M.V. Rajendran vs Joint Registrar
2023 Latest Caselaw 894 Ker

              IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                  PRESENT
          THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
     TUESDAY, THE 17TH DAY OF JANUARY 2023 / 27TH POUSHA, 1944
                      WP(C) NO. 15859 OF 2018
PETITIONER:

             M.V. RAJENDRAN
             AGED 59 YEARS
             PRESIDENT, (SUPERSEDED),MANAGING COMMITTEE,
             ADAT FARMERS CO-OPERATIVE BANK LTD. NO. R 689,
             THRISSUR DISTRICT - 680 551.
             BY ADVS.
             SRI.GEORGE POONTHOTTAM (SR.)
             SMT.NISHA GEORGE
             SMT.ANN MARIA FRANCIS


RESPONDENTS:

      1      JOINT REGISTRAR
             OF CO-OPERATIVE SOCIETIES (GENERAL),
             THRISSUR - 680 001.
      2      THE ADMINISTRATIVE COMMITTEE
             REPRESENTED BY THE CONVENOR,
             ADAT FARMERS SERVICE CO-OPERATIVE BANK
             LTD.NO.R.689,THRISSUR DISTRICT - 680 551.
      3      ADAT FARMERS SERVICE CO-OPERATIVE BANK LTD.NO.R.689
             (SUPERSEDED),THRISSUR DISTRICT - 680 551,
             REPRESENTED BY THE MANAGING DIRECTOR.
             BY ADVS.
             GOVERNMENT PLEADER
             ADVOCATE GENERAL OFFICE KERALA

             SMT.C.S.SHEEJA -SR.GP
             SRI.P.C.SASIDHARAN


       THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON    17.01.2023,   THE   COURT    ON   THE   SAME   DAY   DELIVERED   THE
FOLLOWING:
 WP(C) NO. 15859 OF 2018             2


                                                               CR
                          JUDGMENT

The petitioner is stated to be the President of the Managing

Committee of the 3rd respondent - 'Adat Farmers Service Co-

operative Bank Ltd.' (Society, for short), which has now been

superseded through Ext.P17 order.

2. The petitioner asserts that Ext.P17 was issued without

affording him an opportunity of being heard - he having come to

know of it only when it was published in the news media; and further

that none of the statutory requirements under Section 32 of the

Kerala Co-operative Societies Act ('KCS Act', for short) had been

followed, before it had been issued. He thus prays that Ext.P17 be set

aside.

3. I have heard Sri.George Poonthottam - learned Senior

Counsel, instructed by Smt.Ann Maria Francis, appearing for the

petitioner; Sri.P.C.Sasidharan - learned counsel for respondents 2

and 3 and Smt.C.S.Sheeja - learned Senior Government Pleader

appearing for the 1st respondent.

4. Before I proceed further, I must record that, since the

specific contention of the petitioner is that he was not heard before

Ext.P17 had been issued, it will be treated by me as a preliminary

objection, because, if that is to be found in his favour, the said order

will have no legs to stand on, going by various judicial precedents

covering the field. I say so, since, in such event, the question whether

there was proper consultation and if other requirements under the

statutory Scheme had been followed, would be relegated to a second

position in its rigour and consideration.

5. Sri.George Poonthottam - learned Senior Counsel,

vehemently argued that his client was never given an opportunity of

being heard and he pointed out to Ext.P15 notice issued by the Joint

Registrar, under the provisions of Section 32 of the 'KCS Act'. He

asserted that the aforesaid notice only offered his client and others

an opportunity of furnishing their written explanations against the

action proposed; and that it has now been well settled, through the

judgment of a Full Bench of this Court in Reji K.Joshy and Others

v. Registrar of Co-operative Societies (General), Kollam and

Others [2022 (3) KHC 317] that "the Act contemplates an

opportunity of hearing to all affected persons before action is taken

on the report of inquiry or inspection, whether it be under Section 32

or under Section 68, except in situations provided for in Section 32

where the Registrar is empowered to dispense with the opportunity

of hearing.". He argued that, therefore, when no other notice has

been issued to his client, Ext.P17 is rendered forensically

incompetent.

6. After arguing as afore, and as his second limb of

submissions, the learned Senior Counsel contended that the Circle

Co-operative Union and the Financing Bank were apparently

consulted by the Joint Registrar of Co-operative Societies by issuing

to them Ext.R1(f) notice; but that this contained none of the

documents which were statutorily required to be enclosed, as is

evident from itself. He relied upon the judgment of a learned Division

Bench of this Court in Sahadevan v. Padmanabhan [2004 (1) KLT

192], to predicate that it is not merely sufficient that the explanation

of his client alone be attached to the "tentative findings", but that

every other document mentioned therein ought to have been so. His

singular argument was that, in the absence of such documents, even

if the consultees had given their opinion, it can only be seen to be a

futile formality, since it is clear that they had no idea on what basis

the said findings had been entered into by the Joint Registrar.

7. As an adscititious argument, Sri.George Poonthottam,

learned Senior Counsel, then contended that, even going by

Exts.R1(f), R1(g) and R1(h) - which are the opinions placed on record

by the Circle Co-operative Union and the Financing Bank respectively

- it is luculent that they were settled by Authorities who are much

below the Joint Registrar; and that this is more so in the case of the

Financing Bank, which was, concededly, under the management of

the said Authority himself at the relevant time. The learned Senior

Counsel thus prayed that Ext.P17 be set aside for all these reasons.

8. Smt.C.S.Sheeja - learned Senior Government Pleader,

refuted the afore contentions of the petitioner saying that, before

Ext.P17 order had been issued, the petitioner and others were served

with Ext.P15 notice, (which is also produced as Ext.R1(i) by the 1 st

respondent), giving them an opportunity of offering explanation to

the allegations contained therein.

9. Smt.C.S.Sheeja then argued that, even though the

petitioner and others preferred Ext.P16 reply, they did not seek an

opportunity of being heard; and therefore, that the Joint Registrar

correctly went on to issue Ext.P17 order dated 06.04.2018, but only

after obtaining the mandatory concurrence from the consultees, as is

statutorily required.

10. The learned Senior Government Pleader further

contended that the argument of the petitioner, that Exts.R1(g) and

R1(h) concurrences given by the consultees are illegal solely because

they were settled by Officers below the Rank of Joint Registrar,

cannot hold water because, as evident therefrom, competent officers

were entrusted with the task of evaluating the "tentative opinion" of

the Joint Registrar and to make their recommendations in terms of

the statutory Scheme qua Section 32 of the 'KCS Act'.

11. Pertinently, she conceded that the Financing Bank was, at

the relevant time, under the management of the Joint Registrar, but

pointed out that, as is manifest from the second page of Ext.R1(h),

said Authority adopted a resolution relegating it to the General

Manager of the Bank to take an apposite decision on the tentative

findings entered by him in Ext.R1(f). She submitted that, therefore,

in view of the peculiar circumstances which prevailed at the time

when action was taken forward by the Joint Registrar, this is all that

could have been done; and hence that the petitioner cannot be

allowed to take advantage of a factual scenario, which was inevitable.

12. Smt.C.S.Sheeja thereafter, showed me that the allegations

against the petitioner and others are so grave that no right thinking

Authority could have permitted the Managing Committee to continue

forward; and therefore, that Ext.P17 is irreproachable from that

angle also. She thus prayed that this writ petition be dismissed.

13. I began this judgment saying that the primary question

which deserves this Court's singular attention is whether the

processes, as are statutorily mandated, have been followed by the

Joint Registrar before Ext.P17 order had been issued.

14. In this regard, I am certainly bound and guided by the

judgment of the learned Full Bench in Reji K.Joshy (Supra),

wherein, as rightly argued by Sri.George Poonthottam, the

unanimous view was that an opportunity of hearing must be afforded

to all affected persons before any action is taken on the report of

enquiry or inspection, whether it be under Section 32 or Section 68

of the KCS Act, except in the situations provided in the former

Section, under which, the Registrar has been given the power to

dispense with such a hearing.

15. In the case at hand, the respondents have no contention

that the provisions of Section 32 of the KCS Act, which empowered

the Registrar to dispense with the opportunity of being heard to the

petitioner, had been in any manner attracted.

16. On the contrary, it is expressly conceded that no such

situation prevailed and this is evident from the fact that, in the

counter affidavit filed on behalf of the 1st respondent dated

12.06.2019, his apodictic averment is to the effect that a notice of

hearing had been afforded to the petitioner, but that he had not

availed of the same. Since there was no factual corroboration of the

same, this Court had passed an order on 09.01.2023, asking the 1 st

respondent to clarify on what basis the afore assertion was made;

and further that, if the same was maintained to be true by him, then

to produce the said document on record. However, in response to

this, an affidavit dated 13.01.2023 has been filed by the 1st

respondent, wherein, he unambiguously admits that, what he meant

through the averments in his earlier counter affidavit was that

Ext.P15 notice had been issued to the petitioner and others, giving

them an opportunity of furnishing their written explanation and that

this should be construed to be a notice of hearing also, particularly

when the petitioner did not seek any further opportunity through a

separate request.

17. I am afraid that the afore stand of the Joint Registrar can

never appeal to this Court, especially when the right to be afforded

an opportunity of being heard is manifest and inviolable from the

statutory scheme, as has been declared by this Court in Reji K.Joshy

(Supra).

18. That apart, when it comes to any action under

Administrative Law, various judgments of this Court and that of the

Hon'ble Supreme Court, particularly Automotive Tyre

Manufacturers Association v. Designated Authority and Others

[(2011) 2 SCC 258], render it ineluctable that unless a statutory

provision, either specifically or by necessary implication, excludes the

application of principles of natural justice, the requirement of giving

reasonable opportunity of being heard is to be read in, particularly

when the resultant order may have adverse civil consequences. The

Hon'ble Supreme Court has, in fact, gone to the extent of saying "this

principle holds good, irrespective of whether the power conferred on

a statutory body or Tribunal is administrative or quasi judicial and

that it is equally trite that the concept of natural justice can neither

be put in a straitjacket nor is it a general rule of universal

application".

19. Obviously, therefore, when it is now conceded that no

opportunity of hearing had been afforded to the petitioner and others,

before Ext.P17 had been issued, the same becomes incapable of

being granted judicial favour. For this reason alone, said order is

liable to be set aside.

20. Of course, before I conclude so, I am fully cognizant of the

submissions of Smt.C.S.Sheeja - learned Senior Government Pleader,

that Section 32 of the KCS Act, does not specify that an opportunity

of being heard must be offered to the members of a Managing

Committee, which is sought to be superseded. She pointed out that

Section 32 only mandates that the competent Authority may "after

giving the Committee an opportunity to state their objections, if any,

by order in writing, removed the Committee and appointed in its

place an Administrator or an Administrative Committee" (sic). Her

argument was that, therefore, an opportunity of being heard need not

be offered.

21. As I have already concluded above, Smt.C.S.Sheeja is

attempting to argue against the holdings of a learned Full Bench of

this Court in Reji K.Joshy (Supra) and against settled principles.

The scope of law has been well expanded and explained through

judicial pronouncements and binding precedents, which cannot be

now sought to be read otherwise by the 1 st respondent, which is a

statutory Authority bound by it.

22. That apart, as I have already seen above, the 1 st respondent

has no case that he was not obligated to give a notice of hearing to

the petitioner; but his stand in the counter affidavit is that he did so,

with the latter refusing to accede to it. Though he now explains,

through his additional affidavit, that what he intended was that

Ext.P15 itself was a notice of hearing, the same is also belied by his

own further averments to the effect that what was granted was only

the opportunity of furnishing written explanation, which is undoubted

because, he then further attempts to explicate that the petitioner did

not seek any opportunity of being heard thereafter.

23. Indubitably, refusal of the 1st respondent in even offering an

opportunity of being heard to the petitioner, in spite of his assertions

in the counter affidavit, surely robs Ext.P17 of all legal force.

24. With my conclusion as afore, obviously, I do not think that it

will be necessary for this Court to enter into the merits of the

contentions of the learned Senior Counsel - Sri.Geroge Poonthottam,

regarding the worth of the consultation made by the Joint Registrar,

as evident from Exts.R1(f), R1(g) and R1(h). However, I must record

that going by Sahadevan (Supra), the Joint Registrar was certainly

obligated to furnish all the relevant materials, particularly the show

cause notice under Section 32(1) of the KCS Act, as also the

explanations and objections of the Committee, to the consultees.

Going by Ext.R1(f) dated 22.03.2018, the Joint Registrar appears to

have forwarded only the explanation of the Committee, but without

being accompanied by the show cause notice under Section 32(1) of

the KCS Act; and prima facie, therefore, this Court cannot find favour

with this either.

25. As regards the worth of the consultation by the consultees is

concerned, I choose not to answer it because, the same is irrelevant

and unnecessary, since Ext.P17 cannot be, in any case, granted

imprimatur for the reasons already indited above.

Resultantly I allow this writ petition and set aside Ext.P17.

Sd/-

DEVAN RAMACHANDRAN JUDGE MC/18.1

APPENDIX OF WP(C) 15859/2018

PETITIONER EXHIBITS EXHIBIT P1 COPY OF THE RELEVANT PORTION OF THE BYELAWS OF THE ADAT FARMERS' SERVICE CO-

OPERATIVE BANK.

EXHIBIT P2 COPY OF THE ORDER PASSED BY THE HON'BLE SUPREME COURT IN SLP(C)NO.17964/2014 DATED 24.03.2017 EXHIBIT P3 COPY OF THE ORDER NO. C.R.P.4383/2016 DATED 09.09.2016 PASSED BY THE 1ST RESPONDENT EXHIBIT P4 COPY OF THE ORDER NO. C.R.P 6845/11DATED 04.01.2012 PASSED BY THE 1ST RESPONDENT EXHIBIT P5 COPY OF THE ORDER IN W.P.(C)NO.38905/2016 DATED 13.12.2016 PASSED BY THIS HON'BLE COURT EXHIBIT P6 COPY OF THE DECISION OF THE MANAGING COMMITTEE OF THE BANK DATED 17.12.2016 EXHIBIT P7 COPY OF THE DECISION OF THE MANAGING COMMITTEE OF THE BANK DATED 28.12.2016 EXHIBIT P8 COPY OF THE REQUEST FOR LOAN SUBMITTED BY THE THRISSUR PADDY FARMER'S PRODUCERS COMPANY DATED 27.01.2017 EXHIBIT P9 COPY OF THE DECISION NO.22 OF THE MANAGING COMMITTEE OF THE BANK DATED 28.01.2017 EXHIBIT P9(A) COPY OF THE DECISION NO.23 OF THE MANAGING COMMITTEE OF THE BANK DATED 28.01.2017 EXHIBIT P9(B) COPY OF THE DECISION NO.24 OF THE MANAGING COMMITTEE OF THE BANK DATED 28.01.2017 EXHIBIT P10. COPY OF THE ORDER NO. C.R.P.6567/2016 DATED 12.04.2017 PASSED BY THE 1ST RESPONDENT EXHIBIT P11 COPY OF THE ORDER IN W.P.(C)NO.14016/2017 DATED 21.04.2017 PASSED BY THIS HON'BLE COURT EXHIBIT P12 COPY OF THE AFFIDAVIT IN W.P.

(C)NO.14016/2017 DATED 28.07.2017 FILED BEFORE THIS HON'BLE COURT EXHIBIT P13 COPY OF THE COUNTER AFFIDAVIT IN W.P(C)NO.14016/2017 DATED 20.04.2017 FILED BEFORE THIS HON'BLE COURT.

EXHIBIT P14 COPY OF THE ORDER NO. C.R.P.6567/2016 DATED 10.10.2017 PASSED BY THE 1ST RESPONDENT EXHIBIT P15 COPY OF THE NOTICE NO. C.R.P.821/2018

DATED 07.03.2018 ISSUED BY THE 1ST RESPONDENT EXHIBIT P16 COPY OF THE REPLY TO SECTION 32(1) NOTICE DATED 13.03.2018 SUBMITTED BY THE PETITIONER AND OTHER MANAGING COMMITTEE MEMBERS OF THE BANK EXHIBIT P17 COPY OF THE ORDER NO. C.R.P.821/2018 DATED 06.04.2018 PASSED BY THE 1ST RESPONDENT EXHIBIT P18 COPY OF THE ORDER NO. C.R.P.821/2018 DATED 12.03.2018 PASSED BY THE 1ST RESPONDENT EXHIBIT P19 COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT UNDER SECTION 68(1) AGAINST THE ELECTED MANAGING COMMITTEE MEMBERS OF THE BANK DATED 19.3.2018 EXHIBIT P20 COPY OF THE COMMUNICATION DATED 23.03.2018 SENT BY THE PETITIONER TO THE ASSISTANT REGISTRAR (PLANING), FOR PRELIMINARY ENQUIRY FOR SURCHARGE PROCEEDINGS EXHIBIT P21 COPY OF THE NOTICE NO. C.R.P.2613/2018 DATED 04.04.2018 ISSUED BY THE 1ST RESPONDENT ALONG WITH ENQUIRY REPORT RESPONDENT EXHIBITS EXHIBIT R1(A) A TRUE COPY OF THE ABOVE ORDER NO.C.R.P.6567/2016 DATED 12.04.2017.

EXHIBIT R1(B) A TRUE COPY OF THE COMMUNICATION NO.CRP 6567/2016 DATED 15.05.2017.

EXHIBIT R1(C) A TRUE COPY OF THE COMMUNICATION NO.

SS/TEC/005/17-18 DATED 12.05.2017 GIVEN BY MESSERS, SESAME SOFTWARE SOLUTIONS PRIVATE LIMITED.

EXHIBIT R1(D) A TRUE COPY OF THE REPORT DATED 04.05.2017 FROM THE 3RD RESPONDENT.

EXHIBIT R1(E) A TRUE COPY OF THE REPORT NO.1852/17 DATED 09.05.2017.

EXHIBIT R1(F) TRUE COPY OF THE CONSULTATION LETTER DATED 22-03-2018 ISSUED TO THE FINANCING BANK AND THE CIRCLE CO-OPERATIVE UNION EXHIBIT R1(G) TRUE COPY OF THE LETTER DATED 26.03.2018 OF THE THRISSUR CIRCLE CO-OPERATIVE UNION EXHIBIT R1(H) TRUE COPY OF THE LETTER DATED 26.03.2018 OF THE THRISSUR DISTRICT CO-OPERATIVE BANK, WHICH IS THE FINANCING BANK EXHIBIT R1(I) TRUE COPY OF THE NOTICE UNDER SECTION 32(1) DATED 07.03.2018 EXHIBIT R1(J) TRUE COPY OF THE ACKNOWLEDGEMENT CARD FOR PROOF RECEIPTS OF NOTICE