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2019 DIGILAW 537 (KER)

Varkey. G, S/o. George v. Joint Registrar of Co-Operative Societies (general), Alapuzha P. O. , Alapuzha Via

2019-07-09

DEVAN RAMACHANDRAN

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JUDGMENT : 1. The apparent reluctance of a Co-operative Society to admit a particular applicant to its primary membership, even though the statutory Authorities, including the Government of Kerala, insists so, has led to these writ petitions. 2. These two cases warrant to be heard and disposed of together because, in one of them, namely, W.P(C).No.34725/2017, a person by name Sri.Varkey G., seeks implementation of the orders of the Joint Registrar of Co-operative Societies and the Co-operative Ombudsman, as per which, the Champakulam Service Co-operative Bank Ltd., (hereinafter referred to as the 'Bank') has been directed to admit him as its primary member; while W.P. (C).No.8738/2018 has been filed by the said Bank, challenging these orders as also the subsequent order of the Government, dated 01.03.2018, issued in their statutory appeal filed against them. 3. I have heard Sri. Johnson Manayani, the learned counsel for Sri.Varkey G., the petitioner in W.P(C). No.34725/2017; Sri.P.N. Mohanan, the learned Standing Counsel for the petitioner-Bank in W.P(C).No.8738/2018 and the learned Senior Government Pleader, Sri. Bimal K.Nath, appearing on behalf of the official respondents in both these cases. 4. The singular issue which is involved in these two cases, is whether a Co-operative Bank can refuse to admit a person to its membership, merely on the basis of a speculative apprehension that he is likely to act against their interests in future. 5. The Co-operative bank alleges, in the proceedings issued by them rejecting the application of Sri. Varkey G., that he had earlier been their employee and that while so, he had made several untenable allegations and complaints against them. They also say that Sri.Varkey G. had been proceeded against for disciplinary action while in service and that even after his retirement, he has been making complaints after complaints against the Managing Committee and the Bank before various statutory Authorities, the Human Rights Commission etc. The Bank, therefore, takes a vehement stand that Sri. Varkey G. cannot be admitted as their primary member. 6. Contrary to this, Sri. Johnson Manayani, the learned counsel appearing for Sri.Varkey G., submits that there is no provision in the Kerala Co-operative Societies Act and Rules (hereinafter referred to as the 'KCS Act and Rules') which permits the Managing committee of a Co-operative Society to decline membership to an applicant solely for the conjectural reason that he is likely to act against the interests of the society in future. He says that such a reason is merely hypothetical and assumed; and that, in any event of the matter, the fact that his client had made certain grievous complaints against the erstwhile Managing Committee of the Bank, cannot be good reason to deny him membership, since those complaints had subsequently led to valid action being taken by the competent statutory Authorities, thus establishing that they were not frivolous, as has been alleged. 7. Sri. Johnson Manayani further says that when the Bank refused to grant membership to his client, he filed an appeal before the Joint Registrar of Co-operative Societies, which culminated in an order, produced as Ext.P6 in W.P.(C). No.34725/2017; and that he thereafter moved the Kerala Cooperative Ombudsman and obtained Ext.P10 order, wherein directions have been issued to implement the orders of the Joint Registrar. Sri. Johnson Manayani says that while so, the Bank filed an appeal against Ext.P7 before the Government, but that the same was also rejected, a copy of which order has been produced by the Bank in W.P(C).No.8738/2018, as Exhibit.P4. He therefore, prays that the Bank be directed to admit his client as its primary member forthwith, in obedience to the various orders afore mentioned. 8. In response to the above submissions, Sri.P.N. Mohanan, the learned Standing counsel for the Bank, submitted that the applicable provisions of the KCS Act and Rules give full discretion and authority to the Society and particularly, its Managing Committee, to take a decision as to new memberships. He says that a reading of Section 16 of the KCS Act would make it ineluctable that it is for the Managing Committee of the Bank to take a final decision to grant or reject membership to an applicant; but concedes, that if membership is so refused, the applicant has the right to move to the Government under section 83(1)(c) of the KCS Act. After saying so, he contends very strongly that Sri.Varkey G., however, did not resort to this remedy, but chose to incorrectly invoke the provisions of section 16(2A) of the KCS Act by filing a proceeding before the Registrar of Co-operative Societies, which was not maintainable; and therefore, that, the orders relied upon by him are incompetent. He thus prays that W.P.(C).No.34725/2017 be dismissed and the writ petition filed by his client, namely W.P.(C).No.8738/2018, be allowed. 9. The learned Senior Government Pleader, Sri. He thus prays that W.P.(C).No.34725/2017 be dismissed and the writ petition filed by his client, namely W.P.(C).No.8738/2018, be allowed. 9. The learned Senior Government Pleader, Sri. Bimal K.Nath, submits that he is supporting the order of the Government for various reasons, but primarily because, as has been clearly found therein, the application of Sri.Varkey G. was rejected by the Bank without any credible reason. He says that the reasons stated in Ext.P1 order, produced along with W.P(C).No.8738/2018, are completely unacceptable, since it only says that Sri.Varkey G. had made certain complaints against the Bank in the past. He contends that this is not a reason that was available to the Managing Committee of the Bank to reject his application and therefore, that this Court allow W.P(C).No.34725/2017, dismissing W.P(C). No.8738/2018. 10. I have considered the afore submissions very carefully and I certainly see the anxiety of the Bank that Sri.Varkey G. is not granted membership on their rolls. Whatever be the reasons that the Bank may have and however justified their apprehension may be, membership to Sri.Varkey G. can be legally denied only for the reasons that are sanctioned by the KCS Act and Rules. It is conceded before me, even by Sri. P.N. Mohanan, learned Standing Counsel for the Bank, that the KCS Act and Rules do not specifically contain a provision whereby a prospective applicant can be denied membership merely because he has allegedly acted against the Bank earlier or that he may so act in future. In both these counts, the apprehension is only conjectural, since the fact that the applicant may have preferred complaints against the Bank in the past or the fear that he may do so in the future, are not relevant considerations permitted by the KCS Act and Rules, in rejecting this application. 11. I, therefore, find force in the submissions of Sri.Johnson Manayani and Sri.Bimal K.Nath, that the reasons stated by the Bank in Ext.P1, produced along with W.P(C).8738/2018, cannot obtain the favour of this Court, it being not supported by the mandate of the KCS Act and Rules. 11. I, therefore, find force in the submissions of Sri.Johnson Manayani and Sri.Bimal K.Nath, that the reasons stated by the Bank in Ext.P1, produced along with W.P(C).8738/2018, cannot obtain the favour of this Court, it being not supported by the mandate of the KCS Act and Rules. It is, however, without doubt that there are provisions available in the Act and the Rules to expel a member if he indulges in activities against the Society after he becomes its member; but these provisions cannot be applied retroactively, even before he becomes a member, on the conjectural apprehension that he may so act if he is admitted. 12. That said, I must also answer the contentions of Sri.P.N.Mohanan regarding the maintainability of the application filed by Sri. Varkey G. before the Joint Registrar against the proceedings of the Bank rejecting his application. Strictly and technically, I find in his favour that Sri.Varkey G. ought to have moved the Government under section 83(1)(c) of the KCS Act, rather than under section 16(2A) thereof before the Joint Registrar, as he had done. In normal circumstances, this would have been sufficient for this Court to find in favour of the Bank. 13. However, in this particular case, the fact remains that against the resultant order of the Joint Registrar, which may or may not have been issued with competence, the Bank decided to file an appeal before the Government invoking their appellate remedy under section 83(1)(j) of the KCS Act, which led to the order impugned by them in W.P(C).8738/2019. Therefore, even assuming that the order of the Joint Registrar suffered from a technical problem on account of lack of competence, it is irrelevant at this point of time because the Government has passed a subsequent order in the appeal filed by the Bank against this order. 14. Therefore, even assuming that the order of the Joint Registrar suffered from a technical problem on account of lack of competence, it is irrelevant at this point of time because the Government has passed a subsequent order in the appeal filed by the Bank against this order. 14. Further, as pertinently submitted by Sri.Bimal K.Nath, the learned Government Pleader, even if the contentions of the Bank are accepted and even if I am to find that Sri.Varkey G. ought to have only invoked section 83(1)(c) of the KCS Act against the proceedings of the Bank rejecting his application for membership, the fact remains that the next Appellate Authority is the Government under section 83(1)(j) of the KCS Act; and consequently, even if the order of the Joint Registrar suffered from any such incompetence, the final order of the Government, which interestingly, was issued at the instance of the Bank, rectified it. Resultantly, W.P.(C). No.34725 of 2017 is allowed and I direct the Champakkulam Service Co-operative Bank to immediately act as per the directions of the Government in its order No.123/2018/Co-op. Dated 01.03.2018, a copy of which is on record as Ext.P4 in W.P.(C).No.8738/2018; and axiomatically, W.P.(C). No.8738/18 will stand dismissed. The action as afore directed will be completed by the Bank as expeditiously as is possible, but not later than two weeks from the date of receipt of a copy of this judgement; failing which, consequential steps, as ordered in the afore mentioned Government Order will be initiated by the competent statutory Authority immediately thereafter; but clarifying that if the Bank adheres to the directions, then no action, including under section 32 of the KCS Act will be warranted.