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Judgment
A.N. Venugopala Gowda, J.—The 3rd respondent is a Society registered under the Karnataka Societies Registration Act, 1960 (for short ''the Act''). Petitioners and the respondents 4 to 7 are its members. Petitioners were also the office bearers of the Managing Committee of the 3rd respondent for the period from 01.02.2006 to 13.09.2009. Respondents 4 to 7 having submitted a complaint, vide Annexure-C1, to the 1st respondent and the 1st respondent having forwarded the said complaint to the 2nd respondent on 10.02.2012 and the 2nd respondent having issued a notice, vide Annexure-C and having submitted a report, vide Annexure-D, based on which the 1st respondent having passed an order dated 16.05.2012, as at Annexure-F, the petitioners filed W.P. Nos. 19078-80/2012. Based on the submissions of the learned advocates who appeared for the respondents therein, that the order under challenge is appealable under S. 26(2) of the Act and being of the opinion that the same is more efficacious remedy, the writ petitions were disposed of on 18.06.2012, reserving liberty to the petitioners, to file appeal under S. 26(2) of the Act. Appeal Nos. 425 and 433 of 2012 filed having been dismissed on 27.11.2012, vide the judgment, as at Annexure-A, these writ petitions were filed on 18.12.2012, to quash the judgment, as at Annexure-A and for granting of consequential reliefs. On 20.12.2012, taking note of the submissions made on behalf of the 3rd respondent by its learned advocate that the decision taken to suspend the petitioners herein was withdrawn and waived and the subject of suspension of the petitioners has been placed on the Agenda of the General Body Meeting scheduled to be held on 06.01.2013 and that the petitioners have also filed their nominations and shall be entitled to participate in the election, being of the view that there is no threat of denial of petitioners'' right to participate in the election, awaiting the further developments, on the undertaking that the petitioners'' right to participate in the election was not questioned, the petitions were adjourned.
I.A. No. 1/2013 filed by the respondents 4 to 7, to permit them to come on record as additional respondents was allowed on 18.04.2013.
On behalf of the respondents 1 and 2, statement of objections seeking dismissal of the writ petitions was filed on 19.10.2012. Statement of objections on behalf of respondent No. 3 was filed on 20.12.2012.
Contents of I.A. No. 1/2013 shows that in the election held on 06.01.2013, three petitioners have been declared as elected to the posts of President, Secretary and Joint Secretary of the 3rd respondent.
Sri R. Anil Kumar, learned advocate for the petitioners, firstly, contended that the 2nd respondent had no jurisdiction to conduct the enquiry on a complaint filed by the respondents 4 to 7. He submitted that the complaint, if any, ought to have been filed by the majority of the members of the governing body or not less than 1/3rd of the members of the 3rd respondent. He submitted that entire proceedings conducted by the respondents 1 and 2 being wholly illegal are liable to be quashed. Secondly, respondent No. 1 having not passed any order and the respondent No. 2 having illegally construed that he has been directed to hold an enquiry and having held an unauthorised and illegal enquiry and a perverse report having been submitted, the 1st respondent has committed illegality in mechanically passing the order, as at Annexure-F. Thirdly, W.P. Nos. 19078-80/2012 having been disposed of based on the submissions of the learned advocates who appeared for the respondents therein and the liberty having been reserved to the petitioners to file an appeal, Karnataka Appellate Tribunal is unjustified in not moulding and granting appropriate relief to the petitioners. He submitted that in view of the tenor of the order dated 18.06.2012 passed in W.P. No. 19078-80/2012, in order to do complete justice, the Tribunal ought to have moulded the relief and the same having not been done, in order to prevent any injustice being perpetuated, the Court may mould the relief appropriately for advancing the cause of justice. Lastly, the impugned actions of the respondents 1 and 2 being contrary to the provisions of the Act and the settled position of law and the record of the case, interference is warranted. He submitted that Annexures-D and F being illegal, an appropriate declaration to the said effect may be made.
Sri Laxminarayan, learned AGA, submitted that a complaint vide Annexure-C1 was lodged with the 1st respondent, to conduct an enquiry and the 1st respondent informed the 2nd respondent to hold an enquiry under S. 25 of the Act and that the 2nd respondent having issued the notices to the petitioners and considering the objections filed by them, having conducted the enquiry, submitted a report on 15.05.2012, with regard to loss caused by the petitioners to the 3rd respondent Society. He submitted that, based on the said report, the 1st respondent passed the order dated 16.05.2012, as at Annexure-F, to rectify the errors in the conduct and function of the society and submit the compliance report. He further submitted that in the facts and circumstances of the case, the writ petitions being devoid of merit may be dismissed.
Sri M.S. Varadarajan, learned advocate for respondents 4 to 7 submitted that the 1st respondent having been appraised of the loss caused by the petitioners, in the 3rd respondent society, the respondent No. 1 in exercise of the power under S. 25 of the Act ordered the 2nd respondent to conduct an enquiry and submit the report. He submitted that the 2nd respondent having extended reasonable opportunity of hearing to the petitioners and having held a lawful enquiry, submitted the report vide Annexure-D and in view of the findings recorded therein i.e., based on the evidence, the 1st respondent is justified in passing the order, as at Annexure-F. Learned counsel submitted that the petitioners having participated in the enquiry conducted by the respondent No. 2, without questioning the jurisdiction of the respondent No. 2, in view of their indictment by respondent No. 2 in the report, vide Annexure-D, now at this stage, cannot question the jurisdiction of respondents 1 and 2 in the matter. He submitted that the principles of estoppel and waiver are attracted and hence, the writ petitions are liable to be dismissed.
Sri S. Mahesh, learned advocate for the respondent No. 3 submitted that the case of the 3rd respondent has been stated in detail in the statement of objections filed on 20.12.2012 and in view of the same, the writ petitions may be dismissed.
On 14.11.2013, learned AGA was directed to obtain the file, which led to passing of the order, as at Annexure-F, from the office of the 1st respondent and make available of the same for perusal of the Court. Learned AGA made available the file which led to the submission of the report vide Annexure-D and the order passed, as at Annexure-F. Upon perusal of the file, it was noticed that a complaint vide Annexure-C1 having been submitted by four members of the 3rd respondent i.e., respondents 4 to 7 herein, the same was forwarded to the Assistant Registrar of Co-operative Societies i.e., the 2nd respondent herein, with an observation, that it involves technical aspects and the assistance of central office may be obtained, the matter enquired into and to submit the report. Based on the said communication, 2nd respondent having issued notice as at Annexure-C, after holding enquiry, the report vide Annexure-D was submitted. Thereafter, the order, as at Annexure-F was passed by the 1st respondent.
Keeping in view the rival contentions and the record of the case, the primary question for consideration is, whether the 1st respondent has acted on his ''own motion'' or on the request made by the respondents 4 to 7, in the matter of the impugned enquiry and whether Annexure-F is vitiated?
A reading of Sub-section (1) of S. 25 of the Act makes it clear that there are three situations in which the Registrar can initiate and hold an enquiry i.e., (1) The Registrar acting on ''his own motion''; (2) The Registrar acting at the instance of the ''majority of members of the ''governing body''; and (3) The Registrar acting on the request of the ''1/3rd of the members of the society''.
Statement of objections filed on 19.10.2013 on behalf of the respondent No. 1 makes it clear that a complaint having been lodged with the 1st respondent to conduct an enquiry, accordingly, 1st respondent appointed the 2nd respondent to hold enquiry under S. 25 of the Act. A perusal of the file of the 1st respondent, which was made available by the learned AGA, on 06.12.2013, shows that, on 10.12.2012, the 1st respondent forwarded to the Assistant Registrar of Co-operative Societies, North Zone Circle, the complaint of the members of the 3rd respondent, on the ground that it involves technical aspects and that the assistance of the Central Office may have to be taken and the matter be enquired into and thereafter to submit the report.
Undisputedly, more than 1/3rd of the members of the 3rd respondent did not make the application to the respondent No. 1. Only four members, i.e. respondents 4 to 7 herein, submitted the complaint to the Registrar, to hold an enquiry or direct someone authorised by him by order in writing in accordance with the Rules made, to hold an enquiry into constitution, working and financial condition of the 3rd respondent. Pursuant to the complaint of the respondents 4 to 7, vide Annexure-C1, forwarded by the 1st respondent, the 2nd respondent construing the communication dated 10.12.2012 as an order passed in exercise of the power under S. 25(1) of the Act, held enquiry and submitted the report. There is no order, as such, passed by the 1st respondent, on 10.12.2012 or on subsequent days i.e., after the complaint vide Annexure-C1 was submitted by the respondents 4 to 7. The 2nd respondent by assuming that the 1st respondent has initiated suo motu proceedings and that he was appointed as enquiry officer, by issuing notice to the petitioners, calling for explanation and fixing the date for enquiry, having held an enquiry has submitted the report vide Annexure-D.
The 1st respondent, after receipt of the complaint vide Annexure-C1 from the respondents 4 to 7, before forwarding it to the 2nd respondent, ought to have satisfied himself with the requirements of Sub-Section (1) of S. 25 of the Act. The complaint vide Annexure-C1, being not by persons constituting more than 1/3rd of members of the 3rd respondent and without any application of mind, by acting mechanically, forwarded Annexure-C1, to the 2nd respondent. The 1st respondent has not exercised the power as provided by law, which has created the jurisdiction in him. There being no order made by the 1st respondent in exercise of the power under S. 25(1) of the Act, the enquiry conducted by the 2nd respondent, resulting in submitting of report, vide Annexure-D and the consequential order passed, as at Annexure-F are wholly illegal. Such an illegal action cannot be sustained. I do not find any merit in the contention that the principles of estoppel or waiver are attracted. Undeniably, petitioners did file statement of objections vide Annexures-E to E3, which shows that they did not admit jurisdiction of the enquiry officer in the matter. Petitioners having not waived their right and the objections having been filed, without admitting the jurisdiction of the enquiry officer, it can be said that the principles of estoppel or waiver are attracted.
In the result, the writ petitions are allowed and the report of the 2nd respondent, vide Annexure-D and the order of the 1st respondent, as at Annexure-F are quashed. However, it is open to the Registrar to initiate and hold an enquiry on ''his own motion'', if the situation calls for.
No costs.