SIVADASAN NAIR Vs. REGISTRAR OF CO OPERATIVE SOCIETIES

JUDGEMENT

(1.) The petitioners are the elected members of the Board of Directors of the Kerala State Cooperative Agricultural and Rural Development Bank, Trivandrum. It is an apex Bank. There are 44 primary Cooperative Agricultural Banks as its members. The present Board of Directors was elected in the election held on 2.3.1996 for a period of three years. The Board of Directors consisted of 14 elected Directors, 5 Government nominees, 2 nominated members as per S.28A of the Kerala Cooperative Societies Act, 1969 (hereinafter referred to as 'the Act')- The Additional Secretary to Government and the Director of Agriculture and the Registrar of Cooperative Societies were ex officio members of the Board of Directors. The Managing Director of the Bank who was appointed by the Government was also an ex officio member of the Board of Directors. Of the 14 elected Directors, 12 of them were Directors of the previous Board also.

(2.) First respondent, the Registrar of Cooperative Societies issued notice dated 22.10.1996 to 12 Directors of the Board, who were Directors of the previous Board also. The notice is produced as Ext. P2. The notice is purported to be issued under S.32(1) of the Act. The notice is as follows: The previous Board of Directors on 9.2.1995 by its resolution No. 23 resolved to approve the rank list relating to the appointment of Assistants in the Bank. Accordingly, appointments were made for the said posts.

(3.) Serious complaints were received by the Registrar on irregularies and manipulations in the selection process. The Registrar conducted an enquiry into the matter, which revealed serious violation of statutory provisions under the Act and the Rules framed thereunder, Bye laws and Circular instructions of the Registrar. Hence, the Registrar rescinded resolution dated 9.2.1995. Further the Kerala Public Men's Corruption (Investigation and Inquiries) Commission (hereinafter referred to as 'the Commission') Trivandrum had also found that the Selection Committee consisting of the Board of Directors were prima facie guilty of corruption. The complaint before the Commission were filed against the President, Vice President, Managing Director and Secretary. The Commission found prima facie case of corruption against the President, Vice President and the Managing Director and a detailed enquiry was ordered. According to the Registrar, there was a clear finding that the President, Vice President and the Managing Director were prima facie guilty of corruption, as envisaged under S.3(c) and (d) of the Kerala Public Men's Corruption (Investigations and Inquiries) Act. The Registrar further stated that it was clear from the definite finding that the Managing Committee Members who were responsible for selection and appointment were prima facie guilty of corruption. The Managing Committee had initiated all proceedings relating to selection and appointment. Earlier, the Additional Registrar of Cooperative Societies conducted an enquiry regarding the allegations of corruption and illegal appointments and reported on 24.3.1995 that the Committee Members were guilty of violation of the provisions of the Act and the Rules and the instructions of the Registrar of Cooperative Societies. It was also reported that the appointments were effected against the interest of the Society. Hence, resolution No. 23 of the Board of Directors was found to be void. Since now the Commission had also found that the President, Vice President and the Managing Director were prima facie guilty of corruption, it followed that all the members who were in the Committee as on 9.2.1995 were also prima facie guilty of corruption. Hence, according to the Registrar, he was satisfied that the Committee was persistently negligent in the performance of duties imposed on it by the Act, Rules and Bye law s, which were prejudicial to the interest of the Society and that he was satisfied that there was corruption at large in the appointment of the employees to the Society. Notice further stated that the addressee was also a member of the then Board of Directors of the Bank which took the resolution. Notice concluded as follows: