Gajanana Subbaiah Kodsar and Others vs Assistant Registrar of Co-operative Societies and Others

M.F. Saldanha, J.—We have heard the learned Counsel on both sides on merits. Mr. Hegde, Appellants'' learned Counsel has submitted before us that there is no dispute with regard to the ambit and scope of the different types of investigation or inquiries that are contemplated under Sections 63 to 65 of the Karnataka Co-operative Societies Act but he has narrowed down his challenge to pointing out to us that pursuant to a directive from the Registrar, a detailed inquiry or audit was conducted in respect of the year 1992-93. That audit/inquiry did result in an adverse finding and certain recommendations were also issued pursuant to which action was instituted for recovery of the amounts in question from the Directors and from the previous Secretary. It transpired that despite all of this, that some of the dissatisfied persons have addressed a complaint directly to the Minister who in turn has directed the Registrar to hold an inquiry on the lines of the allegations contained in the complaint. Thereupon, in respect of the same co-operative years the Registrar has issued another show -cause notice for purposes of holding another inquiry. Mr. Hedge''s submission is that in the special facts and circumstances of this case no such inquiry is permissible. The learned Government Advocate has vehemently submitted that in the first instance, the ambit and scope of Sections 64 and 65 of the Act are dissimilar whereas one of them is confined to financial and accounting irregularities, the other concerns the working of the Society and the various administrative issues. He therefore submits that in a given instance where there is gross mismanagement and financial irregularities, that it is certainly open to the Government or for that matter to the Registrar, to direct separate inquiries in respect of different heads of alleged misconduct or illegalities. The learned Single Judge has also referred to this aspect of the law and we have no difficulty in agreeing with the proposition in theory. For that year, Mr. Hedge himself has not disputed the legal position but all that he has pointed out is that where the entire process had been duly completed and action initiated, that the doctrine of finality would certainly apply and that there is absolutely no scope for re-opening the same issues or for that matter the same heads of charge in respect of the same financial year. To this, what the learned Government Advocate submits is that there is an omnibus charge that had been placed before the Government to the effect that there has been a total misconducting of the affairs of the Society and the financial irregularities were so grave that lakhs of rupees have been misappropriated. His submission is that if on this complaint a further inquiry has been directed that it is within the scope of the law and that it is certainly open to the Registrar also to exercise these powers.

It is necessary sometimes to draw a distinction between a theoretical situation and between the factual position. There could be situation in which even as far as financial irregularities are concerned, that an inquiry has been held but the inquiry may be very restrictive or in a given instance the inquiry may be thoroughly unsatisfactory, the result being that the grievance may still not be redressed. In such situations, we do not dispute that the authorities do have the scope to direct a de novo inquiry or further inquiry, but that is not what has happened in the present instance. In respect of the financial mismanagement theory, if we can term it as such, in relation to that financial year a total and thorough and a detailed audit has been conducted and the responsibility has been fixed. Once this procedure has been completed, Mr. Hedge is right in his submission that in the absence of a finding that the inquiry conducted was either too restrictive or that doe snot concern itself to the larger subject matter of the allegation, that it would not be open once again to direct a second inquiry. Mr. Hedge has used the term ''double jeopardy'' obviously by drawing a parallel to the provisions of the Code of Criminal Procedure wherein an accused who has been once tried for an offence cannot be subjected to the re-trial on the same set of charges. There is some broad parallel as far as this principle is concerned even in the present case because it is not really a question of double jeopardy, but it is really a question of principles analogous to res-judicata wherein once an issue has been inquired into and decided, it would not be permissible to thereafter initiate multiplicity of inquiries or trials. In the present instance, there is nothing in the present show-cause notice/order to indicate that the earlier inquiry was either unsatisfactory or that all aspects in relation to the financial working of the society for that financial year had not been totally and completely examined and once this procedure has been completed, there is no scope for reopening those issues. The challenge is therefore well defined. The order passed by the learned Single Judge dismissing the petition would therefore have to be set aside. The petition is allowed. The show cause notice/order is accordingly quashed. The appeal succeeds. No order as to costs.