Disposed

Pavithran C. Nair v. the Joint Registrar of Co-Operative Societies (General)

Kerala HC22 Dec 2020WP(C)/27880/2020

Case brief

AI extract

What is this about?

In this writ petition, members of the Kuttikkol Service Co-operative Bank challenged a show-cause notice seeking to supersede the elected committee based on an inquiry report lodged during the previous committee's tenure. The Court held that writs cannot be issued to prevent anticipated adverse actions and reiterated the exception nature of supersession.

What did the court decide?

Writ petition disposed of directing petitioners to appear before the Registrar and furnish explanation; instructed Registrar to follow Supreme Court principles before deciding on supersession.

Pavithran C. Nair Vs the Joint Registrar of… — Cooperative Societies | Kerala HC (2020)

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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 RAJA VIJAYARAGHAVAN V

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TUESDAY, THE 22ND DAY OF DECEMBER 2020 / 1ST POUSHA, 1942

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WP(C).No.27880 OF 2020(H)

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PETITIONER(S) :

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1 PAVITHRAN C. NAIR, S/O.KUNHIKKANNAN NAIR A., MEMBER, KUTTIKKOL SERVICE COOPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT PLAVILAKAYA HOUSE, KARIVEDAKAM, KUTTIKKOL P.O., KASARGOD DISTRICT.

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2 SHEEBA JOSEPH W/O.SANTHOSH A.V., MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT AMMANA, SANKARAMPADI P.O., KASARGOD DISTRICT.

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3 RUKKYA P., W/O.K.MUHAMMED, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT PARAKKUNNU, KUTTIKKOL P.O., KASARGOD DISTRICT.

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4 RAMACHANDRAN C., S/O.RAMAN NAIR, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT KALLAKKAPPU, SANKARAMPADI P.O., KASARGOD DISTRICT.

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5 GOPINATHAN A.K.,

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S/O.KORAGAN, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT AALAKKATTUDUKKAM, MAANIMOOLA P.O., KASARGOD DISTRICT.

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6 MUHAMMED HANEEFA, S/O.M.H.UMMAR, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT ENIYAADI HOUSE, BANTHADUKKA P.O., KASARGOD DISTRICT.

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7 LAYONSA A.V. W/O.THOMAS, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT ARIMANNIL HOUSE, MALAAMKUNDU, BANTHADUKKA P.O., KASARGOD DISTRICT.

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WP(C).No.27880 OF 2020(H) 2

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8 ALOSIOUS A.T., S/O.THOMAS, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT AKKATTUYILU, MAANADUKKAM P.O., KASARGOD DISTRICT.

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9 NARAYANAN K. S/O.H.KANNAN, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT BANDANKAI HOUSE, KARIVEDAKAM P.O., KASARGOD DISTRICT.

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10 NARAYANAN NAIR E., S/O.KUNJIRAMAN NAIR, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT AALATHIYUKADAVU HOUSE, KARIVEDAKAM P.O., KASARGOD DISTRICT.

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11 ULLAS JOSEPH, S/O.JOSEPH, MEMBER, KUTTIKKOL SERVICE CO-OPERATIVE BANK LTD. NO.F.F.91, KUTTIKKOL P.O., CHENGALA VIA, KASARGOD DISTRICT, RESIDING AT ANDUKUNNEL, KARIVEDAKAM P.O., KASARGOD DISTRICT.

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BY ADVS. SRI.GEORGE POONTHOTTAM (SR.) SRI.ARUN CHANDRAN SMT.NISHA GEORGE

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RESPONDENT(S):

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1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), CIVIL STATION, VIDYA NAGAR POST OFFICE, KASARAGOD DISTRICT, PIN CODE - 671 123 E-mail. [email protected]

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2 THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), KASARAGOD DISTRICT, PIN CODE 671 123

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SRI BIMAL K NATH, SENIOR GOVERNMENT PLEADER

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.12.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No.27880 OF 2020(H) 3

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JUDGMENT

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The petitioners herein are the members of the elected managing committee of the Kuttikkol Service Co-operative Bank Ltd., a Society registered under the Kerala Co-operative Societies Act, 1969 (for short ‘the Act’).

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The petitioners have approached this Court challenging Exhibit P1 proceedings by which the managing committee has been called upon to furnish their explanations as to why the committee shall not be superseded on the basis of the findings of the report pursuant to the conduct of enquiry under Section 65 of the act. The petitioners contend that Exhibit P1 proceedings cannot be sustained as it relates to omissions and commissions of the previous managing committee and in respect of events which took place in the year 2017. According to the petitioner, Ext.P1 proceedings which is based on an enquiry report while the previous committee was in office cannot be the foundation of an action

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against the present committee. It is further stated the notice issued under Section 32 does not disclose the satisfaction of the respondent based on the report to initiate an action for supersession. It is on these foundational facts that the petitioners have approached this Court seeking the following reliefs:

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i) issue a writ of certiorari calling for the records leading to Exhibit P1 and quash the same

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ii) issue a writ declaring that Exhibit P1 notice issued is ignoring the concluded judgment and therefore a process to overreach the same,

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WP(C).No.27880 OF 2020(H) 4

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which is impermissible in law

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iii) issue a writ declaring that the action taken as per Exhibit P1 on submission of Exhibit P4 report on inquiry under Section 65 of the KCS Act which was submitted as early as on 28.4.2017 are entirely opposed to law and therefore liable to be set aside;

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iv) Declare that no action under Section 32 of the KCS Act can be taken against the Managing Committee now which assumed officer on 20.1.2019 on the basis of the report on inquiry submitted on 28.4.2017

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v) issue a writ declaring that the recording of satisfaction, existing of the ingredients that are provided in Section 32(1)(a)(b)(c) and (d) in Exhibit P1 will vitiate the action and therefore bad in law.

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I have heard Sri. George Poonthottam, the learned senior counsel

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appearing for the petitioners and Sri. Bimal K. Nath, the learned Senior Government Pleader.

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Sri. George Poonthottam, the learned senior counsel vehemently submitted that the present committee assumed charge only on 20.1.2019 and an evaluation of Ext.P1 proceedings would show that the entire allegations revolve around the result of an enquiry conducted during the term of the previous committee. He would point out that to initiate an action under Section 32, there should be materials to suggest that there was persistent default, negligence in the performance of duties, actions prejudicial to the interest of the society, willful disobedience or failure to comply with the lawful orders or directions, making of payments contrary to the acts etc. None of these pre-requisites are attracted insofar as the present managing committee is concerned. He would also point out that any action under Section 32(1) should be preceded with an enquiry.

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WP(C).No.27880 OF 2020(H) 5

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However, no such enquiry has been conducted in the office of the society after 28.4.2017. According to the learned counsel, issuance of Ext.P1 is a clear abuse of power warranting interference by this Court.

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Sri. Bimal K. Nath, the learned senior Government Pleader has stoutly opposed the prayer. He would contend that it was when deliberate inaction was noticed in rectifying the illegalities committed by the previous committee that notice was issued to the petitioners asking them to show cause. He would point out that more than sufficient time was granted to rectify the defects pointed out in the report with respect to the incidents which originated when the previous committee was in office. According to the learned Government Pleader, no adverse orders have been passed against the petitioners and they have approached this court on receipt of Ext.P1 proceedings. He would contend that only if the findings against the committee are such that the continuance of the committee would be extremely prejudicial to the interest of the society that the exceptional and rare action under Section 32 shall be taken by the respondent. If the default is minor and negligible and not found to be persistent, an opportunity will be extended to the society to rectify the same. Relying on the judgment of the Hon’ble Supreme Court in Manish S Pardasani(M/s Wine Komder) v. Inspector State Excise and others [(2019) 2 SCC 660], it is contended that this Court will not be justified in issuing directions merely on anticipation of an order being passed by the Joint Registrar.

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I have anxiously considered the submissions advanced. I find that the challenge in this petition is to the show cause notice issued by the 1st

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WP(C).No.27880 OF 2020(H) 6

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respondent under Section 32(1) of the Act. They have been asked to appear before the respondent for a personal hearing. Unless exceptional cause is made out, this Court would refuse to exercise its discretionary jurisdiction by entertaining a writ petition questioning a notice to show cause. In the case on hand, the petitioners have no case that the order suffers from any jurisdictional infirmity or any other error. The only assertion of the petitioners is that an adverse order would be passed by the respondent and the society would be superseded. I am of the considered opinion that such apprehension is misconceived.

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In Manish S Pardasani (supra), the Supreme Court had deprecated the issuance of directions which are essentially passed in anticipation of the order passed by an appellate authority, observing that such orders would interfere with the independence of the authority in deciding the matter before it in accordance with law. It was held thus in para 64 to 67.

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We find that the High Court while disposing of the Writ Petitions also passed the following writ / directions in Para 20 which reads as under:

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“Since an apprehension is expressed and a serious one by the petitioners, we direct that in the event the fourth respondent passes any orders adverse to the petitioners, then such orders shall not take effect for a period of four weeks from the date they are communicated to the petitioners. Since we have set aside the fourth respondent's interim order and for the present not expressed any opinion on the contentions raised before us, interest of justice demands that the sealing of the premises by the authorities should be set aside. Therefore, the Superintendent or other functionary is directed to remove the seal, lock and key placed on the premises forthwith. This order will ensure to the benefit of such of the petitioners whose licenses

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WP(C).No.27880 OF 2020(H) 7

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are subsisting and are not cancelled. The other licences, which are no longer in operation on account of their termination, the holders thereof cannot avail the benefit of this order. However, we do not express any opinion on the remedies that are available to them and they can avail them as observed and held in the above paragraphs.” (Emphasis Supplied)

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In our considered view, the High Court ought not to have issued directions of this nature. It was legally not permissible to do so. Indeed, the High Court by issuing such directions which are essentially passed in anticipation of the the order being passed by an appellate authority, interfered with the judicial independence of an appellate authority in deciding the appeals in accordance with law.

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It is the sole discretion of the appellate authority under the Act to decide the appeal based on the facts involved in the appeal, and legal provisions which eventually result in passing a judicial order. No higher court can pass such directions merely on anticipation of an order being passed by an appellate authority. It is only after the order is passed, that the aggrieved person has a legal right to take recourse to a legal remedy available in law against such order by approaching to a higher forum and pray for grant of appropriate relief against such order.

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This stage in this case is yet to arrive. The High Court should not have, therefore, pre-empted the passing of any order of the appellate authority, while deciding the Writ Petition. It is a settled law that the Court can stay or quash only those orders, which are impugned in the lis before it. A fortiori the Court cannot stay or/and quash the orders in anticipation before they are passed. We cannot, therefore, uphold such writ/directions issued by the High Court.

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Since the matter is now pending consideration of the 1st respondent, this Court in the light of the observations made above by the Apex

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WP(C).No.27880 OF 2020(H) 8

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Court will not be justified in issuing any directions merely in anticipation of an adverse order being passed. If the petitioners are aggrieved by the order passed by the respondent they have a legal right to take recourse to a legal remedy available in law against such an order.

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In view of the apprehension expressed by the petitioners that the proceeding initiated under Section 32(1) is premeditated and with a view to supersede the elected committee, the respondent shall do well to remind itself of the principles laid down by the Apex Court as well as this Court.

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10. In State of Madhyapradesh and Others v. Sanjay

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Nagayach and Others [(2013) 7 SCC 25], the Supreme Court had occasion to observe that supersession of an elected Managing Committee is an exception and can be resorted only in exceptional circumstances and normally the elected body should be allowed to complete the term for which it is elected. In paragraph No.42 of the judgment, the Apex Court had issued general directions taking note of the mushrooming of cases in various Courts challenging orders of supersession of elected Committees: The general directions are extracted below for easy reference.

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Supersession of an elected managing Committee/Board is an exception and be resorted to only in exceptional circumstances and normally elected body be allowed to complete the term for which it is elected.

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1. Elected Committee in office be not penalised for the

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shortcomings or illegalities committed by the previous Committee, unless there is any deliberate inaction in rectifying the illegalities committed by the previous committees.

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Elected Committee in Office be given sufficient time, say at

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WP(C).No.27880 OF 2020(H) 9

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least six months, to rectify the defects, if any, pointed out in the audit report with regard to incidents which originated when the previous committee was in office.

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Registrar/Joint Registrar are legally obliged to comply with all the statutory formalities, including consultation with the financing banks/Controlling Banks etc. Only after getting their view, an opinion be formed as to whether an elected Committee be ousted or not.

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Registrar/ Joint Registrar should always bear in mind the consequences of an order of supersession which has the effect of not only ousting the Board out of office, but also disqualify them for standing for election in the succeeding elections. Registrar/Joint Registrar therefore is duty bound to exercise his powers bona fide and not on the dictation or direction of those who are in power.

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Registrar/Joint Registrar shall not act under political pressure or influence and, if they do, be subjected to disciplinary proceedings and be also held personally liable for the cost of the legal proceedings.

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Public money not to be spent by the State Government or the Registrar for unnecessary litigation involving disputes between various factions in a co-operative society. Tax payers money is not expected to be spent for settling those disputes. If found necessary, the same be spent from the funds available with the concerned Bank.

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11. In Vallapuzha Service Co-operative Bank Ltd. v. Joint

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Registrar [2009 (3) KLT 838] this Court had observed that supersession of a democratically elected committee is a very drastic and extreme step. It is not necessary to cite any judicial precedents to hold that action under Section 32 of the Act cannot therefore be taken lightly for mundane violations. Only if the findings against the Committee are such that the continuance of the Committee would be extremely prejudicial to the interests of the Society, the exceptional and rare action under Section 32 of the Act shall be taken. Findings on the culpability of the Committee on their improper action should inform the action of the

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WP(C).No.27880 OF 2020(H) 10

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Registrar while initiating proceedings under Section 32 of the Act. In other words, the mere finding that the Committee has done the acts alleged alone is not sufficient; the same should be supported by a further finding that they did the same with a culpable mind, failing which the action of the Registrar would be improper.

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These observations shall be borne in mind by the respondent while hearing the petitioner and other members of the managing committee of the Union.

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In that view of the matter, this writ petition will stand disposed of directing the petitioners to appear before the 1st respondent in terms of the directions issued above and furnish their explanation. The respondent shall consider the same and take appropriate decision.

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Sd/-

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RAJA VIJAYARAGHAVAN V

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JUDGE

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sru

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WP(C).No.27880 OF 2020(H) 11

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT	P1	TRUE COPY OF THE PROCEEDINGS
		NO.CRP.2447/19 DATED 18.11.2020 ISSUED BY THE 1ST RESPONDENT JOINT REGISTRAR.
EXHIBIT	P2	TRUE COPY OF THE PROCEEDINGS NO.1513/2016/O DATED 6.9.2016 ISSUED BY THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, KASARGOD.
EXHIBIT	P3	TRUE COPY OF THE INQUIRY REPORT UNDER SECTION 65 OF THE ACT BEARING NO.1513/16/C DATED 28.4.2017.
EXHIBIT	P4	TRUE COPY OF THE JUDGMENT DATED 31.5.2017 IN W.P.(CIVIL) NO.16888 OF 2017 PASSED BY THIS HON'BLE COURT.
EXHIBIT	P5	TRUE COPY OF THE PROCEEDINGS NO.C.R.P/1550/2017 OF THE 1ST RESPONDENT DATED 10.7.2017.
EXHIBIT	P6	TRUE COPY OF THE JUDGMENT DATED 26.7.2017 IN W.P.(C) NO.24772/2017 PASSED BY THIS HON'BLE COURT.
EXHIBIT	P7	TRUE COPY OF THE ORDER DATED 1.8.2017 IN W.A.1628/2017 PASSED BY THIS HON'BLE COURT.
EXHIBIT	P8	TRUE COPY OF THE G.O.(RT) NO.635/2017/CO-OP DATED 24.11.2017.
EXHIBIT	P9	TRUE COPY OF THE JUDGMENT DATED 8.8.2018 IN W.P.(C). W.A. 1628/2017 PASSED BY THIS HON'BLE COURT.
EXHIBIT	P10	TRUE COPY OF THE INVESTIGATION REPORT OF THE INSPECTOR OF POLICE, ADHUR BEARING NO.296/ACO/SO-25/15 DATED 17.6.2015.
EXHIBIT	P11	TRUE COPY OF THE PERMISSION/ORDER NO.C.R.P./158/2016/K.DIS DATED 27.2.2016 ISSUED BY THE JOINT REGISTRAR.
EXHIBIT	P11 (A)	TRUE COPY OF THE ORDER

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WP(C).No.27880 OF 2020(H) 12

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NO.C.R.P./3290/2016/K.DIS DATED 12.8.2016 ISSUED BY THE JOINT REGISTRAR.

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EXHIBIT P11 (B) TRUE COPY OF THE ORDER NO.C.R.P./5055/2016/K.DIS DATED 17.12.2016 ISSUED BY THE JOINT REGISTRAR. EXHIBIT P12 TRUE COPY OF THE APPLICATION DATED 25.9.2019 SUBMITTED BY THE SOCIETY SEEKING PERMISSION FOR CONTINUES FUNCTIONING OF THE PADUPP BRANCH. EXHIBIT P13 TRUE COPY OF THE REPLY SUBMITTED BY THE SECRETARY OF THE SOCIETY DATED 9.9.2020 TO THE JOINT REGISTRAR. EXHIBIT P14 TRUE COPY OF THE ACKNOWLEDGMENT CARD DATED 25.7.2016. EXHIBIT P14 (A) TRUE COPY OF THE ACKNOWLEDGMENT CARD DATED 21.2.2017. EXHIBIT P15 TRUE COPY OF THE PAPER PUBLICATION DATED 9.2.2017 PUBLISHED IN KARAVAL DAILY. EXHIBIT P16 TRUE COPY OF THE REPLY SUBMITTED BY THE SOCIETY DATED 5.10.2020. EXHIBIT P17 TRUE COPY OF THE APPLICATION DATED 11.11.2019 SUBMITTED BY THE SECRETARY OF THE SOCIETY, WITHOUT ENCLOSURES. EXHIBIT P18 TRUE COPY OF THE COMMUNICATION NO.CRP/322/2020 DATED 18.3.2020 ISSUED BY THE JOINT REGISTRAR. EXHIBIT P19 TRUE COPY OF THE REQUEST DATED 18.9.2020 ALONG WITH OTHER CURED DEFECT REPORTS. EXHIBIT P20 TRUE COPY OF THE NOTICE ISSUED BY THE VENDORS TO THE SOCIETY DATED 10.9.2020. EXHIBIT P21 TRUE COPY OF THE CERTIFICATE OF THE TRAINING PROGRAMMES COMPLETED BY SRI.GANGADHARAN K, SECRETARY OF THE BANK. EXHIBIT P21 (A) TRUE COPY OF THE CERTIFICATE OF THE TRAINING PROGRAMMES COMPLETED BY

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WP(C).No.27880 OF 2020(H) 13

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		SRI.GANGADHARAN K, SECRETARY OF THE BANK.
EXHIBIT P21	(B)	TRUE COPY OF THE CERTIFICATE OF THE TRAINING PROGRAMMES COMPLETED BY SRI.GANGADHARAN K, SECRETARY OF THE BANK DATED 28.5.2018.
EXHIBIT P22		TRUE COPY OF THE CERTIFICATE DATED 6.11.2020 ISSUED BY THE INSTITUTE OF CO- OPERATIVE MANAGEMENT KANNUR PERTAINING TO MR.MADHUSOODANAN K., AN EMPLOYEE OF THE BANK.
EXHIBIT P22	(A)	TRUE COPY OF THE CERTIFICATE DATED 6.11.2020 ISSUED BY THE INSTITUTE OF CO- OPERATIVE MANAGEMENT KANNUR PERTAINING TO SMT.JYOTHI V., AN EMPLOYEE OF THE BANK.
EXHIBIT P22	(B)	TRUE COPY OF THE CERTIFICATE DATED 30.11.2019 ISSUED BY THE INSTITUTE OF CO-OPERATIVE MANAGEMENT (KICMA) PERTAINING TO MR.NISANTH C., AN EMPLOYEE OF THE BANK.

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RESPONDENT'S/S EXHIBITS: NIL

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/TRUE COPY/

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P.A. TO JUDGE

Pavithran C. Nair v. the Joint Registrar of Co-Operative Societies (General)

Case brief

What is this about?

What did the court decide?

Pavithran C. Nair v. the Joint Registrar of Co-Operative Societies (General)

Case brief

What is this about?

What did the court decide?

What the court decided

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