JOSE KUTTIYANI Vs. REGISTRAR OF CO-OPERATIVE SOCIETIESKERALATRIVANDRUM

JUDGEMENT

(1.) Idukki District Cooperative Bank Ltd. is a Society registered under the Kerala Cooperative Societies Act, 1969. It has 14 branches and all the members of the Bank are primary societies. However the Bank receives deposits from individuals and also grants loans to individuals. The management of the Bank is vested in Board of Directors consisting of 11 elected members and 3 official members nominated by the Government. Of the 11 elected members three ceased to be Directors for one reason or another and so the remaining elected and non elected members were managing the affairs of the Bank. The Board entered office on 1-7-1978, their term being three years, normally they would have had to go out on 30-6-1981.

(2.) This Bank is insured under the Deposit Insurance Corporation Act 1961 (Central Act). Chap.10A of the Kerala Cooperative Societies Act contains additional provisions of law regarding such insured cooperative banks. The Banking Regulation Act 1949 (Central Act) applies to this Bank subject to certain modifications mentioned in Part 5 of the said Act. In 1974 the Reserve Bank issued license to this Bank to carry on banking business. The volume of business attended to for the years from 1974 to 1980 as evidenced by the progress statements issued by the Bank in December 1980 shows that it has 159 members (all societies and Government). The share capital comes to Rs. 116.26 lakhs, deposit comes to Rs. 484.43 lakhs, investments Rs. 188.31 lakhs and loans and advances given by the Bank comes to Rs. 874.43 lakhs. Under R.35 of the Cooperative Societies Rules the Committee should meet at least 60 days in advance of the date of expiration of its term and pass a resolution fixing the date, time and place for the conduct of the election of a new committee. A copy of the resolution should be sent to the Registrar by registered post within a week. For this purpose the Committee met on 4-3-19&1 and resolved to hold the election on 21st June, 1981. The copy of the resolution was forwarded to the Registrar on 5-3-1981. Thereafter on 5-3-1981 itself and 8-3-1981 the elected members of the Committee who are the petitioners in this petition received notice from the Registrar mentioning certain allegations and charges and they were required to show cause why the committee shall not be superseded under S.32(1) of the Act. The members were required to send a reply, if any, within 10 days and the personal hearing was fixed for 21-3-1981. The copy of the said notice is dated 2-3-1961. Extension of time for submitting replies was granted tin 6th April. 1981 and personal hearing was also fixed for the same date. The petitioners individually filed objections and also moved this Court in 6. P. No. 1792 of 1981 to quash the notice on the ground that even before hearing their objection the Registrar has come to a conclusion that grounds for supersession exist. On 6-4-1981 that Original Petition was admitted and on the Registrar taking notice the Court passed a final order on 8-4-1981 disposing of the Original Petition. The findings in the show cause notice were directed to be treated as provisional and a decision taken within two weeks and in the light of the objections filed by the petitioners and hearing their arguments. Even before the decision of this court in the above O. P. on 6-4-1981 itself the Registrar heard the parties who were present. The Registrar also passed an order on 15-4-1981 superseding the Committee consisting of the petitioners and non official members. An Administrator also was appointed to manage the affairs of the Bank until an election is held and a fresh Committee appointed.

(3.) This order of supersession is attacked in this Original Petition mainly on the following grounds :--