Kerala High Court
The Managing Committee Of The Keechery ... vs The Joint Registrar Of Co-Operative ... on 7 January, 2025
Author: N.Nagaresh
Bench: N.Nagaresh
2025:KER:90
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
TUESDAY, THE 7TH DAY OF JANUARY 2025 / 17TH POUSHA, 1946
WP(C) NO. 29130 OF 2024
PETITIONER:
THE MANAGING COMMITTEE OF THE KEECHERY SERVICE
CO-OPERATIVE BANK LTD. NO. 668
KULAYETTIKKARA P.O.,
ERNAKULAM DISTRICT,
REPRESENTED BY ITS PRESIDENT,
PIN - 682317.
BY ADVS.
NISHA GEORGE
GEORGE POONTHOTTAM (SR.)
ANSHIN K.K
SIDHARTH.R.WARIYAR
FATHIMA AMREEN JAMAL
RESPONDENTS:
1 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES
(GENERAL)OFFICE OF THE JOINT REGISTRAR OF CO-
OPERATIVE SOCIETIES (GENERAL),
KAKKANAD, ERNAKULAM DISTRICT,
PIN - 682031.
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2 THE ASSISTANT REGISTRAR (GENERAL) OF CO-OPERATIVE
SOCIETIES, OFFICE OF THE ASSISTANT REGISTRAR
(GENERAL) OF CO-OPERATIVE SOCIETIES,
KANAYANNUR OFFICE, KANAYANNUR,
VALANJAMBALAM, ERNAKULAM, PIN - 682016.
3 K.G.RENJITH
KALAYIL, KULAYATTIKKARA P.O.,
ERNAKULAM DISTRICT, PIN - 682317.
4 UMADEVI SOMAN
KIZHAKKEMADIYATH, KULAYATTIKKARA P.O.,
ERNAKULAM DISTRICT, PIN - 682317.
5 AJAYAN
KALAYIL, KULAYATTIKKARA P.O.,
ERNAKULAM DISTRICT, PIN - 682317.
6 SYAM MOHAN
KARUMALAPPETTY, KULAYATTIKKARA P.O.,
ERNAKULAM DISTRICT, PIN - 682317.
7 MURUKADAS
KALAYIPARAMBIL, KULAYATTIKKARA P.O.,
ERNAKULAM DISTRICT, PIN - 682317.
BY ADVS.
SRI.P.C SASIDHARAN
SMT.MABLE C KURIAN, SR.GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 03.10.2024 AND THE COURT ON 07.01.2025 DELIVERED THE
FOLLOWING:
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N. NAGARESH, J.
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W.P.(C) No.29130 of 2024
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Dated this the 7th day of January, 2025
JUDGMENT
~~~~~~~~~ The Managing Committee of Keechery Service Co-operative Bank is the petitioner. The petitioner is aggrieved by Ext.P10 report and Ext.P13 order. Ext.P10 report of the Assistant Registrar (General) of Co-operative Societies disclosed certain irregularities in the decisions taken by the Bank. By Ext.P13 order, the Joint Registrar has rescinded the decision of the Managing Committee to transfer the enhanced share value paid by 918 members to suspense account and has directed to restore the membership of those 918 members. W.P.(C)No.29130 of 2024 :4:
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2. The petitioner submits that the present Managing Committee of the Bank assumed charge on 08.12.2019. As per Ext.P1 Certificate of Registration dated 12.06.2014, the share value of 'A' Class Membership was enhanced to ₹50/-. The enhanced share value had to be paid within one year. The time limit prescribed for payment of enhanced share value expired on 11.06.2015. The Managing Committee issued registered notices to the members as per Section 104 of the Kerala Co-operative Societies Act, directing them to remit the enhanced share value within 30 days. According to the petitioner, the members who did not remit the enhanced share value have relinquished their right for being a member of the Bank.
3. In the meanwhile, an Administrative Committee was appointed. The Committee adopted a resolution on 27.08.2019 to conduct Election to the Managing Committee. W.P.(C)No.29130 of 2024 :5:
2025:KER:90 The Administrative Committee illegally permitted the 918 individuals to remit the enhanced share value. The above said 918 individuals remitted the enhanced share value within 60 days of the Election. They were included in the preliminary voters list.
4. The members of the Bank challenged the illegal inclusion of 918 members filing W.P.(C) Nos.24890 of 2019, 25488 of 2019 and 26552 of 2019. This Court has directed the Returning Officer to re-cast the voters list. The Administrative Committee filed a writ appeal. The Division Bench of this Court held that those members, who were admitted or had paid the enhanced share value within 60 days of the Election, are not entitled to be included in the voters list. None of the 918 members preferred any petition before the Arbitration Court. Therefore, they ceased to be members of the Society / Bank, contends the petitioner. W.P.(C)No.29130 of 2024 :6:
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5. The present Managing Committee of the Bank convened a meeting on 02.06.2020 and resolved to transfer the share value of persons who did not remit the enhanced share value, to the suspense account. Ext.P6 decision was placed before the General body Meeting on 14.12.2021 and the General Body ratified the decision of the Managing Committee, as per Ext.P7. Accordingly, the Bank has transferred the share value to the suspense account of the Bank. Subsequently, 48 persons from among 918 persons submitted applications for fresh membership. The Bank has issued new membership to them.
6. Respondents 3 to 7 filed Ext.P9 complaint before the Joint Registrar regarding cessation of their membership. The 2nd respondent-Assistant Registrar (General) of Co-operative Societies submitted Ext.P10 Report dated 19.02.2022. The Assistant Registrar reported that the petitioner W.P.(C)No.29130 of 2024 :7: 2025:KER:90 did not comply with the procedure prescribed in Section 17 of the Kerala Co-operative Societies Act while removing members from the Bank. The petitioner submits that cessation of membership of those persons is by operation of law. It is not a case of removal from membership.
7. Without considering the facts and without appreciating law, the 1st respondent issued Ext.P13 order rescinding the decision taken by the Managing Committee to transfer the share amount to suspense account. By Ext.P13 order, the 1st respondent has directed to restore the membership of 918 persons.
8. The petitioner argued that by Ext.P6, the Managing Committee of the Bank transferred the share value of the 918 persons to the suspense account as there is automatic cessation of membership on their failure to remit the enhanced share value within the prescribed time. The decision was later W.P.(C)No.29130 of 2024 :8: 2025:KER:90 ratified by the General body of the Bank. The 1 st respondent only treated this as removal of membership. Section 17 of the Kerala Co-operative Societies Act will not come into play in the instant case as it is cessation of membership. Ext.P13 order is therefore bad in law.
9. The petitioner further submitted that hearing preceding Ext.P13 order was conducted by one officer and Ext.P13 has been passed by another. One who has heard the matter has not passed the order. Ext.P13, therefore, offends basic principles of natural justice.
10. The Division Bench of this Court has held in the judgment in Part-Time Administrator, Adat Farmers' Service Co-operative Bank Limited v. Vipin K. Hari and others [2022 KHC 974] that if the proceedings are not challenged by the aggrieved persons in the manner known to law, then they may be barred by the principles of delay, laches, W.P.(C)No.29130 of 2024 :9: 2025:KER:90 acquiescence, estoppel, etc., from raising any such challenge belatedly. Ext.P13 order passed at the instance of respondents 3 to 7, is therefore liable to be set aside, urged the petitioner.
11. Respondents 3 to 7 resisted the writ petition filing counter affidavit. Respondents 3 to 7 submitted that a person aggrieved by Rule 176 has an alternate remedy of filing appeal or revision before the Government. A writ petition is therefore not maintainable. The Joint Registrar has power to rescind a resolution of the Committee of a Society. The Society being a Credit Society, it cannot be heard to contend that enrollment of members is prejudicial to the interest of the Society. Respondents 3 to 7 were enrolled in the Society years back.
12. In the judgment in Kadakam Service Co- operative Bank and another v. Narayana Bhat and another [2004 (2) KLT 179], this Court held that removal of members W.P.(C)No.29130 of 2024 : 10 : 2025:KER:90 can be made only in accordance with the procedure laid down under Section 16. No restriction can be imposed in the matter of receiving balance share value and it has been so held in the judgment in Vasavan v. District Coir Project Officer [1993 (1) KLT 293]. Being a member of a Co-operative Society is a fundamental right guaranteed under the Constitution of India. The said right cannot be curtailed by the action of the Society, contended respondents 3 to 7. The intention of the petitioner is only to see that eligible members are excluded from the list in the ensuing Election. The writ petition is therefore liable to be dismissed.
13. The 1st respondent filed a statement. The 1 st respondent stated that Ext.P13 has been passed invoking the powers under Rule 176 of the Kerala Co-operative Societies Rules for the reason that no membership will be terminated automatically, but could be restricted to exercise their right as W.P.(C)No.29130 of 2024 : 11 : 2025:KER:90 per Section 19 of the Kerala Co-operative Societies Act. As per Rule 28 of the Kerala Co-operative Societies Rules, no member of a Society shall exercise the right of a member unless he has made such payment to the Society in respect of the membership 60 days prior to the date of the Election.
14. The 1st respondent submitted that once a Committee had provided membership to persons who applied with the initial share capital as per Rule 20, the successive Committee cannot terminate their membership without following the due procedure laid down under Section 17 read with Section 18 of the Kerala Co-operative Societies Act and Rule 16 of the Kerala Co-operative Societies Rules. The writ petition is therefore devoid of any merit and it is liable to be dismissed, urged the 1st respondent.
15. I have heard the learned counsel for the petitioner and the learned Government Pleader representing W.P.(C)No.29130 of 2024 : 12 : 2025:KER:90 respondents 1 and 2. I have also heard the learned counsel appearing for respondents 3 to 7.
16. The share value of the Bank was enhanced from ₹5/- to ₹50/- by amending bye-laws and a Certificate of Registration was issued as per Ext.P1 on 12.06.2014. The members had to pay the enhanced share value within one year, by 11.06.2015. The Managing Committee thereafter issued notice to the defaulting members giving 30 days to pay the enhanced share value. Thereafter, an Administrative Committee took charge of the affairs of the Bank. The Administrative Committee permitted 918 defaulting members to remit the balance share price.
17. After 08.12.2019, the present Managing Committee resolved on 02.06.2020 to transfer the enhanced share value paid by 918 persons to suspense account on the assumption that the 918 persons have ceased to be members W.P.(C)No.29130 of 2024 : 13 : 2025:KER:90 of the Society. The General body of the Bank approved that decision on 14.12.2021. Respondents 3 to 7 filed representation against the decision taken on 02.06.2020 by the Managing Committee. A hearing was conducted on the dispute on 05.01.2023. By Ext.P13 order, the Joint Registrar rescinded the decision of the Managing Committee.
18. The Joint Registrar found that the Bank has not followed Section 17 of the Kerala Co-operative Societies Act, 1969 while removing persons from membership. They were not given notice or provided with any opportunity of hearing. The Joint Registrar found that the Administrative Committee has only permitted the members to pay the enhanced share value. The bye-laws of the Bank do not provide for ousting persons from membership on the ground of non-payment of enhanced share value.
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19. The petitioner would contend that there is no removal from membership of 918 persons and it is only a case of cessation of membership by operation of law and therefore Section 17 will not apply to the facts of the case. The petitioner argued that Ext.P13 is unsustainable for the further reason that the authority which heard the dispute did not pass the order and Ext.P13 has been passed by an authority who did not hear the parties.
20. As regards hearing, I find that what was taken place pursuant to the hearing notice is an institutional hearing and passing of an order by another competent authority has not adversely affected the petitioner. A Full Bench of this Court has held in the judgment in Sudheer T. v. M.V. Susheela and Others [2009 (4) KLT 29] that when a decision is challenged on the ground that the principle "he who heard must decide" was violated, the Court cannot quash the order on the face of it. In W.P.(C)No.29130 of 2024 : 15 : 2025:KER:90 this case, I do not find any prejudice occurred affecting the right of the petitioner.
21. As regards challenge against Ext.P13 order, I find that the petitioner has an effective alternate remedy against Ext.P13 order under Section 83(1)(j) of the Kerala Co- operative Societies Act, 1969. The petitioner has not exhausted the said remedy. Therefore, I do not find any reason to adjudicate this writ petition on merits.
The writ petition is therefore dismissed.
Sd/-
N. NAGARESH, JUDGE aks/06.01.2025 W.P.(C)No.29130 of 2024 : 16 : 2025:KER:90 APPENDIX OF WP(C) 29130/2024 PETITIONER'S EXHIBITS Exhibit -P1 TRUE COPY OF THE LETTER BEARING NO.
O.4489/14/R.DIS. DATED 12.06.2014 ISSUED BY THE 1ST RESPONDENT ALONG WITH ENCLOSED CERTIFICATE OF REGISTRATION AMENDMENT NO.O/236/2014 DATED 12.06.2014 AND AMENDED BYELAWS OF THE PETITIONER SOCIETY Exhibit -P2 TRUE COPY OF A REGISTERED NOTICE DATED 01.06.2015 ISSUED BY THE SECRETARY OF THE PETITIONER SOCIETY Exhibit -P3 TRUE COPY OF THE SUBSIDIARY DAY BOOK DATED 18.09.2019 OF THE PETITIONER BANK Exhibit -P4 TRUE COPY OF THE SUBSIDIARY DAY BOOK DATED 19.09.2019 OF THE PETITIONER BANK Exhibit -P5 TRUE COPY OF THE SUBSIDIARY DAY BOOK DATED 20.09.2019 OF THE PETITIONER BANK Exhibit -P6 TRUE COPY OF THE DECISIONS OF THE MANAGING COMMITTEE OF THE PETITIONER BANK BEARING NO. 127/06/20-21 DATED 02.06.2020 Exhibit -P7 TRUE COPY OF THE DECISION OF THE GENERAL BODY MEETING OF THE PETITIONER BANK HELD ON 14.12.2021 Exhibit -P8 TRUE COPY OF THE LIST OF THE MEMBERS WHO WERE ENROLLED AS NEW MEMBERS IN THE PETITIONER BANK DATED 10.02.2022 W.P.(C)No.29130 of 2024 : 17 : 2025:KER:90 Exhibit -P9 TRUE COPY OF THE REPRESENTATION DATED NIL SUBMITTED BY THE RESPONDENTS 3 TO 7 BEFORE THE 1ST RESPONDENT Exhibit -P10 TRUE COPY OF THE REPORT BEARING NO.
M.Y. 14/2022 DATED 19.02.2022 SUBMITTED BY THE 2ND RESPONDENT Exhibit -P11 TRUE COPY OF THE NOTICE NO. C.R.P (1) 2463/2021 DATED 21.12.2022 ISSUED BY THE 1ST RESPONDENT Exhibit -P12 TRUE COPY OF THE REPLY DATED 05.01.2023 GIVEN BY THE PRESIDENT OF THE BANK BEFORE THE 1ST RESPONDENT Exhibit -P13 TRUE COPY OF THE ORDER NO. C.R.P.(1) 2463/2021 DATED 27.07.2024 PASSED BY THE 1ST RESPONDENT RESPONDENT EXHIBITS ANNEXURE - R1(a) TRUE COPY OF THE JUDGMENT DATED 5/12/2019 IN W.A.NO.2394/2019