IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 4564 of 2009(R)
1. JOSEPH.K.A, PRESIDENT,(NOW UNDER
1. THE JOINT REGISTRAR (GENERAL)OF CO-OP;
2. K.P.THANKACHAN, ALAKKODE UNIT INSPECTOR,
3. THE STATE OF KERALA,REPRESENTED BY ITS
For Petitioner :SRI.M.A.FIROZ
For Respondent :SRI.P.C.SASIDHARAN
The Hon'ble MR. Justice ANTONY DOMINIC
O R D E R
W.P.(C).No.4564 OF 2009
Dated this the 13th day of July, 2009.
The petitioner was the President of Nediyenga Service Co-operative Bank in Kannur District.
2. Pursuant to an election that was held in March, 2006, the Managing Committee of the Society assumed office on 12/03/2006,and its term is to expire on 11/3/2011. While continuing in office, they were issued Ext.P1 show cause notice calling upon them to show cause why the Committee shall not be superseded under Section 32 of The Kerala Co- operative Societies Act(hereinafter referred to as'the Act' for short). Ext.P1 show cause notice was challenged before the Court in WP(C) No.37881/2008, and the writ petition was disposed of by Ext.P2 judgment rendered on 19/12/2008 WP(c).No.4564/09 2
making it clear that the petitioner will be entitled to obtain copy of the report under Section 66, based on which Ext.P1 was issued, file objections and that the matter will be considered in the light of the materials available.
3. It is stated that pursuant to the judgment, they were given a copy of the report under Section 66 of the Act relied on in Ext.P1, an extract of which is Ext.P3. The petitioner, thereafter filed his objections to Ext.P1, a copy of which is Ext.P4. Parties were heard by the Joint Registrar. While orders were awaited, the petitioner submits that on an apprehension that without passing orders on Ext.P1 or serving copy, the Committee will be superseded, they filed WP(C) No.1825/2009 before this Court. That writ petition was disposed of by Ext.P6 judgment dated 02/02/2009 recording the submission of the learned Government Pleader that orders as apprehended were not passed, and without prejudice to the contentions raised. The petitioner submits that on 02/02/2009 itself, Ext.P7 order was issued by the 1st respondent exercising his powers under WP(c).No.4564/09 3
Section 32 of the Act, and superseding the Committee, of which the petitioner was the President and that accordingly, the 2nd respondent took over charge as the Administrator of the Society on 06/02/2009. It is thereafter that on 09/02/2009 this writ petition has been filed seeking to quash Ext.P7, and for directions enabling the Committee to continue in office.
4. The petitioner submits that Ext.P1 show cause notice contained 19 allegations, out of which, 11 are in relation to incidents which took place prior to their assuming office. Relying on Ext.P8 judgment of the Division Bench in W.A.No.1363/2004, it is contended that the Committee elected to the Office of a Society cannot be superseded for misconducts committed by a previous Committee. In so far as charge numbers 7, 9, 10, 11, 13 & 14 pertaining to the period subsequent to their assuming office are concerned, the learned counsel for the petitioner contends that the findings arrived at in Ext.P7 are absolutely perverse and, at any rate, do WP(c).No.4564/09 4
not justify the extreme step of supersession of elected Committee of the Society. Elaborating on this, the learned counsel contends that though the statute confers power of supersession under Section 32 thereof, the said power is to be exercised only in rarest of rare cases against a Society. Reliance was placed on the decisions of this Court in A.K.Francis v. Joint Registrar (1990(2) KLT 470), Govindan Kutty v. Viyyur Service Co-op. Bank (1990(1) KLT 513), Rajagopalan Nair v. State of Kerala (1995(2) KLT 184), Ellakkal Service Co-operative Bank v. State of Kerala (1997(2) KLT 85) and the Apex Court judgment in Surinder Nath Dewan v. State of Haryana & Others (1994 Supp. (3) SCC 135).
5. The learned counsel also contended that after the receipt of Ext.P3 report, the 1st respondent did not pass any order or issue directions as contemplated under Section 66(5) of the Kerala Co-operative Societies Act (hereinafter referred to as the Act for short). It is stated that in the absence of such an order, there cannot be a case of disobedience to WP(c).No.4564/09 5
comply with any lawful order or direction or default in the performance of the duties as contemplated under Section 32 (1) (a) of the Act to justifying Ext.P7 order. He also points out that along with Ext.P3, the balance sheet of the Society was not enclosed and therefore, there is violation of Rule 66(5) of the Rules. In this context reliance was placed on the decision of this Court in Ellakkal Service Co-operative Bank v. State of Kerala (1997(2) KLT 85).
6. The learned counsel also contended that though the Joint Registrar had visited the Society on 11/12/2008, he did not prepare any report, based on which Ext.P1 show cause notice was issued on 12/12/2008. According to the learned counsel, Ext.P1 show cause notice was already prepared as early as on 06/12/2008 itself and in order to legitimise the same, the visit was conducted and the notice already kept ready was issued with the date 12/12/2008. Referring to the judgments of this Court in Jose Kuttiyani and Others v. The Registrar of Co-operative Societies & Others (AIR 1982 Kerala WP(c).No.4564/09 6
12) and Sahadevan v. Padmanabhan (2004(1) KLT 192), it was argued that the process of consultation was turned into an empty formality in as much as the materials which are required to be forwarded to the District Co-operative Bank and the Circle Co-operative Union were not forwarded. He further argued that as is seen from Ext.P7, the 1st respondent did not await for the response of the District CO-operative Bank or the Circle Co-operative Union, and as a result thereof, there has not been any consultation as contemplated under Section 32 (2) of the Act.
7. The learned Government Pleader submitted that though 11 out of the 19 allegations in the show cause notice pertain to a period prior to the present committee assumed office, instructions were issued by the 1st respondent requiring the Committee to rectify the defects and that those instructions were not complied with. It is stated that this refusal reflects a case of willful disobedience of the lawful orders issued by the departmental authorities, and in such WP(c).No.4564/09 7
cases, the 1st respondent was justified in invoking his powers under Section 32 of the Act. In so far as the consultation process is concerned, referring to Ext.P7 order itself, it is submitted that the Joint Registrar has stated that the documents were forwarded to the District Co-operative Bank and to the Circle Co-operative Union, which were sufficient to enable them to convey their views in the matter. According to the learned Government Pleader, despite having received these documents, the consultees did not respond and that in such circumstances, the 1st respondent was perfectly justified in proceeding with the matter. The learned Government Pleader also invited my attention to Section 32(3) of the Act and contended that if in certain circumstances, the very consultation itself could be dispensed with, the authority could not have been expected to wait endlessly for the response of the consultees. According to the learned Government Pleader, each one of the allegations pertaining to the period after the petitioner assumed office, itself are good grounds for invoking WP(c).No.4564/09 8
Section 32 of the Act.
8. On behalf of the 2nd respondent, Sri. P.C.Sasidhran contended that in Ext.P1 judgment, this Court while directing to furnish copy of the report under Sec.66 of the Act to the petitioner, directed that it was open to him to file objections. It is contended that despite this, objection was not filed and as a result thereof, the findings in the report have become final. It is stated that in such circumstances, proceedings resulting in Ext.P1 are only consequential in nature, and that in such a factual background, this Court should not interfere with the impugned proceedings. It was also contended that this Court exercising power of judicial review, should not sit as an appellate Court and examine the merits of the order. It is also his contention that in a case of willful disobedience or failure to comply with a lawful order as contemplated under Section 32(1)(b) of the Act, the requirement of persistent default or negligence provided in sub section 32(1)(a) need not be present for passing orders under Section 32 of the Act. He WP(c).No.4564/09 9
also made reference to the judgment of this Court in State of Kerala v. Sudarsanan (1997(2) KLT 522), where this Court explained the nature of the power under Section 32 of the Act.
9. I have considered the submissions made.
10. As already noticed, Ext.P1 show cause notice and Ext.P7 order under Section 32, contain 19 allegations. Allegation Nos.2, 7 to 15 & 19 pertain to the period prior to 12/03/2006 when the Committee assumed Office. Allegations Nos.1, 3 to 6, and 16 to 18 relate to the period after the petitioner assumed office. In so far as allegation No.18 is concerned, the explanation furnished in Ext.P4 has been accepted in Ext.P7 order. Allegation No.7 is to the effect that by order dated 20/02/2007, the Bank was directed to take action for recovery of the amount due from a defaulter, and though notice was given on 27/07/2007, the Committee did not take any further action in the matter. Therefore, the allegation is that the Committee disobeyed the direction issued on 20/02/2007. Similarly, in respect of charge Nos.9, WP(c).No.4564/09 10
10, 11, 13 & 14 also, a reading of Exts.P1 & P7 shows that the allegation is that the Committee did not comply with the direction issued by the 1st respondent on 16/08/2006. In so far as the remaining five charges, charge Nos.2,8,12,15 and 19, pertaining to the period prior to 12/03/2006 are concerned, neither Ext.P1 nor Ext.P7 states that any direction was issued.
11. In so far as the question whether the Committee in office could be superseded for the irregularities committed by a previous committee is concerned, as rightly pointed out by the learned counsel for the petitioner, that issue is answered by a Division Bench of this Court in the judgment in K.V.Mohanan v. State of Kerala & Others (Writ Appeal No.1363/2004), a copy of which has been produced as Ext.P8, where, it has been held that the Committee of the Co- operative Society cannot be superseded for the defaults and irregularities alleged to have been committed by a previous Committee. Then what remains is what could be WP(c).No.4564/09 11
consequences of the alleged non-compliance with the directions issued by the 1st respondent on 16/08/2006 and 20/02/2006 pertaining to charge Nos.9, 10, 11, 13, 14 & 7 respectively. I shall deal with this issue at a later stage of this judgment.
12. The charges pertaining to the period subsequent to the assumption of the Office by the Committee led by the petitioner are charge Nos.1, 3 to 6, 16, 17 & 18. Charge No.1 is that the Joint Registrar by order dated 28/11/2006 directed that an accused in a vigilance case be placed under suspension, and that the Committee did not comply with the said direction. It is stated that without doing so, the Committee obtained legal opinion and incurred an unnecessary expenditure of Rs.2,000/-. The answer of the Committee is that the accused in the vigilance case mentioned in charge No.1 had filed WP(C) No.33288/2006 before this Court, which was disposed of by Ext.P9 judgment. In that judgment, this Court directed that the Bank shall take an WP(c).No.4564/09 12
independent decision uninfluenced by the direction issued by the 1st respondent to place the employee under suspension. It is stated in Ext.P4 reply that in pursuance to the aforesaid judgment, in order to consider the matter and pass an order, which is sustainable in law, the Committee sought legal opinion, and in the light of the legal opinion, passed a resolution not to place the employee under suspension. It is stated that the power to place an employee under suspension is a power exclusively vested on the disciplinary authority in terms of Rule 198(6) of the Rules. In Ext.P7, the 1st respondent took the view that the attitude adopted by the Committee is a curious one and on that basis, the explanation has been rejected.
13. Having considered the allegations in Ext.P1 notice in the light of Ext.P4 reply and the findings in Ext.P7 order, I am inclined to think that the 1st respondent was not justified in taking the view that he has taken in Ext.P7. When the 1st respondent ordered to place the employee under suspension, WP(c).No.4564/09 13
that was challenged before this Court, and this Court in Ext.P9 judgment directed the disciplinary authority to take an independent decision uninfluenced by the directions of the 1st respondent. The disciplinary authority wanted to obtain legal advice in the matter and the bona fides of that decision cannot also be faulted. Legal advice can only be on payment fee to the counsel. Accordingly, the matter was considered in the light of the advice received and resolution was passed not to place the employee under suspension. There is nothing irregular in such a decision and if at all, the Joint Registrar had found that the decision is vitiated for any reason, it was always open to the Joint Registrar to have exercised his power under Rule 176 of the Rules. Therefore, the first charge levelled against the petitioner and the findings in Ext.P7 are totally unsustainable.
14. Charge No.3 is that the Committee declined to accord sanction to prosecute certain employees, who were involved in a vigilance case. It is stated that for this purpose WP(c).No.4564/09 14
again legal opinion was obtained and expenditure was incurred and that at a later point of time, sanction was accorded. The crux of the allegation is that in the process, the Bank incurred unnecessary expenditure of Rs.3,750/- towards legal expenses. The answer of the petitioner in Ext.P4 reply submitted is that it being a legal issue, they sought legal opinion, and that it was in the light of the legal opinion that the issue was considered and a decision was taken. It is stated that the expenditure shown to have incurred by the Bank was actually incurred and that the decision of the Bank was not criticized even by the Vigilance Director. In my view, this explanation ought to have been accepted, especially when there is no case that any amount has been misappropriated.
15. Charge No.4 in Ext.P4 show cause notice is that when one of the directors was disqualified on the ground of his being a defaulter, he challenged the proceedings against him before this Court in WP(C) No.15311/2007, impleading the Bank also as a respondent. It is stated that the Managing WP(c).No.4564/09 15
Committee, in its meeting held on 08/06/2007, presided over by the alleged defaulter himself resolved to unnecessarily engage a counsel to appear on behalf of the Bank, and that in that process, an unnecessary expenditure of Rs.5,000/- was incurred. Ext.P10 in this writ petition is the judgment in WP(C) No.15311/2007 filed by the alleged defaulter, which shows that a counsel had appeared for the Bank. In Ext.P4 reply, it is stated that when notice was received from this Court, finding that the Bank was a party in the writ petition, the Bank thought that it is only appropriate that it should be represented by a counsel. They make reference to Ext.P10 judgment and state that the fact that the Bank or its lawyer did not collude with the petitioner therein is evident from the judgment itself, since the writ petition was dismissed by this Court. However, in Ext.P7, the order passed under Section 32, the 1st respondent took the view that the Bank being only a formal party, need not have appeared in the case and could have avoided the legal expenditure.
16. In my view, if the Bank was a party in a writ petition, and irrespective of the stakes involved, it has decided that it should be represented, there is nothing improper about that decision. This is all the more so, as a responsible litigant, the bank is expected to appear before this Court when notice is received. Even if it is taken that the decision of the Bank was an unwise one, that does not mean that such a decision warrants any consequence as provided in Section 32, nor can the payment made to the counsel be said to be one attracting Section 32(1)(c) of the Act.
17. Charge No.5 in Ext.P1 show cause notice is that the Bank did not collect tax receipts at the time of disbursing loans contrary to the direction issued by the District Co- operative Bank. In Ext.P4 reply filed, it has been stated by the petitioner that in the District Level Review Meeting, when it was found that due to the insistence of the tax receipts, the volume of loan transaction has been reduced, it was decided to dispense with tax receipts for renewal of the loan. It is WP(c).No.4564/09 17
stated that in compliance with the above, the Committee resolved to dispense with production of tax receipts for loan renewals for the period from 10/10/2007 to 31/03/2008 , and that tax receipts have been insisted as and when new loans were granted. A reading of Ext.P7 shows that the aforesaid contention urged in Ext.P4 has not been adverted to by the 1st respondent while concluding this issue against the petitioner. Therefore, the finding on Charge No.5 cannot be sustained.
18. Charge No.6 is that default was committed by the Committee in taking steps for the execution of the arbitration awards that the Bank had obtained. In Ext.P4 the answer of the petitioner is that in several cases, the 1st respondent himself had issued orders stalling execution proceedings. It is the case of the Bank that even otherwise, in cases where execution proceedings have been filed, as a result of inordinate delay, realisation of dues was getting delayed. It is stated that therefore the Bank had taken a conscious decision WP(c).No.4564/09 18
to persuade the parties to settle the liabilities on amicable terms, and that in that process, got settled 262 such cases. In Ext.P7, this issue has been found against the petitioner and it has been held that if this situation continues, the Bank will soon be deep in red. The accumulated loss of the Bank is 2.83 crores, and the total defaulted amounts to be realised is Rs.3.33 crores. In this back ground, the finding of the 1st respondent is that execution proceedings have been initiated only in respect of 10% of such cases and that there has been lapses on the part of the committee. Having regard to these facts, I cannot find fault with the 1st respondent, in the view that he has taken.
19. Charge No.16 is that Smt.M.K.Narayani, the Secretary of the Bank had given statement before the Enquiry Officer that she was prevented from discharging her duties and that it was therefore that she opted to quit from service. It is also stated that Shri.Thomas Antony also had refused to take charge as the Secretary for similar reasons. In Ext.P7, this WP(c).No.4564/09 19
issue also has been concluded against the petitioner. The learned counsel for the petitioner referred me to Exts.P11 & P13 and also Ext.P7 reply. Exts.P11 & P12 show that Shri.Thomas Antony himself had submitted his unwillingness to assume charge as the Secretary, and he has requested to avoid him due to personal reasons. In Ext.P4 reply, it is stated that Smt.Narayani requested that she be relieved on health reasons, and a copy of her letter was also enclosed to Ext.P4 as Annexure IV. Similarly, explanation is also offered in regard to Shri.Thomas Antony. A reading of Ext.P7 shows that none of these aspects have been dealt with and on the other hand, the 1st respondent has concluded the issue against the petitioner. Therefore, finding on Charge No.16 cannot be sustained, for not considering the explanation in Ext.P4 and the materials relied on by the petitioner.
20. Charge No.17 is that due to dereliction of duties to the Society deposits were not renewed in time and hence the Bank lost Rs.29,426/- towards interest. This charge has been WP(c).No.4564/09 20
answered by the petitioner in Ext.P4, that it was due to the dereliction of duty of two of its employees that this has happened and that the loss is being recovered from the concerned employees and that disciplinary action has been initiated against them. In Ext.P7, the finding is that this loss had occurred due to the dereliction of duties of the committee. This finding of the 1st respondent also cannot be sustained for the reason that while concluding this issue against the petitioner, the explanation offered by the petitioner has not been considered. Therefore, except the finding on charge No.6, findings of the 1st respondent on the aforesaid other charges are all perverse.
21. The other question which requires to be considered is whether in the facts of this case, an order under Section 32 of the Act is justified. A reading of the various provisions in the Act and the Rules show that the legislative intent is that the Co-operative Societies should function in a democratic manner with an elected committee at its helm of affairs. WP(c).No.4564/09 21
However, power has also been conferred on the statutory authorities to supersede the elected committee and entrust the administration to a Administrator, as a corrective measure and specific grounds have been provided in the Statute for exercising such power of supersession. Exercising the nature of the power under section 32 of the Act, this court in Govindan Kutty V. Viyyur Service Co-operative Bank (1990(1) KLT 513), held as follows;
The power u/s.32 of the Act is not to be
exercised in a casual manner. Co-operative
Societies should have greater autonomy in
their functioning. Registrar's control over the societies should not culminate in virtually depriving themcharacter.
of their democratic and
autonomous Progressive officialisation and politicisation is causing damage to the co-operative movement. A growing tendency is now seen to supersede
the elected boards of societies on flimsy
grounds. This move should be curbed if the
co-operative movement is to thrive in this
6. From the scheme of the Act and Rules
framed there-under, it is evident that the
affairs of a co-operative society are to be controlled and managed by elected board of
directors. It is only in the rarest of rare cases WP(c).No.4564/09 22
can the board be superseded and an Administrator appointed. The registrar is
invested with wide powers to circumscribe the field of activities of the board of directors. The Registrar is to exercise that power and to
control the affairs of the society in the best interest of the society. Registrar's attempt must be to get the activities of the society carried on by the elected board and not to
remove it from office. Registrar must exercise power underinstitutions strengthening the co- the Act for
democratic set up. On flimsymaintaining
boards of directorsinvoking
superseded by of societies areprovisions not to be
contained in S.32 of the Act."
22. Again in Rajagopalan Nair V. State of Kerala (1995(2) KLT 184), it has been held as follows;
In the process of appreciating the contents with reference to the exercise of powers by the
Registrar, the above provisions 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 inofthe process of the role of the Registrar beingThese a supervisory and controlling character.
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 WP(c).No.4564/09 23
in default, negligence in the performance, willful disobedience or failure of an equal characterthe in compliance with the order and finally 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. 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 fromthethe language under
situationconsideration has to be more than careful leads to inevitable
that the court
and cautious in the process of dealing with the exercise of such power or refusal thereof in regard to the super session of committee. The court has to guard and watch in the matter as to whether the material on records 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.
23. The aforesaid decisions reiterate the legal position that, power under Section 32 has to be exercised only in extreme cases, where such invocation is absolutely necessary in the interest of the Society. In this case, I have already concluded that, the finding in respect of charge No.16 WP(c).No.4564/09 24
sustainable. I am also certain that findings in relation to charge No.16 do not warrant the exercise of power under Section 32 and supersede the elected committee.
24. In so far as the charge Nos.7,9,10,11 and 14 are concerned, as noticed in the earlier part of this judgment, the case of the respondent is that though these allegations pertain to a period prior to the committee among office, there has been willful disobedience or failure to comply with the lawful orders issued by the first respondent to rectify the defects mentioned therein. In Ext.P8 judgment in W.A. No.1363/04, this court has taken held that previous committee's failures cannot be a ground to supersede the subsequent committee. Admittedly, the allegations covered by these charges pertaining to lapses committed by previous committees. It is stated that, subsequent to the constitution of the present committee of which petitioner is the President, instructions were issued on 28.2.2006 and 18.6.2006 to rectify the defects and that these instructions were not complied with. WP(c).No.4564/09 25
Therefore, for the failure of the previous committee, the present committee is sought to be superseded on the basis that the present committee did not willfully comply with the instructions issued. If I am to accept the contention that, for non-compliance of the directions, the committee can be superseded, it will enable the first respondent to supersede the present committee for failure of the previous committee, after issuing a communication as in this case. Secondly to make out a case of willful default, there must be repeated and conscious refusal to comply with lawful orders and there is no such case.
25. As rightly pointed out by the counsel for the petitioner, this court in A.K. Francis V. Joint Registrar (1990 (2)KLT 470) the word 'wilfulness' was held to import premeditation or knowledge and consciousness that an injury or loss was likely to result from the act done or from the omission to act. Again this expression was considered by the Apex Court in Pollachi Co-operative Marketing Society V. K.N. WP(c).No.4564/09 26
Valuswami and Ors.(1994( Suppl.III) SCC134), where it has been held that, to constitute willful negligence, the act done or omitted to be done must involve such reckless disregard of duty as to imply bad faith. An appreciation of the materials on record in this case show that the respondents have miserably failed in making out a case of willful disobedience or failure on the part of the committee in office, to invoke against it section 32(1)(b) of the Act.
26. Much has been stated in the impugned order about certain payments made as legal fee. Admittedly such payment have been made when legal opinions were obtained by the Committee in office. The attempt in the order is to make out a case under Section 32(1)(c) of the Act, which provides that if the Registrar is satisfied that the Committee of any society makes any payment contrary to the Act, Rules or Bye-laws or causes loss or damage to the assets of the society, by breach of trust or willful negligence, he may after complying with the procedure laid down in this behalf, remove the Committee. WP(c).No.4564/09 27
On merits I have found that these payments cannot be faulted. Even assuming that the payments were made irregularly, still there is nothing on record to indicate that such payments made were "in breach of trust or willful negligence" in which event alone Section 32(1)(c) is attracted. Therefore that ground also is not available to supersede the committee.
27. There is yet another aspect, which requires to be noticed. Section 32(2) of the Act provides that before passing an order under Sub Section (1), the Registrar shall consult the financing Bank, the Circle Co-operative Union or the State Co- operative Union, as the case may be. Two arguments have been raised relying on this sub section. First is that, the first respondent did not await for the response of the Circle Co- operative Union and the District Co-operative Bank before issuing Ext.P7 order. The other is that while soliciting the views of the consultees, the tentative conclusions arrived at by the first respondent were not forwarded.
28. In so far as the contention of the counsel for the petitioner that the first respondent ought to have awaited for the response of the consultees and that the order passed is illegal for that reason, I should confess that I am not impressed with this contention. A reading of the order shows that the views of the consultees were not forthcoming and it was therefore that the first respondent passed Ext.P7 order. Counsel for the petitioner wants me understand Section 32(2) of the Act, as requiring the first respondent not to pass an order until response of the consultees is received. If this argument raised by the counsel for the petitioner is accepted, that will lead to a situation where the Registrar will have to await endlessly for the views of the consultees and if the consultee do not respond, the Registrar will be disabled from exercising his powers under Section 32 of the Act. This cannot be the spirit and purport of the Statute and the very purpose of this section will be defeated, if this is the law. Although it is mandatory requirement that consultation process should be WP(c).No.4564/09 29
completed, the Registrar cannot be expected to wait endlessly. and if response is not forthcoming, Registrar is at liberty to proceed in the matter. In this case the Registrar had sought the views of the consultees but it was not forthcoming. In such circumstances, if the Registrar has proceeded to pass the order, I cannot find fault with him.
29. However, the contention of the counsel for the petitioner that, while seeking the views of the consultees, tentative conclusion of the Registrar was not enclosed is well found. In Ellakkal Service Co-operative Bank V. State of Kerala (1997(2) KLT 85 and in Sahadevan V. Padmanabhan(2004(1) KLT 192), this court has indicated the manner in which the process of consultation is to be complied with. It is laid down in these judgments that, for a meaningful consultation, the Registrar should forward to the consultees notice, reply and his tentative findings, so that the consultee can apply his mind and convey his views in the matter. In this case, the order itself show that the tentative findings of the first WP(c).No.4564/09 30
respondent were not forwarded. Although, the contention in this behalf has been dealt with in paragraph 16 of the counter affidavit, the averment that the tentative conclusion of the Registrar was not forwarded is not denied. If that be so, I must conclude that the consultation process was also defective.
30. The other argument raised by the counsel for the petitioner is relying on Section 66(5) of the Act. Section 66 provides for supervision and inspection. Section 66(5) inter alia provides that, the Registrar or the person authorized by him under sub-section(1) or sub-section(2) may, by order in writing, direct the society or its officers to take such action as may be specified in such order within the time that may be mentioned in such order. The argument set up by the counsel for the petitioner is that the question of willful disobedience as contemplated in Section 32(1)(b) can arise only if an order as contemplated under Section 66(5) is passed. It is stated that such an order was not passed and WP(c).No.4564/09 31
therefore Section 32(1)(b) cannot be invoked.
31. The pleadings of the respondent as contained in the counter affidavit do not show that the Registrar has passed any order under Section 66(5). If that be so, there could not have been any lawful order as contemplated under Section 32 (1)(b) of the Act, the disobedience of which alone warrants proceedings under Section 32 of the Act. This argument of the Counsel for the petitioner also deserves acceptance For the aforesaid reasons I am satisfied that Ext.P7 is illegal and accordingly Ext.P7 will stand set aside and the 2nd respondent is directed to hand over charge to the Committee, of which the petitioner is the President, forthwith on the production of a copy of the judgment.
Writ Petition is allowed as above.