[Cites 8, Cited by 0]
Kerala High Court
The Managing Committee Of The ... vs The Joint Registrar Of Cooperative ... on 1 December, 2025
2025:KER:93047
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
MONDAY, THE 1ST DAY OF DECEMBER 2025/ 10TH AGRAHAYANA, 1947
WP(C) NO. 41305 OF 2025
PETITIONER:
THE MANAGING COMMITTEE OF THE THIRUVANANTHAPURAM
DISTRICT FARM TOUR CO-OPERATIVE SOCIETY LTD
NO. T.1608
OPPOSITE KAVIL DEVI TEMPLE, VALIYASALAI,
CHALA P.O., THIRUVANANTHAPURAM,
REPRESENTED BY ITS VICE-PRESIDENT, PIN - 695 036.
BY ADVS.
SRI.GEORGE POONTHOTTAM (SR.)
SMT.NISHA GEORGE
SRI.ANSHIN K.K
RESPONDENTS:
1 THE JOINT REGISTRAR OF COOPERATIVE SOCIETIES
(GENERAL)
THIRUVANANTHAPURAM, JAWAHAR SAHAKARANA BHAVAN,
8TH FLOOR, DPI JUNCTION, THYCAUD P.O.,
THIRUVANANTHAPURAM, PIN - 695 014.
2 THE UNIT INSPECTOR, VATTIYOORKKAVU/ENQUIRY
OFFICER
APPOINTED UNDER SECTION 68(1) OF THE KCS ACT,
OFFICE OF THE ASSISTANT REGISTRAR (GENERAL) OF
CO-OPERATIVE SOCIETIES, OPPOSITE FIRE STATION,
STATUE, PALAYAM, THIRUVANANTHAPURAM,
PIN - 695 001.
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2
3 THE UNIT INSPECTOR, VANCHIYOOR/ENQUIRY OFFICER
APPOINTED UNDER SECTION 66 OF THE KCS ACT,
OFFICE OF THE ASSISTANT REGISTRAR (GENERAL) OF
CO-OPERATIVE SOCIETIES, OPPOSITE FIRE STATION,
STATUE, PALAYAM, THIRUVANANTHAPURAM,
PIN - 695 001.
BY ADVS
SRI. V.K SUNIL (GP)
SMT. RESMI THOMAS (GP)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 01.12.2025, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
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3
JUDGMENT
This writ petition has been filed challenging Ext.P3
order issued in terms of the provisions contained in
sub-section (1) of Section 68 of the Kerala Co-operative
Societies Act, 1969 (hereinafter referred to as the
'1969 Act').
2. It is the case of the petitioner that the order is
liable to be set aside, as the proceedings under Section 66
of the 1969 Act, which forms the basis for passing Ext.P3
order, were completed without jurisdiction and beyond the
time stipulated for completing the proceedings. It is
submitted that when the time for completing the
proceedings under Section 66 of the 1969 Act has been
extended without authority, and after the expiry of the time
originally fixed for completing the proceedings, the
consequential report cannot be sustained in law. It is
submitted that consequently, any proceedings initiated on
the basis of such a report also cannot be sustained, and
therefore Ext.P3 order is liable to be set aside.
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3. The learned Government Pleader submits that the
petitioner has no locus standi to challenge Ext.P3 order. It
is pointed out that the writ petition is filed by the
Managing Committee of the Society and not by any
individual member. Further, it is pointed out that going by
the law laid down by a Full Bench of this Court in
Kudayathoor Service Co-operative Bank Limited v.
Joint Registrar of Co-operative Societies (General),
2022 (3) KLT 222 (FB), the petitioner cannot challenge
the proceedings at this stage, and it is for the petitioner to
raise all contentions as and when a further show cause
notice is issued under the provisions of sub-section (2) of
Section 68 of the 1969 Act. It is pointed out that when
such a show cause notice is issued, the same will be issued
to the members of the Committee, and they alone will be
entitled to challenge the proceedings.
4. Having heard the learned counsel appearing for
the petitioner and the learned Government Pleader and
having perused the Full Bench order of this Court in
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Kudayathoor Service Co-operative Bank Limited
(supra), I am of the view that the learned Government
Pleader is right in contending that the petitioner cannot
challenge Ext.P3 order at this stage. Paragraph No.17 of
the order dated 07.04.2022 of the Full Bench judgment of
this Court in Kudayathoor Service Co-operative Bank
Limited (supra) reads thus:
"17. As noted, Section 66 of the Act empowers the
Registrar, on his own motion or on the application of a
creditor of a society, to inspect or direct any person
authorised by him by order in writing in its behalf to
inspect the books of the society. Similarly, Section 65
empowers the Registrar, on his own motion or on any
of the circumstances mentioned in clauses (b) to (f) of
sub-section (1) of Section 65, to order an inquiry by
himself or by a person authorised by an order in
writing into the constitution, working and financial
condition of the society, if he is satisfied that it is
necessary to do so. Section 65 also empowers the
Registrar to supersede the Managing Committee of a
society in accordance with the provisions contained in
Section 32, if any major defect in the constitution or
working or financial condition of the society is noticed
in an inquiry under Section 65(1). Section 68 provides
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that if in the course of an inquiry or inspection it is
found that any person who is or was entrusted with
any organisation or management of co-operative
societies or who is or has at any time been an officer or
an employee of the society has made any payment
contrary to the Act or the Rules or the bye-laws or has
caused to any loss or damage in the assets of the
society by breach of trust or wilful negligence or
mismanagement or has misappropriated or
fraudulently retained any money or other property
belonging to such society or has destroyed or caused
the destruction of the records, the Registrar may, on
his own motion, or on the application of the committee,
liquidator or any creditor, inquire himself or direct any
person authorised by him by an order in writing in this
behalf, to inquire into the conduct of such person.
Section 68(2) provides that where an inquiry is made
under sub-section (1), the Registrar may, after giving
the person concerned an opportunity of being heard,
by order in writing, require him to repay or restore the
money or other property or any part thereof, with
interest at such rate or to pay contribution and costs or
compensation to such extent, as the Registrar may
consider just and equitable. The aforesaid provisions
would indicate that the Registrar would be competent
to supersede the Managing Committee of the society
under Section 32 of the Act or surcharge the members
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of the Managing Committee or others under Section 68
based on the report of the inquiry under Section 65 or
inspection under Section 66. No doubt, supersession of
the Managing Committee of a society and surcharge of
the members of the Managing Committee and others
are drastic measures involving adverse civil
consequence as far as the parties are concerned which
include infraction of property, personal rights and
material deprivation. But it is seen that an opportunity
of hearing is provided for under Section 32 of the Act
before the Managing Committee of a society is
superseded under that provision except in exceptional
circumstances referred to therein. Similarly, a further
inquiry under Section 68(1) of the Act is provided for,
based on the report of inquiry under Section 65 or
inspection under Section 66 and an opportunity of
hearing is required to be given in terms of Section
68(2) before a person is called upon to repay or restore
the money or other property as found recoverable from
him. Rule 66(7)(ii) also provides that on getting the
report of inquiry or inspection, as the case may be, the
Registrar shall give the person or persons concerned
an opportunity of hearing before issuing an order of
surcharge. In other words, 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,
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except in situations provided for in Section 32 where
the Registrar is empowered to dispense with the
opportunity of hearing. Section 32 empowers the
Registrar to dispense with the opportunity of hearing
before a committee is superseded only in cases where
the Registrar is of the opinion that it is not reasonably
practical to do so. The relevant provision contained in
sub-section (3) of Section 32 reads thus:
"Notwithstanding anything contained in
sub-section (1) or sub-section (2) it shall not
be necessary to give an opportunity to the
committee to state its objections and to
consult the Unions and financing banks, in
cases where the Registrar is of the opinion
that it is not reasonably practicable to do so,
subject however to the condition that in such
cases the period of supersession shall
generally be for six months and in case a new
committee, cannot be constituted or enter
upon office in accordance with the bye-laws of
the society within the period of supersession
the period may be extended for a further
period not exceeding six months-
(a) in the case of a co-operative society
only after consulting the Circle Co-operative
Union concerned; and
(b) in the case of an Apex Society or a
Central Society only after consulting the State
Co-operative Union."
The exceptional situation provided for in
sub-section (3) of Section 32 being one of the
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exceptions to the rule audi alteram partem, the scheme
of the Act can certainly be understood as one providing
for an opportunity of hearing to the persons concerned
before an action is taken on the report of inquiry or
inspection. True, the statute does not expressly
provide for an opportunity of hearing to parties on the
acceptability of the report of inquiry or inspection
before the opportunity of hearing provided for under
Sections 32 and 68. As noted, while the requirement of
giving reasonable opportunity of being heard to the
party affected before an order is made by an
administrative or a quasi-judicial or judicial authority
cannot be dispensed with, there can be exceptions to
the said requirement and the extent and its application
cannot be put in a straight jacket formula. In other
words, the question whether the principle has to be
applied and if so, to what extent and at what stage it is
to be done etc. are matters to be decided bearing in
mind the express language and the basic scheme of the
provision conferring the power, the nature of power
conferred, the purpose for which the power is
conferred, and the final effect of the exercise of that
power on the rights of the person affected. As noted,
insofar as proceedings under Sections 32 and 68 are
contemplated and provided for under the Act based on
the report of inquiry or inspection, it is obligatory on
the part of the Registrar initiating steps under Section
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32 or Section 68, to give copy of the report, on the
basis of which the action is proposed, to the parties
concerned. This proposition has not been disputed by
the learned State Attorney, although there was dispute
between the counsel appearing for the parties on
either side as to whether such reports are in reality
being served to the parties concerned. Similarly, the
fact that there is no provision in the Act and Rules
obligating the Registrar under Sections 32 and 68 to
provide copy of report of inquiry or inspection is also
not disputed by the learned State Attorney. The only
argument put forward by the State Attorney in this
context is Rule 24 of the Rules which enables the
parties concerned to obtain copies of such reports.
Rule 24 of the Rules reads thus:
"24. Right to obtain documents from
Registrar's Office:-(1) Any person may on
payment of fees at the rates as may be
prescribed by the Registrar obtain a certified
copy of any public document not being a
document privileged under the Indian
Evidence Act, filed in the office of the
Registrar, provided that no such person shall
be entitled to the supply of such copy unless
he satisfies the Registrar that he requires it to
seek redress in any matter in which he is
aggrieved or for any other lawful purpose.
(2) The application fee shall be paid in the
shape of Court Fee Stamps.
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(3) Along with every application for
copies, copying sheets of the prescribed value
for preparing the copies shall be supplied.
Note:- Each statement, account, report,
petition, order or the like shall be treated
as a separate document and shall be
written on separate copying stamp paper.
(4) Copies must be transcribed only on
the front page of every copying paper."
A reading of the extracted Rule would only show that
any person may on payment of fees at the rates as may
be prescribed, obtain a certified copy of any public
document filed in the office of the Registrar. Even the
said provision clarifies that no such person shall be
entitled to the supply of such copies unless he satisfies
the Registrar that he requires it to seek redress in any
matter in which he is aggrieved or for any other lawful
purpose. In other words, the Rule does not confer an
absolute right on an applicant under the same to claim
copies of the documents filed in the office of the
Registrar. The said Rule, according to us, does not
satisfy the statutory obligation on the part of the
Registrar under the Act to provide a copy of the report
of inquiry or inspection before initiating action under
Section 32 or Section 68, as the case may be, on the
basis of the findings in the report of inquiry or
inspection. Needless to say that if the committee of a
society is superseded under Section 32 of the Act
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based on the factual findings rendered in a report of
inquiry or inspection without providing to the party
concerned a copy of the report of inquiry or inspection,
the order of supersession would be plainly illegal.
Similarly, if any person mentioned in Section 68(1) of
the Act is surcharged based on the finding in an order
of inquiry under Section 65 or inspection under
Section 66 without giving to him a copy of the report of
inquiry or inspection as also the report of inquiry
under Section 68(1), the surcharge order would also
be illegal. The argument advanced by the learned
State Attorney that the party concerned, if chooses to
obtain copy of the report of inquiry or inspection, he
will have to obtain it under Rule 24 of the Rules cannot
be accepted. But that does not mean that the statute
contemplates an implied obligation on the part of the
Registrar to afford an opportunity of hearing as to the
acceptability or otherwise of the report of inspection
before initiating proceedings pursuant to the same
whether it be under Section 32 or under Section 68 of
the Act. The scheme of the Act appears to us to be that
the correctness or otherwise of the report of inquiry or
inspection, shall be canvassed by the parties
concerned in the hearing provided to them on the
further action taken pursuant to the report, for the
hearing would not serve any purpose if the Registrar
does not propose any action based on the report. Even
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if the Registrar proposes any action, be it under
Sections 32 or 68, the said action being one on the
basis of the report of inquiry or inspection, the
essential purpose of the opportunity of hearing in the
proceedings initiated for taking action being to enable
the parties concerned to canvass for the correctness of
the findings in the report of inquiry or inspection,
there is no need for a hearing before a tentative
decision is taken on the action based on the report.
Needless to say, it is unnecessary to have two hearings
for the same purpose. In other words, we are of the
view that the nature of the statutory duty imposed on
the authorities under the Act does not imply any
obligation to hear the parties concerned on the
acceptability or otherwise of the report of inquiry or
inspection as the case may be, before a tentative
decision is taken on the further action on the report. "
It is clear from a reading of paragraph No.17 of the Full
Bench order of this Court in Kudayathoor Service Co-
operative Bank Limited (supra) that all contentions
taken by the petitioner in this writ petition have to be
taken before the competent authority and only at the stage
when a show cause notice is issued in terms of the
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provisions contained in sub-section (2) of Section 68 of the
1969 Act and not at any earlier stage.
Therefore, leaving open all contentions raised, this writ
petition is dismissed.
Sd/-
GOPINATH P.
JUDGE
ats
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APPENDIX OF WP(C) NO. 41305 OF 2025
PETITIONER'S EXHIBITS
Exhibit P1 TRUE COPY OF THE ORDER NO. P(2) 6354/18
DATED 07.12.2019 ISSUED BY THE 1ST
RESPONDENT.
Exhibit P2 TRUE COPY OF THE SECTION 66 REPORT DATED
24.08.2021 SUBMITTED BEFORE THE 1ST
RESPONDENT ALONG WITH COVERING LETTER
NO.P(2) 6354/2018 DATED 04.01.2022.
Exhibit P3 TRUE COPY OF THE ORDER NO. P(2)6354/18
DATED 16.12.2024 ISSUED BY THE 1ST
RESPONDENT.
Exhibit P4 TRUE COPY OF THE ORDER NO. P(2)1877/25
DATED 20.04.2025 ISSUED BY THE 1ST
RESPONDENT.
Exhibit P5 TRUE COPY OF THE ORDER NO. P(2)1877/25
DATED 09.07.2025 ISSUED BY 1ST RESPONDENT.
Exhibit P6 TRUE COPY OF THE ORDER NO. P(2)1877/25
DATED 01.10.2025 ISSUED BY THE 1ST
RESPONDENT.
Exhibit P7 TRUE COPY OF THE STAFF FIXATION ORDER NO.
C.R.B(2)1005/16/KDIS DATED 06.02.2016
APPROVED BY THE 1ST RESPONDENT FOR THE
PETITIONER SOCIETY.
