IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN FRIDAY, THE 8TH JULY 2011 / 17TH ASHADHA 1933 WP(C).No. 15305 of 2011(K) ------------------------- PETITIONER : --------------------- THE CHUNGATHARA SERVICE CO-OPERATIVE BANK LTD, NO.F 1807, CHUNGATHARA PO, NILAMBUR TALUK, MALAPPURAM DISTRICT REP. BY ITS SECRETARY JOSE JACOB, AGED 50 YEARS, S/O.CHACKO, PUTHUSSERYATH HOUSE, CHUNGATHARA PO, NILAMBUR, MALAPPURAM DISTRICT. BY ADVS. SRI.A.T.ANILKUMAR SRI.P.DALBI EMMANUEL SRI.M.J.ABRAHAM RESPONDENT(S): ------------------------- 1. THE STATE OF KERALA REP. BY SECRETARY TO THE GOVERNMENT CO-OPERATIVE DEPARTMENT, THIRUVANANTHAPURAM-695001. 2. THE REGISTRAR OF CO-OPERATIVE SOCIETY THIRUVANANTHAPURAM-695001. 3. THE ADDITIONAL REGISTRAR (CREDIT) CO-OPERATIVE SOCIETY, THIRUVANANTHAPURAM-695001. 4. THE JOINT REGISTRAR (GENERAL) CO-OPERATIVE SOCIETY, MALAPPURAM-676505. 5. THE DISTRICT CO-OPERATIVE BANK LTD., MALAPPURAM (HEAD OFFICE), REP. BY ITS GENERAL MANAGER-676505. R1 TO R4 BY GOVT. PLEADER SRI. P.M. MANOJ R5 BY ADVS.SRI.P.N.MOHANAN SRI. V. KRISHNA MENON THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08/07/2011, ALONG WITH WPC NO. 16381 OF 2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 15305 of 2011(K) APPENDIX PETITIONER'S EXHIBITS: EXT.P1 : COPY OF THE AWARD ISSUED BY THE 2ND RESPONDENT DATED 16.10.2009. EXT.P2 : COPY OF THE APPLICATION SUBMITTED BY THE 5TH RESPONDENT TO THE 2ND RESPONDENT THROUGH THE 4TH RESPONDENT. EXT.P3 : COPY OF THE LETTER ISSUED BY THE 2ND RESPONDENT CALLING FOR THE REPORT OF THE 4TH RESPONDENT. EXT.P4 : COPY OF THE REPORT OF THE 4TH RESPONDENT TO THE 2ND RESPONDENT DATED 26.2.2011. EXT.P5 : COPY OF THE ORDER DATED 12.5.2011 PASSED BY THE 3RD RESPONDENT. RESPONDENT'S EXHIBITS: EXT.R5(a) : COPY OF THE CIRCULAR 25/11 DATED 15.3.2011. //TRUE COPY// P.S. TO JUDGE Mn P.N.RAVINDRAN, J. ----------------------------------------- W.P(C).Nos.15305 & 16381 of 2011 ----------------------------------------- Dated this the 8th July, 2011 JUDGMENT A common question arise in these writ petitions. They were therefore heard together and are being disposed of by this common judgment. 2. The Malappuram District Co-operative Bank, the 5th respondent in these writ petitions moved the Registrar of Co- operative Societies by submitting Ext.P2 representation dated 15.3.2007 for permission to open branches of the Bank at Karulai and Chungathara, both in Nilambur Taluk. By Ext.P5 order dated 12.6.2011 produced in W.P(C)No.15305 of 2011 (Ext.P4 in the connected case) the Additional Registrar of Co-operative Societies (Credit) permitted the Malappuram District Co-operative Bank to open branches at Karulai and Chungathara. The Chungathara Service Co-operative Bank Ltd. and the Karulai Service Co- operative Bank Ltd. have filed these writ petitions challenging the said orders. It is contended that the Chungathara Service Co- operative Bank Ltd. has, besides its head office branch, four other W.P(C).Nos.15305 & 16381 of 2011 -:2:- branches, that it is providing adequate service to its members and the public and that its financial position is not weak. The Karulai Service Co-operative Bank Ltd. contends that it has besides its head office branch, a branch at Karulai, that its financial position is not weak and that it is providing adequate service to its members and the public. It is contended that the Joint Registrar of Co-operative Societies, (General) Malappuram had in his report dated 26.2.2001, a copy of which is produced as Ext.P4 in W.P(C) No.15305 of 2011 (Ext.P3 in the connected case) reported that if branches of the Malappuram District Co-operative Bank are established at Karulai and Chungathara, it will adversely affect the members of the Karulai Service Co-operative Bank Ltd., and Chungathara Service Co-operative Bank Ltd., and the public. It is contended that the circumstances obtaining do not warrant the establishment of a branch of the Malappuram District Co-operative Bank in the respective areas of operation of the petitioners. 3. The Malappuram District Co-operative Bank had filed a counter affidavit in both the writ petitions. It is contended that the nature of activities of the petitioners and the 5th respondent bank are different and distinct and that the rate of interest given W.P(C).Nos.15305 & 16381 of 2011 -:3:- to depositors is also different and therefore the establishment of a branch of the District Co-operative Bank, Malappuram at Chungathara and Karulai will be beneficial to the public, including members of the petitioners banks. 4. I have considered the submissions made at the Bar on either side. Section 74B of the Kerala Co-operative Societies Act, which deals with opening of branches of District Co-operative Banks in the area of operation of member credit societies reads as follows:- “74B. Opening of Branches:- (1) The State Co-operative Bank, the State Co-operative Agricultural and Rural Development Bank and District Co-operative Bank may open branches in the area of operation of their member credit societies if such member credit societies are weak and not functioning enough to provide service to the members or to the public.” It is evident from section 74B of the Act that Apex Banks and District Co-operative Banks can open branches in the area of operation of their member credit societies only if such member credit societies are weak and not providing enough service to the members or to the public. Ext.P4 report (produced in W.P(C) No.15305 of 2011) of the Joint Registrar of Co-operative Societies W.P(C).Nos.15305 & 16381 of 2011 -:4:- (General), Malappuram, states in categorical terms that the Chungathara Service Co-operative Bank Ltd., and the Karulai Service Co-operative Bank Ltd., are providing excellent service to its members and to the public and that if branches of the 5th respondent bank are established it will weaken the said banks. The Additional Registrar of Co-operative has, however, by a cryptic order granted the permission sought for by the 5th respondent bank. The Additional Registrar has not in his order referred to the report submitted by the Joint Registrar of Co- operative Societies (General), Malappuram on 26.2.2011. The Additional Registrar has also not referred to section 74B of the Kerala Co-operative Societies Act and also the conditions subject to which a District Co-operative Bank can be permitted to open its branches in the area of operation of its member societies. I am therefore, of the considered opinion that the impugned orders cannot be sustained. I accordingly allow the writ petitions, quash Ext.P5 in W.P(C) No.15305 of 2011, which is the same as Ext.P4 in the connected writ petition and direct the Registrar of Co-operative Societies to reconsider the application submitted by the 5th respondent bank W.P(C).Nos.15305 & 16381 of 2011 -:5:- bearing in mind the report dated 26.2.2011 submitted by the Joint Registrar of Co-operative Societies (General) Malappuram, after affording the petitioners and the 5th respondent bank an opportunity of being heard. The Registrar of Co-operative Societies shall take a fresh decision in the matter expeditiously and in any event within four months from the date of receipt of a certified copy of this judgment. P.N.RAVINDRAN, Judge. ahg. P.N.RAVINDRAN, J. --------------------------- W.P(C).Nos.15305 & 16381 of 2011 ---------------------------- JUDGMENT 8th July, 2011