Judgment :- The original Petition was filed on 28.12.2001 by the Board of Directors of the Kallurkkad Co-Operative Bank Ltd., represented by it's President against apprehended supersession of the Board and appointment of Administrator by the second respondent under Section 32(1) of the Kerala Co-operative Societies Act. Since the filling of the O.P., the impugned order was passed by the second respondent on 31.12.2001 as apprehended by the petitioners and therefore the petitioners amended the O.P. The petitioners challenge the said order Ext. P13 issued under Section 32(1) of the Act by the second respondent, the Joint Registrar of Co-operative Societies, Ernakulam. the impugned order is based on an interim report submitted by the Enquiry Officer dated 17.12.2001 pursuant to an enquiry ordered under Section 66 of the Act. The Original Petition is opposed by respondents 2 to 4, all officers under the Co-operative Department. represented by Government Pleader. The administrator now in charge of the society, the first respondent, is represented by advocate Sri. Swathi Kumar. The addl. 5 to 8 respondents who are members of the society got themselves impleaded and are represented by advocate Sri. George Poonthottam. and Sri. A.J. Jose. 2. I have learned counsel Sri. V.M. Kurien appearing for the petitioners, and all counsel appearing for the respondents. 3. The events that lead to the impugned order, according to the petitioner, are the following. The petitioner got elected as members of the managing committee of the society in March, 1999 and they took charge on 1.4.1999. Under the bye-laws of the society, the period of the committee was to expire on 31.3.2002. however, pursuant to the amendment to section 28 of the act by Act 1 to 2000 enabling the managing committee of the society to continue for a period of five years, the member of the society passed a resolution amending clause 25(1) of the byelaws of the society establish the committee to continue in office for five years in terms of the amended provisions of the Act, that is upto 31.3.2004. The petitioners sent the resolution dated 6.10.2001 for registration to the second respondent in terms of Section 12 of the Act. Inspite of the amendment of the byelaws in terms of the statutory provision and the forwarding of the resolution to the second respondent, way back on 22.10.2001 vide Ext. The petitioners sent the resolution dated 6.10.2001 for registration to the second respondent in terms of Section 12 of the Act. Inspite of the amendment of the byelaws in terms of the statutory provision and the forwarding of the resolution to the second respondent, way back on 22.10.2001 vide Ext. P2, the petitioners allege that the second respondent did not register the resolution to enable the petitioners to continue in office. Since no action was forthcoming from the second respondent for continuation of the committee in office, and since the committee’s term was coming to an end on 31.3.2002, the petitioners passed another resolution under Rule 35(1) of the Kerala Co-operative Societies Rules, hereinafter called the "Rules" on 15.12.2001 recommending to the Co-operative Election Commission, Trivandrum, to hold election of the members of the committee. According to the petitioner, the said recommendation in the form of a resolution dated 15.12.2001 was forwarded to the Co-operative Election Commission and to the second respondent vide Ext.P5. The petitioners allege that without accepting either of the resolutions, that is without permitting the petitioners to continue in office or to order election, the second respondent proceeded with an enquiry ordered under Section 66 of the Act on various charges leveled against the committee, according to the petitioners, by a few members of the society loyal to some of the political parties ruling the State which are not represented in the present managing committee. By Ext. P8 order dated 13.11.2001 the second respondent had appointed one Smt. P.K. Alice as Enquiry officer to investigate into the various allegations leveled against the petitioners, which are the followings: (Malayalam have to insert here)************************* The petitioners contend that the Enquiry officer, namely, Smt. P.K. Alice, was not willing to oblige the second respondent by giving a report against the petitioners, and therefore the said Enquiry Officer was removed and a new Enquiry Officer was appointed vide Ext. P9 dated 12.12.2001. However, according to the petitioners, the second respondent probably influenced the enquiry officer and obtained an interim report after she was relieved of her responsibility as enquiry officer. P9 dated 12.12.2001. However, according to the petitioners, the second respondent probably influenced the enquiry officer and obtained an interim report after she was relieved of her responsibility as enquiry officer. The report contained certain allegations against the petitioners, and on the basis of which the second respondent issued Ext.P10 notice to the petitioners and though the petitioner requested for copy of the report based on which Ext.P10 was issued, without a copy of the report and without giving a proper opportunity to the petitioners. The second respondent issued the impugned order Ext.P13 superseding the committee constituted by the petitioners and appointed administrator under Section 32(1) of the Act. According to the petitioners, the whole action is politically motivated because the superseded committee did not have any member loyal to any political party constituting the present State Government. On the other hand, the respondents' case is that the additional fifth respondent and 17 others made specific allegations against the committee on corruption and mismanagement, which has resulted in heavy loss to the society and requested for their removal. On behalf of respondents 2 to 4, the Government pleader contended that the second respondent acted strictly in accordance with law in ordering an enquiry and he took appropriate action of superseding the committee, because the committee on enquiry was found to be involved in mismanagement and violation of the Act and Rules and discarded the instructions issued by the Registrar from time to time and violated the norms for giving loan, etc. According to him, the charges brought out by the Enquiry Officer in the enquiry report (produced in court at the time of hearing) are sufficiently grave to justify the impugned action of superseding the committee. Similar was the contention by counsel for the additional fifth respondent, and 17 others lodged a complaint before the Registrar and on the basis of which an enquiry was ordered. Counsel contended that the society has sustained heavy loss during the year 2000-01 and the same is on account of favouritism and mismanagement by the committee constituted by the petitioners. He has also highlighted the violations by the committee in giving interest on deposit at the rates above the prescribed limits in the circular issued by the Registrar and in advancing loans overlooking the objections raised the Chief Executive of the Bank. He has also highlighted the violations by the committee in giving interest on deposit at the rates above the prescribed limits in the circular issued by the Registrar and in advancing loans overlooking the objections raised the Chief Executive of the Bank. He canvassed for the proposition that this Court cannot sit in appeal over impugned order Section 32 and if the Court is satisfied that there are materials to justify action under Section 32, then the Court cannot go into the adequacy or otherwise of the materials based on which action under Section 32(1) is taken. 4. The main thrust of the argument of counsel for the petitioners is that the action is politically motivated and it was a deliberate action by the second respondent at the instance of political parties in power to disqualify the petitioners from contesting the next election by operation of rule 44(k) of the Rules which disqualify members of the superseded committee from contesting for one year from the date of superesession. On behalf of the petitioners, learned counsel Sri. V.M. Kurian, further contended that the petitioners were not given a copy of the interim report of the Enquiry Officer based on which the impugned action was initiated and Ext.P13 order passed without even granting 10 days time asked for perusing record and for filling detailed objections. According to him, no such report would have been submitted by the Enquiry Officer 17.12.2001 who wanted herself to be relieved of her responsibility due to pressure of other work and who was in fact substituted by another on 12.12.2001. The enquiry officer who held the enquiry and submitted an interim report is not a party to this proceeding. Of course, copy of the interim report was not given to the petitioners, even though the action was based on such report and the petitioners specifically requested for a copy in their interim replies Ext.P11 and P14. The petitioners" counsel referred to the decision of this Court in MUKKOM SERVICE CO.OP. BANK V. JOINT REGISTRAR, (1998) 1 K.L.J. 735 and contended that it is a mandatory requirement on the second respondent to give a copy of the report of enquiry under Section 66 before taking action. Counsel appearing for the respondents contended that it is enough if the contents of the report are conveyed to the petitioners, and the petitioners are not entitled to copy of the report. Counsel appearing for the respondents contended that it is enough if the contents of the report are conveyed to the petitioners, and the petitioners are not entitled to copy of the report. According to them, as per the decision of this Court, the validity of the action is not affected by non-furnishing of the copy of the report. On the legal aspect, it may be sufficient compliance of rules of natural justice, if the contents of the report are conveyed to the petitioners to enable them to file a reply. But the issue has to be looked into in the light of other attendant circumstances and the events that led to the final order impugned in this Original petition. 5. I find Ext.P8 was issued appointing Smt. P.K. Alice as enquiry officer on 13.11.2001. Thereafter on 12.12.2001 the second respondent recalled her from her assignment and appointed one John Zacharia as the new Enquiry Officer. Of course the said change of enquiry officer appears to be at the request of the first enquiry officer, Smt. P.K. Alice. However, the respondents have not produced any written request from her for relieving her of her duties. It is not known whether the first enquiry officer was in the process of preparing and sending an interim report, even though Ext.P9 changing her and appointing new enquiry officer by the second respondent did not call for any interim report. It is also not known as to what prompted the first enquiry officer who wanted to be relieved of her duties to proceed to make an interim report after being substituted by the new enquiry officer. A copy of the said report was produced in the court at the time of hearing. I find the said enquiry report is only an interim report dated 17.12.2001 and is said to have been received by the second respondent on 19.12.2001. Strangely on the very same date, i.e., on 19.12.2001 itself, the second respondent issued Ext. P10 notice proposing to supercede the committee under Section 32(1) of the Act. I have gone through the interim report based on which the impugned action is taken. The enquiry officer substantially has relied on the audit report of 2000-2001 and there is no independent enquiry or finding on major allegations. P10 notice proposing to supercede the committee under Section 32(1) of the Act. I have gone through the interim report based on which the impugned action is taken. The enquiry officer substantially has relied on the audit report of 2000-2001 and there is no independent enquiry or finding on major allegations. The most important of the allegations is that the committee is responsible for the bad debt of Rs.10,31,181.38 as seen in the balance sheet as on 31.3.2001. According to the enquiry officer there is finding in the audit report that these amounts were advanced by the committee constituting the petitioners overlooking the recommendation of the Chief Executive. Of course, the sum total of this represents 100s of loans including petty loans advanced on various applications to members of the society. Within a short time of less than one month, it is obviously not possible for the enquiry officer otherwise over burdened with work to see the various applications, verify the recommendation of the Chief Executive and the reason why the committee has overruled the chief Executive's objection while approving the loans. An enquiry involving verification of these loans will involve massive work which I am sure the Enquiry Officer, who was short of time and who was awaiting relieving order is not going to take up. It is physically impossible to make a report on this within a short period, because the report is seen made on 17.12.2001. The enquiry officer has admittedly copied only the comments of the statutory audit committee given in their report which cannot therefore be said to be the result of an independent enquiry. In this context, I have context, I have gone through the reply of the petitioners on this aspect, wherein they have stated that the amount of Rs.10,31,181.38 representing the bad debts as on 31.3.2001 was not given by their committee but the amounts include carry forward loans from earlier years. Another allegation contained in the interim report is with regard to sale of old textile goods resulting in loss of Rs.1,79,509/- which is also alleged to be on account of mismanagement. In this regard, in the their reply the petitioners have stated that the said textile was auctioned by the bank at a good price but the tendered declined to take the same, and approached High Court, which referred the matter for arbitration by the Joint Registrar. In this regard, in the their reply the petitioners have stated that the said textile was auctioned by the bank at a good price but the tendered declined to take the same, and approached High Court, which referred the matter for arbitration by the Joint Registrar. Accordingly on the basis of the arbitration award, an amount of Rs.1 lakh advanced was returned to the tenderer, and the textile was later sold accepting the highest quotation. Therefore according to the petitioners, the bank sold the goods in accordance with fair norms and loss was incurred by the bank when the matter ended in court orders and arbitration. Another allegation leveled against the petitioners was that the petitioners have given higher interest on deposits contrary to circulars of the Registrar. Though the details were not borne out by records, counsel appearing for the respondents produced a statement giving the rates recommended by the Registrar and the rates given by the Bank. According to the petitioners the Bank never got any instruction from the Registrar on the ceiling on rates of interest on deposits. Apart from this, the petitioners case is that the Bank just continued to pay the same rate of interest being paid in 1999 when the present committee took over and the petitioners did not make any increase or decrease in the rate of interest. I find from the comparative statement of approved interest and actual rates paid furnished that in some cases they have given one per cent more than the approved rate on certain term deposits. I further find that the respondents could not establish that the instructions of the Registrar in this regard are absolutely binding and the Board of Directors of the Bank have no right to fix the rates. Above all, I find in Ext. P11 the petitioners wanted a copy of the interim report and 10 days' time for verifying the records and for filing a detailed reply. However, even without granting such short time asked for filing reply and without giving a copy of the report, the very basis of the impugned action, the second respondent issued Ext. P13 in a hurry. I have referred to some of the allegations and the reply and the finding of the enquiry officer only to see whether Section 32(1) action is bona fide and the same would have been taken in the normal course. P13 in a hurry. I have referred to some of the allegations and the reply and the finding of the enquiry officer only to see whether Section 32(1) action is bona fide and the same would have been taken in the normal course. From the sequence of events born out by records, namely, (a) appointment of enquiry officer under Section 66 for enquiring into mainly three allegations on 13.11.2001; (b) enquiry officer expressed inability to proceed with enquiry on account of pressure of work, but letter not produced nor referred to in any communication of the second respondent; (c) second respondent accepts enquiry officer's difficulty and (substitutes her with another) and relieves her of her responsibility on 12.12.2001; (d) the enquiry officer who is relieved from the enquiry submits an unsolicited interim report covering more issues than those referred to her, much after being relieved of her duties on 17.12.2001, received by the second respondent on 19.12.2001; (e) the second respondent on the date of receipt of the interim report itself finds time to study the report and decided to take the extreme action by issuing notice under Section 32 on the very same day; (f) second respondent refuses to give copy of the enquiry report to the petitioners inspite of written request vide Exts. P11 and P14, (g) the second respondent does not grant 10 days applied for by the petitioners to peruse the records and file a proper reply and lastly the climax; (h) the second respondent issues the impugned order on 31.12.2001 after the Writ petition was filed by the petitioners on 28.12.2001 in this Court and before this Court considered the same and after receiving a communication in this regard. My conclusion is inescapable that the second respondent showed undue haste in getting the interim report without waiting for a final report on an enquiry which is still said to be going on and passed the impugned order without giving a fair opportunity to the petitioners. I feel Ext. P13 action does not appear to be taken to save the society, but has been taken to oust the committee from power. It is to be noticed that the second respondent's duty pursuant to the enquiry under Section 66 is to protect the interests of the society and not to act as a disciplinary authority over the Board of directors of the society. It is to be noticed that the second respondent's duty pursuant to the enquiry under Section 66 is to protect the interests of the society and not to act as a disciplinary authority over the Board of directors of the society. As far as possible he has to take corrective measures and removal of the Board under Section 32 only in extreme cases. The second respondent has forgotten the basic principle underlining Section 32 that the rule is management of the society by representative body and the exception is only their substitution by administrator. This has been repeatedly reiterated by this Court in may decisions particularly in GOVINDAN KUTTY V. VIYYUR SERVICE CO.OP. BANK, (1990) 1 K.L.T. 513; RAJAGOPALAN NAIR V. STATE OF KERALA, (1995) 2 K.L.T. 184; and, in T.T. JAMES AND OTHERS V. JOINT REGISTRAR, (1997) 1 K.L.J. 607. I know that I am not sitting in appeal over the decision under Section 32 of the Act in evaluating the adequacy or otherwise of materials based on which the action is taken under Section 32(3) to supersede the committee. But this Court will have to necessarily look into whether the action is bona fide and in order to find out same, the court has a look into the events that led to the impugned action. In this context, I find the enquiry ordered was not under Section 65, but under Section 66. Section 66 speaks of supervisory powers for taking corrective actions, whereas Section 65 speaks of enquiry for the purpose of super session which may lead to action under Section 32. Of course legally there is not bar for the second respondent to take action if materials brought on record under Section 66 enquiry are adequate to take action under Section 32. However, it is evident that in the beginning the second respondent has not taken into account the allegations as grave enough to order enquiry under Section 65 as is evident from Ext.P8 initiation of enquiry proceedings under Section 66 of the Act. The enquiry under Section 66 is still in progress and the interim report which is essentially a copy of the audit report is neither complete nor comprehensive to initiate action under Section 32 and from the action of the second respondent it is clear that the purpose of the enquiry was only to removed the Board. The enquiry under Section 66 is still in progress and the interim report which is essentially a copy of the audit report is neither complete nor comprehensive to initiate action under Section 32 and from the action of the second respondent it is clear that the purpose of the enquiry was only to removed the Board. From the above discussions I find that the super session of the committee vide Ext.P13 is an arbitrary and mala fide action by the second respondent to oblige vested interests. I therefore set aside the same. However, since the enquiry is still going on by the new enquiry officer appointed under Ext.P9, the second respondent is free to take appropriate corrective remedial or even penal action including levy of surcharge under Section 68 after receipt of final report and after complying with the legal formalities. Since I have held that Ext. P13 is arbitrary and illegal I hold that the said action does not disentitle the members of the superseded committee and it’s president from being disqualified under rule 44(k) of the Rules for contesting election. Since the normal period of the committee will be over by 31.3.2002. I do not think any purpose will be served by putting them back in management. In the circumstances I direct the first respondent, the Administrator to immediately hold elections by recommending to the Co-operative Election Commission without any delay. The election will be held within a period of three months from now. The O.P. is allowed as above.