IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR MONDAY, THE 28TH JULY 2008 / 6TH SRAVANA 1930 WP(C).No. 31064 of 2005(W) -------------------------- PETITIONER: ------------ THIRUVALLA TALUK CO-OPERATIVE RUBBER MARKETING SOCIETY LTD.NO. 253, REPRESENTED BY ITS MANAGING DIRECTOR IN CHARGE, CHUNKAPPARA P.O. THIRUVALLA, PATHANAMTHITTA DISTRICT. BY ADV. SRI.SHAJI THOMAS PORKKATTIL SRI.BINU PAUL RESPONDENTS: ------------- 1. THE TAHSILDAR (RR), MALLAPPALLY TALUK, MALLAPPALLY. 2. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, PATHANAMTHITTA. 3. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, MALLAPPALLY. 4. THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, PATHANAMTHITTA. BY GOVERNMENT PLEADER SMT. SMITHA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE APPLICATION DATED 7.8.2003 SUBMITTED BEFORE THE 4TH RESPONDENT. EXT.P2 TRUE COPY OF THE LETTER DATED 20.9.2004 FROM THE 4TH RESPONDENT TO THE DISTRICT COLLECTOR, PATHANAMTHITTA. EXT.P3 TRUE COPY OF THE SAID PROJECT REPORT DATED 20.6.2005 SUBMITTED BY THE PETITIONER SOCIETY. EXT.P4 TRUE COPY OF THE LETTER DATED 16.8.2005 OF THE DISTRICT INDUSTRIES GENERAL MANAGER, PATHANAMTHITTA. EXT.P5 TRUE COPY OF THE DEMAND NOTICE NO. B2-129/-4/MISC. DATED 17.3.2005 EXT.P6 TRUE COPY OF THE DEMAND NOTICE NO. B2-130/04/MIS. DATED 17.3.2005 EXT.P7 TRUE COPY OF THE LETTER DATED 22.9.2005. FIRST RESPONDENT'S EXHIBITS: EXT.R1(a) TRUE COPY OF DISTRICT COLLECTOR'S ORDER NO. R6-37532/2002 DATED 11.7.2005 TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- W.P.C. NO. 31064 OF 2005 -------------------------------------------- Dated this the 28th day of July, 2008 JUDGMENT The District Collector, Pathanamthitta, is impleaded as additional 5th respondent. 2. Petitioner is challenging recovery proceedings for recovery of value of shares stated to have been taken by the State Government in the petitioner's Society. According to the petitioner, petitioner has started industry for centrifuging rubber field latex. However, on account of shortage of raw material, the industry could not utilise it's installed capacity which led to loss. It is submitted that the industry sourced fund through Government equity participation in the shares of the company and loan taken from National Co-operative Development Corporation. Petitioner's case is that amount sought to be recovered is the value of shares taken by the State Government, which cannot be recovered through recovery proceedings. I feel if Government has taken shares in the petitioner-society, then face value of the shares cannot be recovered through recovery proceedings, unless repurchase 2 of shares by the society is agreed upon against payment. It is also not on record whether the Government is entitled to surrender the shares and take back the investment without reckoning capital erosion. Government Pleader submitted that loss has occurred on account of mis-management. However, there does not appear to be any proceedings initiated by the Joint Registrar of Co-op. Societies towards action for mismanagement. In the circumstances, W.P. is disposed of directing the second respondent to conduct enquiry and file report before the District Collector. If any action is required for mis- management the second respondent will take appropriate action under the Kerala Co-op. Societies Act and Rules. Second respondent is directed to forward his report to the District Collector within two months from now. The fourth respondent will consider petitioner's entitlement for the benefits applicable to sick industry and if petitioner is eligible, grant it. The addl.5th respondent will consider contination of recovery proceedings based on the report of the second respondent. If no amount is recoverable from the petitioner, then eligible benefits will be granted to the petitioner by the fourth respondent based on the 3 report of the second respondent. All proceedings for recovery will be kept in abeyance for three months from now for the fourth respondent and addl. 5th respondent to pass orders based on the report of the second respondent. W.P. is disposed of as above. (C.N. RAMACHANDRAN NAIR) Judge kk 4