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2014 DIGILAW 479 (KAR)

H. K. Gopalakrishna v. Registrar of Co-Operative Societies

2014-04-22

A.N.VENUGOPALA GOWDA

body2014
Judgment : 1. The petitioner, a member of respondent No.4, which is a Co-operative Society (for short 'the Society, registered under Karnataka Co-operative Societies Act, 1959 (for short 'the Act, has filed this writ petition asking for a mandamus as against the Registrar of Co-operative Societies, to consider a representation/reminders submitted on 29.07.2013, 03.10.2013, 14.11.2013 and 18.11.2013 and for issue of a direction not to settle the retirement benefits of respondent No.2 and for grant of consequential reliefs. 2. Basic facts which have given rise to this writ petition are that the petitioner and others were elected as members of the Managing Committee of the 4th respondent. Petitioner was disqualified on 03.10.2013, for a period of five years, from the membership of the managing committee of the Society, by respondent No.2, in exercise of the power under S.29-C (8) of the Act. Respondent No.2 passed an order dated 07.12.2013, against the petitioner, authorising the Secretary and President of the Society, to institute civil and criminal proceedings, in terms of S.109 of the Act. Petitioner having submitted a representation on 29.07.2013 seeking to hold an inquiry under S.64 of the Act, into the working and financial condition of the Society and having not received any communication and having submitted reminders on 03.10.2013 and 18.11.2013 and having also sought, on 14.11.2013, the disqualification of all members of the Board of the Society, on account of their alleged collusion with one Mr. M.G. Rangadhamaiah, Proprietor of Sri Mookambika Enterprises,, in the matter of awarding layout development contracts of the Society, filed this writ petition, alleging inaction and arbitrariness on the part of respondent Nos.1 to 3. 3. The main grievance of the petitioner is that the Society is being mismanaged and that there is collusion between the members of the managing committee and the contractor Mr. M.G. Rangadhamaiah, regarding the layouts to be developed at Bettanagere and K.G. Srinivasapura Villages and thereby, the members of the managing committee have caused deficiency in the assets of the Society, necessitating holding of an inquiry under S.64 of the Act. 4. Sri R. Nataraj, learned advocate, contended that under S.64 of the Act, duty is cast upon the Registrar, to hold an inquiry into the working and financial condition of the Society, especially, when serious allegation of maladministration, misappropriation of funds and causing deficiency in the assets of the Society are made. 4. Sri R. Nataraj, learned advocate, contended that under S.64 of the Act, duty is cast upon the Registrar, to hold an inquiry into the working and financial condition of the Society, especially, when serious allegation of maladministration, misappropriation of funds and causing deficiency in the assets of the Society are made. He submitted that despite representation made and the reminders submitted by the petitioner bringing to the notice of the respondents 1 to 3 about the illegalities committed by the members of the managing committee of the Society, respondent Nos.1 to 3 have not initiated any action to hold the inquiry under S.64 of the Act and therefore, there being a failure of the authorities in performing the statutory obligation, this writ petition was filed to compel respondents 1 to 3, to perform their statutory obligations. He submitted that the petitioner having correct knowledge of working affairs of the Society, brought to the notice of the Registrar, the real effect of mal-administration and thereby causing deficiency in the assets of the Society, since, the Registrar can initiate an inquiry, of his own motion. He submitted that deeper examination of the case is called for. 5. Perused the writ record. The point for consideration is, whether the petitioner has the right to compel the Registrar of Co-operative Societies to initiate action to hold inquiry under S.64 of the Act? 6. The petitioner was disqualified on 03.10.2013 from the membership of the managing committee of the Society. An order dated 7.12.2013 was passed against the petitioner, according permission to the Society, to prosecute the petitioner in terms of S.109 of the Act. Petitioner has not produced copy of the representation dated 29.07.2013 which has been referred to in Annexure-G, which is a reminder submitted to respondent No.2, seeking holding of inquiry under S.64 of the Act. Annexure-Gl is a further reminder submitted on 18.11.2013. Annexure-H is a representation dated 14.11.2013 submitted to respondents 1 and 2, seeking to disqualify the members of the committee of management of respondent No.4. 7. Relevant portion of S.64 of the Act, reads thus: "64. Inquiry by Registrar.- (1) The Registrar may, of his own motion, by himself or by a person authorised by him, by order in writing, hold an inquiry into any matter specified in the order touching the constitution, working and financial condition of a co-operative society. 7. Relevant portion of S.64 of the Act, reads thus: "64. Inquiry by Registrar.- (1) The Registrar may, of his own motion, by himself or by a person authorised by him, by order in writing, hold an inquiry into any matter specified in the order touching the constitution, working and financial condition of a co-operative society. (2) An inquiry of the nature referred to in sub section(1) shall be held on the application of.- (a) a co-operative society to which the society concerned is affiliated; (b) a majority of the members of the committee of the society; or (c) net less than one-third of the total number of members of the society." From a plain reading of sub-S.(l) of S.64 of the Act, it is clear that the Registrar may 'of his own motion' hold an inquiry into any matter touching the constitution, working and financial condition of a Co-operative Society. Sub- S. (2) shows that inquiry shall be held on the application of a Co-operative Society to which the society concerned is affiliated or on the application of the majority of the members of the governing body or on the application of not less than one-third members of the Society. The instant case is not concerned with the circumstances provided under sub-S.(2). 8. In BANGALORE GRAIN MERCHANTS ASSOCIATION Vs. DISTRICT REGISTRAR FOR SOCIETIES, BANGALORE AND ANOTHER, 2001 AIR KANT. H.C.R. 833, while examining the scope of S.25 of the Karnataka Societies Registration Act, 1960, which is an analogous provision, Full Bench has held as follows: "7-A. An analysis of Section 25(1) also discloses that there are three situations in which the Registrar can initiate and hold an enquiry. These are: (l) the Registrar acting on his own motion, (2) the Registrar acting at the instance of the majority of the members of the governing body ana (3) the Registrar acting on the request of l/3rd of the members of the Society. In the first contingency, the exercise of power is discretionary and enabling, as denoted by the word 'may', whereas in the latter two cases, it is obligatory to hold an enquiry as seen from the word 'shall'. In the first contingency, the exercise of power is discretionary and enabling, as denoted by the word 'may', whereas in the latter two cases, it is obligatory to hold an enquiry as seen from the word 'shall'. If the second and third requisites are satisfied, the Registrar has no option but to trigger off an enquiry in deference to the wishes of the requisite number of members unless, of course, the allegations are alien to the working of the Society. In the first case, the Registrar can act on his own motion irrespective of any application by the majority of the members of the governing body or l/3rd of the members of the Society. The Registrar, however, is not compelled to act, if the situations 2 and 3 are absent. He can exercise his discretion whether to act or not on the basis of the material or information in his possession. It is significant to note that the expressions 'may' and 'shall' are used in the same subsection i:i contra distinction to each other to emphasize the distinction, which we have earlier pointed out supra. In the context, 'may and 'shall' mean what they ordinarily mean, though it is not uncommon to read one for the other. Of course, the discretion vested in the Registrar under the opening clause may not be absolute and unchannelised. The exercise of discretion is by implication conditioned end moulded by the statutory purpose underlying conferment of such power. Depending on the facts and circumstances of the case, the discretion may be coupled with a duty to act, if such action is warranted. Even in the first situation, therefore, the Registrar cannot exercise or refuse to exercise the power to hold the enquiry on his whim and fancy." (emphasis supplied) 9. No doubt, suo motu enquiry may emanate on the basis of any complaint lodged before the Registrar by any person, who has credible information. In this case, the complaint/representation dated 29.07.2013 said to have submitted by the petitioner and the reminders dated 03.10.2015 and 18.11.2013 (Annexures-G and Gl) do not satisfy the requirement of the application of the majority of the members of the committee of management of the society or not less than one-third members of the Society. In this case, the complaint/representation dated 29.07.2013 said to have submitted by the petitioner and the reminders dated 03.10.2015 and 18.11.2013 (Annexures-G and Gl) do not satisfy the requirement of the application of the majority of the members of the committee of management of the society or not less than one-third members of the Society. The mere making of a complaint or the submission of a representation does not clothe the complaint with any right, beyond bringing the alleged commissions and/or omissions to the notice of the Registrar it is for the Registrar to consider, whether to act on it or not. The choice is of the Registrar. However, an aggrieved member of the Society can raise a dispute under S.70 and obtain relief. Hence, the Registrar has no legal obligation to take note of representation/complaint of a person and initiate inquiry under S.64 of the Act. The Registrar having not initiated suo motu inquiry, the question is whether a writ of mandamus can be issued compelling respondents 1 to 3, to hold suo motu inquiry? 10. In ISLAMIAH INSTITUTE OF TECHNOLOGY EMPLOYEES UNION AND OTHERS Vs. THE STATE OF KARNATAKA, REP. BY ITS COMMISSIONER AND SECRETARY, DEPARTMENT OF CO-OPERATION, BANGALORE AND OTHERS, ILR 2004 KAR 2137, the petitioner No.1 was a Society, registered under Karnataka Societies Registration Act, 1960 and petitioners 2 to 6 were its members and employees. Their grievance was that the affairs of the institution was being mismanaged and they were subjected to great injustice and after 22 years of service they were driven to streets on account of whimsical action of the manager. Alleging that there was misappropriation of funds of the institution, petitioners had submitted representation to the Registrar calling upon him to initiate proceedings against respondent No.7 and the same having remained unanswered, filed writ petition asking for a mandamus against respondents 1 to 6, to initiate action against respondent No.7 and take over the administration of the institution by appointing an Administrator. Considering the rival contention and the relevant provisions of the Act, it has been held as follows: “9. Suo motu proceedings means, a proceedings initiated by the Registrar on his own. He must be satisfied as to the existence of a sufficient ground for initiating such proceedings. That satisfaction should be of that of the Registrar. Neither this Court nor anybody can substitute that satisfaction. Suo motu proceedings means, a proceedings initiated by the Registrar on his own. He must be satisfied as to the existence of a sufficient ground for initiating such proceedings. That satisfaction should be of that of the Registrar. Neither this Court nor anybody can substitute that satisfaction. In other words, he cannot be compelled to adopt a particular reasoning which he is not inclined to adopt. No person can be said to have a legal right to compel a authority to initiate suo motu proceedings. When once a person has no legal right to compel the Registrar to initiate suo motu proceedings, he cannot agitate that non-existing right, such right being a condition precedent to compel this Court to issue a writ of mandamus. Though, if such suo moto proceedings are initiated by the authorities, this Court would not be inclined to interfere with the same and this Court cannot by a writ of mandamus compel an authority to initiate suo moto enquiry." (emphasis supplied) 11. In the instant case, the petitioner is a member of the 4th respondent - Society. He has no legal right under S.64 of the Act, to compel respondents 1 to 3, to hold an inquiry against the managing committee of the Society. It is trite that no one can ask for a mandamus without a legal right and that there must be a judicially enforceable right as well legally protected right before one suffering a legal grievance can ask for a mandamus. A person can be said to be aggrieved only when he is denied a legal right by someone, who has a legal duty to do something or abstains from doing something. Since, Sri. R. Nataraj, was unable to point out any legally enforceable right in the petitioner to compel respondents 1 to 3 to hold an inquiry under S.64 of the Act, in my opinion, the petitioner has no right to move the Registrar to hold an inquiry in terms of S.64 of the Act. Thus, writ petition being devoid of merit and there being no ground to issue Rule Nisi, is rejected. Sri H.T. Narendra Prasad, learned AGA is permitted to file memo of appearance within four weeks.