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Karnataka High Court · body

2015 DIGILAW 1152 (KAR)

Ashoka v. State of Karnataka

2015-10-01

H.G.RAMESH

body2015
ORDER 1. Petitioner, who is President of a co-operative society namely, Meenugarara Sarvatomukha Abhivruddi Sahakara Sangha Niyamita (petitioner-society) is challenging the order of the appellate authority dated 18.9.2015 dismissing the petitioners appeal preferred under Section 106(1)(j) of the Karnataka Co-operative Societies Act, 1959 (the Act) by affirming the order dated. 15.4.2015 passed under Section 72(2) of the Act directing winding up of the petitioner-society and appointing a liquidator for its winding up. 2. I have heard learned counsel for the petitioner and perused the record. The sole contention urged by the learned counsel is that the order dated 15.4.2015 passed under Section 72(2) of the Act was not preceded by an inquiry under Section 64 of the Act and therefore, the order is unsustainable in law. 3. To examine the contention raised, it is relevant to refer to Section 72 of the Act: “72. Winding up of co-operative society:- (1) If the Registrar, after an audit has been conducted under Section 63 or an inquiry has been held under Section 64 or an inspection has been made under Section 65 or on receipt of an application made by no less than three-fourths of the members of a co-operative society, is of opinion that the society ought to be wound up, he may, after giving the society an opportunity of making its representation, issue an order directing it to be wound up. (2) The Registrar may, of his own motion, make an order directing the winding up of a co-operative society:- (a) Where the number of members of the society has been reduced to less than the minimum number required for registration of the co-operative society. (b) Where the co-operative society has not commenced working within a period of six months of the date of its registration or has ceased to function for six months to work. (c) Where the co-operative society has ceased to comply with the conditions imposed by or under this Act regarding registration and management. (3) The Registrar may cancel an order for the winding up of a co-operative society, at any time, in any case where, in his opinion, the society should continue to exist. (4) Notwithstanding anything contained in this section, no co-operative bank shall be wound up or an order for winding up shall be cancelled except with the previous sanction in writing of the Reserve Bank. (4) Notwithstanding anything contained in this section, no co-operative bank shall be wound up or an order for winding up shall be cancelled except with the previous sanction in writing of the Reserve Bank. (5) Notwithstanding anything in this section, the Registrar shall make an order for the winding up of a co-operative society, if the general body of the society, by a resolution passed by two-thirds majority of the members present and voting in a general meeting decides for the winding up of that society.” (Underlining is mine) 4. A plain reading of section 72 of the Act extracted above will show that sub-sections (1) and (2) thereof are independent of each other. Therefore, power under sub-section (2) can be exercised independent of sub-section (1), provided the requirements stated in sub-section (2) are satisfied. Hence, exercise of power under sub-section (2) of Section 72 of the Act need not be preceded by an inquiry under Section 64 of the Act referred to in sub-section (1) of Section 72 of the Act. In other words, an inquiry under Section 64 of the Act is not a condition precedent for exercise of power under sub-section (2) of Section 72 of the Act. The sole contention urged by the petitioner’s counsel is accordingly rejected. 5. The Registrar may, of his own motion, make an order directing winding up of a co-operative society under any of the clauses of sub-section (2) of Section 72 of the Act, provided the requirement therein is satisfied. 6. The order dated. 15.4.2015 directing winding up of the petitioner-society is made under clause (c) of sub-section (2) of Section 72 of the Act as could be seen from the show-cause notice dated. 18.3.2015 (Annexure-A) issued to the petitioner-society. Fourteen defects in the functioning of the petitioner-society are enumerated in the said notice. Both the original and the appellate authority have found that the management of the petitioner-society was not in conformity with the provisions of the Act. The findings are recorded on the basis of the evidence including the reply filed by the petitioner-society. Hence, I find no ground to interfere with the order of the appellate authority in exercise of the power of judicial review under the extraordinary jurisdiction of this Court under Articles 226 and 227 of the Constitution of India. The writ petition is accordingly dismissed.