Padmavati Grameenabhivruddhi v. State of Karnataka
2025-12-02
M.NAGAPRASANNA
body2025
DigiLaw.ai
ORDER : 1. The petitioner is before this Court seeking the following prayer: “a. Issue a writ in nature of Certiorari quashing the Impugned Order Bearing No.Kra.DRL/SOR/Vicharane/06/2024-25 dated 06/02/2025 issued by the 3 rd respondent vide Annexure- E, in the interest of justice and equity. b. Issue such other reliefs as this Hon’ble Court deems fit in the circumstances of the case.” 2. The solitary contention of the learned counsel appearing for the petitioner is that the complainants, who have sought to register a complaint before the Registrar for an enquiry under Section 25 of the Karnataka Societies Registration Act, 1960 (hereinafter referred to as ‘the Act’ for short), are neither the members of the society nor there is 1/3 rd quorum for having registered the complaint, as is necessary under Section 25 of the Act. Section 25 reads as follows: “ 25. Enquiry by the Registrar— (1) The Registrar may on his own motion and shall on the application of the majority of the members of the governing body or of not less than one-third of the members of the society, hold an enquiry or direct some person authorised by him by order in writing in accordance with the rules made in this behalf to hold an enquiry into the constitution, working and financial condition of a registered society.
(2) The Registrar or the person authorised by him under Sub-Section (1) shall have the following powers, namely,— (a) he shall, at all reasonable times, have free access to the books, accounts, documents, securities, cash and other properties belonging to or in the custody of the society and may summon any person in possession or responsible for the custody of any such books, accounts, documents securities, cash or other properties to produce the same at any place at the headquarters of the society or any branch thereof; (b) he may summon any person who, he has reason to believe, has knowledge of any of the affairs of the society to appear before him at any place at the headquarters of the society or any branch thereof and may examine such person on oath; (c)(i) he may, notwithstanding anything contained in this Act or in any rule or regulation prescribing the period of notice for a general meeting of the society, require the governing body of the society to call a general meeting at such time and place at the headquarters of the society or any branch thereof and to determine such matters as may be directed by him. If the governing body of the society refuses or fails to call a meeting, he shall have power to call it himself; (ii) any meeting called under sub-clause (i) shall have all the powers of a general meeting called under the rules or regulations of the society and its proceedings shall be regulated by such rules or regulations; (iii) when an enquiry is made under this section, the Registrar shall communicate the result of the enquiry to the society concerned.” (Emphasis supplied) Section 25 of the Act mandates that proceedings shall be initiated, if not suo motu, at the hands of the Registrar, by a complaint by 1/3 rd of the members of the society. Therefore, the interim order was granted in the case at hand. 3. Learned counsel for respondent Nos.4 to 9, Sri. Girish Yadawad, submits that, in identical circumstances, the Co-ordinate Bench at Kalaburagi, in Writ Petition No.201552 of 2023, disposed on 09.06.2023, has held as follows: “… … … 7.
Therefore, the interim order was granted in the case at hand. 3. Learned counsel for respondent Nos.4 to 9, Sri. Girish Yadawad, submits that, in identical circumstances, the Co-ordinate Bench at Kalaburagi, in Writ Petition No.201552 of 2023, disposed on 09.06.2023, has held as follows: “… … … 7. The short question that arises for consideration in the present matter is whether the Registrar of Societies under Section 25 of the Act, can initiate an enquiry based on complaint received by him or his powers are restricted to only three circumstances: namely (i) suo moto; (ii) complaint by majority of the governing Body or (iii) complaint by not less than 1/3rd of the General body? 8. Section 25 of the Act, reads as under: "(1) The Registrar may on his own motion and shall on the application of the majority of the members of the governing body or of not less than one-third of the members of the society, hold an enquiry or direct some person authorised by him by order in writing in accordance with the rules made in this behalf to hold an enquiry into the constitution, working and financial condition of a registered society." (2) The Registrar or the person authorised by him under sub-section (1) shall have the following powers, namely,- (a) he shall, at all reasonable times, have free access to the books, accounts, documents, securities, cash and other properties belonging to or in the custody of the society and may summon any person in possession or responsible for the custody of any such books, accounts, documents securities, cash or other properties to produce the same at any place at the headquarters of the society or any branch thereof; (b) he may summon any person who, he has reason to believe, has knowledge of any of the affairs of the society to appear before him at any place at the headquarters of the society or any branch thereof and may examine such person on oath; (c) (i) he may, notwithstanding anything contained in this Act or in any rule or regulation prescribing the period of notice for a general meeting of the society, require the governing body of the society to call a general meeting at such time and place at the headquarters of the society or any branch thereof and to determine such matters as may be directed by him.
If the governing body of the society refuses or fails to call a meeting, he shall have power to call it himself; (ii) any meeting called under sub-clause (i) shall have all the powers of a general meeting called under the rules or regulations of the society and its proceedings shall be regulated by such rules or regulations; (iii) when an enquiry is made under this section, the Registrar shall communicate the result of the enquiry to the society concerned.” 9. A perusal of the above Section would indicate that the Registrar may on his own motion and shall on an application of the majority of the members of the Governing Body or of not less than 1/3rd of the members of the society, hold an enquiry or direct some person authorised by him by order in writing to hold an enquiry into the constitution, working and financial condition of the registered society. 10. The submission of learned counsel for the petitioners is that it is only in these three circumstances that an Enquiry Officer could be appointed and any complaint received by the Registrar would have to be only from the majority of the members of the Governing Body and not less than of 1/3rd general body. A complaint lodged by third party non-member like respondent No.4 could not be the basis for exercising of power under Section 25 of the Act. 11. The alternate submission is that the Registrar may on his own motion initiate enquiry and in this regard, no reference or reliance could be placed, on a complaint made by a third party non-member. 12. In my considered opinion, sub-Section (1) of Section 25 of the Act can be segregated into three categories: (i) Firstly, Registrar on his own motion may institute enquiry; (ii) Secondly, the Registrar shall on the application of majority of the members of the Governing Body institute enquiry and (iii) thirdly, the Registrar shall on the application made by not less than 1/3rd of the members of the society institute enquiry. 13. In the latter two cases, no discretion is vested with the Registrar. On an application received in those two cases enquiry is mandatorily required to be instituted. 14. As regards first category, the Registrar may on his own motion institute an enquiry.
13. In the latter two cases, no discretion is vested with the Registrar. On an application received in those two cases enquiry is mandatorily required to be instituted. 14. As regards first category, the Registrar may on his own motion institute an enquiry. It is the mean and purport of “on his own motion” which is up for consideration in the present matter. Merely because the third party were to submit a complaint, the Registrar cannot initiate an enquiry without application of his mind. If a complaint is received by the Registrar and if the Registrar on perusal of the said complaint were to be of the opinion that enquiry is to be instituted, then he can order to do so and when such an order is made by the Registrar, it can only be said to be on his own motion, since there is an independent application of mind by the Registrar 15. It is only in the event of the non- application of mind by the Registrar and or the Registrar blindly following the complaint lodged by a third party that there is an embargo under Sub Section (1) to Section 25 of the Act and such an enquiry would not come within the purview of Sub Section (1) to Section 25 of the Act. 16. In the present case, as could be seen from the order of appointment of Enquiry Officer, on receipt of a complaint, the Registrar issued two notices for a preliminary enquiry and to find out whether there is prima facie truth in the allegations. It s upon receipt of the said report that the Registrar applied his mind to the report and came to an independent conclusion that an enquiry is required to be held. Thus the appointment of Enquiry Officer in the present case is not based on the complaint received but the registrar has acted upon it by instituting a preliminary enquiry and acted upon the preliminary enquiry as regards which he applied his mind. This application of mind, in my considered opinion, would constitute “on his own motion”. 17. As such, I am of the opinion that no grounds are made out in the present petition. Hence, the petition is dismissed at the admission stage itself.” (Emphasis supplied) 4.
This application of mind, in my considered opinion, would constitute “on his own motion”. 17. As such, I am of the opinion that no grounds are made out in the present petition. Hence, the petition is dismissed at the admission stage itself.” (Emphasis supplied) 4. Learned counsel for the respondent Nos.4 to 9 also seeks to place reliance upon the judgment of the Full Bench of this Court, in the case of Bangalore Grain Merchants Association v. The District Registrar for Societies, ILR 2001 KAR 766 wherein the Full Bench has held as follows: “… … … 9. Now, we come to the more crucial and controversial question i.e., what is the meaning and import of the expression ‘on his own motion’ and what is its interrelation to the immediately following clauses of the same sub-section. There could be, no doubt, that the expression ‘on his own motion’ is synonymous to suo-motu, which according to the dictionary means, “on one's own initiative”. ‘Own motion’ obviously implies application of mind and formation of one's own opinion. It does not matter how and from what source he gets information. But, it does not mean that the authority conferred with such power should eschew from consideration information or material furnished by external sources and should look to the information collected by his own self-effort. The exercise of powers suo-motu or on one's own motion, cannot and ought not to be construed in a narrow sense and in a sense which defeats the salutary purpose of the provision. No fetters can be placed on the specified authority from the stand point of source material on which it should exercise the power. An authority exercising the suo- moto power is not debarred from obtaining informations and materials from various sources. The only requirement is that on the basis of such informations and materials gathered either on its own initiative or received from other sources, the concerned authority has to come to the conclusion, on an active application of mind whether to take up the enquiry or not. Undoubtedly, the decision must be his own. He cannot mechanically act at the behest of some other person or authority without independent application of mind to arrive at a conclusion on the need and expediency of holding an enquiry.
Undoubtedly, the decision must be his own. He cannot mechanically act at the behest of some other person or authority without independent application of mind to arrive at a conclusion on the need and expediency of holding an enquiry. It is not argued before us nor can it be disputed that the suo-motu exercise of power does not cease to be such merely because a member of the public or someone in the know of things brings relevant facts to the notice of the prescribed authority, in this case, the Registrar. The Registrar, on a consideration of such facts has to decide whether it is a fit case warranting initiation of enquiry in the over-all interests of the society. The decision must be his and the decision must ofcourse be based on relevant factors, but there is no limitation as to the sources by which he should be prompted to action. … … … 14. There is a fallacy underlying the argument advanced by the learned Counsel for the petitioner. Neither the contextual interpretation nor any canon of construction would countenance the argument of the learned Counsel. The argument of the learned Counsel ignores the crucial fact that suo-motu power conferred by the first limb of sub-section can come into play independent of the power confided to the Registrar in two specific situations. The three relevant clauses of Section 25 (1) have to be read harmoniously and to effectuate the objective of the provision. The ambit and plenitude of the power vested in the Registrar to act on his own motion cannot be curtailed and crippled by any ‘a apriori’ notion that it stands excluded where the members less than the requisite percentage become complainants. There is no taboo against a member or members less than 1/3rd approaching the Registrar with a petition and the Registrar taking cognizance of the same and proceeding to make an enquiry on the basis of information laid before him. As already observed, the information forming the basis for exercise of suo-motu power may come from any source including a single member of the society. The exercise of such power by the Registrar cannot be controlled by the fact that the complaint is made by less than 1/3rd of the members.
As already observed, the information forming the basis for exercise of suo-motu power may come from any source including a single member of the society. The exercise of such power by the Registrar cannot be controlled by the fact that the complaint is made by less than 1/3rd of the members. If the number of members petitioning to the Registrar is 1/3rd or more, as already discussed, the Registrar is bound and obliged to initiate an enquiry. He has no option but to act and direct the enquiry. But, if the number is less, the Registrar can very well refrain from holding the enquiry, if he feels that the enquiry is not warranted. His refrain may be on account of many factors allegations being vague or ex-facie incredible or contrary to the informations on record or the allegations being unrelated to the constitution, working or financial condition of the Society. If the Registrar decides not to move in the matter on the basis of the complaint lodged by less than 1/3rd of the members, the Court cannot compel him to institute an enquiry except in some rare cases such as total non-application of mind to the tell-tale facts. It is only to emphasize the distinction between the discretionary and obligatory nature of duty of the Registrar to hold an enquiry that the second and third modes are specifically enjoined by the statute. Otherwise, the opening clause itself empowering the Registrar to hold enquiry on his own motion, would have been sufficient to take care of all other contingencies including the application by members. The suo-motu exercise of power does not get excluded merely because less than 1/3rd of members of the society make a complaint and invite action of the Registrar. That was what exactly held by the Division Bench, speaking through Rama Jois J. in Muslim Co- Operative Bank's case. We share the same view as was expressed in that case. … … … 16. We are, therefore, of the view that Mahila Seva Samaj case and Srinivasa Rao's case insofar as they lay down the law that the Registrar cannot exercise suo-motu power under the first limb of the sub-section, if the complaint is made by a’ single member or by members falling short of 1/3rd are hereby overruled.
… … … 16. We are, therefore, of the view that Mahila Seva Samaj case and Srinivasa Rao's case insofar as they lay down the law that the Registrar cannot exercise suo-motu power under the first limb of the sub-section, if the complaint is made by a’ single member or by members falling short of 1/3rd are hereby overruled. The view expressed by the learned judges in the second decision that the Section would be rendered nugatory if on the basis of the complaint made by less than 1/3rd of the members an enquiry is set in motion by him is, with great respect, not acceptable, in fact, the provision will become ineffective if not nugatory in case such view is approved. We may also mention that in the latter case, the learned Judges were influenced by the fact that the ratio of the decision in Manila Seva Samaj case was approved by another Division Bench in A.S. Kupparaju's case. Whether that assumption is correct or not, we shall advert to a little later. Irrespective of that, we cannot endorse the’ reasoning and the conclusion arrived at in Srinivasa Rao's case. We, therefore, over-rule the two decisions aforementioned and affirm the view taken in Muslim Co-Operative Bank's case . 17. What remains for consideration is the decision in A.S Kupparaju's case. In that case, the Registrar directed an enquiry into the working of the Society by nominating an Enquiry officer on the basis of representation submitted by a non-member, ‘Raju Kshatriya Welfare Association’, which at one point of time promoted the interests of the Registered Society by name Andhra Kshatriya Maha Samooham it was contended that the Registrar could not have acted upon the representation of that Association as it was neither a member nor did it represent the majority of the governing body or 1/3rd of the members of the Society. The decision in Mahila Seva Samaj case was relied upon on behalf of the petitioner. The Division Bench correctly analysed the various ingredients of Section 25 (1) of the Act, which we have adverted to earlier. We would like to quote the observations at paragraph 10 of the judgment.
The decision in Mahila Seva Samaj case was relied upon on behalf of the petitioner. The Division Bench correctly analysed the various ingredients of Section 25 (1) of the Act, which we have adverted to earlier. We would like to quote the observations at paragraph 10 of the judgment. “ The significant feature to notice in the exercise of the power to hold an enquiry or direct the holding of an enquiry is in the employment of the expressions “may” and “shall” in the language of Section 25 (1) of the Act. ‘May’ occurring just before “on his own” clearly indicates the directory nature i.e, if and when he acts on his own upon or with reference to information or material gathered by him from whatever source or sources, he has the discretion to hold or not to hold an enquiry or direct the holding of it or not holding it by person authorised by him. On the other hand, if it is a case falling either under the second or the third occasion indicated by us, that discretion is taken away by the Legislature and the Registrar is mandated to hold the enquiry or direct the holding of it by person authorised by him. For this reason in Rule 8 of the Rules reference is made to the application that is required to be made relating to the latter two occasions when the power is to be exercised.” The learned Judges then rejected the contentions of the learned Counsel for the petitioner and proceeded to consider the next question whether the enquiry was vitiated by violation of principles of natural justice. The Division Bench found substance in the contention of the petitioner's Counsel that the petitioner had no opportunity to present its case on merits and certain material informations which were obtained behind the back of the petitioner were relied upon in the report.
The Division Bench found substance in the contention of the petitioner's Counsel that the petitioner had no opportunity to present its case on merits and certain material informations which were obtained behind the back of the petitioner were relied upon in the report. In the penultimate paragraph of the judgment, the manner in which the suo-motu power has to be exercised by the Registrar was outlined by the learned Judges in the following words: “ But we add that when the Registrar acts suo-motu or on his own upon whatever material available other than a complaint by Members of the Society or the Governing Body without the requisite majority prescribed to him to exercise his power under Section 25 (1) of the Act, he must do so only after due application of mind and disclosure of material upon which he is acting and that must be explicit in the order he is required to make . Such an order cannot be capricious or without proper examination and investigation of the material upon which he proposes to act lest such action becomes arbitrary.” It becomes evident that the ratio of the decision in Kupparaju's case, far from supporting the contention advanced on behalf of the petitioner in the instant case, runs counter to that contention. The only ground which led to the quashing of the enquiry report, was not the lack of competence to hold enquiry, but denial of fair opportunity. But, the difficulty is created by the following observation made immediately after analysing the provision namely, Section 25 (1): “Understood thus, we do not see any error of construction or interpretation of Section 25 (1) of the Act in Mahila Seva Samaj's case which requires further consideration or reconsideration.” It is here, we should point out, that the observations are inaccurate and too broadly made. Though in the first part of Mahila Seva Samaj's case, the Learned Single Judge correctly analysed the relative scope of various parts of Section 25 (1) and the nature of duty cast on the Registrar, the ultimate conclusion rested on the fact that the Registrar proceeded to hold an enquiry only on the application made by three members of the Society, who fell short of 1/3rd of total members of the Society.
It is this conclusion that should have been faulted by the Division Bench in the light of the viewpoint which the Division Bench had itself taken. However, the Division Bench made a wide observation which is somewhat off the mark, apparently suggesting that a right-conclusion was reached in Mahila Seva Samaj case. To this extent, we must hold that the said observation does not reflect the correct legal position clarified by the learned Judges themselves. 18. The decision in A.S Kupparaju's case was followed by the Division Bench in Sreenivasa Rao's case. In Sreenivasa Rao's case, the learned Judges having regard to the observations in Kupparaju's case to the effect that Mahila Seva Samaj case laid down the law correctly held that the Registrar cannot take any action on the basis of the complaint made by less than 1/3rd of the total number of members of the Society. Though it was commented by the learned Judges that any other interpretation would render the Section nugatory, no reasons were given in support of such viewpoint. The learned Judges did not consider whether there is any dichotomy between the power confided to the Registrar to act on his own motion and the invocation of such power by some members falling short of 1/3rd of the strength of the Society. Moreover, the true import and ratio in A.S Kupparaju's case was not appreciated by their Lordships. For all these reasons, we are unable to place our seal of approval on the decision in Sreenivasa Rao's case. That decision insofar as the first question considered therein, is hereby over-ruled. … … … 20. In the light of the above discussion, we record our conclusion that the enquiry held by the Registrar of Societies is well within his jurisdiction. The Registrar acted on his own motion after considering the petition filed by certain members and the inspection report for 1994-1995. 21. The learned Counsel for the petitioner has also contended that the opportunity of hearing was not given and the recommendation was made to the Government to appoint an Administrator without proper application of mind. On a perusal of the order and the copy of the notes of proceedings furnished by the petitioners' counsel, we find no substance in this contention.” (Emphasis supplied) 5.
On a perusal of the order and the copy of the notes of proceedings furnished by the petitioners' counsel, we find no substance in this contention.” (Emphasis supplied) 5. On a coalesce of the afore-quoted judgments of the Full Bench and that of the Co-ordinate Bench of this Court, what emerges is that the usage of the words ‘on his own motion’ in Section 25 of the Act would indicate that proceedings initiated on the basis of a complaint should bear application of mind, and a complaint by any person would be enough for the Registrar to initiate proceedings under Section 25 of the Act. 6. In the light of the issue standing completely answered by the judgments of the Full Bench of this Court and of the Co-ordinate Bench of this Court as quoted supra, the petition does not deserve any indulgence. The petition is thus rejected.