ALLUM KARIBASAPPA Vs. STATE OF MYSORE

JUDGEMENT

(1.) This is a petition under Art. 226, for the issue of a writ of certiorari to quash the two notifications dated 11th August 1972 issued by the State Government, with a view to have control over the conduct of the business of the Bellary District. Co-operative Central Bank, Ltd., Hospet, (which we shall refer to as the "Bank"). The notifications were issued in exercise of the powers conferred by Ss. 54 and 121 of the Mysore Co-operative Societies Act, 1959 (briefly called the "Act").

(2.) The facts are these:- Allam Karibasappa, the petitioner before us, was the President of the Bank, which is a society governed by the provisions of the Act. He was the President from 1966 up to the date of the impugned notifications. The management and administration of the Bank was conducted by a committee ponsisting of the President, the Vice-President, and ten elected members from various constituencies, with nominees of the State Government. At no time, the Government nominated more than three persons as its representatives. The Bank is having a share capital of Rs. 75 lakhs, out of which the State Government has contributed 23.8 lakhs. The Reserve Bank of India has advanced a loan of Rs. 135 lakhs, while the Apex Bank has given Rs. 200 lakhs. The State Government has guaranteed the repayment of loans to the Reserve Bank of India. - The Bank was inspected from time to time by the officials of the Reserve Bank of India. The last inspection before the writ petition, was on 14th October, 1971: A report of inspection dated 22nd October, 1971, in terms of sub-sec. (1) of S. 35 of the Banking Regulation Act, 1949 (as applicable to the Co-operative Societies), was forwarded to the Secretary of the Bank with a request to place it before the Board of Directors to rectify certain defects pointed out and to implement the suggestions made in the inspection report. On 2nd August 1972, the Deputy Registrar of Co-operative Socier ties, Bellary, made a confidential report to the Joint Registrar of Co-operative Societies, Gulbarga Division, Raichur, on the affairs of the Bank. The report, though it sets out many irregularities, has stated that the financial resources of the Bank has improved slightly. On receipt of the said report, the Joint Registrar on 3rd August 1972, forwarded the same to the Registrar of Co-operative Societies, along with his comments and a suggestion to take action under S. 54 of the Act. He has suggested to amend S.29 of the Act, so as to increase the number of the nominees of the State Government from 3 to 15. His suggestion was that in the interest of the Bank, only officers should be nominated. He also suggested fifteen officials far being considered for nomination. On 4th August, 1972, the Registrar forwarded the said report to the Government approving the recommendation made by his subordinates and with a request to take action under Ss. 54 and 121 of the Act. On 11th August 1972, the Government issued the impugned notifications published in the Extraordinary Gazette of the same date, nominating fifteen officials as its nominees in the Board of Directors of the Bank, and appointing the Deputy Commissioner of the District, as the President, thereby displacing the petitioner.

(3.) The petitioner, complaining that he had no immediate knowledge of the said notifications, moved this Court on 21st August 1972, for the above stated reliefs. On 23rd August, 1972, this Court after admitting the writ petition, issued an interim order staying the notification but it was later vacated after notice to the State Government.