IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN WEDNESDAY, THE 19TH JANUARY 2011 / 29TH POUSHA 1932 WP(C).No. 35585 of 2010(W) ----------------------- PETITIONER : --------------------- V.P.JANARDHANAN, VANIYEDATHUMALAYIL HOUSE, EZHACHERY P.O., KOTTAYAM DISTRICT BY ADV. SRI.GEORGEKUTTY MATHEW RESPONDENT(S): ------------------------ 1. STATE OF KERALA, REP.BY ITS SECRETARY, DEPARTMENT OF CO-OPERATION, SECRETARIAT, THIRUVANANTHAURAM PIN-695001 2. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIEITES (GENERAL), COLLECTORATE, KOTTAYAM PIN-686001 3. THE ENQUIRTY OFFICER/RAMAPURAM UNIT INSPECTOR, ASST:REGISTRAR OF CO-OPERAIVE SOCIETIES, (GENERAL) OFFICE, MEENACHIL, PALAI P.O., PIN-686589 R1 TO R3 BY GOVT. PLEADER SRI. M.A. ASIF THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn P.N.RAVINDRAN, J. --------------------------- W.P.(C) No. 35585 OF 2010 -------------------------- Dated this the 19th day of January, 2011 J U D G M E N T The petitioner was the former President of the Ezhachery Service Co-operative Bank Ltd. No.1548. An enquiry into the affairs of the said bank was conducted by the Joint Registrar of the Kerala Co-operative Societies (General), Kottayam under section 66 of the Kerala Co-operative Societies Act. After the report of enquiry was received, the Joint Registrar of the Kerala Co-operative Societies (General), Kottayam issued Ext.P3 order under section 68 of the Kerala Co-operative Societies Act (hereinafter referred to as 'the Act' for short) appointing Sri. K.P.Padmakumar, Unit Inspector in the office of the third respondent to enquire into the conduct of the officer bearers of the bank. The enquiry officer thereafter issued ExtP4 notice dated 16.11.2010 to the petitioner calling upon him to appear before him at 1 pm on 26.11.2010. The petitioner thereupon filed Ext.P5 appeal before the State Government on 25.11.2010. On the very next day, this writ petition was filed WPC No.35585/2010 2 challenging Ext.P3 order and in the alternative seeking a direction to keep in abeyance further proceedings pursuant to Ext.P3 pending disposal of Ext.P5 appeal. 2. Ext.P3 is an order issued by the second respondent appointing an enquiry officer to hold an enquiry under section 68 (1) of the Act against the petitioner and other office bearers of the Ezhachery Service Co-operative Bank to determine whether they are liable to be surcharged. Such an order happened to be issued based on an enquiry conducted under section 66 of the Act which disclosed that the bank had suffered heavy losses to the tune of Rs.10.80 lakhs. The Registrar of Co-operative Societies thereupon decided to enquire and determine whether such loss was caused on account of the conduct of the officer bearers of the bank. Section 68(1) of the Act states that if in the course of an audit, inquiry, inspection or the winding up of a society, it is found that any person, who is or was entrusted with the organisation or management of such society or who is or has at any time been an officer or an employee of the society, has WPC No.35585/2010 3 made any payment contrary to the Act and the rules or the bye- laws, or has caused any loss or damage in the assets of the society by breach of trust or wilful negligence or mismanagement or has misappropriated or fraudulently retained any money or other property belonging to such society or has destroyed or caused the destruction of the records, the Registrar may, of his own motion or on the application of the committee, liquidator or any creditor, inquire himself or direct any person authorised by an order in writing in this behalf, to inquire into the conduct of such person. Sub section (2) stipulates that the Registrar may, after giving the person concerned an opportunity of being heard, by order in writing, require him to repay or restore the money or other property or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such extent, as the Registrar may consider just and equitable.” 3. In the instant case, the Registrar was satisfied upon a perusal of the enquiry report under section 66 of the Act that a WPC No.35585/2010 4 further enquiry has to be conducted to decide whether the petitioner and other office bearers of the society have caused any loss or damages to the assets of the society by wilful negligence or breach of trust or mis management. The petitioner can in that enquiry contend that he was not responsible for the loss if any and that the loss did not occur as a result of his negligence or mis management on his part. Section 68 mandates that before an order of surcharge is passed, the person proceeded against has to be put on notice and heard. The enquiry officer appointed by the Registrar has accordingly issued notice to the petitioner. In such circumstances, I am of the opinion that the petitioner should participate in the enquiry and await the final order passed by the Registrar. If the petitioner is aggrieved by the final order passed by the Registrar under section 68 of the Act, he can at that stage challenge the same by filing an appeal before the State Government. I am therefore not satisfied that the petitioner has made out a prima case warranting interference with Ext.P3. WPC No.35585/2010 5 The writ petition fails and is accordingly dismissed. Respondents 2 and 3 shall afford the petitioner an opportunity of putting forward his contentions before finalising the proceedings initiated under section 68(1) of the Act. After the writ petition was dismissed, the learned counsel for the petitioner submitted that respondents 2 and 3 may be directed to afford the petitioner to put forward his contentions and to hear him before finalising the proceedings initiated against him. Such request is perfectly reasonable. I accordingly direct respondents 2 and 3 to hear him and consider his objections, before finalising the proceedings initiated under section 68(1) of the Act. P.N.RAVINDRAN, (JUDGE) vps WPC No.35585/2010 6 WPC No.35585/2010 7