[Kerala Co-operative Societies Act] Mere Endorsement Of Complaint By Minister Doesn't Eliminate Registrar's Discretion To Not Order Inspection: High Court

The Kerala High Court recently held that merely because a complaint had been filed before the Minister of Co-operation alleging misappropriation of funds and maladministration by the Managing Committee members of the Primary Agricultural Co-operative Society, which was then routed to the Joint Registrar through the Registrar of Co-operative Societies, who thus ordered inspection, it could not be said that the latter had acted under dictation of the Minister. 

Justice V.G. Arun, while dismissing a petition alleging that the Joint Registrar had acted under dictation, observed that, 

"...the Minister has only made an endorsement, asking the Registrar to look into the matter and the Registrar forwarded the complaint to the Joint Registrar for taking appropriate action. As such, there is no element of dictation in the endorsement made by the Minister. Similarly, merely by reason of the Registrar having forwarded the complaint with a direction to do the needful, the discretion vested with the Joint Registrar under Section 66 of the Act is not taken away". 

The factual matrix of the case reveals that a former Managing Committee Member of the Primary Agricultural Co-operative Society in Thrissur, had lodged complaints before the Registrar of Co-operative Societies and the Minister for Co-operation, alleging misappropriation of funds and maladministration by the present Managing Committee members. Subsequently, the Assistant Registrar, Chalakudy pointed out certain defects in the functioning of the Society. The Registrar of Co-operative Societies then ordered an inspection under Section 66 of the Kerala Co-operative Societies Act, 1969, after referring to the report by the Assistant Registrar. 

It is the petitioner's allegation that the order under Section 66 of the Act, 1969 was issued at the instance of the Registrar of Co-operative Societies, who, in turn, had acted on the dictate of the Minister for Co-operation. He pointed out that an endorsement was made by the said Minister asking the Registrar to look into the matter. He therefore filed the present writ petition seeking the order to be quashed on the finding that the same had been issued under dictation. 

It was contended by Senior Advocate George Poonthottam and Advocate Nisha George on behalf of the petitioner that the impugned order was ex facie illegal as it had been issued under dictation. It was contended that as per the Act, the Government and the Co-operative Department has minimal role and if a Section 65 inquiry or a Section 66 inspection is to be ordered, that can only be done on the basis of the satisfaction arrived at by the Registrar, based on the available materials. The counsels argued that in this case, an inspection under Section 66 was ordered merely on the the dictate of the Minister for Co-operation. 

On the other hand, it was argued by Special Government Pleader (Co-operation) P.P. Thajudeen that merely because a complaint filed before the Co-operation Minister had been forwarded to the Registrar, who in turn had sent it to the Joint Registrar to do the needful, it could not be termed as an order under dictation. It was argued that the direction to conduct inspection under Section 66 was ordered by the Joint Registrar based on the preliminary report filed by the Assistant Registrar on being convinced about the need for conducting the same.

The Court in this case noted the meaning of the term 'dictate' and discerned that in the instant case, the Joint Registrar had ordered inspection based on the findings in the report of the Assistant Registrar.

"The Joint Registrar having thus ordered inspection under Section 66, based on his own satisfaction, the mere fact that the complaint was filed before the Minister for Co-operation and routed to the Joint Registrar through the Registrar of Co-operative Societies, are not sufficient to hold that the Joint Registrar had acted under dictation", it ruled. 

The Court further relied on the decision in Sadasivan K.G. v. Joint Registrar & Ors. (2008) wherein it was held that the Registrar is empowered to initiate action under Section 66 based on the complaint filed by a member of the Society. 

The writ petition was dismissed on these grounds. 

Government Pleader Amminikutty K. also appeared in this case. 

Case Title: The President, Vennoor Services Cooperative Bank v. State of Kerala & Ors. 

Citation: 2023 LiveLaw (Ker) 55

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