IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 27TH JULY 2009 / 5TH SRAVANA 1931 WP(C).No. 18634 of 2009(Y) -------------------------- PETITIONER(S): ------------------ A.R.RADHAMANIAMMA,PARAYIRIKUNNATHIL HOUSE,ULANADU.PO,KUNALADA,PATHANAMTHITTA. BY ADV. SRI.P.P.JACOB RESPONDENT(S): ------------------- 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES(G),PATHANAMTHITTA. 2. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIEITES(G),KOZHENCHERRY. GOVERNMENT PLEADER SRI.K.C.SANTHOSH KUMAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/07/2009, THE COURT ON 27/07/2009 DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. ================ W.P.(C) NO. 18634 OF 2009 (Y) ===================== Dated this the 27th day of July, 2009 J U D G M E N T Petitioner was the Secretary of Kulanada Service Co- operative Bank Limited. On the allegation that she had committed certain misconducts, disciplinary proceedings were initiated and ultimately, she was terminated from service. 2. There were complaints from the members of the managing committee of the Bank and acting upon the report of the Assistant Registrar (General), Kozhencherry, vide order dated 3/9/04, an enquiry under Section 65 of the Kerala Co-operative Societies Act was ordered and the Kulanada Unit Inspector was authorised to conduct the enquiry. Accordingly enquiry was conducted and Ext.P1 report was submitted. In the said report, Rs.5,15,890.26 was recommended to be recovered from the petitioner. 3. On the strength of Ext.P1 report, notice was issued to the petitioner calling upon her to remit the amount. On receipt of the said notice, petitioner submitted Ext.P2 reply disputing her liability to remit the amount. While matters stood thus, Ext.P3 WPC 18634/09 :2 : notice dated 11/5/2009 was issued calling upon the petitioner to file objections against initiating proceedings under Section 68 of the Act pursuant to an order dated 13/4/2007 passed by the Joint Registrar. On receipt of the said notice, petitioner submitted Ext.P4 request for furnishing her details of the order dated 13.4.2007 passed by the Joint Registrar and accordingly Ext.P6 order was furnished to her. Thereafter, petitioner submitted Ext.P5 reply. It was at that stage this writ petition was filed praying to quash Exts.P3 and P6 and to direct the 1st respondent to comply with Rule 66(5) of the Kerala Co-operative Societies Rules. 4. The contention raised by the petitioner is mainly that except after complying with Rule 66(5), the 1st respondent is incompetent to initiate any action based on Ext.P1 report submitted under Section 65 of the Act. Therefore, it is contended that Exts.P3 and P6 are premature and illegal. 5. A counter affidavit has been filed by the 2nd respondent, where it is stated that the enquiry under Section 65 resulting in Ext.P1 report was submitted with notice to the affected parties including the petitioner. It is also stated that the WPC 18634/09 :3 : members of the managing committee had challenged Ext.P1 report before the Arbitration Court by filing ARC 28/07 and had obtained an order of stay against initiating proceedings on the basis of the report. It is stated that the said ARC was finally dismissed by order dated 5/9/2008 and that it was thereafter that Ext.P3 notice was issued. 6. Answering the contention of the petitioner that the period prescribed for enquiry under Section 68 has also expired and therefore, Ext.P3 notice was without jurisdiction, it is stated in the counter that the said period has been extended till 31/7/2009. It is also contended that for initiating proceedings under Section 68 of the Act, notice and hearing as contemplated under Rule 66 (5) of the Rules is unnecessary. 7. From the above pleadings and the submissions made by the counsel on either side, the only question that arises for consideration is whether the Registrar is required to comply with Rule 66(5) of the Kerala Co-operative Societies Rules before initiating any action under Section 68 on the basis of the report submitted under Section 65 of the Act. Rule 66 of the Rules provides the procedure for the conduct of inquiry and inspection WPC 18634/09 :4 : under Section 65 and 66 of the Act. Sub Rule 5 inter alia provides that on submission of the report by the enquiry officer, the Registrar shall pass such orders thereon as may be considered just after giving a reasonable opportunity of being heard to the society, person or persons concerned. 8. From the facts, it can be seen that as per Ext.P6 order dated 13/4/2007, proceedings under Section 68 were ordered to be initiated and it was on the basis of the said order that Ext.P3 notice for fixing the liability under Section 68 was issued. 9. Under Section 65, on the orders of the Registrar, an enquiry officer is appointed to conduct the enquiry. The enquiry officer thereupon conducts the enquiry with notice to the parties and makes his report. Once the report is submitted to the Registrar, it is for the Registrar to independently consider the report and pass orders thereon. Rule 66(5) provides that before the Registrar passes any such order, the Society, the person or persons concerned who are likely to be affected by the report are entitled to be issued notice and heard. Such persons and Societies are entitled to canvass before the Registrar the correctness or otherwise of the findings of the enquiry officer. It WPC 18634/09 :5 : is such opportunity which is provided under Rule 66(5) and necessarily the said rule is mandatory in character and has to be complied with before proceeding further. This is all the more so since proceedings under Section 68 are penal in nature. 10. True, the learned Government Pleader referred me to the judgment of this Court in State of Kerala v. Sudarsanan (1997(2) KLT 522), which reversed the judgment of the learned Single Judge in Sudarsanan v. State (1997(1) KLT 957). That was a case where proceedings were initiated under Section 32 of the Act. Facts of that case are different from the facts arising in this case. Therefore, in the absence of the Registrar having complied with the procedure laid down under Rule 66(5), both Exts.P3 and P6 are premature and illegal. For that reason, Exts.P3 and P6 will stand set aside. The writ petition is therefore disposed of setting aside Exts.P3 and P6, but however clarifying that it will be open to the 1st respondent to comply with Rule 66(5) of the Co-operative Societies Rules and thereafter initiate fresh proceedings in the matter. ANTONY DOMINIC, JUDGE Rp