The registrar's exercise of suo motu power under Section 25 (1) of the Act is not restricted by the number of members making a complaint, but should be based on due application of mind and disclosure of material.

( 1 ) APPARENTLY conflicting decisions of the division benches of this court on the scope and interpretation of Section 25 (1) of the Karnataka societies Registration Act (hereinafter referred to as 'the act') has given rise to this reference to the full bench. What are the preconditions for the exercise of power of holding or directing an enquiry by the registrar into the constitution, working and financial condition of a registered society? Whether the registrar could be said to have exercised power on his now motion, when such power is exercised on the basis of the complaint made by less than 1/3rd of the members of the society, and if so, under what circumstances? These, in brief, are the questions which fall for the consideration of the full bench.

( 2 ) TURNING to the facts first, we notice that the memorandum signed one by Sri ramaiah shetty (the impleaded respondent herein) a member of the Bangalore grain merchants association which is a registered society together with the purported signatures of 157 other members was presented to the chief minister of Karnataka on 11. 7. 1995 complaining against the manner of functioning of the governing body/managing committee of the society. Various irregularities and acts of dishonesty in the management of the society were alleged therein. Collection of unauthorised amounts, non-accountal of the monies collected from the members of the association towards cyclone relief fund, unauthorised allotment of sites to the members and non-members, non-submission of annual reports and statements to the registrar, default in conducting the elections are some of the allegations made against the society. A request was made on 22. 8. 1995 to direct the managing committee to produce the account books, annual reports etc. , before the government for inspection and to supersede the present committee and to hold elections. It appears that a copy of the said application was forwarded to the registrar of firms. Bangalore urban district for appropriate action. The registrar in his turn called for the comments of the association to be submitted within 7 days. A reference was made by the registrar to the petitions submitted by the members of the society on 11. 7. 1995 and also an inspection report dated 5. 6. 1995. The secretary of the association made a bald denial of the allegations in general terms and promised to produce the audit report and the proceedings of the general body meeting soon after the meeting was held. However, the proposed date of general body meeting was not mentioned. It appears from the proceedings dated 4. 10. 1995 (Annexure-F) that the secretary of the association, by his subsequent letter dated 28. 9. 1995 sought further time of one month to submit the explanation. Thereupon, by an order dated 4. 10. 1995, the registrar decided to hold an enquiry in exercise of power under Section 25 (1) of the Act, having felt that there was apparent justification for holding the enquiry. Before that date, the member of the association. Sri ramaiah shetty, submitted a representation directly to the registrar of societies on 22. 9. 1995 reiterating the allegations made in the earlier joint representation.

( 3 ) PURSUANT to the decision taken by the registrar on 4. 10. 1995, the enquiry under Section 25 (1) of the act commenced on 16. 101995. Statement of objections was filed on 10. 11. 1995. It was contended therein that there was no prima facie material to hold an enquiry and that the enquiry had been initiated without giving reasonable time to submit further reply. It was stated that the account books were with the auditors and they will be produced soon after obtaining the same from the auditor. It was further submitted that the documents relating to site layout were not available as no such layout was undertaken by the association. In the course of enquiry, the counsel for the association made an application to examine the persons who made the complaint. As it was not possibl