Disposed

The Managing Committee v. the Joint Registrar of Co-Operative Societies (General)

Kerala HC5 Dec 2018WP(C)/5739/2018

Case brief

AI extract

What is this about?

Writ petition filed against a show cause notice seeking removal of the Managing Committee and declarations. The High Court declined to interfere at the show cause stage, directing the Registrar to consider the reply and pass a decision after hearing.

What did the court decide?

Writ petition dismissed; no interference with show cause notice; Registrar directed to consider reply and pass decision within four weeks.

The Managing Committee Vs the Joint Registrar of… — Company and Corporate | Kerala HC (2018)

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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 ANIL K.NARENDRAN

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WEDNESDAY,THE 05TH DAY OF DECEMBER 2018 / 14TH AGRAHAYANA, 1940

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WP(C).No. 5739 of 2018

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PETITIONERS:

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1 THE MANAGING COMMITTEE, THE VELLATHOOVAL SERVICE CO-OPERATIVE BANK LTD NO.K.71,VELLATHOOVAL P.O., IDUKKI DISTRICT- 685 563 REPRESENTED BY ITS PRESIDENT A.N.SAJIKUMAR.

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2 THE PRESIDENT, THE VELLATHOOVAL SERVICE CO-OPERATIVE BANK LTD NO.K.71,VELLATHOOVAL P.O. IDUKKI DISTRICT-685 563.

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BY ADVS. SRI.GEORGE POONTHOTTAM SMT.NISHA GEORGE

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RESPONDENTS:

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1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL),PAINAVU, IDUKKI DISTRICT-685 603.

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2 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), DEVIKULAM, IDUKKI DISTRICT-685 613.

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BY SENIOR GOVERNMENT PLEADER: SRI.K.P.HARISH

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.12.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 5739 of 2018

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JUDGMENT

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The 1^st petitioner is the Managing Committee of

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Vellathooval Service Co-operative Bank and the 2^nd petitioner is its President. The petitioners have this filed writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P3 notice dated 01.02.2018 issued by the 1^st respondent Joint Registrar, whereby the petitioners have been asked to show cause why proceedings under Section 32 of the Kerala Co-operative Societies Act, 1969 for removal of the Managing Committee shall not be initiated for the reasons stated therein. The petitioners have also sought for a writ of mandamus commanding the respondents to permit them to cure the defects, if any, allegedly found out in the inspection report, within a time limit to be specified by this Court, in terms of the law as declared by the Apex Court. The petitioners have also sought for a declaration that there exists no warranting circumstances in the petitioners' Society for initiating any action under Section 32 of the Kerala Co-operative Societies Act, as there is no wilful or

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WP(C).No. 5739 of 2018

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persistent default on the part of the Managing Committee and the notice now issued vide Ext.P3 is tainted with malafides and oblique motives; and also a declaration that the major defects pointed out in Ext.P3 pertains to the period of the previous committees and the committee now in office is in no way responsible for the said defects.

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On 21.02.2018, when this writ petition came up for admission, the learned Senior Government Pleader took notice for respondents 1 and 2. Respondents were directed to file statement/counter affidavit within 10 days. It was ordered that the petitioners shall submit reply to Ext.P3 show cause notice by 26.02.2018. Further hearing pursuant to Ext.P3 show cause notice was ordered to be deferred for a period of two weeks. It was also ordered that, after submitting reply to Ext.P3 notice, the petitioners shall produce a copy of the same before this Court. The said interim order, which was extended from time to time, is still in force.

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A counter affidavit has been filed by the 1^st

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WP(C).No. 5739 of 2018

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respondent, opposing the reliefs sought for in this writ petition. The petitioners have also filed reply affidavit to

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the counter affidavit filed by the 1^st respondent. Along with I.A.No.4663 of 2018, the petitioners have also produced the reply/explanation submitted to Ext.P3 notice.

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Heard the learned counsel for the petitioners and also the learned Senior Government Pleader appearing for the respondents.

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The sole issue that arises for consideration in this

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writ petition is as to whether any interference is warranted on Ext.P3 notice dated 01.02.2018 issued by the 1^st respondent Joint Registrar.

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The pleadings and materials on record would show that Ext.P3 notice issued by the 1^st respondent Joint Registrar is one in exercise of his powers under Section 32 of the Act. The power of the 1^st respondent Joint Registrar to issue such a notice under Section 32 of the Act is not in dispute. The petitioners would contend that on the facts and circumstances stated in Ext.P3, the 1^st respondent Joint Registrar is justified in issuing such a notice for initiating

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proceedings under Section 32 of the Act.

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Having considered the submissions made by the learned counsel on both sides and also the pleadings and materials on record, this Court finds that the 1^st respondent Joint Registrar has issued Ext.P3 notice, pointing out certain irregularities noticed in the inquiry conducted under Section 66 of the Act by the Inquiry Officer. The aforesaid irregularities/defects are also pointed out in Ext.P3. The contention of the petitioners is that some of the defects are minor in nature, which does not warrant invoking the powers under Section 32 of the Act. The petitioners have got a further case that in respect of certain other defects, opportunity should be granted to cure the defects. The petitioners can raise all such issues before the 1^st respondent since Ext.P3 is only a show cause notice, by which they are asked to show cause why the proceedings under Section 32 of the Act shall not be initiated against them.

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Now in terms of the order of this Court dated 21.02.2018, the petitioners have submitted Ext.P17

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WP(C).No. 5739 of 2018

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reply/explanation before the 2^nd respondent. Therefore, it is for the 1^st respondent Joint Registrar to consider those reply/explanation, with notice to the petitioners and other members of the Managing Committee and after affording them an opportunity of being heard.

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In State of U.P v. Brahm Datt Sharma [(1987) 2 SCC 179] the Apex Court held that, when the show cause notice was issued under a statutory provision calling upon to show cause, the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. The purpose of issuing show cause notice is to afford an opportunity of hearing and once cause is shown it is open to the authority to consider the matter in the light of the facts and submission placed before it and only thereafter a final decision in the matter could be taken. Therefore, interference by the Court before that would be premature.

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In Seimens Ltd v. State of Maharashtra

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[(2006) 12 SCC 33] the Apex Court held that ordinarily, a

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writ court may not exercise its discretionary jurisdiction to entertain a writ petition questioning a notice to show cause unless the notice appears to have been without jurisdiction.

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In Union of India v. Vicco Laboratories [(2007) 13 SCC 270] the Apex Court held that, normally, the writ court should not interfere at the stage of issuance of show cause notice by the authorities. In such a case, the parties get ample opportunity to put forth their contentions before the authorities concerned and satisfy the authorities concerned about the absence of case for proceeding against the person against whom the show cause notices have been issued. Abstinence from interference at the stage of issuance of show cause notice in order to relegate the parties to the proceedings before the authorities concerned is the normal rule. However, the said rule is not without exceptions. Where a show cause notice is issued either without jurisdiction or in an abuse of process of law, certainly, in that case, the writ court would not hesitate to interfere even at the stage of issuance of the show cause notice. The interference at the show cause

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WP(C).No. 5739 of 2018

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notice stage should be rare and not in a routine manner. The mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out.

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In view of the law laid down in the decisions referred to supra, no interference under Article 226 of the Constitution of India is warranted on a show cause notice issued under a statutory provision unless the notice is shown to have been issued palpably without any authority of law or that it is an abuse of process of law. The mere assertion in the writ petition that the show cause notice has been issued without any authority of law or that it is an abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, no interference of this Court in exercise of the extraordinary jurisdiction under Article 226 of the Constitution is warranted.

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Having considered the averments and also the

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grounds raised in this writ petition, this Court finds that the petitioner has not made out a case warranting interference

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on Ext.P3 show cause notice, in exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India. It is for the 1^st respondent Joint Registrar to take a final decision on the matter, after considering Ext.P17 reply/explanation offered by the petitioners to Ext.P3 show cause notice.

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14. In State of M.P. v. Sanjay Nagayach [(2013)

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7 SCC 25] the Apex Court, in the context of Section 53 of the Madhya Pradesh Co-operative Societies Act, 1960 held that, the Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with preconceived notion and shall not speak his masters' voice, because the formation of opinion must be his own, not somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the

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WP(C).No. 5739 of 2018

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society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. In paragraph 42 of the judgment (SCC @pages 44 & 45), the Apex Court laid down the general directions in the matter of supersession of the elected committee.

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In Sanjay Nagayach's case (supra) , the order of supersession was passed by the Joint Registrar after a period of two and a half years of the issuance of show cause notice and most of the charges levelled against the Board of Directors were related to the period when the previous committee was in office and even the charges based on the audit report dated 25.9.2008 were also rectified by the Board of Directors by addressing the primary societies. Based on the decision of the Apex Court In Sanjay Nagayach's case , the Registrar of Co-operative Societies has issued Circular No.45/13 dated 12.07.2013.

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Having considered the submissions made by the learned counsel on both sides, the pleadings and materials

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on record and also the law laid down in the decisions referred to supra, conclusion is irresistible that no

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WP(C).No. 5739 of 2018

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interference is warranted on Ext.P3 show cause notice issued by the 1^st respondent Joint Registrar, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India.

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In the result, the challenge made in this writ petition against Ext.P3 show cause notice is repelled, as the petitioners failed to make out a case warranting interference on that show cause notice, in exercise of the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. The 1^st respondent Joint Registrar shall consider Ext.P17 reply/observation made by the petitioners and pass appropriate orders thereon, strictly in accordance with law, with notice to the petitioners, and after affording them an opportunity of being heard, taking note of the law laid down by the Apex Court in Sanjay Nagayach's case (supra) , as expeditiously as possible, at any rate, within a period of four weeks from the date of receipt of a certified copy of this judgment. The decision so taken shall be communicated to the petitioners without any delay.

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WP(C).No. 5739 of 2018

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The legal and factual contentions raised by the

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petitioners are left open to be raised before the 1^st

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respondent Joint Registrar at appropriate stage.

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The writ petition is disposed of as above.

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Sd/-

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ANIL K.NARENDRAN JUDGE

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bpr

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WP(C).No. 5739 of 2018

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PETITIONERS' EXHIBITS:

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EXHIBIT P1	TRUE COPY OF HE O 5797/2016 DATED 0 THE 1ST RESPONDEN	RDER NO.CRP 8-03-2017 PASSED BY T.
EXHIBIT P2	TRUE COPY OF HE O 5797/2016 DATED 0 THE 1ST RESPONDEN	RDER NO.CRP 7-08-2017 PASSED BY T.
EXHIBIT P3	TRUE COPY OF HE O 5797/2016 DATED 0 THE 1ST RESPONDEN	RDER NO.CRP 1-02-2018 PASSED BY T.
EXHIBIT P4	TRUE COPY OF THE DATED 30-03-2014 PETITIONER TO THE SOCIETY.	SHOW CAUSE NOTICE ISSUED BY THE 2ND SECRETARY OF THE
EXHIBIT P5	TRUE COPY OF THE DATED 15-05-2017 OF CHARGES ISSUED THE SOCIETY.	ORDER OF SUSPENSION ALONG WITH THE MEMO TO THE SECRETARY OF
EXHIBIT P6	TRUE COPY OF THE REQUEST NO.VSCB16 03-01-2017 ALONG *TO RETURN THEMAN* DATED 29-12-2016.**	COMMUNICATION/ 84/17 DATED WITH THE RESOLUTION GALYA NIDHI SCHEME
EXHIBIT P7	TRUE COPY OF THE REQUEST NO.VSCB 4 06-11-2013.	COMMUNICATION/ 26/13 DATED
EXHIBIT P8	TRUE COPY OF THE DATED 19-01-2018 2ND RESPONDENT.	ORDER NO.A 592/17 PASSED BY THE
EXHIBIT P9	TRUE COPY OF THE REQUEST OF THE SE SOCIETY DATED 01- COMMITTEE RESOLUT	COMMUNICATION/ CRETARY OF THE 01-2018 WITH ION.

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WP(C).No. 5739 of 2018

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EXHIBTIP10	TRUE COPY OF THE 27-07-2009 SENT BY THE SOCIETY	COMMUNICATION DATED TO THE PENSION BOARD
EXHIBIT P11	TRUE COPY OF THE REQUEST VSCB 152 SUBMITTED BEFORE BY THE SECRETARY DATED 09-06-2016	COMMUNICATION/ 5/16 DATED 26-06-2016 THE 1ST RESPONDENT WITH RESOLUTION AND ENCLOSURES
EXHIBIT P11(A)	TRUE COPY OF THE REQUEST NO.VSCB 25-10-2017 SUBMI RESPONDENT BY TH RESOLUTION DATED ENCLOSURES	COMMUNICATION/ 2342/17 DATED TTED BEFORE THE 1ST E SECRETARY WITH 24-10-2017 AND
EXHIBIT P12	TRUE COPY OF THE VSCB 1289/15 DAT SUBMITTED BY THE	APPLICATION NO. ED 25-11-2015 SECRETARY
EXHIBIT P13	TRUE COPY OF THE RULES AND STAFF THE 1ST RESPONDE LETTER DATED 04-	FEEDER CATEGORY PATTERN APPROVED BY NT WITH COVERING 10-2013
EXHIBIT P14	TRUE COPY OF THE 19-12-2016 FOR C FUNCTIONING OF T	APPLICATION DATED ONTINUATION OF THE HE BRANCHES
EXHIBIT P15	TRUE COPY OF THE DELIVERY ADVICE MARKETING DIVISI	TAX INVOICE CUM ISSUED BY THE ON FACT
EXHIBIT P16	TRUE COPY OF THE CRP 5797/16 ISSU RESPONDENT DATED	COMMUNICATION NO. ED BY THE 1ST 14-02-2018
EXHIBIT P17	TRUE COPY OF THE (WITHOUT ENCLOSU THE PETITIONERS REGISTRAR DATED COVERING LETTER.	REPLY/EXPLANATION RES) SUBMITTED BY BEFORE THE JOINT 26/2/2018 WITH

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EXHIBIT P18 TRUE COPY OF THE REQUEST DATED 25.10.2017 ALONG WITH THE STAFF PATTERN AND THE FEEDER CATEGORY SUB RULES.

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RESPONDENTS' EXHIBITS:

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EXHIBIT R1(A)	A TRUE COPY OF THE NOTICE AND STATEMENT OF THE 2ND PETITIONER CURING THE PERSONAL HEARING.
EXHIBIT R1(B)	TRUE COPY OF THE COMPLAINTS RAISED BY SOME MEMBERS OF THE BANK.
EXHIBIT R1(C)	TRUE COPIES OF THE SUMMARY OF DEFECTS NOTED IN THE AUDIT REPORTS FOR THE YEAR 2014-15 AND 2015-16.
EXHIBIT R1(D)	A TRUE COPY OF THE BILLS DISCOUNTING STATEMENTS FROM THE BANK.
EXHIBIT R1(E)	A TRUE COPY OF THE CIRCULAR NO.20/79 DATED 02.04.1979.
EXHIBIT R1(F)	A TRUE COPY OF THE CIRCULAR NO.2/87.
EXHIBIT R1(G)	A TRUE COPY OF THE RELEVANT PAGES OF SB A/C NO.4725 DATED 08.06.2012.
EXHIBIT R1(H)	A TRUE COPY OF THE RELEVANT PAGES OF SB A/C NO.4725 DATED 05.11.2015.
EXHIBIT R1(I)	A TRUE COPY OF THE CIRCULAR NO.28/86.
EXHIBIT R1(J)	A TRUE COPY OF THE CIRCULAR NO.50/2000 AND CIRCULAR NO.16/2011.
EXHIBIT R1(K)	A TRUE COPY OF THE LETTER DATED 17.10.2017 ISSUED BY THE 1ST RESPONDENT.
EXHIBIT R1(L)	TRUE COPY OF THE RELEVANT PAGES OF THE BYE-LAW.
	//TRUE COPY//
	P.A. TO JUDGE

The Managing Committee v. the Joint Registrar of Co-Operative Societies (General)

Case brief

What is this about?

What did the court decide?

The Managing Committee v. the Joint Registrar of Co-Operative Societies (General)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

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