BALAKRISHNA, J. ( 1 ) THIS writ petition is directed against the impugned order dated 20-6-1989 passed by the state government under Section 30 (a) of the Karnataka co-operative societies Act, 1959 (hereinafter referred to as 'the act') superseding the board of management of the raibagh sahakari sakkrare karkhane limited by appointing the deputy commissioner, bclgaum district, bclgaum as the special officer to manage the affairs of the said sugar factory for a period of one year or until further orders with immediate effect, whichever period is earlier. ( 2 ) THE material facts involved in this case are as follows: the petitioner who is the ex-chairman of raibagh sahakari sakkare karkhane niyamith, raibagh was elected to the board of management of 4th respondent during the year 1986. According to the petitioner, during his chairmanship, the management and functioning of the factory produced improved results and profits winning appreciation from bankers and majority of the shareholders. It was only between 1979 and 1983, the committee came to be changed and replaced by a nominated committee and during that period there was mal-functioning resulting in enormous loss to the society. The petitioner is substantiating the said assertion by producing a comparative chart relating to the production, borrowing and repayment of the loans during the period 1979 to 1983 when the management was in the hands of the nominated committee. Further the petitioner has also produced a chart reflecting the position that prevailed during the management of the elected body from 1983 to 1987. By this comparison, the petitioner is making out a case that there was nomal-administration or impropriety in management during the period when the elected body was functioning under the chairmanship of the petitioner. On the other hand, it is claimed that the management was marked by efficient administration and realisation of huge profits. On 21-7-1987, a show cause notice was issued by the 2nd respondent under Section 30 (1) of the act to the petitioner and the same was suitably replied by the petitioner on 12-8-1987. Thereafter, an order was passed on 2-2-1988 superseding the elected body notwithstanding the reply given by the petitioner. In writ petition No. 4449 of 1988, the said order of supersession was challenged and emergent notice was ordered to the first respondent.
Thereafter, an order was passed on 2-2-1988 superseding the elected body notwithstanding the reply given by the petitioner. In writ petition No. 4449 of 1988, the said order of supersession was challenged and emergent notice was ordered to the first respondent. However, there was a significant development within a short period from the date of supersession and an order dated 24th march, 1988 was passed by the state government revoking the order of supersession dated 2nd february, 1988 and restoring the original board of management. In view of the revocation, the writ petition came to be dismissed as infructuous. It is slated that the central and state governments accorded sanction for the expansion of the crushing capacity of the factory to 2500 tcd. Another significant development took the petitioner by surprise within a period of two months from the date of revocation when an order was passed by the 2nd respondent in the purported exercise of power vested in him under Section 64 (1) of the act directing statutory inquiry fixing the time limit for submitting the report of the inquiry within four weeks from the date of the order and also to fix specific responsibilities on the persons concerned. This was the order passed on 31-5-1988. This was the subject matter of challenge in writ petition No. 9839/1988, (1989 (1) kar. lj. 143) and while disposing of the said writ petition, the court made the following observation:"in that view of the matter, this court cannot find fault with the order now issued which appears to have spent itself out. It will be open to the chairman or any one else aggrieved to question the action that may follow the report of the enquiry under annexurc 'd', till then, this court has no reason to interfere with anncxure-d. Petition is rejected. " ( 3 ) STATISTICAL figures have been furnished by the petitioner in support of the assertion that the society had been functioning efficiently and huge profits were realised during the chairmanship of the petitioner. For instance, it is shown that a profit of rs, 65,55,186-66 ps. Was realised. It is also shown that a net profit of Rs. 1,27,94,506- 91 ps. Was realised for the year ending with 1987- 88 based on the audit report of the government.
For instance, it is shown that a profit of rs, 65,55,186-66 ps. Was realised. It is also shown that a net profit of Rs. 1,27,94,506- 91 ps. Was realised for the year ending with 1987- 88 based on the audit report of the government. In fact, it is said that the auditors upgraded the audit classification of the 4th respondent from category 'c' to category 'b' on the basis of good performance. ( 4 ) IT is stated that the petitioner had represented to the 2nd respondent that since the term of the committee was due to expire by the end of july, 1989, the 2nd respondent ought to permit the election to be conducted in accordance with the rules. ( 5 ) AT this stage, the petitioner was served with the impugned order dated 20-6-1989 and this was like a bolt from the blue since the order was by virtue of exercise of power under Section 30 (a) of the act superseding the elected body and appointing the deputy commissioner, belgaum district, belgaum as special officer to manage the affairs of the sugar factory (respondent No. 4 herein ). The petitioner is therefore aggrieved. ( 6 ) IT was contended by the learned counsel appearing for the petitioner that the order of the 1st respondent in superseding the management is illegal and contrary to established principles of law. It is contended that once the order of revocation was passed by the state government on 24-3-1988 cancelling the order of supersession passed on 2-2-1988, a presumption ought to be that all the circumstances and facts commencing from the date of issue of the show cause notice dated 21-7-1987 upto the date of the revocation of the order of supersession were taken into account by the state government and the order revoking supersession was passed after due consideration. It is further contended that even assuming that power is vested in the authority to hold an enquiry under Section 64 (1) of the Act, even before enquiry is concluded without a reasonable opportunity of hearing being afforded to the petitioner, the state government was in serious error in passing the impugned order relying upon the very same report dated 16-5-1989.
It is pointed out that all the allegations contained in the report dated 16-5-1989 are repeated verbatim in the impugned order and the same allegations have been gone into leading to the order in question. It is further pointed out that no new material is on record to lend support to the order passed on 20-6-1989. It is, therefore, submitted that the impugned order is not only contrary to law but also opposed to the principles of natural justice. ( 7 ) THE learned Advocate general appearingon be half of the respondents-1 to 3 submitted that it is possible to sustain the impugned order on the basis of the remarks contained in the impugned order which read thus:-"whereas the director of sugar and additional registrar of co-operative societies in his d,o. Letter No. Dsk/fa-i enq. /p. 38/89-90 dated 16-5-1989 has submitted report stating that since the charges levelled against the board of management has also not yet rectified all the irregularities that were levelled against the management which is a clear breach of the trust and the interests of the members of the factory and therefore, he has requested the government to take early action to restore the earlier government order No. Cmw158 cof 87, dated 2-2-1988 by appointing the deputy commissioner as special officer to the karkhane. " ( 8 ) ON the basis of the said remarks, it was submitted that the management had not rectified all the irregularities that were levelled against it and therefore the government was justified in passing the order of supersession. ( 9 ) IT was also contended that the action taken under Section 30 (a) of the act is independent of the enquiry ordered under Section 64 of the act. Therefore, it was submitted that it is not necessary for the state government to await the report of the enquiry. ( 10 ) THE point for consideration is whether the impugned order of supersession is contrary to law and vitiated by arbitrariness. ( 11 ) IT appears to me that the order of supersession passed on 20-6-1989 is in effect andsubstance a review of the order passed by the very same state government on reconsideration on 24-3-1988.
( 10 ) THE point for consideration is whether the impugned order of supersession is contrary to law and vitiated by arbitrariness. ( 11 ) IT appears to me that the order of supersession passed on 20-6-1989 is in effect andsubstance a review of the order passed by the very same state government on reconsideration on 24-3-1988. In the extracted portion of the order passed on 20-6-1989 quoted above, it is stated that the director of sugar and additional registrar of co-operative societies in his d. o. letter dated 16-5-1989 has requested the government to take early action to restore the earlier government order dated 2-2-1988 by appointing the deputy commissioner as the special officer to the karkhane. I do not see any statutory power vested in the government to review the order of revocation. Unless the power of review is vested in the authority by statute, it cannot be read into it by implication. The impugned order tantamounts to review of an order which is itself a product of review. There cannot be a second review. ( 12 ) LEARNED counsel appearing for the petitioner pointed out that though in the impugned order it is alleged that the board of management has not yet rectified all the irregularities that were levelled against the management, at no stage, was any irregularity pointed out for the purpose of rectification and the petitioner was never called upon to rectify any irregularity. Therefore, the impugned order is misconceived and is based on a wrong assumption. I must observe that all the allegations found in the report dated 16-5-1989 are deemed to have been wiped out by the revocation dated 24-3-1988 and no basis remains for the impugned order. ( 13 ) THE impugned order appears to run counter to not only the spirit of the act but also to the democratic process of having an elected body to run the management and affairs of the society. Looking from any angle, it is not possible to sustain the impugned order. The impugned order is not only illegal but also arbitrary. For the above reasons. , the order under Annexure 'm' is liable to be quashed.
Looking from any angle, it is not possible to sustain the impugned order. The impugned order is not only illegal but also arbitrary. For the above reasons. , the order under Annexure 'm' is liable to be quashed. ( 14 ) IT was submitted on behalf of respondents-1 to 3 that the term of the elected bodyhas already expired and that the time limit may be fixed for holding fresh elections to elect a new body of management. Learned counsel appearing for the petitioner has no objections for holding fresh elections within a reasonable time. But it was rightly insisted that the elected body which was superseded should be restored first and allowed to continue the management of 4th respondent until the elections are duly effected in accordance with law. But, the learned Advocate general appearing for rcspondcnts-1 to 3 submitted that a special officer is already in office whose term is due to expire shortly and that he may be directed to hold fresh elections within a time limit instead of restoring the superseded body till the elections are held. ( 15 ) WHAT is in question in this writ petition is, the legality and propriety of the impugned order of the state government in superseding the elected body. 1 have reached the finding that the State Action is both illegal and arbitrary. As a necessary corollary, the rights of the petitioner deserve to be vindicated. The sanctity of the elected body deserves to be recognised eventhough the term of office of the superseded body has expired. The act permits the functioning of a time-expired elected body until fresh elections are held. I do not see any justification for any other view. Hence, the following order:- the writ petition is allowed and the impugned order is quashed. The superseded body is restored to office with immediate effect. Election shall he held in accordance with law within a reasonable time. Writ petition allowed. --- *** --- .