IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 32487 of 2008(P)
1. THE KANJIRAPPALLY CO-OPERATIVE RUBBER
... Petitioner
Vs
1. STATE OF KERALA, REPRESENTED BY THE
... Respondent
2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES,
3. THE JOINT REGISTRAR OF CO-OPERATIVE
4. THE NATIONAL CO-OPERATIVE DEVELOPMENT
5. THE INTEGRATED CO-OPERATIVE DEVELOPMENT
6. THE DEPUTY TAHSILDAR (REVENUE RECOVERY),
7. MR.GEORGE THOAMS, VALIPLACKAL,
8. THE KERALA CARDAMOM PROCESSING &
For Petitioner :SRI.K.K.CHANDRAN PILLAI
For Respondent :SRI.GRASHIOUS KURIAKOSE
The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN
Dated :05/12/2008
O R D E R
THOTTATHIL B. RADHAKRISHNAN, J.
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W.P.(C).Nos.32487/2008-P & 35756/2008-F
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Dated this the 5th day of December, 2008.
JUDGMENT
1.These writ petitions are filed challenging an
order issued by the Joint Registrar of Co-
operative Societies setting aside a proceeding
for private sale of an item of property of the
Kanjirappally Co-operative Rubber Marketing
Society Limited, hereinafter called, the
“Society”, the petitioner in WP(C).32487/2008 in
favour of the Kerala Cardamom Processing &
Marketing Company Limited, hereinafter called,
the “Company”, the 8th respondent in that writ
petition.
2.The Society owes different amounts to NCDC, ICDP,
State Government and the Meenachil Rubber
Marketing and Processing Co-operative Society.
For the purpose of liquidating those
WP(C)32487 & 35756/08 -: 2 :-
outstandings, the Society obtained prior
permission of the competent statutory authority
to conduct private sale of one of the items of
its assets. That permission was granted on the
basis of a valuation statement of 2004. But, the
Society could, ultimately, conclude on a proper
purchaser only in 2008. The competition was among
two purchasers. One is the Company aforesaid and
the other, Mr.George Thomas, the 7th respondent
in WP(C).32487/2008, represented by Joji Joseph,
the petitioner in WP(C).35756/2008. George Thomas
offered an amount of Rs.55,55,555/- as against
the offer of Rs.53,77,735/- by the Company. There
is some controversy between the parties as to
whether George Thomas had withdrawn half way
through, while he would assert that he would not.
The proceedings reached the hands of the Joint
Registrar in the wake of a controversy between
the Company and George Thomas as to who should be
the successful bidder. The Joint Registrar was
moved by George Thomas.
WP(C)32487 & 35756/08 -: 3 :-
3.The Joint Registrar took stock of the entire
scenario and noticed that the Society is indebted
for an odd sum and it would not be in the
interest of the Society to have the sale on the
basis of the 2004 valuation. The proceedings of
the Society are accordingly set aside with a
direction to auction de novo. The Society has
challenged the order on the allegation that it
was not heard before issuing the impugned
decision. It has also placed on record in WP(C).
32487/2008 that it is indebted to different
establishments as noticed above, though Meenachil
Society is not a respondent in that writ
petition.
4.I have heard the learned counsel appearing for
the Society, the Company, George Thomas and the
learned Government Pleader quite in extenso.
5.The impugned order reflects a state of affairs
where the Society had availed facilities from
NCDC, ICDP etc. with the guarantee of the State
WP(C)32487 & 35756/08 -: 4 :-
and is functioning with share capital
contribution by the State Government. Obviously,
therefore, there is an involvement of the State
interest in the matter. That apart, the Society
is a rubber marketing society and the interest of
a large number of its members will also have to
be appropriately protected. The Joint Registrar
cannot be wholly at fault in having taken a
complete stock of the situation, though the en
result does not really satisfy the complete needs
of the Society. I say this because, the Society
may not be interested, as of now, to sell off its
immovable property. Its only aspiration is to see
that the debts are liquidated. This means that
any sale of the immovable property for which
sanction was granted should be with the ultimate
aid of resulting in the Society retrieving its
status of being a debtor to different
establishments. In that context, it may be
worthwhile to note that a large chunk of amounts
which are shown to be due from the Society is by
way of interest payable to NCDC, ICDP or the
WP(C)32487 & 35756/08 -: 5 :-
Government and may be to the Meenachil Society
also.
6.The impugned decision of the Joint Registrar is
one amenable to the statutory remedies before the
Government. There are revenue recovery
proceedings also pending at the instance of NCDC
or ICDP. In the fitness of things, this is a case
where the attention of the Government is
immediately obtained in a comprehensive manner so
that the different creditors, including Meenachil
Society or any other creditor, as discernible
from the books of accounts of the Society, could
be persuaded to reduce the total outstandings by
scaling down the rate of interest. This could be
done in the case of ICDP and NCDC also. These are
matters which would work out more on the basis of
an appropriate dispute negotiation resolution
system through the Governmental guidance and
blessings, particularly because, Government funds
are also ultimately involved in the process. It
would not be in the interest of any one to wind
WP(C)32487 & 35756/08 -: 6 :-
up and ultimately, liquidate a rubber marketing
co-operative society in Kerala. It would equally
be not in the interest of any one to pass off
properties belonging to a co-operative society to
private hands taking it out of co-operative
movement of the State. The very object sought to
be achieved by the legislation in co-operative
sector and the co-operative movement will only
fail, if that ultimately happens.
7.In the light of what is stated above, all further
proceedings on the basis of the orders impugned
will continue to remain stayed for a period of
one year to enable the Society to move the
Government within a period of four weeks from now
by filing appropriate petitions calling for the
interference of the Government with the order of
the Joint Registrar and also to have all the
transactions referred to earlier settled. Let
such a comprehensive petition be filed
notwithstanding the petitions already pending
before the State Government touching revenue
WP(C)32487 & 35756/08 -: 7 :-
recovery and other matters. The Government will,
at the appropriate level, have the entire issues
looked into and settled with notice, hearing and
views of the NCDC, ICDP, the Meenachil Society
and any other creditor, Mr.Goerge Thomas
represented by Joji Joseph and the Kerala
Cardamom Processing & Marketing Company Limited
would also be heard in the matter. If ultimately
it becomes necessary that the property needs to
be sold, it shall be done upon appropriate
valuation and in accordance with law and even by
confining any auction to be between George Thomas
and the Kerala Cardamom Processing & Marketing
Company Limited, who are, as of now, in the fray.
Once the Government concludes finally, the order
of stay granted by this judgment will stand
vacated and parties will be regulated by the
decision of the Government.
This judgment is being issued before service of
notice is complete on NCDC and ICDP in WP(c).
32487/2008 since no orders are being issued
WP(C)32487 & 35756/08 -: 8 :-
against their interest and if this judgment
reaches its goal, even the establishment would
also stand only to reach at amounts due to them.
However, if they are, in any manner, aggrieved by
the directions contained in this judgment, they
are at liberty to seek review of this judgment.
All revenue recovery proceedings against the
Society will also stand suspended for the period
covered above. The Society will obtain a fresh
valuation from competent valuers and place it
before the Government, in the meanwhile. Whatever
amounts have been paid by the Company and George
Thomas will be refunded forthwith by the Society
and further action will proceed only on the basis
of the decision of the Government, however that
their efforts will continue to remain firm and
enforceable, subject to the final decision of the
Government. The Government will consider
convening necessary meetings either through the
Joint Registrar or otherwise at the appropriate
level of all the creditors of the Society. Let a
final decision from the Government follow within
WP(C)32487 & 35756/08 -: 9 :-
four months. These writ petitions are ordered
accordingly.
THOTTATHIL B. RADHAKRISHNAN,
JUDGE.
Sha/