IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER TUESDAY, THE 10TH JUNE 2008 / 20TH JYAISHTA 1930 W.A.No. 1086 of 2008 ----------------------------- AGAINST THE JUDGEMENT IN WPC.21870/2007 DATED 29.2.2008 .................... APPELLANTS/RESPONDENTS 1 & 2 IN WPC -------------------------------------------------------------- 1. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, CO-OPERATION DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM. BY SPECIAL GOVERNMENT PLEADER SMT.A.G.ANEETHA RESPONDENT/PETITIONER IN WPC --------------------------------------------------- P.BALAGOPAL, MEMBER, BOARD OF DIRECTORS, KERALA STATE CO-OPERATIVE AGRICULTURAL & RURAL DEVELOPMENT BANK LTD., THIRUVANANTHAPURAM. BY ADV.SRI.GEORGE POONTHOTTAM THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 10/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------ W.A.No.1086 of 2008 ------------------------------------------ Dated, this the 10th day of June, 2008 JUDGMENT H.L.Dattu, C.J. This writ appeal is directed against the orders passed by the learned Single Judge in W.P.(C) No.21870 of 2007 dated 29th February, 2008. 2. In our judgment, we will be referring to the parties as arrayed in the writ petition. 3. Petitioner was a committee member of the Palakkad Primary Co-operative Agricultural and Rrural Development Bank Limited (hereinafter, for the sake of brevity, referred to as 'Primary Bank') and an elected member of the Board of Directors of the Kerala State Co-operative Agricultural and Rural Development Bank Limited ('Apex Bank' for short) as a delegate from the Palakkad District. In the writ petition filed, the petitioner had called in question Ext.P13 order passed by the Registrar of Co-operative Societies, wherein he had concluded that the petitioner ceased to be a member of the committee of the Apex Bank, since the Primary Bank is in default to the Apex Bank. Aggrieved by the said order, the petitioner had carried the matter by way of appeal before the State Government. The State Government by its order dated 30.6.2007 (Ext.P20) has rejected the appeal. Petitioner has called in question Ext.P13 order passed by the Registrar of Co-operative Societies and Ext.P20 order passed by the State Government in the writ petition. 4. The learned Single Judge while allowing the writ petition has observed in his order, that, on an earlier occasion the petitioner was before this W.A.No.1086 of 2008 2 Court in W.P.(C) No.10043 of 2007, wherein he had called in question Ext.P9 show cause notice issued by the respondent/Registrar of Co-operative Societies. This Court by Ext.P10 judgment had directed the Registrar to consider the objections filed by the petitioner and pass appropriate orders thereon. In the objections so filed, the primary contention of the petitioner was that, Palakkad District is covered by the package scheme announced by the Government of India and the entire interest arrears has been wiped off under the scheme and a further direction has also been issued for rescheduling the existing loans and treating the same as fresh loans, and further had contended that as per Ext.P19 certificate issued by the Apex Bank, the Primary Bank is not in arrears as on 31.3.2007, and accordingly had requested the Registrar of Co-operative Societies to drop the proceedings initiated pursuant to Ext.P9 notice. 5. The Registrar of Co-operative Societies without adverting to all these objections raised by the petitioner, has proceeded to pass Ext.P13 order, inter alia, holding, that, since the Primary bank has committed default to the Apex Bank, the delegate from the Palakkad District cannot continue to be a delegate of the Palakkad District. 6. This view of the Registrar of Co-operative Societies is affirmed by the State Government while dismissing the appeal filed by the petitioner against the orders passed by the Registrar. 7. The learned Single Judge has taken the view that Primary Bank could be said to be in default, if it is fails to take recourse to recovery steps for defaulted loans and thus amounts are due to Apex Bank. But, when the W.A.No.1086 of 2008 3 Government and other agencies having statutory control over Co-operative sector extends benefits by way of Moratorium, stay of attachment proceedings, deferring of collection of interest, etc., the Primary societies cannot be compelled to effect recoveries and therefore, it cannot be said that the Primary Bank is said to be in default and accordingly has held that cessation of membership of the petitioner as per Exts.P13 and P20 orders is bad in law. 8. The State being aggrieved by the orders passed by the learned Single Judge is before us in this Writ Appeal. In the memorandum of the Writ Appeal, it is stated that the order passed by the learned Single Judge is exfacie illegal, arbitrary and unsustainable. It is further stated that in view of the show cause notice (Ext.P9) dated 19.2.2007, that the Primary Bank is in default to the Apex Bank for six months and therefore, the learned Single Judge was not justified in holding that the Primary Bank is not in default to the Apex Bank and lastly, the certificate (Ext.P19) issued by the Apex Bank stating that Primary Bank is not in default as on 31.3.2007 will not absolve the disqualification of the petitioner, since Ext.P19 certificate is issued much after issuance of Ext.P9 notice. 9. The learned Government Advocate while reiterating the grounds urged in the Memorandum of Appeal, invites our attention to the observations made by a Division Bench of this Court in the case of Subodhan v. State of Kerala (2008 (2) KLT 198). The question that was considered by this Court in the said decision, was whether, there is any requirement of issuing notice demanding payment of defaulting amount and allowing one month time for W.A.No.1086 of 2008 4 payment to a primary society who is in default. The learned Judges took the view that once there was a default, the delegate from that society will automatically cease to be a member of the Apex Society. 10. In our considered view, the facts situation in the aforesaid decision is totally different from the facts situation that is pleaded by the petitioner in this writ petition. In our view, because of the package scheme announced by the Government of India and because of Ext.P19 certificate issued by the Apex Bank, the delegate from the Primary Bank cannot be said to be a defaulter and therefore, the learned Single Judge is justified in allowing the writ petition by quashing Ext.P13 order passed by the Registrar of Co-operative Societies and Ext.P20 order passed by the State Government. Therefore, we are of the opinion that the learned Single Judge has not committed any error which calls for our interference. Therefore, the writ appeal filed by the State requires to be rejected and accordingly it is rejected. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER) JUDGE vns/dk.