IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN MONDAY, THE 12TH DECEMBER 2011 / 21ST AGRAHAYANA 1933 WP(C).No. 24401 of 2011(A) -------------------------- PETITIONER(S): --------------- THE BOARD OF DIRECTORS OF THE KERALA STATE CO-OPERATIVE FEDERATION FOR FISHERIES DEVELOPMENT LIMITED, NO.FT 738 (MATSYAFED) MANACAUD, THIRUVANANTHAPURAM-695 009, REPRESENTED BY ITS CHAIRMAN. BY ADV. SRI.M.K.DAMODARAN, SENIOR ADVOCATE SRI.P.K.VIJAYAMOHANAN SRI.GILBERT GEORGE CORREYA SRI.V.K.BIJU RESPONDENT(S): --------------- 1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, FISHERIES DEPARTMENT, GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2. THE REGISTRAR OF FISHERIES CO-OPERATIVE SOCIETIES AND DIRECTOR OF FISHERIES, VIKAS BHAVAN, THIRUVANANTHAPURAM-695 003. *ADDL.R3 AND R4 IMPLEADED: 3. THE ADMINISTRATOR, THE KERALA STATE CO-OPERATIVE FEDERATION FOR FISHERIES DEVELOPMENT LIMITED NO.FT 738 (MATSYAFED), MANACAUD, THIRUVANANTHAPURAM 695 009 4. THE STATE CO-OPERATIVE UNION, REPRESENTED BY ITS CHAIRMAN, SAMSTHANA SAHAKARANA BHAVAN, OOTTUKUZHY, THIRUVANANTHAPURAM - 695 001 ADDL. R3 AND R4 ARE IMPLEADEDE AS PER ORDER DT. 25.9.2011 IN IA 15054/2011 ADV. SRI.C.P.MOHAMMED NIAS FOR R-4 SRI.GEORGE POONTHOTTAM FOR R3 SPECIAL GOVERNMENT PLEADER SRI.D.SOMASUNDARAM FOR R1 & R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/12/2011, THE COURT ON 12/12/2011 DELIVERED THE FOLLOWING: W.P(C)No.24401/2011 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1: TRUE COPY OF THE COMPLAINT DATED 1/6/2011 FILED BY THE KERALA PRADESH MATSYA THOZHILALI CONGRESS BEFORE THE CHIEF MINISTER. EXHIBIT P2: TRUE COPY OF THE COMPLAINT DATED 8/6/2011 FILED BY THEERADESA NETHRUVEDI STATE COMMITTEE REPRESENTED BY ITS PRESIDENT BEFORE THE 2ND RESPONDENT. EXHIBIT P3: TRUE COPY OF THE COMPLAINT DATED 24/6/2011 FILED BY SRI.AUSTINE GOMEZ, THE PRESIDENT OF A MEMBER SOCIETY BEFORETHE 2ND RESPONDENT. EXHIBIT P4: TRUE COPY OF THE COMMUNICATION NO.F3/9479/2011 DATED 27/7/2011 FORWARDING THE ENQUIRY REPORT WITH ITS ENCLOSURE EXHIBIT P5: TRUE COPY OF THE EXPLANTION NO.M.FED/BM/11 DATED 22/8/2011 OF THE CHAIRMAN BEFORE THE 2ND RESPONDENT. EXHIBIT P6 : TRUE COPY OF THE COMPLAINT DATED 27/7/2011 SUBMITTED BY THE THEERADESA NETHRUVEDI BEFORE THE CHIEF MINISTER. EXHIBIT P7: TRUE COPY OF THE SHOW CAUSE NOTICE NO.F3/9479/2011 DATED 1/9/2011 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P8: TRUE COPY OF THE SCHEDULE SHOWING THE ALLEGATIONS REPORT, EXPLANATION AND THE CHARGE. EXHIBIT P9: TRUE COPY OF THE REQUEST DATED 5.9.2011 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P10: TRUE COPY OF THE ORDER NO.F3-9479/2011 DTD. 7.9.2011 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P11: TRUE COPY OF THE COMMUNICATION NO.F3/9479/11 DATED 1.9.2011 OF THE 2ND RESPONDENT TO THE STATE CO-OPERATIVE UNION. EXHIBIT P12: TRUE COPY OF THE COMMUNICATION NO.ADM(1)/8633/2011 DATED 6.9.2011 OF THE STATE CO-OPERATIVE UNION TO THE 2ND RESPONDENT. EXHIBIT P13: TRUE COPY OF THE COMMUNICATION NO.F3/9479/11 DATED 30.6.2011 FROM THE OFFICE OF THE 2ND RESPONDENT TO THE JOINT DIRECTOR OF FISHERIES. RESPONDENTS' EXHIBITS: EXT.R1(a): TRUE COPY OF THE GO(RT)NO.79/2004/F&PD DATED 19.2.2004 EXT.R1(b): TRUE COPY OF THE STATEMENT OF THE EMPLOYEES. / TRUE COPY / P.S.TO JUDGE P.N.RAVINDRAN, J. ----------------------------------------- W.P(C).No.24401 of 2011 ----------------------------------------- Dated this the 12th day of December, 2011 JUDGMENT The Board of Directors of the Kerala State Co- operative Federation for Fisheries Development Ltd. No.F(T) 738, otherwise known as the MATSYAFED, represented by its Chairman, is the petitioner in this writ petition. 2. This writ petition was filed on 6.9.2011 challenging Ext.P7 notice dated 1.9.2011 issued by the Registrar of Fisheries Co-operative Societies (Director of Fisheries) under sub-section (1) of section 32 of the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as the Act for short) calling upon the Board of Directors of the MATSYAFED to show cause why proceedings should not be initiated to supersede it under section 32(1) of the Act. The petitioner had also prayed for a declaration that no circumstance warranting invocation of the power under section 32 of the Act exists. When this writ petition came up before me for admission hearing on 7.9.2011, the learned Special W.P(C).No.24401 of 2011 -:2:- Government Pleader appearing for respondents 1 and 2 submitted that orders have already been passed under section 32 of the Act superseding the Board of Directors of the MATSYAFED. The learned counsel appearing for the petitioner thereupon submitted that the petitioner may be given liberty to amend the writ petition and seek appropriate orders. The writ petition was thereafter amended incorporating a challenge to Ext.P10 order dated 7.9.2011 issued by the Registrar of Fisheries Co-operative Societies, superseding the Board of Directors of the MATSYAFED. The brief facts of the case are as follows. 3. The MATSYAFED is the apex society of 653 fisheries co- operative societies under the administrative control of the Department of Fisheries. The Board of Directors of the MATSYAFED consists of 15 members elected by the delegates of member societies from among themselves and 7 ex officio members. The ex officio members are : (i) Secretary to Government, Fisheries Department; (ii) Director of Fisheries, Government of Kerala; (iii) Managing Director of MATSYAFED; (iv) Nominee of the National Co-operative Development W.P(C).No.24401 of 2011 -:3:- Corporation; (v) Secretary, Finance (Expenditure) or his nominee; (vi) Managing Director of National Backward Classes and Fishermen Development Corporation or his nominee, and (vii) Managing Director of the National Marine Development Finance Corporation or his nominee. 4. The Board of Directors of the MATSYAFED, which was superseded by the order impugned in this writ petition assumed office on 17.12.2006. Its term would have, in the ordinary course, expired only on 16.12.2011. On 1.6.2011, the office bearers of the State Committee of the Kerala Pradesh Matsya Thozhilali Congress (I) submitted Ext.P1 petition before the Chief Minister requesting him to order an enquiry into the irregularities alleged to have been committed by the Board of Directors of the MATSYAFED and to take steps to recover the loss caused to the MATSYAFED from the members of the Board of Directors. The Chief Minister forwarded the said representation to the Secretary, Fisheries Department, an ex officio member of the Board of Directors of the MATSYAFED with instructions to look into the complaint. A few days later, the President of an organization known as Theeradesa Nethruvedi filed Ext.P2 petition dated W.P(C).No.24401 of 2011 -:4:- 8.6.2011 before the Registrar of Fisheries Co-operative Societies (Director of Fisheries) wherein, after levelling various allegations, he requested that the Board of Directors of the MATSYAFED be superseded and an election held under the supervision of an administrative committee. He also requested that an inspection be held under section 65 of the Act into the functioning of the MATSYAFED. A few days later, Sri.R.Augustine Gomaz, the President of a fisheries co-operative society and one among the signatories to Ext.P1 complaint, submitted Ext.P3 representation dated 24.6.2011 before the Registrar of Fisheries Co-operative Societies requesting for an enquiry into the irregularities alleged therein and to take steps to recover the loss alleged to have been caused to the MATSYAFED from the members of its Board of Directors. The Registrar of Fisheries Co-operative Societies thereupon sent Ext.P13 letter dated 30.6.2011 to the Joint Director of Fisheries wherein, after referring to the aforesaid three complaints, he requested the Joint Director to forward a report after enquiring into the allegations levelled in the said complaints within one week. The Joint Director was also required to state in his report as to whether an enquiry under section 65 of the Act W.P(C).No.24401 of 2011 -:5:- should be conducted. Along with the said letter copies of Exts.P2 and P3 complaints were enclosed. 5. The Joint Director of Fisheries, Trivandrum, conducted a preliminary enquiry into the allegations levelled in the three complaints and submitted a report to the Registrar of Fisheries Co-operative Societies. A copy thereof was forwarded by the Registrar of Fisheries Co-operative Societies to the Chairman of the MATSYAFED along with Ext.P4 letter dated 27.7.2011. By that letter the explanation of the Chairman of MATSYAFED was also sought. Upon receipt of Ext.P4 letter and the report accompanying it, the Chairman of the Board of Directors of the MATSYAFED submitted Ext.P5 reply dated 22.8.2011. The organization which had submitted Ext.P2 complaint thereafter submitted Ext.P6 representation before the Chief Minister complaining that a copy of Ext.P4 report has not been served on him and that he apprehends that there is an attempt to allow the Board of Directors of the MATSYAFED to continue in office till its term expires on 16.12.2011. The said representation was also forwarded to the Secretary, Fisheries Department. Shortly thereafter, the Registrar of Fisheries Co-operative Societies issued W.P(C).No.24401 of 2011 -:6:- Ext.P7 show cause notice dated 1.9.2011 wherein, after referring to the observations in Ext.P4 report, he called upon the Board of Directors of the MATSYAFED to show cause why it should not be superseded under section 32(1) of the Act. The Board of Directors was directed to submit its explanation within three days from the date of receipt of the show cause notice and its members were also informed that if they wish to be heard in person, they may appear before him at 11 a.m. on 5.9.2011. 6. Ext.P7 show cause notice was served on the Chairman of the MATSYAFED on 3.9.2011. He appeared before the Registrar of Fisheries Co-operative Societies on 5.9.2011 and submitted Ext.P9 representation 5.9.2011 wherein he requested for time till 15.9.2011 to submit a written reply to Ext.P7 show cause notice and for an adjournment of the hearing to any day subsequent to 16.9.2011, in view of the impending Onam holidays and also for the reason that he will be out of station till 16.9.2011 on account of prior commitments. The Registrar of Fisheries Co-operative Societies thereafter sent Ext.P11 letter dated 1.9.2011 to the Chairman of the State Co-operative Union whereby he called upon the Chairman of the State Co-operative Union to offer the views, if W.P(C).No.24401 of 2011 -:7:- any, of the State Co-operative Union before 11 a.m. on 7.9.2011. In that letter it was mentioned that though a show cause notice was served on the Chairman of the Board of Directors of the MATSYAFED and three days time was granted for furnishing an explanation, no explanation has been received, instead, a request for further time to submit the explanation was made and that though the Chairman had submitted Ext.P9 representation seeking enlargement of time and was also present, he did not make any oral submissions. Upon receipt of Ext.P11 letter, the Additional Registrar who was in charge of the Secretary of the State Co- operative Union, sent Ext.P12 letter dated 6.9.2011 wherein he pointed out that as at least 10 days' time is required to convene a meeting of the Managing Committee of the State Co-operative Union, the opinion of the State Co-operative Union cannot be communicated on 7.9.2011. By that letter he also sought ten days time for communicating the views of the State Co-operative Union in the matter. On the very next, day the Registrar of Fisheries Co-operative Societies issued Ext.P10 order dated 7.9.2011 whereby he superseded the Board of Directors of the MATSYAFED and appointed the Deputy Director of Fisheries, W.P(C).No.24401 of 2011 -:8:- Trivandrum as the Administrator. Ext.P10 is under challenge in this writ petition wherein the petitioner seeks the following reliefs:- (i) To issue a writ of certiorari quashing Ext.P7 and all further proceedings thereon since Ext.P7 is vitiated by the doctrine of dictation, illegal, malafide and arbitrary and against the intention and purpose of Sections 27, 28 and 32 of the Kerala Co-operative Societies Act. (ii) To declare that as discernible from Ext.P4 enquiry report and Ext.P5 explanation of the petitioner, there exist no circumstances warranting the invoking of the powers under section 32 of the Kerala Co-operative Societies Act, against the petitioner Board. (iii) To issue such other writ, order or direction which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case; (iv) To issue a writ of certiorari quashing Ext.P10 since the above order is vitiated by doctrine of dictation, illegal, malafide, arbitrary, against the statutory mandates under Sections 27, 28 and 32 of the Kerala Co-operative Societies Act and offending the principles of natural justice. (v) Set aside Ext.P10 with further direction to the W.P(C).No.24401 of 2011 -:9:- respondents 1 to 3 to restore the Committee of the petitioner to office. It is contended that Ext.P7 show cause notice and Ext.P10 order have been issued on extraneous considerations and is vitiated by mala fides, that no grounds have been made out or exist, warranting supersession of the Board of Directors, that no reasonable opportunity was given to the Board of Directors to reply to Ext.P7 show cause notice, that there was no consultation with the State Co-operative Union and that the show cause notice and the order of supersession are therefore, liable to be quashed. 7. A counter affidavit dated 15.11.2011 has been filed on behalf of respondents 1 and 2. In paragraph 2 thereof it is contended that the writ petition is not maintainable for the reason that after supersession, the Board of Directors have no authority to file the writ petition, that it ought to have been filed by the members of the Board of Directors and therefore, on that short ground it is liable to be dismissed. The counter affidavit proceeds to justify the order of supersession on various grounds which are referred to in detail in the impugned order as well as in the show cause notice. It is contended that the finding entered by the W.P(C).No.24401 of 2011 -:10:- Registrar of Fisheries Co-operative Societies that the Board of Directors is liable to be superseded is unassailable having regard to the various acts of omission and commission referred to in the show cause notice and the impugned order. With reference to the contention that the Board of Directors was not given adequate time to file its reply to the show cause notice, it is stated that pursuant to Ext.P4 report the Board of Directors submitted their explanation only on 23.8.2011, after the expiry of 18 days, that they had ample time to examine the observations and findings in the enquiry report and therefore, the enquiry report being the foundation for the show cause notice, the three days time given in the show cause notice to submit a reply cannot be said to be insufficient. It is also contended that an opportunity for personal hearing was also offered to the petitioner and therefore, it cannot be said that adequate opportunity was not afforded to the petitioner to reply to the show cause notice. As regards consultation with the State Co-operative Union it is contended that the Board of Directors was superseded after complying with the procedural formalities stipulated in the Act. 8. The third respondent has filed a counter affidavit dated W.P(C).No.24401 of 2011 -:11:- 25.11.2011 wherein it is stated that pursuant to the order of supersession passed on 7.9.2011 he assumed charge as Administrator on the same day, that since then he is functioning as the Administrator in the place of the Board of Directors, that the Board of Directors has been removed from office and does not exist thereafter and therefore, it cannot continue to prosecute the writ petition. It is contended that the writ petition is liable to be dismissed on that short ground. 9. The petitioner has filed an affidavit dated 21.11.2011 in reply to the counter affidavit filed on behalf of respondents 1 and 2, reiterating the contentions raised in the writ petition and contending inter alia that the writ petition is maintainable and that there was no consultation with the State Co-operative Union. The Chairman of the State Co-operative Union has sworn to an affidavit dated 8.12.2011 wherein it is stated that Ext.P11 letter was received in the office of the State Co-operative Union at 4.30 p.m. on 5.9.2011, that before a reply could be sent to Ext.P11 letter, a decision of the Managing Committee of the State Co- operative Union was required and Ext.P12 letter was sent seeking ten days time to offer the views of the State Co-operative Union. W.P(C).No.24401 of 2011 -:12:- It is stated that the previous meeting of the Managing Committee of the State Co-operative Union was on 29.8.2011, the next meeting was scheduled to be held on 4.10.2011 and as the supersession order was passed on 7.9.2011, no meeting was thereafter called in connection with Ext.P11. 10. I heard Sri.M.K.Damodaran, learned Senior Advocate appearing for the petitioner, Sri.D.Somasundaram, learned Special Government Pleader appearing for respondents 1 and 2, Sri.George Poonthottam, learned counsel appearing for the third respondent and Sri.C.P.Mohammed Nias, learned counsel appearing for the fourth respondent. I have also gone through the pleadings and the materials on record. The learned Senior Advocate appearing for the petitioner contended reiterating the contentions set out in the writ petition that the order of supersession was not passed after following the procedure prescribed in the Act and the Rules and therefore, the order does not have the effect of removing the Board of Directors from office. The learned Senior Advocate contended that only a valid order of supersession can have the effect of superseding the Board of Directors and if this Court were to find that the order of W.P(C).No.24401 of 2011 -:13:- supersession is bad, then it would have no effect in law and therefore the writ petition cannot be thrown out on the technical ground that after the order of supersession was passed, the Board of Directors cannot maintain the writ petition. The learned Senior Advocate also contended with reference to the observations and findings in Ext.P4 enquiry report, the explanation offered by the Chairman of the MATSYAFED in Ext.P5 reply and the contents of Ext.P7 show cause notice that no grounds whatsoever existed warranting supersession of the Board of Directors of the MATSYAFED. The learned counsel contended that though the allegations levelled in Ext.P7 show cause notice do not justify an order of supersession, for extraneous considerations and on irrelevant grounds, an order of supersession was passed with a view to remove the Board of Directors from office. 11. Per contra, Sri.D.Somasundaram, learned Special Government Pleader appearing for respondents 1 and 2 contended with reference to the allegations levelled in Ext.P7 show cause notice, particularly the allegations relating to the appointment of staff and construction of the head office building of the MATSYAFED that the Board of Directors have committed several W.P(C).No.24401 of 2011 -:14:- acts of commission and omission and have also committed breach of trust and therefore, the order of supersession cannot be said to be unwarranted. The learned Special Government Pleader contended that as the order of supersession was validly passed, the Board of Directors stood superseded and therefore, it cannot maintain the writ petition after 7.9.2011. The learned counsel also contended that there is no averment to the effect that the Board of Directors had adopted a resolution to challenge the order of supersession and on that score also the writ petition is not maintainable. As regards the contention that a reasonable opportunity was not given to the Board of Directors to submit a reply to Ext.P7 show cause notice, the learned Special Government Pleader contended that though in Ext.P4 letter dated 27.7.2011 the remarks of the Board of Directors of MATSYAFED were sought within seven days from the date of receipt of the letter, the Chairman of the MATSYAFED asked for time to submit an explanation as per letter dated 8.8.2011, that it was granted by order dated 10.8.2011, that thereafter Ext.P5 explanation dated 22.8.2011 was submitted and therefore as nearly three weeks time was given to the Board of Directors to offer its W.P(C).No.24401 of 2011 -:15:- remarks with reference to the findings and observations in Ext.P4 report, it cannot be said that any prejudice has been caused to the Board of Directors, merely by reason of the fact that they were granted only three days time to file a reply to Ext.P7 show cause notice. The learned Special Government Pleader contended that the grounds for supersession set out in Ext.P7 show cause notice are referred to in Ext.P4 report and the Board of Directors having given an explanation with reference to the findings and observations in Ext.P4 report, cannot be heard to contend that it did not get an adequate opportunity to submit a reply to the show cause notice. The learned Special Government Pleader also contended with particular reference to the allegations regarding appointment of staff and the construction of the head office building of the MATSYAFED that the Managing Committee had made large scale illegal appointments and have also caused loss to the society and therefore, it was liable to be superseded and was validly superseded. With reference to the contention that there was no proper consultation with the State Co-operative Union, the learned Special Government Pleader contended with reference to Ext.P12 letter that the State Co-operative Union was W.P(C).No.24401 of 2011 -:16:- siding along with the petitioner when it asked for ten days time to offer its views in the matter and therefore it cannot be said that there was no proper consultation. 12. Sri.George Poonthottam, learned counsel appearing for the third respondent, submitted that the Administrator, who is presently discharging the functions of the Board of Directors and has stepped into the shoes of the Board of Directors, is not pressing the writ petition and therefore, the writ petition may be dismissed as not pressed. The learned counsel for the third respondent also contended that on and with effect from 7.9.2011, the Board of Directors has no legal existence, that section 32 of the Act contemplates removal of the elected committee and the appointment of an Administrator in its place, that with the passing of Ext.P10 order, the Board of Directors ceased to exist and cannot thereafter maintain a writ petition and therefore, the writ petition is liable to be dismissed as not properly constituted. The learned counsel contended that there was no legal impediment for the members of the Board of Directors of the MATSYAFED from challenging the order of supersession, that the members of the Board of Directors are the persons aggrieved by the order of W.P(C).No.24401 of 2011 -:17:- supersession and therefore, in the absence of a challenge to Ext.P10 order by the persons aggrieved, namely the members of the Board of Directors, who were removed from office, this writ petition is liable to be dismissed as not maintainable. The learned counsel further contended that even if this writ petition is to be dismissed as not maintainable, no prejudice will be caused to the members of the Board of Directors for the reason that they can still challenge Ext.P10 order of supersession. The learned counsel appearing for the third respondent also contended that as the Board of Directors had not submitted a reply to Ext.P7 notice, the consultee could not have offered its views and therefore the mere fact that no reply was received from the consultee, namely the State Co-operative Union, with reference to the allegations in Ext.P7 show cause notice, is not a reason to hold that there was no effective or meaningful consultation with the consultee. The learned counsel lastly contended that an order invalidating the supersession can be passed only in a properly constituted writ petition and in the absence of a challenge to the impugned order by the members of the Board of Directors of the MATSYAFED, no relief can be granted to the petitioner, even if this Court were to W.P(C).No.24401 of 2011 -:18:- find that the procedure prescribed in the Act had not been followed before the impugned order was passed. 13. I have considered the submissions made at the Bar by the learned counsel appearing on either side. The pleadings and the materials on record disclose that upon receipt of Exts.P1, P2 and P3 complaints, the Registrar of Fisheries Co-operative Societies had sent Ext.P13 letter dated 30.6.2011 to the Joint Director of Fisheries, Trivandrum, calling upon him to conduct a preliminary enquiry into the allegations levelled therein. That letter discloses that the Joint Director of Fisheries was also called upon to state in the preliminary report as to whether an enquiry under section 65 of the Act should be held into the affairs of the MATSYAFED and to submit the report within