 2018

authority with the Registrar, was negatived.

27. In none of the aforesaid decisions an occasion arose for the

court to decide the scope or extent of the power of the Registrar under

Section 66A. However, what is discernible from a reading of the aforesaid

decisions is that the consistent stand taken by the various Benches is that the

general powers vested with the Registrar is it to be invoked sparingly and

only when it is really called for.

28. Is the power under Section 66A, which is to be sparingly used,

enable the Registrar to issue directions in individual cases or in contractual

matters between a Society and its Members or in matters relating to its

business? Can such a direction be stated to be "in furtherance of the purpose

of the Act or for implementing Government policies for the benefit of the

members and the general"? In our opinion the answer is - 'No' keeping in

mind the purpose for which the Act has been enacted. As noticed earlier the

object of the Act as contained in the preamble is to provide for the orderly

development of the Co-operative sector in the State in accordance with the

Directive Principles of State Policy as enunciated in the Constitution of

India and to promote scientific and technological development, health care,

market intervention and management excellence in the co-operative sector.

Writ Appeal No.1693 of 2018

It is in furtherance of this purpose/object of the Act, the power under Section

66A can be invoked by the Registrar. We hold that the general directions

and guidelines that can be issued by the Registrar under Section 66A can

only be for the purpose of implementing or enforcing the purpose of the Act

or for implementing the policies of the Government for the benefit of the

Members of the Society and general public and not in individual cases or in

purely contractual matters between the Society or its Members. Only such

orders issued by the Registrar under Section 66A which satisfy the above

test would be valid.

Reference is answered accordingly. The matter may be placed before

the Bench concerned for considering the writ appeal.

Sd/-

P.B. SURESH KUMAR, JUDGE.

Sd/-

P.V. KUNHIKRISHNAN, JUDGE.

Sd/-

C.S. SUDHA, JUDGE.

       STK




07-04-2022                           /True Copy/                         Assistant Registrar