IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 23RD SEPTEMBER 2009 / 1ST ASWINA 1931 OP.No. 8359 of 1998(T) ---------------------- PETITIONER(S): --------------- PRESIDENT, ALLEPPEY URBAN CO-OP. BANK LTD. NO. A67, ALAPPUZHA P.O. BY ADV. SMT.I.SHEILA DEVI RESPONDENT(S): --------------- 1. STATE OF KERALA, REP. BY SECRETARY TO GOVT., DEPARTMENT OF CO-OPERATION, GOVT. SECRETARIAT, THIRUVANANTHAPURAM. 2. REGISTRAR OF CO-OP. SOCIETIES, THIRUVANANTHAPURAM. 3. JOINT REGISTRAR OF CO-OP. SOCIETIES, ALAPPUZHA. 4. K.K. SUDARSHANAN, KRISHNALAYALM KUTTAMANGALAM, KAINAKARI, ALAPPUZHA. ADV. SRI.P.K.VIJAYAMOHANAN FOR R4 SRI.M.K.DAMODARAN, SENIOR ADVOCATE FOR R4 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 23/09/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PETITIONER'S EXHIBITS: O.P. 8359/1998. ------------------------------------------------------- EXT.P1 TRUE COP OF JUDGMENT IN O.P.5312/1988. EXT.P2 ORDER DT. 28-6-1995. EXT.P3 PETITION DT. 29-3-1994. EXT.P4 ORDER DT. 13-3-1996. EXT.P5 APPEAL MEMOANDOUM DT. 31-5-1996. EXT.P5(a) JUDGMENT IN O.P. 8521/1996 EXT.P6 GOVT. ORDER DT. 16-1-1998. EXT.P7 COMMUNICATION DT. 27-7-1985. EXT.P8 RELEVANT PAGES OF MINUTES BOOK. EXT.P9 ORDER DT. 2-4-1987. RESPONDENTS' EXHIBITS: -------------------------------------- EXT.R4(a) SHOW CAUSE NOTICE DT. 9-2-1987. EXT.R4(b) REQUEST DT. 16-2-1987. EXT.R4(c) ORDER DT. 19-2-1987. EXT.R4(d) ORDER OF THE BOARD. EXT.R4(e) REPORT OF ENQUIRY OFFICER. EXT.R4(f) ORDER DT. 20-7-1988. EXT.R4(g) COMMUNICATION D5. 16-1-1985. [TRUE COPY] P.S TO JUDGE. S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= O.P. No. 8359 of 1998 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 23rd September, 2009. J U D G M E N T The petitioner is a Co-operative Society registered under the Kerala Co-operative Societies Act. The 4th respondent was the Secretary of the Society. By order dated 23-5-1985, the 4th respondent was suspended from service pending enquiry on certain allegations of misconduct. At the relevant time, the Society was under the management of an administrator. The administrator appointed a retired Law Secretary as enquiry officer to conduct a domestic enquiry into the charges levelled against the 4th respondent, which involved dishonesty, breach of trust, misappropriation of funds, furnishing of false information to the Reserve Bank of India and dereliction of duty. The enquiry officer submitted Ext. R4(e) enquiry report dated 5-12-1986 finding the 4th respondent guilty of 4 out of the 15 charges levelled against him. On the basis of the enquiry report, the Society imposed on the 4th respondent the punishment of dismissal from service. The 4th respondent filed an appeal against the decision of the executive committee before the Board of Directors. The Board of Directors dismissed the appeal by order dated 31-3-1987 by a resolution. On 9-9-1987, the 4th respondent filed a petition before the 3rd respondent under Rule 176 of the Kerala Co-operative Societies Rules against the resolutions dismissing the 4th respondent from service and dismissing the appeal filed by the 4th respondent. By Ext. R4(f) dated 20-7-1988, the petition filed by the 4th respondent under Rule 176 was dismissed by the 2nd respondent-Registrar of Co- operative Societies. The 4th respondent filed A.R.C. No. 2/1989 against that order, which was also dismissed by the 3rd respondent. Thereafter, the 4th respondent again filed Ext. P3 petition on 29-3- 1994 under Rule 176. The 4th respondent thereupon filed O.P.No. 20109/1995 before this Court, seeking a direction to the Joint O.P.. No. 8359/1998 -: 2 :- Registrar to dispose of that petition. Pursuant to the order in that original petition, the 3rd respondent considered Ext. P3 petition filed by the 4th respondent and by Ext. P4 order, rescinded the resolutions of the petitioner-Society. The petitioner filed Ext. P5 appeal before the 1st respondent. By Ext. P6 order, the Government dismissed the appeal filed by the Bank upholding Ext. P4 order of the 3rd respondent. Exts.P4 and P6 orders are under challenge in this original petition. 2. According to the petitioner, the 3rd respondent has no jurisdiction under Rule 176 to interfere with the punishment imposed on the 4th respondent by the petitioner. Therefore, Exts.P4 and P6 are liable to be quashed by this Court, is the contention raised. 3. The 4th respondent contested the matter on the ground that insofar as the mandatory provisions of Rule 198 have no been complied with by the Society in dismissing the 4th respondent, the 3rd respondent has jurisdiction to rescind the resolutions of the Society dismissing the 4th respondent from service. He particularly refers to Rule 198(2) of the Rules. He further contends that he should have been given two opportunities, first against the enquiry report and the second against the punishment proposed. Insofar as he has not been given an opportunity to show cause against the enquiry report, but only against the proposed punishment, the order of the 3rd respondent is perfectly justified, is the contention of the 4th respondent. 4. I have heard all parties and considered the contentions in detail. 5. Rule 176 of the Rules reads thus: “176. Registrar's power to rescind resolution:- Notwithstanding anything contained in the bye-laws of a registered society, it shall be competent for the Registrar to O.P.. No. 8359/1998 -: 3 :- rescind any resolution of any meeting of any society or the committee of any society, if it appears to him that such resolution is ultra vires of the objects of the society, or is against the provisions of the Act, Rules, Bye-laws or of any direction or instructions issued by the Department, or calculated to disturb the peaceful and orderly working of the society or is contrary to the better interest of the society.” 6. Going by Rule 176, the Joint Registrar of Co-operative Societies would get jurisdiction to rescind a resolution only on a finding that the resolution is ultra vires the objects of the Society or is against the provisions of the Act and Rules, Bye laws or of any direction or instructions issued by the department or calculated to disturb the peaceful and orderly working of the Society or contrary to the better interest of the Society. Of the same, the only provision now invoked by the respondents is that the resolutions are against the provisions of the Act and Rules. In Ext. P4 order, what has been stated is that when notice was issued to the 4th respondent to show cause against the proposed punishment, he applied for extension of time to file reply, which was not granted, which, according to the 3rd respondent, is violative of the Rules. The second ground on which the resolutions were rescinded was that the punishment imposed is disproportionate to the charges proved against the 4th respondent. I have very serious doubts about the correctness of the findings of the 3rd respondent. First of all, admittedly, seven days' time was granted to the 4th respondent for filing the reply. Nobody can say that seven days' time is inadequate, especially since a domestic enquiry was conducted and the 4th respondent had participated fully in the enquiry. It is pursuant to the said enquiry that the copy of the report of the enquiry officer was forwarded to the 4th respondent directing him to show cause against the proposed punishment. Whether further time could have been granted is not a matter, which could have been O.P.. No. 8359/1998 -: 4 :- agitated under Rule 176 of the Rules insofar as the Rules do not contain any provision regarding the time to be granted. Regarding the second finding, nowhere in Ext. P4 the 3rd respondent has chosen to state what are the charges which have been found to have been proved against the 4th respondent. If the 3rd respondent had simply stated that the punishment awarded is disproportionate to the charges proved against the 4th respondent, even according to industrial jurisprudence, the Labour Courts and Industrial Tribunals can interfere with punishments imposed by the management only if the punishment imposed is shockingly disproportionate to the gravity of the misconduct. There is no finding in Ext. P4 that the punishment is shockingly disproportionate to the gravity of the misconduct. Even otherwise, I do not think that that question itself is within the powers of the 3rd respondent under Rule 176. That being so, the findings in Ext. P4 does not appear to be sustainable at all. Further, there is no reasoning given in Ext. P4 as to why a different decision than one taken earlier, which was confirmed by the Government should be taken to rescind the resolutions. Further, insofar as the findings of the enquiry officer have not been interfered with, the petitioner should have been given opportunity to start afresh from the stage of reply to show cause notice against the enquiry report and the proposed punishment, which has not been granted in the impugned orders. 7. However, the learned counsel for the 4th respondent would point out that as laid down by the Supreme Court, a delinquent in a disciplinary proceeding has a right to show cause against the enquiry report before the disciplinary authority agrees with the findings of the enquiry officer, which opportunity has not been given to the 4th respondent. Taking into consideration all the facts and circumstances O.P.. No. 8359/1998 -: 5 :- of the case, I dispose of this original petition with the following directions: The petitioner-Society shall issue a fresh notice to the 4th respondent giving him opportunity to file his representation against the findings in the enquiry report. The 4th respondent shall file his representation positively within two weeks from the date of receipt of the notice. On the same, the petitioner shall take a final decision on the findings of the enquiry officer. Thereafter, a further show cause notice shall be issued to the 4th respondent, if the petitioner agrees with the findings of the enquiry officer, directing the 4th respondent to show cause against the proposed punishment. The 4th respondent shall file his representation against the same within two weeks therefrom. Thereafter, the Society shall consider the representation of the petitioner and adopt a resolution taking a final decision in the disciplinary proceedings against the 4th respondent. If the 4th respondent is aggrieved by such decision, it would be open to the 4th respondent to take up the matter in proceedings under Section 69 of the Kerala Co-operative Societies Act, insofar as such a remedy is available to the 4th respondent in view of subsequent amendment to Section 69. Sd/- S. Siri Jagan, Judge. Tds/