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2009 DIGILAW 232 (KER)

Bank Ltd. v. Registrar of Co-operative Societies

2009-03-05

B.RADHAKRISHNAN

body2009
Judgment : 1. Petitioner, the president of the third respondent, Kerala State Co-operative Agricultural and Rural Development Bank Ltd.No.4017, challenges Ext.P5 decision of the Registrar of Co-operative Societies, granting deemed affiliation to the second respondent, a Taluk Co-operative Agricultural and Rule Development Bank, to the third respondent apex bank. The relevant facts are as follows: (a)Following directions of this Court in O.P.No.10603/00, the Government issued Ext.P1, permitting, among others, the second respondent, to continue to function. The third respondent apex bank was required to take immediate action for granting affiliation to the six Primary Agricultural Co-operative and Rural Development Banks enlisted in Ext.P1. That includes the second respondent. (b)The second respondent submitted an application to the third respondent for affiliation. (c)That was rejected as per Ext.P2 resolution on 112.2004 on the ground that the resolution adopted by the committee of the second respondent seeking affiliation is dated 1.1998, i.e, before Ext.P1 Government Order and the managing committee which was in office while making the application had not passed any resolution in that regard. It was also stated that the second respondent cannot operationalise its activities unless there is bifurcation of the establishment of the parent bank. (d) xt.P3 communication was issued by the General Manager of the third respondent seeking to intimate the second respondent the decision to reject its application for affiliation. (e) The second respondent asserts that Ext.P3 was not received. The third respondent General Manager, in his counter affidavit, states that the postal articles were returned “undelivered”. The petitioner’s plea is that the article was returned “unclaimed”. This Court perused the original of that postal article from the file produced by the third respondent. The endorsement is that the article was unclaimed. (f) The operation of Ext. P1 Government Order to the extent it directed the retention of the second respondent stood stayed by this Court from 310.2006 as per Ext.P4 interim order in W.P. (C).28496/06. (g) Thereafter, acting on a representation dated 20.7.2006 made by the convenor of the administrative committee of the second respondent and after considering the materials enumerated in Ext.P5, that decision, the impugned one, was issued by the Registrar, granting deemed affiliation to the second respondent in terms of Section 8A of the Kerala Co-operative Societies Act, 1969, hereinafter, the ‘Act’ for short. (h) On 212.2006, i.e., on the date of receipt of Ext.P5 by the third respondent, Ext.P6 is issued by the Managing Director of the third respondent to the Registrar, stating that the second respondent cannot be treated as an affiliated member of the third respondent. This writ petition is filed on 1.2007, seeking to quash Ext.P5. 2. No interim relief was granted in this case. 3. The plea raised is that the impugned decision is without authority and against the provisions of the Act. On the basis of the fact that the communication, Ext.P3, is to be presumed as having been duly delivered having regard to the endorsement “unclaimed”, it is argued on behalf of the petitioner that on the face of Section 8A(3), only an appeal could have been filed before the competent authority, that too, within the statutory period of 30 days and that there is no power to condone the delay in filing even such an appeal. Bereft of that, there is no other recourse, by which, the convenor of the administrative committee could have made a representation on 20.7.2006, triggering the impugned order declaring deemed affiliation, it is contended. Learned counsel for the petitioner referred to the decision of this Court in Kottayam Co-operative Bank v. State of Kerala (1988 (1) KLT 827) to contend that the power of the Registrar or the Government does not extend, in any manner, enabling them to interfere with the democratic status of the co-operative societies and those authorities cannot act except in situations where the statute provides specific power. 4. The second respondent has filed a counter affidavit, pointing out that there could be no objection of any overlapping in view of Ext.R2(d), by which, amendment to the byelaws has been made and approved in relation to the Wayanad Primary Co-operative Agricultural and Rural Development Bank and that even earlier, applications and reminders for affiliation stood without being considered by the third respondent. It is pointed out that Exts. R2(e) top R2(h) tend to show that the plea of the third respondent that the postal article forwarding Ext.P3 was returned “unclaimed” is not sustainable. 5. It is pointed out that Exts. R2(e) top R2(h) tend to show that the plea of the third respondent that the postal article forwarding Ext.P3 was returned “unclaimed” is not sustainable. 5. The learned Advocate General, relied on the decision of the Apex Court in National Highways Authority of India v. Monoranjan R. Mondal & Another [2001 AIR SC 3471) (Para 16,), to state that an order passed but retained in file without being communicated, can have no force or authority whatsoever and the same has no valid existence in the eye of law or claim to have come into operation and effect. It is pointed out that no reliance can be placed on the same to even assert a claim based on its contents. This submission is made on the premise of the plea in the third respondent’s counter affidavit that the postal article was returned “undelivered”. 6. Following the order issued on 22.2009, the third respondent has produced the minutes book Vol.XIII of the Board of the third respondent, which takes in the board resolutions till 19.7.2006. This Court has perused the said original. Pages 288 to 295 carry the minutes of the meeting of the board of directors of the third respondent, held on 112.2004. Agenda item No.B.12 therein is the same as Ext.P2. 7. The aforesaid facts would show that the second respondent’s application or affiliation, which was received by the third respondent on 20.11.2004, was considered by the Board of the third respondent on 112.2004. The second respondent would say that the application for affiliation was made on 111.2004. With the aid of the minutes book, the credibility of Ext.P2 is established. Therefore, it has to be taken that the application dated 111.2004 made by the second respondent for affiliation was received in the office of the third respondent on 20.11.2004, was considered by the Board of the third respondent on 112.2004 and it was resolved to reject that application. 8. With the aforesaid fact situation, Section 8A of the Act calls for consideration. The said provision reads as follows: Affiliation to apex society:- (1) Every Primary Co-operative Society or Central Co-operative Society may within such time and in such manner, as may be prescribed, apply for affiliation to the concerned apex society or Central Society as the case may be. With the aforesaid fact situation, Section 8A of the Act calls for consideration. The said provision reads as follows: Affiliation to apex society:- (1) Every Primary Co-operative Society or Central Co-operative Society may within such time and in such manner, as may be prescribed, apply for affiliation to the concerned apex society or Central Society as the case may be. .(2) Where the apex society or central society does not, within sixty days from the date of receipt of the application for affiliation, determine whether such affiliation should be given or not, such affiliation shall be deemed to have been given to the appellant society from the date on which the said period of sixty days expires. .(3) When the apex or Central Society, as the case may be, rejects and application for affiliation under sub-section (1), the aggrieved society may file an appeal before the Registrar against such rejection within thirty days from the date of receipt of the order of rejection and the Registrar shall dispose the appeal within sixty days from the date of appeal. 9. The application for affiliation having been considered within a period of 60 days from the date of receipt of that application, the deeming provision contained in Section 8A(2) does not operate. The said provision is essentially one that provides for affiliation by default to consider. What is provided is that the question whether affiliation should be given or not has to be determined within a period of 60 days and if the determination of that question is not made within that period of 60 days, the application for affiliation is deemed to have been granted and the affiliation is deemed to have been given. The status of affiliation is automatic on the event of expiry of the period of 60 days fixed under Section 8A(2). It does not depend upon any further act of declaration or any direction that the Registrar may give. 10. Having shown that the decision was taken on 112.2004 to reject the application of the second respondent, the question is whether the third respondent had communicated that decision to the second respondent. Ext.P3 shows that on 1.2005 (6.1.2005), the decision contained in Ext.P2 resolution was issued by the General Manager of the third respondent to the second respondent. The postal article, as already noticed, shows that the said material was returned unclaimed. Ext.P3 shows that on 1.2005 (6.1.2005), the decision contained in Ext.P2 resolution was issued by the General Manager of the third respondent to the second respondent. The postal article, as already noticed, shows that the said material was returned unclaimed. Obviously therefore, this is a case where the decision was communicated to the second respondent by the third respondent and against that decision of rejection, the remedy available to the second respondent was to file an appeal under Section 8A(3) to the Registrar. But that appeal has to be filed within a period of 30 days from the date of receipt of the order of rejection. Ext.R2(g) categorically show that the second respondent does not have a case that any appeal was filed against the decision of the third respondent as contained in Ext.P2 resolution. The second respondent would take the stand that it submitted Ext.R2(c) application supported by Ext.R2(b) resolution and that it had submitted the application on 27.01.2000 and subsequent communications dated 212.2000 and 111.2004 are only reminders accompanied by earlier applications and communications. It seeks to support its case with Ext.R2(e), by which, the General Manager of the third respondent has informed the president of the second respondent that the matter is taken up with the Registrar. The plea of the second respondent is that even in Ext.R2(e), the third respondent does not take the stand that it had rejected the second respondent’s application for affiliation. However, as already noticed, the fact of the matter remains that going by the original records, the third respondent has been able to show that the second respondent’s application for affiliation, following Ext.P1 government Order, was considered by the Board of the third respondent on 112.2004 and rejected and such decision was communicated to the second respondent. The fact that the said postal article was returned unclaimed does not, by itself, till the case in favour of the second respondent. 11. Withthe aforesaid, it needs to be observed that all that has been stated in Ext.P2 is that the application for affiliation is not supported by the resolution of the managing committee of the second respondent, which was in office at the time of making the application and that the resolution that was placed along with the application was one drawn on 1.1998, before Ext.P1 decision of the Government. Proper application by the subsequent committee which enters office to manage the affairs of the second respondent, supported by a resolution in that regard drawn up by that society, could nevertheless be considered. The only remaining reason was the assumption of the third respondent that the second respondent could become viable only on bifurcation of the Wayanad PCARD Bank. That stand in Ext.P2 does not survive the decision of this Court in W.P.(C).26399/06 (judgment dated 19.2.2009) as to the effect of the amendment to Section 2(oc) of the Act, including the proviso thereto. By the operation of that provision, which is mandatory, the areas of operation of the existing PCARD banks would stand statutorily regulated. Therefore, while the impugned Ext.P5 does stand as of now, it being incapable of being faulted on any jurisdictional issue, there would be no legal impediment for the second respondent to apply de novo for affiliation with the third respondent. However, any decision of the third respondent in that regard would be in accordance with Section 8A of the Act and cannot be thrust on it otherwise. The democratic fabric of the third respondent and such sustenance of the second respondent provides for a decision by the third respondent on any such application of the second respondent. 12. For the foregoing reasons, this writ petition is allowed, quashing Ext.P4 and directing that the third respondent shall consider any application that the second respondent may make de novo for affiliation, in accordance with Section 8A of the Act.