Partly allowed

The President, Managing Committee v. State of Kerala

Kerala HC14 Dec 2023WP(C)/16258/2023

Case brief

AI extract

What is this about?

Bank seeking writ to set aside order declining its application to sell a land held as security for a debt to realize funds for profit. Court directed Registrar to reconsider sale decision afresh and set aside impugned order within one month due to lack of reasoning on structural inability to use asset.

What did the court decide?

Joint Registrar to reconsider application for sale of land afresh and decide within one month; Impugned Ext.P10 set aside.

The President, Managing Committee Vs State of Kerala — Cooperative Societies | Kerala HC (2023)

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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 N.NAGARESH

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THURSDAY,THE 14^TH DAY OF DECEMBER 2023/ 23RD AGRAHAYANA, 1945

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WP(C) NO. 16258 OF 2023

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PETITIONERS:

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THE PRESIDENT, MANAGING COMMITTEE AGED 71 YEARS AKATHETHARA SERVICE CO-OPERATIVE BANK LTD. NO.F 1514, AKATHETHARA PALAKKAD DISTRICT., PIN - 678008 BY ADVS. K.T.THOMAS NIKHIL BERNY

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RESPONDENTS:

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1 STATE OF KERALA REP. BY SECRETARY TO GOVERNMENT, CO-OPERATION DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695001

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2 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), CIVIL STATION, PALAKKAD, PIN - 678001 3 AKATHETHARA SERVICE CO-OPERATIVE BANK LTD. NO.F 1514, AKATHETHARA, PALAKKAD DISTRICT REP. BY ITS SECRETARY., PIN - 678008

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) No.16258 of 2023

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JUDGMENT

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Dated this the 14^th day of December, 2023

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The petitioner is the President of the Managing

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Committee of the 3^rd respondent-Akathethara Service Cooperative Bank Limited.

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The petitioner states that during the year 2016, after obtaining permission from the 2^nd respondent-Joint Registrar, the 3^rd respondent-Bank purchased a plot of land for ₹4.35 Crores. The property, situated outside the territorial jurisdiction of the Bank, was purchased since amounts were due to the Society from Palakkad District Co-operative Rubber Marketing Society Limited which owned the property. Later, the building situated in the property was demolished and removed after securing permission from the 2^nd respondent.

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In the last two years, due to Government restrictions and Covid 19 pandemic, the Bank went into loss. Hence, the General Body decided to sell the property so that

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WP(C) No.16258 of 2023

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the funds realised can be profitably utilized. The Managing Committee approved the same and the Bank submitted an application before the 2^nd respondent seeking sanction to sell the property. The 2^nd respondent initially sought some clarifications, which were duly furnished. Later, by Ext.P10 order, permission was declined stating that amounts realised by sale of the property can be shown in the Capital Reserve Fund only and not in the Profit and Loss Account and further, sale of capital asset cannot be resolved to reduce loss. The impugned order passed by the 2^nd respondent is unsustainable. Hence, the petitioner filed this writ petition.

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Government Pleader entered appearance and resisted the writ petition. The Government Pleader pointed out that the property of the Bank cannot be sold to make good the loss suffered by the Bank in its business transactions. As the proposal made by the petitioner is against the Rules, the proposal had only to be rejected by the Joint Registrar. Ext.P10 does not suffer from any illegality, contended the

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WP(C) No.16258 of 2023

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Government Pleader.

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I have heard the learned counsel for the petitioner

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and the learned Government Pleader representing respondents 1 and 2.

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It is to be noted that the Bank intended to sell the property not to make good the loss suffered by the Bank in its business transactions. What is stated in Ext.P7 is that as the

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land purchased by the Bank is lying as ‘Non Performing Asset’, the Bank is suffering losses and it is to arrest the said loss that the land is proposed to be sold.

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The counsel for the petitioner would point out that the land purchased by the Bank was from another Society, from which amount was due to the Bank. The land in question is situated beyond the territorial jurisdiction of the Bank. Retaining the property there, is not going to help to achieve the aims and objects of the Bank, as the Bank cannot start any creative activity there.

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WP(C) No.16258 of 2023

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Taking into consideration the afore facts, I am of the view that the Joint Registrar of Co-operative Societies (General) shall reconsider the decision taken in Ext.P10.

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The writ petition is therefore disposed of directing the 2^nd respondent-Joint Registrar of Co-operative Societies (General) to reconsider the application submitted by the Bank for selling the land and take a decision thereon afresh in accordance with law. In order to enable the Joint Registrar to reconsider the application, Ext.P10 is set aside. The Joint Registrar shall take appropriate decision on the application of the Bank, within a period of one month.

Sd/-

N.NAGARESH

JUDGE

hmh

WP(C) No.16258 of 2023

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APPENDIX OF WP(C) 16258/2023

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PETITIONER EXHI	BITS
Exhibit-P1	TRUE COPY OF THE ORDER NO.
	2729/2015/S.T DATED 17.02.2016 ISSUED BY THE 2ND RESPONDENT
Exhibit-P2	TRUE COPY OF THE ORDER
	NO.1915/2016/C.R.P./KDS DATED
	10.03.2016 ISSUED BY THE 2ND RESPONDENT
Exhibit-P3	TRUE COPY OF THE BASIC TAX RECEIPT NO.KL09052405781/2022 DATED 24.08.2022
	ISSUED BY VILLAGE OFFICE PALAKKAD - 3
Exhibit-P4	TRUE COPY OF THE ORDER
	NO.6230/2018/C.R.P.1/KDS DATED
	13.12.2018 ISSUED BY THE 2ND RESPONDENT
Exhibit-P5	TRUE COPY OF THE RESOLUTION NO.7 DATED
	20.03.2021 OF GENERAL BODY OF THE SOCIETY
Exhibit-P6	TRUE COPY OF THE RESOLUTION NO.9 DATED
	23.06.2021 OF MANAGING COMMITTEE OF THE SOCIETY
Exhibit-P7	TRUE COPY OF THE APPLICATION NO.
	ASCB/3/2021-22 DATED 01.09.2021
	SUBMITTED BY SECRETARY
Exhibit-P8	. TRUE COPY OF THE LETTER NO.
	1211/2021/MAL DATED 07.10.2022 ISSUED BY 2ND RESPONDENT
Exhibit-P9	TRUE COPY OF THE EXPLANATION NO.
	ASCB/3/2022-2023 DATED 25.01.2023 SUBMITTED BY THE SOCIETY
Exhibit-P10	TRUE COPY OF THE ORDER/COMMUNICATION NO. JRGPKD/2745/2022-CRP.2 DATED
	01.04.2023 ISSUED BY THE 2ND RESPONDENT

The President, Managing Committee v. State of Kerala

Case brief

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The President, Managing Committee v. State of Kerala

Case brief

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