IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN WEDNESDAY, THE 30TH JULY 2008 / 8TH SRAVANA 1930 WP(C).No. 7922 of 2008(R) -------------------------------------- PETITIONER: --------------------- ADV. N.BAJI, CHAIRMAN, MANAGING COMMITTEE OF NEDUMANGAD URBAN CO-OPERATIVE BANK LTD.NO.3193, (UNDER SUPERCESSION), NEDUMANGAD, THIRUVANANTHAPURAM DISTRICT. BY ADV. SRI.GEORGE POONTHOTTAM RESPONDENTS: ------------------------- 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), THIRUVANANTHAPURAM. 2. THE ADMINISTRATOR, NEDUMANGAD URBAN CO-OPERATIVE BANK LTD.NO.3193, NEDUMANGAD, THIRUVANANTHAPURAM DISTRICT. *ADDL.R3 & R4 ARE IMPLEADED: R3. TRIVANDRUM DISTRICT CO-OPERATIVE BANK, REP. BY THE GENERAL MANAGER. R4. CIRCLE CO-OPERATIVE UNION, REP. BY SECRETARY (ASSISTANT REGISTRAR (GENERAL), NEDUMANGAD. *ARE IMPLEADED AS ADDL.RESPONDENTS 3 & 4 VIDE ORDER DTD. 3/07/2008. BY GOVERNMENT PLEADER SMT. A.G. ANEETHA – R1 & R2 BY ADV. SRI.V.G.ARUN - ADDL.RES. SRI.T.R.HARIKUMAR - ADDL.RES. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.7922/2008 R APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE NOTICE NO.C.R.B.8870/06 DTD. 28/01/2008. EXT.P2: COPY OF THE REPLY DTD. 21/02/2008. EXT.P3: COPY OF THE ORDER NO.C.R.B.8870/06 DTD. 28/02/2008. EXT.P3(A): COPY OF THE TYPED COPY OF EXT.P3. EXT.P4: COPY OF THE ORDER NO.C.R.B.6/2004 DTD. 9/01/2004. EXT.P5: COPY OF THE ORDER NO.C.R.B.5650/07 DTD. 20/07/2007. EXT.P6: COPY OF THE LIST OF EMPLOYEES WORKING IN CO-OPERATIVE SOCIETIES WITHOUT THE SANCTION OF THE JOINT REGISTRAR ON DAILY WAGES BASIS. EXT.P7: COPY OF THE RECEIPT DTD. 5/11/2007. EXT.P8: COPY OF THE RECEIPT DTD. 26/11/2007. EXT.P9: COPY OF THE CIRCULAR NO.30/2005 DTD. 31/08/2005. EXT.P10: COPY OF THE CHART SHOWING THE PAYMENT MADE BY THE LOANEES. EXT.P11: COPY OF THE COMMUNICATION GIVEN BY RBI TO THE NEDUMANGAD CO-OPERATIVE URBAN BANK REGARDING COMPLIANCE OF REPORT AS ON 31/03/2006. EXT.P12: COPY OF THE COMMUNICATION GIVEN BY RBI TO THE NEDUMANGAD CO-OPERATIVE URBAN BANK REGARDING COMPLIANCE OF REPORT AS ON 31/03/2007. EXT.P13: AFFIDAVIT OF THE PRESIDENT OF THE CIRCLE CO-OPERATIVE UNION. RESPONDENT'S EXHIBITS & ANNEXURES: EXT.R1(A): COPY OF THE AUDIT CERTIFICATES FOR THE YEAR 2005-2006. EXT.R1(B): COPY OF THE AUDIT CERTIFICATES FOR THE YEAR 2T006-2007. Kss ..2/- ...2..... WPC.NO.7922/2008 R EXT.R1(C): COPY OF THE INSPECTION REPORT OF RESERVE BANK OF INDIA DTD. 01/06/06. EXT.R1(D): COPY OF THE INSPECTION REPORT OF RESERVE BANK OF INDIA DTD. 26/06/07. EXT.R3(A): COPY OF THE ORDER NO.CRB/8870/2006 DTD. 1/12/2007. EXT.R3(B): COPY OF THE ORDER NO.CRB.8870/2006 DTD. 28/02/2008. EXT.R3(C): COPY OF THE ORDER NO.CRB.8870/2006 DTD. 28/01/2008. EXT.R3(D): COPY OF THE REPLY DTD. NIL. EXT.R3(E): COPY OF THE APPLICATION DTD. 14/02/2008. EXT.R3(F): COPY OF THE REPLY DTD. 21/02/2008. ANNEXURE R4(A): LETTER DTD. 28/01/08 FORWARDED BY JOINT REGISTRAR (G), THIRUVANANTHAPURAM. ANNEXURE R4(B): REPLY DTD. 21/02/08 OF BOARD OF DIRECTORS OF NEDUMANGAD CO-OP.URBAN BANK AND 2 OTHER COMMITTEE MEMBERS SEPERATELY. /TRUE COPY/ P.S.TO JUDGE Kss THOTTATHIL B. RADHAKRISHNAN, J. = = = = = = = = = = = = = = = = = = = = = = = = W.P.(C)No.7922 of 2008-R = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 30th day of July, 2008. JUDGMENT 1.While admitting this writ petition, an interim order was issued on 10-3-208 ordering that the Administrator shall not carry on any activity other than the day to day proceedings of the society, after noticing that there was absence of consultation with the Reserve Bank. 2.The files in relation to the case were perused by me and it was recorded on 3rd July, 2008 as follows: “I have perused the files as are made available by the learned special Government Pleader for Co-operation. It is seen that the draft of the communication for consultation, a manuscript, was signed on 21.2.2008 and WP(C)7922/2008 -: 2 :- the receipt of the copy thereof was also acknowledged by one Assistant Registrar on that day itself on the said manuscript overleaf. Learned special Government Pleader has also made available certain communications from the Trivandrum District Co-operative Bank and the Secretary of the Circle Co- operative Union, who is the Assistant Registrar (General) regarding the communications of consultation. I deem it appropriate that the Circle Co- operative Union, Nedumangad and the Trivandrum District Co-operative Bank are also heard in relation to this case. Hence Trivandrum District Co-operative Bank represented by the General Manager and the Circle Co-operative Union represented by the Secretary [Assistant Registrar (General), Nedumangad] are impleaded as additional respondents. 2. Adv.Sri.V.G.Arun takes notice for the Trivandrum District Co-operative Bank and learned special Government Pleader for Co-operation takes notice for the Circle Co-operative Union, Nedumangad. WP(C)7922/2008 -: 3 :- 3. The additional respondents are directed to file affidavits stating the date on which communication, if any, was received from the Joint Registrar regarding the supersession in question, including any pre-decisional consultation. Copy of materials, if any, forwarded by the Joint Registrar along with such communication and receipts shall be placed on record. The said additional respondents will also state the decision, if any, taken by them and the reason as to why such decision has been taken. Those respondents will also state whether any meeting of the committee/board, as the case may be, was held to consider the materials placed for consideration. Such affidavits shall be on record within a period of 10 days. Post after 10 days. The petitioner will serve a copy of the writ petition on Adv.Sri.V.G.Arun.” 3.Accordingly, the financing bank, namely, the Trivandrum District Co-operative Bank and the Circle Co-operative Union have been brought on WP(C)7922/2008 -: 4 :- record. The financing bank has filed a counter affidavit as directed in that order. That bank is also under the Administrator even as of now. The General Manager has sworn to the counter affidavit on behalf of the Trivandrum DCB on 10th July, 2008 stating that it was after the receipt of the impugned order dated 28-2-2008 (Ext.P3) that the DCB received the different materials which are enumerated in paragraph 4, except Item No.1. Those materials ought to have been put to the DCB by the Joint Registrar, it having been decided that the financing bank shall be consulted. However, those materials were put to the DCB only long after the supersession order was issued on 28-2-2008. This, obviously, means that there was no consultation at all. It is not a case where the Joint Registrar decided that the consultation should be dispensed with. Not only that, the counter affidavit on behalf of the DCB is also eloquent regarding the fact that there was no consideration of the proposal for superseding the petitioner in any of the WP(C)7922/2008 -: 5 :- meetings. It is stated that the Joint Registrar, who passed the impugned order, is himself the Administrator of the DCB. Even then, there is no resolution by him in his dual role, including that of the Administrator of the DCB. 4.The question as to whether the action taken against the bank on the basis of the report under Section 66 stands, can stand deferred, as of now, for the simple reason that following the remit, the petitioner will have an opportunity of hearing before the first respondent. For the aforesaid reasons, the impugned order does not stand and the same is accordingly set aside directing the first respondent to give the petitioner a further opportunity of hearing and take a decision de novo after putting the tentative decisions to the consultees in terms of Section 32. Such decision shall be taken afresh after following the procedure prescribed by Section 74A also, if such provision applies to WP(C)7922/2008 -: 6 :- the institution in question. Prior to consultation, there should be a hearing. The writ petition is allowed accordingly. No costs. THOTTATHIL B. RADHAKRISHNAN, JUDGE. Sha/300708