Chithara Madhu, President, Board of Directors of The Kollam Co-Operative Agricultural and Rural Development Bank Ltd. No. Q-167 Kollam District-691001 vs The Joint Registrar of Co-Operative Societies (General) Kollam - 691 001, The Registrar of Co-Operative Societies Thiruvananthapuram-695001, State of Kerala and A.S. Nold, Director Board member Kollam Co-Operative Agricultural and Rural Development Bank Ltd.

Ramachandran Nair, J.—The question raised is whether the learned Single Judge was justified in upholding the order of the Joint Registrar of Co-operative Societies disapproving appointment of 7 Peons/Watchmen made by the Bank of which the appellant in W.A.No.417/2012 is the President. Appellants in W.A.No.464/2012 are the persons whose appointments are disapproved. We have heard learned counsel appearing for the appellants, learned Special Government Pleader appearing for the Joint Registrar and also learned counsel appearing for the contesting parties.

After hearing learned counsel appearing for all parties, we are of the view that the situation is very peculiar in this case because 3 out of 10 Board Members themselves complained that appointment of the 7 staff members was not with the approval of Board of Directors in their meeting, but is a manipulation by the majority of the Board Members with the President as the Chairman. Learned Special Government Pleader submitted that the financial position of the Society is not sound as it is suffering losses to justify appointment of additional staff, which is in excess of approved staff strength of the society. The 3 members of the Board of Directors, who are on the respondents side and on whose complaint the Joint Registrar took action, also assert that the Bank is engaged mainly in advances to agricultural sector and it''s profit is very low and if additional staff are appointed the Society will go into further debts. The learned Single Judge upheld the Joint Registrar''s order because appointments are found to be in excess of staff strength approved for the Bank.

Before us, all the parties conceded that the Bank which was operating in two Taluks is now bifurcated after creation of a new Bank at Kottarakkara Taluk and as a result of which the operations and business of the Bank in this case have substantially come down. In view of this position, certainly there will be only likelihood of reduction in staff strength of the Bank. According to the Special Government Pleader, some of the staff members are already transferred to the newly created Bank at Kottarakkara. We feel one more opportunity can be given to the Board of Directors and also to the employees concerned to approach the Joint Registrar to demonstrate that there is case of appointment of more staff to the Bank after bifurcation. In the first place, the accounts of the Bank has to be audited up to date and this should be done up to the financial year ending 31/03/2012 and thereafter depending on the financial position and the operations of both the Banks, staff strength has to be determined afresh, and based on the same if there is shortage, the Joint Registrar will authorise appointment not only in this Bank but also in the newly established Bank after bifurcation of the Bank into two. The employees concerned will be disengaged immediately and they will be engaged only after refixation of the staff strength and authorisation is issued by the Joint Registrar in regard to appointments. As already stated in the interim order, if appointments were found to be unauthorised, then salary paid to such employees will be recovered from the Board of Directors in surcharge proceedings. While considering surcharge, such of the Directors, who are not party to this appointment process, should be excluded.

These Writ Appeals and the Writ Petition are disposed of as above.