JUDGMENT : The underlying legal aspects in these cases are edificed on the pith and tenor of Section 68 of the Kerala Co-operative Societies Act (hereinafter referred ‘the KCS Act’ for short), as per which proceedings for imposition of surcharge against persons in charge and management of Co-operative Societies and on its concerned officers and employees are stipulated. 2. Since the issues in these cases revolve around the manner in which Section 68 of the KCS Act operates, I deem it appropriate to extract it under; “[68. Surcharge:-(1) If in the course of an audit, inquiry, inspection or the winding up of a society, it is found that any person, who is or was entrusted with the organization or management of such society or who is or has at any time been an officer or an employee of the society, has made any payment contrary to the Act and the rules or the bye-laws, or has caused any loss or damage in the Assets of the society by breach of trust or willful negligence or mismanagement or has misappropriated or fraudulently retained any money or other property belonging to such society or has destroyed or caused the destruction of the records, the Registrar may, of his own motion or on the application of the committee, liquidator or any creditor, inquire himself or direct any person authorized by him by an order in writing in this behalf, to inquire into the conduct of such person. (2) Where an inquiry is made under sub-section(1), the Registrar may after giving the person concerned an opportunity of being heard, by order in writing, require him to repay or restore the money or other property or any part thereof, with interest at such rate or to pay contribution and costs or compensation to such extent, as the Registrar may consider just and equitable] (3) Where the money, property, interest, cost or compensation is not repaid or restored as per sub-section (2), the Registrar shall takes urgent steps to recover such amounts from the concerned persons as arrears of public revenue due on land as specified in section 79 of the Act”.] 3. As is limpid from the afore extracted provisions, the proceedings under this Section are to be initiated against any person entrusted with the organization or management of a Society or against its concerned officer or employee, who have: a. made payment contrary to the provisions of the KCS Act, b. has caused loss or damage to the assets of the Society by: c. Who destroys or causes destruction of the records Rules and the Bye-laws of the Society; or (i) Breach of trust (ii) Willful negligence (iii) Mismanagement (iv) Misappropriation (v) fraudulent retention of money or property belonging to the Society. or 4. It is indubitable from the frame of the afore Section that in the event of any of the afore instances, the Registrar, on his own motion or on the application of the Managing Committee, liquidator or any creditor, may enquire or direct any person to make such enquiry into the conduct of the person against whom the allegations are made. 5. The afore introduction has become necessary because, in the cases at hand, it is the Secretary and the members of the erstwhile Managing Committee of the Mavelikkara Taluk Co-operative Bank Limited, who have approached this Court challenging the action initiated against them under the above Section by the Registrar of Cooperative Societies. 6. The specific contention of the Secretary and members of the erstwhile Managing Committee of the Bank is that they cannot be fixed with any culpability nor can they be imputed with any wrong doing, because it were they who had brought the large scale misappropriation in the Bank, which had been going on for the last several years, to the notice of the competent statutory Authorities. They assert that, therefore, they cannot be seen to be the perpetrators of the misdeeds, but must be construed to be informants; and therefore, that the Registrar ought not to have initiated action against them under Section 68 of the KCS Act, which would have the effect of penalizing them solely for having exposed the wrong-doing. 7. The petitioners also say that the real miscreants are three other employees of the Bank, who have allegedly confessed to their actions and have even executed an agreement stating that they are fully responsible for the loss caused to the Bank and that they will make up for the same. 8. 7. The petitioners also say that the real miscreants are three other employees of the Bank, who have allegedly confessed to their actions and have even executed an agreement stating that they are fully responsible for the loss caused to the Bank and that they will make up for the same. 8. The petitioners further assert that the Managing Committee has, therefore, initiated recovery action against the perpetrators/employees by filing ARC No.1/2017 before the Joint Registrar of Co-operative Societies, Alappuzha, who is the competent Arbitrator under Section 69 of the KCS Act and that the said Arbitration proceedings are still pending. They contend that the perpetrators/employees have been dismissed from service after a valid disciplinary enquiry, in which their guilt were fully proved; thus clearly establishing that they are not responsible for any loss caused to the Bank and consequently that they cannot be made liable for the same. 9. In answer to the afore submissions made on behalf of the petitioners by their learned counsel Sri. D.Somasundram and Sri.P.Ramakrishnan, the learned Special Government leader, Sri. Mohammad Hashim, commenced his submissions by pointing out that proceedings under Section 68 of the KCS Act were initiated by the statutory Authority against the petitioners only after a comprehensive enquiry against them under Section 65 had been completed. He says that it has been established from the said enquiry report that the Managing Committee members and the Secretary are not merely guilty of mismanagement and supervisory lapses, but that there are specific statements made by the perpetrators/employees that many of their transgressions were committed as dictated to them by the President and members of the Committee. He, therefore, prays that the surcharge enquiry against them be allowed to be completed, adding that a notice under Section 68(2) of the KCS Act has now been issued to them by the Registrar of Co-operative Societies; and axiomatically, that they are at liberty to answer the same, employing all their defences, including that they are not responsible for the actual loss. The learned Special Government Pleader closed his submissions by reiteratingly saying that these writ petitions are premature, since what have been assailed are only the notices issued under Section 68(2) of the KCS Act and that the petitioners cannot speculate that the final action will only be to a particular result, as they allege. 10. The learned Special Government Pleader closed his submissions by reiteratingly saying that these writ petitions are premature, since what have been assailed are only the notices issued under Section 68(2) of the KCS Act and that the petitioners cannot speculate that the final action will only be to a particular result, as they allege. 10. After the submissions as afore were made on behalf of the petitioners and by the learned Special Government Pleader, Sri.C.S.Manu, learned counsel, stood up to argue on behalf of some of the members of the Bank, who are stated to have invested large amounts in fixed deposits but are now forced to wait for its repayment on account of the misappropriation mentioned above, by the errant employees. Sri.C.S.Manu, submits that the extent of misappropriation now found by the statutory Authorities is to the tune of over Rs.80 crores and that persons from all walks of life, particularly those from the lowest strata, have been very badly hit by this. He, therefore, says that unless requisite action against the perpetrators is quickly completed, many of the depositors will be irreparably prejudiced, since they are finding it difficult to even sustain themselves on account of the Bank refusing to return their fixed deposits. He submits that many of his clients are persons now in the winter of their lives and that without these amounts being recovered quickly, they may not be able to survive further. 11. I have considered the contentions of the parties recorded as afore, with the care it deserves, being conscious that the consequences that may be set upon the petitioners can be very severe; however, I am of the firm view that it will not be justified for this Court to intervene in the impugned proceedings at this stage, for the reasons that I will presently state. 12. As I have indicated above, the scheme of Section 68 of the KCS Act provides for surcharge proceedings against any person who is or has been entrusted with the management or organization of a Society or a person who has been its officer or an employee. The petitioners in these cases certainly fall into one of these two categories and therefore, cannot contend that they do not come within the ambit of this Section. 13. The petitioners in these cases certainly fall into one of these two categories and therefore, cannot contend that they do not come within the ambit of this Section. 13. The surviving question is whether they are liable to be proceeded against under Section 68 of the KCS Act on account of further prescriptions of the said Section. 14. It is indubitable from the manner in which Section 68 is drafted that any of the afore mentioned classes of persons, who either makes payment contrary to the Act, Rules and Bye-laws; or causes any loss or damage to the assets of the Bank on account of breach of trust, willful negligence, mismanagement or misappropriation would certainly become liable to answer the rigor of the said Section. Pertinently, the word ‘Mismanagement’ in the said Section has been used without any other qualification and therefore, a simplicitor mismanagement, even without it being willful or otherwise, certainly would bring the responsible person under the clutches of the said Section. This is incontestable because, in the other areas of the Section, it is clearly mandated that the loss or damage to the assets of the Bank must be made either by breach of trust; or by willful negligence; or by misappropriation; or by fraudulent retention of money, but when it comes to “mismanagement” there is no such qualification that it ought to be willful, fraudulent or in violation of trust. I am, therefore, firm in my mind that even simplicitor case of mismanagement would be sufficient to bring the enumerated classes of persons within the ambit of the said Section. 15. The impact of my observations above is contextually important because, it is the specific case of the petitioners in these cases that they were not aware of the misappropriation which was happening in the Bank for the last several years and that they, therefore, cannot be found to be willfully or fraudulently culpable for the same. However, even if these submissions are accepted ex-facie and on its face value, it would still not exonerate them of the obligation to answer the charges under Section 68 without further enquiry, since the factum of them being in the management of the Bank is without any contest and the scale and modus of the misappropriation, prima facie points to gross mismanagement, if not to other ingredients of the Section. This is more so because, as far as the Secretary of the Bank is concerned, she is its Chief Executive Officer; while the Board of Management is its final Administrative Authority, which takes all decisions, including on policy matters. It may be true that the members of the Managing Committee may not be involved in the day-to-day affairs of the Bank, but in the case of the Secretary, this cannot even be taken as a defense. 16. That having been said, it is certainly possible that inspite of the best diligence and care, sometimes employees and or other persons may be able to successfully operate a conspiracy, using dseception and deceit which cannot be easily identified or ascertained. However, whether it is so in these cases are aspects that the petitioners will have to prove and establish through cogent and reliable methods and if they are able to irrefutably circumstantiate that the misappropriation which went on in the Bank for a long period of time was something that could not be identified in spite of all due diligence and effort from their side, it would certainly be a factor in their favour. 17. I am certain that this is a valid defense available to them, which they can take up appropriately, because it has already been declared by a learned Judge of this Court, as early as in the year 1990, in A.K.Francis V. The Joint Registrar [1990 KHC 411], that in normal circumstances, liability under Section 68 of the KCS Act would get fastened only when the person, against whom the allegation is made, is found to have criminal intent or the necessary mens rea while having committed the infractions. 18. Coalescing the above declaration of law with the provisions of Section 68 seen above, it renders it irrefutable that officers, employees and persons in charge of the affairs of a Society, who are found guilty of mismanagement by gross disregard to their duties and obligations cast upon them under law and thus allows loss to be caused to the Society in the manner enumerated in the Section, would, notwithstanding whether they were deliberately complicit in the offence, be liable under this Section unless they are able to establish that the violations occurred in spite of them having exercised all due diligence and care, as are expected of them statutorily. In other words, mismanagement coupled with the absence of due diligence and care would attract the assumption of culpability under this Section on the concerned officer/person. 19. The sum total of my observations above is that this Court cannot intervene in or interdict the present action being proceeded against the petitioners under Section 68 of the KCS Act, but that they certainly can invoke and pursue all their other legal remedies and their available defenses, including that which I have spoken about it supra. In the afore circumstances, I order these writ petitions leaving the petitioners liberty to respond to the impugned notices, issued to them under Section 68(2) of the KCS Act, within a period of one month from the date of a receipt of a copy of this judgment; in which event, the competent Registrar of Co-operative Societies will hear them and offer them an opportunity of producing necessary evidence, if they so require; and thereafter, conclude the proceedings in terms of law. I reiteratingly clarify that the petitioners will be given full opportunity of setting forth all their defenses, including that the misappropriation occured inspite of their best and most effective supervision and diligence and this is a factor that the Registrar will advert to while taking a final decision. Even though I have concluded as above on the legal issues, I am cognizant that ARC No.1/2017 is still pending against the employees of the Society, who are suspected to be the direct perpetrators of the misappropriation. I therefore, order the concerned Arbitrator to complete the proceedings therein as expeditiously as is possible, but not later than six months from the date of receipt of a copy of this judgment. I am fixing the time short because, if any recovery is enabled through such processes, then the burden of the petitioners herein may stand reduced to that extent, even if they are found guilty through the action to be completed by the Registrar under Section 68 of the KCS Act. Sri.C.S.Manu, learned counsel appearing for the depositors, at this time interjected to pray that his clients also be allowed to be heard while the Registrar completes the proceedings under Section 68 of the KCS Act, so that they can place their version of the various aspects involved before the said Authority effectively. Sri.C.S.Manu, learned counsel appearing for the depositors, at this time interjected to pray that his clients also be allowed to be heard while the Registrar completes the proceedings under Section 68 of the KCS Act, so that they can place their version of the various aspects involved before the said Authority effectively. I cannot find this request to be unjustified and feel it apposite to accede to it, since any valid input to be offered by the depositors may assist the Registrar to arrive at an appropriate decision. I consequently, direct the Registrar to call one or two such depositors for hearing, who, as Sri.C.S.Manu suggests, shall be Sri.Jayakumar B. Kurup and Sri.Udayakumar R, who are arrayed as additional respondents Nos. 4 and 5 in W.P. (C).No.19648 of 2018. After I dictated this judgment, Sri.P.N.Mohanan, pointed out that as far a W.P.(C) No.19320 of 2018 is concerned, the petitioner therein is the Secretary of the Society, who has prayed that her retiral benefits be released to her. He alleges that not even her pension dockets have been forwarded by the Bank to the Pension Board and that she is therefore, not in a position to enjoy any of her benefits until now. Even when I hear Sri.P.N.Mohanan as afore, I am aware that proceedings under Section 68 is pending against the Secretary also and I am of the firm view that it will not be proper for me to now issue any orders in this writ petition until the said proceedings are concluded against her; however, leaving her liberty to seek these reliefs appropriately there after. These Writ Petitions are thus ordered.