Akalakunnam Village Service Co-Operative Bank Ltd. Represented by President v. Joint Registrar of Co-Operative Societies (General)
2017-10-24
SHAJI P.CHALY
body2017
DigiLaw.ai
JUDGMENT : 1. This writ petition is filed by the petitioner seeking to quash Ext.P6 order passed by the 1st respondent dated 07.12.2012, whereby the petitioner Bank is directed to deposit amounts that are required for the expenses of conducting the enquiry in respect of a complaint filed by the 2nd respondent, and for other consequential reliefs. Material facts for the disposal of the writ petition are as follows: 2. Second respondent filed Ext.P2 complaint before the Joint Registrar to remove 1225 members from the membership of the petitioner bank. According to the petitioner, some of them are enrolled about 50 years back, and some of them have signed in the bye-law, to register it. The 2nd respondent filed W.P.(C) No.19789 of 2012 seeking direction to consider Ext.P2. The said writ petition was disposed of by Ext.P5 judgment, directing the 1st respondent to consider the petition in accordance with law. Subsequently, the Joint Registrar as per Ext.P6 directed the petitioner to remit the expenses for sending registered notices to 1225 members. 3. According to the petitioner, as per Sec.27 of the Kerala Co-operative Societies Act, 1969 [hereinafter called 'the Act, 1969'], general body is the final authority and as per Sec.29(1), general body has to approve the budget. Without any approved budget or any provision in the budget, no money can be spend by the bank. Therefore, if any money is spend, the same will be objected in the statutory audit, and will be recovered from the managing committee. The Joint Registrar is exercising the power conferred on him/her under Rule 16(4) of the Kerala Co-operative Societies Rules, 1969 [hereinafter called 'the Rules, 1969']. Such power conferred can be exercised either suo motu or on the basis of a complaint filed by a third party. Therefore, according to the petitioner, the expenses have to be met from the exchequer or if it is on the basis of a complaint filed by the 2nd respondent, the 1st respondent is vested with powers to demand the amount from the 2nd respondent. It is also stated that an amount of Rs.31,250/- was orally demanded by the 1st respondent to meet the expenses and also directed to render the services of two or three employees of the bank.
It is also stated that an amount of Rs.31,250/- was orally demanded by the 1st respondent to meet the expenses and also directed to render the services of two or three employees of the bank. According to the petitioner, even though petitioner has submitted Ext.P7 reply to Ext.P6 notice, the 1st respondent was not amenable to the request made by the petitioner. 4. Heard learned counsel for the petitioner and the learned Senior Government Pleader. Perused the documents on record and the pleadings put forth by the petitioner. From the proceedings recorded, I find that notice is not issued to the respondents. Even though notice was not issued, I had the advantage of hearing the learned Senior Government Pleader on behalf of the 1st respondent. Now, four years have elapsed from the filing of the writ petition. Since, in the nature of order I propose to pass, I do not think that it is necessary to issue notice to the respondents, at this distance of time. 5. The summary of fact discussion made above would make it clear that the sole question arising for consideration in this writ petition is, whether the 1st respondent is vested with powers to demand any expense from the petitioner bank to conduct the enquiry on the basis of the complaint filed by the 2nd respondent. The paramount contention advanced by learned counsel for the petitioner is that the issue in question is guided by Rule 16(4) of Rule, 1969. Rule 16 deals with the conditions to be complied with for admission for membership. Sub rule (4) of Rule 16 deals with conduct of enquiry in respect of ineligibility of a member, which read thus: “(4) Where a member of a society becomes ineligible to continue as such, the Registrar may of his own motion or on a representation made to him by any member of the society or by the financing Bank, by an order in writing declare that he has ceased to be a member of the society from the date of his order. The Registrar shall give such person an opportunity to state his objection, if any, to the proposed action and if the person wishes to be heard, he shall be given an opportunity to be heard before passing an order as aforesaid.” 6.
The Registrar shall give such person an opportunity to state his objection, if any, to the proposed action and if the person wishes to be heard, he shall be given an opportunity to be heard before passing an order as aforesaid.” 6. Therefore, the contention of the learned counsel for the petitioner is that, in view of the specific provision contained under sub-rule (4) of Rule 16, the demand made as per Ext.P6 by the 1st respondent cannot be sustained under law. To counter the said contention, learned Senior Government Pleader has invited my attention to Sec.67 of Act, 1969, which deals with cost of inquiry or inspection, which read thus: “67. Cost of inquiry or inspection:-- Where an inquiry is held under S.65, or an inspection is held under S.66 on the application of a creditor, the Registrar may, by order, apportion the cost, or such portion of the cost, as he may deem fit, between the society to which the society concerned is affiliated, the society, the member or creditor demanding an enquiry or inspection, and the officers or former officers of the society: Provided that:-- (a) no order of apportionment of the cost shall be made under this section unless the society or the person sought to be made liable to pay the costs thereunder has had a reasonable opportunity of being heard. (b) The Registrar shall state in writing the grounds on which the costs are apportioned.” Therefore, according to the learned Senior Government Pleader, the direction issued under Ext.P6 to foot the expenses in order to send notices is in accordance with law. 7. Having evaluated the situation and reckoning the law, I am of the considered opinion that Sec.67 of Act, 1969 deals with inquiry under Sec.65 or an inspection held under Sec.66 on the application of a creditor. Apparently, Sec.65 deals with an inquiry by Registrar into the aspects recited thereto in respect of the constitution, working and financial condition of the society, if he is satisfied that it is necessary to do so. Section 66 deals with the power of the Registrar to supervise or cause to be supervised by a person authorized by him by general or special order in writing in this behalf, the working of every society as frequently as he may consider necessary.
Section 66 deals with the power of the Registrar to supervise or cause to be supervised by a person authorized by him by general or special order in writing in this behalf, the working of every society as frequently as he may consider necessary. Therefore, the cost that is recited under Sec.67 of the Act is only with respect to the inquiry contemplated under Sec.65 and supervision and inspection under Sec.66, whereas Rule 16(4) of Rules 1969 deals specifically with enquiry into the disqualification of a member and removal of such a member. Therefore, when there is a specific provision provided under the Rules, to deal with a particular situation, the statutory authority will have to resort to the said power and confine himself to the stipulations contained thereunder. Sub-rule (4) of Rule 16 is a self-contained provision, wherein a procedure is prescribed in order to adjudicate the disqualification. 8. On a reading of the said provision, it is clear that, whenever the Registrar takes any action suo motu or on a representation made to him by any member of the society or by the financing bank, an enquiry is to be undertaken. The said provision is not empowering the 1st respondent to demand the cost of sending notices to conduct the enquiry. In that view of the matter, I am of the considered opinion that the 1st respondent did not have sufficient power to issue direction to provide cost of sending notices to the alleged ineligible members in order to conduct the enquiry. It is the statutory duty conferred on the 1st respondent, and therefore, in the absence of any power vested with the 1st respondent to seek cost of the enquiry, it is illegal on the part of the 1st respondent to demand so. Moreover, when a statute prescribes a particular modality in order to conduct an enquiry, the same will have to be scrupulously and strictly followed by the statutory authority. 9. In my considered opinion, 1st respondent has overlooked the specific provision contained under Rule 16(4) of Rules, 1969, and therefore, Ext.P6 cannot be sustained under law. Therefore, I quash Ext.P6. If the proceedings are still pending, 1st respondent shall proceed with the enquiry in accordance with law, taking into account the directions and observations contained above. The writ petition is allowed accordingly.