JUDGMENT : C.N. Ramachandran Nair, J. Employees association of Thrissur Co-operative Bank is the appellant in this case challenging the judgment of the learned Single Judge upholding amendment to the bye-laws constituting sub committee of the employees for approving sanctioning of loans to borrowers. We have heard counsel appearing for the appellant, standing counsel appearing for the 3rd respondent and also Government Pleader for the remaining respondents. The bye laws of the Bank originally provided for approval of loans by the managing committee. We do not know whether managing committee has a system of constituting sub committees among themselves for sanctioning of loans depending on limit of the loan amount. Grievance of the appellant is about the amendment to the bye law constituting sub committees in each branch only with employees starting from Manager to clerk to sanction loan. According to the appellant the objective is for the managing committee to get out of responsibility and throw the blame on low level employees if the loans turn bad. Standing counsel appearing for the 3rd respondent Bank submitted that as of now Bank is under the Administrator and there is no committee to furnish instruction in the matter. 2. After hearing both sides, we feel the delegation by the managing committee is neither permissible under the scheme of the Co-operative Societies Act or under the original bye laws of the Bank. Even though the ultimate power of Bank is with general body, S. 28 of the Kerala Co-operative Societies Act authorises the General body to constitute the managing committee and entrust the management of the affairs of the society to such committee. Of course wherever provisions of the Act and Rules and bye laws required ratification of the decisions of the managing committee by the general body, the same is done. However, question raised is whether the managing committee which is the delegate of the general body can further delegate important functions like loan sanctioning to sub committees constituted by them that too only with employees. It is settled position under the scheme of the Co-operative Societies Act that Societies are run democratically by elected bodies namely managing committee elected by the general body. Managing committee itself is a delegate of the general body and therefore they cannot delegate essential functions entrusted in them under the bye law further to another delegate constituted by them. It is settled position under the scheme of the Co-operative Societies Act that Societies are run democratically by elected bodies namely managing committee elected by the general body. Managing committee itself is a delegate of the general body and therefore they cannot delegate essential functions entrusted in them under the bye law further to another delegate constituted by them. Sanctioning of loan probably is the most important and sensitive work because if loans become bad, Bank will suffer and high bad debt will lead to even closure of the Bank. Sanctioning of the loan is certainly a managerial function which cannot be delegated to clerical staff of the Bank. Secretaries and Managers are certainly officers of the Co-operative Bank and there is nothing wrong in utilizing their experience and services by the managing committee by co-ordinating them in granting the loan. However, there is no scope for completely eliminating members of the Managing Committees from the committees and sub committees constituted for sanctioning of loan. Of course surcharge proceedings under S. 68 entitles recovery of misappropriated funds from the members of the managing committee and even from employees. However we do not think S. 68 contemplates recovery of liability for bad debts from clerical staff and so much so they cannot be entrusted with the responsibility of sanctioning loan. They are also not the people with the required education or ability to appraise the genuineness of the loan or credibility of the borrower. We therefore feel that the best way is to provide for sanctioning of big loans above a limit only by the managing committee in their full meeting who will take assistance from legal advisors and the managerial staff. However, it may not be possible for the Bank to have every loan application placed before the full committee for sanctioning. So much so delegation could be possible by constituting sub committee with atleast two members of the Bank and along with probably Secretaries like Secretaries. Managers or even Assistant Managers. Further, petty loans could be authorised to be approved by General Managers or even Branch Managers under proper guidelines. We do not know whether bye law similar to one challenged in this case is there in other Co-operative Banks in other districts. In any case we feel the managing committee cannot throw the blame on bad debts arising from loans to low level employees of any society. We do not know whether bye law similar to one challenged in this case is there in other Co-operative Banks in other districts. In any case we feel the managing committee cannot throw the blame on bad debts arising from loans to low level employees of any society. We feel the Registrar of Co-operative Societies should look into the matter and he can probably issue instructions under S. 66A of the Kerala Co-operative Societies Act giving guidelines with regard to delegation of powers for sanctioning loan so that not only this Bank, but other societies can make uniform pattern of bye laws in a rational manner completely exonerating clerks, cashiers and staff other than officers from being members of the committees to sanction loans. We accordingly dispose of the Writ Appeal by vacating judgment of the learned Single Judge and by setting aside the order of the Registrar approving the bye law and by remanding the matter to the Registrar of Co-operative Societies for a re-consideration after hearing association of employees and Association of managerial staff of the Bank.