IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC FRIDAY, THE 22ND MAY 2009 / 1ST JYAISHTA 1931 WP(C).No. 31612 of 2008(L) -------------------------------------- PETITIONER: ------------------- M.R.SIMON, RESIDING AT M.R.SADANAM, CHENKAL, NEYYATTINKARA, THIRUVANANTHAPURAM. BY ADV. MR.B.S.SWATHI KUMAR. RESPONDENTS: ------------------------ 1. JOINT REGISTRAR (G) OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM. 2. THE CHENKAL SERVICE CO-OPERATIVE BANK LTD NO.1258, CHENKAL, NEYYATTINKARA, REPRESENTED BY ITS ADMINISTRATOR. R1 BY SPL. GOVT. PLEADER SMT. A.G. ANEETHA, R2 BY ADVS. MR.V.G.ARUN, MR.T.R.HARIKUMAR, MR.P.RAMAKRISHNAN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22/05/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.31612/2008-L: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE ORDER NO. CRP(1) 3776/2006 DTD. 09/04/2008 ISSUED BY THE R.1. EXT.P.2: COPY OF THE ORDER NO. CRP (1) 3776/2006 DTD. 22/01/2008 ISSUED BY THE R.1. EXT.P.3: COPY OF THE ORDER NO.R.P.NO.369/2008 DTD. 28/03/2008. EXT.P.4: COPY OF THE ORDER IN W.P.(C).NO.12832/2008 DTD. 11/04/2008 BY THIS HONOURABLE COURT. EXT.P.5: COPY OF THE JUDGMENT IN W.P.(C). 12832/2008 DTD. 01/07/2008. EXT.P.6: COPY OF THE ORDER IN I.A. NOS. 8569/2008 & 8392/2008 IN W.P.(C). NO.12832/2008 DTD. 07/07/2008. EXT.P.7: COPY OF THE ORDER NO. C.R.P. (1) 3776/2006 DTD. 23/09/2008 OF THE RESPONDENT. EXT.P.8: COPY OF THE EXPLANATION SUBMITTED BY THE PETITIONER BEFORE THE R.1. DTD. 10/10/2008. EXT.P.9: COPY OF THE ORDER NO. C.R.P (1) 3776/2008 DTD. 23/10/2008 OF THE R.1. EXT.P.10: COPY OF THE CERTIFICATE ISSUED BY THE AGRICULTURAL OFFICER, CHENKAL DTD. 16/02/2008. EXT.P.11: COPY OF THE CERTIFICATE OF REGISTRATION OF AMENDMENT NO. 84/04 DTD. 28/09/2004. EXT.P.12: COPY OF THE AMENDMENT BYE-LAW DTD. 28/09/2004 OF THE R.2. EXT.P.13: COPY OF THE CERTIFICATE ISSUED BY THE TAHSILDAR, NEYYATTINKARA DTD. 12/02/2008. EXT.P.14: COPY OF THE JUDGMENT IN W.P.(C).NO.479/2007 DTD. 13/02/2007. EXT.P.15: COPY OF THE JUDGMENT IN W.P.(C).NO.2718/2008 DTD. 01/07/2008. EXT.P.16: COPY OF THE NOTES OF ASSISTANT REGISTRAR (G)NEYYATTINKARA DTD. 22/10/2008. EXT.P.17: COPY OF THE ADVOCATE NOTICE DTD. 29/08/2008. EXT.P.18: COPY OF THE RESOLUTION NO. 16 DTD. 22/09/2008. W.P.(C). NO.31612/2008-L: EXT.P.19: COPY OF THE LETTER NO. B & L/D/3902/2008-2009 DTD. 24/09/2008. EXT.P.20: COPY OF THE LETTER NO. C.R.P(1) 3776/06 DTD. 13/10/2008. EXT.P.21: COPY OF THE RESOLUTION NO. 1 DTD. 17/10/2008. EXT.P.22: COPY OF THE COMPLAINT FILED BY SURESH BEFORE THE HONOURABLE CHIEF MINISTER DTD. 14/06/2007. EXT.P.23: COPY OF THE LETTER NO. C.R.P. 6653/81/L/DIS. DTD. 05/10/1981. EXT.P.24: COPY OF THE LETTER NO. CRP(2) 1992/95 DTD.1 5/05/1995. EXT.P.25: COPY OF THE LETTER NO. C.U.3/2008 DTD. 21/10/2008. EXT.P.26: COPY OF THE CIRCULAR NO. 40/06-07 DTD. 31/01/2007. EXT.P.27: COPY OF THE COMMUNICATION NO. B & L/ST/SAO/07-08 DTD. 26/06/2007. RESPONDENTS' EXHIBITS: EXT.R1.A: COPY OF THE STATEMENT OF BOARD MEMBER VIZ. B. JAYACHANDRAN NAIR. EXT.R1.B: COPY OF THE JUDGMENT DTD. 08/05/2007 IN W.P.(C).14288/2007. EXT.R2.A: COPY OF THE DETAILED INQUIRY REPORT PREPARED AND SUBMITTED IN RELATION TO THE ENQUIRY UNDER SECTION 65. EXT.R2.B: COPY OF THE JUDGMENT IN W.P.(C).NO.29220/08. EXT.R2.C: COPY OF THE JUDGMENT DTD. 08/05/07 IN W.P.(C).NO.14288/07. //TRUE COPY// P.A. TO JUDGE. Prv. ANTONY DOMINIC, J. -------------------------------------------------------- Writ Petition (C) No.31612 of 2008-L -------------------------------------------------------- Dated 22nd May 2009 Judgment The petitioner, who was elected as the President of Chenkal Service Co-operative Bank, the 2nd respondent in this Writ Petition, has filed this Writ Petition, mainly praying to quash Ext.P9, an order passed by the 1st respondent, exercising his powers under S.32(1) of the Kerala Co-operative Societies Act (hereinafter referred to as the Act). 2. Although both sides have raised several contentions in the pleadings, when the matter was taken up for hearing, the learned counsel on either side confined their submissions to contention regarding violation of S.32(2) of the Act, requiring that the Registrar shall consult the financing bank and the Circle Co-operative Union or the State Co-operative Union as the case may be, before passing an order under Sub-section (1) of S.32 of the Act. In view of the limited nature of the controversy raised before me, the facts of the case need be referred to only to the extent that is relevant. WPC 31612/08 2 3. Ext.P1 is an order passed by the 1st respondent on 09.04.2008, exercising his powers under S.32(1) of the Act. That was challenged before this court in WP(C) No.12832/08 and this court by Ext.P5 judgment dated 01.07.2008, set aside Ext.P1 for the reason that there has not been consultation as provided in Section 32 of the Act and violation of the Division Bench Judgment of this Court in Sahadevan v. Padmanabhan (2004(1) KLT 192). 4. From the materials produced, it would appear that taking advantage of the liberty that was given to the 1st respondent to initiate further action in accordance with law, the said respondent issued notice to the District Co-operative Bank and the Circle Co-operative Union on 15.09.2008. In pursuance to that notice that the District Co-operative Bank had passed Ext.P18 resolution dated 22.09.2008, conveying their no objection to the passing an order against the 2nd respondent under S.32(1) of the Act. This resolution (Ext.P18) is seen to be conveyed to the 1st respondent under the cover of Ext.P19. In this context, it needs to be noticed that at the time when Ext.P8 was passed, the 1st respondent was acting as the Administrator of the District Co-operative Bank as well. WPC 31612/08 3 5. It would appear that in the meanwhile, the petitioner had filed yet another Writ Petition before this court as WP (C) No.26422/08 and the said Writ Petition was disposed of by judgment dated 03.09.2008 directing the 1st respondent to hear the petitioner also in the matter. According to the 1st respondent, in compliance with the said direction of this court in WP (C) No.26422/08, he issued Ext.P7 notice dated 23.09.2008, scheduling a hearing to the petitioner on 10.10.2008. 6. The petitioner also accepts that he was granted an opportunity of hearing, which according to him, concluded at 5.30 pm on 10.10.2008. It is stated that the succeeding two days, being second Saturday and Sunday, were holidays and that on 13.10.2008, the 1st respondent issued Ext.P20 letter to the District Co-operative Bank and the Circle Co-operative Union, calling for their views on superseding the committee of the 2nd respondent. The petitioner contends that Ext.P20 reflects the final conclusion of the 1st respondent about the necessity of superseding the committee of the 2nd respondent and that what is stated in Ext.P20 are not tentative conclusions as required in law. WPC 31612/08 4 7. Be that as it may, it would appear that on receipt of Ext.P20, the District Co-operative Bank passed Ext.P21 resolution and expressing their no-objection in passing an order against the 2nd respondent under S.32(1) of the Act. Here again, it needs to be mentioned, on this occasion also, the 1st respondent was acting as the Administrator of the District Co-operative Bank. Similarly, the Circle Co-operative Union passed Ext.P25, wherein they too have expressed their no-objection in the matter. Thus, apparently, concluding the process of consultation as envisaged under S.32 of the Act, the 1st respondent passed Ext.P9 order superseding the committee of the 2nd respondent and in this background, this Writ Petition is filed, challenging Ext.P9 order. 8. As already noticed, the contention raised by the learned counsel for the petitioner is regarding the absence of mandatory consultation as envisaged under S.32 of the Act. The learned Government Pleader would admit of having issued notices dated 15.09.2008 to the District Co-operative Bank and the Co-operative Circle Union, calling for their views in the matter. However, she pointed out that in the light of the judgment of this court in WP(C) WPC 31612/08 5 No.26422/08, the petitioner was heard on 10.10.2008 and taking note of the submissions that were made by the petitioner, the 1st respondent again issued Ext.P7 notice to the District Co-operative Bank and the Co-operative Circle Union in order to complete the process of consultation. It is stated that on receipt of the notices, the District Co-operative Bank and the Co-operative Circle Union conveyed their views as per Exts.P21 and P22 and taking into account the views thus expressed by the District Co-operative Bank and the Co-operative Circle Union, the 1st respondent passed Ext.P9. It is therefore, contended that while passing Ext.P9 order, the 1st respondent had complied with the requirements of S.32(2) and on that basis, it is argued that there is no substance in the contention raised by the petitioner. 9. At the commencement of the judgment itself, I have stated that the controversy raised was only regarding the allegation that the requirement of mandatory consultation as per Section 32(2) of the Act has not been complied with. Section 32(2) provides that the Registrar shall consult the financing bank and the circle co-operative union as the case may be before passing an order under sub-section (1). Sub-section (3) enables the Registrar to dispense with the WPC 31612/08 6 process of consultation in certain circumstances. In this case, however, the 1st respondent has not chosen to dispense with the process of consultation and even the learned Government Pleader has no such case. Therefore, I am proceeding on the basis that the process undertaken by the 1st respondent was in the purported compliance of S.32(2) of the Act. 10. The process of consultation that is required to be undertaken and the meaning of the word “consultation” have been examined by a Division Bench of this court in Jose Kuttiyani v. Registrar of Co-operative Societies (AIR 1982 Kerala 12) wherein reference has been made to R.Pushpam v. State of Madras (AIR 1953 Madras 392). The Division Bench held that the word “consult” implies a conference of two or more persons or an impact of two or more minds in respect of a topic in order to enable them to evolve a correct or at least a satisfactory solution. Thereafter, referring to the decision of the Apex Court in Union of India v. Sankalchand (AIR 1977 SC 2328) and it has been held as follows : WPC 31612/08 7 “The word 'consult' implies a conference of two or more persons or an impact of two or more minds in respect of a topic in order to enable them to evolve a correct or at least a satisfactory solution. This meaning was approved by the Supreme Court in Union of India v. Sankalchand (AIR 1977 SC 2328) and then their Lordships added -- 'In order that the two minds may be able to confer and produce a mutual impact, it is essential that each must have for its consideration full and identical facts, which can at once constitute both the source and foundation of the final decision.' In a case that arose under a similar provision in the Tamil Nadu Co-operative Societies Act, a single Judge of the Madras High Court has in K.Thangavelu v. Jt. Registrar, Co-operative Societies (AIR 1976 Mad 280) considered the nature and occasion of consultation with the financing bank. The aspect is stated thus at p.281, para 4. WPC 31612/08 8 'At the stage of the issue of the above show cause notice no one knows as to what is going to happen ultimately. It is only the first respondent makes up his mind after due enquiry in relation to the irregularities referred to in the show cause notice, that the financing bank has to be consulted with regard to the action proposed to be taken. If the consultation is before the issue of show cause notice and if the first respondent ultimately finds that the irregularities referred to in the show case notice have not been established, the consultation earlier obtained will become a mere formality and it would be a sheer waste of time.' We think, the principle is correctly stated in this case and we agree with it.” This court held that there has not been a consultation as required by law and on that basis, interfered with the order. 11. Subsequently, yet another Division Bench of this Court had occasion to consider the very same issue in Sahadevan v. Padmanabhan (supra), wherein it was held as follows : WPC 31612/08 9 “Sub-s.(2) of S.32 provides that the Registrar shall consult the Financing Bank and the Circle Co-operative Union or the State Co-operative Union as the case may be before passing an order under sub-s(1) of S.32. It is seen from Ext.P6 that a copy of the notice dated 24.09.2003 issued under sub-s.(1) of S.32 of the Act was sent to the General Manager, Palakkad District Co- operative Bank (Financing Bank) and the Secretary, Co- operative Union, Palakkad. Apart from sending a copy of the notice, no further request or direction was made. Ext.P8 order of the Joint Registrar shows that the views of the financing bank and the Circle Co-operative Union were not received on time and therefore, the Joint Registrar proceeded on the assumption that they had nothing to say in the matter. Learned Single Judge, relying on the decisions in Jose Kuttiyani v. Registrar, Co-operative Societies (AIR 1982 Ker.12) and Elakkal Service Co-operative Bank v. State of Kerala (1997 (2) KLT 85) held that the mere sending of the copy of the show cause notice to the consultees would not satisfy the WPC 31612/08 10 requirement of the provisions contained in sub-s(2) of S.32 of the Act. According to the learned Single Judge, the notice, the reply and the tentative findings of the Joint Registrar should be forwarded to the consultees so that they can form an opinion and inform the same to the Joint Registrar. The learned Single Judge has also pointed out that the impugned order, Ext.P8 does not show that any such consultation was made. There is no case for the appellant that apart from sending a copy of Ext.P6 notice to the Financing Bank and the Circle Co- operative Union, the Joint Registrar had forwarded to them the explanations/objections given on behalf of the Committee and the tentative findings arrived at by the Joint Registrar after considering the explanations/ objections of the committee. Therefore, we have to proceed on the basis that, apart from sending a copy of Ext.P6 to the financing bank and the Circle Co-operative Union, no further action was taken by the Joint Registrar as part of the consultation process contemplated under sub-s(2) of S.32 of the Act. The consultation WPC 31612/08 11 contemplated under sub-s(2) of S.32 of the Act can be effective and meaningful only if the show cause notice issued under S.32(1), the explanations/objections given by the committee to such show cause notice and the tentative findings arrived at by the Joint Registrar after considering such explanations/objections are also forwarded to the financing bank and the circle co- operative union requesting them to offer their views on the proposal to supersede the committee. Such a consultation process has not taken place in this case. Therefore, the provisions of sub-s.(2) of S.32 of the Act have been violated. Hence Ext.P8 order was liable to be set aside on the second ground mentioned by the learned Single Judge.” 12. In the light of the aforementioned judgments, the question to be examined is whether the process of consultation adopted by the1st respondent would meet the statutory requirements and the law laid down by the Division Bench of this court in the aforementioned two decisions. It is thus evident from the judgment in Sahadevan's case (supra) that the consultation has to be effective and meaningful WPC 31612/08 12 only if show cause notice, explanations/objections given by the committee and the tentative findings are forwarded to the financing bank and the co-operative circle union. From the facts, it is evident that after Ext.P5 judgment was rendered by this court, even before notice was issued to the petitioner or their objections were received, the 1st respondent issued notices to the District Co-operative Bank and the circle co-operative union on 15.09.2008. The response in the form of a no-objection was received from the District Co-operative Bank as per Ext.P18 resolution dated 22.09.2008 and at that time, the 1st respondent himself was the Administrator. It was still later that on 23.09.2008, notice was issued to the petitioner, in response to which, the petitioner filed Ext.P8 and was heard in purported compliance with the judgment of this court. It is true that thereafter also, Ext.P20 notice was issued to the District Co-operative Bank and the circle co-operative union. In Exts.P21 and P25 responses received from the District Co-operative bank and the circle co- operative union were only reiteration of the views they had expressed on the earlier occasion. On this occasion also, the first respondent was the Administrator of the District Co-operative bank. It is still later that Ext.P9 order was passed. In this context, reference should be WPC 31612/08 13 made to Ext.P20, the notice issued by the 1st respondent to the District Co-operative Bank and the Circle C-operative Union. A reading of the notice shows that it reflects that the first respondent had already made up his mind to supersede the committee. The contents of this notice cannot, by any stretch of imagination, be described as tentative as required in law. 13. If one is to appreciate the entire facts thus disclosed in this writ petition, the correctness of which is not in dispute, it is fairly clear that the 1st respondent had already decided to supersede the committee and as only implementing a pre-planned decision by passing an order of supersession without any meaningful consultation as contemplated under S.32(2) of the Act. 14. Another reason which compels this court to arrive at this conclusion is that the 1st respondent himself was acting as the Administrator of the District Co-operative Bank both at the time when Exts.P18 and P21 resolutions were passed by the said bank. Though statutorily, there is no prohibition for the 1st respondent to act as the Administrator of the bank, still, when one person is initiating proceedings under S.32 and completing the process by consultation as contemplated under S.32(2), since the person who is acting as WPC 31612/08 14 both the both the capacities are one and the same, it cannot be contended that there is any consultation much less any meaningful consultation. It has to be stated that at the time when the so called consultation process was going on, the election to the committee of the District Co-operative Bank was already over and the office bearers were in the process of taking charge and the committee took charge on 01.11.2008 while Ext.P21 resolution was passed by the district co-operative bank on 17.10.2008. The 1st respondent, who had full knowledge of these facts could have, in fairness, waited till the committee takes charge, so that, the committee could have independently considered the request made by the 1st respondent in Ext.P20 and given its response thereto. This also strengthens the conclusion that the 1st respondent was only implementing a pre- planned programme to supersede the committee. 15. In the above facts and circumstances, the only possible conclusion is that there has not been any meaningful consultation as contemplated under S.32(2) of the Act. For that reason, I set aside Ext.P9 and allow the writ petition to that extent. SD/-ANTONY DOMINIC, JUDGE sta WPC 31612/08 15 sta WPC 31612/08 16