Nedumangad Government Employees Housing Co Operative Society Ltd.No. T.1834 vs Joint Registrar Of Co Operative Societies (G)

Anu Sivaraman J.

This appeal is preferred against the judgment of the learned single Judge declining to interfere with the inspection ordered into the affairs of the appellant society by the Joint Registrar by Exhibit P1. The learned counsel appearing for the appellant contends that the appellant is a Primary Housing Co-operative Society and that Exhibit P1 order, which was under challenge in the writ petition, was passed without considering the mandatory provisions of the Co-operative Societies Act and the Rules. It is submitted that Exhibit P1 only refers to an inspection under Section 66 of the Co-operative Societies Act and does not specify the sub-section under which the inspection is sought to be conducted. Further, it is submitted that the recommendation was forwarded by the 2nd respondent, and there is no satisfaction of the Registrar that an inspection is liable to be conducted into the affairs of the society.

Further, relying on the decision of a Full Bench of this Court in Kudayathoor Service Co-operative Bank Ltd v. Joint Registrar of Co-operative Societies (General) (2022 (3) KLT 222 (FB)], it is contended that an opportunity of hearing is provided for wherever adverse orders are contemplated and therefore even on a recommendation of the Assistant Registrar, the Society is to be put on notice and heard before a subjective satisfaction is entered by the Joint Registrar that an enquiry and inspection is necessary.

Relying on an unreported judgment of this Court in  The Board of Management of Perumpazhuthoor Service Co-operative Bank Ltd. v. Shaibu S [WA.No.342 of 2022], it is contended that an inspection of the books of a society can be ordered by the Registrar invoking the power under Section 66(2) of the Act on specific point or points and no roving inspection is contemplated. The decision of a Division Bench of this Court in Melukkara Service Co-operative Bank Ltd. v. Joint Registrar (General) District Co-operative Society [2018 (2) KLT 640] is also relied on.

Having considered the contentions advanced, we notice that the specific points on which the inspection is to be conducted is specified in Exhibit P1 order. The supervision under Section 66 of the Act is a general power granted to the Registrar to supervise the functioning of societies registered under the Cooperative Societies Act. The decision relied on by the learned counsel for the petitioner, that is, Melukkara Service Cooperative Bank Ltd. v. Joint Registrar (General) District Co-operative Society specifically referred to the power of enquiry as provided under Section 65. The Full Bench decision referred to, that is Reji K.Joshy and others v. Joint Registrar of Co-operative Societies(General) Kollam and others (2022 (3) KHC 317 (FB)] relied on by the learned Government Pleader considered the necessity of granting an opportunity of hearing at the stage of acceptance of a report of inspection or enquiry under Rule 66(5) of the Rules. None of the said decisions have any application in the instant case. Here, on the basis of a report submitted by the Assistant Registrar, an inspection is proposed to be conducted into the affairs of the society including the issues with regard to discrepancies, if any, in the software used by the society. The learned single Judge has considered the contentions advanced and has also gone into the scope of an inspection under Section 66 of the Act. It is stated that before any further action is contemplated on a report of the inspection, notice to the society is specifically provided for.

We are in agreement with the view expressed by the learned single Judge that an inspection into the affairs of the society in the light the general power of the provision as provided under Section 66 cannot be stopped on hyper-technical grounds. The learned single Judge has specifically held that before any action is taken on the basis of report, if any, of the inspection, the society would be entitled to notice as contemplated in the Act and the Rules, In the above view of the matter, we are of the opinion that there is no justification in interfering with the order of the learned single Judge in this intra court appeal. The appeal, therefore, fails and the same is accordingly dismissed.