Kurian v. Joint Registrar — 1990 DIGILAW 105 (KER)

Judgment :- Since these Original Petitions relate to same issue, viz., appointment of petitioners in O.P.No.9170/88 in the Kurichi Service Co-operative Bank Limited No.1538, hereinafter referred to as 'the Bank', I consider it advantageous to dispose of them by a common judgment. O.P.No.3120/88isfiledbythe President of the Bank. lam referring to the parties and exhibits as they are arrayed and marked in O.P.No..3120/1988. 2. The Bank came under Class II of Appendix III of the Kerala co-operative Societies Rules. It is ranked as Class II in serial No.II(c). The sanctioned staff strength of petitioner Bank is: (i) Secretary -1 Post (ii) Asst.Secretary/ Manager/ Chief Accountant - 2 Posts (iii) Head Clerk/ Accountant 1 Post (iv) Cashier/Senior Clerk -3 Posts (v) Junior Clerks/Typists - 4 Posts (vi) attender/peon - 3 Posts The existing strength of the staff was one Secretary, two Junior Clerks and one Attender. The Bank took steps for filling up the vacant posts. Applications were invited by advertising in Malayala Manorama daily dated 4-6-1987 and Deepika daily dated 3-6-1987. As per Ext.P1 resolution the President was authorised to appoint an examiner to set question papers, to conduct examination and to value the answer books. Shri. P. Narayanan Nair, General Manager of the Kottayam District Co-operative Bank, was entrusted with the above duties. The written test was conducted on 25-7-1987 between 10 AM and 12 Nooh. Immediately after the test was over Shri. Narayanan Nair valued the answer books, prepared mark list and entrusted the answer books and the mark list with the President. The same day between 1PM and 5 PM candidates who took the written test were interviewed. 3. By Ext.P2 order dated 24-7-1987 the Joint Registrar directed the bank not to make appointment in pursuance to the written test scheduled to be held on 25-7-1987 and the interview without obtaining specific orders from him. Immediately after the test and interview the President represented to the joint Registrar for permission to make appointment in pursuance to the selection made by the committee. Sanction was not accorded. Hence the President filed O.P.3120/88. Along with O.P.No.3120/88 petitioner moved C.M.P. No.9218/88 praying for stay of operation of Ext.P2 order. On 3-8-1988 this court passed the following order: "Operation of Ext.P2 order is stayed until further order. Sanction was not accorded. Hence the President filed O.P.3120/88. Along with O.P.No.3120/88 petitioner moved C.M.P. No.9218/88 praying for stay of operation of Ext.P2 order. On 3-8-1988 this court passed the following order: "Operation of Ext.P2 order is stayed until further order. However and if any appointments are made to the service of the Kurichi Service Co-operative Bank Ltd., it shall be stated in the order that the appointment is provisional and subject to the result of the Original Petition." Consequent on this order petitioners in O.P.9170/88 were given orders of appointment on 9-8-1988. Petitioners 1 to 3 therein appointed as Junior Clerks and 4th petitioner as Peon. They were appointed in pursuance to Resolution No.3 passed by the Sub Committee of the Board of Directors of the Bank. Learned Government Pleader then moved for modification of the order dated 3-8-1988. This court on 9-8-1988 modified the earlier order as: "Govt Pleader submits that Ext.P2 is only a preliminary order and prays for liberty to pass final order. There is no stay of further proceedings before the Joint Registrar in passing final orders in the matter. The stay order passed by this court is only regarding the operation of Ext.P2 and appointments to be made by the Co-operative Bank in question. The Government Pleader's apprehension that respondent is precluded from passing final orders in the matter has no basis. It is clarified that the respondent will be at liberty to pass final orders in accordance with law after notice to and hearing the interested parties." There-upon the Joint Registrar issued Ext.P3 notice to the Bank and to petitioners in O.P.9170/88. The President of the Bank and the new recruits filed their written objections. After going through the written objections, Joint Registrar issued Ext.P6 order directing the Bank to cancel the orders of appointment given to the petitioners in O.P.9170/88. On getting Ext.P6 order O.P.3120/88 was amended by incorporating a prayer for quashing the same. After the amendment petitioner moved C.M.P. No.23674/88 praying for stay of Ext.P6 order. On 30-9-1988 this court ordered: "Ext.P6 shall not be given effect to, in view of the order dated 3-8-1988 in CMP No.9218/88 till the disposal of the O.P." Petitioner now prays for quashing Exts.P2 and P6 orders passed by the Joint Registrar. 4. On behalf of the respondent, the Joint Registrar of Co-operative Societies, an Assistant Registrar has sworn to a detailed counter affidavit. 4. On behalf of the respondent, the Joint Registrar of Co-operative Societies, an Assistant Registrar has sworn to a detailed counter affidavit. The averments made therein are to the following effect. Petitioner and his associates wanted to appoint candidates of their choice. Petitioner could manage the selection and make appointments. Complaints were received regarding the conduct of the examination and selection to be made for filling up the posts of Junior Clerks and Peon. So, Ext.P2 order was issued directing the Bank not to make any appointment until further orders on the subject. The Bank rejected the applications of M/s. K. Prabhakaran of Kulathoor, Sathish Kumar of Nattasseri and Smt. Vijayalakshmi of S.H. Mount, without any valid grounds. By the rejection of their applications eligible and qualified candidates were denied opportunity to take the written test and interview. Thus, they were denied opportunity to compete in the selection. The written test was not conducted properly and fairly. When the Assistant Registrar (Vigilance Squad) examined the candidate who secured the first rank in the selection he could not give correct answers. On enquiry it was found that the candidate who secured the first rank is a near relative of the proprietor of Hotel Logos at Kottoyam who is a very close to the examiner. The examiner and the Bank could manipulate the written test and interview in such away as to select candidates in whom they were interested. One of the candidates who was working on daily wages in the Bank was given 10 marks and another 9.45 marks out of ten. The candidate who stood second in the written testwasgivenO.19 marks in the interview to offset the relative merit of that candidate. On the basis of the materials collected by the Vigilance Squad Ext.P7 notice was issued to the Bank. Petitioner was given opportunity to peruse all the documents referred to in Ext.P7. Except two reports of the Assistant Registrars mentioned as Items2and8inExt.P6 copies of all other documents were given to the petitioner. They were afforded opportunity to peruse the reports submitted by the Assistant Registrars. There-after petitioners filed their written objections. They did not want to make any oral submission. After perusing the entire documents Ext.P7 order was issued. In these circumstances, neither Ext.P2 nor Ext.P6 order is open to challenge in this proceeding. 5. They were afforded opportunity to peruse the reports submitted by the Assistant Registrars. There-after petitioners filed their written objections. They did not want to make any oral submission. After perusing the entire documents Ext.P7 order was issued. In these circumstances, neither Ext.P2 nor Ext.P6 order is open to challenge in this proceeding. 5. The contentions raised by the petitioner in O.P. 3120/88 are reiterated by the petitioners in O.P.9170/88. 6. The short question that arises for consideration is whether the Joint Registrar of Co-operative Societies was justified in issuing Exts.P2 and P6 orders. Learned Counsel representing the petitioner submitted that the Joint Registrar had no jurisdiction to interfere with the process of selection of candidates for appointment to be made by the Bank. The Bank is the appointing authority. The power of the Bank to appoint candidates selected in accordance with the general directions given by the Registrar is not to be interfered with by the Joint Registrar. It is further submitted that Ext.P6 order is one issued in violation of the principles of natural justice. This argument is built up on the basis of the non-supply of the reports of Assistant Registrars referred to as items 2 and 8 in Ext.P7.On these grounds it was submitted that Exts.P2 and P6 orders are to be quashed. I shall proceed to deal with these contentions in detail. 7. It is common case that the Bank was entitled to appoint three Junior Clerks and one Peon in accordance with the staff pattern fixed in the Rules framed under the Kerala Co-operative Societies Act, hereinafter referred to as the Act'. For making selection to the above posts the Bank published notification in two daily newspapers having wide circulation in Kottayam. In pursuance to that notification published in early June, 1987, many a number of candidates applied. By Ext.P1 Resolution the board of directors of the Bank authorised the President to make arrangements for the conduct of written test by a competent person. As authorised by the Board petitioner made arrangements with Shri P. Narayanan Nair, General Manager of Kottayam District Cooperative Bank to set the question papers, to hold the test and to value the answer books. Test was scheduled to be held on 25-7-1987. Even before that, the Joint Registrar received complaints regarding the process of selection. As authorised by the Board petitioner made arrangements with Shri P. Narayanan Nair, General Manager of Kottayam District Cooperative Bank to set the question papers, to hold the test and to value the answer books. Test was scheduled to be held on 25-7-1987. Even before that, the Joint Registrar received complaints regarding the process of selection. He, thereupon, issued Ext.P2 order stating that appointment of candidates who are selected in pursuance to the test and interview to be held on 25-7-1987, is not to be made until further orders from him. Has the Joint Registrar got the power to pass an order like this? 8. Clause 42 (16) of the Bye-laws of the Bank specifically provides that the appointment to the staff of the Bank should be in conformity with the provisions of the Act, the Rules framed there-under and the general instructions and directions issued by the Registrar from time to time. S.66(1) of the Act empowers the Registrar to supervise the working of the society by issuing general or special orders as he may consider it necessary. The Registrar of Co-operative Societies issued Ext.P12(a) instruction regarding the manner in which selection is to be made of candidates for appointment to the staff. It inter alia provides that the applications from persons possessing qualification as fixed in Rule 186 of the Rules should be accepted and the selection to be made from among them by holding written test and interview, Marks in the written test is to be 90 and 10 for interview. If further provides the manner in which 10 marks allotted for interview is to be awarded. Two marks are to be given for higher educational qualifications. Three marks for experience in similar posts. The remaining five marks to be awarded for performance at the interview. Directions contained in Ext.P12(a) are binding on all co-operative societies in the State. Petitioner Bank is also bound by the above direction. 9. If a co-operative society violates the direction given by the Registrar u/s.66(1) of the Act, what should be the consequence? The Registrar or an officer exercising powers of the Registrar has got authority and power to supervise the management of the affairs of the society. In exercise of this power, general or special orders in that behalf can be issued. This power of the Registrar is not disputed by the learned counsel representing the petitioners in these cases. The Registrar or an officer exercising powers of the Registrar has got authority and power to supervise the management of the affairs of the society. In exercise of this power, general or special orders in that behalf can be issued. This power of the Registrar is not disputed by the learned counsel representing the petitioners in these cases. According to counsel, the direction issued by the Registrar evidenced by Ext.P12(a) is valid and binding on all the co-operative societies in the State. When this power of the Registrar to supervise the management of the affairs of the society is not in dispute and the binding nature of the instructions issued by the Registrar is conceded, violation of those directives issued by the Registrar must invalidate the action taken by the Bank or the Society as the case may be. 10. Learned counsel representing the petitioners submitted that the Joint Registrar has no power to interfere with the selection and appointment of candidates to the various sanctioned posts in the Bank. According to counsel, this position has been recognised by this court in Shertallai Urban Co-operative Bank Ltd. v. State of Kerala (1984 KLT971) and in Kottayam Co-operative Bank Ltd. v. State of Kerala (1988 (1) KLT 827). In Shertallai Urban Co-operative Bank's case, the Joint Registrar passed orders upgrading the society as a Class II credit society and sanctioned additional Posts. But he imposed a condition that appointments to the newly created posts can be made only with his prior approval. Propriety of this condition was challenged before this court. This court observed that the direction requiring the society to obtain prior approval of the Joint Registrar for appointment of officers and servants of the society is illegal. Consequently, that part of the order which imposed the restriction was quashed. In the Kottayam Co-operative Bank's case, certain candidates who appeared for the test conducted by the Bank for selection for appointment as Junior Clerks sent representations to Government alleging irregularities in the conduct of test. Immediately, the Minister for Co-operation ordered: "Call for an urgent report from the J.R. Kottayam within 15 days. Pending disposal of the petition, the J.R. may be directed to instruct the society not to conduct the interview for making new appointments in the Bank". Immediately, the Minister for Co-operation ordered: "Call for an urgent report from the J.R. Kottayam within 15 days. Pending disposal of the petition, the J.R. may be directed to instruct the society not to conduct the interview for making new appointments in the Bank". On the basis of this directive the Joint Registrar issued orders restraining the Bank from conducting interview for appointment of Junior Clerks. Propriety of the orders issued by the Government and the Joint Registrar was in issue before this Court. In that case the Joint Registrar did not apply his mind to the facts which necessitated action by him. He simply followed the dictates of the Government. The Registrar or the person 66 of 66 of the Act has to satisfy himself of the existence of a circumstance warranting enquiry, audit or inspection into the affairs of a society. The Joint Registrar who exercised the powers of the Registrar in that case acted under the dictates of Government. Since he failed to exercise the power under the Act on his own volition, this court quashed the order issued by the Joint Registrar. As per the Scheme of the Act Government had no power to issue a direction to the Joint Registrar as the one given in that case. Consequently, the order of the Government was also annulled. These decisions, according to me, have no application to the facts in this case. It is nobody's case that the Joint Registrar exercising powers of the Registrar under the Act, issued Ext.P2 on account of any direction from superior authority. On getting the complaints regarding the process of selection, that was being adopted by the Managing Committee of the Bank, Joint Registrar thought it proper to enquire into the propriety of the en tire process of selection. Ext.P2 is seen to have been issued by the Joint Registrar on getting himself satisfied of the necessity to have an enquiry into the affairs of the Bank. 11. Joint Registrar made enquiries into the entire process of selection resorted to by the Bank through Assistant Registrars (General and Vigilance). They reported about the malpractices resorted to in the selection process. On getting that report a detailed enquiry was conducted by the Joint Registrar himself. Ext.P7 notice of enquiry was issued to the Bank and persons selected for appointment. Notices made mention of the documents relied on by the Joint Registrar. They reported about the malpractices resorted to in the selection process. On getting that report a detailed enquiry was conducted by the Joint Registrar himself. Ext.P7 notice of enquiry was issued to the Bank and persons selected for appointment. Notices made mention of the documents relied on by the Joint Registrar. They were also informed that they could peruse the documents mentioned therein and take extracts there from. Petitioners in these Original Petitions asked for copies of all the documents mentioned in Ext.P7 including the reports submitted by the Assistant Registrars. Copies of all documents other than the reports of the Assistant Registrars were made available. They were informed that the copies of the reports cannot be given and that they can peruse the same and take extracts from it. Petitioners did not avail of that opportunity to take extracts from the reports. 12. Shri N. Raghava Kurup, learned counsel representing the petitioner in O.P. 3120/88 raised a contention that the enquiry which preceded Ext.P6 order was held in violation of the principles of natural justice. According to counsel, since copies of the reports submitted by the Assistant Registrars were not made available to his client, he could not make any effective representation and hence the enquiry was only a farce. In support of this argument he relies on the statements made in Ext.P8 and affidavit, Ext P11, filed by the petitioner's counsel who appeared before the Joint Registrar. In Ext.P8 it was stated: "On behalf of us our Advocate submitted an application to you requesting you to provide the copies of all documents you rely upon for the purpose of your enquiry. On his request you have not given the copies of the report, 3 in number, mentioned as items 2 and 8 in the notice on the ground that those reports are' confidential". It is further stated therein: "It is submitted that no decision can be arrived at by you on the basis of the confidential reports, copies of which were denied to us and made available to the main complainant Mr.Soman and the Desabhimani reported. It is further stated therein: "It is submitted that no decision can be arrived at by you on the basis of the confidential reports, copies of which were denied to us and made available to the main complainant Mr.Soman and the Desabhimani reported. It will be violative of the principles of natural justice." In ExtP11 affidavit filed by the counsel who represented the petitioner before the Joint Registrar it is stated: "In spite of repeated applications for the issue of copies of documents items (1) to (11) except item (9) referred in the J.R,s. notice copies of documents (2) and (8) were not supplied attributing confidential. This was so stated in the statement dated 15-9-1988 filed by my clients in the file." The above quoted statement from Ext.Pll does not go to show that the Joint Registrar did not make available the reports for their perusal. In Ext.P7 notice itself they were told that they are entitled to go through the reports and to take extracts there from. The non-supply of copies of the reports cannot affect the validity of the enquiry on the ground that it was held in violation of the principles of natural justice. This is so because the reports were not kept a secret. If the petitioners wanted they could go through the same and take extracts from it. The failure on the part of the petitioner in not availing of that opportunity will not in any way go to affect the enquiry. 13. The enquiry was posted to 5-9-1988. On that day counsel representing the petitioners appeared before the Joint Registrar and applied for copies of documents. Copies of all documents except item 2 and 8 mentioned in Ext.P7 notice were given to them. They were also informed that they could copy the relevant portions from the reports submitted by the Assistant Registrars. Thereafter hearing was adjourned to 15-9-1988. On that day no counsel appeared before the Joint Registrar. Ext.P8 statement was submitted by the petitioner in O.P.3120/88. No application for adjournment was filed. The Joint Registrar took the case for orders. After considering the entire materials he issued Ext.P6 order. He gave eight reasons for issuing Ext.P6. Joint Registrar came to the conclusion that the general directions given by the Registrar in Ext.P12(a) have been violated in selecting the candidates. No application for adjournment was filed. The Joint Registrar took the case for orders. After considering the entire materials he issued Ext.P6 order. He gave eight reasons for issuing Ext.P6. Joint Registrar came to the conclusion that the general directions given by the Registrar in Ext.P12(a) have been violated in selecting the candidates. Since the Bank made the selection ignoring the directives given by the Registrar, the Joint Registrar thought it fit to direct the Bank to cancel the appointments given to the petitioners in O.P. 9170/88. The bank committed an illegality in appointing the candidates in violation of the directions given by the Registrar. The appointment made by the Bank in violation of the directions are invalid. Those illegal acts have to be undone. Ext.P6 gives directions for undoing that wrong. It cannot be considered as unsustainable. 14. As per the bye-laws of the Bank appointment to its staff is to be effected by the board of directors. Petitioners in O.P.9170/88 have not been appointed by the Board. Subcommittee consisting of the President of the Bank and another member took decision to appoint them. The appointment made by such a committee cannot be taken as a valid one. As per S.28 of the Act the general body of the society should constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee. So, the committee or board of directors of the society is the delegate of the general body of the society. It is trite law that a delegate cannot further delegate its duties. The bye-laws of the Bank specifically provide that the elected committee or the board of directors alone has got power to make appointment. The cumulative effect of the provisions contained in the bye-laws and S.28 of the Act is that the appointment to the bank should be done by the Committee or board of directors. The impugned appointments were not effected by the committee or board of directors. On this ground also it has to be held that the Bank did not act in accordance with the Act and bye-laws. So, the Joint Registrar was acting within his power when he directed the committee to revoke the orders of appointments. 15. It is true that a co-operative society must have freedom of activities. On this ground also it has to be held that the Bank did not act in accordance with the Act and bye-laws. So, the Joint Registrar was acting within his power when he directed the committee to revoke the orders of appointments. 15. It is true that a co-operative society must have freedom of activities. Officers of the Department and the Government are not to take action interfering with the autonomy of the societies. This does not mean that the society can act in any manner ignoring the provisions of the Act and the directions given by the Registrar of Cooperative Societies. Only when a co-operative society acts within its jurisdiction, in conformity with the provisions of the Act and the general directions by the Registrar, can they claim freedom from interference. When they violate the provisions of the bye-laws and the Act in an arbitrary manner, their actions will be subject to the supervisory control of the authorities under the Act. The committee cannot act against the interest of the society with immunity. If they resort to activities prejudicial to the interest of the society, the Registrar must have the power to curb and curtail their freedom. In the instant case the applications of eligible candidates were rejected. Persons who were summoned for written test were not informed of the interview that was to follow the test on the same day. These actions of the board were in violation of the specific directions given by the Registrar. Such actions have gone to materially affect the selection. So, the selection has to be cancelled. Ext.P6 is an order in that direction. I do not find any ground to interfere with the same. 16. The appointment given to the petitioners in O.P.9170 of 1988 is provisional subject to the result of O.P.3120/1988.Orders of appointment issued to them makes mention of this fact. So, they are not having any right to continue in the post when the order, Ext. P6, has been sustained.. The prayer made by the petitioners in O.P.9170/88 have only to be declined. I do so. The Board of Directors of the Bank may consider whether petitioners in O.P.9170/88 can be allowed to continue till a proper selection is made in conformity with the provisions of the Act and the directions given by the Registrar. The result, therefore, is the Original Petitions fail. They are accordingly dismissed. I do so. The Board of Directors of the Bank may consider whether petitioners in O.P.9170/88 can be allowed to continue till a proper selection is made in conformity with the provisions of the Act and the directions given by the Registrar. The result, therefore, is the Original Petitions fail. They are accordingly dismissed. Issue photo copy of the judgment to the parties on usual terms.