Ndrajith T.R vs Joint Registrar Of Co-Operative Societies (General)

Devan Ramachandran, J

The petitioners, who are employees of the 2nd respondent – Mavelikkara Taluk Co-operative Bank Ltd.(hereinafter referred to as the 'Society', for short), impugn Ext.P2 order issued by the Joint Registrar of Co-operative Societies, directing the Society to pay them only the basic pay and no other allowances until such time as their liabilities are settled.

Sri.D.Somasundaram – learned counsel for the petitioners, vehemently argued that Ext.P2 is punitive in nature and that it imposes a detriment solely on his clients and other similarly placed employees because of the misdeeds of a few others, including members of the erstwhile Managing Committee. He argued that, therefore, Ext.P2 to the extent to which it imposes such detriment on his clients is illegal and unlawful.

Sri.P.P.Thajudeen – learned Special Government Pleader appearing for the official respondents, submitted that Ext.P2 has been issued in deference to the various judgments and orders of this Court relating to the affairs of the Society, particularly taking note of the fact that large amounts of money are due from them to be paid to honest and bona fide depositors.

The learned Special Government Pleader argued that Ext.P2 is only a suggestion made by the Joint Registrar to the Society to cut down their expenses, so that maximum amounts can be collected and repaid to the depositors. He pointed out that the Registrar has already issued several Circulars in the past and has also made certain suggestions to the Society; but that they are still acting in defiance of the same; and thus that the Joint Registrar had no other option, but to issue Ext.P2. He, therefore, prayed that this writ petition be dismissed.

Sri.B.Ashok Shenoy – learned counsel appearing for the Society, conceded that his client is going through extreme financial crisis and he left it to this Court to issue appropriate orders.

When I evaluate and assess the afore submissions, I must say upfront that I cannot find fault with the intentions of the Joint Registrar in having issued Ext.P2. He appears to have acted bona fide to ensure that the Society is able to garner sufficient resources to pay back the depositors; which is certainly the most primary and important requisite.

However, that said, I cannot find favour with any action which will put only a section of the employees of the Society to detriment, particularly when there is not even a whispering allegation against any of them that they had indulged in any misconduct which has now lead to the present state.

Of course, when I say as afore, I am aware that investigations are still going on into the affairs of the Society. However, as matters now stand, there is no allegation against any of the petitioners in this writ petition.

Before I go forward, I must record that when this matter was heard by me on an earlier occasion on 12.08.2022, I passed the following order:

“Sri.P.P.Thajudheen – learned Special Government Pleader, submitted that recovery and penal action, as regards the fraud committed in the Society in question, are still going on. He, however, sought some time to place on record a comprehensive report before this Court.

The challenge of the petitioners to Ext.P2 is, prima facie, well founded, because all employees cannot be put to detriment for the acts of a few of them, or for the misconduct of the Managing Committee members.

This Court has been saying repeatedly that if the Co-operative Sector has to be now reined in and controlled, the persons in charge must have fear of law instilled in them. The fraud with respect to the Society in this case was detected at least in the year 2016; and it has been six years as of now. However, there is nothing on record to show what action has culminated against the officers in charge, the accused and the then Managing Committee members; nor is that any information as to what the stage of the Arbitration Case filed by the Society is at present.

This creates a lot of consternation because, unless the action is swift and quick, instances of such fraud will continue to be perpetrated, as we now see with respect to other Societies.

I, therefore, adjourn this matter to be called on 22.08.2022; within which time, the 1st respondent – Joint Registrar will file an affidavit, detailing the steps taken against the accused and erstwhile Managing Committee members - including the penal action against them and its stage at present. The affidavit will also specify the action taken by the Assistant Registrar, Mavelikkara, who is stated to be the jurisdictional Arbitrator in ARC No.1/2017, as also the details of any recovery/attachments or surcharge action until today.

In the meanwhile, until further orders are issued from this Court, none of the Managing Committee members shall draw any amount under any head as emoluments from the Society.

I am persuaded to issue this order, because it is not only the employees of the Society, who should be put to detriment, but also the Supervisory and Managerial personnel.”

Today, Sri.P.P.Thajudeen – learned Special Government Pleader, submitted that the competent Authorities have considered the afore order of this Court in its right perspective and are ready to take any action as may be ordered; but balancing the requisites of the Society being able to pay off their depositors and the employees being in a position to receive their salary, subject to the profits to be generated by the Society.

The learned Special Government Pleader added that, in fact, he has reliable information that the employees have voluntarily given up certain benefits, so as to enable the Society to continue forward; and that, therefore, the Joint Registrar may be permitted to reconsider the whole matter, after hearing all the stakeholders.

I must say that the afore suggestions of Sri.P.P.Thajudeen are the best available in the given circumstances because, as rightly argued by him, the requirement of the Society being able to repay the depositors is primary, as much as the requisite of their employees being paid eligible salary and allowances.

Resultantly, I order this writ petition and set aside Ext.P2; with a consequential direction to the 1st respondent – Joint Registrar, to hear the petitioners, as also the Society and take a final decision, adverting to any suggestion which may be made by either of the sides and to all the Circulars which have been issued in the past by the Registrar, as also to the Statutory Scheme and the Rules; thus culminating in an appropriate order and necessary action thereon, as expeditiously as is possible, but not later than two weeks from the date of receipt of a copy of this judgment.

I, however, make it clear that the intent of this Court is indubitable that no employee be put to unreasonable and unnecessary prejudice, unless there is any allegation against them, which has been proved, or to be proved in future.

Before I close, I must say that the investigation to the affairs of the Society must be carried on by the jurisdictional Officers, including the Police, without any exception or fail; and that every accused, whatever be the rank or status, be brought to law and booked under the most stringent provisions without any further delay, since it has already been more than six years. This Court expects the Authorities to act diligently and to complete the investigation as early as possible.

Similarly, as regards the surcharge proceedings already initiated by the Statutory Authorities, as also the ARCs stated to have been filed by the Society, the Officers concerned shall ensure that these culminate in appropriate proceedings and recovery without any avoidable delay.

I also leave liberty to the petitioners to approach this Court seeking any clarification in this writ petition, if it becomes so necessary in future, with respect to any of the afore directed actions.