IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN FRIDAY, THE 5TH DECEMBER 2008 / 14TH AGRAHAYANA 1930 WP(C).No. 32487 of 2008(P) ----------------------------------------- PETITIONER(S): ------------------------- THE KANJIRAPPALLY CO-OPERATIVE RUBBER MARKETING SOCIETY LIMITED, NO.K-157,KANJIRAPPALLY P.O., KOTTAYAM DISTRICT, REPRESENTED BY ITS PRESIDENT K.GEORGE VARGHESE. BY ADV. SRI.K.K.CHANDRAN PILLAI RESPONDENT(S): --------------------------- 1. STATE OF KERALA, REPRESENTED BY THE SPECIAL SECRETARY, CO-OPERATION DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM. 3. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), KOTTAYAM. 4. THE NATIONAL CO-OPERATIVE DEVELOPMENT CORPORATION, (NCDC),CO-BANK TOWERS, THIRUVANANTHAPURAM, REPRESETNED BY ITS REGIONAL DIRECTOR. 5. THE INTEGRATED CO-OPERATIVE DEVELOPMENT PROJECT (ICDP),REPRESENTED BY ITS REGIONAL MANAGER,CO-BANK TOWERS, THIRUVANANTHAPURAM. 6. THE DEPUTY TAHSILDAR (REVENUE RECOVERY), KANJIRAPPALLY. 7. MR.GEORGE THOAMS, VALIPLACKAL, KOORALY P.O, PONKUNNAM, REPRESENTED BY HIS NOMINEE SRI.JOJI JOSEPH, VALIPLACKAL HOUSE, PARATHODU.P.O, KANJIRAPPALLY. 8. THE KERALA CARDAMOM PROCESSING & MARKETING COMPANY LIMITED, SPICES HOUSE, THEKKADY P.O, IDUKKI DISTRICT, REP. BY ITS MANAGING DIRECTOR. GOVERNMENT PLEADER SRI. K.C.SANTHOSHKUMAR FOR R1,2,3 & 6 ADV. SRI.V.K.SUNIL FOR R7 SRI.GRASHIOUS KURIAKOSE FOR R8 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05/12/2008 ALONG WITH WPC.NO.35756 OF 2008,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss THOTTATHIL B. RADHAKRISHNAN, J. = = = = = = = = = = = = = = = = = = = = = = = = W.P.(C).Nos.32487/2008-P & 35756/2008-F = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 5th day of December, 2008. JUDGMENT 1.These writ petitions are filed challenging an order issued by the Joint Registrar of Co- operative Societies setting aside a proceeding for private sale of an item of property of the Kanjirappally Co-operative Rubber Marketing Society Limited, hereinafter called, the “Society”, the petitioner in WP(C).32487/2008 in favour of the Kerala Cardamom Processing & Marketing Company Limited, hereinafter called, the “Company”, the 8th respondent in that writ petition. 2.The Society owes different amounts to NCDC, ICDP, State Government and the Meenachil Rubber Marketing and Processing Co-operative Society. For the purpose of liquidating those WP(C)32487 & 35756/08 -: 2 :- outstandings, the Society obtained prior permission of the competent statutory authority to conduct private sale of one of the items of its assets. That permission was granted on the basis of a valuation statement of 2004. But, the Society could, ultimately, conclude on a proper purchaser only in 2008. The competition was among two purchasers. One is the Company aforesaid and the other, Mr.George Thomas, the 7th respondent in WP(C).32487/2008, represented by Joji Joseph, the petitioner in WP(C).35756/2008. George Thomas offered an amount of Rs.55,55,555/- as against the offer of Rs.53,77,735/- by the Company. There is some controversy between the parties as to whether George Thomas had withdrawn half way through, while he would assert that he would not. The proceedings reached the hands of the Joint Registrar in the wake of a controversy between the Company and George Thomas as to who should be the successful bidder. The Joint Registrar was moved by George Thomas. WP(C)32487 & 35756/08 -: 3 :- 3.The Joint Registrar took stock of the entire scenario and noticed that the Society is indebted for an odd sum and it would not be in the interest of the Society to have the sale on the basis of the 2004 valuation. The proceedings of the Society are accordingly set aside with a direction to auction de novo. The Society has challenged the order on the allegation that it was not heard before issuing the impugned decision. It has also placed on record in WP(C). 32487/2008 that it is indebted to different establishments as noticed above, though Meenachil Society is not a respondent in that writ petition. 4.I have heard the learned counsel appearing for the Society, the Company, George Thomas and the learned Government Pleader quite in extenso. 5.The impugned order reflects a state of affairs where the Society had availed facilities from NCDC, ICDP etc. with the guarantee of the State WP(C)32487 & 35756/08 -: 4 :- and is functioning with share capital contribution by the State Government. Obviously, therefore, there is an involvement of the State interest in the matter. That apart, the Society is a rubber marketing society and the interest of a large number of its members will also have to be appropriately protected. The Joint Registrar cannot be wholly at fault in having taken a complete stock of the situation, though the en result does not really satisfy the complete needs of the Society. I say this because, the Society may not be interested, as of now, to sell off its immovable property. Its only aspiration is to see that the debts are liquidated. This means that any sale of the immovable property for which sanction was granted should be with the ultimate aid of resulting in the Society retrieving its status of being a debtor to different establishments. In that context, it may be worthwhile to note that a large chunk of amounts which are shown to be due from the Society is by way of interest payable to NCDC, ICDP or the WP(C)32487 & 35756/08 -: 5 :- Government and may be to the Meenachil Society also. 6.The impugned decision of the Joint Registrar is one amenable to the statutory remedies before the Government. There are revenue recovery proceedings also pending at the instance of NCDC or ICDP. In the fitness of things, this is a case where the attention of the Government is immediately obtained in a comprehensive manner so that the different creditors, including Meenachil Society or any other creditor, as discernible from the books of accounts of the Society, could be persuaded to reduce the total outstandings by scaling down the rate of interest. This could be done in the case of ICDP and NCDC also. These are matters which would work out more on the basis of an appropriate dispute negotiation resolution system through the Governmental guidance and blessings, particularly because, Government funds are also ultimately involved in the process. It would not be in the interest of any one to wind WP(C)32487 & 35756/08 -: 6 :- up and ultimately, liquidate a rubber marketing co-operative society in Kerala. It would equally be not in the interest of any one to pass off properties belonging to a co-operative society to private hands taking it out of co-operative movement of the State. The very object sought to be achieved by the legislation in co-operative sector and the co-operative movement will only fail, if that ultimately happens. 7.In the light of what is stated above, all further proceedings on the basis of the orders impugned will continue to remain stayed for a period of one year to enable the Society to move the Government within a period of four weeks from now by filing appropriate petitions calling for the interference of the Government with the order of the Joint Registrar and also to have all the transactions referred to earlier settled. Let such a comprehensive petition be filed notwithstanding the petitions already pending before the State Government touching revenue WP(C)32487 & 35756/08 -: 7 :- recovery and other matters. The Government will, at the appropriate level, have the entire issues looked into and settled with notice, hearing and views of the NCDC, ICDP, the Meenachil Society and any other creditor, Mr.Goerge Thomas represented by Joji Joseph and the Kerala Cardamom Processing & Marketing Company Limited would also be heard in the matter. If ultimately it becomes necessary that the property needs to be sold, it shall be done upon appropriate valuation and in accordance with law and even by confining any auction to be between George Thomas and the Kerala Cardamom Processing & Marketing Company Limited, who are, as of now, in the fray. Once the Government concludes finally, the order of stay granted by this judgment will stand vacated and parties will be regulated by the decision of the Government. This judgment is being issued before service of notice is complete on NCDC and ICDP in WP(c). 32487/2008 since no orders are being issued WP(C)32487 & 35756/08 -: 8 :- against their interest and if this judgment reaches its goal, even the establishment would also stand only to reach at amounts due to them. However, if they are, in any manner, aggrieved by the directions contained in this judgment, they are at liberty to seek review of this judgment. All revenue recovery proceedings against the Society will also stand suspended for the period covered above. The Society will obtain a fresh valuation from competent valuers and place it before the Government, in the meanwhile. Whatever amounts have been paid by the Company and George Thomas will be refunded forthwith by the Society and further action will proceed only on the basis of the decision of the Government, however that their efforts will continue to remain firm and enforceable, subject to the final decision of the Government. The Government will consider convening necessary meetings either through the Joint Registrar or otherwise at the appropriate level of all the creditors of the Society. Let a final decision from the Government follow within WP(C)32487 & 35756/08 -: 9 :- four months. These writ petitions are ordered accordingly. THOTTATHIL B. RADHAKRISHNAN, JUDGE. Sha/