Research › Search › Judgment

Karnataka High Court · body

2004 DIGILAW 618 (KAR)

N. RANGAPPA v. STAT OF KARNATAKA

2004-11-05

N.K.PATIL

body2004
( 1 ) THE 8thpetitioner in W. P. No. 10590/2004 and 7thpetitioner in W. P. No. 10593/2004 are Co-operative Societies registered under the Karnataka Co-operative Societies Act, 1959 (hereinafter called he Act.) Rest of the petitioners in both the petitioner are members of the respective co-operative Societies. ( 2 ) ALL the petitioners in both the petitions, questioning the legality and validity of the dated 30thseptember 1994 passed by the third respondent- Deputy Registrar of Co-operative Societies, Bangalore vide Annexure A, the order passed by the second respondent joint Registrar of Co-operative Societies, Bangalore dated 7thjune 1997 vide Annexure B and the order passed by first respondentprincipal Secretary to Government, Co-operation Department, Bangalore, dated 15thfebruary 2002 vide Annexure C, have presented the instant writ petitions. Further, the petitioners in these petitions have prayed to direct the respondents to permit the petitioners to carry on the activities of the 8thpetitioner and the 7thpetitioner -Co-operative Societies, respectively and to serve its members. ( 3 ) THE grievance of the petitioners in these petitions is that, these petitioners are the managing members of the 8thpetitioner and 7thpetitioner Co-operative Societies respectively. When they were so functioning effectively, without any blemish and to the satisfaction of the members of the 8thand 7thpetitioners Co-operative Societies, it appears, there was a Government direction to the competent authority to make spot inspection and submit the report regarding the manner in which the societies are functioning. Accordingly, the concerned co-operative Development Officer, Bangalore North Taluk, has made the spot inspection of the 8thpetitioner and the 7thpetitioner Co operative Societies respectively, and after through evaluation of the entire records available, on the file of the respective Societies, has submitted the report under Section 65 of the Co-operative Societies Act before the third respondent Deputy Registrar of Co-operative Societies, Bangalore District 1. The Deputy Registrar of Co-operative Societies, Bangalore District 1 has initiated proceedings under Section 72 of the Co-operative Societies Act for winding up of these two Co-operative Societies, viz. 8thpetitioner and the 7thpetitioner in these petitions respectively. A statutory notice was served on 27thjune 1994, as referred at Sl. The Deputy Registrar of Co-operative Societies, Bangalore District 1 has initiated proceedings under Section 72 of the Co-operative Societies Act for winding up of these two Co-operative Societies, viz. 8thpetitioner and the 7thpetitioner in these petitions respectively. A statutory notice was served on 27thjune 1994, as referred at Sl. No. 1 of the reference in Annexure A, and in spite of giving statutory notice, the petitioners respectively in these writ petitions have chosen to file any objections to substantiate the stand that, the said Societies are functioning as per their respective bye laws and as per mandatory provisions of the Co-operative Societies Act and Rules. Having regard to this back ground, the Deputy Registrar of Co-operative Societies, after considering the report submitted by the competent authority regarding the nature of functioning, financial viability of the respective Societies etc. has passed the order for winding up of these two Societies by a common order dated 30thseptember 1994. Being aggrieved gy the order passed the deputy registrar of Co-operative Societies, the president of the 8thpetitioner and 7thpetitioner Co-operative Societies and their respective Directors have filed the appeal on the file of the joint Registrar of Co-operative Societies, Bangalore Division, Bangalore in Appeal No. JRB/appeal/45/97-95 and Appeal No. JRB/appeal/44/94-95. The joint Registrar of Co-operative Societies, after evaluation of the material available on record and the order passed by the Deputy Registrar of Co-operative Societies has passed separate orders on 7thjune 1997 vide Annexure B in both petitions. Being aggrieved by the order passed by both the authorities, the petitioners have filed a Revision Petition on the file of the Principal Secretary to Government of Karnataka, Co-operative Department in Revision Petition No. CMW29/cap 98 and No. CMW 28/cap98. Both the Revision Petitions filed by the petitioners had come up for consideration before the first respondent and the first respondent, after considering the material available on record such as the report submitted by the competent authority, the order passed by both the authorities. Etc has dismissed the revision petitions, holding that, the Revisional Authority does not find anything wrong in the order passed by the Deputy Registrar of Co-operative Societies, confirmed by the joint Registrar of Co-operative Societies. Etc has dismissed the revision petitions, holding that, the Revisional Authority does not find anything wrong in the order passed by the Deputy Registrar of Co-operative Societies, confirmed by the joint Registrar of Co-operative Societies. Feeling aggrieved by the orders passed by all the three competent authorities, referred above, the petitioners felt necessitated to present these petitions invoking the extra ordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India. ( 4 ) THE principal submission canvassed by the learned counsel appearing for the petitioners in both petitions is that, the winding up proceedings initiated against the 8thpetitioner and 7thpetitioner Co-operative Societies respectively in these petitions under Section 72 of the Act is one without jurisdiction. Secondly, he submitted that, there is no notice as such given to the 8thand 7thpetitioners Co-operative Societies or the other petitioner who are the members of the said Societies. He submitted that, all the three authorities have committed an error and illegality in proceeding to pass the orders without conducting proper enquiry and without satisfying the grounds for winding up of the 8thand 7thpetitioner-Co-operative Societies. Therefore, the impugned orders passed by all the three authorities are liable to be set aside. ( 5 ) PER contra, the learned Government Pleader, appearing for respondents, for inter alia, contended and substantiated the impugned orders passed by the competent authorities, stating that the competent authorities after thorough evaluation of the entire material available on record and after going through the report submitted by the competent authority, have recorded concurrent finding of fact against the 8thand 7thpetitioners -Co-operative Societies in both petitioners. In view of the concurrent finding of fact recorded by all the authorities, on the basis of the oral and documentary evidence, interference by this Court, at this stage, is not justifiable. To substantiate the said submission, the learned Government Pleader has produced the original records and taken me through the report submitted by the Co-operative Development Officer, Bangalore North Taluk which is at ink page 7 and 35 of the original records. To substantiate the said submission, the learned Government Pleader has produced the original records and taken me through the report submitted by the Co-operative Development Officer, Bangalore North Taluk which is at ink page 7 and 35 of the original records. In the said report, the competent authority has made the spot inspection of the 8thpetitioner Co-operative Society on 23rdand 24thdecember 1992 and of the 7thpetitioner Co-operative Society on 18thfebruary 1993 and 19thfebruary 1993 and after thorough evaluation of the records has given a finding that the 8thpetitioner in first writ petition has not been advancing any agriculture loans from 1985 onwards and virtually not functioning since 1985 and the 7thpetitioner in the second petition is not functioning from 1988-89 onwards and the financial viability of both the Societies is not satisfactory. Therefore, after considering the report submitted by the competent authority, the third respondent has proceeded to pass the impugned order vide Annexure A. He submitted that, the authorities have not committed any good grounds for interference by this Court. Hence, the writ petitions filled by the petitioners are liable to be dismissed. ( 6 ) AFTER hearing the learned counsel appearing for the petitioners and the learned Government Pleader appearing for respondents for considerable length of time, and after considering the rival contentions advanced by both the counsel, as referred supra, the only question that arise for consideration in these petitioners is as to: whether the impugned orders passed by all the three competent authorities are sustainable in law? after careful perusal of the impugned orders passed by the competent authorities vide Annexure A, B and C, respectively passed by the Deputy Registrar of Co-operative Societies, Joint Registrar of Co-operative Department, it emerges on the face of the said orders that, the authorities have not committed any error of law much less material irregularity in passing the impugned orders. It is significant to note here itself that, these matters had come up for consideration on several occasions before this court and at the request of the learned Government Pleader, the matter was being adjourned to enable him to procure the original records. Today, during the course of submission, he has made available the original records and pointed out the report of the competent authority which find a place in the original records at ink page. 7 (first petition) ink page. 35 (second petition ). Today, during the course of submission, he has made available the original records and pointed out the report of the competent authority which find a place in the original records at ink page. 7 (first petition) ink page. 35 (second petition ). In the said pages, it can be seen that, a detailed report has been submitted after making the spot inspection, going in to the grass root of the affairs of both the Societies. In respect of the 8thpetitioner Society in first petition, the competent authority has made spot inspection on 23rdand 24thdecember 1992 and recorded his report under different heads namely 1) Financial Viability of the society 2) The business potential, 3) The extent to which the Societies activities are conductive to the objects as stipulated in the bye-laws and to what extent its objects not covered by its activities,4) Rent due to TAPCMS, Bangalore North Taluk, 5) Investments, Maintenance of Accounts, Board Meetings Audit Objection, General Body Meeting, Election of Board of Directors etc. Under the heading Financial Viability of the society, it has been stated that the said society has hardly any scope for functioning as an economically viable unit. With regard to issue of Agricultural Loans by raising the same from financial institutions, it has been discussed elaborately under different headings and has specifically observed that the said society is not functioning since 1985. However, in respect of the 7thpetitioner in second petition, the competent authority has made the spot inspection on 18thfebruary 1993 and 19thfebruary 1993 and recorded his report under different heads namely 1) Financial Viability of the Society 2) The business Potential, 3) The extent to which the Societies activities are conductive to the objects as stipulated in the bye-laws and to what extent its objects not covered by its activities, 4) promotion if self help and thrift among members 5) issue of agricultural loans by raising the same from financial institutions, 6) Distribution of food articles and articles of daily needs 7) Distribution of Agriculture requisites like fertilities and seeds etc. to members, Audit Objections, General Body Meeting, Election of Board of Directions etc. Under the heading Financial Viability of the society, it has been specifically stated that the said society cannot function as an economically viable unit and under the heading Business potential, it has been specifically stated that, the said economically viable unit. to members, Audit Objections, General Body Meeting, Election of Board of Directions etc. Under the heading Financial Viability of the society, it has been specifically stated that the said society cannot function as an economically viable unit and under the heading Business potential, it has been specifically stated that, the said economically viable unit. Further,it is relevant to mention here itself that, these societies have been established with the aim and object of encouraging the agriculture by way of advancing loans, to purchase fertilizers, and to give just and reasonable price to the produce of the members of the said society. After careful perusal of the inspection report threadbare, it is revealed from the same that, the two societies have failed to achieve the aim, object and reasons for which they have been established. Further, it is made clear here itself that, these societies have been established several years back for the purpose of encouraging the agriculture activities. But, by the time the inspection of the society was made, the entire area has been well development and all the agriculture lands and a big layout has been formed, and the allottees of the lands have constructed their houses and that the said area comes within the area of the Municple Corporation of Bangalore. The authorities have after taking in to consideration the report submitted by the Co-operative Development officer and after seeing the economic viability of the societies, the manner in which they are functioning and due to change of circumstances in view of the subsequest development in the area, the first respondent has rightly passed the order at Annexure A for winding up of the affairs of the 8thpetitioner in first petition and 7thpetitioner in second petition Co-operative Societies. Therefore, I do not find any substance in the submission of the learned counsel for petitioners that the mandatory provision of Section 72 of the Act has not at all been followed and no opportunity as such has been given to the petitioners and hence, there is violation of the principles of natural justice. The third respondent, being the competent authority and the fact finding authority, after issuing the statutory notice, as referred at Sl. The third respondent, being the competent authority and the fact finding authority, after issuing the statutory notice, as referred at Sl. No. 1 of the order vide Annexure A, has initiated the proceedings under Section 72 of the Act, After through evaluation of the oral and documentary evidence available on file and after taking into consideration the detailed report submitted by the Co-operative Development officer under different heads, as stated supra. I am of the considered view that all the three authorities have recorded concurrent finding of fact against the 8thpetitioner in first petition an d7th petitioner in Second petition and each and each and every aspect of the matter has been taken into consideration and appreciated by the revisional authority. The Revisional Authority, has specifically referred that, the 8thand 7thpetitioner respectively in these two petitions have failed to repay the large sums of loans that they had borrowed form the financial institutions and that the and that the said Societies are not functioning satisfactorily. In fact the said societies have not even followed their main function of helping the farmers in their job of cultivation. However, it is specifically observed by the revisional authority that, he cannot find anything wrong with the order passed by the Deputy Registrar and after all it is desirable to eliminate cancerous elements from the fabric of co-operation or such malignant institutions would spoil the entire movement and therefore, the order passed by the Deputy Registrar of Co-operative Societies and the Joint Registrar of co-operative Societies are well funded. Therefore, I do not find any error or illegality in the impugned orders and hence, interference in the same is totally uncalled for. After thorough evaluation of the original records available on file and after appreciating the views taken by the competent authority Deputy Registrar of Co-operative Societies, the revisional authority has recorded well founded reasons and rejected the revision petitions filed by the petitioners. Therefore, in view of the concurrent finding of fact recorded by the Deputy Registrar of Co-operative Societies, being the fact finding authority, the order passed by the Joint Registrar of Co-operative Societies, on the basis of the documentary evidence available on file as well as the well-considered order passed by the revisional authority, I do not find any justification or good grounds to interfere in the orders passed by all the three authorities. ( 7 ) HAVING regard to the facts and circumstances of the case. As stated above, the writ petitions filed by the petitioners are dismissed. At this stage the learned counsel appearing for the petitioners submitted that, so far as another society namely Nagavara Vyavasaya Seva Sankara Sangha Niyamita is concerned, the Government has permitted the said society to convert itself into consumer Co-operative Society. If that is so, it is very much open for the petitioners to give necessary representation to the concerned authority and in turn, the concerned authority shall consider the same, if it is permissible under law. --- *** --- .