The Madal Co-op. Rural Bank Vs. State of Kerala - Court Judgment

SooperKanoon Citationsooperkanoon.com/1141824
CourtKerala High Court
Decided OnMay-22-2014
JudgeHONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
AppellantThe Madal Co-op. Rural Bank
RespondentState of Kerala
Excerpt:
in the high court of kerala at ernakulam present: the honourable mr. justice a.k.jayasankaran nambiar thursday, the22d day of may20141st jyaishta, 1936 wp(c).no. 20578 of 2004 (y) ---------------------------- petitioner(s): -------------- the madai co-operative rural bank ltd. no.f. 1233, payayangadi post, kannur district represented by its, secretary. by adv. sri.m.sasindran respondent(s): --------------- 1. state of kerala - represented by secretary to government, department of co-operation government secretariate, thiruvananthapuram.2. the joint registrar of co-operative societies, (general), kannur. r1 & 2 by government pleader sri.t.r.rajesh this writ petition (civil) having been finally heard on2205-2014, the court on the same day delivered the following: wp(c).no. 20578 of 2004 (y) appendix petitioner's exhibits: ext.p1: a true copy of the relevant extracts of the bye laws of the society ext.p2: a true copy of the request of approbval for amendments submitted by the petitioner before the2d respondent dated286.02 ext.p3: a true copy of the order dated2310 2002 issued by the2d respondent rejecting the approval for amendment. ext.p4: a true copy of the a true copy of the appeal filed by the petitioner before the1t respondent dated131.2003 ext.p5: a true copy of the argument note filed on behalf of the petitioner before the1t respondent dated221.2004 ext.p6:a true copy of the order passed in the appeal dated43.2004 ext.p7: a true copy of the relevant extract from the bye laws of pappinissery service co-operative bank respondents' exhibits: nil //true copy// p a to judge a.k.jayasankaran nambiar, j.~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ w.p.(c).no.20578 of 2004 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ dated this the 22nd day of may, 2014 judgment the petitioner is a co-operative rural bank registered as a co-operative society under the provisions of the kerala co- operative societies act. although initially it was registered as a consumer society the principal object of the society was later amended in the bye-laws to pursue mainly agricultural activities and other activities that were incidentally there to. the classification of the society was also accordingly in terms of rule 15 of the kerala co-operative societies rules and it is presently classified as a primary agricultural credit society. with a view to expanding the function of the society, the petitioner society resolved to amend the bye-laws and seek insertion of 4 new sub clauses in the said bye-laws. the amendments that were sought to be incorporated in the bye- laws are borne out in ext.p2 produced in the writ petition. it is the case of the petitioner society that the amendment of the bye-laws was approved by the general body by a resolution in the meeting convened for the purpose. thereafter the proposal for amendment was forwarded to the 2nd respondent for approval vide ext.p3 order dated 23.10.2002. the 2nd w.p.(c).no.20578 of 2004 2 respondent rejected the request for approval of the amendment stating that the amendments proposed in the bye- laws pertained to activities that were not agricultural in nature and, therefore, could be included in the bye-laws of a society that was constituted primarily for agricultural purposes. the petitioner society preferred an appeal against ext.p3 order before the 1st respondent government. the 1st respondent after hearing the petitioner passed ext.p6 order dated 04.03.2004 rejecting the appeal preferred by the petitioner and upholding the order of the 2nd respondent. ext.p3 order of the 2nd respondent and ext.p6 order of the 1st respondent are impugned in the writ petition. although the writ petition was filed as early as on 2004, the respondents have not chosen to file any counter affidavit in the matter.2. i have heard sri.m.sasindran, counsel appearing for the petitioner and the learned government pleader on behalf of the respondents.3. on a perusal of exts.p3 and p6 orders, it is evident that the sole reason that weighed with the 1st and 2nd respondents while passing the said orders is that the w.p.(c).no.20578 of 2004 3 amendments proposed in the bye-laws were seen as empowering the society to pursue activities that were wholly alien to the primary object of agricultural activities that was sought to be pursued by the petitioner society. the orders, however, do not refer to any provisions under the act or the rules which would disable the petitioner society from incorporating other objects which, although not primarily agricultural in nature, could possibly enable the society to pursue such activities as would augment its revenue for the purposes of pursuing its principal object. at any rate, even assuming that pursuant to the amendment of the bye-laws the petitioner society discontinued the pursuit of its primary objects and pursued objects that were wholly different from what was indicated as its primary objects, the legal ramification of such action on the part of the society would only be in respect of the classification of the society in terms of the provisions of the kerala co-operative societies act and rules. this option of re-classification of the society, if it is found, as a matter of fact, to be pursuing objects which are not indicated as primary objects, is one that is available to the w.p.(c).no.20578 of 2004 4 government to pursue as and when it finds that the actions of the society warrant the invocation of the relevant provisions. the mere amendment of the bye-laws, to incorporate additional objects, would not by itself tantamount to altering the primary objects that is sought to be pursued by the society. in this view of the matter, i do not think that the reasons contained in exts.p3 and p6 orders, for rejecting the approval sought by the petitioner society for an amendment of its bye-laws, can be legally sustained. i accordingly quash exts.p3 and p6 orders of the respondents and direct the 2nd respondent to approve the amendments to the bye-laws of the petitioner society, as borne out in ext.p2 representation filed before it by the petitioner society. considering the period of time that has elapsed since the filing of the writ petition, i direct the 2nd respondent to register the amendments to the objects of the petitioner society within a period of one month from the date of receipt of a copy of the judgment. the writ petition is allowed as above. a.k.jayasankaran nambiar judge mns/ w.p.(c).no.20578 of 2004 5
Judgment:

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR THURSDAY, THE22D DAY OF MAY20141ST JYAISHTA, 1936 WP(C).No. 20578 of 2004 (Y) ---------------------------- PETITIONER(S): -------------- THE MADAI CO-OPERATIVE RURAL BANK LTD. NO.F. 1233, PAYAYANGADI POST, KANNUR DISTRICT REPRESENTED BY ITS, SECRETARY. BY ADV. SRI.M.SASINDRAN RESPONDENT(S): --------------- 1. STATE OF KERALA - REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF CO-OPERATION GOVERNMENT SECRETARIATE, THIRUVANANTHAPURAM.

2. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, (GENERAL), KANNUR. R1 & 2 BY GOVERNMENT PLEADER SRI.T.R.RAJESH THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON2205-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 20578 of 2004 (Y) APPENDIX PETITIONER'S EXHIBITS: EXT.P1: A TRUE COPY OF THE RELEVANT EXTRACTS OF THE BYE LAWS OF THE SOCIETY EXT.P2: A TRUE COPY OF THE REQUEST OF APPROBVAL FOR AMENDMENTS SUBMITTED BY THE PETITIONER BEFORE THE2D RESPONDENT DATED286.02 EXT.P3: A TRUE COPY OF THE ORDER

DATED2310 2002 ISSUED BY THE2D RESPONDENT REJECTING THE APPROVAL FOR AMENDMENT. EXT.P4: A TRUE COPY OF THE A TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE1T RESPONDENT DATED131.2003 EXT.P5: A TRUE COPY OF THE ARGUMENT NOTE FILED ON BEHALF OF THE PETITIONER BEFORE THE1T RESPONDENT DATED221.2004 EXT.P6:A TRUE COPY OF THE ORDER

PASSED IN THE APPEAL DATED43.2004 EXT.P7: A TRUE COPY OF THE RELEVANT EXTRACT FROM THE BYE LAWS OF PAPPINISSERY SERVICE CO-OPERATIVE BANK RESPONDENTS' EXHIBITS: NIL //TRUE COPY// P A TO JUDGE A.K.JAYASANKARAN NAMBIAR, J.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ W.P.(C).No.20578 of 2004 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Dated this the 22nd day of May, 2014

JUDGMENT

The petitioner is a Co-operative Rural Bank registered as a Co-operative Society under the provisions of the Kerala Co- operative Societies Act. Although initially it was registered as a Consumer Society the principal object of the Society was later amended in the bye-laws to pursue mainly agricultural activities and other activities that were incidentally there to. The classification of the Society was also accordingly in terms of Rule 15 of the Kerala Co-operative Societies Rules and it is presently classified as a Primary Agricultural Credit Society. With a view to expanding the function of the Society, the petitioner Society resolved to amend the bye-laws and seek insertion of 4 new sub clauses in the said bye-laws. The amendments that were sought to be incorporated in the bye- laws are borne out in Ext.P2 produced in the writ petition. It is the case of the petitioner Society that the amendment of the bye-laws was approved by the general body by a resolution in the meeting convened for the purpose. Thereafter the proposal for amendment was forwarded to the 2nd respondent for approval vide Ext.P3 order dated 23.10.2002. The 2nd W.P.(C).No.20578 of 2004 2 respondent rejected the request for approval of the amendment stating that the amendments proposed in the bye- laws pertained to activities that were not agricultural in nature and, therefore, could be included in the bye-laws of a Society that was constituted primarily for agricultural purposes. The petitioner Society preferred an appeal against Ext.P3 order before the 1st respondent Government. The 1st respondent after hearing the petitioner passed Ext.P6 order dated 04.03.2004 rejecting the appeal preferred by the petitioner and upholding the order of the 2nd respondent. Ext.P3 order of the 2nd respondent and Ext.P6 order of the 1st respondent are impugned in the writ petition. Although the writ petition was filed as early as on 2004, the respondents have not chosen to file any counter affidavit in the matter.

2. I have heard Sri.M.Sasindran, counsel appearing for the petitioner and the learned Government Pleader on behalf of the respondents.

3. On a perusal of Exts.P3 and P6 orders, it is evident that the sole reason that weighed with the 1st and 2nd respondents while passing the said orders is that the W.P.(C).No.20578 of 2004 3 amendments proposed in the bye-laws were seen as empowering the Society to pursue activities that were wholly alien to the primary object of agricultural activities that was sought to be pursued by the petitioner Society. The orders, however, do not refer to any provisions under the Act or the Rules which would disable the petitioner Society from incorporating other objects which, although not primarily agricultural in nature, could possibly enable the Society to pursue such activities as would augment its revenue for the purposes of pursuing its principal object. At any rate, even assuming that pursuant to the amendment of the bye-laws the petitioner Society discontinued the pursuit of its primary objects and pursued objects that were wholly different from what was indicated as its primary objects, the legal ramification of such action on the part of the Society would only be in respect of the classification of the Society in terms of the provisions of the Kerala Co-operative Societies Act and Rules. This option of re-classification of the Society, if it is found, as a matter of fact, to be pursuing objects which are not indicated as primary objects, is one that is available to the W.P.(C).No.20578 of 2004 4 Government to pursue as and when it finds that the actions of the Society warrant the invocation of the relevant provisions. The mere amendment of the bye-laws, to incorporate additional objects, would not by itself tantamount to altering the primary objects that is sought to be pursued by the Society. In this view of the matter, I do not think that the reasons contained in Exts.P3 and P6 orders, for rejecting the approval sought by the petitioner Society for an amendment of its bye-laws, can be legally sustained. I accordingly quash Exts.P3 and P6 orders of the respondents and direct the 2nd respondent to approve the amendments to the bye-laws of the petitioner Society, as borne out in Ext.P2 representation filed before it by the petitioner Society. Considering the period of time that has elapsed since the filing of the writ petition, I direct the 2nd respondent to register the amendments to the objects of the petitioner Society within a period of one month from the date of receipt of a copy of the judgment. The Writ petition is allowed as above. A.K.JAYASANKARAN NAMBIAR JUDGE mns/ W.P.(C).No.20578 of 2004 5