Kerala High Court
M. Rajagopalan Nair And Ors. vs State Of Kerala And Ors. on 14 June, 1995
Equivalent citations: AIR1995KER389, AIR 1995 KERALA 389, (1995) 2 KER LT 184 (1995) 2 KER LJ 23, (1995) 2 KER LJ 23
ORDER
1. This is a petition by five petitioners who are, in addition to being the members of the co-operative bank (Ayiroo-para Farmers Society Bank), elected members of the Board of Directors in pursuance of the election held on Feb. 13, 1994. Along with these five petitioners eight others were also elected to constitute what is known as the Board of Directors. They approached this court for a challenge to Ext . P1 which is an order of the joint Registrar of Co-operative Socieites, Thiruvananthapuram (respondent No. 2) acting under Section 32 of the Kerala Co-operative Societies Act, 1969, proceeding to remove the Board of Directors in the said society and as a consequence appointing part time administrator, ostensibly for a period of three months, till the newly elected committee is in a position to take charge. There is no dispute that the Joint Registrar passed the impunged order (Ext. P1) on Feb. II, 1994 (Saturday) appointing the administrator in pursuance thereof almost only for a day (Feb. 12, 1994 -- Sunday) because the factual matrix shows that the newly elected committee was ready to assume charge in pursuance of the order. In regard to this certain averments are placed on record which would be considered at the appropriate stage.
2. Since the impugned order (Ext. P1) is passed under the provisions of Section 32 of the Act, it would be really necessary and relevant in the first instance to refer to the concerned statutory provisions for the purpose of setting at rest finally legal and statutory limits of the authority of the Joint Registrar under the said provision. These limits would be more convenient to set down to facilitate further examination of the activities in the context as are sought to be placed through the material on record,
3. Section 32 empowers the Registrar to proceed with the supersession of the committee of a co-operative society. The committee in this context would be the Board of Directors in function in accordance with the provisions of the Act, Rules and the concerned by-laws. This supersession requires the existence of the satisfaction of the Registrar. The satisfaction is referable to certain situa-tions. If the committee makes persistent defaults or if the committee is negligent in the performance of the duties, then in regard thereto the Registrar requires satisfaction in the context. This persistency in defaults or negligence in the performance relates to the duties under the Act or the Rules or Bye-laws. It also refers to the commission of the acts of the committee, in regard to which satisfaction is required that the concerned acts are prejudicial to the inter ests of the society. In addition, if the committee wilfully disobeys or wilfully fails to comply with any lawful order or direction, on satisfaction the Registrar can supersede the concerned committee. However, it is required that this wilful disobedience or compliance of a similar character of orders or directions need be referable only to those issues under the Act or the Rules.
4. Reading the requirements specified above, correct and proper jurisdiction of the Registrar would depend on the satisfaction. The satisfaction is relatable to a situation of persistency in the matter of defaults or negligence in regard to the performance of duties by the concerned committee. Additionally it is also a requirement that these defaults or duties should be referable to the Act or the Rules or the Bye-laws. Additionally also acts have to be prejudicial to the interests of the society showing wilful disobedience or failure of a similar character in the matter of lawful orders or directions issued by the Registrar, additionally requiring the issuance of these orders and directions also to be falling in some of the provisions of the Act or the Rules. It is only on the satisfaction of these requirements, the Rgistrar may proceed to think of giving an opportunity to the concerned members of the committee by an order in writing.
5. In the process of appreciating the contents with reference to the exercise of powers by the Registrar, the above provisions lay emphasis on certain key words as the guiding factors for the courts as well as the statutory authorities concerned with the exercise of power which appears to be not a routine power in any way, but a power of an exceptional character to be exercised on satisfaction of some of the requirement in the process of the role of the Registrar being of a supervisory and controlling character. These features float on the surface of the language of the section, otherwise it would be more than difficult to understand and appreciate in the context of the fabric that the provisions would require persistency in default, negligence in the performance, wilful disobedience or failure of an equal character in compliance with the order and finally the requirement of orders or directions being lawful in character. The words "persistent", "negligent", "wilful" and "lawful" are the key words to guide the normal understanding of the nature of satisfaction that is required by the Registrar. These words also provide legitimate material for the court to observe that under the provisions the Registrar, who is the principal statutory authority under the Act, gets an exemplary power which enables him authoritatively to disband the members of the committee as a whole, which is saddled by the democratic process. The material that is available from the language under consideration leads to the inevitable situation that the court has to be more than careful and cautious in the process of dealing with the exercise of such power or refusal thereof in regard to the supersession of committee. The court has to guard and watch in the matter as to whether the material on record spells out the requirement in the matter of exercise of the power by the Registrar that such a power has to be resorted to by its sparing use and exceptional enforcement.
6. Not only these key provisions in regard to the power, but further provisions of the said section go a long way in reinforcing the above situation of the power of the Registrar. He has to give an opportunity in pursuance of the satisfaction which by itself is of an exceptional character. The notice is also statutorily required to be given in writing in the nature of an order. Even thereafter the Registrar can appoint a new committee not of more than three members of the society in its place or even one member or more as administrators, who need not be members of the said society. A further additional requirement is also placed on the statute. Such an arrangement in this exceptional situation is not also to continue for a period of more than one year, in regard to which the Registrar has been given power to grant extension upto the final limit of two years.
7. This is not sufficient. There is a further close jacket provided by the subsequent provisions of the sections under consideration. The Registrar is under a stautory obligation to consult the financing bank and also the Circle Co-operative Union or the State Co-operative Union before passing an order under Sub-section (1). Further provision (Sub-section (3)) gives restricted jurisdiction to the Registrar to do away with the prior consultation of the financing bank and the union, as stated above, in a special situation creating reasonable impracticability to comply with the provisions of prior consultation. Even then, in such a situation, it is enacted that in that eventuality the period of supersession shall generally be for six months. Added to this, the provision further requires that the committee or administrators so appointed on supersession is to be subject to the control of the Registrar.
8. Reading the provisions in the light of the purposes for which the Kerala Cooperative Societies Act, 1969 emerge on the statute, it would have to be understood that the provision of supersession would be considered as an exceptional and rare action.
The co-operative movement was required to be provided for in the context of its orderly development. A need was felt that the orderly development was really required in the light of the requirements of the directive principles of the State policy enunciated in the Constitution of India. The law relating to cooperative societies was required to be consolidated because several areas in the State were being dealt with by the provisions of different Acts in the context and a uniform law was the need of the desired situation. It would be found on examination of the various provisions that the Act permits societies registered to function as body corporates with a continued existence of a legal person having a perpetual succession. It gives power to hold property, enter into contract, institute and defend suits and to do all things necessary, which is subject only to such restrictions and controls that have been imposed by the Act and the controls are to be understood to ensure timely supervision for their proper administration.
9. In the process the statutory authorities would have to be understood to have a statutory function of control and supervision in tune with the purposes of the Act. In other words, the registered societies are expected to function as a democratic process, affairs to be managed and administered by the elected members who are described as committees or the Board of Directors in accordance with the nomenclature of the activity.
10. It is not that the question is being required to be considered for the first time in the context. In fact this court had an occasion to consider the power of the Registrar to supersede a committee to treat it really as an extraordinary power which should not be resorted to unless there is an extraordinary situation. In the process of discussion, considering that the satisfaction may be subjective, it is observed that it shall not be arbitrary. It is also observed that this court, acting under Art. 226 of the Constitution of India, does not function as an appellate authority and proceeds to investi- gate into the sufficiency of the material in regard thereto. However, if the material shows that the Registrar never applied his mind and consequently therefore could not have been satisfied, even the limited jurisdiction affording a peeping view into the material, the court can examine the question with reference to the ingredients of the provision, conditions specified in regard thereto to see if the action is in excess if any of the established ways.
11. In other words, the action comes under the judicial scrutiny of the writ court if the material on record shows that the authority (the Registrar) exercises the power as if it is a routine administrative exercise, with regard to the material in regard to which no reasonable man could come to a conclusion, in the matter of exercise of an exceptional power which could be used under exceptional situation, exercise the power on the grounds totally irrelevant to the purpose of the statute, or exercise the power on considerations that are foreign to the provisions under consideration.
12. Even thereafter this court had an occasion while dealing with this power to utter words of caution that the said power is not to be exercised in a casual manner. The Registrar has to keep in mind that the cooperative societies should have greater autonomy in their functioning and the control over them should not culminate in virtually depriving them of their democratic and autonomous character. In the context the pathos of the situation is placed on record that progressive officialisation and politicisa-tion is causing damage to the co-operative movement resulting in the supersession of the elected Boards of Societies on flimsy grounds. It is emphaised on an examination of the scheme of the Act and the Rules that the affairs of a co-operative society are to be controlled and managed by elected Board of Directors and it is only in the rarest of rare cases such Boards or Committees should be thought of to be superseded by replacement of an administrator.
13. In spite of this position and in spite of the experience recorded by this Court that the functioning of the Registrar in this context is more automatic and processual that it compels the court to have an impression that the orders under the said provision are passed without any application of mind. It is necessary to place on record of this judgment the observations in Jose Kuttiyarii's case (AIR 1982 Kerala 12) (supra) showing that the Registrar does not weigh and assess the facts independently or tries to notice or know the concerned position and what is available on record is ad verbatim reproduction of the contents of the report of the Co-operative Inspector placed in the order in a blind folded manner to be repeated similarly in the show cause notice.
14. The proceedings of this petition would have to be considered and examined in the light of the above summarised essence of the law to be applied in regard thereto.
15. The petitioners have averred (paragraph 3) that respondent No. 4 (E. Abdul Kareem) is an important Congress leader who yields immense political influence over the Minister for Co-operation (respondent No. 3) as well as amongst the officers of the Cooperative Department. It is further averred that a petition was presented on Feb. 13, 1994 by the respondent No. 4 directly to respondent No. 3 in pursuance of which the Joint Registrar (respondent No. 2) was directed to conduct an enquiry in the affairs of the bank and it is alleged by the averment on oath that the respondent No. 2 (Joint Registrar) ordered enquiry under Section 64 and this act of ordering immediate enquiry was the inspiration of inherent loyalty of the Joint Registrar to the Minister.
16. In regard to this the society bank and its President approached this court by O.P. No. 6288/1993. This court has decided the said petition by the judgment dated January 11, 1994 (a copy of which is made available to me from the record). Perusal of the judgment shows that during the pendency of the said petition the report of the enquiry was placed on record along with the statement that the report referred to irregularities proposing action under Section 32(1) of the Act. The judgment further shows that the merits of the allegations or the reply of the parties thereto were not considered and the original petition was dismissed in view of the situation that the enquiry is already over affording protection to the situation that adequate opportunity and personal hearing would be given.
17. In this context, the record shows that during the pendency of O.P. No. 6288/1993, the Joint Registrar prayed for permission to appoint a returning officer in view of the situation that the committee was about to be superseded. It appears that another original petition No. 2/1994 for the appointment of a returning officer became necessary. On hearing respondents Nos. 2 and 4 the court ordered the appointment of the returning officer forthwith and this is how both O.P. Nos. 6288/1993 and 2/1994 were decided directing the Joint Registrar to appoint the returning officer for the conduct of elections to the Board of Directors. It is a matter of coincidence that this could decided these petitions on Janury 11, 1994 and within a month (Feb. 11, 1994) the impugned order came to be passed.
18. The movements in pursuance of the order of this court would be the material in the present petition. Since the earlier two petitions were between the same parties, the record of the said petitions was made available to me to find that in all the earlier petitions, the petitioners in the present petition as well as the petitioners therein emphatically urged that the order (Ext. PI) and the whole process of the proceedings of enquiry was not only a blatant illegality, but was also a situation noting mala fides. It is also urged that this court was unable to consider the situation in the earlier petitions to which the respondent No. 3 was not a party.
19. It is in these circumstances I have to examine the allegations and counter allegations with regard to the situation.
20. A show cause notice came to be issued on Feb. 3, 1994 and it is in pursuance of the said show cause notice that the impugned order is issued by the Joint Registrar acting under Section 32 of the Act. It would be more convenient to consider the. merits of the situation not for the purpose of its scrutiny and examination as an appellate authority, but with the Habited purpose of considering the probability of the allegations that are made in regard to the circumstances in which the impugned order came to be passed. Although I have chosen to consider the situation on merits in the first instance, in the context of chronology it would be better to relate the case of the present petitioners unfolding the circumstances on the basis of which they have built up their contentions in regard thereto.
21. With reference to the show cause notice, the objections were to be raised till Feb. 10, 1994 and the objectors were to be heard on February 11, 1994 making it clear that Feb. 13, 1994 would be the date of election. Based on these dates which are undisputed, the petitioners submit that obviously this is a situation of an anomalous character. It is urged that even the supersession that was contemplated would have to be termed as of nominal character or an artificiality in the context. It is submitted that the record of calendar shows that the hearing of objections were to be on Feb. 11, 1994 (Saturday) and the date of the election on supersession was Feb. 13, 1994. The submission is that supersession was only to be understood for a day and that too on a Sunday. The learned counsel submitted that the proposed move itself shows and justifiably exhibits the ridicule of the situation. He submitted that anywhere Sunday is not to be counted for all practical purposes and therefore supersession would have to be understood in the context of circumstances as similar or analogous to what are normally known to the courts as 'midnight orders'.
22. With regard to this there is also yet another contention. It is with regard to what happened in pursuance of the notice of personal hearing to be held on Feb. 11, 1994. It is urged and specifically averred in paragraph 8 of the petition and it is in the following words which are required to be quoted:
"Pursuant to the notice issued for personal hearing the petitioners including the President of the Director Board reached the office of the 2nd respondent at 10.55 a.m. The personal hearing was fixed at 11 a.m. on the same day. But the 2nd respondent told them that the written statement contain all materials and no further hearing is required. Then the petitioners pleaded with him that they had further details supported with documents and they should be considered in the personal hearing. The 2nd respondent promised to hear them after the conference of the department officers to be held at 11 a.m. At 1 noon the 2nd respondent emerged out of the office, he told them in a belligerent mood that 11 a.m. is over and he is not disposed to give any hearing. Immediately afterwords he left in a jeep sent by the Private Secretary to the Minister to Co-operation. The petitioners understand that the supersession order Ext. P1 was prepared in the office of the Minister on late hours of 11-2-1994, issued only on 12-2-1994 and the poor second respondent had to sign on the dotted line. At the time when the 2nd respondent was about to leave the office, the petitioners gave a written submission to him protesting against his high handed action. He refused to accept the submission and therefore the petitioners submitted the letter to the office. The office personnel received it but refused to give acknowledgment. Therefore on that day itself it was sent to the 2nd respondent by registered post."
Needless to state that Ext. P4 of the petition is in the nature of a contemporaneous record which lends probability to the contention that a call for personal hearing was farcical under the circumstances. It is to be noted that in Ext. P4 the averments that respondent No. 2 left in a jeep sent by the Private Secretary to the Minister for Co-operation are not to be found. However, its absence will have to be tested on probabilities of the situation and understanding the parties in the context, if all other particulars are found with equal meticulous details in Ext. P4.
23. On the basis of these factual facets it is contended that the respondent No. 4 presented the petition directly on March 3, 1994 to respondent No. 3 which unexpectedly and promptly shed the situation in jet speed, on the basis of which the Joint Registrar fixed the hearing on Feb. 11, 1994 within a day. The hearing was a farce. The supersession was ridiculous in the context and almost on the next day the election could be declared. It is submitted that these factors on the basis of which the petitioners allege mala fides to contend that respondent No. 4 was the busy body who could get the things to move in an unusual speed to give impossible results in the context. It is also urged that it was in such a siutation that the 2nd respondent - the statutory authority - who has all the statutory duties described and settled down by the course discussed hereinbefore acted not like an authority having official obligation in regard thereto, but as a preacher Mindfully obedient in the context. It is urged that these averments which can be independently established on their own worth get fortified in the process of assessment of probability in regard thereto on consideration of the merits of the situation.
24. Referring to the merits of the situation, the learned counsel urged that not from the point of view of examining them as an appellate authority, even a cursory examination thereof for the limited purpose would show that under the circumscribed and well spelt out exceptional character of the powers of the Registrar, the powers are exercised in such a manner that the merits would convince that no reasonable man would have passed the order on the material that is discussed with reference to the exceptional character of the power under Section 32 of the Act.
25. Even if the impugned order (Ext. P1) is considered with the limited purpose, it would show that respondent No. 2, the Joint Registrar, has travelled far beyond the limits of his authority discussed above. The alleged irregularities are taken up for discussion by respondent "No. 2 as pointed out in the show cause notice. It would be convenient to consider them for the limited purpose.
Allegation No. 1.
This allegation is with regard to the employees being admitted to membership of the bank, alleged to be in violation of Rule 16(2)(e) of the 1969 rules. It is alleged that the present Board of Directors did iiot carry out diredtions in the audit report to remove the employees from membership, but in addition five employees were granted loan amounting to Rs. 44,529/-.
In this context simultaneously it would be convenient to see the contents of the written statement (at page 26) which shows that none of the employees as alleged are admitted to membership during the tenure of the present committee. In fact names are given. It is further contended that in regard thereto the provisions of Section 64(2) have not been complied with to give an opportunity to remedy the situation if it has really occurred. With regard to the loans granted to five employees, it is also mentioned that recovery proceedings are immediately started before the issuance of the notice and one of the employees having repaid the amounts, the loan account is closed. It is also added that this is not at all wilful, but in the interests of the society. It is obvious that what is required to be seen is whether the statutory provisions are satisfied in order to take cognisance of this allegation for the consequent action already taken thereupon. The discussion in the impugned order, if appreciated in the light of the contents of the written statement in the context would at once show that the allegation under consideration falls much short to the requirements of law with regard to the exercise of extraordinary action.
Allegation No. 2.
This allegation relates to the failure of performance of duties by the Board of Directors in not realising the stock deficit amounting to Rs. 23,071.79 from one Sri Jayaprakash, salesman of the bank. The record shows that the employee is terminated from the services of the bank on Dec. 44, 1991. This was immediately when the stock deficit was detected on December 5, 1991. The employee was a temporary hand and the contents of the written statement in regard thereto show that a police complaint was filed in Mangalapuram Police Station and as the local police did not effectively proceed with the matter, the matter was taken up before the Inspector General of Police (Crime) on December 18, 1992 and the matter is under investigation. The bank has also filed arbitration proceedings (ARC 29/1993) before the Assistant Registrar (General), Trivadrum. Although the said allegation is held to be absolutely baseless, the respondent No. 2 ought to have drawn the necessary inferences from there with regard to the conduct of the Board of Directors which shows that the Board, on knowing on December 5, 1991, made the employee to be removed from service on December 14, 1991 and approached the police station on December 18,1992 in the matter. In spite of these it is not possible to see how this ground is also taken up as the base for exercise of exceptional power.
Allegation No. 3.
This allegation relates to slackness in not taking effective steps to recover arrears amounting to Rs. 31.93 lakhs from defaulters. Firstly in this context it would be necessary to hurriedly refer to the opening contentions in the written statement in regard thereto. The present Board assumed office on February 25, 1991, of the bank which is class I credit cooperative society with a total membership of 1183 members with a share capital of Rs. 12,78,390/-. On that day the deposits were Rs. 1,04,00,000/-. It is placed on record that the amount of present deposit is Rs. 2.67 crores. Then there was a deposit mobilisation campaign of 1991-92 where Rs. 33.75 lakhs were collected as against the target of Rs. 10 lakhs. For the year 1992-93 Rupees 50 lakhs were collected as against the target of Rs. 12 lakhs. On the other count relating to the consumer business turnover, it is stated that for the year 1990-91 it was Rs. 9,85,121/-and it increased to Rs. 2I,05,091/- for 1991-92 and further up to Rs. 25,60,300/- during 1992-93. The written statement makes a detailed record on other counts also, such as gold loan business, manure consumption and ration arrangements and if this opening re'sume' of the activities of the bank under the auspicious of the present Board of Directors is cursorily referred to, it would show the brighter side of the picture.
Even in regard to the allegation under consideration certain aspects would require mention that these arrears is an accumulated figure continuously from 1974 onwards. It is also pointed out in the written statement that a considerable sum of Rs. 1,78,333/- is recovered right from 1978 onwards. The activities of the Board are placed on record showing that 577 arbitration cases are initiated covering a total of Rs. 16,92,448/- obviously pointing out that pendency could not be foisted on the Board of Directors. The general picture presented with particulars specified thereto in the written statement would show the nature of the allegation and its worth in regard to the exercise of the rarest of rare powers by respondent No. 2.
Allegation No. 4.
This allegation is the smiling ridicule of the situation. It states that the Board of Directors spent Rs. 2500/- from the bank funds for constructing an arch in connection with the religious festival "Panimoola Festival". Even then there is an explanation on record to show that this "Panimoola Devi Temple" has six fixed deposits in the bank amounting to Rs. 6 lakhs in addition to the savings bank deposit account. It is also recorded that the bank used to construct similar arches in the past on all the festival occasions of the temple. It is urged that this has been done in order to promote the business of the bank and establish encouragement for the goodwill in future. It is in regard to this, the impugned order observes, that prior sanction of the Registrar under Rule 180 is necessary, recording on emphasis that the former and the present Board of Directors have not obtained sanction for spending amounts once in two years for construction of an arch. On the face of it the observation of respondent No. 2 that there is violation of Rule 180 of the Kerala Co-operative Societies Rules, 1969 would be unjustified. It is a simple action of the bank in the interest of maintaining the business and increasing the business relationship with the customer of the bank in regard to which under the functioning of the bank the Board of Directors have independent and unconcerned powers and expectation on the part of the Joint Registrar to have prior sanction on the flimsy excuse that it is against the secular nature of the co-operative institutions, shows the situation which would be more conveniently considered on cumulative basis hereafter.
Allegation No. 5.
This item relates to an amount of Rs. 16,307.50 spent by the bank for printing of calendars. It is alleged that this amount should not have been spent when the bank is running in huge loss. This also has been explained. It is stated that the members of the bank are not given any dividend and equally well the depositors are not given gifts as done by the other co-operative institutions. It is submitted in such a situation that one calendar for a member or a depositor is the only token of gratitude tendered to them once in a year. It is obvious that even this becomes one of the allegations on the basis that an institution running in losses is not to function on the path of prospective future in any sense of the term. It is in regard to this also the Registrar expects prior compliance or permission under Rule 180 of the Kerala Cooperative Societies Rules, 1969. It is already established in law that the co-operative bank works on the basis of the democratic principle on autonomous basis. The expectation of the Joint Registrar to have prior sanction with regard to the erection of a flower arch and printing of calendars requiring prior sanction under Rule 180 of the 1969 rules will have to be termed as understanding the provision in such a manner that the entire spirit in which the Act is framed and Rules are enacted would have to be understood and implemented in a different spirit altogether which is foreign to the emergence of the concerned enactments as stated at the outset.
Allegation No. 6.
This is with regard to the release of fixed deposits of Sri Kuttan and Sri Raveendran Nair without realising their loans availed on the security of the above deposits. Even in regard to this it is stated, firstly that Sri Raveendran Nair has another fixed deposit No. 1173 for Rs. 50,000/- while there was a balance of Rs. 1000/- against the fixed deposit loan. It is also placed in the explanation that the fixed deposit of Sri Kuttan was released without realising his fixed deposit loan. Although in regard to this the respondent No. 2 has accepted the explanation, it has its own legitimate reflexion on the manner in which the enquiry was initiated under Section 32 on flimsy and, at any rate, undesirable and unsustainable allegations.
26. Additionally, in the impugned order the respondent No. 2 considers the question of giving reasonable opportunity to the Board of Directors to cure the defects and has observed that such an opportunity is to be provided only in respect of minor defects noticed during Section 65 enquiry and it is not expected when the defects are of major character. It is thus concluded that no opportunity was required to be provided in view of the requirement of Section 65(v) of the Kerala Co-operative Societies Act. 1969. Whether the defects were major or minor, the situation has been examined even within the limited domain, reaching the conclusion that the allegations are of a flimsy character far away from the required seriousness in ac-cordance with the provisions of Section 32. It is in such a situation the conclusion that the defects were major assumes importance ultimately to be considered in a cumulative character. Holding that the explanation submitted by the present Board is not satisfactory, respondent No. 2 has proceeded to pass the impugned order of removal of the Board of Directors. In the context it is recorded by respondent No. 2 in the order that by the intimation dt. February 3, 1994 objections, if any, providing the period prescribed for filing objections was already issued and had expired, on the basis of which respondent No. 2 took it for granted, as stated in the order, that the bank and the union have no objection. This will have to be appreciated in the light of evidence supported by contemporary Ext. P-4 in regard to the objections and the hearing.
27. The above discussion with regard to the allegations would lead me to the conclusion that these allegations individually and cumulatively fall much below the requirement of Section 32(1) of the Act. As already observed that even if the allegations are taken at their face value, separately from the explanations tendered in regard thereto, there is nothing to show as regards persistency, negligence or wilful disobedience or failure to comply with lawful orders or directions in a wilful manner as is required as a pre-requisite for even the contemplation of the exercise of powers under Section 32 of the Act. In addition, as analysed hereinbefore, the order does not refer to the contentions taken in the written statement in the way in which it is expected of the authority exercising sparing powers of exceptional character. I have pointed out at appropriate stages what are the contentions of the written statements.
28. The entire proceeding will have to be understood in the context of contents of the show cause notice, the contents of the report and the contents of the impugned order Ext. P-1. It is said that history repeats itself which is the other way of saying that the man does not learn by experience. This Court has far back in 1982 found illustratively that the authorities (such as respondent No. 2) do not take the trouble of applying their mind and therefore the consequence is that the order that is ultimately passed becomes an ad verbatim replica of the contents of the report which in turn borrows its body from the contents of the show cause notice. This Court has already made observations which are to be found in the present proceedings. I have seen the contents of the show cause notice as well as the impugned order and in the context pointed out the observations to the learned Government Pleader for him to satisfy that even in this case the history has repeated and what is placed before the Court is an ad verbatim reproduction. This assumes great importance in regard to the exercise of a power of an exceptional character.
29. This power has to be exercised by the statutory authority under the Act in an independent manner taking into consideration the law of official obligations which require the statutory authority to be under a legal obligation to exercise powers in accordance with the spirit of the powers and if the powers are of an exceptional character already decided to be used in a sparing manner, any material showing that the power has not been used in the legal sense, the authority concerned becomes liable to a vulnerable attack in the context. Illustratively again this Court had an occasion to consider the powers of the Joint Registrar to hold that he has no jurisdiction to order an enquiry based on instructions issued by the Minister. A caution is given that a statutory authority vested with discretion has to exercise the same unin- fluenced by any extraneous consideration or dictation from any higher authority, adding that even a request from a higher authority to a subordinate authority will tantamount to positive command. This aspect requires a deeper probe after understanding and consequently judging the unsustainable character of the impugned order.
30. I have already stated certain factors in regard to the manner in which the enquiry came to be initiated culminating into the passing of the impugned order by respondent No. 2. In fact Ext. P-1 itself makes a reference to the petition of respondent No. 4 dt. March 3, 1993. There is no doubt that respondent No. 4 is a member of the bank bearing membership No. 7701. Thus there is no doubt that the whole thing was initiated on the basis of the petition of respondent No. 4 directly presented before the respondent No. 3. The Joint Registrar ought to have taken into consideration the very genesis of invitation for him to exercise powers as he has done in pursuance thereof.
31. In fact the very opening of the impugned order confirms this aspect and it is on the basis of this petition directly addressed to the Minister, the Joint Registrar (respondent No. 2) directed an enquiry by the Assistant Registrar (Planning) who submitted the preliminary report dt. March 20, 1993. It is on the basis of this that Section 65 enquiry was initiated.
32. Apart therefrom, in the context the averments of the petition of the proximity of respondent No. 4 in being close to respondent No. 3 is also reproduced above. With specific purpose I have quoted the averments in the context ad verbatim hereinbefore specifying pointed averments that respondent No. 2 was inspired by the element of his loyalty to the Minister ordered an enquiry. Averments are also made that the material of the enquiry would not induce a reasonable man to venture to initiate action under Section 32 of the Act. This Court will have to proceed as per the law of pleadings and in this situation if specific and pointed averments are made in the nature of unambiguous allegations against respondent No. 2, it should have been expected by some reference in regard thereto in the affidavit of return of respondent No. 2. Reading the counter and also with the help of the learned Government Pleader it will have to be stated that these averments have not been replied at all. There is yet another aspect of the matter. This is a petition wherein pointed averments are made with regard to delicate issues in the context and, if not anything else, the averments of the petition would create legitimate expectations from the respondent No. 2 to give something of his own in regard to these pointed averments. In my judgment, the averments go to the extent of urging that the impugned order could not have been passed by any reasonable man, that the impugned order has been passed by respondent No. 2 by his inspiration out of loyalty to respondent No. 3. The record of the impugned order also spells out that the action is initiated on the basis of a petition directly presented before the Minister (respondent No. 3) by respondent No. 4. There are direct allegations with regard to the relationship and political clout of respondents 3 and 4, inter se, consequently urging that the statutory authority of a responsible character, who has been given the exercise of exceptional powers, has acted on the inspiration resulting from this attitude of loyalty. It is painful for this Court to record that these pointed and specific averments have remained wholly unreplied. The law of pleading leads to the necessary conclusion. The conclusion is that, as stated by this Court in'Panicker Kadavu Consumer Coop. Society's base (1994 (2) Ker LT 564) (supra), the order cannot be said to have been passed by respondent No. 2 at all on his own and therefore lacks jurisdiction.
33. There is yet another aspect for consideration. The petitioners have averred that the show cause notice wanted them to file their objections till February 10, 1994 when the date of hearing was fixed on February 11, 1994, February 13, 1994 being the date of, election. I have quoted above the specific averments in paragraph 8 of the petition together with the contemporaneous record thereof in the nature of Ext. P-4. Considering these averments together with the effect of the contemporaneous record, on their own these averments induce element of acceptance by this Court, firstly because the averments are tersely clear, squarely the immediate contemporaneous record (Ext. P-4) bears the date of despatch of the same date (February 11, 1994). The things do not rest here. It is in this context I am at pains to observe the attitude of laxity of respondent No. 2 which is floating on the surface of the counter in the context. The respondent No. 2, the Joint Registrar, in the counter accepts the receipt of the letter, but beyond denial does not choose to say anything in regard thereto. It would be the lamenting misfortune that the counter clearly shows that respondent No. 2 has not even read the contents of the letter sent under registered post. Thus what happened on February 11, 1994 is a matter of record which becomes acceptable by him and in the context the observations of respondent No. 2 in the impugned order that the petitioners were absent has to be thrown at the doors of respondent No. 2 for their proper consequence. Time has come and I have observed already there is a refusal to learn from experience. This Court far back as in 1982 has observed that these orders are in the nature of replicas of the reports of the lower authorities. These orders on their own show utter non-application of mind. These orders also show that they are passed in an ugly haste at the behest of someone. The factual matrix spelt out hereinbefore by me shows that all these have proceeded in ugly haste at the behest of a busy body and in all probability, as spelt out from the record, it is none else than respondent No. 4 who has taken advantage of his proximity with , respondent No. 3, the Minister, who has made the Joint Registrar (respondent No. 2) to start proceedings to give what is required under the situation on extraneous considerations. It is a far cry not only in this matter, but twice hereinbefore of this Court that the authorities are travelling beyond the ambit of their statutory authority. If it is in the nature of ordinary legal error or a factually erroneous judgment, this Court knowing its limits would not even think of interference. But when this Court gets the material to show on all probabilities that respondent No. 2 has not acted on his own, but has acted on undesirable extraneous material shaking the statutory confidence shown in him to make use of the power only under exceptional situations, in my judgment, an occasion has come to examine the situation if the authorities behaved this way, those who are concerned with the maintenance of law and order in regard thereto should have spared such authorities. It is left to them and it is left to this Court to state what has appeared before them,
34. Respondent No. 2 has shown no seriousness in regard to the matter. This is an independent aspect which I am bringing to the notice of respondent No. 2 by this judgment. This was not the matter wherein respondent No. 2 should have left the task of swearing the counter by his subordinate -- Sri G. Nara-simhan -- Special Grade Inspector working in the office of the Joint Registrar, Trivan-drum, having been duly authorised to swear this counter-affidavit on behalf of respondent No. 2. It is not necessary for this Court to state that affidavits containing personal allegations are not to be left to be sworn by anyone admittedly subordinate to the concerned authority.
35. Be that as it may, the record shows, as discussed above, with reasons that the impugned order is wholly unsustainable on its own merits even within the limited jurisdiction. It shows that the impugned order has not been passed by respondent No. 2 on his own and, as observed by this Court, acting at the instance of someone else makes the order lacking the necessary jurisdiction in regard thereto. The proceedings has placed before me the material that respondent No. 4 acted on his own and has straightaway approached the Minister hoodwinking the statutory provisions of the Act and has set the machinery in motion on the basis of which respondent No. 2 has acted and it will have to be termed as thinking through one's hat. Additionally, even though the right of hearing is statutorily inbuilt in the section itself, there are factors already discussed to show that the hearing has been unjustifiably denied and the concerned authority has chosen to remain silent in regard thereto. It is further seen from the record that the personal allegations of a serious nature have not at all been explained or answered by respondent No. 2. And lastly, this Court has been dealt with by respondent No. 2 through his subordinate which is, to say the least, is undesirable in the context.
36. It is difficult to part with this judgment without a feeling of righteous indignation. Institutions are established by enactments with a noble democratic principle and they are handed over incharge of the authorities to see that they function. The authorities, it need not be stated, are created by the statute to see that these democratic fields do not become the play grounds or pastures of interested parties, but the institutions function in accordance with the rule of law and the rule of law is provided by the statute. The lament of the situation is that if the statutory authorities themselves act wholly contrary to the law set down by this Court, this Court will have to take a more serious and more effective view in future in regard to these aspects. In my judgment, at this stage judicial restraint prevents me to state something more in the context.
For all these reasons the petition succeeds and consequently the impugned order (Ext. P-1) gets quashed and set aside. By way of an interim order in C.M.P. No. 4618/1994 alt further proceedings in pursuance of Ext. P-l have been stayed. Needless to state that if any such proceedings are already pending in pursuance of the above impugned order (Ext. P-l), they shall get quashed and set aside as a necessary consequence of the situation.