PUTTASWAMY, J. ( 1 ) AS these cases are interconnected, in which the principal parties are also common, we propose to dispose of them by a common judgment. In the course of our judgment, the parties will be referred to with reference to their array in Writ Appeal No. 1904/1980. ( 2 ) AT the City of Gulbarga, that being the District Head Quarters of the same District, there is a Co-operative society called the 'district Central Cooperative Bank Limited, Gulbarga' (hereinafter referred to as the 'society') constituted and functioning under the Karnataka Co-operative Societies Act of 1959 (hereinafter referred to as the Act ). The society which is at the apex of the Co-operative Societies of the District is managed by a committee of management consisting of 15 elected directors and 5 nominated directors, the nomination being made by Government under the Act, by virtue of the investments made by it, ( 3 ) IN the general elections held in july 1978, 12 persons including the appellant were elected as directors from various contituencies. On 25-7-1978 Government exercising its power under the Act, nominated 5 persons which was struck down by this Court on 13-10-1978 in Writ Petition No. 8398 of 1978 filed by the appellant. On 26-7-1978 the appellant was elected as the President of the Society. Even though the order made by this Court in the said writ petition, which was substantially affirmed by the appellate Bench on 12-4-79 in Writ appeals Nos. 567, 592 of 1978, 204 and 280 of 1979, did not prohibit Government from making fresh nominations. Government for reasons that are not clear, did not make fresh nominations, with the result, the elected directors continued to manage the affairs of the society till 14-8-1980, on which day as many as 7 elected directors tendered their resignation. On an examination of that fact apprised to it by the Registrar of Co-operative Societies and taking the view that the remaining five directors cannot function, Government by its notification No, RDC. 58 CIM 80 dated 11-9-1980 appointed, the Deputy Commissioner, gulbarga District, as the Special Officer of the Society with immmediate effect for a period of six months from that date under S. 30-A of the Act On the expiry of the original period specified in the notification impugned in the writ petition government by its notification No. RDC.
58 CIM 80 dated 11-9-1980 appointed, the Deputy Commissioner, gulbarga District, as the Special Officer of the Society with immmediate effect for a period of six months from that date under S. 30-A of the Act On the expiry of the original period specified in the notification impugned in the writ petition government by its notification No. RDC. 58 clm 80 dated 11th March, 1981, has extended the period of the Special Officer for a further period of six months. ( 4 ) ON 16-9-1980. the appellant challenged the aforesaid notification of the government in WP. No. 18126 of 1980 as violative of one of the basic principles of natural justice viz. , audi alteram pattem and actuated by mala fides. In justifying its action, respondent No. 1 did not dispute that the notification had been issued without issuing a show cause notice to the appellant and the other directors. But, still respondent No 1 contended that in the circumstances, there was no other course open to it except to take over the management of the society under s 30-A of the Act. It also denied the imputation of mala fides attributed by the appellant. ( 5 ) ON an examination of the contentions urged, Venkatesh J, by his order dated 24-11-1980 accepted the case of respondent No. 1 and dismissed the Writ petition No. 18126 of 1980. Appellant challenges this order in Writ Appeal No. 1904 of 1980. ( 6 ) AT the apex of all the co-operative societies in the State of Karnataka, there is an institution called the Karnataka State Co-operative Apex Bank limited, Bangalore (hereinafter referred to as the 'apex Bank'), respondent No. 4 in writ Petition No. 1331 of 1981, on the committee of management of which appellant, as the President of the Society, was representative director. The Apex Bank taking the view that the interim order made by this Court, modified by the Supreme Court in S. L. P. No. 8910 of 1980 decided on 10th October, 1980, did not enable the appellant to participate as a member of its committee of management and did not also issue him a notice of the meeting scheduled to be held on 27-1-81 at that stage the appellant instead of seeking appropriate directions in Writ Appeal no.
1904 of 1980 which was then pending, moved this Court on 23-1-1981 by writ Petition No. 1331 of 1981 for a mandamus to the Apex Bank to treat him as the representative of the 'society' and for appropriate interim relief. On 23-1-1981 bhimiah J. issued rule nisi in this case and issued an interim order directing the apex Bank not to hold its meeting on 27-1-1981 or thereafter until further orders of this Court in the Writ Petition. On a reference made by the same learned judge, this writ petition, was posted before us for disposal along with the writ appeal. As the result of this writ petition, which was wholly unnecesary, depends on the result of the Writ appeal No 1904 of 1980, we first propose to deal with the appeal. ( 7 ) SRI Murlidhar Rao, learned counsel appearing in support of appeal, challenged the findings of the learned single Judge on all the points found against the appellant. Sri Tilak Hegde, learned counsel appearing for the appellant in the connected writ petition supported Sri Rao. ( 8 ) SRIYUTHAS V. C. Bramharayappa and A. K. Chennegowda, learned counsels appearing for respondents 1 and 2 and 3 respectively, sought to support the order of the learned single Judge on the grounds found by him as also on other grounds. ( 9 ) WE have earlier noticed the grounds on which the appellant had challenged the impugned notification and the justification pleaded thereto by Government. But, in dealing with the contentions urged for the appellant, the learned Judge first examined the justification for and merits of the action of Government at great length and found the same in favour of the respondents. After that the learned Judge examined the grievance of the appellant that the action was violative of the principles of natural justice and found that that grievance was not without substance. But, having so held, the learned Judge was persuaded to the view that in the circumstances of the case, this Court in exercise of its discretionary jurisdiction under art. 226 of the Constitution should not aid the appellant. Lastly, the learned judge examined whether the action of government was vitiated by mala fides and found no substance in that allegation. With great respect, we are unable to bring ourselves to agree with this approach to the case.
226 of the Constitution should not aid the appellant. Lastly, the learned judge examined whether the action of government was vitiated by mala fides and found no substance in that allegation. With great respect, we are unable to bring ourselves to agree with this approach to the case. On the facts of the case and having regard to the contentions urged, the proper approach to make is (i) first, to ascertain whether the notification was violative of the rules of natural justice and thus stands vitiated to be quashed; (ii) second, to examine whether the action was vitiated by mala fides; and (iii) finally, examine whether there were any circumstances disentitling appellant to relief, if the Court accepted either of the two or both grounds urged for the appellant. We, therefore propose to examine these questions in that sequence. ( 10 ) S. 30-A of the Act, empowers the Government to appoint a Special officer to a 'society' and displace the exist ting committee of management. An order made under S, 30-A of the Act displacing the committee of management results in civil consequences against each member of the committee. The concept of civil consequences has been exhaustively explained by the Supreme Court in Mohinder Singh gill v. Chief Election Commissioner, AIR 1978 SC 851 . ( 11 ) S. 30-A of the Act does not expressly provide or exclude issue of a show cause notice, an opportunity to file representations and an opportunity of oral hearing before the Government decides to appoint a Special Officer thereto. In examining a similar action of Government under S. 30-A of the Act this Court speaking through one of us in R. Ranga Rao v. State of Karnataka, WP. 7848 and 8913/76 dt. 21-4-78 applying the principles enunciated by the Supreme Court in various cases, read into S. 30-A of the act, the principles of audi alteram partem which was affirmed by a Division bench of this Court consisting of Venkaramiah J. , (as he then was) and srinivasa lyengar J. in WA. Nos. 381 and 382 of 1978 filed by the State and also the supreme Court. On this part of the case, it must be said, these decisions which directly bear on the point were not brought to the notice of the learned single Judge.
Nos. 381 and 382 of 1978 filed by the State and also the supreme Court. On this part of the case, it must be said, these decisions which directly bear on the point were not brought to the notice of the learned single Judge. However, the learned Judge has found that the notification was violative of one of the basic principles of natural justice viz. audi alteram partem. We are bound by the Division Bench ruling in WA Nos. 381 and 382 of 1978, in which this court has held that before making an appointment under S. 30-A of the Act, government is bound to comply with the requirements of principles of natural justice. The reasoning and conclusion of the learned single judge on this point, if we may say so with respect is correct. We, therefore, concur with his conclusion on this aspect. For these very reasons, the contention of Sri Brahmarayappa that the principle of audi atleram partem has no application to an action under S. 30-A of the Act, is devoid of merit and we reject the same. ( 12 ) ON the above conclusion, the learned Judge should have quashed the impugned notification as was done by this court in Kangarao's case (2), without examining any further question. But, the learned Judge did not do so for the various reasons that commended themselves for his acceptance. We may now examine whether those reasons compel the view the learned Judge was persuaded to take. ( 13 ) WHENEVER a complaint of violation of rules of natural justice is made by an aggrieved person, it is not normally possible to predict that that decision would have been taken by the appropriate authority, had it complied with the principles of natural justice. In such a situation this Court which does not exercise an appellate jurisdiction but only a supervisory jurisdiction within the well defined limits cannot embark upon an examination of the merits of an action taken. In our view, an examination of the merits of the impugned action in such a case would not be a proper exercise of jurisdiction under Art. 226 of the constitution. Any such attempt would virtually convert this Court into a Court of appeal on facts which is neither permissible nor desirable.
In our view, an examination of the merits of the impugned action in such a case would not be a proper exercise of jurisdiction under Art. 226 of the constitution. Any such attempt would virtually convert this Court into a Court of appeal on facts which is neither permissible nor desirable. In such a situation, the correct approach to be made has been stated pithily by Lord Wright in general Medical Council v. Spackman, 1943 AC 627. in these words :" If the principles of natural Justice are violated in respect of any decision, it is indeed, immaterial whether the same decision would have been arrived at in the absence of the departure from the essential principles of justice. The decision must be declared to be no decision". In Muniyellappa v. Krishnamurty B. M. , (1977) 1 Kar. L. J. 389. a Division Bench of this Court consisting of one of us (Venkatachaliah, j.) has followed the dicta of Lord wright. The Supreme Court in Swadeshi cotton Mills v. Union of India, (1981) 1 SCC 665. has stated the principle in these words :" (84) Before we conclude the discussion on this point, we may notice one more argument that has been advanced on behalf of the respondents. It is argued that this was a case where a prior hearing to the company could only be a useless formality because the impugned action has been taken on the basis of evidence, consisting of the balance sheet, account books and other records of the Company itself, the correctness of which could not have been disputed by the Company. On these premises, it is submitted that non-observance of the rule of audi alteram partem would not prejudice the Company, and this makes no difference. (85) The contention does not appear to be well founded. Firstly, this documentary evidence, at best, shows that the Company was in debt and the assets of some of its 'units' had been hypothecated or mortgaged as security for those debts. Given an opportunity the Company might have explained that as a result of this indebtedness there was no likelihood of fall in production which is one of the essential conditions in regard to which the government must be satisfied before taking action under S. 18aa ( () (a ).
Given an opportunity the Company might have explained that as a result of this indebtedness there was no likelihood of fall in production which is one of the essential conditions in regard to which the government must be satisfied before taking action under S. 18aa ( () (a ). Secondly, what the rule of natural justice required in the circumstances of this case, was not only that the company should have been given an opportunity to explain the evidence against it, but also an opportunity to be informed of the proposed action of take over and to represent why it be not taken. (94) The further question to be considered is : What is the effect of the non-observance of this fundamental principle of fair play ? Does the non-observance of the audi alteram partem rule, which is the quest of justice under the rule of law, has been considered universally and most spontaneously acceptable principle, render an administrative decision having civil consequences, void or voidable? In England, the outfall from the watershed decision, Ridge v. Baldw in ). (1964 AC 40) brought with it a rash of conflicting opinion on this point. The majority of the house of Lords in Ridge v. Baldwin held that the non-observance of this principle, had rendered the dismissal of the Chief Constable void. The rationale of the majority view is that where there is a duty to act fairly, just like the duty to act reasonably, it has to be enforced as an impled statutory requirement, so that failure to observe it means that the administrative act or decision was outside the statutory power, unjustified by law, and therefore ultra vires and void (see Wade's Administrative Law. ibid. , page 448 ). In india, this Court has consistently taken the view that a quasi-judicial or administrative decision rendere. d in violation of the audi alteram partem rule, wherever it can be read as an implied requirement of the law, is null and void, e. g. Maneka Gandhi case (1978) 1 SCC 248 and S. L. Kapoor v. Jagmohan (1980) 4 SCC 379 )]. In the facts and circumstances of the instant case, there has been a non-compliance with such implied requirement of the audi alteram partem rule of natural justice at the pre-decisional stage. The impugned order, therefore, could be struck down as invalid on that score alone.
In the facts and circumstances of the instant case, there has been a non-compliance with such implied requirement of the audi alteram partem rule of natural justice at the pre-decisional stage. The impugned order, therefore, could be struck down as invalid on that score alone. But, we refrain from doing so, because the learned Solicitor- general in all fairness, has both orally and in his written submissions dated August 28, 1979, committed himself to the position that under s. 18-F the Central Government in exercise of its curial functions, is bound to give the affected owner of the undertaking taken over, a "full and effective hearing on all aspects touching the validity and or correctness of the order and or action of take-over," within a reasonable time after the take-over. The learned solicitor General has assured the court that such a hearing will be afforded to the appellant-company if it approaches the Central Government for cancellation of the impugned order. It is pointed out that this was the conceded position in the high Court that the aggrieved owner of the undertaking had a right to such a hearing. " ( 14 ) WE may also point out that the appellant disputes the very basis of the conclusion reached by Government and concurred with by the learned Judge. According to him, it is open to the remaining 5 directors to legally function and that in any event, it would have been possible for them to persuade Government to nominate 5 persons and make the committee workable. But, according to Government, neither of them was a permissible or proper course. Which of the two views is correct and acceptable would be a matter for Government to decide in the first instance after giving a show cause notice. We should also remember that the right to be heard is not an empty formality or a ritual. We are of the view that, at the stage at which the matter came before the learned single judge, it was not permissible to examine the merits and accept the case urged for the respondents. A fortiori, it follows that we cannot examine at this stage the validity of the contentions urged for the parties and, therefore, we ought at this stage express no opinion on them but leave them open.
A fortiori, it follows that we cannot examine at this stage the validity of the contentions urged for the parties and, therefore, we ought at this stage express no opinion on them but leave them open. ( 15 ) SRI Brahmarayappa urged that in the event of our holding that the impugned notification is violative of the principles of natural justice, we should not annul the same, but permit the Government to issue a show cause notice, consider the representations that may be filed by the appellant and others and redetermine the matter in accordance with law as was done by the Supreme court in Maneka Gandhi v. Union of india, AIR 1978 SC 597 ( 16 ) WE are of the opinion, that in the circumstances of this case the course of action suggested by Sri Brahmarayappa is not permissible, The reasons are more than one. First, this is not one of those cases in which a precipitate and immediate action that does not brook a moment's delay was and is required to be taken as in the case of impounding of a passport of an Indian citizen leaving the shores of India. Secondly, the principle 'action first and then an opportunity of hearing" is more in the nature of an exception of that rule and cannot be applied to all cases irrespective of its particular fact-situation Acceptance of any such submission would virtually rob the precious right to be heard of its essence and reduce it to an empty formality. This court should be loathe to accept such a suggestion except in compelling exceptional circumstances. We cannot, therefore, accede to this request of Sri Brahmarayappa and we reject the same. ( 17 ) ON the scope and ambit of the interim order made by Kudoor J. in WP. No. 18126 of 1980, modified by the Supreme Court which has been continued in this writ appeal, the parties are at variance Both sides assert that the same is in their favour and on that basis claim to have performed various acts. As we are disposing of the appeal finally, we do not consider it necessary to examine the rival contentions on this question in any great detail.
As we are disposing of the appeal finally, we do not consider it necessary to examine the rival contentions on this question in any great detail. However, the circumstances and documents relied upon by respondent No. 3, considered in the light of the statutory provisions envisaging the consequences that ensue from an order under S. 30-A preponderates over the material relied upon by the appellant. Moreover in the interests of institution and of innocent third parties that may have dealt with the society in the interregnum and to give effect to the final order we make in these cases, we are of the view that it is necessary to hold that the Special Officer had legally taken charge of the Society before the Interim Order was made by Kudoor J. and the same has been continued so far. ( 18 ) THE claim of the appellant to represent the Society on the Apex Bank depends on the result of the writ appeal filed by him. We have earlier pointed out that the writ petition filed by the appellant was wholly unnecessary and illcon- ceived. In this view, we are of the opinion that it is not necessary to deal with the contentions urged in this writ petition at any length and make any orders and directions. ( 19 ) IN the light of our discussion, we make the following orders and directions : (1) We allow WA. No. 1904 of 1980, set aside the order dt. 24-11-80 of Venkatesh, J. in WP. No. 18126 of 1980 and allow WP. No. 18126 of 1980 filed by the appellant and quash notifications Nos. RDC. 58 CLM. 1980 and RDC. 58 CLM. 80 dated 11-9-1980 and 11-3-1981 respectively by issue of a writ of certiorari ; (2) We direct the Deputy Commissioner, Gulbarga, appointed as the Special Officer of District Central co-operative Bank Limited, Gulbarga to desist from acting as Special Officer and hand over charge of the said institution to its President and Secretary forthwith ; (3) We dismiss WP. No. 1331 of 1981 as having become unnecessary. ( 20 ) WE award costs to the appellant in WA. No. 1904/1980 both here and before the learned single Judge. Advocate's fee Rs. 100. But, we decline to award costs to the petitioner in WP. No. 1331 of 1981. --- *** --- .