Orissa High Court
Kartikeswar Sahu vs All Odisha State Bank Officers' .... ... on 13 March, 2025
Author: S.K. Panigrahi
Bench: S.K. Panigrahi
Signature Not Verified
Digitally Signed
Signed by: BHABAGRAHI JHANKAR
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 13-Mar-2025 17:54:08
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 1994 of 2020
(In the matter of an application under Articles 226 and 227of the
Constitution of India, 1950).
Kartikeswar Sahu .... Petitioner(s)
-versus-
All Odisha State Bank Officers' .... Opposite Party (s)
Cooperative Society Ltd.,
Bhubaneswar
Advocates appeared in the case through Hybrid Mode:
For Petitioner(s) : Mr. Mahitosh Sinha, Sr. Adv.
Along with associates
For Opposite Party (s) : Mr. J.K. Naik, Adv.
CORAM:
DR. JUSTICE S.K. PANIGRAHI
DATE OF HEARING:-11.02.2025
DATE OF JUDGMENT:-13.03.2025
Dr. S.K. Panigrahi, J.
1. In this Writ Petition, the Petitioner challenges the order dated
06.10.2018, passed by the Registrar, Co-operative Societies, Odisha,
Bhubaneswar, dismissing the Dispute Case No.298/2017 for lack of
cause of action.
Location: ORISSA HIGH COURT, CUTTACK
2. Additionally, the Petitioner assails the order of the Co-operative
Tribunal passed in TA No. 391/2018, which affirmed the aforesaid order
dated 06.10.2018.
I. FACTUAL MATRIX OF THE CASE:
3. The brief facts of the case are as follows:
(i) The petitioner, an active shareholder of the Opposite Party No.1
Cooperative Society, invoked the provisions of Section 68(1)(b) of the
Odisha Co-operative Societies Act, 1962, to initiate a dispute case before
the Registrar of Co-operative Societies. The dispute case, registered as
Dispute Case No. 298/2017, which centered around alleged misconduct
by the President and Directors of the Society, who are the present
Opposite Parties 2 to 16.
(ii) The Opposite Party No. 1 is a co-operative society registered under the
Odisha Co-operative Societies Act, 1962, and the corresponding rules,
vide the Registration Certificate No. 8 dated 25.09.1980. The society was
formed with the objective of conducting business as a credit co-
operative society.
(iii) Clause 6 of the society's bye-laws prescribes the eligibility criteria for
membership, restricting it to employees of the State Bank of India (SBI)
working within the State of Odisha, provided they are not members of
any other similar credit co-operative society.
(iv) The Registrar of Co-operative Societies dismissed the Dispute Case No.
298/2017, holding it to be non-maintainable. It was observed that the
petitioner had failed to establish a valid cause of action under the
provisions of the Odisha Co-operative Societies Act, 1962. It was further
Location: ORISSA HIGH COURT, CUTTACK
observed that the issues raised by the petitioner could have been
addressed in a General Body Meeting, and the petitioner had made no
attempt to raise these concerns there before invoking Section 68 of the
Odisha Co-operative Societies Act, 1962.
(v) The petitioner challenged the decision of the Registrar of Co-operative
Societies by filing T.A. No. 39/2018 before the Co-operative Tribunal,
Odisha, Bhubaneswar. The Tribunal, upon examination, held that in the
absence of any deficiencies in the society's audit report, the petitioner's
plea for the supersession of the Managing Committee was untenable. It
further observed that the challenge to the continuity of membership of
retired officers lacked merit as the society's bye-laws permitted retired
officers to contribute to the Thrift Fund and thereby retain their
membership. Regarding the petitioner's request for supersession of the
Managing Committee, the Co-operative Tribunal noted that under
Section 32 of the Odisha Co-operative Societies Act, 1962, such action
could only be taken under exceptional circumstances, such as
government shareholding or financial assistance.
(vi) Aggrieved by the Co-operative Tribunal's decision and finding no other
efficacious remedy, the petitioner has approached this Court by way of
the present writ petition.
II. SUBMISSIONS ON BEHALF OF THE PETITIONER:
4. Learned counsel for the Petitioner earnestly made the following
submissions in support of his contentions:
(i) The petitioner contended that Clause 6(iii) of the society's bye-laws was
unlawfully altered without approval of the Registrar of Co-operative
Location: ORISSA HIGH COURT, CUTTACK
Societies. While the original provision stated "can continue to contribute,"
the amendment reworded it to "officers can continue by contributing." This
subtle yet significant change allowed retired officers to retain
membership, contradicting the original intent of the bye-law. As a
result, retired SBI officers, including Rabindra Kumar Pattnaik,
assumed executive positions such as President despite having retired.
The petitioner further asserted that this amendment was never
approved by the Registrar of Co-operative Societies.
(ii) The petitioner contended that the Society accepted term deposits from
both members and non-members without the mandatory RBI license,
effectively operating like a chit-fund. This practice, facilitated by the
Opposite Parties Nos. 2 through 12, was concealed through
manipulated audit clearances. Additionally, the Society engaged in
unauthorized real estate activities, including land purchases and plot
distribution to non-members, funded through the illegal collection of
money from non-members.
(iii) The petitioner referred to the 2015-16 annual report of the society
alleging that it revealed a diversion of ₹7,00,02,464/- into real estate
activities in violation of bye-laws and RBI regulations, endangering
members' funds. The petitioner submitted that despite these
disclosures, the Registrar of Co-operative Societies failed to take any
action. Further, land transactions were conducted without the approval
of the Registrar of Co-operative Societies', with a separate land account
operated secretly by the Opposite Parties Nos. 2 and 5 to facilitate
misappropriation.
Location: ORISSA HIGH COURT, CUTTACK
(iv) The petitioner contended that from 2013 to 2015, the Management In-
Charge failed to curb illegal land dealings and fund mismanagement. A
resolution dated 12.09.2014 records a withdrawal of ₹20,00,000/- by the
Opposite Party No. 2 with no proper investment record, indicating
embezzlement. Additionally, land prices were inflated, and fraudulent
misrepresentations were made to extract money for personal gains.
(v) The petitioner contended that despite his repeated efforts to expose
these financial irregularities, the Registrar of Co-operative Societies
dismissed the dispute on irrelevant grounds. As a legitimate member,
the petitioner seeks judicial inquiry and supersession of the
management committee under the Odisha Co-operative Societies Act,
1962, given the magnitude of fraudulent activities.
(vi) The petitioner contended that the Registrar of Co-operative Societies is
empowered to conduct a summary inquiry under Rule 77 of the Odisha
Cooperative Rules, 1965. The Registrar of Co-operative Societies is not
bound by civil procedure provisions such as Order 7 Rule 11 CPC or
Order 14 Rule 2 CPC, as special laws governing cooperative societies
prevail over general procedural laws.
(vii) The petitioner submitted that retired SBI officers should not hold
positions or participate in elections, as the Society's bye-laws restrict
membership to active SBI officers. Further, the auditors failed to report
these irregularities, including continued membership of retired officers,
their election to the Board, and unauthorized real estate dealings.
(viii) The petitioner contended that Rabindra Kumar Pattnaik, who retired in
2007, continued serving as President in violation of the bye-laws. His
Location: ORISSA HIGH COURT, CUTTACK
participation in the 2014 election and subsequent appointment as
President was illegal.
(ix) The petitioner asserted that the Opposite Parties' actions concern the
Society's constitution, management, and business, making them
squarely fall within the scope of Section 65(b) & 68 of the Odisha Co-
operative Societies Act, 1962. However, the Co-operative Tribunal
erroneously dismissed the appeal without considering material facts.
Section 68(3) of the Odisha Co-operative Societies Act, 1962expressly
ousts the jurisdiction of civil courts, reinforcing the self-contained and
exclusive nature of the Odisha Co-operative Societies Act, 1962. The
petitioner relied on the decision in State of Maharashtra v. Laljit
Rajshi Shah & Ors1, where the Supreme Court observed that co-
operative society laws operate as self-contained codes.
(x) The petitioner contended that the Co-operative Tribunal erred in
interpreting Section 32 of the Odisha Co-operative Societies Act, 1962,
which pertains to negligence by the committee, as overriding Section 68.
Section 68 specifically governs disputes concerning the Society's
constitution, management, and business and operates independently. In
order to substantiate that disputes concerning the business of the
Society fall under Section 68 of the Odisha Co-operative Societies Act,
1962, the petitioner placed reliance on the decision of this court in Sri
Gunduchi Rout v. Orissa State Handloom Weaver's Co-operative
Society Ltd & others2.
2000 (2) SCC 699.
2008 (Supp.-II) OLR 747.
Location: ORISSA HIGH COURT, CUTTACK
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY (S):
5. The Learned Counsel for the Opposite Party(s) earnestly made the
following submissions in support of his contentions:
(i) The petitioner filed a Dispute Case under Section 68 of the Odisha Co-
operative Societies Act, 1962, seeking a declaration that retired bank
employees cease to be members of Opposite Party No. 1 Society. The
Opposite Parties denied the allegations and filed a petition under Order
7 Rule 11 CPC, challenging maintainability on the grounds of lack of
cause of action, res judicata, limitation, and lack of jurisdiction under
Section 68 of the Odisha Co-operative Societies Act, 1962. The Registrar
of Co-operative Societies rightly dismissed the dispute on 06.10.2018 for
failure to disclose a valid cause of action. Judicial forums have
consistently held that maintainability must be determined before
addressing the merits, and the petitioner failed to provide sufficient
evidence to establish jurisdiction.
(ii) The petitioner failed to raise the issue at the General Body Meeting, as
required under Section 29(2) of the Odisha Co-operative Societies Act,
1962. Consequently, invoking Section 68 was inappropriate and
unnecessarily complicated the matter.
(iii) Furthermore, the Society's Bye-laws allow retired bank employees to
remain members under specific conditions, such as contributing to the
thrift deposit. The petitioner's claim that their continued membership is
illegal is baseless.
Location: ORISSA HIGH COURT, CUTTACK
(iv) Allegations of financial mismanagement are unfounded, as Section 62(1)
of the Odisha Co-operative Societies Act, 1962, mandates regular audits.
No audit reports of the society indicate any financial irregularities, and
the ongoing audit process has revealed no adverse findings.
(v) The Registrar of Co-operative Societies' power to supersede the
Committee under Section 32 of the Odisha Co-operative Societies Act,
1962applies only where there is government shareholding, loans,
financial assistance, or guarantees, none of which exist in this case.
Therefore, the petitioner's demand for supersession lacks legal basis.
(vi) The Board of Directors/Committee Members of the Opposite Party
Society were elected on 15.01.2015 but became defunct on 25.01.2020. A
new Board was reconstituted on 04.02.2020, and since 10.02.2020, the
Deputy Registrar of Co-operative Societies, Khordha, Rosalyn Senapati,
has been managing the Society under Section 32(1) of the Odisha Co-
operative Societies Act, 1962. Consequently, all Opposite Parties have
ceased to hold positions, and the allegations in the writ petition are now
infructuous.
(vii) Three Opposite Parties i.e., Opposite Party No. 6, Opposite Party No. 9,
and Opposite Party No. 12, passed away years ago. The petitioner failed
to substitute them in the writ application and concealed their deaths,
leading to abatement of the case against them.
(viii) Amendments to the Society's Bye-laws fall solely within the discretion
of the Governing Body. Neither the Government nor any other
authority can enforce or execute such amendments.
Location: ORISSA HIGH COURT, CUTTACK
(ix) The present writ petition lacks merit. The orders passed by the Registrar
of Co-operative Societies and the Co-operative Tribunal are legally
sound and require no interference. Accordingly, this writ petition is
liable to be dismissed.
IV. COURT'S REASONING AND ANALYSIS:
6. Heard the learned counsel for the Parties and perused the materials
placed on record.
7. In the exercise of its writ jurisdiction, this Court does not function as an
appellate authority over the Registrar of Cooperative Societies or the
Co-operative Tribunal. However, intervention is warranted where the
Tribunal has erroneously refused to admit admissible and material
evidence, has erroneously admitted inadmissible evidence, or where a
finding of fact is based on no evidence, amounting to an error of law
correctable by a writ of certiorari.
8. In this regard, Supreme court observed in Syed Yakoob v. K.S
Radhakrishnan & Ors.3 as hereinunder:
"8. ...Where it is manifest or clear that the conclusion of
law recorded by an inferior Court or Tribunal is based on an
obvious mis-interpretation of the relevant statutory
provision, or sometimes in ignorance of it, or may be, even
in disregard of it, or is expressly founded on reasons which
are wrong in law, the said conclusion can be corrected by a
writ of certiorari. In all these cases, the impugned
conclusion should be so plainly inconsistent with the
relevant statutory provision that no difficulty is experienced
by the High Court in holding that the said error of law is
apparent on the face of the record. It may also be that in
(1964) 5 SCR 64.
Location: ORISSA HIGH COURT, CUTTACK
some cases, the impugned error of law may not be obvious or
patent on the face of the record as such and the Court may
need an argument to discover the said error; but there can be
no doubt that what can be corrected by a writ of certiorari is
an error of law and the said error must, on the whole, be of
such a character as would satisfy the test that it is an error
of law apparent on the face of the record. If a statutory
provision is reasonably capable of two constructions and one
construction has been adopted by the inferior Court or
Tribunal, its conclusion may not necessarily or always be
open to correction by a writ of certiorari. In our opinion, it
is neither possible nor desirable to attempt either to define or
to describe adequately all cases of errors which can be
appropriately described as errors of law apparent on the face
of the record. Whether or not an impugned error is an error
of law and an error of law which is apparent on the face of
the record, must always depend upon the facts and
circumstances of each case and upon the nature and scope of
the legal provision which is alleged to have been
misconstrued or contravened."
9. The petitioner, in the present writ petition, is challenging the order
dated 06.10.2018, issued by the Registrar of Cooperative Societies,
Odisha, Bhubaneswar, whereby the Dispute Case No. 298/2017 was
dismissed for lack of cause of action.
10. To examine the validity of the impugned order, it is necessary to
analyze the contours of Section 68 of the Odisha Cooperative Societies
Act, 1962, which governs disputes concerning the constitution,
management, or business of a cooperative society. The same is
replicated hereinunder:
"68. Disputes which may be referred to arbitration.
Location: ORISSA HIGH COURT, CUTTACK
(1) Notwithstanding anything contained in any other law
for the time being in force, any dispute touching the
constitution, management or the business of a Society, other
than a dispute required to be referred to the Tribunal and a
dispute required to be adjudicated under the Industrial
Disputes Act, 1947, [and a dispute relating to non-payment
of contribution to the Co-operative Education Fund referred
to in Sub-section (3) of Section 56] shall be referred to the
Registrar if the parties thereto are among the following,
namely:-
(a) the Society, its Committee, past Committee, any
past or present Officer or office-bearer, any past or
present agent, any past or present servant or the
nominee, legal heir or representative of any deceased
Officer, office-bearer, deceased agent or deceased
servant of the Society; or
(b) a member, past member, or a person claiming
through a member, past member or deceased member of
the Society, or of a Society which is a member of the
Society; or
(c) a surety of a member, past member or a deceased
member, whether such surety is or is not a member of
the Society; or
(d)any other Society.
Explanation I - A claim in respect of any sum payable to or
by a Society, by or to a person or Society mentioned in
Clauses (a) to (d) shall be a dispute touching the business of
the Society within the meaning of this section, even in case
such claim is admitted and the only points at issue are the
ability to pay and the manner of enforcement of payment.
Explanation II - A claim by a Financing Bank against a
member of a Society which is a member of the Financing
Bank and indebted to it for the recovery of dues payable by
such member to the Society shall be a dispute touching the
business of the Financing Bank within the meaning of this
Section.
Location: ORISSA HIGH COURT, CUTTACK
Explanation III - The question whether a person is or was a
member of a Society or not shall be a dispute within the
meaning of this section.
Explanation IV - A claim by a surety for any sum or
payment due to him from the principal borrower in respect
of a loan advanced by a Society shall be a dispute within the
meaning of this Section.
Explanation V - The question whether a person or any one
of his family members is carrying on any business
prejudicial to the business or interests of the Society, or
whether such family member has common economic interest
with such person shall be a dispute within the meaning of
this Section.]
(2) Any person, Society, [or Financing Bank] referring a
dispute to the Registrar under Sub-Section (1) shall deposit
in advance such fees as may be prescribed.
(3) No dispute referred to in this section shall be entertained
in any Civil Court and decision of the Registrar in this
respect shall, subject to the provisions of Section 70, be final.
(4) If any question arises whether a dispute referred to the
Registrar under this section is a dispute touching the
constitution, management or the business of a Society, the
decision thereon of the Registrar shall be final and shall not
be called in question in any Court.
(5) Nothing in this section shall, where the disputes relate to
the recovery of the dues of any Society from any of its
member be construed to debar any Financing Bank of such
Society from referring such dispute to the Registrar."
11. A perusal of Section 68 of the Odisha Cooperative Societies Act, 1962,
makes it clear that disputes concerning the constitution, management,
or business of a cooperative society may be referred to the Registrar of
Cooperative Societies, thereby excluding interference by civil courts.
12. In the present case, the Registrar of Cooperative Societies, while
dismissing the dispute, observed that the petitioner had failed to
Location: ORISSA HIGH COURT, CUTTACK
demonstrate any cause of action within the meaning of Section 68of the
Odisha Cooperative Societies Act, 1962. A careful examination of the
record reveals that the petitioner's contentions lacked both substantive
legal backing or factual foundation to bring the matter within the
purview of Sections 68 and 70 of the Odisha Cooperative Societies Act,
1962.
13. The core grievance of the petitioner pertains to the continued
membership of retired bank employees in the cooperative society.
However, Clause 6(iii) of the society's bye-laws explicitly permits such
membership, subject to the following conditions:
"Officers after retirement can continue by contributing to
his/her Thrift Fund provided he/she shall intimate the
Society in writing to do so, subject to approval of the
Management Committee."
14. Furthermore, Rule 8 of the Odisha Cooperative Societies Rules, 1965,
affirms that matters related to membership qualification, admission,
and continuation fall squarely within the purview of the society's bye-
laws.
15. At this juncture, it is imperative to underscore that judicial intervention
in the internal affairs of a cooperative society is inherently
circumscribed. The amendment, interpretation, and implementation of
bye-laws remain an internal matter, falling exclusively within the
domain of the society's governing body. External authorities, including
this Court, ought to refrain from interference in such matters unless
there is a clear and manifest violation of statutory provisions.
Location: ORISSA HIGH COURT, CUTTACK
16. The petitioner has also alleged irregularities in the society's
management. In this regard, the Cooperative Tribunal, in T.A. No.
391/2018, observed that Section 62(1) of the Odisha Cooperative
Societies Act, 1962, mandates an annual statutory audit within six
months of the end of the financial year to detect any violations.
Crucially, it was observed that no material has been placed on record to
suggest that the alleged irregularities were reflected in any audit report.
17. As for the petitioner's plea for the supersession of the managing
committee, Section 32 of the Odisha Cooperative Societies Act, 1962,
assumes significance. This provision vests the Registrar of Cooperative
Societies with discretionary power to supersede a committee under
extraordinary circumstances. It was observed by the Cooperative
Tribunal that such an action necessitates an independent assessment by
the Registrar, and the petitioner cannot invoke this provision in the
absence of statutory grounds. This Court does not find any infirmity
with this view.
18. Furthermore, both the Registrar of Cooperative Societiesand the
Cooperative Tribunal have observed that the petitioner had the
opportunity to raise these grievances before the General Body or to
requisition a General Body meeting under Section 29(2) of the Odisha
Cooperative Societies Act, 1962. There is no indication that the
petitioner availed of these remedies before resorting to the dispute
resolution mechanism under Section 68 of the Odisha Cooperative
Societies Act, 1962.
Location: ORISSA HIGH COURT, CUTTACK
19. Given the availability of an effective and specific remedy under Section
29(2) of the Odisha Cooperative Societies Act, 1962, no case has been
made out warranting judicial intervention. Since such remedies were
not availed, this Court enters into the precinct of merit and finds that
the impugned order is well reasoned and does not suffer from any legal
infirmity.
20. It is also pertinent to note that the Board of Directors/Committee
Members of the respondent society became defunct on 25.01.2020. As a
result, all office-bearers have ceased to hold their respective positions,
rendering the present writ infructuous.
21. Therefore, in the absence of any material discrepancies in the statutory
audit report and given that the issues raised by the petitioner pertain to
internal matters governed by the society's bye-laws, this Court finds no
justification for interference.
V. CONCLUSION:
22. In light of the foregoing discussion, this Court finds no substantial
ground for intervention in the orders of the Registrar, Co-operative
Societies, Odisha, Bhubaneswar and the Co-operative Tribunal.
23. Accordingly, the Writ Petition stands dismissed.
24. Interim order, if any, passed earlier stands vacated.
(Dr.S.K. Panigrahi)
Judge
Orissa High Court, Cuttack,
Dated the 13th March, 2025/
