Kerala High Court
V.Dinakaran vs The Registrar on 14 July, 2016
Author: P.B.Suresh Kumar
Bench: P.B.Suresh Kumar
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
WEDNESDAY, THE 22ND DAY OF FEBRUARY 2017/3RD PHALGUNA, 1938
WP(C).No. 5715 of 2017 (L)
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PETITIONER:
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V.DINAKARAN,
EX.MLA,
CHAIRMAN, MANAGING COMMITTEE,
MATSYAFED, THIRUVANANTHAPURAM-695 001.
BY ADVS.SRI.M.K.DAMODARAN (SR.)
SRI.ALAN PAPALI
SRI.GILBERT GEORGE CORREYA
SRI.NISHIL.P.S.
SRI.J.VIMAL
SRI.ANTONY ROBERT DIAS
KUM.NIHARIKA HEMA RAJ
RESPONDENT(S):
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1. THE REGISTRAR,
FISHERIES CO-OPERATIVE SOCIEITES,
THIRUVANANTHAPURAM-695001.
2. SRI.V.MANOHARAN,
JOINT DIRECTOR FISHERIES (SOUTH ZONE),
THIRUVANANTHAPURAM-695001.
3. MR.YESURAJAN,
PRESIDENT,
KOCHUTHARA FISHERIES CO-OPERATIVE SOCIETY,
THIRUVANANTHAPURAM-695001.
R1 BY SPECIAL GOVERNMENT PLEADER SRI K.S.MOHAMED HASHIM
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 22-02-2017, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
K.V.
WP(C).No. 5715 of 2017 (L)
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APPENDIX
PETITIONER(S)' EXHIBITS
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P1 TRUE COPY OF THE COMPLAINT FILED BY THE 3RD RESPONDENT BEFORE
THE 1ST RESPONDENT REGISTRAR DATED 14.7.2016
P2 TRUE COPY OF THE ORDER DATED 1.10.2016 OF THE 1STRESPONDENT
APPOINTING THE 2ND RESPONDENT AS ENQUIRY OFFICER.
P3 TRUE COPY OF THE NOTICE DATED 8.2.2017 ISSUED UNDER SECTION 32
(1) OF THE K.C.S ACT BY THE 1ST RESPONDENT TO THE PETITIONER
P4 TRUE COPY OF THE AUDIT REPORT OF THE MATSYAFED FOR THE PERIOD
FROM 2015-2016
P5 TRUE COPY OF THE REPLY DATED 14.2.2017 FILED BY THE PETITIONER
TO EXT.P3 NOTICE UNDER SECTION 32(1) OF THE K.C.S. ACT
P6 TRUE COPY OF THE JUDGMENT DATED 31.1.2017 IN
WP(C) NO.38904/2016
P7 TRUE COPY OF THE JUDGMENT DATED 7.2.2017 IN WA NO.247/2017.
RESPONDENT(S)' EXHIBITS NIL
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/TRUE COPY/
P.A.TO JUDGE
K.V.
P.B.SURESH KUMAR, J.
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W.P.(C).No.5715 of 2017
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Dated this the 22nd day of February, 2017
J U D G M E N T
The petitioner is the Chairman of the Managing Committee of the Kerala State Co-operative Federation for Fisheries Development Limited ('the Matsyafed'). The Matsyafed is the apex society of the Primary Fishery Co- operative Societies in the State registered under the Kerala Co-operative Societies Act. Ext.P3 notice, by which the petitioner was directed to show cause why the Managing Committee of the Matsyafed shall not be superseded, is under challenge in this writ petition.
2. The facts relevant are the following :
There was an inquiry under Section 65 of the Act in relation to the affairs of the Matsyafed. Ext.P3 show W.P.(c).No.5715 of 2017 : 2 : cause notice has been issued relying on the report of the said inquiry. The main case of the petitioner is that Ext.P3 notice has been issued only to the Chairman of the managing committee. According to the petitioner, since the managing committee of the society is proposed to be superseded, notice should have been given to all the members of the managing committee. It is also the case of the petitioner that before initiating proceedings under Section 32 of the Kerala Co-operative Societies Act based on the report of inquiry under Section 65 of the Act, the members of the managing committee of the Matsyafed should have been an opportunity to raise their objections against the findings in the inquiry. Since the above procedure has not been complied with, according to the petitioner, Ext.P3 notice issued based on the report of enquiry is without jurisdiction.
3. Heard the learned Senior Counsel for the petitioner as also the learned Special Government Pleader.
4. The show cause notice issued under Section W.P.(c).No.5715 of 2017 : 3 : 32(1) of the Act for superseding the managing committee of the Matsyafed is under challenge in the writ petition. Section 32 of the Act reads thus:
"Section 32: Supersession of Committee.
[(1) If the Registrar, after an inquiry by himself or through his subordinates or on a report of the financing bank, or the Vigilance and Anti Corruption Bureau of the Government or the Vigilance Officer or other wise is satisfied that the committee of any society,-
(a) persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the rules or bye-laws or does anything which is prejudicial to the interests of the society; or
(b) willfully disobeys or fails to comply with any lawful order or direction issued under this Act or the rules; or
(c) makes any payment contrary to this Act or the rules or the bye-
laws or causes any loss or damage to the assets of the society by breach of trust of willful negligence; or [(d) misappropriates or destroys or tampers with the records or causes the destruction of records to cover up any misconduct or malpractice, he may, after giving the committee an opportunity to state its objections, if any, by order in writing, remove the committee and appoint in its place, one administrator or an administrative committee consisting of not more than three individuals, one among them as convener, who need not be members of the society, to manage the affairs of the society for a period not exceeding six months [Provided that in the case of co-operative society, carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 (Central Act 10 of 1949) shall also apply:
Provided further that in the case of a co-operative society, carrying on the business of Banking, appointment of administrator/administrative committee shall not exceed one year in the aggregate:
Provided also that the board of a co-operative society shall not be superseded or kept under suspension where there is no Government share holding or loan or financial assistance or any guarantee by the Government or any Board or Institutions constituted by the Government.] W.P.(c).No.5715 of 2017 : 4 : Explanation:-A notice and an order given as per this clause to the President, in his absence to the Vice President or any committee member who is holding charge of President or Vice President or to the Chief Executive of a society shall be treated as an order given to the committee of the society.]] [(e) Every member of the committee superseded under this section shall from the date of order of such supersession stand disqualified to contest in the election to or to be nominated to the committee of any Society or to be appointed as an administrator in any society for two consecutive terms.] (2) The Registrar shall consult the financing bank and Circle Co-operative Union or State Co-operative Union as the case may be before passing an order under sub-section (1).
(3) Notwithstanding anything contained in sub-section (1) or sub-section (2) it shall not be necessary to give an opportunity to the committee to state its objections and to consult the Unions and financing banks, in cases where the Registrar is of the opinion that it is not reasonably practicable to do so, subject however to the condition that in such cases the period of supersession shall generally be for six months and in case a new committee, cannot be constituted or enter upon office in accordance with the bye-laws of the society within the period of supersession the period may be extended for a further period not exceeding six months -
(a) in the case of a Co-operative society only after consulting the Circle Co-operative Union concerned; and
(b) in the case of an Apex Society and a Central Society only after consulting the State Co-operative Union.
(4) The Committee or administrator or administrators so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, 53 [have power to exercise all or any of the powers and functions] of the committee or of any officer of the society and take such action as may be required in the interests of the society.
(5) The Committee or administrator or administrators shall, before the expiry of its or his or their term of office, arrange for the constitution of a new committee in accordance with the bye- laws of the society.
(6) Every order made by the Registrar under sub-section (1) shall be communicated to the Circle Co-operative Union."
It is evident from Section 32 of the Act that before superseding the managing committee of a society, a notice W.P.(c).No.5715 of 2017 : 5 : is required to be given to the managing committee. The Explanation added to the provision by way of amendment with effect from 14/02/2013 makes it clear that a notice given as per the said provision to the President shall be treated as a notice given to the committee of the society. In the light of the said Explanation, notice to the President of the Committee has to be accepted as sufficient notice in the proceedings under Section 32 of the Act. It is seen that before the introduction of the Explanation referred to above into the statute, a Division Bench of this Court has held that notice to the President is to be accepted as sufficient notice to the committee. Paragraph (2) of the decision of the Division Bench in Raghavan v. Joint Registrar [1996 (2) KLT 671] referred to above, reads thus:
"2. We heard counsel for the appellant. It was contended before us that under S. 32(1) of the Act, the first respondent was bound to give notice under S. 32(1) to each member of the Board of Directors of the Society. S. 32(1) of the Act reads as follows:
"32. Supersession of Committee - (1) If the Registrar is satisfied that the committee of any society persistently makes default or is negligent in the performance of the duties imposed on it by mis Act or the rules or bye-laws W.P.(c).No.5715 of 2017 : 6 : or commits any act which is prejudicial to the interests of the society or wilfully disobeys or wilfully fails to comply with any lawful order or direction issued under this Act or the rules, the Registrar may, after giving the committee an opportunity to state its obligations, if any, by order in writing remove the committee and .......".
On going by the section there is no provision to give separate notice to each member of the Board of Directors. Notice is to be given to the committee and it is the committee which has to raise its objections, if any, against the proposed supersession. Admittedly, notice was issued to the President of the Committee. It is important to note that the petitioner has no case that the President is acting against the interest of either the petitioner or other members of the Society. Normally, the President will bring it to the notice of the other members of the committee that he had received a notice from the first respondent under S. 32(1) of the Act and it is fo the Committee to give suitable reply or objections to the proposed supersession." The petitioner has no case that there is a conflict among the members of the committee, so that lack of individual notices to all the members of the committee would result in depriving some of the members of the committee an opportunity of hearing. Further, in the absence of any grievance for the remaining members of the committee that they are deprived of an opportunity to raise their objection against the proposed action, the petitioner who has admittedly been given notice cannot be heard to contend W.P.(c).No.5715 of 2017 : 7 : that the proceedings is vitiated for non-compliance of the principles of natural justice for want of notice to other members. The contention raised by the petitioner in this regard is, therefore, liable to be rejected.
5. The next contention of the petitioner is that before initiating proceedings under Section 32 of the Act based on a report of inquiry under Section 65 of the Act, the members of the managing committee of the society should have been given an opportunity to raise their objections against the findings in the inquiry. Sub rule (5) of Rule 66 of the Kerala Co-operative Societies Rules has been relied on by the learned Senior Counsel for the petitioner in support of the said contention. It is seen that the issue is covered against the petitioner by the decision of this Court in State of Kerala v. Aravindakshan Nair (2010 (3) KLT 11). A Division Bench of this Court, in the said case, held that since separate opportunity of hearing is provided for in the statute wherever action is contemplated based on a report of inquiry under Section 65 of the Act, the contention that W.P.(c).No.5715 of 2017 : 8 : report of inquiry cannot be acted upon without compliance of the provisions contained in Rule 66(5) of the Rules cannot be accepted. It is clarified by the Division Bench in the said case that the opportunity of hearing provided for in Rule 66 (5) of the Rules is only for the purpose of ordering recovery of the cost of inquiry under Section 65 or the inspection under Section 66. The learned counsel has brought to the notice of this Court, a decision rendered by a later Division Bench of this Court in W.A.No.2198 of 2012. True, a contrary view has been taken by the Division Bench in W.A.No.2198 of 2012 without noticing the decision in State of Kerala v. Aravindakshan Nair (supra), but, it is seen that the issue has not been considered by the Division Bench in W.A.No.2198 of 2012. On the other hand, the Division Bench in W.A.No.2198 of 2012 proceeded as if the statute mandates an opportunity of hearing before a report under Section 65 of the Act is acted upon. In so far as the issue has been considered by this Court in State of Kerala v. Aravindakshan Nair, I am of the view that this Court is W.P.(c).No.5715 of 2017 : 9 : bound by the said decision. This contention of the petitioner also, therefore, fails.
6. The learned Senior Counsel contended that the inquiry ordered into the affairs of the Society under Section 65 of the Act was based on a complaint submitted by an individual. According to the learned Senior Counsel, on the basis of a complaint by an individual, an inquiry under Section 65 could not have been ordered. The petitioner has challenged the order directing inquiry under Section 65 of the Act before this Court in W.P.(C).No.38904/2016 on various grounds. The ground now raised was not a ground on which the order was challenged in W.P.(C). No.38904/2016. According to me, the petitioner who has not challenged the order directing inquiry under Section 65 of the Act in the earlier writ petition filed by him on the said ground is not entitled to contend that the said order is bad on that ground in this proceedings. The principle of might and ought in raising contentions in judicial proceedings would interdict the petitioner from raising the said W.P.(c).No.5715 of 2017 : 10 : contention. The above contention of the petitioner also, therefore, fails.
The writ petition, in the circumstances, is without merits and the same is, accordingly, dismissed.
Sd/-
P.B.SURESH KUMAR JUDGE rsr