S. Siri Jagan, J.
1. The petitioner in this writ petition is the present managing committee of the Vallappuzha Service Co-operative Bank Ltd., a co-operative Society registered under the Kerala Co-operative Societies Act, 1969, (hereinafter referred to as 'the Act' for short) represented by its President Sri. P.K. Koya. As originally constituted, the challenge in the writ petition was against Ext PI show cause notice issued under Section 32(1) of the Act, directing the committee to show cause why the committee should not be superseded under that Section for the 12 irregularities detailed therein. By interim order dated 8-5-2007, this Court directed mat the implementation of any order pursuant to Ext. P1 shall be kept in abeyance for three weeks. Subsequently, after several extensions of the said order, the same was extended until further orders on 13-1-2007. Thereafter, ExtP5 order dated 6-12-2007 was passed by the 1st respondent, superseding the Society and appointing an administrator for the Society. By Ext. P10 intimation dated 20-12-2007,. the administrator appointed by Ext. P5. informed the Secretary of the Society that he has taken charge on 29-12-2007. The petitioner has subsequently got the writ petition amended to include a challenge against Ext P5 order also. By interim order dated 1-1-2008, this Court stayed Exts. P5 and P10 until further orders.
2. The present committee was elected on 28-1-2006 and they took charge on 30.1.2006. The committee of the Society consists of 11 members. Out of the 11 members elected on 28-1-2006, 7 were new members who were not members of any of the previous committees. On the basis of a complaint received from 4 members of the Society, the 1st respondent ordered an inspection into the affaire (of the Society under Section 66 of the Act. by Ext. P3 order dated 30-9-2006. Pursuant thereto, the Unit Inspector of the Office of the Asst. Registrar (G), Ottappalam submitted Ext. Rl(f) report dated 14-3-2007, wherein the Unit Inspector reported that his inspection revealed the irregularities detailed in the report Based on that report, the 1st respondent-Joint Registrar of Cooperative Societies (G), Palakkad issued Ext.P1 show cause notice, to which the petitioner submitted Ext. P2 reply stating that the committee has not committed any of the irregularities mentioned Ext. P1. and therefore further proceedings pursuant to Ext. PI may be dropped. Anticipating supersession despite the reply and alleging that Ext. PI itself is lacking in the essential requirements of Section 32, the petitioner filed this writ petition and as stated earlier, after Ext. P5 order was passed confirming Ext. P1, the writ petition was got amended as per which the petitioner seeks the following reliefs:
(i) Issue a writ in the nature of certiorari calling for the records leading to Ext PI and to quash the same.
(ii) Issue a writ declaring that the notice issued as per Ext. PI and the alligations, contained therein are oat grounds for the invoking of the power . under Section 32 of the KCS Act as against the committee now 'in office and therefore the proceedings are vitiated,
(iii) Issue a writ declaring that Ext PI is in violation of the essential requirements mandated under Section 32(1) of the KCSW Act and therefore the same is bad.
(iv) Issue a writ of certiorari calling for the records leading to Ext.P5 and to quash the same,
(v) Issue a writ declaring that Ext P5 order has been issued based on irrelevant consideration and taking into account factors which are beyond the scope of Section 32 of the KCS Act and therefore based in the eye of law.
3. The petitioner challenges the proceedings evidenced by Exts.P1 and P5 on the main ground that out of the 12 allegations in Ext. PI, 10 are in respect of actions of the previous committee, of which only 4 are members of the present committee and for the action of the previous committee, no proceedings for supersession can be initiated against the present committee. As far as the allegations against the actions of the present committee are concerned, the petitioner would contend either that they have not committed the same or that they are not irregularities and the same were taken in the best financial interests of the Society. The second contention is that an action under Section 32 should be invoked only as a last resort, that too only if the committee commits persistent defaults or is persistently negligent in the performance of its duties and that the findings in Ext. P5 do not contain the essential ingredients for an action under Section 32. It is further contended that the impugned action is an abuse of prower and mala fide, insofar as the same has been initiated on account of the change of political climate in the State, resulting from a new political alliance opposed to the members of the committee coming into power in the State, on whose directions the inspector and the 1st respondent have embarked on a pre-determined action for unseating the committee from power in the Society on some pretext or other.
4. Two members of the Society have got themselves impleaded as respondents 2 and 3 to support the impugned action of the 1st respondent.
5. The 1st respondent has filed counter affidavits to the writ petition before and after amendment, supporting the impugned action. According to the 1st respondent the' action has been taken on finding the committee guilty of very serious irregularities and the allegations of political interference and mala fides are without any basis. It is contended on behalf of all the respondents that the requirement that the default or negligence should be persistent is applicable only to Sub-section (a) of Section 32(1) and in respect of the actions referred to in Sub-sections (b) to (d), one single instance would suffice. According to them, the findings in Ext. P5 are referable to Sub-sections (b) to (d) and the allegations in respect thereof are proved by adequate materials on record. The counsel for the 1st respondent elaborates further that prior to amendment of Section 32 in 2000, Sub-section (a) alone was there in the statute book, to which alone the requirement of persistent default or negligence applies and while adding Sub-sections (b) to (d) the legislature consciously did not add such requirement and therefore for a single instance of the action of the committee referable to those Sub-sections, action under Section 32 is maintainable.
6. I have considered the contentions of both sides.
7. Since elaborate arguments were advanced on the scope of Section 32(1) before and after amendment. I shall extract the Section as obtaining before and after amendment. Before amendment. Section 32(1) read thus:
(1) If the Registrar is satisfied that the committee of any society persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the rules or bye-laws or commits any act which is prejudicial to the interest of the society or wilfully disobeys or wilfully fails to comply with any lawful order or direction issued under this Act or the rules, the Registrar may, after giving the committee an opportunity to state its objections, if any, by order in writing remove the committee and:
(a) appoint a new committee consisting of not more than three members of the society in its place; or
(b) appoint one or more administrator or administrators who need not be member or members of the society.
to manage the affairs of the society for a period not exceeding one year as may be specified in the order, which period may, at the discretion of the Registrar, be extended from time to time, so however that the aggregate period does not exceed two years.
After amendment, the same reads now thus:
32. Supersession of Committee:- (1) If the Registrar, after an inquiry by himself or through his subordinates or on a report of the financing bank, or the Vigilance and Anticorruption Bureau of the Government or the Vigilance officer or otherwise is satisfied that the committee of any society,:
(a) persistently makes default or is negligent in the performance of the duties, imposed on it by this Act or the rules or bye laws or does anything which is prejudicial to the interests of the society; or
(b) wilfully disobeys or fails to comply with any lawful order or direction issued under this Act or the 'rules; or
(c) makes any payment contrary to this Act or the rules or the bye-laws or causes, any loss or damage to the assets of the society by breach of trust of wilful negligence; or
(d) misappropriates or destroys or tampers with the records or causes of destcuction of records to covet up any misconduct or malpractice,
he may. after giving the committee an opportunity to state its objections, if any, by order in writing, remove the committee and appoint a new committee consisting of not more than three members of the society in its place or, appoint not more than three administrators, who need not be members of the society, to manage the affairs of the society for a period not exceeding six months, as may be specified in the order, which period may at the discretion of the Registrar, be extended from time to time, so however that the aggregate period does not exceed one year.
Prior to the amendment in 2000, Section 32(1) contained only the provisions contained in Sub-sections (a) and (b) of the present Section, but roiled into the same sub section. In Rajagopalan Nair v. State of Kerala 1995 (2) KLT 184, a learned Judge of this Court held that the words persistent negligent 'wilfull, and lawful occurring in the Section are the key words to guide the normal understanding of the satisfaction that is required of the Registrar for an action for superseding the committee. Another learned Single Judge of this Court has, in Krishnan v. Joint Registrar 1997 (1) KLT S.N. 16 Case No. 20), held that the relevant ingredients for satisfaction of the Registrar under Section 32 are persistent negligence in the performance of the duties imposed by the Act or Rules or bye-laws, acting against the interests of the Society and wilful disobeying and wilfully failing to comply with the orders and directions issued under the Act or Rules. But, those decisions were rendered construing the Section as it obtained prior to the amendment in 2000. After amendment also, a learned Judge of this Court had in Ashok Kumar v. State of Kerala 2003 (3) KLT 86 (Case No. 114) held that it is not negligence alone which authorises interference under Section 32(1)e but the same should be persistent, deliberate and also at times fit to be characterized as culpable. Then again that related only to negligence and not to the other ingredients of Section 32(1).
8. As far as Sub-section (b) is concerned, the action is qualified by the word wilfully Therefore, although it can be held that such action need not be persistent; the same should be wilful, no doubt.
9. As far as Sub-sections (c) and (d) are concerned, the same are also not qualified by the word persistent. Sub-section (c) is qualified by the words 'by breach of trust or wilful negligence'. Misappropriation or destruction or tampering with records or causing destruction of records to cover up any misconduct or malpractice mentioned in Sub-section (d) for obvious reasons, are not qualified by any such words, since such actions are per se culpable and only one single instance would be so disastrous to the Society that the Registrar would certainly be justified in taking action for that single instance itself. Therefore, I am of opinion that the acts mentioned in Sub-sections (c) and (d) being by the very nature of those acts, such that a single instance would be extremely prejudicial to the interests of the Society, the Registrar can invoke Section 32 even for a single instance.
10. The next question that arises for consideration on the facts of this case is as to whether for the action of the previous committee, even if some of the members of the present committee were also members of the present committee. Section 32 can be invoked. That question is no more res integra. Since that issue has been settled by two Division Bench decisions of this Court. In Sivadasan Nair v. Registrar of Co-operative Societies 1997 (2) KLT 710, a Division Bench of this Court held in paragraphs 13 and 19 thus:
13. It can be seen from Ext.P2 notice as well as ExtP4 order of the Registrar that none of the conditions mentioned in Section 32 of the Act was relied upon to supersede or remove the present Committee in office. What has been done by the Registrar is that 11 members out of the present Board of Directors were removed by him and then the Registrar removed the Committee on the ground that the remaining members cannot form sufficient quorum for the Managing Committee. Thus the Registrar had exercised his power under Section 32(1) of the Act to remove 11 members from the Managing Committee of the Bank, and thereafter, the entire committee was, superseded. Therefore, the question is. whether the Registrar has got power to remove the individual members under Section 32 of the Act The heading of the Section itself is supersession of Committee. Further the body of the Section says that the Registrar may be order in writing remove the committee & appoint a new committee or an arbitrator to manage the affairs of the Society, Sub-section (3) of Section 32 of the Act says that not withstanding anything contained in Sub-section (1) or Sub-section (2) it shall not be necessary to give an opportunity to the committee to state its objections and to consult the Union and financing banks, in cases where the Registrar is of the opinion that it is not reasonably practicable to do so. Thus, a plain reading of Section 32 of the Act shows the power is given to the Registrar under Section 32 to remove the entire body of Committee as a whole.
XX XX XX
19. The second stage of the enquiry did not commence so far. The effect of Ext.P4 order is that the present Managing Committee is superseded for the faults of the previous Managing Committee The power under Section 32 of the Act can be invoked only if the existing Managing Committee is guilty. It may be that many of the members of the previous Managing Committee could have come back having been reelected and would be continuing as members of the existing Managing Committee. As already stated, what is to be adjudged is whether the existing committee is guilty of the conditions mentioned in Section 32 of the Act and not whether some individual members of the Committee, were guilty of any act of corruption while they were members of the previous Committee.
Again, by judgment dated 6-8-2004 in W.A. No. 1363 of 2004 (KV Mohanan v. State of Kerala and Ors.), another Division Bench of this Court has held thus in paragraph 4:
4. From a perusal of ExtP1 notice and ExtP3 order and the averments in the writ petition and the counter affidavit it is abundantly clear that the alleged irregularities and defaults were committed by the Board of Directors which was in office from 27-6-1998 to 17-5-2003. The present Board of Directors took charge only on 18.5.2003. Therefore the only question to be considered is whether the present Board of Directors can be removed under Section 32 of the Kerala Co-operative Societies Act for the irregularities and defaults alleged to have been committed by the previous Board of Directors. Section 32 of the Kerala Co-operative Societies Act can be invoked only against a committee which has committed the irregularities or defaults. Removal of a committee for the defaults and irregularities of a previous committee is not contemplated by Section 32. It may be pointed out that under Rule 44(1)(k) of the Kerala Co-operative Societies Rules, no member of the society shall be eligible for being elected or appointed as a member of the committee of the society under Section 28 if he was a member of the committee which has been superseded and a period of one year has not elapsed from the date of supersession. Thus removal of the committee under Section 32 casts a stigma and imposes a disqualification on the members of the committee and the removal visits such members with serious consequences. Therefore we are of the view that the committee of a Co-operative Society cannot be superseded under Section 32 of the Kerala Co-operative Societies Act for the defaults and irregularities alleged to have been committed by a previous committee In this view of the matter Exts.P1 and P3 are liable to be quashed.
In view of these decisions, it is settled law that proceedings under Section 32 can be invoked only for actions of the present committee as a whole, who is sought to be proceeded against under the Section even if some of the members of the previous committee which is guilty of the action are also members of the present committee and not for actions of the previous committees.
11. Perhaps, being aware of the above legal position; the 1st respondent has, in his counter affidavits, sought to justify his action only on the basis of the actions alleged against the present committee. Respondents 2 and 3 also advanced arguments to Justify Ext P5 only on that basis.
12. Supersession of a democratically elected committee is a very drastic and extreme step. It is not necessary to cite any judicial precedents to hold that action under Section 32 cannot therefore be taken lightly for mundane violations. Only if the findings against the committee are such that the continuance of the committee would be extremely prejudicial to the interests of the Society, the exceptional and rare action under Section 32 shall be taken. Findings on the culpability of the committee on their improper action should inform the action of the Registrar while initiating proceedings under Section 32. In other words, the mere finding that the committee has done the acts alleged alone is not sufficient; the same should be supported by a further finding that they did the same with a culpable mind, failing which the action of the Registrar would be improper.
13. I shall examine the validity of Ext. P5 in the light of the above legal position. In Ext P5 the findings of irregularities attributable to the present committee out of the 12 charges are only the following, the others being clearly attributable to the previous committee:
(a) A jeep purchased by the Bank on 24-10-2002 for Rs. 3,68,850/- was sold by the present committee on 25-07-2006 for Rs. 2,31,676/-. which was without a performance certificate of a mechanical engineer and violating the instructions in Circular No. 55/03 dated 3-10-2003 of the Registrar.
(b) The vehicle belonging to the Bank was used for going to Mannarghat on 20-07-2006 as per trip sheet no 834, to Thrissur on 13-07-2006 as per trip sheet No. 829 and to Mannarghat, Perinthalmanna and Malappuram on 18-07-2006, without specifying the purpose in the log book sheet.
(c) The minutes book of the committee was tampered with by fraudulently adding the words also decided to give the gold coin of 8 grams given by the Company as gift to the lady director Smt. Vilasini teacher, in resolution No. 43 of the committee meeting held on 26-10-2002., to the word 'approved' which alone was there in the original minutes.
(d) Although the place Kuruvattoor is excluded from the area of operation of the Society, many persons of that locality have been given membership in the Society without ascertaining whether they are members of the Kayiliyad Service Co-operative Bank and one Alavi, of Kuruvattoor member No. 13483, was given a loan of Rs. 16,000/- on 1-3-2005. Although as per bye-law No. 55(2)(b) of the bye-laws of the Bank, for marriage, maintenance of house and seeking employment abroad, the maximum loan which can be sanctioned is Rs. 1 lakh, 11 loans detailed in Ext. P5 order were sanctioned in excess of the prescribed limit.
(e) An amount of Rs. 84,447/- due from the former President of the Society has been transferred to suspense account, without recovering the same.
(f) Two employees of the Bank namely, the former Secretary Sri, P. Mohammed, and the Manager of the Marayamangalam Branch of the Bank Sri. T.P. Unnikrishnan were allowed to be kept under suspension beyond one year in violation of Rule 198(6) of the Kerala Co-operative Societies Rules, 1969.
14. Since, out of the above charges, charge (c) narrated above is the most serious one a decision regarding the sustainability of which against the petitioner may even obviate the necessity to consider the sustainability of the other charges. I shall consider the same first.
15. The details of the charge as given in Ext. PI show cause notice roughly translated into English are as follows:
When the Bank purchased a vehicle, the Company from which, the vehkila was purchased presented a gift off a gold coin weighing 8 grams. Although records have been kept in the Bank to the effect that the President of the Bank Sri. P.K. Koya had taken it on 29-11-2002, in the resolution of the committee meeting held on 26-12-2002, to the word 'approved' originally included in the minutes, it has been added by writing later that 'also decided to give the gold coin of 8 grams given by the Company as gift, to the lady director Smt. Vilasini Teacher Adding by writing later in the minutes of the resolution of the committee that as per resolution dated 16-10-2002, the 8 grams' gold coin was decided to be given to another director, is clear evidence to show that the Bank records have been fraudulently fabricated. As to what should be done with the said gold coin was not part of the agenda for the meeting. Three committee members who took part in the meeting has stated that in that meeting no such resolution was taken. The receipt of the gold coin was not included in the stock register. By tampering with the minutes book of the bank, fraudulently record has been created by giving gold coin to teacher In the minutes of 26-30-2002, there is marked difference ink used for adding the same by writing later. The inspecting officer has reported that it is clear that the same has been added in the minutes between 30-9-2006 and 28-2-2007. When as per the report of charge transfer between the Secretary and the Assistant Secretary on 27-01-2003 it is clear that the gold coin is with the President, it is dubious as to how the lady director received the same on 26-10-2002, The gold coin received when buying the vehicle is the asset of the bank and that should be brought in the accounts of the Bank. Because of failure to do so giving it to a director and tampering with the records for the same, it is found that very serious misconduct has been committed.
16. This is answered by the petitioner in Ext P2 reply, which roughly translated into English would read thus:
The gold coin scandal by misinterpreting the resolutions of the managing committee is another allegation designed to draw us to surcharge proceedings. When Jeep No. KL 9L/1386 was purchased from the TVS agencies, Palakkad, a gold coin of 8 grams was promised as gift That cannot be linked to the. price of the jeep. In the managing committee meeting held on 26-10-2002, when the price of the jeep and other expenses were ratified, the meeting had decided to give the present to be received as gift to Vilasini teacher The receipt written by Vilasini teacher in her own handwriting for receipt of the gold coin on 23-12-2002 is kept in the Bank. It is not stated in the notice that it has been checked with Vilasini teacher for ascertaining whether the same is true. The allegation that it has been added in the minutes by writing later is a foisted allegation and cannot be justified. It is seen that a true copy of the said minutes had been given by the Bank as per the request of Smt. Vilasini teacher on 19-3-2004, At the time of inspection, the said certified copy bad been shown to the inspecting officer by the Secretary-in-charge Sri Ramanunni and senior clerk of the H.O., Sri. Asharaf Ali, which was verified by him and he was satisfied about the same. Formerly and now also, there is no procedure of recording by number in the agenda all things carried out by the managing committee of the Bank. The normal procedure followed is that things connected with one subject are included in the agenda relating to that subject and decisions taken. No director bad recorded any objections in respect of the decisions of the resolution taken by the Managing Committee with Sri. P.K. Koya as the President from 2002. It is submitted that the complaint of 3 persons who though members of the Managing Committee then, for political reasons fell apart and lost in the election held to the Managing Committee on 28-1-2006 contesting against the panel beaded by Sri. P.K. Koya, has been prepared for making a sustainable charge deliberately, by the inspecting officer. The document included in the charge transfer list given to the Assistant Secretary Sri K. Ramachandran by Sri P. Mohammed, the Secretary suspended on 27-01-2003, is one fabricated by him. It is dubious that the inspecting officer has accepted the statement of only the former Secretary P. Mohammed who has been suspended for charges relating to fabricating documents also to show that four members of the Managing Committee had not attended four meetings, for disqualifying then, during the Managing Committee of the period 1999-2004.
17. This is dealt with by the 1st respondent in Ext. P5 order thus:
(Translation by the Court)
I am satisfied that as per the above said second charge, although in the charge handover memo, it is shown that a jeep registered as No. KL9L 1386 has been purchased on 24-10-2002 from the establishment named T.V. Sundaram Iyangar Sons for the Vallapuzha Service Cooperative Bank, that the Bank Secretary had accepted a gold coin weighing 8 grams from that establishment as gift, and that this said gold coin was taken by Sri. P.K. Koya, the President of the Bank on 29-11-2002 by adding to the 43rd resolution of the bank of the Managing Committee meeting of the bank held on 26-10-2002 that decided to give the gold coin of 8 grams given by the Company as gift to the lady director Smt. Vilasini teacher, document has been fabricated in the minutes book, which is the most important record of the Bank.
The inspecting officer, as per Section 66, has submitted a report that difference in ink used for adding later by writing later in the minutes book of the Bank dated 26-10-2002 is clear and that the adding by writing has been done between 30-9-2006 and 28-2-2007 by the present Managing Committee of the Bank. For the following reasons, it is clear that it has been fraudulently added to the Managing Committee Resolution dated 28-10-2002, by writing later by the present committee:
(1) When the gold coin was received in the Bank on 28-31-2002-, it is false and unbelievable that a decision regarding that had been taken on 26-12-2002.
(2) In the agenda for the meeting of the Managing Committee on 26-10-2002, there is no agenda relating to the gold coin.
(3) Out of the ten managing committee members, who participated in the meeting held on 26-10-2002, three members namely Sri. C. Vijayakumar, Sri. A. Moideenkutty, and Sri. M. Moideenkutty have given a written statement that in the meeting held on 26-10-2002 no decision relating to the gold coin has been taken.
(4) The Bank President has produced only a true a true copy of the resolution No. 43 dated 26-10-2002 in which, the decision relating to the gold coin has been taken. The original minutes or the photocopy of the minutes has not been produced.
(5) A receipt has been produced to the effect that the gold coin received in the Bank on 28-11-2002 was received by Smt. Vilasini Teacher only on 23-12-2002. If that be so, no clear evidence has been produced to show as to in whose possession the gold coin was, during the interim period.
It is provided in Sub-section (1)(d) of Section 32 of the Kerala Co-operative Society Act 1969 (Act 21 of 1969) that the managing committee which tampers with the records to cover up any misappropriation, irregularities and other misconducts, can be superseded. The present managing committee has tampered with the minutes book, which is the most important record of the bank therefore this office is fully satisfied that the managing committee is liable to be suspended.
18. From the above, it is abundantly clear that, out of the above, the only charge for which the present managing committee has to answer, is the charge regarding tampering with the minutes books As far as the allegations regarding the gold coin itself is concerned, the same has to be answered by the previous committee. As per the direction of this Court, the original minutes book was produced in Court, On perusing the same, this Court could not find any noticeable difference in the ink used for the two parts of the resolution, first consisting of one word and the other one sentence, except the initial extra flow of the ink usually noticed at the start when a fountain pen is used for writing. Both writings are in the same handwriting using green ink In fact, throughout in the minutes book for recording the agenda, blue ink is used and for recording resolutions green ink is used. Along with Ext. P2 explanation, the petitioner has produced a photo copy of a certified copy of the very same resolution issued during the time when the present committee was not in charge. It is seen signed by Sri. K. Abdullakkutty President, Sri. K. Ramachandrari, Secretary and a Director (name not decipherable). The Secretary has also put the date below his signature as 19-3-04. The same contains both the decisions of the committee regarding approval of the purchase of the vehicle as well as the decision to give the gold coin to Smt. Vilasini teacher. The genuineness of this document is not even disputed by any of the respondents before me, All what is stated in Ext. P5 by the 1st respondent is that only a true copy of the resolution is produced and the original or a photocopy is not produced. When the purpose of producing the certified copy issued on 19-3-2004, is to show that the sentence alleged to have been added by the present committee between 30-3-20Q6 and 28-2-2007 was present in the minutes book on 19-3-2004, one fails to understand how the same can be discredited by stating that the original minutes book or a photocopy of the same has not been produced. Further, nothing prevented the 1st respondent from summoning the original minutes book, if he wanted to see the same. In the above circumstances, I am fully satisfied that the petitioner has fully succeeded in proving that the charge of tampering with the minutes book is false and is a fabricated charge.
19. In Ext.Rl(f) the inspecting officer has stated that the managing committee headed by Sri. P.K. Koya has added now what was not there., when he inspected the minutes book earlier. He has also stated that there is difference in the ink used for writing the two parts of the resolution. Both these findings are totally unsustainable in view of my above finding. Therefore, it is clear that the inspecting officer's intentions were not bona fide. Clearly, he had approached the issue with a prejudiced mind after taking a decision to return affinding of guilt. To that end he has made a false statement in his report that when he inspected the minutes book the first time, the second sentence was not there. Ext. P5 order was passed by the respondent relying on Ext. Rl(f) report. Ext R1(f) having been prepared by a mind prejudiced against the petitioner, without any reason, no part of his report can be relied upon for the purpose of finding the petitioner guilty of any irregularity whatsoever, since the entire report is therefore tainted. The fact that even after the certified copy dated 19-3-2004 was brought to the attention of the 1st respondent by the petitioner in Ext. P2 reply, without disputing the genuineness of the same, he was prepared to hold the petitioner guilty on the totally perverse reason that the original or a photocopy of the minutes book had not been produced, shows that he also approached the issue with a prejudiced mind, with the predetermined intention of holding the petitioner guilty of the charge against them, in which he sadly failed- For this, reason alone, Exts.P1, P5 and P10 are liable to be quashed. However, J shall consider the sustainability of the other charges also for the sake of completion.
20. Next, I shall consider charge No. (d) detailed above. It has three parts. The first is that the present managing committee had given membership to persons residing outside the area of operation of the Society. The second is that the managing committee gave loan to a person outside the area of operation without ascertaining whether he was a member of another Society. The third is that the committee sanctioned loan in excess of the ceiling limit
21. Regarding the fist limb of the charge, some numbers of members have been given in Ext. PI., but the same are not referred to in Ext. P5. There is also no reference as to when they were admitted as members. It does not show that they were admitted as members by the present committee. In the absence of details regarding the same, the 1st respondent could not have concluded that the act was that of the present committee. Further, in Ext. P5, I do not find any reference to the explanation given in Ext. P2
22. Regarding the second limb of the charge, it is admitted that the borrower was an existing member of the Society. If that be so, when he applied for a loan, if loan is given, the fact that later it was found that he is residing outside the area of operation is hardly relevant to find the managing committee guilty of any culpable act relevant for an action under Section 32.
23. The third limb is that the managing committee sanctioned 11 loans in excess of the ceiling limit of Rs. 1 lakh. In Ext P2 reply, it is specifically stated by the petitioner that by circular No. 20/04 of the Registrar, the ceiling limit has been enhanced and no loan has been granted in excess of the enhanced ceiling limit. That circular is produced as Ext. P7 and true copy of the resolution dated 13-9-04 of the managing committee recording the said circular is produced as Ext. P8. From a perusal of the amounts of the 11 loan so detailed in Ext. P5, there cannot be any doubt that the same is within the limit prescribed in Ext. P7. The fact that despite the petitioner relying upon Ext/P7 circular in Ext. P2 to prove that no loan was sanctioned in excess of the enhanced ceiling limit, the 1st respondent has not chosen to even refer to the same in Ext. P5, shows that the 1st respondent approached the issue with a closed mind, with a pre determined intention to return a verdict against the petitioner. In any event, I do not find any wilful negligence or breach of trust on the part of the petitioner in that regard. For this reason, the findings in Ext. P5 in this regard is also unsustainable.
24. I shall next consider charge (a) detailed above. The charge is that the Society sold a vehicle purchased on 24-10-2002 for Rs. 3,68,850/- on 25-7-2006 for Rs. 2,31,676/-. without obtaining a performance certificate. In Ext. P2, the petitioner has stated that before sale, performance certificate of the mechanical engineer and valuation certificate have been obtained. In Ext. P5 that statement is not even referred to. Further, in Ext. P2, it is stated that as per the bye-laws approved by the Registrar, the managing committee is authorised to sell old vehicles, which is also not referred to in Ext. P5. In Ext. P5, it is admitted that the vehicle is almost four years old and had run 86400 kilo meters. The question as to when the vehicle becomes old enough to be sold-to the best advantage of the Society is a subjective opinion, which depends on many factors. By that sale, 63% of the original price had been realised, after using the vehicle for 3 years and 9 months, which vehicle has run 86,400 kms. In Ext. P2, it is stated mat as per the audit finalisation by the department, the depreciation allowed for the vehicle works out to Rs. 3,31,966/- and taking into account the same, the sale for Rs. 2,31,676/- has resulted in a profit of Rs. 1,94,792/- to the Bank, which has also not been considered in Ext. P5. In such circumstances, that charge also could not have been finalised against the petitioner. In any event, the same hardly qualifies for the extreme action of supersession under Section 32.
25. Then comes charge (b). In that charge, the only allegation is that the Bank's vehicle has been used without recording the purpose in the log book of the vehicle. There is no allegation that the use of the vehicle is not for the purpose of the Bank There is also no allegation that the vehicle has been used for personal purposes of the members of the managing committee and that the same is prohibited. Even though non-recording of the purpose in the log book sheet is an irregularity, that cannot be regarded as serious enough to warrant an action for supersession under Section 32.
26. Charge (c) relates to transferring to the suspense account tan amount of Rs. 84,447/- due from the former President, without recovering the same. In Ext. P2, it is stated that proceedings have been initiated to recover the amount and that the same was done during 1999-2004 with the connivance of the former Secretary Sri. P. Mohammed, who has been suspended for this charge also. These explanations are not seen considered in Ext. P5. In any event, by transferring the amount to the suspense account the amount is not lost to the Bank and still the same can be recovered. Therefore, the said allegation even if established, also cannot be considered to be capital enough to warrant proceedings under Section 32.
27. The last charge is that two employees of the Society have been kept under suspension beyond one year without prior permission from the Registrar. In this respect, both Ext P1, show cause notice and Ext. P2 reply are vague. In Ext P1. nothing is mentioned about non-compliance with 198(6) except that in the matter of suspension and disciplinary proceedings, appropriate procedural formalities have not been complied with. From the documents I find that one of the suspended employees is charged with the misconduct of fabricating documents. The same being a very serious charge, it is in the interest of the Society not to reinstate him pending finalization of the disciplinary proceedings. Nothing also prevented the 1st respondent from directing the petitioner to complete the disciplinary proceedings expeditiously. Even if the charge is proved to be correct I do not think that charge is also serious enough to warrant proceedings under Section 32 against the committee.
28. For all the above reasons, I am satisfied that Ext P5 and all proceedings pursuant thereto are unsustainable. Accordingly, the same are quashed and the writ petition is allowed.
29. Before parting with the case, I would like to comment on a very serious malady plaguing the co-operative movement in the State. Over politicization is the bane of the co-operative movement in Kerala. Politics has permeated all aspects of the co-operative sector so badly that the movement itself is slowly dying in the State. Elections to cooperative societies are also fought on political lines and political parties resort to all sorts of legal and illegal methods to win the majority in managing committees of co-operative societies. Once in power, they admit members owing allegiance to their political parties in order to ensure a win for themselves in the next election. If they do not win the majority, as soon as their party comes into power in the State, they resort to every legal and illegal means to dethrone the other side and wrest power even physically. Every time the political climate in the State changes, there is a spate of litigation against proceedings under Section 32 of the Kerala Co-operative Societies Act in respect of societies under the control of the opposition parties. They make the officers of the co-operative department who has control over the co-operative societies as tools in the process of overthrowing the other side from power. These officers often do their bidding and pass orders as dictated by their political bosses without any respect for natural justice and fair play. Once the managing committees having control thus having been unseated, they appoint persons who do their bidding as administrators and starts a process of wresting control through all sorts of means without respect for democratic values. The process is reversed when the political alliance supporting the opposite side comes into power in the State. In the process, the genuine co-operator is driven out of the scene. Public money is squandered or misappropriated with impunity. When the same is detected, the Secretary is the one who is made a scape goat. Courts and other quasi-judicial institutions are mere onlookers, since often evidences are manufactured with the help of officers of the department, who are only, too willing to toe the line for their political masters. In the process, societies die a slow death. Good money of the investors are no longer safe in the co-operative Banks. Therefore, I am of opinion that it is high time that co-operative societies are made free from State control and made autonomous bodies like local bodies. Otherwise, instances like the present one would ultimately choke and kill the co-operative movement in the State conclusively and decisively With the solemn hope that wisdom would dawn on the politicians at least now, to save the movement in Kerala. I conclude.