Kerala High Court
U.A.Lathif Mla vs State Of Kerala on 12 January, 2023
WP(C) No.173/2023 1/7
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
Thursday, the 12th day of January 2023 / 22nd Pousha, 1944
WP(C) NO. 173 OF 2023 (V)
PETITIONERS:
1. U.A.LATHIF MLA, PRESIDENT, THE MALAPPURAM DISTRICT CO-OPERATIVE BANK
LTD. NO. 4329, HEAD OFFICE, P.B. NO. 8, MALAPPURAM- 676 505.
2. P.T. AJAY MOHAN, S/O. P.T. MOHANAKRISHNAN, VICE PRESIDENT, THE
MALAPPURAM DISTRICT CO-OPERATIVE BANK LTD. NO. 4329, HEAD OFFICE,
P.B. NO. 8, MALAPPURAM- 676 505.
RESPONDENTS:
1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT,
DEPARTMENT OF CO-OPERATION, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695001.
2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, D.P.I. JUNCTION, JAWAHAR
SAHAKARANA BHAVAN, THIRUVANANTHAPURAM - 695 014.
3. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, OFFICE OF THE JOINT
REGISTRAR OF CO- OPERATIVE SOCIETIES (GENERAL), CIVIL STATION ROAD,
UP HILL, MALAPPURAM DISTRICT, PIN CODE: 673 505.
4. THE RESERVE BANK OF INDIA CENTRAL OFFICE BUILDING, C-7, 18TH FLOOR,
SHAHID BHAGATH SINGH MARG, FORT, MUMBAI - 400001, REPRESENTED BY THE
GOVERNOR.
5. GOVERNMENT OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF CO-
OPERATION, ATAL AKSHAY URJA BHAWAN, CGO COMPLEX, LODHI ROAD, BEHIND
NIA BUILDING, NEW DELHI - 110003.
6. THE CHAIRMAN, NATIONAL BANK FOR AGRICULTURAL AND RURAL DEVELOPMENT,
(NABARD), CENTRAL OFFICE, BANDRA KURLA COMPLEX, BKC ROAD, BANDRA,
MUMBAI - 400051.
Writ petition (civil) praying inter alia that in the circumstances
stated in the affidavit filed along with the WP(C) the High Court be
pleased to stay further actions following Exhibit-P10 and the application
of proviso as regards District Co-Operative Bank in Section 2(ia) of the
Kerala Co-Operative Societies Act, pending disposal of the Writ Petition.
This petition coming on for admission upon perusing the petition and
the affidavit filed in support of WP(C) and upon hearing the arguments of
SHRI.GEORGE POONTHOTTAM (SENIOR) along with SRI.A.L.NAVANEETH KRISHNAN,
Advocates for the petitioners, SRI.K.GOPALAKRISHNA KURUP, ADVOCATE GENERAL
for the Respondents, the court passed the following:
WP(C) No.173/2023 2/7
V.G.ARUN, J.
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W.P.(C) Nos. 12 & 173 of 2023
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Dated this the 12th day of January , 2023
ORDER
The petitioners in W.P.(C) No. 12 of 2023 are the
Presidents of Primary Agricultural Credit Societies and Urban
Co-operative Banks that are members of the Malappuram
District Co-operative Bank. The petitioners in W.P.(C) No 173
of 2023 are the President and Vice- president of the
Malappuram District Co-operative Bank (for short 'the
Malappuram DCB'). The Malappuram DCB has 131 Primary
Agricultural Credit Societies and Urban Co-operative Banks as
its A class members with voting rights. In the year 2018, steps
were taken for amalgamation/transfer of assets of District Co-
operative Banks ('DCBs' for short) with the Kerala State Co-
operative Bank, ('KSCB' for short). The objective of
amalgamation was stated to be delayering of the existing
three tier system of Co-operative Societies in the State and
establishment of a strong, vibrant, technology driven and
professionally managed universal bank in the co-operative
WP(C) No.173/2023 3/7
W.P.(C) Nos. 12 & 173 of 2023
sector. The law as it then stood, required the passing of a
resolution by the member societies with 2/3 rd majority, as
provided under Section 14 of the Kerala Co-operative Societies
Act, 1969 ('the Act' for short). When permission was sought
for amalgamation of DCBs with the Kerala State Co-operative
Bank, the Reserve Bank of India granted in-principle
permission, with a stipulation that the resolution should be
passed with 2/3rd majority. In the meanwhile, the Act was
amended vide Act 1 of 2019 and Section 14A inserted,
permitting transfer of assets and liabilities of DCBs to KSCB
by a simple majority of members present and voting in the
General Body meeting. All DCBs, except the Malappuram DCB,
passed resolutions transferring their assets and liabilities to
the KSCB. Even though the resolution proposing transfer of
assets and liabilities was placed before the General Body of
the Malappuram District Co-operative Bank, it got defeated.
While so, the RBI accorded final approval to the Government's
proposal to amalgamate 13 DCBs with KSCB on 07.10.2019.
Consequently, the amalgamated entity came into existence on
WP(C) No.173/2023 4/7
W.P.(C) Nos. 12 & 173 of 2023
29.11.2019 and started functioning with the brand name
'Kerala Bank'. From then onwards, the Malappuram DCB alone
continued to exist as a District Co-operative Bank and an
independent entity. In that scenario, the Government
introduced an Ordinance, substituting the definition of
District Co-operative Bank under Section 2(ii)(ia) and
incorporating Clause a to Sub-section 1(i) of Section 74H of
the Act. The Ordinance was challenged in a batch of writ
petitions. By judgment dated 28.04.2021 the writ petitions
were disposed of with a direction to expedite the process of
merger of the Malappuram DCB with the KSCB. That
judgment was challenged in appeal and the Division Bench
initially issued an order of status quo. Later, as per judgment
dated 25.02.2022 in W.A. No. 708 of 2021 and connected
cases, the writ appeals were closed. In the meanwhile, the
Government introduced the Kerala Co-operative Societies
Amendment Act, 2021.
2. While so, the petitioners in W.P.(C) No. 173 of 2023
approached this Court by filing W.P.(C) No. 28650 of 2021
WP(C) No.173/2023 5/7
W.P.(C) Nos. 12 & 173 of 2023
voicing an apprehension that the Registrar may take steps for
amalgamation. Therein, this Court passed an interim order
on 14.12.2021, directing that the merger, if any, shall not be
effected without complying the procedure contemplated in
Section 74H of the Act. The said writ petition is still pending
consideration. The Registrar having issued Ext.P10 notice in
exercise of the power under Section 74H of the Act, this writ
petition is filed.
3. Heard Adv. George Poonthottam, learned Senior
Counsel appearing for the petitioners and learned Advocate
General, K. Gopalakrishna Kurup for the respondents.
4. Although various factual and legal contentions are
raised by the Senior Counsel and countered by the learned
Advocate General, I refrain from delving into those contentions
for the purpose of deciding the prayer for interim relief. This
is for the reason that a scrutiny of the grounds and the reliefs
sought in W.P.(C) No. 28650 of 2021 shows that similar
grounds of challenge are raised in that writ petition and the
reliefs sought are also similar. The only difference being that,
WP(C) No.173/2023 6/7
W.P.(C) Nos. 12 & 173 of 2023
in the writ petitions under consideration, Ext.P10 notice is
also under challenge. In so far as the interim order in W.P.(C)
No. 28650 of 2021 is to the effect that the merger, if any,
shall not be effected without complying the procedure
contemplated in Section 74H of the Act and Ext.P10 is seen
issued in exercise of the power under Section 74H, it will be
inappropriate to interdict the proceedings based on Ext.P10.
Therefore, while declining the prayer for stay of further
proceedings based on Ext.P10, it is ordered that the decision
taken pursuant to Ext.P10 and consequential actions, if any,
will be subject to the result of these writ petitions.
Post along with W.P.(C) No. 28650 of 2021.
Sd/-
V.G.ARUN
JUDGE
sb
12-01-2023 /True Copy/ Assistant Registrar
WP(C) No.173/2023 7/7
APPENDIX OF WP(C) 173/2023
Exhibit-P10 TRUE COPY OF THE NOTICE NO. CB(5)6394/2020 DATED
23.12.2022 ISSUED BY THE REGISTRAR OF CO-OPERATIVE
SOCIETIES.
12-01-2023 /True Copy/ Assistant Registrar
