Kerala High Court

John P.V vs Lovely Jacob on 8 November, 2024

Author: N.Nagaresh

Bench: N.Nagaresh

                                                      2024:KER:82916

             IN THE HIGH COURT OF KERALA AT ERNAKULAM

                              PRESENT

               THE HONOURABLE MR.JUSTICE N.NAGARESH

    FRIDAY, THE 8TH DAY OF NOVEMBER 2024 / 17TH KARTHIKA, 1946

                      WP(C) NO. 41269 OF 2023

PETITIONERS:
     1     JOHN P.V.,
           AGED 66 YEARS,
           S/O. VARKEY, PUTHIYAMADATHIL,
           MATTATHIPARA P.O.,
           KOTTAYAM, PIN - 686651

    2     THOMAS CHERIAN,
          AGED 57 YEARS,
          S/O. CHERIAN, VAZHAKALAYIL,
          PIZHAKU P.O.,
          KOTTAYAM DISTRICT, PIN - 686655

    3     GEORGE JOSEPH,
          AGED 73 YEARS,
          S/O. M.C. JOSEPH, MARAMATTOM HOUSE,
          AIMCOMB, KADANAD P.O.,
          KOTTAYAM DISTRICT, PIN - 686653

    4     SEBASTIAN MATHEW,
          AGED 58 YEARS,
          S/O. LATE MATHEW PINAKATTU,
          RAMAPURAM BAZAR P.O., RAMAPURAM,
          KOTTAYAM DISTRICT, PIN - 686576

    5     AUGUSTINE MATHEW,
          AGED 54 YEARS,
          S/O. LATE MATHEW PINAKATTU,
          RAMAPURAM BAZAR P.O., RAMAPURAM,
          KOTTAYAM DISTRICT, PIN - 686576

          BY ADVS.
          SRI.JOHNSON MANAYANI
          SRI.JEEVAN MATHEW MANAYANI
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W.P.(C) No.41269/2023
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RESPONDENTS:

     1     LOVELY JACOB,
           SECRETARY,
           KADANAD SERVICE COOPERATIVE BANK LTD.NO.K2,
           HEAD OFFICE AT KOLLAPALY, ANTHINAD P.O.,
           KOTTAYAM DISTRICT, PIN - 686612

     2     SEBASTIAN THOMAS (THANKACHAN),
           VANCHIKACHALIL, KADANAD P.O.,
           KOTTAYAM DISTRICT, (FORMER PRESIDENT,
           KADANAD SERVICE COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY, ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686651

     3     SEBASTIAN K.S.,
           KATTAKKAL HOUSE, MATTATHIPARA P.O.
           (FORMER VICE PRESIDENT,
           KADANAD SERVICE COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY, ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686651

     4     SABU P.R.,
           POOVATHUNGAL HOUSE, PIZHAKU P.O,
           (FORMER COMMITTEE MEMBER, KADANAD SERVICE
           COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY, ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686651

     5     ANTONY JOSEPH,
           ADVOCATE, NJAVALLIL HOUSE, PIZHAKU P.O,
           (FORMER COMMITTEE MEMBER, KADANAD SERVICE
           COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY,ANTHINAD P.O.
           KOTTAYAM DISTRICT), PIN - 686651

     6     SARATCHANDRAN N.,
           NELLIKUNNEL HOUSE, KADANAD P.O.,
           (FORMER COMMITTEE MEMBER, KADANAD SERVICE
           COOPERATIVE BANK LTD NO.K2, HEAD OFFICE AT
           KOLLAPALY,ANTHINADP.O.,
           KOTTAYAM DISTRICT), PIN - 686651
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     7     SHILU K.P.,
           KODUR, PIZHAKU P.O.
           (FORMER COMMITTEE MEMBER,
           KADANAD SERVICE COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY,
           ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686651

     8     THOMAS K.N.,[KUNJUMON],
           KALAVANAL HOUSE, KURUMANNU P.O.
           (FORMER COMMITTEE MEMBER,
           KADANAD SERVICE COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY,
           ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686654

     9     VIPIN SASI,
           KALAPURACKAL, KADANAD P.O.,
           (FORMER COMMITTEE MEMBER, KADANAD SERVICE
           COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY,
           ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686651

    10     NISHA BABU,
           VALLIRINGATTU, IDIYANAD P.O.,
           FORMER COMMITTEE MEMBER, KADANAD SERVICE
           COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY, ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686576

    11     SEENA SAJIV,
           MANNAMTHANATHU, KADANAD P.O.,
           (FORMER COMMITTEE MEMBER, KADANAD SERVICE
           COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY,
           ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686651

    12     SONIYA ROY,
           CHITTADIKUNNEL HOUSE, KADANAD P.O.,
           (FORMER COMMITTEE MEMBER, KADANAD SERVICE
           COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY, ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686651
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    13     SATHISH K.B.,
           KUNNEL HOUSE, ANTHINAD P.O.,
           (FORMER COMMITTEE MEMBER, KADANAD SERVICE
           COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY, ANTHINAD P.O.,
           KOTTAYAM DISTRICT), PIN - 686651

    14     THE PART TIME ADMINISTRATOR,
           KADANAD SERVICE COOPERATIVE BANK LTD NO.K2,
           HEAD OFFICE AT KOLLAPALY, ANTHINAD P.O.,
           KOTTAYAM DISTRICT, PIN - 686612

    15     THE KADANADU SERVICE CO-OPERATIVE BANK LTD.,
           NO.K2, HEAD OFFICE AT KOLLAPALY,
           ANTHINAD P.O., KOTTAYAM,
           REP BY ITS SECRETARY, PIN - 686612

    16     THE SECRETARY TO COOPERATION,
           DEPARTEMENT OF CO-OPERATION, SECRETARIAT,
           THIRUVANANTHAPURAM, PIN - 695001

    17     THE SECRETARY TO HOME AFFAIRS,
           HOME DEPARTMENT,SECRETARIATE,
           THIRUVANANTHAPURAM, PIN - 695001

    18     THE REGISTRAR,
           COOPERATIVE SOCIETIES (GENERAL)
           SAHAKARANA BHAVAN, JAWAHAR SAHAKARANA BHAVAN,
           DPI JUNCTION,
           THIRUVANANTHAPURAM, PIN - 695014

    19     THE VIGILANCE DIRECTOR,
           VIKAS BHAVAN, LAW COLLEGE RD,
           OPPOSITE KSRTC DEPOT, P.O, PALAYAM,
           THIRUVANANTHAPURAM, PIN - 695033

    20     THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES
           (GENERAL),
           COLLECTORATE P.O.,
           KOTTAYAM, PIN - 686002

    21     STATE OF KERALA,
           REP BY ITS CHIEF SECRETARY,
           SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001
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           BY ADVS.
           SMT.DIVYA C BALAN
           SRI.P.D.SUBRAHMANIAN NAMPOOTHIRI
           SRI.C.P.SABARI
           SRI. P.P. THAJUDHEEN, SPL. GOVERNMENT PLEADER


     THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 06.11.2024, THE COURT ON 08.11.2024 DELIVERED THE
FOLLOWING:
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W.P.(C) No.41269/2023
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                              N. NAGARESH, J.

           `````````````````````````````````````````````````````````````
                       W.P.(C) No.41269 of 2023

             `````````````````````````````````````````````````````````````
                Dated this the 8th day of November, 2024


                               JUDGMENT

~~~~~~~~~

The petitioners are depositors of the Kadanad

Service Co-operative Bank Limited. Respondents 2 and 3 were

the former President and Vice President of the Bank.

Respondents 4 to 13 were former Committee Members. The 1 st

respondent is the Secretary of the Bank.

2. The petitioners state that though the Fixed Deposits

of the petitioners are matured long back, those deposits are not

paid back. Respondents 1 to 13 committed grave offences.

They cheated the Banks and its depositors. Huge loans were

given to their own men creating false records and documents.

Those loans are now irrecoverable. Ext.P1 inquiry report under 2024:KER:82916

Section 66(2) of the Kerala Co-operative Societies Act, 1969

would prove the misappropriation and forgery.

3. The petitioners therefore filed Ext.P2 petition before

respondents 16 to 19. The petitioners requested respondents

16 to 19 that a thorough enquiry may be initiated against

respondents 1 to 13 in respect of the misappropriation and

forgery committed by them. Appropriate steps may be taken to

recover the money so misappropriated. A crime may be

registered for the offences committed by respondents 1 to 13.

4. The Joint Registrar, Co-operative Societies filed

counter affidavit. When irregularities were disclosed in the

Special Audit Report, the 28th respondent ordered an inspection

under Section 66. The inspection revealed many serious

irregularities. Loans were sanctioned irregularly. Funds of the

Banks were misused for the purchase and installation of Core

Banking System. Huge amounts were spent for repair and

maintenance. Funds were utilised without obtaining prior

sanction.

2024:KER:82916

5. Section 66(2) report was submitted during the

Covid-19 pandemic period. Therefore, hearing could not be

conducted immediately. Later, after receiving objections, further

action was dropped. However, a Section 65 enquiry is

progressing now. After getting the report, further action will be

taken.

6. I have heard the learned counsel for the petitioners,

the respective counsel representing respondents 1 to 13, the

learned Standing Counsel representing respondents 14 and 15,

the learned Special Government Pleader representing

respondents 16 to 21.

7. When this writ petition came up for hearing today, it

was submitted on behalf of the respondents that a complaint

has been received in respect of the fraud and misappropriation

disclosed in the Bank. The complaint is under investigation by

the Co-operative Vigilance Department.

8. The counter affidavit filed by the 20 th respondent

would show that the magnitude of misappropriation and fraud 2024:KER:82916

committed is huge involving crores of rupees. The Bank is not

in a position to repay the deposits made by innocent members

of the Bank. In the circumstances, I am of the view that a

thorough enquiry in the matter is mandatory. Effective steps

should be taken to recover the loss caused to the Bank through

surcharge and other proceedings.

The writ petition is therefore disposed of directing

respondents 18 and 20 to take all necessary steps for enquiry

and recovery of the amounts misappropriated from the Bank

and take all such steps for surcharge and recovery of the

amount. Respondents 18 and 20 should also monitor the

progress of Co-operative Vigilance Enquiry and take appropriate

steps based on the vigilance enquiry report.

Sd/-

N. NAGARESH, JUDGE aks/06.11.2024 2024:KER:82916

APPENDIX OF WP(C) 41269/2023

PETITIONER'S EXHIBITS:

Exhibit P1 THE TRUE COPY OF ENQUIRY REPORT MADE UNDER SECTION 66(2) OF THE CO-OPERATIVE SOCIETIES ACT DT 31.7.2018 SUBMITTED BY THE RAMAPURAM UNIT INSPECTOR OF ASSISTANT REGISTRAR (GENERAL) OFFICE, MEENACHIL, PALA.