JUDGMENT : The petitioner who was the President of Edamulackal Service Co-operative Bank Ltd.No.2047 has filed this writ petition, on 30.11.2017, under Article 226 of the Constitution of India seeking a writ of certiorari to quash Ext.P1 notice dated 21.11.2017 issued by the 3rd respondent Joint Registrar under sub-section (1) of Section 32 of the Kerala Co-operative Societies Act, 1969 (for brevity 'the Act') and also Ext.P3 communication dated 28.11.2017, whereby the 3rd petitioner was required to be present in the office of the 3rd respondent on 30.11.2017, for personal hearing in connection with Ext.P1 notice. The petitioner has also sought for a declaration that the proposal to invoke the power of supersession under Section 32 of the Act against the managing committee of the Society is ultra vires the Act, malafide and amounts to gross abuse of the powers vested in respondents 2 and 3. 2. During the pendency of this writ petition, the 3rd respondent issued Ext.P6 order dated 1.12.2017, whereby the managing committee of the Society stands superseded under sub-section (1) of Section 32 of the Act. The petitioner filed I.A.No.19919 of 2017 seeking an order to amend the writ petition by incorporating additional statement of facts, grounds and prayers. The said interlocutory application was allowed on 11.12.2017. 3. The 3rd respondent has filed a counter affidavit on 11.12.2017, opposing the reliefs sought for in this writ petition. 4. On 12.12.2017, when this writ petition came up for admission, the learned Special Government Pleader took notice for respondents 1 to 4 and urgent notice on admission through special messenger was ordered to respondents 5 and 6. 5. Heard the learned Senior Counsel for the petitioner, the learned Special Government Pleader appearing for respondents 1 to 4 and also the learned counsel for the 5th respondent Society. 6. The learned Senior Counsel for the petitioner would contend that, instead of proceeding to surcharge the members under Section 68 of the Act, based on the interim report submitted by the Inquiry Officer under Section 65 of the Act, the 3rd respondent Joint Registrar by Ext.P6 order superseded the managing committee, invoking the provisions under sub-section (1) of Section 32 of the Act. Though, Ext.P1 is purported to be a notice, it contains a decision of the 3rd respondent to supersede the managing committee of the 5th respondent Society and as such, there is denial of pre-decisional opportunity provided under sub-section (1) of Section 32 of the Act. To Ext.P1 show cause notice the members of the managing committee submitted Ext.P4 reply pointing out that the managing committee is in no way connected with the irregular and improper conduct attributed to the Secretary and the Assistant Secretary of the Society and that, the committee has been vigilant in preventing their misdeeds. The learned Senior Counsel would submit that, the materials relied on by the 3rd respondent Joint Registrar in Ext.P1 show cause notice and also in Ext.P6 order of supersession are against the Secretary, the Assistant Secretary and other staff of the Society and that, the only allegation made against the managing committee is that, the committee failed to take appropriate action. The said allegation, by itself, will not attract the provisions of clause (a) of sub-section (1) of Section 32 of the Act, as neither of the three misconducts, i.e., (i) persistently making default; (ii) negligent in the performance of the duties imposed by the Act or the rules or the bye-laws; or (iii) doing anything which is prejudicial to the interests of the Society is attracted. 7. Per contra, the learned Special Government Pleader appearing for respondents 1 to 4 would contend that, the 3rd respondent Joint Registrar has issued Ext.P6 order of supersession on a finding that the managing committee of the 5th respondent Society is guilty of persistent default in the performance of the duties imposed on it by the Act, the Rules and the bye-laws and that the managing committee did such acts with a culpable mind. The reasoning of the 3rd respondent in Ext.P6 is perfectly legal, which warrants no interference in exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India. Moreover, before issuing the order of supersession, the 3rd respondent has consulted the Circle Co-operative Union and the Financing Bank and considered their opinion. The learned Special Government Pleader would also point out that the Administrator has taken charge on 1.12.2017 itself, as evidenced by Ext.R3(b) report. 8. Moreover, before issuing the order of supersession, the 3rd respondent has consulted the Circle Co-operative Union and the Financing Bank and considered their opinion. The learned Special Government Pleader would also point out that the Administrator has taken charge on 1.12.2017 itself, as evidenced by Ext.R3(b) report. 8. Edamulackal Service Co-operative Bank Ltd., the 5th respondent herein, is a Co-operative Society registered under the Act and the petitioner was the President of that Society. The previous managing committee of the Society was in office from 24.8.2009 till 21.8.2014 and the present managing committee came into office on 21.8.2014. Therefore, as on the date of issuance of Ext.P1 show cause notice under sub-section (1) of Section 32 of the Act, the present managing committee was in office for more than three years. 9. On receiving complaint from some of the members of the 5th respondent Society as to grave irregularities and malpractices in the sanctioning of loans without obtaining legal opinion and registering 'gehan' by misusing copy of the security documents already furnished by such members for availing loans, the 4th respondent Assistant Registrar conducted a preliminary enquiry through the Unit Inspectors. In the said enquiry, serious irregularities and malpractices were detected and therefore the 4th respondent submitted a report dated 17.8.2017 to the 3rd respondent Joint Registrar for further action. Considering the gravity of the irregularities and malpractices detected in the preliminary report, the 3rd respondent Joint Registrar ordered an inquiry under Section 65 of the Act into the working of the 5th respondent Society, by the order dated 31.8.2017, whereby the Unit Inspector, Anchal in the office of the Assistant Registrar of Co-operative Societies, Punalur, was appointed as the Inquiry Officer. The Inquiry Officer submitted an interim report dated 23.10.2017, which forms part of Ext.P3 communication dated 28.11.2017 of the 3rd respondent. After satisfying himself that the committee of the Society was guilty of persistent default in the performance of the duties imposed on it by the Act, the Rules and the bye-laws, justifying initiation of proceedings for supersession under sub-section (1) of Section 32 of the Act, the 4th respondent issued Ext.P1 notice dated 21.11.2017 to the petitioner and other members of the managing committee, under sub-section (1) of Section 32 of the Act, to show cause within five days from the date of receipt of the notice, why the managing committee shall not be superseded. It was made clear in Ext.P1 that if the members of the managing committee require a personal hearing, they will have to appear before the 3rd respondent on 30.11.2017 at 11.00 am. 10. On 28.11.2017, the petitioner submitted Ext.P2 request before the 3rd respondent for furnishing him copy of the documents referred to in Ext.P1 show cause notice and also to grant a period of 15 days for giving reply. The 3rd respondent was also requested to furnish a copy of remarks, if any, provided by the District Co-operative Bank, which is the Financing Bank, and also the Circle Co-operative Union. On receipt of Ext.P2 request, the 3rd respondent, along with Ext.P3 communication dated 28.11.2017, furnished the petitioner a copy of the interim report dated 23.10.2017 submitted by the Inquiry Officer and also the documents referred to as Sl.Nos.1 and 3 in Ext.P1 show cause notice. By Ext.P3, the petitioner was informed that the personal hearing will be conducted on 30.11.2017 itself, as stated in the show cause notice. 11. The petitioner, on behalf of the managing committee of the Society, submitted Ext.P4 reply dated 30.11.2017 to Ext.P1 notice. The petitioner and other members of the managing committee attended the personal hearing conducted on 30.11.2017. 12. Based on the interim report, the 3rd respondent requested the Circle Co-operative Union, Pathanapuram and the Kollam District Co-Operative Bank Ltd. to offer their remarks. The Circle Co-operative Union, vide Resolution No.10/17 dated 29.11.2017 informed that, the continuance of the existing Board of Directors is harmful to the interests of the Society and its members and hence necessary action may be taken under Section 32 of the Act against the Board of Directors. The District Co-operative Bank has also given their opinion vide Resolution No.1216 dated 27.11.2017 stating that, appropriate action should be taken against the Board of Directors of the Society. 13. In the interim report dated 23.10.2017, the Inquiry Officer has pointed out the following irregularities; (i) misappropriation of cash balance; (ii) sanctioning of loans without the knowledge or consent of the members; (iii) misappropriation of amount by not accounting repayment of loan; and (iv) misappropriation of amount by not accounting the fixed deposits. 14. In the personal hearing conducted by the 3rd respondent on 30.11.2017, the President and eight members of the managing committee submitted their statements in writing. 14. In the personal hearing conducted by the 3rd respondent on 30.11.2017, the President and eight members of the managing committee submitted their statements in writing. In the said statements, they have admitted the malpractices occurred in the Society. However, they alleged that the Secretary and the Assistant Secretary are the persons responsible for all those malpractices. One Abhilash, another member of the Board of Directors has given a statement to the effect that, the members of the Board of Directors and the Secretary colluded with each other, which led to all those malpractices. In the said statement, it was alleged that, even though the Secretary was placed under suspension, he was actually controlling the managing committee. After considering the relevant materials, the 3rd respondent found that the managing committee of the Society is guilty of persistent default in the performance of the duties imposed on it by the Act, the Rules and the bye-laws and caused financial loss to the Society. The 3rd respondent has also found that the members of the managing committee did such acts with a culpable mind. In such circumstances, the 3rd respondent issued Ext.P6 order of supersession under sub-section (1) of Section 32 of the Act. 15. Section 32 of the Kerala Co-operative Societies Act deals with supersession of a committee. The 3rd respondent has also found that the members of the managing committee did such acts with a culpable mind. In such circumstances, the 3rd respondent issued Ext.P6 order of supersession under sub-section (1) of Section 32 of the Act. 15. Section 32 of the Kerala Co-operative Societies Act deals with supersession of a committee. As per sub-section (1) of Section 32, if the Registrar, after an enquiry by himself or through his subordinates or on a report of the financing bank, or the Vigilance and Anti Corruption Bureau of the Government or the Vigilance Officer or otherwise, is satisfied that the committee of any society, (a) persistently makes default or is negligent in the performance of the duties imposed on it by the Act or the rules or bye-laws or does anything which is prejudicial to the interests of the society; or (b) wilfully disobeys or fails to comply with any lawful order or direction issued under the Act or the rules; or (c) makes any payment contrary to the Act or the rules or the bye-laws or causes any loss or damage to the assets of the society, by breach of trust or wilfull negligence; or (d) misappropriates or destroys or tampers with the records or causes the destruction of records to cover up any misconduct or malpractice, the Registrar may, after giving the committee an opportunity to state its objections, if any, by order in writing, remove the committee and appoint in its place, one administrator or an administrative committee consisting of not more than three individuals, one among them as convener, who need not be members of the society, to manage the affairs of the society for a period not exceeding six months. The 3rd proviso to sub-section (1) of Section 32 provides that, the Board of a Co-operative Society shall not be superseded or kept under suspension where there is no Government share holding or loan or financial assistance or any guarantee by the Government or any Board or Institutions constituted by the Government. Vide the Co-operative Societies (Amendment) Act, 2017, after the third proviso to sub-section (1) of Section 32 of the Act, Explanation I was inserted, after renumbering the existing explanation as Explanation II. Vide the Co-operative Societies (Amendment) Act, 2017, after the third proviso to sub-section (1) of Section 32 of the Act, Explanation I was inserted, after renumbering the existing explanation as Explanation II. Going by sub-section (2) of Section 32, the Registrar shall consult the financing bank and Circle Co-operative Union or State Co-operative Union, as the case may be, before passing an order under sub-section (1). 16. Sub-section (3) of Section 32, which begins with a non obstante clause provides that, notwithstanding anything contained in sub-section (1) or sub-section (2) it shall not be necessary to give an opportunity to the committee to state its objections and to consult the Unions and financing banks, in cases where the Registrar is of the opinion that it is not reasonably practicable to do so, subject however to the condition that in such cases the period of supersession shall generally be for six months and in case a new committee cannot be constituted or enter upon office in accordance with the bye-laws of the society within the period of supersession, the period may be extended for a further period not exceeding six months in the case of a co-operative society only after consulting the Circle Co-operative Union concerned; and in the case of an Apex Society or a Central Society only after consulting the State Co-operative Union. 17. In State of M.P. v. Sanjay Nagayach [ (2013) 7 SCC 25 ], a decision relied on by the learned Senior Counsel for the petitioner, the Apex Court, in the context of Section 53 of the Madhya Pradesh Co-operative Societies Act, 1960 held that, t he Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with pre-conceived notion and shall not speak his masters' voice, because the formation of opinion must be his own, not somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the society and its members, but in such situations, they have to act bona fide and within the four corners of the Statute. In that case, the order of supersession was passed by the Joint Registrar after a period of two and a half years of the issuance of show cause notice and most of the charges levelled against the Board of Directors were related to the period when the previous committee was in office and even the charges based on the Audit Report dated 25.9.2008 were also rectified by the Board of Directors by addressing the primary societies. In paragraph 35 of the judgment, the Apex Court laid down the general directions in the matter of supersession of the elected committee, which read thus; “35. Further, we are inclined to give the following general directions in view of the mushrooming of cases in various courts challenging orders of supersession of elected Committees: (1) Supersession of an elected managing Committee/ Board is an exception and be resorted to only in exceptional circumstances and normally elected body be allowed to complete the term for which it is elected. (2) Elected Committee in office be not penalised for the short-comings or illegalities committed by the previous committee, unless there is any deliberate inaction in rectifying the illegalities committed by the previous committees. (3) Elected committee in office be given sufficient time, say at least six months, to rectify the defects, if any, pointed out in the audit report with regard to incidents which originated when the previous committee was in office. (4) Registrar/Joint Registrar are legally obliged to comply with all the statutory formalities, including consultation with the Financing Banks/Controlling Banks etc., Only after getting their view, an opinion be formed as to whether an elected committee be ousted or not. (5) Registrar/Joint Registrar should always bear in mind the consequences of an order of supersession which has the effect of not only ousting the Board out of office, but also disqualify them for standing for election in the succeeding elections. Registrar/Joint Registrar therefore is duty bound to exercise his powers bona fide and not on the dictation or direction of those who are in power. Registrar/Joint Registrar therefore is duty bound to exercise his powers bona fide and not on the dictation or direction of those who are in power. (6) Registrar/Joint Registrar shall not act under political pressure or influence and, if they do, be subjected to disciplinary proceedings and be also held personally liable for the cost of the legal proceedings. (7) Public money not to be spent by the State Government or the Registrar for unnecessary litigation involving disputes between various factions in a co-operative society. Tax payers money is not expected to be spent for settling those disputes. If found necessary, the same be spent from the funds available with the concerned Bank.” 18. In Rajagopalan Nair v. State of Kerala [ 1995 (2) KLT 184 ], another decision relied on by the learned Senior Counsel for the petitioner, a learned Judge of this Court, in the context of sub-section (1) of Section 32 of the Act, as it stood prior to its substitution by the Kerala Co-operative Societies (Amendment) Act, 1999 with effect from 1.1.2000, held that in the process of appreciating the contents with reference to the exercise of powers by the Registrar, the provisions under sub-section (1) of Section 32 of the Act lay emphasis on certain key words as the guiding factors for the courts as well as the statutory authorities concerned with the exercise of power which appears to be not a routine power in any way, but a power of an exceptional character to be exercised on satisfaction of some of the requirements in the process of the role of the Registrar being of a supervisory and controlling character. These features float on the surface of the language of the section, otherwise it would be more than difficult to understand and appreciate in the context of the fabric that the provisions would require persistency in default, negligence in the performance, wilful disobedience or failure of an equal character in compliance with the order and finally the requirement of orders or directions being lawful in character. The words 'persistent', 'negligent', 'wilful' and 'lawful' are the key words to guide the normal understanding of the nature of satisfaction that is required by the Registrar. The words 'persistent', 'negligent', 'wilful' and 'lawful' are the key words to guide the normal understanding of the nature of satisfaction that is required by the Registrar. These words also provide legitimate material for the court to observe that under the provisions the Registrar, who is the principal statutory authority under the Act, gets an exemplary power which enables him authoritatively to disband the members of the committee as a whole, which is saddled by the democratic process. The material that is available from the language under consideration leads to the inevitable situation that the court has to be more than careful and cautious in the process of dealing with the exercise of such power or refusal thereof in regard to the supersession of committee. The court has to guard and watch in the matter as to whether the material on record spells out the requirement in the matter of exercise of the power by the Registrar that such a power has to be resorted to by its sparing use and exceptional enforcement. This Court held further that, in the light of the purposes for which Kerala Co-operative Societies Act emerge on the statute, it would have to be understood that the provision of supersession would be considered as an exceptional and rare action. 19. In Vallappuzha Service Co-operative Bank Ltd. v. Joint Registrar [ 2009 (3) KHC 599 ], another decision relied on by the learned Senior Counsel for the petitioner, a learned Judge of this Court held that, supersession of a democratically elected committee is a very drastic and extreme step. It is not necessary to cite any judicial precedents to hold that action under Section 32 of the Act cannot therefore be taken lightly for mundane violations. Only if the findings against the committee are such that the continuance of the committee would be extremely prejudicial to the interest of the Society, the exceptional and rare action under Section 32 of the Act shall be taken. The findings on the culpability of a committee on their improper action should inform the action of the Registrar while initiating proceedings under Section 32. In other words, the mere finding that the committee has done the acts alleged alone is not sufficient; the same should be supported by a further finding that they did the same with a culpable mind, failing which the action of the Registrar would be improper. In other words, the mere finding that the committee has done the acts alleged alone is not sufficient; the same should be supported by a further finding that they did the same with a culpable mind, failing which the action of the Registrar would be improper. 20. In Vallappuzha Service Co-op. Bank's case the committee which was superseded under Section 32 of the Act was elected on 28.1.2006 and they took charge on 30.1.2006. The committee consisted of 11 members, out of which 7 were new members, who were not members of any of the previous committees. On the basis of a complaint received from 4 members of the Society, the Joint Registrar ordered an inspection into the affairs of the Society under Section 66 of the Act, by the order dated 30.9.2006. Pursuant to the said order, the Unit Inspector submitted a report dated 14.3.2007 to the effect that his inspection revealed the irregularities detailed in that report. Based on that report, the Joint Registrar issued a show cause notice, to which the committee submitted a reply stating that the committee has not committed any of the irregularities mentioned in the show cause notice and therefore further proceedings pursuant to that notice may be dropped. Anticipating supersession, despite the reply, and alleging that the show cause notice itself is lacking in the essential requirements of Section 32 of the Act, the committee filed writ petition. During the pendency of that writ petition, the Joint Registrar passed the order of supersession and the petitioner got the writ petition amended. This Court noticed that, in the order of supersession, the findings of irregularities attributable to the present committee are 6 out of the 12 charges. The only charge for which the present committee has to answer, was the charge regarding tampering with the minutes book, i.e., the 3rd charge, which reads as follows; “The minutes book of the committee was tampered with by fraudulently adding the words 'also decided to give the gold coin of 8 grams given by the Company as gift to the lady director Smt. Vilasini teacher', in resolution No.43 of the committee meeting held on 26.10.2002, to the word 'approved' which alone was there in the original minutes”. In the order of supersession the Joint Registrar found that the present committee has tampered with the minutes book, which is the most important record of the Bank, and therefore the committee is liable to be superseded. As per the direction of this Court, the original minutes book was produced and on perusing the same, this Court could not find any noticeable difference in the ink used for the two parts of the resolution, first consisting of one word and the other one sentence, except the initial extra flow of the ink usually noticed at the start when a fountain pen is used for writing. Both writings are in the same handwriting using green ink. After considering the rival submissions, this Court concluded that the petitioner has fully succeeded in proving that the charge of tampering with the minutes book is false and is a fabricated charge and that, the Inspecting Officer has approached the issue with a prejudiced mind, with the pre determined intention of holding the petitioner guilty of the charge against them, in which he sadly failed. 21. As pointed out by the learned Special Government Pleader, in Vallappuzha Service Co-op. Bank's case, this Court noticed that as far as clause (a) of sub-section (1) of Section 32 of the Act is concerned it is not negligence alone which authorises interference under, but the same should be persistent, deliberate and also at times fit to be characterised as culpable. As far as clause (b) of sub-section (1) of Section 32 is concerned, the action is qualified by the word 'wilfully'. Therefore, although it can be held that such action need not be persistent, the same should be wilful. As far as clauses (c) and (d) of sub-section (1) of Section 32 are concerned, the same are not qualified by the word 'persistent'. Clause (c) of sub-section (1) is qualified by the words 'by breach of trust or wilful negligence'. Misappropriation or destruction or tampering with records or causing destruction of records to cover up any misconduct or malpractice mentioned in clause (d) of sub-section (1), for obvious reasons, are not qualified by any such words, since such actions are per se culpable and only one single instance would be disastrous to the Society that the Registrar would be certainly be justified in taking action for that single instance itself. Therefore, the acts mentioned in clauses (c) and (d) of sub-section (1) of Section 32 being by the very nature of those acts, such that a single instance would be extremely prejudicial to the interests of the society, the Registrar can invoke Section 32 of the Act even for a single instance. 22. In Kandalloor Farmers Service Co-operative Bank Ltd. v. Joint Registrar [ 2008 (4) KLT 856 ], another decision relied on by the learned Senior Counsel for the petitioner, a learned Judge of this Court held that, the Joint Registrar, exercising the powers of the Registrar, is empowered to initiate proceedings in terms of sub-section (1) of Section 65 of the Act. The Registrar can have the enquiry conducted through a person as authorised by him under sub-section (1) of Section 65. Sub-section (2) of Section 65 enumerates the powers for the purpose of the said enquiry. While the Registrar may communicate the result of that enquiry to the Financing Bank and the Circle Co-operative Union in terms of sub-section (3), sub-section (5) provides that the enquiry shall be completed within a period of six months. Sub-section (4) states that, when the inquiry under Section 65 reveals only minor defects, which in the opinion of the Registrar can be remedied by the society, he shall communicate the result of the inquiry to the society and the society, if any, to which the said society is affiliated. The Registrar is statutorily obliged by sub-section (4) of Section 65, in such a situation, to direct the society or its officers to take such action within the time specified therein to rectify the defects disclosed in such inquiry. Therefore, whenever minor defects are disclosed, the Registrar is duty bound to ensure that directions are issued by him for rectification of such defects. Sub-section (6) of Section 65 provides that, if the Registrar, on completion of the enquiry, finds that there is major defect in the constitution or working or financial condition of the society, he may initiate action in accordance with the provisions of Section 32. 23. In Kandalloor Farmers Service Co-op. Sub-section (6) of Section 65 provides that, if the Registrar, on completion of the enquiry, finds that there is major defect in the constitution or working or financial condition of the society, he may initiate action in accordance with the provisions of Section 32. 23. In Kandalloor Farmers Service Co-op. Bank's case, after referring to the provisions under sub-sections (4) and (6) of Section 65 of the Act, this Court held further that, when the statute contemplates two types of actions, depending upon the nature of the defects noticed; and when the Legislature has given its mandate regarding the proceedings that shall or may be adopted, the distinction conceived by the Legislature has to be borne in mind. To arrive at the procedure to be followed, the officer exercising the powers of the Registrar under Section 65 has necessarily to conclude whether the enquiry reveals only minor defects or whether there is major defect in the constitution or working or financial condition of the society. The consequences of the views that the Registrar may have, following the enquiry under sub-section (5) of Section 65 could be drastic; having regard to Section 68 and other provisions. The legislative authorisation in sub-section (6) of Section 65 that the Registrar may initiate action in accordance with the provisions of Section 32 is regulated by the jurisdictional fact that the said officer reaches a finding that there is major defect in either among the three aspects; namely, constitution, working and financial condition, of the society. On completion of enquiry under sub-section (5) of Section 65, the Registrar will get the authority to initiate action in accordance with the provisions of Section 32 on the basis of that enquiry, only when the Registrar, on completion of the enquiry, finds that there is such major defect. That provision in sub-section (6) of Section 65, in contradistinction to sub-section (1) of Section 32, would show that the grounds available for action under sub-section (6) of Section 65 would be beyond even those in clauses (a) to (d) of sub-section (1) of Section 32. All that the last limb of sub-section (6) of Section 65 provides is that the action under that sub-section shall be in accordance with the provisions of Section 32. All that the last limb of sub-section (6) of Section 65 provides is that the action under that sub-section shall be in accordance with the provisions of Section 32. Therefore, to initiate action for supersession on the basis of findings in an enquiry under sub-section (5) of Section 65, the Registrar has to definitely reach at a finding that there are major defects in the constitution or working or financial condition of the society. Having commenced proceedings under Section 65, the Registrar cannot abdicate, or defer, the function of arriving at a conclusion for himself following the enquiry under Section 65 and then, with the materials gathered in the inquiry under Section 65, move on to sub-section (1) of Section 32 of the Act. If that was permissible in terms of the legislative intention, there was no necessity for sub-section (6) to use the words 'major defect' when such terms are not available in sub-section (1) of Section 32. 24. In Kandalloor Farmers Service Co-op. Bank's case, Ext.P2 notice was issued specifically invoking the jurisdiction and authority under Section 65 of the Act. After receiving Ext.P3 objections dated 30.11.2007, the Joint Registrar stated in Ext.P4 notice dated 29.1.2008 under sub-section (1) of Section 32 of the Act that, the petitioners were heard on 30.11.2007. Sub-section (5) of Section 65 provides for an enquiry and sub-rule (5) of Rule 66 of the Kerala Co-operative Societies Rules provides that the Registrar shall pass such orders thereon as may be considered just, after giving a reasonable opportunity of being heard to the society, person or persons concerned. However, as evident from Ext.P4, a further report from the Assistant Registrar was obtained on 22.1.2008 regarding the objections of the petitioners in Ext.P3, which was not put to the petitioners before the issuance of Ext.P4. The Joint Registrar issued Ext.P4 notice by only stating that Ext.P3 objections and the report from the Assistant Registrar at Sl.No.5 in Ext. P4 have been examined in detail and it is found that the committee has been found to have failed in the matters enumerated in Ext.P4. This Court noticed that, there is no statement in Ext.P4 of any major defect, having been found by the officer exercising the powers of the Registrar. P4 have been examined in detail and it is found that the committee has been found to have failed in the matters enumerated in Ext.P4. This Court noticed that, there is no statement in Ext.P4 of any major defect, having been found by the officer exercising the powers of the Registrar. With that view of the Joint Registrar, there was no finding of any major defect on the basis of which proceedings could have followed under subsection (6) of Section 65 of the Act, meaning thereby that, there could not have been proceedings initiated for supersession and for further action in accordance with the provisions of Section 32. 25. In Kandalloor Farmers Service Co-op. Bank's case this Court held that, when materials come out during supervisory inspection in terms of Section 65 of the Act, disclosing that the committee of the society becomes liable for supersession in terms of Section 32, an action could be initiated thereby under Section 32 without reference to sub-section (6) of Section 65. But when proceedings are initiated specifically under Section 65 and enumerated grounds are raised and objections called for from the committee, it does not stand to reason that the Registrar, after hearing the parties and after even calling for further report from the Assistant Registrar, could confine himself to silence as regards the proceedings under Section 65, without expressing himself on the views generated following the enquiry under sub-section (5) of Section 65 and then initiate action under sub-section (1) of Section 32 as if it is a fresh proceedings. This is not the content of law when Section 32 and Section 65 are read harmoniously. Section 32 occurs in the statute much earlier than Section 65. It is not the provision in the Act and the intention of the Legislature that the Registrar could have the proceedings under Section 65 at the stage of sub-section (5) of Section 65 without concluding as to whether there are any defects and if there are any, whether those defects are minor or major and then go off to proceedings under Section 32. If such a situation is to be conceived, it would only be a tottering drapery, swinging to the fancied tunes of repositories of administrative and statutory powers. Any such concept would only give room for arbitrary exercise of power in an unbridled manner. If such a situation is to be conceived, it would only be a tottering drapery, swinging to the fancied tunes of repositories of administrative and statutory powers. Any such concept would only give room for arbitrary exercise of power in an unbridled manner. When Section 65 conceives a scheme for itself, the proceedings initiated under that provision has to be allowed to its logical end. That would be the only sure test of fairness and to decide whether the statutory authority has acted in terms of law. 26. In Mariyamma George and others v. Joint Registrar of Co-operative Societies and others [ 2010 (3) KHC 307 ], another decision relied on by the learned Senior Counsel for the petitioner, a learned Judge of this Court held that, sub-section (4) of Section 65 stipulates that where an enquiry made under the section reveals only minor defects which in the opinion of the Registrar can be remedied by the society, he shall communicate the result of the enquiry to the society and he shall direct the society or its officers to take such action within the time specified therein to rectify the defects disclosed by such enquiry. On the other hand, sub-section (6) of Section 65 provides that if the Registrar on completion of the enquiry finds that there is a major defect in the constitution or working or financial condition of the society, he may initiate action in accordance with the provisions of Section 32 of the Act. Therefore, the Registrar on receipt of the report of enquiry has to first enter a finding as to whether the report of enquiry reveals only a minor defect or whether there is a major defect in the constitution, working or financial condition of the society. Where there are only minor defects, the Registrar is empowered to direct the society to rectify the defects. Whereas, in the case of major defects, he may initiate proceedings in accordance with the provisions of Section 32. Therefore, a finding that the report of enquiry reveals a major defect in the constitution or working or financial condition of the society is a pre-condition for the initiation of action under Section 32 of the Act. 27. In Mariyamma George's case, after referring to the law laid down in Kandalloor Farmers Service Co-op. Therefore, a finding that the report of enquiry reveals a major defect in the constitution or working or financial condition of the society is a pre-condition for the initiation of action under Section 32 of the Act. 27. In Mariyamma George's case, after referring to the law laid down in Kandalloor Farmers Service Co-op. Bank's case (supra) this Court held that, while initiating further action under Section 32 of the Act, the procedure contemplated by Section 32 would have to be complied with. As per sub-section (1) of Section 32 of the Act, the Registrar has to be satisfied that the committee of the society was guilty of persistent default or negligence in the performance of the duties imposed on it by the Act, or disobedience of the lawful orders or directions issued under the provisions of the Act and the Rules or any of the other circumstances enumerated therein. After having satisfied himself of the fact that the circumstances justifying supersession of the committee were in existence, he has to give an opportunity to the committee to state its objections and thereafter he can remove the committee from office and appoint a new committee in its place. This Court held further that, as per sub-section (6) of Section 65, the Registrar had to enter a finding that there was a 'major defect' in the constitution or working or financial condition of the society. Once such a finding is entered, the Registrar has the power to initiate action in accordance with the provisions of Section 32 of the Act, which provides that, where the Registrar is 'satisfied' after an enquiry by himself or through his subordinates or on a report of the financing bank or the Vigilance and Anti Corruption Bureau of the Government or the Vigilance Officer or otherwise, that the committee of a society is guilty of one of the acts contemplated by clauses (a) to (d) of sub-section (1) thereof, he could proceed to take action under the said provision. In such cases, the Registrar is duty bound to give the committee an opportunity to state its objections, if any. It is only thereafter that the Registrar has the power to pass an order superseding the committee. In such cases, the Registrar is duty bound to give the committee an opportunity to state its objections, if any. It is only thereafter that the Registrar has the power to pass an order superseding the committee. No doubt sub-section (3) of Section 32 confers power on the Registrar to dispense with the opportunity contemplated by sub-section (1) and the consultation contemplated by sub-section (2) where he is of the opinion that it is not reasonably practicable to do so. On the facts of that case, this Court noticed that, though Ext.P5 contains a statement dispensing with the consultation contemplated by sub-section (3) of Section 32, there is no similar statement dispensing with an opportunity under sub-section (1) of Section 32. In other words, Ext.P5 does not contain any finding that the irregularities found in Ext.P2 report constitute a 'major defect' as contemplated by sub-section (6) of Section 65 of the Act. Such a finding is important for the reason that the procedure to be followed in the case of 'minor defect' is as laid down in sub-section (4) whereas it is only in cases where a major defect is found that the procedure under sub-section (6) of Section 65 of the Act is to be adopted. 28. In Mariyamma George's case this Court held that, the finding regarding a 'major defect' and the 'satisfaction' contemplated by sub-section (1) of Section 32 of the Act have to be objectively arrived at and specifically entered. It is clear from the wording of the provisions referred to above that the Legislature in its wisdom has conferred the drastic power of supersession on the Registrar, hedged in by sufficient procedural safeguards aimed at ensuring that the power is not misused. When the statute provides that the exercise of a power shall be only in accordance with the procedure stipulated in the provision, it follows that the said power is not capable of being exercised in any other manner. Adverting to the contention raised by the respondents that, the allegations levelled against the petitioners, by their very nature are grave and serious, and therefore, it was not necessary for the Registrar to specifically categorise the said irregularities as 'major defects', this Court observed that, even without such a categorisation, the gravity of the defects was evident and clear. Adverting to the contention raised by the respondents that, the allegations levelled against the petitioners, by their very nature are grave and serious, and therefore, it was not necessary for the Registrar to specifically categorise the said irregularities as 'major defects', this Court observed that, even without such a categorisation, the gravity of the defects was evident and clear. However, it is a specific finding that there was 'major defect' that is contemplated by sub-section (6) of Section 65 of the Act. When the provision specifically provides that the action of the authority shall be preceded by a finding regarding the existence of a 'major defect', a finding regarding the said jurisdictional fact is necessary for initiating further action under sub-section (1) of Section 32 of the Act. Since there was neither such a finding nor compliance with sub-section (1) of Section 32 of the Act, this Court held that Ext.P5 order of supersession cannot be sustained. 29. In Urukunnu Service Co-operative Bank Ltd. v. State of Kerala [ 2012 (4) KLT 941 ], another decision relied on by the learned Senior Counsel for the petitioner, a learned Judge of this Court held that, power is conferred under sub-section (5) of Section 66 of the Act to the Registrar to issue appropriate directions as he consider it necessary to correct the functioning of the society. The report on inspection prepared under sub-section (2) of Section 66 of the Act is not intended for initiating steps for supersession, but for passing an order under sub-section (5) of Section 66 of the Act, to direct the society to take such action as the Registrar consider it necessary to correct the functioning of the society. The power to supersede a committee should be exercised with due caution and circumspection and only in cases where it is really called for. Mere default or failure to comply with the provisions of the Act if found to be true, cannot be a ground for supersession unless it is shown that there is persistent willful negligence and willful disobedience. On the facts of that case, this Court found that the Joint Registrar superseded the committee solely on the basis of Ext.P1 report. Ext.P1 report was not analysed or evaluated nor the findings recorded on the basis of the explanation offered by the present managing committee. On the facts of that case, this Court found that the Joint Registrar superseded the committee solely on the basis of Ext.P1 report. Ext.P1 report was not analysed or evaluated nor the findings recorded on the basis of the explanation offered by the present managing committee. The Joint Registrar was legally bound to deal with the explanations and objections and to record the reasons for rejecting such explanations and objections. Since he failed to do so, there was no fair or proper consideration of the objections and explanations. 30. In Urukunnu Service Co-op. Bank's case this Court held further that, the initiation of proceedings under Section 32 of the Act, on the basis of a report under Section 66, would be justified only if there is a major defect in the constitution, working or financial condition of the society and that has to be specifically entered by recording the same. If the Registrar recorded findings that there are major defects, he may initiate proceedings in accordance with the provisions of Section 32. The finding that there are major defects in the constitution, working or financial condition is a precondition for initiating action under Section 32 of the Act. Such a finding have to be objectively arrived and specifically entered. On the facts of that case, this Court found that the report on inspection prepared under Section 66 of the Act was not considered nor the Joint Registrar had entered a finding in Ext.P7 order that there are 'major defects' to initiate action under Section 32 of the Act. None of the explanations offered by the petitioners, i.e., Ext.P3 explanation to Ext.P2 notice and Ext.P5 explanation to Ext.P4 notice, were considered by the Joint Registrar. Ext.P7 order evidently shows that the explanation offered are ignored and overlooked. Therefore, this Court held that Ext.P7 order passed without considering the contentions of the petitioners cannot stand in the eyes of law. 31. The judgment in Urukunnu Service Co-op. Bank's case (supra) was affirmed by the Division Bench in State of Kerala v. Urukunnu Service Co-operative Bank Ltd. [ 2013 (2) KLT 74 ]. The Division Bench confirmed the law laid down in Vallappuzha Service Co-op. 31. The judgment in Urukunnu Service Co-op. Bank's case (supra) was affirmed by the Division Bench in State of Kerala v. Urukunnu Service Co-operative Bank Ltd. [ 2013 (2) KLT 74 ]. The Division Bench confirmed the law laid down in Vallappuzha Service Co-op. Bank's case (supra) by holding that, for invoking clause (a) of sub-section (1) of Section 32 of the Act, it is not sufficient to merely hold that the managing committee had committed a default or is negligent in the performance of the duties imposed on it by the Act or the Rules or Bye-laws, but such default should be shown to be persistent and must be prejudicial to the interest of the society as well. Apart from the same, findings on the culpability of the committee on their improper action should inform the action of the Registrar while initiating proceedings under Section 32. In other words, the mere finding that the committee has done the acts alleged alone is not sufficient; the same should be supported by a further finding that they did the same with a culpable mind, failing which the action of the Registrar would be improper. On the facts of that case, the Division Bench held that, in addition to the finding on non-convening of the Annual General Body Meeting and non-passing of the budget for the year, there must be a further finding by the Joint Registrar that the non-convening of the general body meeting was not only persistent, but also that such non-convening was with a culpable mind. Therefore, the Division Bench declined interference on the findings of the learned Single Judge in Urukunnu Service Co-op. Bank's case that there was no valid reason available for the Joint Registrar to supersede the Board of Directors by invoking Section 32 of the Act, for the only reason that they did not convene a general body meeting and get the budget passed. 32. In Gireesh Kumar v. Joint Registrar of Co-operative Societies [2013 (3) KLT SN 101 Case No.105] the question that came up for consideration before a learned Judge of this Court was as to whether the Joint Registrar can initiate proceedings under sub-section (1) of Section 32 of the Act before completing the inquiry under Section 65. 32. In Gireesh Kumar v. Joint Registrar of Co-operative Societies [2013 (3) KLT SN 101 Case No.105] the question that came up for consideration before a learned Judge of this Court was as to whether the Joint Registrar can initiate proceedings under sub-section (1) of Section 32 of the Act before completing the inquiry under Section 65. It was argued that as per sub-section (6) of Section 65 of the Act, the Registrar is entitled to initiate action in accordance with the provisions of sub-section (1) of Section 32 only on completion of the inquiry. This Court held that as per sub-section (1) of section 32 of the Act, the Registrar can take action, after an inquiry by himself or through other agencies, or is otherwise satisfied that the committee of any Society has acted or omitted to act in terms of clauses (a) to (d) of sub-section (1) of Section 32 after issuing notice to the committee. The expression 'or otherwise' clearly enables the Registrar to take any action, even if an inquiry is not contemplated. The provisions under sub-section (6) of Section 65 is only one among the methods to initiate inquiry under Section 32. 33. In Krishnan Nair v. Joint Registrar of Co-operative Societies [ 2014 (1) KLT 116 ], another decision relied on by the learned Senior Counsel for the petitioner, a learned Judge of this Court held that, there is a distinction in the enquiry contemplated under Section 65 and Section 66 of the Act. The former of which could lead to direct consequences, including supersession, while the latter could only result in compelling the society to cure the defects or irregularities pointed out therein. But, however, this does not at all militate against the Registrar proceeding under Section 32 on the basis of a report under Section 65 or Section 66 of the Act. Section 32, as it is worded, confers on the Registrar, authority to proceed on the basis of an inquiry by himself or through his officers on the basis of a report of the financing bank, or the Vigilance and Anti-Corruption Bureau and even in the absence of all these instances, if 'otherwise satisfied that the committee of a society has committed any of the defaults pointed out in clauses (a) to (d) of sub-section (1) of Section 32'. Hence, even under Section 66, if an enquiry reveals major defects with respect to the working or financial situation of the society, the Registrar, if satisfied that the committee of the society is involved in any of the defects noticed in clauses (a) to (d), can supersede the committee under Section 32 of the Act, but after giving an opportunity to the committee to state its objections. This Court held further that, for invoking clause (a) of sub-section (1) of Section 32, it is not sufficient to merely hold that the managing committee had committed a default or is negligent in the performance of the duties imposed on it by the Act or the Rules or Bye-laws, but such default should be shown to be persistent and must be prejudicial to the interest of the society as well. The mere finding that the committee has done the acts alleged alone is not sufficient; the same should be supported by a further finding that they did the same with a culpable mind, failing which the action of the Registrar would be improper. On the facts of that case, this Court noticed that Ext.P2 show-cause notice was widely worded, which cannot be considered as one intended at the consequence of supersession of the managing committee. It does not also speak of any persistent default leading to the extreme action of supersession. The satisfaction recorded by the Registrar is a mundane refrain of the summary of the enquiry report and the action proposed in Ext.P2 notice is as vague as possible, giving no indication of the drastic step of supersession. In such circumstance, there is no notice as contemplated under Section 32 of the Act. 34. In Prabhakaran Pillai v. Assistant Registrar of Co-operative Societies [ 2017 (2) KLT 620 ] the question that came up for consideration before a learned Judge of this Court was as to whether a report in an inquiry under Section 65 of the Act, in respect of which notice has been given to the members of the managing committee of the Society under sub-rule (5) of Rule 66 of the Rules, can be acted upon for the purpose of the proceedings under Section 32 of the Act. This Court noticed that the said issue has been dealt with by a Division Bench in State of Kerala v. Aravindakshan Nair [ 2010 (3) KLT 11 ], wherein it was held that since separate opportunity of hearing is provided for in the statute whenever action is contemplated based on a report of inquiry under Section 65 of the Act, the contention that report of inquiry under Section 65 cannot be acted upon without compliance of the provisions contained in sub-rule (5) of Rule 66 of the Rules cannot be accepted. It was clarified by the Division Bench that the opportunity of hearing provided under sub-rule (5) of Rule 66 is only for the purpose of ordering recovery of the cost of inquiry under Section 65 or inspection under Section 66, as the case may be. 35. In Prabhakaran Pillai's case (supra) this Court held further that the scheme of the Act is that the societies registered under the Act shall be governed by democratically elected managing committees. Sub-section (1) of Section 32 of the Act, however, provides that if the managing committee makes persistent default or commits negligence in the performance of duties imposed on it by the Act or does anything prejudicial to the interests of the society or wilfully disobeys or fails to comply with any lawful order or direction issued under the Act or makes any payment contrary to the Act or causes any loss or damage to the assets of the society, by breach of trust or wilful negligence or misappropriates or destroys or tampers with the records or causes the destruction of records to cover up any misconduct or malpractice, the Registrar may supersede the managing committee of the society. Going by the scheme of the Act, it is evident that the power conferred on the Registrar by the said Section is a power to be exercised in the grave situations referred to in the provision to protect the interests of the society and its members. In other words, the substantive provision contained in sub-section (1) of Section 32 of the Act is a provision intended to protect the interest of the members of the Societies from various acts and deeds of the managing committee which would prejudicially affect the members. In other words, it is a protective clause. In other words, the substantive provision contained in sub-section (1) of Section 32 of the Act is a provision intended to protect the interest of the members of the Societies from various acts and deeds of the managing committee which would prejudicially affect the members. In other words, it is a protective clause. Since the substantive provision is a protective clause, it is settled that the provision including the provisos therein have to be interpreted liberally, keeping in mind the object of the substantive provision. 36. As already noticed, in the instant case, the Inquiry Officer pointed out the following irregularities in the interim report dated 23.10.2017; (i) misappropriation of cash balance; (ii) sanctioning of loans without the knowledge or consent of the members; (iii) misappropriation of amount by not accounting repayment of loan; and (iv) misappropriation of amount by not accounting the fixed deposits. As discernible from the interim report, pursuant to the order of the 3rd respondent Joint Registrar dated 31.8.2017, the Inquiry Officer verified the cash balance of the 5th respondent Society as on 9.9.2017 (Saturday), on the next working day, i.e., 11.9.2017 at 9.50 am, and noticed a shortage of Rs. 50,00,110.45. In the absence of the Secretary, the Inquiry Officer verified the cash balance in the presence of the Assistant Secretary (Smt.Girija) and the Cashier-in-charge (Sri.Sabu Yohannan). When the Inquiry Officer sought explanation from them, the Assistant Secretary has reported that Rs. 50,00,000/- was received by the Secretary on 9.9.2017 for the purpose of returning deposits to the members of the Society and she has also produced a voucher for Rs. 50,00,000/- dated 9.9.2017 signed by the Secretary. The Inquiry Officer noticed that, the receipt of an amount of Rs. 50,00,000/- by the Secretary on 9.9.2017 is not reflected in the registers of the Society. 37. Regarding sanctioning of loans, the Inquiry Officer found that, 29 loans were sanctioned without the knowledge or consent of the members. The Inquiry Officer has dealt with in detail the irregularities noted in the sanctioning of bogus loans, in pages 11 to 44 of the interim report (pages 35 to 70 of Ext.P3). As discernible from the said report, most of the loans were sanctioned without registering 'gehan' in the Sub Registrar Office, in violation of Section 36A of the Act and Rule 51A of the Rules. As discernible from the said report, most of the loans were sanctioned without registering 'gehan' in the Sub Registrar Office, in violation of Section 36A of the Act and Rule 51A of the Rules. Out of 29 bogus loans, 9 loans (Sl.Nos.5 to 8, 22, 23, 26, 28 and 29) were sanctioned while the present managing committee was in office; out of which, in respect of 8 loan accounts, not even a single repayment has been made. The remaining 20 bogus loans were sanctioned while the previous managing committee was in office, out of which, in respect of 18 loan accounts (Sl.Nos.1 to 4, 9 to 17, 19 to 21, 24 and 27), not even a single repayment has been made. Though the present managing committee was in office for more than three years, the aforesaid 18 loan accounts remained as such, i.e., even without a single repayment. 38. As per the report of the Inquiry Officer, the Secretary has sanctioned and disbursed loans even before placing the matter for consideration before the present managing committee. The decision of the managing committee sanctioning the loans applied for were taken after the disbursal of the loan amount. The loan availed on 4.3.2017, in the name of Achankunju (M.T.N. A2/3968/2016-17) for Rs.8,00,000/-, was sanctioned by the managing committee only on 24.3.2017. Similarly, the loan availed on 10.3.2017, in the name of Shylamma Alex for Rs.7,00,000/-, was sanctioned by the managing committee only on 24.3.2017. Both the above members have made complaints to the effect that they never availed such loans. The total amount sanctioned and disbursed through 29 bogus loan accounts comes to Rs. 1,59,00,000/- and as per the interim report, the principal amount outstanding in those 29 loan accounts together with interest comes to Rs. 2,26,13,118/-. 39. As borne out from the interim report, which forms part of Ext.P3 (Page Nos.48, 49, 50, 51, 62, 63, 66, 68 and 69 of Ext.P3) 9 bogus loans were sanctioned to J.Thomas (M.T.N. A2/3865/2016-17); Achankunju (M.T.N. A2/3968/2016-17); Lissy Thomas (M.T.N. A2/3853/2016-17); Kunjandi (M.T.N. A2/4037/2016-17); Leelamma Joy (M.T.N. A2/4047/2016-17); Leelamma Babu (M.T.N. A2/3040/2014-15); Kunjumol John (M.T.N.A2/3895/2016-17); Shylamma Alex (M.T.N.A2/3983/ 2016-17) and Ullasan (M.T.N. A2/3074/2015-16) while the present managing committee was in office. At the time of inspection, the loan files in relation to the said loan accounts contained only the loan application, 'venkadapathram' and valuation report. At the time of inspection, the loan files in relation to the said loan accounts contained only the loan application, 'venkadapathram' and valuation report. The details of the security offered by the respective members for availing such loans are not available in the loan files. Such details are also not available in the report of the sub committee, consisting of the members of the present managing committee, which had recommended sanctioning of such bogus loans. In the inquiry it was found that such loans were sanctioned even without insisting subscription of shares to the requite extent by the respective members. The members of the present managing committee, who have sanctioned those loans on 24.3.2017 cannot plead ignorance of the serious irregularity committed in disbursing the loan amount, even before placing the matter before the managing committee for its sanction. The findings in the interim report of the Inquiry Officer would show that the present managing committee had sanctioned bogus loans, without the knowledge of the respective members, and those loans were sanctioned even without registering 'gehan' in violation of Section 36A of the Act and Rule 51A of the Rules. 40. Regarding misappropriation of amount by not accounting repayments in respect of 3 loan accounts, the Inquiry Officer found that, repayment of the principal and interest by the respective loanees are not properly accounted in the books of account of the Society and the total amount misappropriated comes to Rs. 9,50,911/-, as on 19.10.2017. As per the records, in the case of Lazar B. (M.T.N. A2/496/2004-05), who availed a loan for Rs. 50,000/- on 13.1.2005, the total remittance made was Rs. 25,000/- and the principal amount outstanding was Rs. 25,000/-. The said Lazar died on 12.10.2012. His wife Leelamma Lazar has stated before the Inquiry Officer that, after clearing the entire dues in all the loan accounts, the original documents have already been returned by the 5th respondent Society, and that she has no knowledge about loan account M.T.N. A2/496/2004-05. The Secretary-in-charge has stated before the Inquiry Officer that the loan file in respect of the above loan account could not be traced out. As per the statement given by Sarithamol (M.T.N. A2/1968/2010-11), who availed a loan for Rs. 1,00,000/- on 6.12.2010, the loan account was closed by her father Natarajan on 22.5.2017, by remitting Rs. 98,685/-, after availing another loan (M.T.N. A2/4106/2017-18) on 22.5.2017 in his name. As per the statement given by Sarithamol (M.T.N. A2/1968/2010-11), who availed a loan for Rs. 1,00,000/- on 6.12.2010, the loan account was closed by her father Natarajan on 22.5.2017, by remitting Rs. 98,685/-, after availing another loan (M.T.N. A2/4106/2017-18) on 22.5.2017 in his name. Natarajan has also acknowledged the receipt of the original documents in respect of the loan availed by Sarithamol, by affixing his signature in the register maintained by the 5th respondent society. Though, the loan file was produced before the Inquiry Officer, it contained only the loan application and venkatapathram. As per the statement given by Sreedevi Natarajan (M.T.N. A2/1988/2010-11), who availed a loan for Rs. 3,00,000/- on 27.12.2010, the loan account was closed by her husband Natarajan on 22.5.2017, by remitting the entire dues after availing another loan (M.T.N. A2/4106/2017-18) on 22.5.2017 in his name. Natarajan has also acknowledged the receipt of the original documents in respect of the loan availed by Sreedevi, by affixing his signature in the register maintained by the 5th respondent Society. Though, the loan file was produced before the Inquiry Officer, it contained only the loan application and venkatapathram. The closure of the above two loan accounts was on 22.5.2017, when the present managing committee was in office, utilising loan availed by Natarajan on the very same day. However, the remittances made on 22.5.2017 in those two loan transactions are not reflected in the records of the 5th respondent Society. 41. Regarding misappropriation of amount by not accounting the fixed deposits, the Inquiry Officer found that, a total sum of Rs. 32,50,000/- deposited by 4 members are not reflected in the registers of the Society. Such fixed deposits are not seen accounted in the Society and on verification of the fixed deposit register, the address and amount do not tally with that mentioned in the fixed deposit receipts. Those fixed deposit receipts were signed by the Secretary and the Assistant Secretary, who are now placed under suspension. The Inquiry Officer found that those fixed deposit receipts were issued in the fixed deposit receipts printed by the Society. Since no stock register is maintained in the Society, the Inquiry Officer could not verify the number of fixed deposit receipts printed and used by the Society. 42. The Inquiry Officer found that those fixed deposit receipts were issued in the fixed deposit receipts printed by the Society. Since no stock register is maintained in the Society, the Inquiry Officer could not verify the number of fixed deposit receipts printed and used by the Society. 42. On receiving complaint from some of the members of the 5th respondent Society as to grave irregularities and malpractices in the sanctioning of loans, the 4th respondent Assistant Registrar conducted a preliminary inquiry through the Unit Inspectors of his office. In the said inquiry, serious irregularities and malpractices were detected in the matter of granting loans by the Society. The 4th respondent submitted a report dated 17.8.2017 to the 3rd respondent Joint Registrar for further action. The 3rd respondent, after considering the preliminary report ordered an inquiry under Section 65 of the Act into the working of the Society, vide order dated 31.8.2017. The Inquiry Officer submitted an interim report dated 23.10.2017 pointing out misappropriation of cash, issuance of bogus loans, misappropriation of the repayment amount by the loanees and misappropriation of the fixed deposit amount. After satisfying himself that the committee of the Society was guilty of persistent default in the performance of the duties imposed on it by the Act, the Rules and the bye-laws, justifying initiation of proceedings for supersession under sub-section (1) of Section 32 of the Act, the 4th respondent issued Ext.P1 notice dated 21.11.2017 to the petitioner and other members of the managing committee, under sub-section (1) of Section 32 of the Act, to show cause within five days from the date of receipt of the notice, why the managing committee shall not be superseded. 43. Based on the interim report, the 3rd respondent requested the Circle Co-operative Union, Pathanapuram and the Kollam District Co-Operative Bank Ltd. to offer their remarks. The Circle Co-operative Union, Pathanapuram, vide Resolution No.10/17 dated 29.11.2017 informed that, the continuance of the existing Board of Directors is harmful to the interests of the Society and its members and hence necessary action may be taken under Section 32 of the Act against the Board of Directors. The District Co-operative Bank has also given their opinion vide Resolution No.1216 dated 27.11.2017 stating that, appropriate action should be taken against the Board of Directors of the Society. 44. The District Co-operative Bank has also given their opinion vide Resolution No.1216 dated 27.11.2017 stating that, appropriate action should be taken against the Board of Directors of the Society. 44. In the personal hearing conducted by the 3rd respondent Joint Registrar on 30.11.2017, the President and eight members of the managing committee of the Society submitted their statements in writing. In the said statements, they have admitted the malpractices occurred in the Society. However, they alleged that the Secretary and the Assistant Secretary are the persons responsible for all those malpractices. The statement given by one Abhilash, another member of the Board of Directors is to the effect that, the members of the Board of Directors and the Secretary colluded each other, which led to all those malpractices. After considering the relevant materials, the 3rd respondent found that the managing committee of the Society is guilty of persistent default in the performance of the duties imposed on it by the Act, the Rules and the bye-laws and caused financial loss to the Society. The 3rd respondent has also found that the members of the managing committee did such acts with a culpable mind. In such circumstances, the 3rd respondent issued Ext.P6 order of supersession under Section 32(1) of the Act. 45. Rule 47 of the Kerala Co-operative Societies Rules deals with custody of cash, securities, records, seal, etc. of a society. As per clause (a) of Rule 47, it shall be the duty of the paid Secretary/Manager of every society to maintain and keep in proper form all the accounts, registers, other records and the seal of the society, under his safe custody and shall be personally responsible for their safety. He shall also be the custodian of cash, securities and all other properties of the society subject to the overall control of the President. Going by clause (b) of Rule 47, if there is no paid Secretary/Manager it shall be duty of the President to arrange to maintain the accounts and registers in proper form and to keep the cash balance and other assets including bonds and securities under safe custody. He will also act as Treasurer of the society in cases where there are no specific provisions in the bye-laws to elect or appoint a Treasurer. He will also act as Treasurer of the society in cases where there are no specific provisions in the bye-laws to elect or appoint a Treasurer. Where there are other arrangements for the safe custody of the cash balance by the Secretary and the cashier under double lock system the responsibility to account for the cash balance to the committee will be that of the Secretary. As per clause (c) of Rule 47, the President and Secretary/Manager/ Treasurer or President where there is no paid Secretary/Manager/ Treasurer shall be bound to produce the records, cash balances and other assets, before the officers of the Department and other persons authorised by the Registrar by general or special order for verification, inspection or inquiry, etc. 46. Clause (d) of Rule 47, which starts with a 'non obstante' clause provides that, notwithstanding anything contained in clauses (a) to (c), the committee of the society shall primarily be responsible for the maintenance and safety of all accounts, records, cash and other assets of the society. It shall be the duty of the committee to see that the officers concerned discharge their functions and perform their duties as laid down in the rules and the bye-laws. As per clause (e) of Rule 47, it is the responsibility of the Chief Executive to see that all the registers and accounts are written up properly and completely and produced for audit within a period of three months on completion of the accounting year. Any lapse on the part of the Chief Executive in this regard will be considered as an offence under sub-section (4) and sub-section (5) of Section 94 of the Act. 47. In Thrikkadavoor Service Co-operative Society Ltd. v. Sivasankara Pillai [ 1990 (2) KLT 594 ], a decision relied on by the learned Special Government Pleader, a learned Judge of this Court held that, as per clause (b) of Rule 47 of the Kerala Co-operative Societies Rules, it is the duty of the President of the society to arrange to maintain accounts and registers in proper form and to keep the cash balance and other assets under safe custody. He is to act as the Treasurer of the society if there is no specific provision in the bye-laws to elect or appoint a Treasurer. He is to act as the Treasurer of the society if there is no specific provision in the bye-laws to elect or appoint a Treasurer. Clause (d) of Rule 47 states that the committee of the society shall primarily be responsible for the maintenance and safety of all accounts, records, cash and other assets of the society. It is their duty to see that the officers concerned discharge their functions and duties as laid down in the rules and the bye-laws. It is evident from these provisions, that there is a statutory duty cast on the committee of the society for the proper custody and accounting of the cash and other assets of the society and that they are answerable for any misappropriation of the same during their tenure. They cannot wash off their hands of liability, by contending that there was a Secretary in office. 48. In Anilbhai M. Patel v. Suryapur Bank Agent DBH Samiti ( 2007 (4) SCC 83 ), another decision relied on by the learned Special Government Pleader, the Apex Court held that a co-operative society should ordinarily be allowed to function through its elected representatives. This although does not mean that the members of the committee have a right to mismanage the affairs of the co-operative society but there cannot be any doubt whatsoever that allegations in relation to the mismanagement and commission/omission of illegalities, or irregularities or other acts of omission and commission, the remedies as contemplated under the statute should ordinarily be resorted to. 49. In the instant case, the present managing committee took charge on 21.8.2014. The various irregularities detected in the interim report dated 23.10.2017 of the Inquiry Officer relates to sanctioning of bogus loans. Out of 29 bogus loans, 9 were sanctioned while the present managing committee was in office, out of which, in respect of 8 loans, not even a single repayment has been made. Out of 20 bogus loans, which were sanctioned while the previous managing committee was in office, there was not even a single repayment in 18 loan accounts. Though the present managing committee was in office for more than 3 years, the said 18 loan accounts remained as such. 50. Out of 20 bogus loans, which were sanctioned while the previous managing committee was in office, there was not even a single repayment in 18 loan accounts. Though the present managing committee was in office for more than 3 years, the said 18 loan accounts remained as such. 50. The irregularities detected in the interim report dated 23.10.2017 in respect of the loan accounts which were sanctioned and disbursed while the present managing committee was in office makes out a case of persistent default and negligence in the performance of the duties imposed on it by the Act, the Rules and also the bye-laws of the 5th respondent Society. The bogus loans were sanctioned either by fabricating the documents or by misusing the documents submitted by the respective members at the time of availing other loans. The fact that such bogus loans were sanctioned based on the recommendation of the sub-committee consisting of the members of the present managing committee and that, the decision of the managing committee sanctioning some of those bogus loans were taken much after the disbursal of the loan amount and that, such bogus loans and also the bogus loans sanctioned by the previous managing committee remained without even a single repayment though the present managing committee was in office for more than three years, would indicate that the members of the managing committee did such irregularities with a culpable mind. 51. As per the findings in the interim report, the present managing committee had sanctioned bogus loans, without the knowledge of the respective members and those loans were sanctioned even without registering 'gehan' in violation of Section 36A of the Act and Rule 51A of the Rules. The total loan sanctioned and disbursed through 29 bogus loan accounts comes to Rs. 1,59,00,000/- and as per the interim report the principal amount outstanding together with interest comes to Rs. 2,26,13,118/-. 52. The 3rd respondent Joint Registrar, after satisfying himself that the managing committee of the 5th respondent Society was guilty of persistent default in the performance of the duties imposed on it under the Act, the Rules and the bye-laws, justifying initiation of proceedings for supersession, has issued Ext.P1 show cause notice under sub-section (1) of Section 32 of the Act. The 3rd respondent Joint Registrar, after satisfying himself that the managing committee of the 5th respondent Society was guilty of persistent default in the performance of the duties imposed on it under the Act, the Rules and the bye-laws, justifying initiation of proceedings for supersession, has issued Ext.P1 show cause notice under sub-section (1) of Section 32 of the Act. It cannot be said that Ext.P1 show cause notice contains a decision of the 3rd respondent to supersede the managing committee of the 5th respondent Society and as such there is denial of pre-decisional opportunity provided under sub-section (1) of Section 32 of the Act. After considering the report of the Inquiry Officer and also the statements made in writing by the members of the managing committee in the personal hearing conducted on 30.11.2017, the 3rd respondent Joint Registrar arrived at a conclusion that there is persistent default and negligence on the part of the previous managing committee as well as the present managing committee in the performance of the duties imposed on it by the Act, the Rules and also the bye-laws of the Society and that, the members of the managing committee did such acts with a culpable mind and as such, the committee is liable to be superseded under sub-section (1) of Section 32 of the Act. 53. One of the contentions taken by the petitioner is that the only allegation made against the present managing committee is that it failed to take appropriate action against the Secretary, the Assistant Secretary and other staff of the Society and that by itself will not attract the provisions of clause (a) of sub-section (1) of Section 32 of the Act. As I have already noticed, the persistent default and negligence of the present managing committee in the performance of the duties imposed on it by the Act, the Rules and the bye-laws of the Society and also the culpable mind of the members are evident from the report of the Inquiry Officer and also from Ext.P6 order of the 3rd respondent Joint Registrar. It was after considering the materials on record that the 3rd respondent Joint Registrar arrived at a conclusion in Ext.P6 order that there is persistent default and negligence on the part of the managing committee in the performance of the duties imposed on it by the Act, the Rules and the bye-laws and that, the managing committee did such irregularities with a culpable mind. The said finding in Ext.P6 order of the 3rd respondent is neither perverse nor patently illegal, warranting an interference in this writ petition, invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. In the result, the challenge made in this writ petition against Ext.P6 order of supersession of by the 3rd respondent Joint Registrar fails. Consequently, the petitioner is not entitled for any of the reliefs sought for in this writ petition and the same is accordingly dismissed. No order as to costs.