Judgment :- Ext. P7 is under challenge. The first respondent by Ext. P7 order has issued the following direction: 2. The learned counsel for the petitioner submits that the Joint Registrar has not complied with the procedure prescribed under Ss.65 and 66 of The Co-operative Societies Act read with R.66 of The Rules framed under The Co-operative Societies Act while passing Ext. P7 order; that even according to the first respondent Ext. P7 order is based only on the inspection report of the second respondent within the meaning of S.66 of The Act; that the second respondent happened to conduct the enquiry because he had received complaints from two members of the society, and as such Ext. P7 is not sustainable in law. On the other hand the case of the respondents in this regard, discernible from the counter, is this: "It is true that an enquiry under S.65 of the K.C.S. Act was ordered as per Ext. P2. It is highly necessary on the basis of the complaint mentioned in the above paragraphs. Therefore the Ext. P2 order of enquiry is justified and it is not an attack on the petitioner and the Board of Directors of the society. Simultaneous to the enquiry, the 2nd respondent has taken an inspection of accounts under S.66(1) (a) and (b) as his routine duty vested on him by general order. He made report on his inspection on 22-12-1988 and taking into account of this report, the S.65 enquiry ordered as per Ext. P2 was cancelled by another order Ext. P3 issued by this respondent as per S.66 of the Act it shall be the duty of the statutory authority to supervise or cause to be supervised by the person authorised by him toy General or special order, the working of the every society as frequently as he may consider necessary action. Sub-section (b) of S.66 of the Act makes it clear that the supervision „ will include inspection of accounts also. Therefore the inspection of accounts of the society is according to the authority vested under provisions in K.C.S. Act. No special order is also required for inspection of accounts of the society. The Ext. P7 order has been issued based on a routine inspection of accounts envisaged under S.66(1) (a) and (b) of the Kerala Co-operative Societies Act. This is a pre-requisite for instituting an enquiry under S.68 of the Act.
No special order is also required for inspection of accounts of the society. The Ext. P7 order has been issued based on a routine inspection of accounts envisaged under S.66(1) (a) and (b) of the Kerala Co-operative Societies Act. This is a pre-requisite for instituting an enquiry under S.68 of the Act. The question of harassment therefore did not arise. So Ext. P7 order is legal and sustainable under the Act and Rules". 3. The question therefore is, can an order under S.68 be passed in the course of a routine inspection by the officer concerned. A reference in this connection to Rule 66 in Chapter VIII of The Rules is relevant. It says that an order, authorising inquiry under S.65 or inspection under S.66 shall among other things, contain the following: (a) the name of the society whose affairs are to be inquired into or whose books of accounts are to be inspected; (b) the name of the person authorised to conduct the inquiry or inspection; (c) the specific point or points on which the inquiry or inspection is to be made, the period within which the inquiry or inspection is to be completed and report submitted to the Registrar, (d) costs of inquiry or inspection; (e) any other matter relating or pertaining to the inquiry or inspection. Sub-rule 2 says that a copy of every order authorising inquiry under S.65 or inspection under S.66 shall be issued to the President or the Secretary of the Society concerned by registered post with acknowledgment due. A copy of the order shall also be made available to the Central society or societies, to which the society in respect of which the order is issued, is affiliated. The answer to the question, considered in the light of the above provisions, must be in the negative, his relevant in this context to refer to the statements contained in the counter affidavit namely that the order is one passed in the course of a routine inspection conducted by the officer concerned. No proceeding under S.68 can be initiated on the basis of the report of the officer who has conducted only a routine inspection. Only on the basis of the report of the officer who has been authorised under R.66 to conduct an enquiry into the affairs of the society, an order under S.68 can be passed.
No proceeding under S.68 can be initiated on the basis of the report of the officer who has conducted only a routine inspection. Only on the basis of the report of the officer who has been authorised under R.66 to conduct an enquiry into the affairs of the society, an order under S.68 can be passed. That no such enquiry has been conducted before Ext. P7 order is passed, is beyond dispute. 4-. If that be the position Ext. P7 order cannot be said to be one passed in accordance with law. 1n other words it is one passed in violation of the procedure prescribed by law which in my view must strictly be observed by the authorities concerned because the said procedure is prescribed with a view to avoid possible arbitrary orders. In view of the finding in this point it is unnecessary to consider the other points raised at the O.P. Accordingly Ext. P7 is quashed. 5. The learned Government Pleader submits that this judgment may perhaps bar fresh proceedings under S.68 being initiated against the management. The very fact that this court interfered with the order under challenge only on the ground that the same was passed in violation of the provisions of law is more than sufficient to hold that the apprehension is misplaced. It is relevant in this context to note that this court has not gone into the merits of the case. The O.P. is allowed to the extent indicated above. No costs.