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1990 Supreme(Kar) 325
Karnataka High Court
Muslim Co-operative Bank Ltd - Appellant
Versus
Assistant Registrar of Co-operative Societies - Respondent
Decided On : 07-20-90
W.P. : 8939 of 1984
T.N.RAGHUPATHY
The Registrar has the discretionary power to initiate an inquiry into the affairs of a co-operative society based on his own motion or on written request by the society or its members. The exercise of suo motu powers is at the discretion of the Registrar, and the written complaint by a member can be a source of information for instituting the inquiry.
Headnote:
Registrar's Power - Co-operative Society - Karnataka Co-operative Societies Act, 1959 - Section 64 - The Registrar has the power to order an inquiry into the affairs of a co-operative society on his own motion or on written request by the society or its members. The exercise of suo motu powers is at the discretion of the Registrar. The written complaint by a member can be a source of information for instituting the inquiry. The Deputy Registrar has the authority to authorize an Assistant Registrar to hold an inquiry.
Fact of the Case:
The Muslim Co-operative Bank Limited filed a writ petition challenging the legality of an inquiry ordered by the Deputy Registrar of Co-operative Societies based on a written complaint by a member of the bank. The petitioner contended that the inquiry was illegal as it was initiated on the complaint of a single member and that the Assistant Registrar did not have the authority to issue the notice for the inquiry.
Finding of the Court:
The court held that the Deputy Registrar had the jurisdiction to initiate the inquiry under Section 64(1) of the Karnataka Co-operative Societies Act, 1959, based on the written complaint by a member. The court also found that the Assistant Registrar had the authority to hold the inquiry as authorized by the Deputy Registrar.
Issues: The issues involved the legality of initiating an inquiry based on a single member's complaint and the authority of the Assistant Registrar to issue the notice for the inquiry.
Ratio Decidendi: The Registrar has the power to order an inquiry into the affairs of a co-operative society on his own motion or on written request by the society or its members. The exercise of suo motu powers is at the discretion of the Registrar. The written complaint by a member can be a source of information for instituting the inquiry. The Deputy Registrar has the authority to authorize an Assistant Registrar to hold an inquiry.
Final Decision: The writ petition was dismissed, and the court upheld the legality of the inquiry initiated by the Deputy Registrar based on the written complaint by a member. The court also affirmed the authority of the Assistant Registrar to hold the inquiry as authorized by the Deputy Registrar.
( 2 ) WHETHER an order directing the holding of an inquiry into the affairs of a Co-operative Society instituted by the Registrar pursuant to a complaint made by one of the members of the Society is violative of Section 64 of the Karnataka Co-operative Societies Act, 1959 (The Act for short)
( 3 ) THE brief facts of the case are these : the petitioner Bank is a co-operative society registered and functioning under the provisions of the Act. An inquiry into certain allegations regarding the working of the society leveled in writing by one of its members has been ordered by the 2nd respondent ---Deputy Registrar of Co-operative Societies, under Section 64 of the Act. Sub-sections (1) and (2) of Section 64 of the Act which are relevant to this case read:"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) not less than one-third of the total number of members of the society. " the expression 'registrar' used in the above Section includes Additional Registrar, Joint Registrar, Deputy Registrar and also an Assistant Registrar of Co-operative Societies appointed to assist the Registrar when exercising all or any of the powers of the Registrar in view of the definition of 'registrar' given in Section 2 (1) of the Act. The Deputy Registrar of Co-operative Society, Mysore District who is competent to exercise powers of the Registrar under Section 64 of the Act, in relation to the petitioner society, received a complaint from one Mohamed Khaleel, a member of the petitioner society making a complaint about the irregularity, misappropriation and incongruities committed by the Board of Management of the petitioner society. On receipt of the same, the Deputy Registrar directed the Assistant Registrar to hold an enquiry in terms of Section 64 of the Act. On receipt of the said direction, the Assistant Registrar issued notice dated 29-5-1984 Annexure-A which reads:"proceedings of the Asstt. Registrar of Co-operative Societies, Mysore Sub-Division, Mysore sub: Grave irregularities committed by the Board of Management of the Muslim Co-op. Bank Ltd. , Mysore - Enquiry u/ S. 640 of the K. C. S. Act, 1959 - Regarding- ref: Letter No. DRM. RSR. 2/929/8384 dated 16-2-84 of the Deputy Registrar of Co-op. Socys. Mysore District, Mysore. Preamble: the Deputy Registrar of Co-op. Socys; Mysore Dist. Mysore, while enclosing the original letter dated 23-1-84, of Sri Mohamed Khaleel, a member of Muslim Co-op. Bank Ltd. Mysore in respect of irregularities, misappropriation and defalcation committed by the Board of Management has instructed to order an enquiry under Section 64 of Karnataka Co-op. Socy. Act, 1959. The following are the irregularities pointed out. 1. It is alleged that the Auditor has directed to recover a sum of Rs. 7,949. 70 from the concerned persons (as stated in Page No. 19 of General Body Meeting report) for which details are not available. 2. The steps taken for the recovery of the other dues of Rs. 22,713. 81 ps. narrated in Page No. 18 of G. B. M. Report. 3. It is alleged that without obtaining quotations printing work was got done as objected by the Auditor (Page No. 192) G. B. M. Report. 4. It is alleged that, there is defalcation to the extent of Rs. 1,05,266. 00 in respect of S. B. Account whether any enquiry is conducted by the Board of Management? If so who conducts the enqu
