MANAGING COMMITTEE, (UNDER ORDER OF SUSPENSION), THE VELLATHOOVAL SERVICE CO-OPERATIVE BANK LTD Vs. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES

JUDGEMENT

(1.) Questions posed for consideration in this Writ Petition filed by the Managing Committee of the Vellathooval Service Cooperative Bank Ltd. No.K71 (the 'Bank' for short) is whether the order of supersession of the Managing Committee invoking the exceptional powers of the Registrar under Section 32 (3) of the Kerala Cooperative Societies Act, 1969 ('the Act' for short) is justified in the facts and circumstances. The incidental question is whether the discretion exercised by the Registrar to proceed with the suspension of the Managing Committee without providing an opportunity to the Committee to state its objections and without consulting the Unions and financing Banks is arbitrary and liable to be interfered with by this Court.

(2.) To appreciate the grievance voiced by the Committee, few relevant facts which led to the exercise of such powers by the Registrar are required to be stated:

(3.) The petitioner contends that Exhibit P7 order is vitiated by mala fides and arbitrariness. They state that Exhibit P7 order pertains to matters which took place during the tenure of the previous Managing Committee, and for their misdeeds, petitioner Society is not liable to be superseded. All that is stated in Exhibit P7 order is that the petitioner failed to rectify the illegal acts committed by the previous Committee and nothing more. It is contended that supersession or suspension, as the case may be, of an elected Managing Committee, is an exception and can be resorted to only in very exceptional circumstances as it is an affront on the concept of the democratic function of a Co-operative Society. It is further contended that the impugned order was passed by invoking 32(3) of the Act which enables the 1st respondent to suspend the Committee without affording an opportunity to the Committee to state its objections and consult the Unions and the financing banks. The impugned order would not show that the 1st respondent was satisfied that it was not reasonably practicable for him to permit the Committee to state its objections before the drastic step of suspension is taken. It is further contended that the appointment of an Administrator is a matter of serious import for the Society and its members as a democratically elected Committee is superseded and a nominee of the department assumes control and management of the Society. The normal mode of functioning for any such Society is through its elected Managing Committee and if this needs to be given a go by, it should only be for valid grounds, and after due and strict compliance with the provisions of the statute governing the matter.