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2010 DIGILAW 207 (KER)

Calicut City Service Co-operative Bank Ltd. , Chalappuram, Calicut v. Registrar of Co-operative Societies, Thiruvananthapuram

2010-03-10

K.SURENDRA MOHAN

body2010
Judgment : The Petitioner is the President of the Calicut City Service Co-operative Bank Ltd No. D 2777, a Co-operative Society registered under the Kerala Co-operative Societies Act, 1969. The Society is classified as Special Grade-I. According to the petitioner, the bank is functioning in an excellent manner and is one of the best Co-operative Societies in the State. It has deposits worth more than 45 Crores and loans outstanding to the tune of Rs.39 Crores. It is stated to be the only bank in the Co-operative Sector having ISO certification. 2. According to the petitioner, ever since May 2006, after the present Government came to power, there has been gross interference in the day-today affairs of the Society for the reason that the present Managing Committee belongs to a rival political party. Therefore, for one flimsy reason or the other, enquiries were being instituted by the authorities into the affairs of the Society with the object of fishing out some reason to take action against the present management thereof. 3. Accordingly, the petitioner contends that during the 26 months preceding the filing of this writ petition, there has been five vigilance enquiries and one enquiry under Section 66 of the Act, which is stated to be continuing. According to the petitioner, all the enquiries are based on the same set of allegations regarding the use of the official vehicle of the bank, promotions claimed by the employees, etc. A vigilance enquiry conducted by the fourth respondent has found that there was nothing wrong with the affairs of the bank. The petitioner relies on Ext.P1 to point out that there is an enquiry in progress into a complaint made by one Sudheer. V before the second respondent. The petitioner co-operated with all the enquiries. However, the allegations against the petitioner could not be substantiated in any one of the enquiries that were conducted one after another into the affairs of the society. 4. While so, the petitioner was served with Ext.P5, a notice issued by the fifth respondent directing the Secretary of the Society to produce before it the documents listed therein. He has also issued Exe.P4 directing the driver of the Society to attend his office for being questioned. 4. While so, the petitioner was served with Ext.P5, a notice issued by the fifth respondent directing the Secretary of the Society to produce before it the documents listed therein. He has also issued Exe.P4 directing the driver of the Society to attend his office for being questioned. The petitioner understood from the above proceedings that some enquiry was being conducted by the fifth respondent, but, he was not in a position to understand the basis on which the same was initiated. Therefore, he filed this writ petition challenging the enquiry that was being conducted, without producing the order by which the enquiry was ordered. Later on, pursuant to an interim order dated 3.12.2008, the order was produced in court by the Government Pleader. Subsequently, the writ petition was amended producing the same as Ext.P6 and by incorporating necessary amendments in the writ petition challenging Ext.P6 also. Therefore, at present, the challenge in this writ petition is against Ext.P6 proceedings of the first respondent. 5. As per Ext.P6, the first respondent has directed the Co-operative Vigilance Officer, DIG of Police, Co-operative Vigilance Office, Thiruvananthapuram, to conduct an impartial enquiry into a complaint submitted by Sri. A.V.Vaisakh. The complaint referred to in Ext.P6 is produced by the petitioner, marked Ext.P2. In Ext.P2, Sri Vysakh has complained that he was pressurized by the office bearers of the Society into submitting a letter requesting that he may be reverted to the post of a Peon from that of a Senior Clerk. On the basis of the said request, he complains that he was actually reverted. He has further made allegations against the action of the petitioner and other office bearers in forcing another employee by name, Vinod to submit his resignation. Consequent to such resignation, the said person is alleged to have committed suicide by consuming poison. Allegations are also made against misuse of the official vehicle of the Bank. Ext.P2 further contains allegations regarding misuse of pledged articles of gold as well as political interference in the functioning of the Society. Therefore, he has requested for appropriate action to ensure that he is permitted to work peacefully and to earn his livelihood. 6. Ext.P2 further shows an endorsement in its margin made by the concerned Minister directing the conduct of a Vigilance enquiry. The endorsement has been numbered as 680/MCCD/07. Therefore, he has requested for appropriate action to ensure that he is permitted to work peacefully and to earn his livelihood. 6. Ext.P2 further shows an endorsement in its margin made by the concerned Minister directing the conduct of a Vigilance enquiry. The endorsement has been numbered as 680/MCCD/07. A reading of Ext.P6 shows that, reference No.1 therein is the endorsement of the Minister referred to above. Ext.P6 makes reference to two other documents, one of which is an enquiry report of the fourth respondent and the covering letter of the second respondent dated 5.7.2007. The second document is a letter dated 7.8.2008 of the Government. On the basis of the above, the first respondent has directed the Co-operative Vigilance Officer to conduct an impartial enquiry into the complaint of Sri A.V. Vaisakh and to submit a report. The first respondent has forwarded to the 5th respondent, a copy of the enquiry report of the fourth respondent referred to as item No.2 in Ext.P6 and also the Government letter referred to as item No.3 therein. 7. It is evident from a reading of Ext.P6 that the fourth respondent had conducted some enquiry into the complaint of Sri A.V. Vaisakh. It is the case of the petitioner that an enquiry had been so conducted by the fourth respondent and that the complaint was found to be without any substance. However, a copy of the said report has not been produced before me and therefore, I am not in a position to say anything about the contents thereof. The letter of the Government referred to as item No.3 in Ext.P6 has also not been produced before me. However, it is agreed before me by the petitioner as well as the learned Senior Government Pleader that Ext.P6 has been issued by the first respondent in exercise of the power under Section 68A of the Co-operative Societies Act, 1969, hereinafter referred to as ‘the Act’ for short. Section 68A reads as follows:- “Vigilance Officer – (1) The Government shall appoint an officer, not below the rank of Deputy Inspector General of Police, as Vigilance Officer with powers to enquire into and investigate the cases of misappropriation, corruption and any other major irregularities in the society as may be referred to him by the Registrar 2. The Vigilance Officer shall conduct the inquiry and investigation in such manner, as may be prescribed. 3. The Vigilance Officer shall conduct the inquiry and investigation in such manner, as may be prescribed. 3. The Vigilance Officer shall be under the administrative control of the Registrar of Cooperative Societies. Provided that the powers of the Registrar of Co-operative Societies under this section shall not be conferred on any other person” 8. The above provision confers power on the Registrar of Co-operative Societies to direct an enquiry through the Vigilance Officer into cases of misappropriation, corruption and any other major irregularities in the Society, as may be referred to him. Therefore, the matters to be referred to the vigilance Officer should concern cases of ‘misappropriation’, ‘corruption’ and ‘any other major irregularities in the Society’. The proviso to the above provision, stipulates that the Registrar shall not delegate the powers under the section to any other person. Therefore, the above provision confers a discretion exclusively on the first respondent to refer for investigation of the Vigilance Officer, cases of misappropriation, corruption or other major irregularities. Though ‘misappropriation’ and ‘corruption’ are expressions with a large measure of definiteness in their meaning content, the expression ‘any other major irregularities’ is general in connotation and could take in all varieties of irregularities that could be characterized as ‘major’, by the first respondent. The exclusive authority for deciding whether a particular case is one that requires investigation by the Vigilance Officer would fall within the discretion of the Registrar under Section 68A of the Act or in other words, the above provision confers an exclusive authority on the Registrar to decide whether a case involves misappropriation, corruption or other major irregularities that warrant investigation thereof by the Vigilance Officer. The proviso makes it abundantly clear that the discretion has to be exercised by the Registrar himself without the power being delegated to any other person. 9. Ext.P2 shows that the complaint therein is mainly relating to the service of the complainant. However, he has made complaints regarding other general aspects also concerning the functioning of the Society. Whether the allegations in the complaint constitute a ‘major irregularity’, as contemplated by Section 68A is a matter that had to be decide by the first respondent. I also take note of the fact that the fourth respondent had conducted an enquiry into the complaint and had submitted a report which is referred to as item No.2 in Ext.P6. Whether the allegations in the complaint constitute a ‘major irregularity’, as contemplated by Section 68A is a matter that had to be decide by the first respondent. I also take note of the fact that the fourth respondent had conducted an enquiry into the complaint and had submitted a report which is referred to as item No.2 in Ext.P6. Therefore, the first respondent had the benefit of the said report of enquiry, a Government letter as well as the complaint of Sri A.V. Vaisakh, Ext.P2 as materials before him while issuing Ext.P6. However, there is nothing in Ext.P6 to warrant a conclusion that the first respondent had bestowed his mind to any of the documents before him or the materials that form the basis of the said documents. What is stated in Ext.P6 is only that the complaint of Sri. A.V. Vaisakh has been forwarded for enquiry by the Government. The statement clearly shows that the first respondent has ordered the enquiry merely acting on the directions of the Government. In fact, a reading of Ext.P6 shows that the 1st respondent had simply forwarded Ext.P2 for investigation, without applying his mind. Ext.P2 as noted above, contains an endorsement by the Minister concerned directing an enquiry to be conducted. It is therefore clear that Ext.P6 has been issued in obedience to the direction of the Minister. .Therefore, the first respondent has issued Ext.P6 without exercising the discretion vested in him. The first respondent was merely acting under the dictation of his superior authority, in this case, the Minister. Therefore, Ext.P6 cannot be justified as a proper exercise of the power under Section 68A of the Act. 10. The counsel for the petitioner has placed before me an unreported decision of this court in WP(C) No.236 of 2007 dated 9.1.2007. In the said case, an enquiry was ordered under Section 65 of the Act. The complaint, on the basis of which the enquiry was ordered, showed that the concerned Minister had forwarded the same to the Joint Registrar. It has been held in the said case that ordering of an enquiry on the basic of an endorsement made by the Minister was nothing but obedience of an order by the superior authority. In the said case also, it was found that the order was without application of mind. I am in respectful agreement with the dictum in the above case. 11. In the said case also, it was found that the order was without application of mind. I am in respectful agreement with the dictum in the above case. 11. The learned Senior Government Pleader relies on the decision of this court reported in Sadasivan K.G.V. Joint Registrar and Others (2008 (1) ILR Kerala 64). In the said case, an inspection ordered under Section 66(2) of the Act was under challenge. It was contended that the action in the said case was initiated on the basis of a complaint by a member of the Society. Since the provision provided for initiation of proceedings only on the application of a creditor of the society or the Registrar acting on his own motion, it was contended that the action was unsustainable. Rejecting the said contention, this court held that since the Registrar had the power to act on his own motion, the Registrar was free to initiate action on the basis of a complaint by another person also. If the action has been initiated by the Registrar on his own, the material on the basis of which such action was initiated, is immaterial. 12. The above decision has no direct relevance to the fact situation of the present case. That was a case in which the Registrar had acted on the basis of a complaint made by a member of the society, presumable with proper application of mind. In this case, as I have already found, the first respondent has issued Ext.P6 without application of mind. Since the legislative intent is unmistakably clear that the discretion in the matter of initiating a Vigilance inquiry under Section 68A of the Act is to be exercised exclusively by the Registrar and no one else, Ext.P6 is unsustainable. 13. For the foregoing reasons, the proceedings of the first respondent, evidenced herein by Ext.P6 is set aside. However, it is made clear that this judgment will not stand in the way of the first respondent considering the matter afresh and initiating action on the complaint of Sri. A.V. Vaisakh, if the conduct of an enquiry under Section 68A is found necessary, on a proper application of mind. This writ petition is allowed. No costs.