[Cites 19, Cited by 0]
Kerala High Court
K.V Sabu vs Registrar Of Co-Operative Societies on 30 January, 2026
Author: K. Babu
Bench: K. Babu
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE K. BABU
FRIDAY, THE 30TH DAY OF JANUARY 2026 / 10TH MAGHA, 1947
WP(C) NO. 5292 OF 2025
PETITIONER/S:
K.V SABU
AGED 55 YEARS
S/O K.E VASU, KALLUVEETTIL HOUSE, PACHALAM P.O,
ERNAKULAM, PIN - 682012
BY ADVS.
SHRI.JOY GEORGE
SMT.PRAICY JOSEPH
SRI.ARJUN RAGHAVAN
SMT.TANYA JOY
RESPONDENT/S:
1 REGISTRAR OF CO-OPERATIVE SOCIETIES
(JOINT DIRECTOR, CENTRAL RANGE) FISHERIES
DEPARTMENT (ERNAKULAM), ERNAKULAM, PIN - 682030
2 FISHERIES DEVELOPMENT OFFICER
REGIONAL EXICUTIVE OFFICER (UNIT-5), ERNAKULAM,
PIN - 682018
3 ADMINISTRATOR (SENIOR CO-OPERATIVE INSPECTOR,
UNIT-4)
ERNAKULAM WEST RURAL FISHERMEN DEVELOPMENT AND
WELFARE COOPERATIVE SOCIETY LTD NO F€
114/96/CZ, PIN - 682030
4 ERNAKULAM WEST ULLNADAN MALSYA THOZHILALI
VIKASANA KSHEEMA SAHAKARANA SANGAM
REPRESENTED BY ITS SECRETARY, ERNAKULAM WEST
W.P.(C). No. 5292 of 2025
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ULLNADAN MALSYA THOZHILALI VIKASANA KSHEEMA
SAHAKARANA SANGAM, PACHALAM, KOCHI, PIN - 682012
OTHER PRESENT:
ADV C SHEEJA SR GP
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 30.01.2026, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
W.P.(C). No. 5292 of 2025
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"C.R."
K. BABU, J
---------------------------------------
W.P.(C). No. 5292 of 2025
-------------------------------------------------
Dated this the 30th day of January, 2026
JUDGMENT
The petitioner is the former President of the
Ernakulam West Rural Fishermen Development and
Welfare Co-operative Society Ltd., a primary co-operative
society. Pursuant to a democratic process, the Managing
Committee of the society assumed charge on 30.10.2020.
2. The Registrar of Co-operative Societies,
Fisheries Department (Ernakulam) (respondent No.1)
issued an order under Section 66 of the Kerala Co-
operative Societies Act (for short "the Act") directing an
inspection into the functioning of the Society. The office
bearers of the Society cooperated with the inspection and
participated in the inquiry.
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3. The Registrar (respondent No.1), as per the
order dated 13.01.2025, superseded the Board of
Directors and appointed a part-time Administrator for the
Society on the ground that the Managing Committee had
indulged in illegal actions. The order of supersession of
the Managing Committee under Section 32(1) of the Act,
(Ext.P15) is under challenge in this proceeding.
4. I have heard the learned counsel for the
petitioner and the learned Senior Government Pleader.
5. The learned counsel for the petitioner confined
the challenge on Ext.P15 on the ground that it is in
violation of sub-section (2) of Section 32 of the Act.
6. The learned counsel for the petitioner
submitted that before issuing an order superseding the
Managing Committee of a society, the Registrar shall
consult the Financing Bank and the Circle Co-operative
Union or the State Co-operative Union, as the case may
be.
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7. The learned Senior Government Pleader
submitted that consultation as provided under sub-section
(2) of Section 32 of the Act does not arise in the present
case, as respondent No.4 society has not been affiliated to
the Circle Co-operative Union and, further, that there is
no financing bank in respect of Fishermen Development
and Welfare Co-operative Society. It is submitted that the
District Co-operative Bank/State Co-operative Bank can
only be considered as Financing Bank within the meaning
of sub-section (2) of Section 32 of the Act.
8. The learned counsel for the petitioner
submitted that the apex society in the case of respondent
No.4 primary society, is Matsyafed (Kerala State Co-
operative Federation for Fisheries Development Limited
No.F(T) 738).
9. It is relevant to extract Section 32 of the Act.
32. Supersession of Committee(1) If the Registrar,
after an inquiry by himself or through his
subordinates or on a report of the financing bank, or
the Vigilance, and Anticorruption Bureau of the
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Government or the Vigilance Officer or otherwise, is
satisfied that the committee of any society,-
(a) persistently makes default or is negligent in the
performance of the duties imposed on it by this Act or
the rules or bye-laws or does anything which is
prejudicial to the interests of the society; or
(b) wilfully disobeys or fails to comply with any lawful
order or direction issued under this Act or the rules;
or
(c) makes any payment contrary to this Act or the rules
or the bye-laws or causes any loss or damage to the
assets of the society, by breach of trust or wilful
negligence; or
(d) misappropriates or destroys or tampers with the
records or causes the destruction of records to cover
up any misconduct or malpractice,
He may, after giving the committee an opportunity to
state its objections, if any, by order in writing, remove
the committee and, appoint in its place, one
administrator or an administrative committee
consisting of not more than three individuals, one
among them as convenor, who need not be members
of the society, to manage the affairs of the society for
a period not exceeding six months.
Provided that in the case of Co-operative Society,
carrying on the business of banking, the provisions of
the Banking Regulation Act, 1949 (Central Act 10 of
1949) shall also apply;
Provided further that in the case of a Co-operative
Society, carrying on the business of Banking,
appointment of Administrator/administrative
committee shall not exceed one year in the aggregate.
Provided also that the Board of Co-operative Society
shall not be superseded or kept under suspension
where there is no Government share holding or loan
or financial assitance or any guarantee by the
Government or any Board or Institutions constituted
by the Government.
(e)Every member of the Committee superseded under
this Section shall from the date of order of such
supersession stand disqualified to contest in the
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election to or to be nominated to the committee of any
society or to be appointed as an administrator in any
society for two consecutive terms.
(2) The Registrar shall consult the financing bank and
Circle Co-operative Union or State Co-operative
Union, as the case may be, before passing an order
under sub-section (1).
(3) 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.
(4) The committee or administrator or administrators so
appointed shall, subject to the control of the Registrar
and to such instructions as he may from time to time
give, have power to exercise all or any of the powers
and functions of the committee or of any officer of the
society and take such action as may be required in the
interests of the society.
(5) The committee or administrator or administrators
shall, before the expiry of its or his or their terms of
office, arrange for the constitution of a new committee
in accordance with the bye-laws of the society.
(6) Every order made by the Registrar under sub-section
(1) shall be communicated to the Circle Co-operative
Union.
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10. I shall first consider the question whether
Matsyafed, the State Co-operative Federation for
Fisheries Development Limited, is a financing bank within
the meaning of sub-section (2) of Section 32 of the Act.
11. Section 2(j) of the Co-operative Societies Act
defines "Financing Bank". Section 2(j) reads thus:-
"(j)Financing bank" means a co-operative society having
as its members only other co-operative societies and the
main object of which is to raise money and lend the sum
to its members;
12. Section 2(j) makes it clear that a co-operative
society having other co-operative societies as its members
and where the object of such society is to raise money
and lend the same to its members would constitute a
"financing bank". Admittedly, the primary societies like
respondent No.4 society are the only members of the
Apex Society/ Matsyafed. Micro finance credit facility is
being extended to respondent No.4 society from the funds
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of the Matsyafed/the apex society for the purpose of
disbursing loans, which would make the Apex Society the
"financing bank" of respondent No.4 society.
13. The argument of the learned Government
Pleader that the District Co-operative Bank/State Co-
operative Bank can only be treated as the financing bank
is resisted by the learned counsel for the petitioner on the
ground that the statutory provision does not so provide,
coupled with the fact that only primary credit societies
are members of the State Co-operative Bank (erstwhile
District Co-operative Banks). The learned counsel for the
petitioner further submitted that, if the interpretation
advanced by the learned Government Pleader is accepted,
there would be no financing bank for primay non-credit
co-operative societies. I find force in the argument of the
learned counsel for the petitioner. I am of the considered
view that the Apex Society, the Matsyafed, would be the
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"financing bank" in the case of primary societies like
respondent No.4.
14. Now, I turn to consider the contention
regarding non-consultation of Circle Co-operative Union
by the Registrar.
15. Admittedly, respondent No.4 society has not
been affiliated to the Circle Co-operative Union.
16. Sub-section (2) of Section 32 of the Act makes it
clear that before passing an order of supersession of a
Managing Committee, the Registrar shall consult the
Financing Bank and the Circle Co-operative Union or the
State Co-operative Union, as the case may be.
17. The challenge raised by the learned
Government Pleader on the applicability of sub-section (2)
of Section 32 of the Act, in the case of respondent No.4
society, is that it has not been affiliated to the Circle Co-
operative Union.
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18. Chapter XIV of the Act, deals with Co-operative
Unions. As per Section 88 of the Act, the Government
shall, by notification in the Gazette, constitute a Circle
Co-operative Union for each circle in the State consisting
of members elected from various categories of affiliated
societies, members elected by employees, a woman
member, an SC/ST member, a member elected by the
District Co-operative Bank Board, and certain ex-officio
members. Each Circle Co-operative Union shall elect
one of the members, other than an ex-officio member, as
its Chairman.
19. Chapter XIII of the Kerala Co-operative
Societies Rules, 1969, also deals with Co-operative
Unions. Rule 139 of the Rules deals with functions of the
Circle Co-operative Union. Rule 139 reads thus:-
"139. Functions of the circle co-operative union.--The
functions of a circle co-operative union shall be-
(i) to organize, assist and generally develop co-operative
societies within the circle;
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(ii) to carry on co-operative propaganda and to spread
education on co-operative principles and practices
according to the instructions of the Registrar and the
State Co-operative Union;
(iii) to offer views on matters relating to registration of
societies, registration of amendments to the Bye-laws of
societies, amalgamation and division of societies,
supersession of committees, winding up of societies and
other matters referred to it by the registrar;
(iv) to settle all matters of common interest, to advise and
assist the primary societies in the circle and to further
their interests in every way.
(v) to undertake any other functions or discharge such
duties as may be entrusted to it by the Registrar or the
State Co-operative Unions."
20. Having regard to the structure of the Circle Co-
operative Union and its functions, I am of the view that
the intention of sub-section (2) of Section 32 of the Act is
to rule out the arbitrariness of proceedings of
supersession by the Registrar. The mandate of
consultation with the Circle Co-operative Union or the
State Co-operative Union, a democratic body, protects the
arbitrary supersession of a Committee elected in a
democratic process. The character of the Circle Co-
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operative Union as provided in Section 88 of the Act
indicates its democratic structure. The consultation
provided in sub-section(2) of Section 32 of the Act is
intended to keep a check on the arbitrary exercise of
powers by the Registrar. The provision for consultation is
a unique and key feature of the Kerala Co-operative
Societies Act and Rules, 1969 (for sbort 'the Rules').
21. The learned Government Pleader submitted
that the Managing Committee of the co-operative society
has violated Section 90 of the Act, which mandates that
every co-operative society in the State shall get itself
affiliated to the State Co-operative Union. The learned
counsel for the petitioner submitted that the
consequences of non-affiliation are provided in sub-
section (4) of Section 90 of the Act, which reads thus:-
"90 - Co-operative Societies to affiliate to State Co-
operative Union
xxxxx
(4) If any co-operative Society fails to affiliate to the State Co-
operative Union as required by sub-section (1) or to renew
such affiliation as required by sub-section (2), such society
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shall not be entitled to any of the privileges conferred on a co-
operative society under Chapter V of this Act."
22. The learned counsel for the petitioner
submitted that non-affiliation of a society would disentitle
it from the previleges conferred on a co-operative society,
but it would not confer the Registrar the power to
supersede such a society without consultation with the
Union.
23. A survey of precedents on the subject is
beneficial.
24. In Vallapuzha Service Co-operative Bank
Ltd. v. Joint Registrar (2009 (3) KLT 838), this Court
held that supersession of a democratically elected
committee is a very drastic and extreme step, which
cannot be taken lightly for trivial violations. This Court
further held that only if the findings against the
committee are such that the continuance of the
committee would be extremely prejudicial to the interests
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of the Society, the exceptional and rare action under S.32
shall be taken. Findings on the culpability of the
committee on their improper action should inform the
action of the Registrar while initiating proceedings under
S.32. The Registrar's decision to initiate proceedings
under Section 32 of the Act should be based on the
findings regarding the committee's culpability for its
improper actions, this Court held.
25. In State of Kerala v Urukunnu Service Co-
Operative Bank Ltd (2013 (2) KLT 74), this Court held
that if supersession is found inevitable under exceptional
circumstances, the authority should scrupulously follow
the procedure prescribed in Section 32 of the Act. This is
because if a Managing Committee is superseded under
Section 32, the same would attract disqualification of
every member of the Managing Committee in the matter
of contesting future elections to the Managing Committee
for two consecutive terms. This Court further held that, it
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is in view of the drastic nature of the power that the
legislature has incorporated safeguards in the matter of
exercise of such powers, so that it will not be arbitrary.
26. In Krishnan Nair v Joint Registrar of Co-
operative Societies (2014 (1) KLT 116), this Court held
that the hedged-in safeguards cannot be reduced to an
empty formality rendering the process a mere farce. It is
added that S.32 cannot be reduced to a naming ceremony,
intended only at hanging the named one and it also
cannot be assumed that the consultants would have
concurred with the Registrar.
27. In Jose Kuttiyani and Others v The Registrar
of Co-operative Societies (1981 KHC 210), this Court
held that though it is for the Registrar to be satisfied that
whether circumstances exist for supersession of the
Society, such satisfaction cannot be arbitrary. The
legislature has prescribed very strict formalities before
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embarking upon the act of supersession of an elected
body.
28. In Johny Kachappally v. Joint Registrar of Co-
operative Societies, Thrissur (2022 (1) KHC 182), a
Division Bench of this Court held that the object behind sub-
section (2) of Section 32 is that the financing bank and the
Circle Co-Operative Union concerned shall have a say in the
matter of the Registrar exercising the power under sub-
section (1) of Section 32 of the Act to supersede the
Managing Committee of a society. The requirement in terms
of sub-section (2) of Section 32 of the Act is therefore not a
mere formality, but one to be complied with by the Registrar
in its letter and spirit.
29. In Sajeevan B. and Others v. Joint Registrar of
Co-operative Societies (General) (2015 KHC 748), this
Court observed that a perusal of Section 32 of the Act leaves
no manner of doubt in anybody's mind that it has been
couched in mandatory terms that the Registrar shall consult
the financing bank and the Circle Co-operative Union before
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inflicting any supersession. Further, if there were to be any
dispensation of consultation, cogent reasons ought to be
specified.
30. An understanding of the statutory provisions on
the touchstone of the precedents discussed above leads
me to the conclusion that the Registrar before passing an
order under Section 32(1) of the Act to supersede the
Committee shall consult the Circle Co-operative Union or
the State Co-operative Union, as the case may be under
sub-section (2) irrespective of the fact that the society
concerned is affiliated to the Circle Co-operative Union
or the State Co-operative Union or not.
31. The learned Senior Government Pleader,
relying on the statement filed by respondent No.1,
highlighted certain irregularities in the functioning of the
Co-operative Society. The learned Government Pleader
submitted that the Managing Committee failed to
produce the documents required by the Inspecting Officer
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in the proceedings under Section 66 of the Act. The
learned Government Pleader submitted that the
Managing Committee did not cooperate with the
inspection. The learned counsel for the petitioner
submitted that the President of the Society produced the
relevant documents on 16.09.2023 and had taken back
the same on 25.09.2023 for General Body Meeting and
later the documents were produced on 06.10.2023 and
taken back on 18.10.2023 for official purposes.
32. The impugned order reads thus:
"In the inquiry report conducted under Section 66 of the
Kerala Co-operative Societies Act in respect of Ernakulam
West Inland Fishermen Development and Welfare Co-
operative Society Ltd., Registration No. F (E.) 114/96, it was
revealed that, despite calling for an explanation as per remark
(2) therein, the same was not furnished. Further, during the
course of inspection, correct accounts and records were not
produced. It was also found that the meetings of the
Managing Committee and the Annual General Body, as
stipulated in the bye-laws of the Society, were not convened
and that such situation continued.In the above circumstances,
exercising the powers vested in me under the Rules, 1969, I
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hereby order the dissolution of the existing Managing
Committee and further order, under Section 34(1) of the
Kerala Co-operative Societies Act, 1969, for attachment of the
accounts and records.
In view of the above circumstances, in order to avoid
administrative vacuum in the Society, I hereby appoint the
Senior Co-operative Inspector, Unit-4, Ernakulam, as
Administrator under Section 32(1)(d) of the Kerala Co-
operative Societies Act, 1969. The Administrator shall
forthwith take charge of all records of the Society and all
assets in its possession and in banks, as per the charge list,
and shall submit a copy of the charge list before the Registrar
without delay.
The term of the Administrator shall be effective from the
date of this order, and the Administrator shall take such steps
as may be necessary in accordance with law."
33. No exceptional reasons for not invoking sub-
section (2) of Section 32 of the Act have been placed in
the order. Therefore, there is a violation of sub-section
(2) of Section 32 of the Act. Since no sufficient and
cogent reasons have been given to dispense with the
consultation as described in Section 32 of the Act, I am of
the opinion that Ext.P15 order is liable to be interfered
with.
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The Writ Petition is therefore disposed of as below:-
Ext.P15 and the consequent direction to the
Administrator to take over the administration of
the Society are set aside. The Managing
Committee shall be restored to Office forthwith.
It is made clear that respondent No.1 is not
precluded from proceeding afresh against the
Managing Committee in accordance with law. It is
further made clear that this Court has not gone
into the merits of the allegations raised against
the Managing Committee under Section 66 of the
Act. This Court has only considered the
procedural irregularities in the order of
supersession.
Sd/-
K.BABU,
JUDGE
kkj
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APENDIX OF WP(C) NO. 5292 OF 2025
PETITIONER EXHIBITS
Exhibit P1 A TRUE COPY OF REGISTRATION
CERTIFICATE DATED 13 DECEMBER 2016
Exhibit P2 A TRUE COPY OF ORDER OF THE FISHERIES
JOINT DIRECTOR, ERNAKULAM DATED 22
JUNE 2023
Exhibit P3 A TRUE COPY OF THE INVENTORY DATED 16
SEPTEMBER 2023
Exhibit P4 A TRUE COPY OF RELEVANT PAGES OF THE
MINUTES BOOK
Exhibit P5 A TRUE COPY OF THE BUDGET FOR THE YEAR
2024-25
Exhibit P6 A TRUE COPY OF THE WORKING REPORT FOR
THE YEAR 2023-24
Exhibit P7 A TRUE COPY OF THE AUDIT REPORT FOR
2023-24
Exhibit P8 A TRUE COPY OF THE NOTICE DATED 18-9-
Exhibit P9 A TRUE COPY OF RELEVANT PAGES OF THE
LEDGER
Exhibit P10 A TRUE COPY OF THE STATEMENT ISSUED
FROM THE DISTRICT CO-OPERATIVE BANK,
DURING MARCH-2023
Exhibit P11 A TRUE COPY OF THE CONFIRMATION
CERTIFICATE DATED 24-7-2023
Exhibit P12 A TRUE COPY OF THE STATEMENT DATED 6-
12-2023
Exhibit P13 A TRUE COPY OF THE STATEMENT DATED 22-
7-2024 SUBMITTED BY THE SOCIETY TO THE
SECOND RESPONDENT
Exhibit P14 A TRUE COPY OF THE STATEMENT DATED 05-
09-2024
Exhibit P15 A TRUE COPY OF THE ORDER OF JOINT
DIRECTOR OF FISHERIES DATED 13-01-2025
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RESPONDENT ANNEXURES
Annexure R1 (f) True copy of the Letter No. SC1-Unit
4/114/2024 dated 03-06-2024
Annexure R1 (a) True copy of the Letter No. SC/unit-
4/114/2022 dated 11.08.2022 of the
Unit Inspector
Annexure R1 (b) True copy of the Letter No.SC1/Unit
4/114/2022 dated 02.12.2022
Annexure R1 (c) True copy of the Letter No. SC1/unit
4/114/2023 dated 20-04-2023
Annexure R1 (d) True copy of the enquiry Report dated
24.01.2024
Annexure R1 (e) True copy of the Letter No.
JDFEKM/23/2024-C2 dated 11.03.2024 of
the Fisheries Joint Director,
Ernakulam
Annexure R1 (g) True copy of the Letter No.
JDFEKM/23/2024-C2 dated 05-08-2024 of
the Fisheries Joint Director,
Ernakulam
Annexure R1 (h) True copy of the Reply Letter dated
02-12-2024 of the Vice president of
the Society
PETITIONER EXHIBITS
EXHIBIT- P16 A true copy of the show cause notice
dated 23-09-2024 issued to the vice
president from the society
EXHIBIT- P17 A true copy of the Communication dated
07-10-2024 issued from the society
EXHIBIT- P18 A true copy of the communication dated
07-10-2024, issued by the society to
the Co-operative inspector along with
copy of resolution
