Quashed

The Mattannur Co-Op. Rural Bank Ltd. v. State of Kerala

Kerala HC31 Oct 2016WP(C)/13306/2007

Case brief

AI extract

What is this about?

The petitioner, a cooperative bank, challenged a circular refixing interest rates, arguing the Joint Registrar lacked authority before 2010 amendments. The court noted prior precedent against interference but held the new section empowered the Registrar only from 2010 onwards.

What did the court decide?

The impugned circular issued by the Joint Registrar refixing the rate of interest was quashed and set aside.

The Mattannur Co-Op. Rural Bank Ltd. Vs State of Kerala — Cooperative Societies | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE

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MONDAY, THE 31ST DAY OF OCTOBER 2016/9TH KARTHIKA, 1938

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WP(C).No. 13306 of 2007 (H)

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PETITIONER(S):

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THE MATTANNUR CO-OPERATIVE RURAL BANK LTD., HEAD OFFICE, MATTANUR, KANNUR DISTRICT, PIN 670 702, REPRESENTED BY ITS SECRETARY.

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BY ADV. SRI.GEORGE POONTHOTTAM

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RESPONDENT(S):

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1. STATE OF KERALA, REPRESENTED BY ITS SECRETARY, CO-OPERATION (B) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.

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2. THE REGISTRAR OF CO-OPERATIVE

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SOCIETIES, THIRUVANANTHAPURAM.

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BY GOVERNMENT PLEADER SMT.POOJA SURENDRAN

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31-10-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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msv/

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WP(C).No. 13306 of 2007 (H)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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EXHIBIT P1 TRUE COPY OF THE LETTER DTD.18.8.2005.

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EXHIBIT P2 TRUE COPY OF THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS ON 18.8.2005.

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EXHIBIT P3 TRUE COPY OF THE LETTER DTD.24.10.2005.

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EXHIBIT P4 TRUE COPY OF LETTER NO.A.D.L.(4) 586/2006 DTD.31.10.2006.

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EXHIBIT P5 TRUE COPY OF THE LETTER NO.1272/05/B. DTD.24.11.2006.

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EXHIBIT P6 TRUE COPY OF THE CIRCULAR DATED 30.11.2006

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EXHIBIT P7 TRUE COPY OF THE LETTER NO.6494/2005/E DTD.17.1.2007.

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RESPONDENT(S)' EXHIBITS

NIL

//TRUE COPY//

P.S.TO JUDGE

msv/

A.MUHAMED MUSTAQUE, J.

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W.P.(C).No.13306 of 2007

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Dated this the 31^st day of October, 2016

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J U D G M E N T

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This writ petition is filed in the year 2007 challenging Ext.P6 circular by the Registrar of Co-operative Societies refixing the rate of interest. The main ground in the writ petition is that Joint Registrar has no power at the relevant time to issue such circular. Petitioner also relied upon the judgment of this Court in Kallettumkara Service Co-operative Bank v. Registrar of Co-operative Societies and Another [2005(3)

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KLT 483] wherein this Court held as follows:

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“The supervision under this sub-section may include an inspection of the books of the society. S.66 in our view would not authorize Registrar to issue any direction or guideline to Cooperative Societies to regulate their financial transactions entered into by the society. Cooperative Society registered under the Cooperative Societies Act has set up to provide for the orderly development of the Cooperative Sector in the State. They are self Governing and democratic institutions to achieve the objects of equity, social justice and economic development, as envisaged in the directive principles of State Policy. They have got their own

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W.P.C.13306/07

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bye-laws. Generally they would frame their own rules and regulations governing members and the society. Banking society accepts deposits from its members agreeing to repay the same with fixed rate of interest, so also for advancing loans to members on the basis of agreement fixing rate of interest. Generally such transactions are contracts entered into between the society and its members. Unless there is clear statutory provision the Registrar of Cooperative Societies cannot interfere with those transactions entered into between the society and its members.”

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However, the learned Government Pleader submitted that that the Joint Registrar has necessary power in terms of Section 66 A of Co-operative Societies Act. It is to be noted that Section 66 A has been amended only by Act 07/2010 to enable Registrar to issue general direction guidelines. Therefore, this Court is of the view that power in terms of Section 66A is only from the year 2010 onwards. In the light of the above impugned circular is quashed and set aside.

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Sd/-

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(A.MUHAMED MUSTAQUE, JUDGE) TRUE COPY

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P.A TO JUDGE

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The Mattannur Co-Op. Rural Bank Ltd. v. State of Kerala

Case brief

What is this about?

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The Mattannur Co-Op. Rural Bank Ltd. v. State of Kerala

Case brief

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