Delayed Justice and Accessless Justice

(By V.K. Babu Prakash, Secretary, Kerala Legislature Secretariat)

“Delayed justice is today perhaps the biggest bane of judicial administration in India. What use is a divorce decree when one is too old to remarry, or return of a house when the owner is dead? “ -- Justice Leila Seth In Her Book

‘Talking of Justice: - Peoples Rights In Modern India’.

As of 30^th June 2016, there were 2,81,25,304 cases pending in the Lower Judiciary, 39,45,158 cases in High Courts and 62,646 cases in the Supreme Court1. The number of cases pending in the Courts has grown at more than 30% over the last two decades. Various reasons are given for this massive backlog of cases including inadequate number of judges, lack of infrastructure, complex procedural laws and inefficiency of lawyers and judges. Irrespective of the reasons, the time taken for each case to navigate the judicial system takes decades. While no detailed study has been done to measure the average life cycle of a case from institution to final disposal, the law reports reveal that often the Supreme Court and High Court are rendering judgments in cases that were filed in the Lower Courts nearly two decades earlier. The non-governmental research organization DAKSH has recently started building a database of all pending cases in the High Courts to analyze in detail the pendency problem. In the 29 High Courts, the average pendency is 1296 days for the case currently pending. There are matters from 1950 still pending in some Courts. The oldest matter on record has been pending since 1958. Data has also been obtained from 3000 Lower Courts across the country and the average pendency in those Courts is 2155 days. In the Supreme Court, the average pendency of cases pending is 1148 days.

The huge backlog of cases is not just a time related problem, as most observers believe. There is no doubt that delayed justice is equivalent to denial of justice in many cases. However, this glosses over the equally serious quality of justice problem that is a direct consequence of severe backlog. Judges are required to hear nearly 100 matters a day on a daily basis. While some may be a minorprocedural matters and cannot be compared to a substantial hearing, expecting a human being, even a highly skilled and trained one, to take 100 decisions in a period of five hours, to be fair and reasonable, and to ensure justice, is an impossibility. The sheer volume of cases that a judge has to hear each day affects the quality of his/her behavior in Court, order and judgments. Judges just do not have the time to give each matter the time it deserves, reflect upon it, review existing precedents and then pass a considered order. Law reports contain a number of cases where judges have made fundamental errors, that cannot be pardoned. Two examples can be illustrated. In Bengalure a magistrate accepted a complaint of harassment and issued notice, when the relief sought was to parade the accused naked on the street, garland them with slippers and force feed them with human faeces.²

In another case report from Gujarat a Magistrate had issued bailable arrest warrant against the President of India, the Chief Justice of India and other high functionaries without even scrutinizing the complaint.³

Judges also end up writing judgments that are nothing more than a collation of quotes from past cases making it impossible even for experienced lawyers to decipher the judgment.

The length of these judgments and the difficulty in finding the ratio of the case are obstacles, which discourages any attempt at effective communication of the law laid down to the public. Poor quality of justice and indecipherable judgments also increase the number of appeals resulting in more cases and further delays. This means that the appellate courts are dealing mostly with cases more than a decade old and which are not necessarily the most important current issues facing society.

Pratap Bhanu Mehta argues that judicial administration, including docket management has never been taken seriously by the judiciary. He observes, “as an institution, almost all levels of the judiciary exhibit what can only be described as administrated chaos. There is unanimity in the view that the court system is administratively inefficient. Judges are excessively passive in an adversarial legal system, excessive party control allows respondents to delay cases with impunity and there are few alternatives for dispute resolution other than ill managed trial. The administrative infrastructure of most courts is woefully inadequate. Records of filings are mostly kept by hand, documents are difficult to trace, and judges orally summaries testimony for court records, judges are moved around from bench to bench faster than depositions are filed. Judges seem to seldom exercise the power to impose costs for frivolous litigations, interim injunction relief and adjournments are routinely granted and the number of possible appeals while a case is still on is large enough to effectively fracture the trial or stay it” ⁴

The judicial system has become so oppressively slow that it is incapable of protecting the rights of citizens and has resulted in the executive acting with utter impunity. The Law Commission in its 120^th report observed that one of the costs of judicial delay was an all declining respect for the rule of law. In fact, members of the judiciary themselves have shown a lack of faith in the rule of law due to massive judicial delays. The most shocking example in recent times is a Session’s Judge in Mumbai seeking help of an underworld don to settle his personal affairs.

The position has only worsened after nearly 60 years. There has been very little effort to study this problem in detail. There are many reports by the Law Commission on the issue of judicial delay and multiple suggestions have been made by the Commission with almost non implementation by the executive and the judiciary. The Law Commission even acknowledges that the problem cannot be studied properly in the absence of properly maintained data by the Courts. In its 245th report, the Commission observed that there is no scientific collection and maintenance of data by the High Courts to even begin to study the backlog problem in detail. As a result, most suggestions are based on surmises and anecdotal evidence. At the Chief Justice’s Conference in April 2015, the then Chief Justice of India set a target of 5 years for the disposal of each case at the trial court stage. The 5-year period may sound great for people who are used to trials going on for decades. However, from a right’s perspective, this reflects a severe lack of ambition in setting targets that make real change to the life of litigants. Five years in the trial court means that final disposal in the highest court may not happen for a minimum of 10-15 years after institution of a case.

It is not sure that India is an extremely litigious country as severe backlog and delays suggest. On the other hand, many argue that it is an under litigated country with persistent access to justice problem. The judiciary has tried to innovate through the concept of public interest litigation and Lok Adalaths. While there is a Legal Services Authority that provides legal aid to deserving people, the quality of legal aid has not only been poor but also only a myth most of the times. Lok Adalaths, however, have been reduced to a mechanism for achieving disposal rates by the judiciary. Unfortunately, it is the poor who are often forced to settle their cases through Lok Adalaths, as they do not have the luxury of financing a long drawn litigation and hoping for a favorable result at its end. At best, Lok Adalaths, are an inequitable form of mediation for the poor as the poor people are being left to settle matters because of the inability of the judiciary to provide remedies for breach of their rights.

One of the celebrated innovations of the Indian judiciary is the development of public or social interest litigation in the higher courts. However, most of the remedies ordered by the higher courts in PILS are ineffective in enforcing the rights claimed by litigant. A system based on rights has to provide meaningful remedies for their violation. These remedies should necessarily contain two aspects: first, the person suffering the violation should either be restored to his original situation or suitably compensated and second, the person causing the violation should be made to pay either monitory or otherwise. PILS have generally not been able to rectify the inability of the legal system to do either of the above. The Supreme Court in 1980 ordered that under trial prisoners should not be hand cuffed, as it is a prima facieviolation of their human rights.⁶However this practice has not stopped and it is common to see the accused hand cuffed, even in Court premises where lawyers and magistrates are present. Similarly, the Supreme Court has on many occasions ruled that under trails shall be released if they have served as much or more time than the prescribed punishment for the offence they have been accused of.⁷However, very often, civil society groups have to approach judiciary for implementation of the Supreme Court order, as there are no continuous compliances without further intervention by civil society. Even today many under trials continue to rot in jails, across the country after 39 years of the Supreme Court’s judgments. In 2013 a study showed that more than 75% of prisoners in India are under trials. Given that the conviction rate in India is very low, the incarceration of under trial is in itself a violation of rights. The Government is the largest litigant in the country in the lower courts and the higher courts. However, it is the attitude of the Government towards litigation, which makes it a large contributor to both judicial delays and problems in the legal system. A Government does not shy away from regularly appealing every order that comes against it, without considering whether the matter is worth appealing. Arun Shourie gives some examples in which appeals were filed before the Supreme Court by the Government in which the subject matter is not more than `15,000-20,000.⁸Courts have observed on innumerable occasion that the Government should not file appeals automatically, by examining if there is a serious issue that needs resolution rather than the attitudes of the officers involved.

Litigation between two departments of the same Government is also very common by spending money on counsel and court fees.

The executive and the judicial systems responsible for enforcement of rights and laws are crumbling on its legs. Where there is clarity on the rights, its enforcement is poor or non-existence. The judiciary is often left to plead helplessness and put itself at the mercy of the executive to enforce its orders at least to some extent. Its refusal to comedown heavily on the executive even in contempt proceedings, for lack of enforcement adds to the instability of rule of law. Another glaring problem is that while judicial activism can possibly give relief in the short term, it is hurtful to the cause of rights and the rule of law in the long term as the other institutions are quite happy not to do anything and pass the buck to a willing judiciary. The rights jurisprudence is undermined by two further aspects. First, is the tendency of the judiciary to apply its ruling only prospectively on grounds of practical consideration and difficulties in undoing the effects of illegal aspects. The judiciary resorts to this prospective over ruling approach often. The effect of prospective over ruling is protection to the beneficiaries of illegal actions and it does not meaningfully compensate the victims of illegal actions. The beneficiaries of illegal actions and the executive are so used to prospective over ruling by the judiciary that they do not hesitate to take action even when they are aware of its illegality. Leila Seth highlights the second aspect by pointing out that many judges appear to be oblivious of the existence of rights itself and are more influenced by personal, class and societal prejudices. Justice Leila Seth gives the example of the decision by the District & Sessions Court Jaipur in the Bhanwari Devi rape case and observes as follows;

“ What is historic however is the view taken by the Sessions Judge that the accused by virtue of their age and social standing were necessarily incapable of a crime like rape. The judgment suggests that rapists are usually teenagers. This may or may not be statistically true. But extending that to mean that accused who are not teenagers cannot rape is ludicrous. If this were to be accepted all cases of rape should be dropped the moment it is established that the accused have crossed their teens. Equally astonishing is the finding in the judgment of the Sessions Judge that since the alleged rapist were middle aged, they must necessarily be responsible, a contention supported neither by statistics nor by elementary logic. The most degrading reason given for acquittal was that the accused (one of whom was a brahmin) were fairly highly placed in the caste hierarchy and that this ruled them out as possible rapist of a lower caste woman. Such caste characterization of crime, apart from being morally objectionable, betrays an entirely a historical perspective and this perspective while insidious in society at large is even more abhorrent within the judiciary “.⁹

The failure to recognize, implement and sustain the culture of rights means that the discourse in India continues to be one of the entitlements which the executive in its discretion bestows on people, raising the question of India is still a subject society. While the success of electoral democracy ensures that claims of India being a subject society remain muted, the everyday impunity of the executive makes the case for bringing these muted voices to the surface. Judicial impunity, lack of consistent reasoning, while exercising judicial discretion and judicial delay have added to the desperation of citizens, who have no one to turn to for effective enforcement of laws, contributing to the sense of lawlessness.

The rule of law thus hangs in the balance.

1. This information is available on the website of Supreme Court of India.

2. The newspaper The Hindu dated 10.04.2015.

3. The Newspaper The Hindu dated 28.04.2004.

4. Mehta, India’s Judiciary: The Promise of Uncertainty, page 151.

5. R.K.Sen, A.Das Guptha, Crime and Corruption in Indian Economy, page 209.

6. Prem Shankar v.Delhi Administration (1980) 3 SCC page 526).

7. Hussainara Khatoon v. Home Secretary, State of Bihar (AIR 1979 Supreme Court, page 1369).

8. Arun Shourie, Courts and their Judgments, page 370.

9. Leila Seth in her book Talking of Justice, page 21.

Compendium of Cases on Co-operatives, 2018 Expounded by the
High Court of Kerala

(By R.Muralidharan, Puducherry Civil Service Officer (Retd.).,
Director, Catalyst (The Training People)

The High Court of Kerala continues to exhibit its brilliance in interpreting the provisions of the Kerala Co-operative Societies Act and the rules made thereunder with classic decisions rendered by it. The noteworthy aspect during 2018 is that quite a few decisions of the learned single Judge were reversed by the Division Bench and the insight to the judgments is really notable. Of the 50 cases which are cataloged in this article, 22 decisions pertain to the employees of co-operative societies.

MEMBERSHIP

(i) The challenge before the Division Bench in M.K.Abdul Salam & Ors. v. State of Kerala & Ors.(2018 (3) KLT 507)is confined to S.2(ia), the third proviso to S.18(1) and Explanation I to S.32(1) of the Act. The above provisions were brought in by the Kerala Co-operative Societies (Amendment) Act, 2017.

It is true that only Primary Agricultural Credit Societies and Urban Co-operative Banks can be admitted as members of the District Co-operative Bank with a right to vote as per S.2(ia) of the Act. Other co-operative societies registered under the Act can only be admitted as nominal or associate members without any right to vote as per the third proviso to S.18(1) of the Act. A nominal or associate member under S.18 of the Act shall not have the right to vote under S.20(b) of the Act though funds can be lent to them by the District Co-operative Bank. Does the denial of the right to vote to other co-operative societies as nominal or associate members infringe Article 19(1)(c) of the Constitution of India? The right of a citizen to form a co-operative society has been protected under Article 19(1)(c)
by virtue of the Constitution (Ninety-seventh Amendment) Act, 2011 with effect from 15.2.2012. It is one thing to say that a citizen has a right to form a co-operative society and quite another thing to say that a member society has a right to form a central society. Firstly, a co-operative society is not a citizen who alone can have fundamental rights guaranteed under Part III of the Constitution of India and secondly, even a citizen has no fundamental right to be a member of a society. The contention that the fundamental right of co-operative societies other than Primary Agricultural Credit Societies and Urban Co-operative Banks is infringed is totally misconceived.

The Government was well within their powers to exclude co-operative societies other than Primary Agricultural Credit Societies and Urban Co-operative Banks from the management control of District Co-operative Bank. The legislative wisdom of this Act by amending Section 2(ia) and adding the third proviso to Section 18(1) of the Act cannot be tested or substituted by this Court. It is settled law that court should show undue deference to the parliamentary wisdom and exercise self-restraint while examining the vires of legislations validly enacted.

(ii) Whether the special general body meeting convened by the society in pursuance of the request made by two members, expel a member from the society was the moot question before the Division Bench inCochin City Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies & Anr.(2018 (3) KLT SN 66 (C.No.74) = 2018 (3) KLT OnLine 2074).

Section 17 of the Act stipulates that any member of a society who has acted adverse to the interests of the society, or has failed to comply with the provisions of the bye-laws, may be expelled upon a resolution of the general body passed at a special meeting convened for the purpose. Such resolution has to be supported by not less than two third of the total number of members present and voting at the meeting. In the instant case, such a resolution was passed by the general body of the society at the special general body meeting, in which, 131 members of the society were present and 130 out of them voted. 127 members voted in favour of the resolution to expel the second respondent from membership of the society. The Joint Registrar however rescinded the resolution on the ground that the special general body meeting was not validly convened for the reason that 1/5th of the total number of members of the society had not given a requisition in writing to convene such a meeting.

The stipulation in S.30 and R.36 that a special general body meeting shall be convened within one month from the date of receipt of a requisition in writing from 1/5th of the total number of members of the society cannot be interpreted to mean that a resolution seeking the expulsion of another member can be moved only by 1/5th of the total number of members of the society. R.18 on the other hand empowers any member of a society to bring a resolution for expulsion of another member. S.17 of the Act does not stipulate that a resolution seeking the expulsion of a member of the society can be moved only by 1/5th of the total number of members of the society. The requisition to convene the special general body meeting contemplated in S.30 and R.36 is for purposes other than the expulsion of a member of the society. In the case of expulsion of members, the special general body meeting has to be convened by the committee of the society after considering the explanation furnished by the member concerned. It is evident from R.18(b) that if the managing committee decides to expel a member, after considering the written representation, if any, given by him and after hearing him, if he so desires, it has to convene a special general body meeting after issuing due notice and place the matter before it for decision under S.17. The Joint Registrar as well as the learned single Judge has failed to take into account this crucial and significant aspect of the matter.

In fine, the appeal was allowed and the second respondent was given liberty to move an appeal before the first respondent who shall dispose the appeal on merits.

MANAGEMENT

(i) Rule 47 imposes a statutory duty on the committee of the society to ensure proper custody and accounting of cash and other assets of the society and the committee is answerable for any misappropriation of the same during its tenure. The committee cannot wash its hands off the liability by contending that there was a Secretary in office. This was the ruling in Rajeev Koshy v. State of Kerala(2018 (3) KLT SN 24 (C.No.32) =2018 (3) KLT OnLine 2032).

(ii) The order of appointment of an administrator to the Puthuppally Adhyapaka Urban Co-operative Bank Limited was assailed in Gopakumar K.R. & Ors. v. The Joint Registrar of Co-operative Societies (General) & Ors. (2018 (1) KLT 860). The impugned order was passed for the reason that there was no required quorum for the board of the bank.

Three points emerged for consideration in this case, viz., (i) Whether the bye-laws contemplate cessation of membership of service employees after their retirement from the service?; (ii) Whether the board has the power to nominate specialized members invoking S.28(1)(1G)?, and (iii) Whether nomination of petitioners 8 and 9 was vitiated for want of quorum in the board meeting?

The bye-laws never intended that the service employees will cease to become members on their retirement from service. In the absence of any such provisions in the bye-laws those members cannot be considered as disqualified merely for the reason that they had retired from service.

Section 28AA provides for reservation of members with banking experience or professional qualifications. Therefore, those members will have to contest through election to become members of the committee in a constituency earmarked for such reserved members. On the other hand, S.28(1)(1G) provides for nomination by co-opting two persons, who are having experience in the field of banking, management etc. If there are no members in the Urban Co-operative Bank to be elected among the reserved category under S.28AA, certainly, the board can resort to S.28(1)(1G) to co-opt two persons. If the Urban Bank Society is prevented from co-opting two persons invoking Section 28(1)(IG), in case of non-availability of members under S. 28AA, they will be left without any remedy to have experienced persons in the special field in the board of directors. The Joint Registrar has no case in the impugned order that the society had already worked out reservation under S.28AA and therefore, they cannot invoke S.28(1)(1G). In the absence of any such finding, the nomination made by the board nominating the petitioners 10 and 11 was legally correct and valid.

In the light of the findings on point Nos. (i) and (ii), point No.(iii) was answered in favour of the petitioners holding that there was sufficient quorum to nominate petitioners 8 and 9.

The Joint Registrar committed grave jurisdictional error in passing the orders, placing the issue on wrong premise of law. The management of the society was, therefore, restored with the board which was in office prior to the issuance of impugned orders. The Writ Petition was allowed.

ELECTION

(i) The sole issue that arose for consideration in Mercy George v. Kerala State Co-operative Election Commission(2018 (1) KLT 70),was as to the legality or otherwise of the order passed by the returning officer, whereby the nomination paper submitted by the petitioner to contest in the election to the managing committee of the Kalloorkkad Farmers Co-operative Bank stood rejected. After referring various decisions on the subject, the Court held that if rejection of nomination paper is patently illegal or on totally untenable grounds and there is no need to adduce elaborate oral or documentary evidence in order to substantiate the said contention, then the Court can interfere with the rejection of nomination paper, invoking writ jurisdiction, without upsetting the election calendar. In all other cases, the person aggrieved has to avail the statutory remedy available under S.69 of the Act, before the Co-operative Arbitration Court constituted under S.70A, by raising dispute within one month from the date of election.

(ii) InAbdul Salam v. Kerala State Co-operative Election Commission(2018 (1) KLT SN 15
(C.No.21) the Court clarified the import of sub-rules (3) and (4) of R.35A. Both operate on different fields. So far as sub-rule (3) is concerned, the State Election Commission is to notify the details of election to the committee of the society in two vernacular dailies. However, as per sub-rule (4) it is the duty of the electoral officer to publish the preliminary voters list in Form 34 in the notice board of the head office and branches, if any. On an appreciation of the provisions, it is categorical and clear that so far as the paper publication carried out in vernacular dailies are concerned, there is no time stipulated and the same is within the intention of notifying the committee with respect to the details of election. However, in sub-rule (4) in order to object the draft voters list, seven days time period is
to be prescribed, which is a mandatory requirement. Sub-rule (3) does not insist for publi-cation within any specified period.

(iii) The correctness of the decision in P.V.Manoharan v. Kerala State Co-operative Election Commission & Ors. (2016 (2) KLT OnLine 2508 = 2016 (1) KLJ 784) was challenged before the Division Bench in Kuttiyachan Joseph v. Manoharan(2018 (3) KLT 631).

The disqualification for being elected as members of the committee of the bank is attracted only if the appellants have been sentenced for any offence other than an offence of political character or involving moral delinquency. Such sentence should not have been reversed or offence pardoned and a period of three years should not have elapsed from the date of expiration of the sentence. The legislature has guardedly employed the term ‘sentenced’ instead of ‘convicted’ meaning thereby that only the operation of sentence incurs disqualification. This is in contra-distinction to S.8(1) of the Representation of the People Act where there has to be a conviction in addition to sentence for disqualification.

The invalidation of the act of the Returning Officer who accepted the nomination even if on doubtful grounds would certain impede the process of election and does not in any manner smoothen it. The proper remedy of the first respondent was to call in question the election after it is held by raising a dispute under S.69(2) of the Act. The impugned judgment was set aside and the Writ Petition wherein a declaration was granted that the appellants were ‘disqualified from contesting the election’ was dismissed. Thus, the Writ Appeal was allowed.

(iv) In Ajitha Kumari v. Priyadarsini Vanitha Coir Vyavasaya Co-operative Society Ltd.(2018 (3) KLT 727),the Court noted that going by the Explanation to S.69(2)(c), a dispute arising at any stage of an election shall be deemed to be a dispute arising in connection with election. Final voters list is one published by the electoral officer in exercise of his powers under R.35A(4). If that be so, any dispute in relation to final voters list published by the electoral officer is a dispute arising in connection with that election, which can be raised before the Co-operative Arbitration Court constituted under S.70A, by invoking the statutory remedy under S.69 within one month from the date of election.

DISQUALIFICATION OF COMMITTEE MEMBERS

R.44 provides for disqualification from the membership of a managing committee of a society. Obviously all the disqualifications mentioned under that head, which includes sub-clause (j), would be with respect to the disqualification relating to a member of the managing committee. The way R.44(1)(j) is drafted would make it inevitable that a member of the society would become ineligible for being elected or appointed as a member of the managing committee, if he is disqualified under any of the provisions of the bye-laws of the society. This would necessarily lead to the inescapable incident that the disqualification mentioned in clause (j) would be the disqualifications enumerated in the bye-laws for being a member of the managing committee and not for being a member of the society.

It therefore becomes perspicuous that so long as the person continues to be a member of the society without being sought to be removed by the Registrar under the provisions of R.27(2), dual membership per semay not be a reason why he can be restrained from offering his candidature or nomination to the election of the society. Since R.35A encompasses the provisions relating to conduct of elections to the committee of the society, the disqualification mentioned herein can only be axiomatically construed to be a disqualification to be a member of the committee, as held by the Division Bench in Mercy George v. Kerala State Co-operative Election Commission (2018 (2) KLT SN 1 (C.No.1) = 2018 (2) KLT OnLine 2001).

PROPERTIES AND FUNDS

Writ Appeals in Radhakrishna Kurup v. Nadakkal Service Co-operative Bank Ltd.(2018 (3) KLT 214) arose out of the common judgment in the case Radhakrishna Kurup v. Nadakkal Service Co-operative Bank Ltd. (2016 (4) KLT 82). The learned single Judge has held that S.56A of the Act was arbitrary and violative of Article 14 of the Constitution since it applies only to co-operative banks and not to commercial banks.

The object of S.56A is to persuade the co-operative banks or the banking companies to sell the non-banking asset and liquefy the same in cash for it to be available as working capital. Otherwise the non-banking assets would remain as a stumbling block paralyzing the entire banking system thereby producing results which are totally counter-productive. The motive of operation of co-operative banks is ‘service’ whereas the motive of operation of commercial banks is ‘profit’ and therefore both cannot be treated on par to test the plea of discrimination. The borrowers of the co-operative banks are member share holders having a definite say in the lending policy of the bank obviously on account of their voting power. But the borrowers of the commercial banks are only account holders with no voting power and the lending policy of the bank is governed by the regulations of the Reserve Bank of India. The co-operative banks usually cater to the credit needs of agriculturists whereas the commercial banks provide short term finance to industry, trade and commerce. The co-operative banks have comparatively less variety of services and offer lesser rate of interest whereas commercial banks have an array of services and offer slightly higher rate of interest. The co-operative bank is a separate class by itself when compared to the commercial banks and the classification is based on an intelligible differentia. The differentia which is the basis of the classification has a nexus with the object sought to be achieved which is obviously the orderly development of the co-operative sector in the State.

Article 14 of the Constitution of India comes into play only when the banks in the same class are treated differently and not when they fall in two distinct classes. In that view of the matter, the impugned judgment was set aside.

AUDIT, INQUIRY AND INSPECTION

(i) The axiomatic question before the Division Bench in Melukkara Service Co-operative Bank Ltd. v. Joint Registrar (General), District Co-operative Society(2018 (2) KLT 640), was as to the nature of the consideration that the Registrar should first commit himself before ordering an inquiry under S.65 on the ground that he is satisfied that it is necessary to do so.

Section 65(1)(a) invests the Registrar with great powers while ordering an inquiry under its mandate, to the working of the society. The words ‘on his own motion’ in sub-clause (a) are not quantified in any manner except that in the last portion of sub-clause (f), it is mandated that he shall order an inquiry only if he is satisfied that it is necessary to do so. A combined reading of these two provisions would make it ineluctable that the Registrar can order an inquiry into the working of a society on his own motion, provided he is first satisfied that it is necessary to do so.

Words ‘that it is necessary to do so’ in the last portion of S.65(1) clearly postulates that the power to be exercised by the Registrar has to be done with necessary care, caution and circumspection. It is not permissible on the part of the Registrar to order an inquiry under S.65 merely because he is competent to do so. The powers vested with him being virtually plenary in nature, the requirement of him being subjectively satisfied that it is necessary to do so is statutorily in-built. The requirement of being personally satisfied before an inquiry is ordered by the Registrar is implicit in the provision and, therefore, it is essential that before making an order under S.65, to cause an inquiry into the working of the society, it is necessary and exigent for the Registrar to be first satisfied that such an inquiry is required and essential.

(ii) The Joint Registrar was in appeal against the judgment in Akalakkkunnam Village Service Co-operative Bank Ltd., v. Joint Registrar of Co-operative Societies & Anr.,(2017 (4) KLT 628) before the Division Bench in Joint Registrar of Co-operative Societies (General) v. Akalakkkunnam Village Service Co-operative Bank Ltd.(2018 (3) KLT 849).

The second respondent who is a member of the first respondent bank filed a representation to the appellant complaining that about 1225 persons were ineligible to be members. An inquiry on the representation necessarily involved issuing individual notices to the members complained about and hearing them before an order is passed. The appellant issued notice to the first respondent to meet the expenses. The said notice was quashed by the impugned judgment on the ground that neither the Act nor the Rules support the demand.

It is true that expenses may have to be incurred for issuing notices to the members complained of since the Registrar is obliged to give them an opportunity to file objections or of being heard before passing an order. But that by itself may not be a justification to demand expenses from the member of the society or the financing bank on whose representation was the inquiry initiated by the Registrar. The learned single Judge was correct in quashing the notice issued by the Joint Registrar demanding expenses from the first respondent even before an inquiry. The Division Bench observed that the expenses incurred can be recovered from the second respondent who filed the representation if his complaint is found to be ill-founded. The second respondent can be so saddled with the liability only after the completion of the inquiry and if it is found that the representation is bereft of bona fides. The valuable time and energy of the Registrar would otherwise go waste in disposal of the frivolous representations put in by any member of the society or the financing bank. The Writ Appeal was disposed accordingly.

(iii) In Wayanad District Wholesale Consumers Stores Ltd. v. Joint Registrar of
Co-operative Societies (General) (2018 (4) KLT SN 50 (C.No.57) = 2018 (4) KLT OnLine 2057)
the Court quashed the order issued by the Joint Registrar under S.68 without mentioning the specific point or points on which the inquiry is to be made. The law laid down in Cheranellur Co-operative Society Ltd. case(1976 KLT 353) was relied on.

SURCHARGE

Whether the opportunity given to peruse the inquiry report would be sufficient compliance of ‘opportunity of being heard’ in S.68(2) before imposing surcharge came to be decided by the Division Bench in Thomas v. Secretary to Government, Co-operation, (2018 (3) KLT 244).The petitioner was unsuccessful before the learned single Judge.

Several data will be incorporated in the inquiry report which is an item of evidence in the proceedings for surcharge to substantiate the allegations levelled. The charge is that those persons caused loss or damage to the assets of the society by breach of trust or wilful negligence or mismanagement or misappropriation or destroyed the records. The inquiry report containing minute details rested on collection of several data cannot be memorized by a perusal for 2-3 hours by an untrained legal mind. The inquiry report cannot be withheld or relied on in evidence behind the back of the persons proceeded against without furnishing a copy of the same to them when sought. Fairness demands that a copy of the inquiry report is supplied when applied for so that the persons who are sought to be surcharged get an opportunity to collect evidence for rebuttal. The fact that the inquiry report is voluminous is no excuse since the copy can be furnished to the persons on terms and a mere opportunity to peruse the same is not a substitute. The ‘opportunity of being heard’ in S.68(2) of the Act takes within its fold the obligation to furnish a copy of the inquiry report when applied for. All these should precede the order in writing under S.68(2) of the Act by the Registrar requiring the persons to repay or restore the money or property or any part thereof.

It is true that a person against whom an inquiry has been ordered under S.68(1) of the Act need not be heard before passing an order to conduct an inquiry. But when once an inquiry is ordered the Registrar is duty bound to adhere to the principles of natural justice by furnishing copy of the audit, inquiry or inspection relied on to the persons concerned. In fine, the impugned judgment was set aside and the case was remitted to the Joint Registrar to furnish a copy of the report and then proceed in accordance with law.

SUPERSESSION

(i) A comparative survey between Ss.68 and 32 was made by the Division Bench in Shabin Antony v. Gireesh Kumar (2018 (1) KLT 260). The Court observed that the two provisions make it irrefragable that surcharge proceedings can be initiated only with respect of fiscal indiscipline or mismanagement causing loss to the assets of the society or if the delinquent has illegally retained any money belonging to the society or has destroyed the records with intend to cover such misfeasance. The provisions of S.32, on the other hand, does not confine itself to fiscal mismanagement or indiscipline alone, though they are also included in the criterion leading to such action and the Registrar is statutorily entitled, after following due procedure to order supersession, if he finds persistent negligence and default in performance of the duties or if any act is found proved prejudicial to the interests of the society or if the committee wilfully disobeys or fails to comply with any lawful order. It is, therefore, leculent that the powers and considerations under S.32 is of a much wider compass than that would be involved in a surcharge proceedings, even though a few of the criterion, namely those relating to fiscal management or indiscipline are common in both. In such view of the matter, no doubt, it might appear that setting aside an order under S.32 because of a subsequent order under S.68 would be incongruous.

(ii) Order suspending the board of co-operative society for a period of six months issued by the Joint Registrar (General) under S.32(1) was impugned before the Division Bench in Hameed Kutty v. Joint Registrar of Co-operative Societies (General) (2018 (3) KLT 149).
The grounds under which the Registrar can remove the managing committee in office and appoint its place one administrator or an administrative committee are explicitly spelt out in S.32. The removal of the managing committee can either be by way of suppression or suspension which in the former case is permanent and the latter case is temporary capable of reinstatement.

The word ‘or’ appearing in the third proviso of S.32(1) implies that supersession and suspension should not coalesce the same period. The supersession of the board of a society can follow the suspension if there are just grounds and not vice versaunless the superseded committee is reinstated in office. It should be noted that S.32(1) was amended empowering suspension in addition to supersession in tune with Article 243ZL of the Constitution. The decision in Hameed Kutty M.S. & Ors. v. Joint Registrar of Co-operative Societies & Ors.(2017 (1) KLT 511)was approved and the contention of the appellants that there is no power of suspension was repelled. The Writ Appeals were dismissed.

DISPUTES

(i) It is evident from a reading of the plaint in ARC that the respondent was not originally joined as a defendant. As a matter of fact, it was he, who had signed and verified the plaint in his capacity as the Secretary in-charge of the appellant society. Though the plaint was thereafter, by joining the writ petitioner and three others as additional defendants 11 to 14, the body of the plaint was not amended by raising appropriate pleadings against them. They were not put on notice regarding the nature of their involvement in the fraudulent transactions and the grounds on which liability was sought to be fastened on them. The Division Bench was in agreement with the learned single Judge that adequate opportunity was not given to the writ petitioner to meet the case against him. The amended plaint did not contain any averment as against the writ petitioner. The appeal was accordingly dismissed by the Division Bench in Kannur District Ex-servicemen Multi Purpose Co-operative
Society Ltd. v. Sivadasan(2018 (2) KLT 901).

(ii) The petitioner was a practicing lawyer. The respondent society had engaged the petitioner to file execution petition for executing awards passed in favour of the society and paid professional fees. The petitioner did not conduct the case and returned the awards to the society without even filing execution petition. The ARC was filed by the society seeking return of the amount paid as professional fee with interest was challenged in Sugatha Kumar v. Assistant Registrar of Co-operative Societies (General) (2018 (3) KLT 44).

The engagement of the petitioner as an advocate for the purpose of filing execution petition for recovery of amounts due under the loans advanced by the society would also be a matter which touches upon the business of the society. Even if the question whether the petitioner is an agent of the society is not considered, the petitioner would be a creditor of the society in the sense that where professional fees are accepted and services are not provided, the advocate would be bound to return such part of the fees as has not been earned. There was no perversity or patent illegality in the impugned orders and the Writ Petition was dismissed.

(iii) In Shibi v. Vaniyamkulam Panchayath Vanitha Sahakarana Sangham(2018 (4) KLT 444),the Division Bench held that an arbitration case will lie against the surety in respect of a loan even if he is not a member of the society in view of the explicit provision contained in S.69(1)(j) of the Act. An arbitration case should lie against the indemnifier also applying the same logic when his liability is co-extensive with the agent who is sued under S.69(1)(c) of the Act. Multitude of litigations arising out of the same cause of action has to be deprecated and the very object of S.69 is to curtain lengthy procedure.

APPEAL, REVISION AND REVIEW

(i) In Thumboor Service Co-operative Bank Ltd. v. Sobhy(2018 (1) KLT 512), it was held
that only an award passed by the Co-operative Arbitration Court under Section 70(1) is appealable to the Tribunal in terms of S.82(1)(a). Clauses (b) to (e) of S.82(1) deal with other scenarios and do not deal with a decision of the Co-operative Arbitration Court. S.70(2) deals with the interlocutory orders that may be passed by the Co-operative Arbitration Court in contradiction to the final award that may be passed by the said Arbitration Court as envisaged in S.70(1). S.82 has consciously excluded from the appealable purview, as interlocutory order passed by the Co-operative Arbitration Court as envisaged in S.70(2). The legislature has consciously included in S.82(1) only an award of the Co-operative Arbitration Court as provided in S.70(1) as appealable. The impugned orders were interlocutory orders passed by the Arbitration Court and therefore were not appealable before the Co-operative Tribunal. Therefore, the impugned judgments passed by the Kerala Co-operative Tribunal were without jurisdiction and hence ultra viresand liable to be interfered with.

(ii) Belated challenge, nearly after two years, by way of Writ Petition against the judgment of the Co-operative Tribunal need not be entertained under Ss.69 and 77, vide John Mathew v. Assistant Registrar of Co-operative Societies(2018 (3) KLT SN 18 (C.No.23) = 2018 (3) KLT OnLine 2023).

(iii) The correctness of the decision of the learned single Judge in Nedumon Service Co-operative Bank Ltd. v. Joint Registrar of Co-operative Societies & Ors.(2014 (4) KLT SN 63
(C.No.78)) was impugned by the bank by way of Writ Appeal in Nedumon Service Co-operative Bank Ltd., v. Joint Registrar of Co-operative Societies & Ors.(2018 (3) KLT 412).
The judgment was confirmed by the Division Bench for altogether different reasons.

The Joint Registrar rescinded the resolution of the managing committee deciding to enrol 485 persons as members of the bank on the basis of an inquiry conducted under S.65 by the Assistant Registrar, preceded by a show cause notice and an opportunity of personal hearing to the bank. There arose many factual disputes on the report which can be gone into only in an appeal filed to the Government under S.83(1)(j) of the Act assailing the order of the Joint Registrar. The jurisdiction under Article 226 cannot be invoked by the bank challenging the finding of fact rendered by the Joint Registrar under R.176.

The bank heavily relied on R.16(4) to contend that the persons found ineligible to be members should have been afforded a personal hearing to state their objection about the proposed action. The infraction of the above rule will certainly entitle a member to maintain a Writ Petition on the ground of violation of principles of natural justice. But none of the members had filed the Writ Petition from which the Writ Appeal arose. The Writ Appeal was eventually dismissed.

RECOVERY

When there is no power granted to the board of management to quantify the damages under the statute or the Rules, the board of management is not at liberty to quantify damages allegedly suffered by the bank, especially when S. 69 enables the bank to seek recovery of any damages from its employees by instituting appropriate proceedings. Without any power conferred under law, nobody is vested with power to quantify the damages suo motuand recover the same unilaterally. The procedure adopted by the management to recover the amount is strange and alien to rule of law, as held in Kottayam District Co-operative Bank Ltd., v. Co-operative Tribunal (2018 (1) KLT SN 32 (C.No.43).

ATTACHMENT AND SALE

When sale of mortgaged property is carried out without even fixing a fair and accurate value of that property, sale is liable to be set aside under R.8 of the Co-operative Agricultural and Rural Development Bank Rules, 1986, vide Sosamma John v. Thrissur Co-operative Agricultural & Rural Development Bank(2018 (2) KLT SN 30 (C.No.39) = 2018 (2) KLT OnLine 2039).

RIGHT TO INFORMATION ACT

When the rule mandates that every co-operative society will have to prepare and publish list of its members as on the last day of each co-operative year concerned under R.33(4), such vital information should also necessarily be conveyed by that society to the supervisory officer concerned of the Co-operative Department is the ruling in Nedungapra Service Co-operative Bank Ltd. v. Public Information Officer (2018 (3) KLT 355).

MISCELLANEOUS

(i) Writ petition was filed in Meenachil Rubber Marketing & Processing Co-operative Society Ltd., v. Choondacherry Service Co-operative Bank Ltd.(2018 (2) KLT SN 55 (C.No.66)
= 2018 (2) KLT OnLine 2066) for issuing a direction to co-operative society to repay amount covered by fixed deposit with future interest. The Division Bench held that in the absence of any violation of statutory provisions or breach of any public duty by the co-operative society, a Writ Petition would not be maintainable against the society.

(ii) The question which essentially felt for consideration before the Division Bench in Kerala State Co-operative Bank Ltd. v. Kerala Co-operative Ombudsman(2018 (2) KLT 251)
was whether Ombudsman has jurisdiction to entertain a complaint regarding variation/enhancement of the rate at which interest is payable on the amount of loan granted to a person by the bank pursuant to an agreement executed between the bank and the borrower.

A reading of Clause 5(1) of the Ombudsman Co-operative Scheme 2010, would show that Ombudsman could consider only complaints relating to deficiencies in the business or services of societies. It is also provided that such complaints shall be on the grounds mentioned in Clause 7 of the scheme. Clause 7(2)(e) provides that no complaint to the Ombudsman shall lie if the complaint is in the nature of a dispute under S.69 of the Act or in the nature of an appeal/petition under Ss.82 and 83 of the Act. It means that the Ombudsman has no jurisdiction to entertain and deal with a complaint which is in the nature of a dispute.

When the provisions of the scheme specifically provides that no complaint shall lie before Ombudsman in respect of disputes covered by S.69, submission of the bank to the jurisdiction of the Ombudsman does not give it jurisdiction to entertain and decide such a complaint. It is a case of patent lack of jurisdiction. The rate of interest is fixed as per the contract between the bank and the borrowers. It is not fixed by the Reserve Bank of India or the Registrar. The Ombudsman has no jurisdiction to decide a complaint regarding variation of interest by the bank in violation of the terms of the agreement executed by it and the borrowers.

(iii) In Shaji v. Alappuzha District Co-operative Bank Ltd.,(2018 (4) KLT 1176) direction was sought to the first respondent to consider the direction given by the second respondent Joint Registrar to allow him to clear the defaulted instalments in lump sum and also permit him to repay the regular monthly instalments. Rejecting the plea the Court held that it is well settled that a litigant who invokes the extraordinary jurisdiction under Art.226 of the Constitution must come with clean hands and clean objects. The judicial proceedings are sacrosanct and no person would be allowed to abuse the judicial process, particularly in public law remedy. In writ proceedings, the Court places implicit faith on the parties and their pleadings, as it does not indulge in any fact finding or roving enquiry of what has been asserted. Since Art.226 espouses equity jurisprudence, a litigant who has approached the Court with unclean hands, without disclosing full facts, is not entitled to any relief.

EMPLOYEES OF SOCIETIES

(i) The Apex Court has in Deepali Gundu Surwase v. Kanti Junior Adhyapak Mahavdyalaya (D.ED.) & Ors.(2013 (3) KLT Suppl.72 (SC) = (2013) 10 SCC 324) held that
with the passing of an order which has the effect of severing the employer employee relationship, the latter’s source of income gets dried up. Not only the concerned employee, but his entire family suffers grave adversities. They are deprived of the source of sustenance. The children are deprived of nutritious food and all opportunities of education and advancement in life. At times, the family has to borrow from the relatives and other acquaintance to avoid starvation. It was observed that these sufferings continue till the competent adjudicatory forum decides on the legality of the action taken by the employer. The reinstatement of such an employee, which is preceded by a finding of the competent judicial/quasi judicial body or Court that the action taken by the employer is ultra viresthe relevant statutory provisions or is in violation of the principles of natural justice, entitles the employee to claim full back wages. The Apex Court has also held that if the employer wants to deny back wages to the employee or contest his entitlement to get consequential benefits, then it is for him/her to specifically plead and prove that during the intervening period the employee was gainfully employed and was getting the same emoluments. It was held by the Division Bench in Perinthalmanna Taluk Co-operative Educational Society v. Satheeratnam (2018 (2) KLT 99) that denial of back wages to an employee, who has suffered due to an illegal act of the employer would amount to indirectly punishing the concerned employee and rewarding the employer by relieving him of the obligation to pay back wages including the emoluments.

(ii) Once the appointment was purely contractual, then by efflux of time as envisaged in the contract itself, the same came to an end and the persons holding such post can have no legal right to continue or renew the contract of service as a matter of right. The petitioner had voluntarily accepted the engagement as plant attendar on daily rated basis subject to the conditions clearly stipulated therein. Having accepted such engagement, with eyes wide open, the petitioner cannot now turn around and claim higher rights ignoring the conditions subject to which such engagements have been accepted. This is the ruling in
Santhosh v. Malabar Regional Co-operative Milk Producers Association(2018 (2) KLT SN 76 (C.No.95) = 2018 (2) KLT OnLine 2095).

(iii) Challenge was made before the Division Bench on the validity of the judgment dated 1.3.2016 in W.P.(C) 31764/2013 of the learned single Judge contending inter alia that the disciplinary action envisaged under R.198 could not have been dispensed with before the order of dismissal.

The word ‘shall’ appearing in sub-rules (2), (2A) and (2B) of R.198 implies that it is mandatory to conform to the procedure before imposing the penalty of ‘dismissal from service’ of any member of the establishment. Any exchange of notices without informing the employee in writing of the grounds on which action is proposed to be taken out or without affording him an opportunity to defend is not a substitute. Similar is the necessity to constitute a disciplinary sub-committee who of course can enquire into the charges against the employee by themselves or by engaging an external agency. All the procedure should precede ‘the order of dismissal from service’ which in the instant case was concededly not done rendering the proceeding non est in law. The Writ Appeal was allowed.

(iv) A reading of the communication would reveal that the Government has dictated to the Registrar to request the Kannadi Service Co-operative Bank to place the appellant under suspension which has been conveyed by the Assistant Registrar. The bank is bound by the orders of dictation giving little room for it to independently apply its mind about the need to place the appellant under suspension. There is no doubt on the entitlement of the bank to independently assess the materials and take a decision as to whether the appellant has to be placed under suspension or not. But the apprehension that the bank would mechanically issue orders placing the appellant under suspension on dictation by the Government cannot be said to be ill-founded. In the above circumstances, the Division Bench in Suresh v. Joint Registrar (General) (2018 (3) KLT 320) has set aside the impugned judgment of the learned single Judge and quashed the communication leaving it open to the bank to do the needful as is warranted under the circumstances.

(v) Writ Appeals in Mayadevi v. Thrissur District Co-operative Bank Ltd.
(2018 (3) KLT 330), arose out of the judgment in Omana K.S. & Anr. v. Thrissur District Co-operative Bank Ltd., & Anr., (2015 (3) KLT Online 1103 : 2015 Lab.I.C. 4268). The learned single Judge quashed the notification issued by the bank for appointment to the category of part time sweeper in the existing and future vacancies on the ground that the said notification was suffering from the vice of vagueness and hence arbitrary.

The Division Bench held that a notification can be said to be vague or arbitrary in the context of Article 14 of the Constitution only if the same is unworkable or susceptible to two interpretations at the time of its enforcement. The notification in the instant case prescribes the age requirement and qualifications as per S. 80 of the Act which cannot be said to be unclear. It stipulated that the reservation shall be followed as per the statute. Therefore, the notification was upheld and the Writ Appeals were allowed.

(vi) Whether the bank can unilaterally appropriate the amount from the retiral benefits without resorting to the adjudicatory process under the Act was the question before the Division Bench in Philip v. Registrar of Co-operative Societies(2018 (3) KLT 347). The learned single Judge did not provide relief to the petitioner in C.M.Philip v. The Registrar of Co-operative Societies & Ors.(2017 (2) KLT 1087) and hence this appeal.

The disciplinary authority could have imposed the punishment of recovery from pay of any pecuniary loss caused to the bank while the appellant was in service as a member of the establishment. No such penalty was imposed and the disciplinary authority was rest contended with imposing the penalty of reduction to a lower rank which the appellant has already suffered. A fresh disciplinary proceedings for imposing the penalty of recovery from pay (even if it includes pension) can be initiated only if the appellant is still a member of the establishment. No other disciplinary proceedings are possible after the appellant has retired from service. There is no rationale or justification in the bank retaining the retiral benefits of the appellant which are no longer a bounty but valuable right in his hands. The Writ Appeal was allowed and the impugned judgment was quashed.

(vii) The Enathu Service Co-operative Bank has challenged the judgment of the learned single Judge in Vinodkumar T.R. & Anr. v. Enathu Service Co-operative Bank
(2015 (4) KLT SN 64 (C.No.76))in Enathu Service Co-operative Bank Ltd. v. Sachu
(2018 (3) KLT 389)before the Division Bench. By impugned order, the notification issued by the bank was quashed on the ground that the method adopted by the bank resulted in deprivation of opportunity to the candidates of all sections to compete for one post.

The bank has reserved the post of data entry operator (equivalent to the post of clerk or typist) for physically handicapped persons after identifying the said post as per S.32 of the Disabilities Act. Such an identification is essential and the resolution of the bank was in order even if it deprived the able-bodied candidates from applying to the post. The criticism for reserving a ‘specific post exclusively for the physically challenged’ has been made without reference to Circular No.54/2011 and S.32 of the Disabilities Act. There is no rationale or justification in directing the physically handicapped candidates to compete with the able-bodied candidates for the same post. Manual typewriters are replaced by desktop computers and the same can be easily handled by physically handicapped candidates working as data entry operators. Resultantly, the Writ Appeal was allowed and the bank was directed to continue the recruitment process from the stage at which it was halted.

(viii) The challenge in Kerala Co-operative Employees Front v. Government of Kerala(2018 (3) KLT 484) was against Note 6 to Appendix III of the Co-operative Societies Rules by S.R.O. 9/2010. Note 6 refers to reduction of salary consequent upon reclassification of the society. Government is having power under S.80 to classify the societies according to their type and financial position. Under S.80(6) the Government is having power to fix the pay and allowance and other benefits of employees of co-operative societies. The Government also have power to prescribe the staff pattern as well as the pay and allowances applicable to such societies. Consequent upon degradation of society, the Government has no right to revise and reduce pay and allowances that was enjoyed by such employees before degradation. The pay and allowances to an employee therefore cannot be made dependent on profit of a co-operative society. It is open for the Government to fix the pay and allowances. But it cannot reduce such pay and allowances merely referring to the financial position of the society. Such an action is repugnant to the goal of a welfare State based on socialist ideals. Note 6 to Appendix III to the extent ordering reduction of salary is without power. The power to fix the pay and allowances cannot include the power to reduce salary unless such power is expressly given to the Government. The accrued rights of an employee can be only divested through the legislative power and the Government can use such power only if it is so authorized. The Writ Petitions were allowed striking down
Note 6 to Appendix III of the Rules to the extent ordering reduction of pay and allowances on reclassification of the society.

(ix) Can the Writ Petition be entertained against a co-operative society even if there is a violation of the principles of natural justice was the question posed before the Division Bench by the appellant bank in Anapanthy Service Co-operative Bank Ltd. v. Thomas
(2018 (3) KLT 592).A violation of the principles of natural justice may at best enable the delinquent to skip the statutory remedy and invoke the writ jurisdiction provided the impugned over was passed by a Government authority. In this case, the proceedings were issued by the sub-committee of a co-operative society which is not a ‘State’ coming within Article 12 of the Constitution. The learned single Judge has evaluated the evidence of the parties before the disciplinary enquiry officer to come a finding that the charges against the delinquent were not proved. It is for the Co-operative Arbitration Court or the Labour Court to do so and it is not for the writ Court to test the sufficiency of evidence in the disciplinary proceedings for the first time. As an upshot, the impugned judgment was set aside and the Writ Petition was held not maintainable. The appellant was given liberty to move the appropriate forum and thus the Writ Appeal was allowed.

(x) Can the Co-operative Arbitration Court constituted under the Kerala Co-operative Societies Act direct an employer society to retain the services of an employee whom it no longer wishes to employ was decided by the Division Bench in Ambika v. The Kottappady Service Co-operative Bank Ltd.(2018 (3) KLT 779).

The issue is now set at rest by the decision in Maharashtra State Co-operative Housing Finance Corporation Ltd. v. Prabhakar Sitaram Bhandange(2017 (2) KLT Online 2020 (SC) = (2017) 5 SCC 623), wherein it was clarified that contract of personal service is not enforceable under the common law. S.14 read with S.41(e) of the Specific Relief Act specially bars the enforcement of such a contract. It is for this reason the principle of law which is well established is that the civil Court does not have the jurisdiction to grant relief of reinstatement as giving of such relief would amount to enforcing the contract of personal service. The Registrar whose jurisdiction is co-terminus with that of the civil Court cannot specifically enforce a contract of personal service which is barred under S.14 read with S.41(e) of the Specific Relief Act. It goes without saying that reinstatement in service amounts to specifically enforcing a contract of personal service which cannot be granted by the Court. S.11A of the Industrial Disputes Act empowers the Labour Court to direct reinstatement of the workman on such terms and conditions as it things fit.

No power is given to the Court constituted under the Kerala Co-operative Societies Act to direct reinstatement in service of a delinquent as can be found in S.11A of the I.D. Act. But a delinquent who is a ‘workman’ as defined in the I.D. Act has the option to move the Labour Court even if he is an employee of the co-operative bank. The Labour/Industrial Tribunal can order reinstatement in service whereas the Court constituted under the Kerala Co-operative Societies Act can only award damages for wrongful termination of service. Affirming the judgment of the learned single Judge, the Writ Appeal stood dismissed.

(xi) The subsisting grievance of the appellant in Viswanathan v. Haripad Service Co-operative Bank Ltd.(2018 (3) KLT 815)was as regards the non disbursement of pay revision arrears since other retiral benefits like pension, gratuity, provident fund etc., have been received pursuant to the Writ Petition. The relief on that count was declined solely for the reason that the arrears was for the period from 1.7.1991 to 17.7.1998 and the claim made years after was belated. It should be borne in mind that the object behind the periodic revision of the pay scale is to ensure a decent standard of living which emanates from Art.43 of the Constitution.

The mere fact that the co-operative bank thought it fit to postpone the disbursement of the pay revision arrears in implementation does not affect the entitlement thereof. The total salary includes the pre-revised and revised pay and the admitted disbursement of a portion to the appellant during the period in question saves limitation even if there is any. The respondent was directed to disburse the pay revision arrears due to the appellant within a time frame and the impugned judgment to that extent stood modified by the Division Bench.

(xii) Divergent views on the question of passing an order of relaxation of the educational qualification of an employee for the purpose of promotion in terms of R.185(8) in anticipation of an arising vacancy by the Registrar were settled by the Division Bench in Mariyamma v. Thrissur District Co-operative Bank Ltd. (2018 (3) KLT 863).

It is to remove the anomaly and the iniquitous position has the practice of passing an order of relaxation of education qualification by the Registrar well ahead become prevalent. The expression ‘for the propose of promotion’ occurring in R.185(8) has to be understood as ‘for the object of promotion’ lest it does violence to the principles of statutory interpretation. R.185 (8) cannot be interpreted to mean that an order of relaxation of educational qualification can be passed only after a vacancy for promotion has arisen. A vacancy is asine qua nonfor promotion and an order of relaxation of educational qualification for an employee is passed by the Registrar to facilitate promotion. It was answered that the Registrar is competent to relax the qualification of an employee for the purpose of promotion in deserving cases in anticipation of an arising vacancy.

(xiii) Once wilful disobedience of a lawful authority is found, justification for disobedience shall not be a defence is the dictum of the Division Bench in Kerala Co-operative Milk Marketing Federation Ltd. v. Mathew(2018 (3) KLT 1112).If the direction given is lawful and with authority, it needs to be obeyed. Wilful disobedience to the instruction of the superior amounts to insubordination. Unless the standing orders or the staff regulations specify the nature of the work of an employee, the employer is the best person to decide as to the nature of the work to be allotted to an employee. The wisdom of the employer in the said regard cannot be challenged. The staff regulations clearly spell out that the delinquent was liable to obey the instructions given to him regarding taking over of charge. Necessarily, the enquiry officer needs to consider if the disobedience was wilful. But once wilful disobedience of a lawful authority is found, the justification for disobedience shall not be a defence on the charge. Of course, it could be a factor relevant while deciding on the punishment, if any, to be imposed.

(xiv) The order of appointment of an administrator to the Puthuppally Adhyapaka Urban Co-operative Bank Limited was assailed in Gopakumar K.R. & Ors. v. The Joint Registrar of Co-operative Societies (General) & Ors.(2018 (1) KLT 860).The impugned order was passed for the reason that there was no required quorum for the board of the bank.

Three points emerged for consideration in this case, viz., (i) Whether the bye-laws contemplate cessation of membership of service employees after their retirement from the service?; (ii) Whether the board has the power to nominate specialized members invoking S. 28(1)(1G)?, and (iii) Whether nomination of petitioners 8 and 9 was vitiated for want of quorum in the board meeting?

Section 28(1)(1G), in case of non-availability of members under S.28AA, they will be left without any remedy to have experienced persons in the special field in the board of directors. The Joint Registrar has no case in the impugned order that the society had already worked out reservation under S.28AA and therefore, they cannot invoke S.28(1)(1G). In the absence of any such finding, the nomination made by the board nominating the petitioners 10 and 11 was legally correct and valid.

In the light of the findings on point Nos. (i) and (ii), point No.(iii) was answered in favour of the petitioners holding that there was sufficient quorum to nominate petitioners 8 and 9.

(xv) The appellants who are working in the post of Senior Accountant in the respondent co-operative bank sought provisional promotion to the post of Branch Manager. It was conceded that vacancies in the quota for promotees have already been filled up and what remains to be filled up are the vacancies in the quota for direct recruitment. The appellants inAnilkumar v. Thrissur District Co-operative Bank(2018 (4) KLT 344), placed reliance on S.80(8) of the Act which provides that interim vacancies exceeding 30 days and above may ordinarily be filled up by temporary promotion. The Division Bench held that the appellants may claim temporary promotion in the quota for promotees and does not permit them to encroach into the quota for direct recruitment. The practice of provisional promotion encroaching into the quota earmarked for another stream and subsequent reversion when regular hands come has to be deprecated. The Writ Appeal was dismissed.

(xvi) The question before the Division Bench in Shajith v. Hamza(2018 (4) KLT 349),
was whether the benefit of relaxation of educational qualification could be granted with retrospective effect. It shall be competent for the committee of a society to relax the qualification of an employee for the purpose of promotion with the prior approval of the Registrar as per R.185(8) as it earlier stood. The ‘prior’ approval has been converted to a ‘post’ approval by the Registrar on the request of the society as per R.185(8) amended with effect from 3.9.2005.

The mere fact that ‘prior’ approval has been converted to a ‘post’ approval as per
R.185(8) as amended does not mean that the benefit of relaxation would inure only from the date of the order of the Registrar. The power to recommend for the relaxation is still with the managing committee of the society. There is no significant shift in the power of both the society and the Registrar even after amendment. The judgment of the learned single Judge was affirmed and the Writ Appeal was dismissed.

(xvii) Whether the rank list will cease to be valid after vacancies are filled up was clarified by the Division Bench in Pannivizha Service Co-operative Bank Ltd., v. Smitha T. Pillai(2018 (4) KLT SN 31 (C.No.34) = 2018 (4) KLT OnLine 2034). The purpose of the stipulation in R.182(4)(viii) that the vacancies shall be filled up within one month from the date of publication of the rank list is to ensure that the society or bank concerned does not delay making appointments to the notified vacancies. It is to prevent such a contingency that it is stipulated in R.182(4)(vii) that the rank list shall be published within 20 days from the date of receipt of the consolidated mark list. Though in R.182(4)(viii) it is stipulated that the vacancies shall be filled up within one month from the date of publication of the select list that by itself is not a reason to hold that thereafter the rank list ceases to be valid and therefore vacancies arising after the notification but before the rank list was published and vacancies which arise after the rank list is published and during its currency, need not be filled up. The expression used in R.182(4)(viii) is ‘all appointments to the vacancies’ and not ‘all appointments to the notified vacancies’. As the ranked list has a validity period of two years, the words ‘arising during the period of validity of the ranked list’ has to be read into R.182(4)(viii) as otherwise the stipulation in clause (vii) would be rendered illusory and meaningless.

(xviii) When reservation is given to a particular category of persons, it is necessary that the applicant satisfies or falls within that eligibility criteria even as on the date of appointment. The post being reserved for the employee of a member society, if as on the date of appointment, he ceases to be so, he gets denuded of the eligibility for appointment under R.187. The Division Bench inIndu v. State of Kerala (2018 (4) KLT SN 33 (C.No.36)
= 2018 (4) KLT OnLine 2036) held that law is settled that once selection process has commenced, there cannot be a subsequent tinkering with the eligibility criteria.

(xix) In view of law laid down by the Full Bench in Chandrasekharan Nair’scase (2017 (4) KLT 276) and also the judgment of the Division Bench in W.A.No.524/2018, the entitlement of an employee of a co-operative society, which is covered by the provisions under the Payment of Gratuity Act, to receive better terms of gratuity arises only when such an employee is covered by better terms of gratuity under S.4(4) of the said Act. In the instant case, at the time of retirement of the petitioner, payment of gratuity of the employees of the second respondent bank was covered by the policy issued by LIC with a ceiling of `3,50,000. In such circumstances, in terms of master policy, the entitlement of the petitioner for gratuity was only ` 3,50,000 together with interest for delayed payment. The claim made by the petitioner for payment of gratuity in excess of statutory limit under S.4(3) of the Payment of Gratuity Act was repelled by the Court in Kuttykrishnan Nair v. Joint Registrar (General)(2018 (4) KLT SN 44 (C.No.49) = 2018 (4) KLT OnLine 2049).

(xx) It should be borne in mind that the disciplinary sub-committee was not bound to ipso factoaccept the enquiry report and was also at liberty to discard the same for cogent and justifiable reasons. A finding of the enquiry officer which was not rested on evidence or a finding entered into on the basis of a perverse appreciation of the material on record can be discarded. But this privilege is lost when the same person functions as a witness of the employer society and also as disciplinary sub-committee constituted to probe into the charges against the employee appellant. The Division Bench in Joseph v. Idukki District Taxi Drivers Co-operative Society Ltd. (2018 (4) KLT SN 53 (C.No.61) = 2018 (4) KLT OnLine 2061) found that when one has functioned in both the capacities rolled into one, it is sufficient to hold that the punishment imposed by the disciplinary sub-committee after the culmination of the disciplinary proceedings was biased.

(xxi) In case of societies to which the Payment of Gratuity Act is not applicable, since there is no provision in the Co-operative Societies Act or Rules akin to S.4(5) of the Gratuity Act, the maximum amount payable cannot in view of the first and second provisos, exceed 15 months pay as stipulated in first proviso even if any special scheme has been opted by the society for payment of gratuity. If the Payment of Gratuity Act is applicable, in view of S.4(5) of the said Act, the employee shall be entitled to the entire amount due under the special terms of gratuity irrespective of any restriction regarding quantum and in cases of societies not covered by the Central Act, the restriction under the first proviso applies irrespective of the availability of any scheme. This view was held by the Division Bench in Malappuram District Co-operative Bank v. Janardhanan(2018 (4) KLT SN 58 (C.No.66) =
2018 (4) KLT OnLine 2066).

(xxii) The common issue raised inPrasannakumari v. Pathanamthitta District Co-operative Bank Ltd. (2018 (4) KLT 1311) was the entitlement of the employees of various District Co-operative Banks in the State for provisional promotion to the post of branch manager against vacancies earmarked for direct recruitment, which are lying vacant in the absence of candidates advised by Kerala Public Service Commission. Dismissing the batch of Writ Petitions without prejudice to the right of the petitioner to work out his remedy before the Arbitration Court under S.69 of the Act the Court observed that the provisions under Ss.69 and 70 make it abundantly clear that an effective statutory forum has been created under the Act for adjudication of disputes of the employees of a co-operative bank in connection with their employment, including promotion and inter seseniority.

The district co-operative banks cannot be characterized as a ‘State’ falling under Art.12 of the Constitution and therefore, the petitioners cannot seek a writ of mandamus commanding the respective district co-operative banks and its administrators to provisionally promote them to the post of branch managers. If the institution has a separate existence of its own without any reference to the statute concerned but is merely governed by the statutory provisions, it cannot be said to be a statutory body.

The Court observed further that the committee cannot on its own appoint any person who does not have the requisite qualification under R.186. If unqualified person is appointed, the Registrar who has power of supervision in the working of the society can interfere and correct the same.

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