Kerala High Court
The Managing Committee Of Taliparamba ... vs The Joint Registrar Of Co-Operative ... on 21 December, 2023
Author: N. Nagaresh
Bench: N.Nagaresh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
THURSDAY, THE 21ST DAY OF DECEMBER 2023 / 30TH
AGRAHAYANA, 1945
WP(C) NO. 7716 OF 2023
PETITIONER:
THE MANAGING COMMITTEE OF TALIPARAMBA
SERVICE CO-OPERATIVE BANK LTD., NO.F-1264,
REPRESENTED BY ITS PRESIDENT,
TALIPARAMBA,
KANNUR DISTRICT, PIN - 670141.
BY ADVS.
SHRI.P.N.MOHANAN
SHRI.C.P.SABARI
SMT.AMRUTHA SURESH
SHRI.GILROY ROZARIO
RESPONDENTS:
1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES
(GENERAL),
OFFICE OF THE JOINT REGISTRAR OF
CO-OPERATIVE SOCIETIES,
CIVIL LINES, 3RD FLOOR,
KANNUR, PIN - 670002
*ADDL. 2 DHARANEEDHARAN,
S/O. NARAYANAN, RESIDING AT NETAJI HOUSING
COLONY, THRICHAMBARAM, TALIPARAMBA,
KANNUR DISTRICT, PIN - 670141
*(ADDITIONAL R2 IS SUO MOTU IMPLEADED AS PER
ORDER DATED 22-03-2023)
BY ADVS.
SHRI.SURESH KUMAR KODOTH
SHRI.SUKARNAN(K/001572/2021)
SMT.SHEEJA C.S.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 21.12.2023, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.P.(C) No.7716/2023
:2:
N. NAGARESH, J.
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W.P.(C) No.7716 of 2023
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Dated this the 21st day of December, 2023
JUDGMENT
~~~~~~~~~
The Managing Committee of Taliparamba Service
Co-operative Bank Limited is before this Court seeking to
quash Ext.P1 and to direct the Joint Registrar to consider
Ext.P2 for posts sanction, within the time fixed by this Court.
2. The petitioner states that the present Managing
Committee of the Bank assumed office on 28.10.2018. One
Mr.Dharanendran and Mr. P.V. Narendran made a complaint
about the functioning of the Bank on 25.02.2022. On the
basis of the said complaint, the Joint Registrar by Ext.P1
order dated 07.02.2023 ordered a Section 65 enquiry. The
subject matter of enquiry is of the period commencing from
2005-2006. The period is 18 years back, when another
Managing Committee was in office then. The petitioner
states that a Section 65 enquiry can be ordered only as
provided in Rule 66 of the Kerala Co-operative Societies
Rules. According to Rule 66(1)(c) of the Kerala Co-operative
Societies Rules, specific point or points on which the enquiry
or inspection is to be made, should be specified in the order.
3. According to Section 65(1)(f), an enquiry can be
conducted only against constitution, working and financial
condition of the Society. The subject matter of enquiry
ordered under Ext.P1 goes beyond Section 65. The
petitioner would urge that as per Section 65, an enquiry can
be ordered by the Joint Registrar on the basis of the
complaint filed by the members consisting of at least one
third of the quorum of the General Body. In the case of the
petitioner, the one third would be at least 33 members. As
far as Ext.P1 enquiry is concerned, it has been ordered at
the instance of two persons. There is no subjective
satisfaction reflected in Ext.P1 for the Joint Registrar to order
suo motu enquiry. Ext.P1 is therefore liable to be set aside.
4. The 2nd respondent resisted the writ petition. The
2nd respondent submitted that the 1 st respondent had
considered the inspection report of the Assistant Registrar
dated 11.10.2021 objectively and applied his mind before
directing enquiry. The 1st respondent also conducted
inspection and has drawn a report dated 22.11.2022 before
ordering enquiry. Ext.P1 order shows 14 specific points to
be enquired into.
5. The present Committee committed irregularities
including advancing of fake loan through proxy and also
allowed waiver of interest to such loans. The
misappropriation and mismanagement by the present
Managing Committee has resulted in weakening of the
Society. As per the audit report for the year 2020-2021, the
net loss of the Society has come to an approximate amount
of ₹15 Crores. Therefore, Ext.P1 order is perfectly justified.
6. The 1st respondent-Joint Registrar also filed a
counter affidavit. The 1st respondent submitted that the
Deputy Registrar (Administration) had made a surprise
inspection in the petitioner's Bank. The Assistant Registrar
(General), Taliparamba has submitted a detailed report.
Both the report of the Assistant Registrar and the surprise
inspection conducted revealed prima facie evidence of
existence of allegations. Hence, the 1 st respondent was
convinced that a detailed enquiry under Section 65 of the
Kerala Co-operative Societies Act is essential. The writ
petition is without any merit and it is liable to be dismissed,
contended the 1st respondent.
7. I have heard the learned counsel for the petitioner,
the learned Government Pleader representing the 1st
respondent and the learned counsel appearing for the 2nd
respondent.
8. By Ext.P1 order dated 07.02.2023, the 1st
respondent has ordered a Section 65 enquiry into the affairs
of the Taliparamba Service Co-operative Bank Limited. The
subjects of enquiry are as follows:-
(i) One Time Settlement of loan made as
per the directions of the Registrar during
the year 2005 and 2006.
(ii) Promotions given to the employees since
2016-2017.
(iii) Appointment made to the post of Peon
from Collection Agents in the light
of Rule 185(11) of the Kerala
Co-operative Societies Rules.
(iv) Housing loans given to the employees.
(v) Advocate fee paid to Sri.C.A. Joseph,
Advocate.
(vi) Amount due under miscellaneous
account.
(vii) Overdue of rent.
(viii) Membership given outside the area of
operation.
(ix) Nomination to the Managing Committee
in terms of Section 28(1J) of the KCS
Act.
(x) Shifting of the Kuppam Branch to
Chirava junction.
(xi) Construction works in 2016-2017.
(xii) Any other subject which feels fit to the
enquiry officer.
9. The argument of the petitioner is that the subject
One Time Settlement of loan relates to incidents during the
year 2005 and 2006. It relates to 18 years back, when the
present Managing Committee was not in office. It is the
further argument that the period of limitation as per Section
69(4) of the Kerala Co-operative Societies Act read with
Schedule III of the Kerala Co-operative Societies Act is three
years.
10. The petitioner would further urge that promotion
given to employees and appointment made to the post of
Peon from Collection Agents, is beyond the jurisdiction of
Joint Registrar since the constitution of Arbitration Court.
The petitioner would rely on the judgment of Raveendran v.
State of Kerala [2007 (3) KLT 558] and urge that any
dispute arising in connection with employment of officers and
servants of different classes of societies including their
promotion and inter se seniority, is to be decided by the
Arbitration Court.
11. Ext.P1 is the proceedings ordering Section 15
enquiry. Ext.P1 refers to certain complaints filed by one
Sri. P.Dharanendran and Sri. P.V. Narendran before the
Registrar of Co-operative Societies. It also refers to a report
of the Assistant Registrar and a report of Deputy Registrar in
charge of Joint Registrar. The reports indicated that one A
Class member of the Bank Advocate C.A. Joseph has been
given a waiver of interest amounting to ₹4,88,854/- and
waiver of penal interest amounting to ₹33,808/-. The said
Advocate C.A. Joseph was paid ₹12 lakhs towards
professional fee as a lawyer. While paying professional
charges, the Bank did not attempt to realise the dues to the
Bank from the said Advocate C.A. Joseph.
12. The Assistant Registrar reported that the said
loanee has no right for any waiver other than of penal
interest. The Assistant Registrar further reported that a staff
who was in charge of the Secretary of the Bank and another
employee availed home loans at nominal interest and that
the said employees have not constructed homes utilising the
loan advanced. No utility certificates were produced by
those employees. The Assistant Registrar further noted that
towards collection of rent from the buildings rented out to
tenants, more than ₹9 lakhs is pending as arrears and the
Managing Committee has miserably failed to take steps for
realisation of the rent arrears. It was further noted that loans
were advanced to persons who are residing beyond the
territorial limits of the Bank. The report of the Assistant
Registrar indicated further instances of mismanagement.
13. Ext.P1 proceedings would show that the Joint
Registrar has considered the report of the Joint Registrar in
Charge also, to come to a conclusion that Section 65 enquiry
is necessary. Ext.P1 discloses personal satisfaction of the
Joint Registrar. Reading Ext.P1 proceedings, I am satisfied
that the Registrar has ordered Section 65 enquiry suo motu
after being convinced of the requirement of holding an
enquiry into the working and financial condition of the
Society. I find no reason to interfere with Ext.P1
proceedings.
14. The petitioner urges that the legal question
whether in all cases of suo motu action under Section 65,
there should be some personal verification of records by the
Registrar, has been referred to Larger Bench as per order
dated 02.11.2022 in W.A. No.745/2019 and hence till a final
decision is taken by the Larger Bench, final orders should not
be passed by the 1st respondent. However, I find that in the
enquiry under Ext.P1, the decision of the Joint Registrar is
based on a report of the Deputy Registrar in charge of Joint
Registrar and hence the legal issue referred to the Larger
Bench does not arise in this case.
The writ petition therefore fails and it is
consequently dismissed.
Sd/-
N. NAGARESH, JUDGE
aks/21.12.2023
APPENDIX OF WP(C) 7716/2023
PETITIONER'S EXHIBITS:
Exhibit P1 A TRUE COPY OF THE ORDER DATED
07.02.2023 OF THE JOINT REGISTRAR
Exhibit P2 A TRUE COPY OF THE COVERING LETTER
DATED 27.04.2022 ADDRESSED TO THE
JOINT REGISTRAR ALONG WITH RESOLUTION
NO.18 DATED 27.04.2022 OF THE BANK
RESPONDENTS' EXHIBITS:
Exhibit R2 (a) TRUE COPY OF ORDER DATED 18/11/2009 IN
CRL.MC NO. 488/2008,
Exhibit R2 (b) TRUE COPY OF THE INSPECTION REPORT OF
THE ASSISTANT REGISTRAR DATED
11/10/2021
Exhibit R2 (c) TRUE COPY OF THE INSPECTION REPORT
DATED 22/11/2022 OF THE FIRST
RESPONDENT
SR
