IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 9620 of 2008(T)
1. K.JAYAVARMA, ADVOCATE,
... Petitioner
Vs
1. THE JOINT REGISTRAR OF CO-OP.SOCIETIES
... Respondent
2. GOVERNMENT OF KERALA, REP. BY ITS
3. K.RAVEENDRAN (MEMBER NO. 56187)
For Petitioner :SRI.P.RAVINDRAN (SR.)
For Respondent :SRI.S.SUBHASH CHAND
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :13/10/2009
O R D E R
ANTONY DOMINIC, J.
--------------------------------------------------
W.P.(C) NO.9620 OF 2008 (T)
--------------------------------------------------
Dated this the 13th day of October, 2009
J U D G M E N T
In the election that was held on 6.11.2004 to the Board of
Directors of the Thiruvalla East Co-operative Bank, the petitioner
was elected and later he was also elected as the President of the
said Bank. The term of the Managing Committee is to expire on
5.11.2009. While he was thus continuing as President, the 3rd
respondent filed a complaint before the Ist respondent that the
petitioner was a member of the Board of Directors of the
Mallappally Housing Co-operative Society Ltd. at the time of his
election and therefore, suffered ineligibility to become a
member of the Thiruvalla East Co-operative Bank in view of the
provisions contained in Section 28(2)(a) of the Kerala Co-
operative Societies Act, here-in-after referred to as `the Act’ for
short.
2. On receipt of the said complaint, the first respondent
issued Ext.P5, a show cause notice, calling upon the petitioner as
to why, in view of the ineligibility he suffered under Section 28(2)
(a) and Rule 44(1)(a) of the Co-operative Societies Rules he shall
WPC.No.9620/08
:2 :
not be disqualified as the member of the Committee of the
Thiruvalla East Co-operative Bank exercising the powers under
Rule 44(3) of the Rules. On receipt of Ext.P5, the petitioner filed
Ext.P6 explanation, complaining that he was not given copies of
the complaint filed by the 3rd respondent and the report of the
Assistant Registrar dated 10.3.2008 relied on in Ext.P5 show
cause notice. It was also contended that the Mallapally Housing
Co-operative Society and the Thiruvalla East Co-operative Bank,
do not fall under the same type of Societies in order to attract
Section 28(2)(a) of the Act and Rule 44(1)(a) of the Rules. He also
relied on the definition of `Urban Co-operative Bank’ as provided
in Section 2(ta) of the Act to contend that Thiruvalla East Co-
operative Bank being an Urban Co-operative Bank, it did not fall
under the same type of Societies to justify the proceedings as
proposed in Ext.P5. The acknowledgment in Ext.P6 reply shows
that this was delivered in the office of the Joint Registrar on
17.3.2008, much before 19.3.2008 to which date hearing of
Ext.P5 was scheduled. Immediately thereafter he filed this writ
petition challenging the show cause notice.
3. This writ petition came up for admission on 24.3.2008
and an interim order to maintain status quo was passed. In the
WPC.No.9620/08
:3 :
meanwhile, on 19.3.2008, the counsel for the petitioner appeared
before the first respondent and filed Ext.P8 Vakalath along with
Ext.P9 application seeking adjournment by one month for filing a
detailed objection and arguments. Endorsement on Exts.P8 and
P9 referred to above show that these were received by the first
respondent on 19.3.2008 itself.
4. However, Ext.P7 order was passed by the first
respondent on 19.3.2008. It is stated in Ext.P7 that based on the
averments in the complaint and the report of the Assistant
Registrar dated 10.3.2008, he was satisfied that the Mallappally
Taluk Housing Co-operative Society and the Thiruvalla East Co-
operative Bank are societies of the same type and that while
being a member of Mallappally Taluk Housing Society, petitioner
contested in the election held to the Board of Directors of the
Thiruvalla East Co-operative Bank and became a member of the
Board of the latter Bank, attracting the ineligibility provided in
Section 28(2)(a) read with Rule 44(1)(a) of the Rules. It is stated
that it was in view of this he was issued Ext.P5 show cause notice
and that in response, though the petitioner did not appear in
person, he filed Ext.P6 objection. Proceeding further it is stated
that, based on the materials available, he was satisfied that the
WPC.No.9620/08
:4 :
Mallappally Housing Co-operative Society is incorporated with the
main object of giving housing finance and that one of the main
objects of Thiruvalla East Co-operative Bank is giving housing
loans and therefore both the societies are of the same type. On
this basis, holding that the ineligibility provided under Section 28
(2)(a) of the Act read with Rule 44(2) of the Co-operative
Societies Rules is attracted, exercising his powers under Rule
44(3) of the Rules the petitioner was disqualified to be member of
the Committee of Thiruvalla East Co-operative Bank.
5. Referring to Ext.P7(a), the cover under which Ext.P7 was
sent, the petitioner submits that it was after communicating the
satus quo order passed by this court that Ext.P7 order was
dispatched from the office of the first respondent on 26.3.2008.
Thereupon the petitioner got the writ petition amended
incorporating challenge against Ext.P7 also. Thus as at
present, the writ petition contains prayers for quashing Exts.P5
and P7 and to declare that being a member of the Board of
Directors of the Urban Co-operative Bank, shall not disentitle him
for being elected as a member of the committee of the Housing
Society. Though there is a further prayer to declare Rule 15 of the
Co-operative Societies Rule as amended by SRO.No.380/00 to the
WPC.No.9620/08
:5 :
extent it clubs Urban C0-operative Bank and Housing Society
together as ultravires the rule making power of the State
Government and therefore is unconstitutional. When the matter
was taken up for hearing, Senior counsel for the petitioner did
not press the prayer against Rule 15 of the Rules.
6. On behalf of the petitioner, Sr. Counsel Sri. P. Ravindran
contended that in Ext.P7 order, points raised by the petitioner, in
Ext.P6 objections filed against Ext.P5 show cause notice, were
not considered. It was also contended that under Rule 44(3), the
petitioner is entitled to have an opportunity to file his objections
and also an opportunity of hearing. Despite having filed Ext.P8
Vakalath and Ext.P9 application for adjournment, declining an
opportunity makes his representations, and without even
mentioning the filing of Exts.P8 and P9, ExtP7 order was passed
in violation of the statutory provisions and also the principles of
natural justice. It was also contended that the ineligibility under
Section 28(2)(a) is only against membership in another society of
the same type. According to the learned Sr. counsel, in view of
the definition Urban Co-operative Bank as provided in Section 2
(ta) and Primary Co-operative Society in Section 2(ob) read with
Rule 182 and Appendix III of the Rules, the Thiruvalla East Co-
WPC.No.9620/08
:6 :
operative Bank and the Mallapally Housing Co-operative Society
fall under different types of societies and if so the ineligibility
provided in Section 28 of the Act and Rule 44 is not attracted.
Learned counsel also referred to me Rule 15 of the Rules and
contended that the categorization of different types of societies
is contrary to the categorization in Appendix III and the provisions
contained in Section 2 of the Act, which defines different types of
societies. On this basis it was argued that it was unsafe to rely
entirely on the categorization under Rule 15 of the Rules.
7. On behalf of the first respondent, the learned Advocate
General contended that in paragraph 11 of the writ petition the
petitioner has admitted that going by the categorization provided
under Rule 15, Housing Societies and Urban Co-operative Banks
are credit societies. It is stated that, in view of the admitted fact
that these societies of which the petitioner is a member of the
committee, fall under the same type of societies, the ineligibility
as provided under Section 28(2) is squarely attracted. It is
contended that even if the petitioner is taken to have been not
given an opportunity of hearing, still having regard to the fact of
the case, since no other conclusion is possible in this case and
no prejudice is proved to have been caused to the petitioner,
WPC.No.9620/08
:7 :
complaint regarding violation of the principles of natural justice
has no substance.
8. On behalf of the 3rd respondent, the complainant at
whose instance proceedings were initiated, a counter affidavit
has been filed and the learned counsel made extensive reference
to the averments in paragraphs 10,11 and 16 of the counter
affidavit. According to him, both the banks carry on similar
business and having regard to its main objects and the
categorization of Rule 15 of the Rules, these societies are credit
societies. According to him the issue has to be decided referring
to Rule 15 of the Rules only. In so far as the contention regarding
the violation of principles of natural justice, the learned counsel
for the 3rd respondent contended that since the petitioner has not
established any prejudice, the petitioner cannot plead that
principles of natural justice has been violated.
9. First I shall deal with the contention of the learned
counsel for the petitioner that the petitioner was denied an
opportunity of hearing before Ext.P7 order was passed by the
first respondent. I choose to adopt this course, for the reason
that, in case I accept the contention of the learned counsel for
the petitioner, necessarily, the matter should be reconsidered and
WPC.No.9620/08
:8 :
decided by the statutory authority and it is for that authority to
deal with the contentions on merits.
10. The power exercised by the Joint Registrar is conferred
by Rule 44(3) of the Kerala Co-operative Societies Rules, which
provides that if a person becomes disqualified to be a member of
the Committee of a Society, the Registrar may in the
circumstances pointed out in the Rule Boban J. Olasa, by order
in writing declare that the person has ceased to be a member of
the committee of the society concerned from the date of such
disqualification. Rule 44(1) further provides that no member of
the Society shall be eligible for being elected and appointed as
member of the committee of the Society if he is disqualified under
Section 28. Since, what is canvassed against the petitioner in this
case is the ineligibility under Section 28(2)(a), if the ineligibility is
proved, it is open to the Registrar to pass orders invoking his
powers under Rule 44(3).
11. However Rule 44(3) further provides that before passing
an order the Registrar shall give the person against whom
proceedings are initiated, an opportunity to state his objections, if
any, against the proposed action and if the person wishes to be
heard, he shall be given an opportunity to be heard also. In this
WPC.No.9620/08
:9 :
case, Ext.P5 show cause notice was issuing relying on the
complaint filed by the 3rd respondent and also the report of the
Assistant Registrar dated 10.3.2008. A reading of the show cause
notice shows that the first respondent had given the petitioner an
opportunity to file his objections and to appear before him on
19.3.2008 for hearing. Ext.P6 is the objection that was filed. In
Ext.P6 petitioner has complained of not having given him a copy
of the complaint and also the copy of the report submitted by the
Registrar. On merits also the petitioner raised his objections.
According to him the societies do not fall within the same type to
invoke the power of the Registrar under Rule 44(3) of the Rules.
12. On 19.3.2008 by filing Exts.P8 Vakalath and P9
application, counsel for the petitioner sought an adjournment.
However, without passing any order on Ext.P9 application for
adjournment and without making even a reference to Ext.P8 and
P9, Ext.P7 order has been passed by Registrar on 19.3.2008. In
Ext.P7, although it is stated that Ext.P6 objection was filed by
the petitioner, the contentions raised in Ext.P6 are also not dealt
with in the order. Moreover, in Ext.P7 order, it is also stated
that, grant of housing loan, is one of the main objects of the
Thiruvalla East Co-operative Bank. This finding is factually
WPC.No.9620/08
:10 :
erroneous, in as much as Ext.R1(a) bye laws of the Bank
containing its objects show that there is no such object
incorporated in the bye laws. Be that as it may, fact remains that
it was without giving an opportunity of hearing to the petitioner,
without making reference to any of the contentions raised by the
petitioner in Ext.P6 and with even referring to Ext.P9 that Ext.P7
has been passed.
13. Further it is an elementary principle of natural justice
that when a complaint or report is sought to be used against a
person, a copy there of should be given or at least, the contends
of the complaint or report should be disclosed to him. In this
case, in Ext.P6 reply, the petitioner has raised a complaint in this
respect and that aspect is also not addressed by the Ist
respondent. Thus Ext.P7 order is passed not only in violation
of the principles of natural justice but is in violation of the
provisions contained in Rule 44(3) of the Rules. If there is
violation of the statutory rules, the question of prejudice or proof
of prejudice, in my view, does not arise at all. Therefore I am
satisfied that the order Ext.P7 has been passed in violation of the
principles of natural justice and statutory rules and for that
reason the order is liable to be set aside and I do so. The first
WPC.No.9620/08
:11 :
respondent shall disclose the materials which are proposed to be
used against the petitioner and pass fresh orders giving the
petitioner an opportunity of hearing. It is clarified that this court
has not dealt with the merits of the contentions raised by both
sides and it is entirely for the Ist respondent to deal with these
issues.
Accordingly, the writ petition is disposed of quashing Ext.P7
and leaving open the first respondent to decide the matter afresh,
in accordance with law and in the light of the observations made
above. This shall be done, as expeditiously as possible, at any
rate, within 6 weeks from the date of production of a copy of the
judgment.
(ANTONY DOMINIC)
JUDGE
vi/