This writ petition is filed for a mandamus to declare the action of respondent No.1 in ordering an inquiry under Section 51 of the Andhra Pradesh Cooperative Societies Act, 1964 (for short 'the Act') vide Rc.No.4166/2010-D1, dated 11.10.2010, as arbitrary and illegal.

2. The petitioner is a House Building Society. The Divisional Cooperative Officer, Kadapa, respondent No.2, has submitted his report, dated 06.10.2010, to respondent No.1, wherein he has pointed out that a sum of Rs.89,32,539/- was found as imbalance in between loan outstanding of loans at Housefed level and member level of the petitioner-Society. While submitting the said report, respondent No.2 has requested for instituting an inquiry under Section 51 of the Act. Placing reliance on the said report, respondent No.1 has ordered for inquiry into the affairs of the petitioner-Society by appointing respondent No.3 as Inquiry Officer.

3. At the hearing, Sri L.J.Veera Reddy, learned counsel for the petitioner, strenuously contended that the impugned order is in violation of the provisions of Section 51 of the Act, inasmuch as respondent No.1 has not exercised his suo motu power or that no requisite quorum for holding an inquiry was made either by 1/3rd of the Managing Committee Members or 1/5th of the total number of members of the Society.

4. Section 51 of the Act reads as under:

"51. Inquiry:- The Registrar, may of his own motion and shall, on the application of a society to which the society concerned is affiliated, or of not less than one third of the members of the Committee, or of not less than one fifth of the total number of members of the society, hold an inquiry or direct some person authorized by him by an order in this behalf to hold an inquiry into the constitution, working and financial condition of a society. Such inquiry shall be completed within a period of four months and the report of inquiry along with the findings of the Registrar thereon shall be communicated to the managing committee of the society. It shall be the responsibility of the managing committee to place the inquiry report before the General Body or Special General Body convened for the purpose of its information, within a period of one month from the communication of the inquiry report by the Registrar. The Registrar shall be competent to initiate action under the provisions of this Act, if the committee fails to take action as aforesaid: Provided that notwithstanding anything contained in this Act and the Rules made thereunder, the bye laws of a society and the action of the society in placing inquiry report along with the findings of the Registrar, the Registrar shall not be precluded from taking follow up action as may be required on the basis of inquiry report: Provided further that such action shall not be nullified even if the General Body of the Society passes a resolution negativing the findings of the inquiry. Provided also that the Registrar may for reasons to be recorded in writing extend the period of four months for completion of inquiry for a further period not exceeding two months."

5. A perusal of the impugned proceedings shows that respondent No.1 has exercised his power under Section 51 of the Act on the basis of the report of respondent No.2, who has also incidentally made a request for instituting an inquiry. Though respondent No.1 has not used the phrase "on his own motion", the purport of the impugned order clearly reveals that he has exercised the powers inhered in him to order for an inquiry on the basis of the report received by him. The mere absence of words that he was exercising power of his own motion or his placing reliance on the report of a subordinate officer would not detract the nature of the power from the one of suo motu exercise.

6. I am also unable to accept the contention of the learned counsel for the petitioner that there is no application of mind on the part of respondent No.1. The very fact that respondent No.1 has referr