2012 (7) TMI 1092 - KERALA HIGH COURT

Whether the absence of a seat reserved for the depositors in the Managing committee under the bye-law of the Sreekandamangalam Service Co-operative Bank Ltd. (Society), the Election Commission can provide it as a statutory requirement by operation of Section 28(1C) of the Kerala Co-operative Societies Act (Act) - HELD THAT:- Court feel procedural compliance is required by the Registrar to re-classify the Society and issue fresh certificate under the category Primary Credit Society, the Managing committee of which compulsory requires one representative from the depositor's constituency. It is for the Registrar to direct the Society to first suitably amend the bye laws particularly object clause, for re-classifying it as a Primary Credit Society with corresponding changes and constitution of the Managing Committee by providing a seat for depositors quota in terms of Section 28(1C) of the Act. This shall be done at the earliest. However, we make it clear that since Note (ii) of Rule 15 provides only prospective effect for re-classification we make it clear that except for the election upheld by us the Registrar's order on re-classification will have prospective effect in terms of Note (ii) of Rule 15 as stated above. It is for him to consider the transactions already entered by the Society particularly in regard to rate of interest on deposits accepted and loans advanced and make arrangements without retrospective effect on transactions adversely affecting depositors and borrowers. Similarly if RBI sanction is required under the Banking Regulation Act, Registrar will give sufficient time to the Society to take approval from RBI which will apply for application for future operations.

Writ appeals are allowed vacating the impugned judgment of the learned single Judge and by disposing of writ petitions as above. We feel the Registrar should arrange for a close scrutiny of the operations of all the Societies in the State and consider whether the societies function under the bye-laws and under the Act and if not, to take corrective measures including de-classification as required in this case.