The Pallikkunnu Service Co-Operative Bank Ltd. vs Joint Registrar Of Co-Operative Societies (General) and Others

V. Chitambaresh, J.—Ext. P11 order of supersession of the Managing Committee of the petitioner bank is impugned in this amended writ petition. Section 32(2) of the Kerala Co-operative Societies Act, 1969 mandates that the first respondent shall consult the financing bank (the District Co-operative Bank in the instant case) and the Circle Co-operative Union before passing an order of supersession. The issue has been considered in detail by the Division Bench of this Court in Sahadevan Vs. Padmanabhan, (2004) 2 ILR (Ker) 169 : (2004) 1 KLT 192 wherein it is held as follows:-

"5. xxxx Learned Single Judge, relying on the decisions in Jose Kuttiyani and Others Vs. The Registrar of Co-operative Societies, Kerala, Trivandrum and Others, AIR 1982 Ker 12 and Elakkal Service Co-operative Bank v. State of Kerala ( 1997 (2) KLT 85) held that the mere sending of the copy of the show cause notice to the consultees would not satisfy the requirement of the provisions contained in sub-s. (2) of S. 32 of the Act. According to the learned Single Judge, the notice, the reply and the tentative findings of the Joint Registrar should be forwarded to the consultees so that they can form an opinion and inform the same to the Joint Registrar. The learned Single Judge has also pointed out that the impugned order, Ext. P8, does not show that any such consultation was made. xxxx"

The Supreme Court has reiterated this proposition of law in State of M.P. and Others Vs. Sanjay Nagayach and Others, (2013) 6 AD 185 : AIR 2013 SC 1921 : (2013) 178 CompCas 502 : (2013) 4 CompLJ 30 : (2013) 8 JT 339 : (2013) 7 SCALE 354 : (2013) 7 SCC 25 : (2013) AIRSCW 2832 : (2013) 4 Supreme 10 wherein it is held as follows:-

"16. The mere serving a copy of the show-cause-notice on R.B.I. with supporting documents is not what is contemplated under the second proviso to S. 53(1). For a meaningful and effective consultation, the copy of the reply filed by the Bank to the various charges and allegations levelled against them should also be made available to the R.B.I. as well as the action proposed by the Joint Registrar, after examining the reply submitted by the Bank. On the other hand, R.B.I. should be told of the action the Joint Registrar is intending to take. Only then, there will be an effective consultation and the views expressed by the R.B.I. will be a relevant material for deciding whether the elected Board be superseded or not. In other words, the previous consultation is a condition precedent before forming an opinion by the Joint Registrar to supersede the Board of Directors or not"

The Special Government Pleader on instructions fairly submits that there has not been a consultation in the case on hand as laid down in the decisions aforequoted. The notice preceding supersession has been merely forwarded to the first respondent without waiting for the reply from the Managing Committee or rendering any tentative findings. There has been an infraction of the statutory provisions in passing an order of supersession under Section 32(1) of the Kerala Co-operative Societies Act, 1969. Resultantly Ext. P11 order is quashed and the first respondent is directed to restore the Managing Committee of the petitioner bank in office within a period of two days.

The parties are at variance as to whether Ext. P11 order of supersession was passed after the interim order was rendered in this writ petition on 06.01.2015. The said dispute cannot be adjudicated without the parties letting in oral evidence especially in the light of two reports of the Advocate Commissioner. I do not want to delve deep into those aspects in this writ petition in view of the ultimate decision to annul Ext. P11 order of supersession and restore the Managing Committee to office. The Advocate Commissioner shall however be paid a further sum of Rs. 25,000/- (Rupees Twenty Five Thousand only) by the petitioner bank for the meticulous analysis made by him with the aid of experts. The invocation of fresh proceedings afresh if there are good and valid grounds is however not precluded by this judgment.

The writ petition is disposed of. No costs.