IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC TUESDAY, THE 13TH OCTOBER 2009 / 21ST ASWINA 1931 WP(C).No. 9620 of 2008(T) ----------------------------------- PETITIONER(S): ----------------------- K.JAYAVARMA, ADVOCATE, VARIPPAMKOTTUKOIKAL, EZHUMATTOOR P.O., MALLAPPALLY PIN 689 586 BY MR.P.RAVINDRAN, SENIOR ADVOCATE BY ADVS. MR.ANIL SIVARAMAN MR.HARIKRISHNAN RAVINDRAN RESPONDENT(S): ------------------------- 1. THE JOINT REGISTRAR OF CO-OP.SOCIETIES (GENERAL) PATHANAMTHITTA. 2. GOVERNMENT OF KERALA, REP. BY ITS CHIEF SECRETARY, SECRETARIAT,THIRUVANANTHAPURAM 3. K.RAVEENDRAN (MEMBER NO. 56187) OONNUKALLUNKAL VEEDU, PUTHUSSERY SOUTH P.O. KALLOOPPARA, MALLAPPALLY. *ADDL. R4 IS IMPLEADED 4. C.K.MOHANAN NAIR, (MEMBER NO.50390), THIRUVALLA EAST CO- OPERATIVE BANK LTD., ERAVIPEROOR P.O., PATHANAMTHITTA DISTRICT. ADDL. R4 IS IMPLEADED AS PER ORDER DTD. 7.7.08 IN IA. 8663/08. R1 & R2 BY ADVOCATE GENERAL MR.C.P.SUDHAKARA PRASAD R3 BY ADV. MR.S.SUBHASH CHAND ADDL. R4 BY MR.M.K.DAMODARAN, SENIOR ADVOCATE ADDL. R4 BY ADV.MR.ALAN PAPALI, MR.P.K.VIJAYAMOHANAN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.9620/2008 APPENDIX PETITIONER'S EXHIBITS P1:- COPY OF THE INTERIM ORDER IN WP. NO.27925/07 DTD. 20.9.07. P2:- COPY OF THE ORDER OF THE OST RESPONDENT DTD. 17.12.07. P3:- COPY OF THE INTERIM ORDER IN WP. NO.1567/08 DTD. 12.3.08. P4:- COPY OF THE INTERIM ORDER IN WP. 3170/08 DTD. 28.1.08. P5:- COPY OF THE ORDER OF THE IST RESPONDENT DTD. 12.3.08. P6:- COPY OF THE OBJECTION PREFERRED BY THE PETITIONER BEFORE THE IST RESPONDENT DTD. 15.3.08. P7:- COPY OF THE ORDER OF THE IST RESPONDENT DTD. 19.3.08. P7(a):- COPY OF THE POSTAL COVER P8:- COPY OF THE VAKALATH FILED BY THE PETITIONER BEFORE THE IST RESPONDENT DTD. 19.3.08. P9:- COPY OF THE WRITTEN OBJECTION FILED BY THE PETITIONER BEFORE THE IST RESPONDENT DTD. 19.3.08. RESPONDENT'S EXHIBITS R1(a):- COPY OF THE PROCEEDINGS OF JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (G) PATHANAMTHITTA NO.CRB 1084/08 DTD. 19.3.08. R1(b):- COPY OF THE SUB RULES OF HOUSING FINANCE SCHEME IN THIRUVALLA EAST CO.OP. BANK. R1(c):- COPY OF THE RELEVANT PAGES OF THE BYELAWS OF THIRUVALLA EAST CO- OP. BANK. R3(a):- COPY OF THE RELEVANT PORTION OF THE PROFORMA DTD. 24.9.08 IN RESPECT OF THE MALLAPPALLY HOUSING CO-OPERATIVE SOCIETY NO.A-694 IN CONNECTION WITH THE ELECTION ON 25.11.08. R3(b):- COPY OF THE RELEVANT PORTION OF THE PROFORMA DTD. 17.9.09 ATTESTED BY THE DEPUTY REGISTRAR (ADMINISTRATION) PATHANAMTHITTA AND SUBMITTED BY THIRUVALLA EAST CO-OP. BANK LTD. NO.3260. TRUE COPY P.A. TO JUDGE tss ANTONY DOMINIC, J. -------------------------------------------------- W.P.(C) NO.9620 OF 2008 (T) -------------------------------------------------- Dated this the 13th day of October, 2009 J U D G M E N T In the election that was held on 6.11.2004 to the Board of Directors of the Thiruvalla East Co-operative Bank, the petitioner was elected and later he was also elected as the President of the said Bank. The term of the Managing Committee is to expire on 5.11.2009. While he was thus continuing as President, the 3rd respondent filed a complaint before the Ist respondent that the petitioner was a member of the Board of Directors of the Mallappally Housing Co-operative Society Ltd. at the time of his election and therefore, suffered ineligibility to become a member of the Thiruvalla East Co-operative Bank in view of the provisions contained in Section 28(2)(a) of the Kerala Co- operative Societies Act, here-in-after referred to as `the Act' for short. 2. On receipt of the said complaint, the first respondent issued Ext.P5, a show cause notice, calling upon the petitioner as to why, in view of the ineligibility he suffered under Section 28(2) (a) and Rule 44(1)(a) of the Co-operative Societies Rules he shall WPC.No.9620/08 :2 : not be disqualified as the member of the Committee of the Thiruvalla East Co-operative Bank exercising the powers under Rule 44(3) of the Rules. On receipt of Ext.P5, the petitioner filed Ext.P6 explanation, complaining that he was not given copies of the complaint filed by the 3rd respondent and the report of the Assistant Registrar dated 10.3.2008 relied on in Ext.P5 show cause notice. It was also contended that the Mallapally Housing Co-operative Society and the Thiruvalla East Co-operative Bank, do not fall under the same type of Societies in order to attract Section 28(2)(a) of the Act and Rule 44(1)(a) of the Rules. He also relied on the definition of `Urban Co-operative Bank' as provided in Section 2(ta) of the Act to contend that Thiruvalla East Co- operative Bank being an Urban Co-operative Bank, it did not fall under the same type of Societies to justify the proceedings as proposed in Ext.P5. The acknowledgment in Ext.P6 reply shows that this was delivered in the office of the Joint Registrar on 17.3.2008, much before 19.3.2008 to which date hearing of Ext.P5 was scheduled. Immediately thereafter he filed this writ petition challenging the show cause notice. 3. This writ petition came up for admission on 24.3.2008 and an interim order to maintain status quo was passed. In the WPC.No.9620/08 :3 : meanwhile, on 19.3.2008, the counsel for the petitioner appeared before the first respondent and filed Ext.P8 Vakalath along with Ext.P9 application seeking adjournment by one month for filing a detailed objection and arguments. Endorsement on Exts.P8 and P9 referred to above show that these were received by the first respondent on 19.3.2008 itself. 4. However, Ext.P7 order was passed by the first respondent on 19.3.2008. It is stated in Ext.P7 that based on the averments in the complaint and the report of the Assistant Registrar dated 10.3.2008, he was satisfied that the Mallappally Taluk Housing Co-operative Society and the Thiruvalla East Co- operative Bank are societies of the same type and that while being a member of Mallappally Taluk Housing Society, petitioner contested in the election held to the Board of Directors of the Thiruvalla East Co-operative Bank and became a member of the Board of the latter Bank, attracting the ineligibility provided in Section 28(2)(a) read with Rule 44(1)(a) of the Rules. It is stated that it was in view of this he was issued Ext.P5 show cause notice and that in response, though the petitioner did not appear in person, he filed Ext.P6 objection. Proceeding further it is stated that, based on the materials available, he was satisfied that the WPC.No.9620/08 :4 : Mallappally Housing Co-operative Society is incorporated with the main object of giving housing finance and that one of the main objects of Thiruvalla East Co-operative Bank is giving housing loans and therefore both the societies are of the same type. On this basis, holding that the ineligibility provided under Section 28 (2)(a) of the Act read with Rule 44(2) of the Co-operative Societies Rules is attracted, exercising his powers under Rule 44(3) of the Rules the petitioner was disqualified to be member of the Committee of Thiruvalla East Co-operative Bank. 5. Referring to Ext.P7(a), the cover under which Ext.P7 was sent, the petitioner submits that it was after communicating the satus quo order passed by this court that Ext.P7 order was dispatched from the office of the first respondent on 26.3.2008. Thereupon the petitioner got the writ petition amended incorporating challenge against Ext.P7 also. Thus as at present, the writ petition contains prayers for quashing Exts.P5 and P7 and to declare that being a member of the Board of Directors of the Urban Co-operative Bank, shall not disentitle him for being elected as a member of the committee of the Housing Society. Though there is a further prayer to declare Rule 15 of the Co-operative Societies Rule as amended by SRO.No.380/00 to the WPC.No.9620/08 :5 : extent it clubs Urban C0-operative Bank and Housing Society together as ultravires the rule making power of the State Government and therefore is unconstitutional. When the matter was taken up for hearing, Senior counsel for the petitioner did not press the prayer against Rule 15 of the Rules. 6. On behalf of the petitioner, Sr. Counsel Sri. P. Ravindran contended that in Ext.P7 order, points raised by the petitioner, in Ext.P6 objections filed against Ext.P5 show cause notice, were not considered. It was also contended that under Rule 44(3), the petitioner is entitled to have an opportunity to file his objections and also an opportunity of hearing. Despite having filed Ext.P8 Vakalath and Ext.P9 application for adjournment, declining an opportunity makes his representations, and without even mentioning the filing of Exts.P8 and P9, ExtP7 order was passed in violation of the statutory provisions and also the principles of natural justice. It was also contended that the ineligibility under Section 28(2)(a) is only against membership in another society of the same type. According to the learned Sr. counsel, in view of the definition Urban Co-operative Bank as provided in Section 2 (ta) and Primary Co-operative Society in Section 2(ob) read with Rule 182 and Appendix III of the Rules, the Thiruvalla East Co- WPC.No.9620/08 :6 : operative Bank and the Mallapally Housing Co-operative Society fall under different types of societies and if so the ineligibility provided in Section 28 of the Act and Rule 44 is not attracted. Learned counsel also referred to me Rule 15 of the Rules and contended that the categorization of different types of societies is contrary to the categorization in Appendix III and the provisions contained in Section 2 of the Act, which defines different types of societies. On this basis it was argued that it was unsafe to rely entirely on the categorization under Rule 15 of the Rules. 7. On behalf of the first respondent, the learned Advocate General contended that in paragraph 11 of the writ petition the petitioner has admitted that going by the categorization provided under Rule 15, Housing Societies and Urban Co-operative Banks are credit societies. It is stated that, in view of the admitted fact that these societies of which the petitioner is a member of the committee, fall under the same type of societies, the ineligibility as provided under Section 28(2) is squarely attracted. It is contended that even if the petitioner is taken to have been not given an opportunity of hearing, still having regard to the fact of the case, since no other conclusion is possible in this case and no prejudice is proved to have been caused to the petitioner, WPC.No.9620/08 :7 : complaint regarding violation of the principles of natural justice has no substance. 8. On behalf of the 3rd respondent, the complainant at whose instance proceedings were initiated, a counter affidavit has been filed and the learned counsel made extensive reference to the averments in paragraphs 10,11 and 16 of the counter affidavit. According to him, both the banks carry on similar business and having regard to its main objects and the categorization of Rule 15 of the Rules, these societies are credit societies. According to him the issue has to be decided referring to Rule 15 of the Rules only. In so far as the contention regarding the violation of principles of natural justice, the learned counsel for the 3rd respondent contended that since the petitioner has not established any prejudice, the petitioner cannot plead that principles of natural justice has been violated. 9. First I shall deal with the contention of the learned counsel for the petitioner that the petitioner was denied an opportunity of hearing before Ext.P7 order was passed by the first respondent. I choose to adopt this course, for the reason that, in case I accept the contention of the learned counsel for the petitioner, necessarily, the matter should be reconsidered and WPC.No.9620/08 :8 : decided by the statutory authority and it is for that authority to deal with the contentions on merits. 10. The power exercised by the Joint Registrar is conferred by Rule 44(3) of the Kerala Co-operative Societies Rules, which provides that if a person becomes disqualified to be a member of the Committee of a Society, the Registrar may in the circumstances pointed out in the Rule Boban J. Olasa, by order in writing declare that the person has ceased to be a member of the committee of the society concerned from the date of such disqualification. Rule 44(1) further provides that no member of the Society shall be eligible for being elected and appointed as member of the committee of the Society if he is disqualified under Section 28. Since, what is canvassed against the petitioner in this case is the ineligibility under Section 28(2)(a), if the ineligibility is proved, it is open to the Registrar to pass orders invoking his powers under Rule 44(3). 11. However Rule 44(3) further provides that before passing an order the Registrar shall give the person against whom proceedings are initiated, an opportunity to state his objections, if any, against the proposed action and if the person wishes to be heard, he shall be given an opportunity to be heard also. In this WPC.No.9620/08 :9 : case, Ext.P5 show cause notice was issuing relying on the complaint filed by the 3rd respondent and also the report of the Assistant Registrar dated 10.3.2008. A reading of the show cause notice shows that the first respondent had given the petitioner an opportunity to file his objections and to appear before him on 19.3.2008 for hearing. Ext.P6 is the objection that was filed. In Ext.P6 petitioner has complained of not having given him a copy of the complaint and also the copy of the report submitted by the Registrar. On merits also the petitioner raised his objections. According to him the societies do not fall within the same type to invoke the power of the Registrar under Rule 44(3) of the Rules. 12. On 19.3.2008 by filing Exts.P8 Vakalath and P9 application, counsel for the petitioner sought an adjournment. However, without passing any order on Ext.P9 application for adjournment and without making even a reference to Ext.P8 and P9, Ext.P7 order has been passed by Registrar on 19.3.2008. In Ext.P7, although it is stated that Ext.P6 objection was filed by the petitioner, the contentions raised in Ext.P6 are also not dealt with in the order. Moreover, in Ext.P7 order, it is also stated that, grant of housing loan, is one of the main objects of the Thiruvalla East Co-operative Bank. This finding is factually WPC.No.9620/08 :10 : erroneous, in as much as Ext.R1(a) bye laws of the Bank containing its objects show that there is no such object incorporated in the bye laws. Be that as it may, fact remains that it was without giving an opportunity of hearing to the petitioner, without making reference to any of the contentions raised by the petitioner in Ext.P6 and with even referring to Ext.P9 that Ext.P7 has been passed. 13. Further it is an elementary principle of natural justice that when a complaint or report is sought to be used against a person, a copy there of should be given or at least, the contends of the complaint or report should be disclosed to him. In this case, in Ext.P6 reply, the petitioner has raised a complaint in this respect and that aspect is also not addressed by the Ist respondent. Thus Ext.P7 order is passed not only in violation of the principles of natural justice but is in violation of the provisions contained in Rule 44(3) of the Rules. If there is violation of the statutory rules, the question of prejudice or proof of prejudice, in my view, does not arise at all. Therefore I am satisfied that the order Ext.P7 has been passed in violation of the principles of natural justice and statutory rules and for that reason the order is liable to be set aside and I do so. The first WPC.No.9620/08 :11 : respondent shall disclose the materials which are proposed to be used against the petitioner and pass fresh orders giving the petitioner an opportunity of hearing. It is clarified that this court has not dealt with the merits of the contentions raised by both sides and it is entirely for the Ist respondent to deal with these issues. Accordingly, the writ petition is disposed of quashing Ext.P7 and leaving open the first respondent to decide the matter afresh, in accordance with law and in the light of the observations made above. This shall be done, as expeditiously as possible, at any rate, within 6 weeks from the date of production of a copy of the judgment. (ANTONY DOMINIC) JUDGE vi/