Writ Petition No. 27057 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:16112 WP No. 27057 of 2024 R IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 27057 OF 2024 (CS-RES) …PETITIONER BETWEEN: JUDICIAL DEPARTMENT MULTI-PURPOSE CO-OPERATIVE SOCIETY 1ST FLOOR, OLD K.G.I.D. BUILDING, HIGH COURT, BENGALURU-560 001, REPRESENTED BY ITS SECRETARY, (REGISTERED UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959) (BY SRI. PRUTHVI WODEYAR.,ADVOCATE) AND: 1. THE STATE OF KARNATAKA DEPARTMENT OF CO-OPERATION, M.S. BUILDING, DR. B. R. AMBEDKAR VEEDHI, BENGALURU-560 001, REPRESENTED BY ITS PRINCIPAL SECRETARY. 2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES NO.1, ALI ASKAR ROAD, BENGALURU-560 052. 3. THE ADDITIONAL REGISTRAR OF CO-OPERATIVE SOCIETIES NO. 1, ALI ASKAR ROAD, BENGALURU-560 052. 4. THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES FIRST ZONE, BENGALURU CITY DISTRICT, SAHAKARA SOUDHA, Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:16112 WP No. 27057 of 2024 5. 6. MALLESHWARAM, BENGALURU-560 003. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES THIRD ZONE, BENGALURU CITY DISTRICT, BENGALURU-560 001. SRI. DEEPAK S/O KRISHNA AGED ABOUT 41 YEARS, COURT OFFICER, HIGH COURT OF KARNATAKA R/AT NO. 3848/A, 4TH CROSS, 2ND MAIN, GAYATHRINAGAR, BANGALORE-560021. (BY SRI. YOGESH D. NAIK., AGA FOR R1 TO R5 SRI. SAMEER SHARMA., ADVOCATE FOR R6) …RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI QUASHING THE ORDER DTD. 21.09.2024 IN NO. OTS-1/357/HOT/2023-24 PASSED BY THE R-3 VIDE ANNX-H AND ETC. THIS WRIT PETITION, COMING ON FOR ORDERS AND HAVING BEEN RESERVED FOR ORDERS ON 17.12.2024, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING. CORAM: HON'BLE MR JUSTICE SURAJ GOVINDARAJ CAV ORDER 1. The Petitioner is before this Court seeking for the following reliefs: - 3 - NC: 2025:KHC:16112 WP No. 27057 of 2024 a. Issue a writ in the nature of certiorari quashing the order dated 21.9.2024 in No. OTS-1/357/HOT/2023- 24 passed by the 3rd Respondent vide Annexure-H. b. Grant such other relief as deems in the circumstances of case and allow the writ petition with cost in the interest of justice and equity. fit 2. The Petitioner claims to be a Society registered under the Karnataka Cooperative Societies Act, 1959 [‘KCS Act’ for short], with the object to promote the economic interest of its members and to encourage self-help from their income. The Petitioner society gives loans to its members as also allots sites in the layout formed by the soceity, and it consists of nearly 6312 members. 3. On 26.02.2024, one of the members, Mr.Deepak K, filed a complaint with the Respondent No.2- Registrar of Cooperative Societies, making certain allegations as regards the formation of layouts at Bannikoppa village, Ramanagara taluk, Kenchanapura village and Hejjala village. The allegations were made that the Society has made payments to developers against the interest of the - 4 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Society. The representation having been received, Respondent No.3-Addl. Registrar directed Respondent No.4-Deputy Registrar Cooperative Societies (hereinafter referred to as DRCS for brevity), to hold an enquiry into the allegations and submit a report within one month. 4. Pursuant thereto, DRCS issued notice on 19.04.2023 calling upon the Petitioner to be present on 30.04.2024 at 11 am to submit relevant documents, the Petitioner had submitted its written submission and documents on 27.06.2024. 5. In the meanwhile, the Complainant before the enquiry could be conducted by DRCS approached this Court in W.P. No.16270/2024. This court vide order dated 1.07.2024, in the said writ petition, directed Respondent No.2 to consider whether an enquiry under Sections 64 and 65 of the Act is required to be conducted in accordance with law on the basis of the complaint given by the - 5 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Petitioner therein/Respondent No.6 herein. The said order had been challenged by the Petitioner by filing a Writ Appeal in W.A. No.1598/2024 [Judicial Department Multi-purpose Co- operative Society -v- The Registrar of Co- operative Societies and others]. 6. Pursuant to the aforesaid order dated 1.07.2024, DRCS issued a notice dated 12.07.2024 calling upon the Petitioner to submit records within three days. The complainant appeared before DRCS and submitted the order passed by this Court and requested DRCS to take action against the Petitioner-Society as per Section 30(2)(iv) and 30(2)(v) of the Act. One more notice came to be issued by DRCS on 6.08.2024 calling upon the Petitioner-Society to submit its explanation along with documents. The Petitioner submitted its reply on 6.08.2024 alleging that DRCS, without hearing the Petitioner and without holding an enquiry or - 6 - NC: 2025:KHC:16112 WP No. 27057 of 2024 inspection, has submitted a report to Respondent No.3 on 31.08.2024. 7. Respondent No.3 vide order dated 21.09.2024 directed Respondent No.5-Asst. Registrar of Cooperative Societies (Hereinafter referred to ARCS for brevity) to hold an enquiry under Section 64 of the Act and submit a report within six months. It is challenging the said order that the Petitioner-Society is before this Court. 8. Sri.Pruthvi Wodeyar, learned counsel appearing for the Petitioner -Society would submit that, 8.1. The impugned order dated 21.09.2024 is completely illegal, arbitrary and contrary to law. There is no independent application of mind by Respondent No.3. Respondent No.3 has only acted on a complaint filed by a third party. 8.2. The impugned order is contrary to Section 64 of the KCS Act. - 7 - NC: 2025:KHC:16112 WP No. 27057 of 2024 8.3. The Petitioner Society consisting of 6312 members, on the basis of a complaint filed by one member, enquiry could not have been conducted by DRCS. Majority of the members have no objection. The only objection raised is by the complainant. This aspect ought to have been taken into consideration by Respondent No.3. 8.4. Respondent No.3 has acted on the recommendation made by DRCS. Recommendation of DRCS is solely based on the complaint filed by a single member. The order of Respondent No.3 is solely based on the recommendation made by DRCS. 8.5. Petitioner having submitted its reply of more than 1000 pages, the details having been furnished, it was required to be ascertained by Respondent No.3 if the statement made by the Petitioner would suffice the allegations made by third party represented. - 8 - NC: 2025:KHC:16112 WP No. 27057 of 2024 If that were to be so, then there would have been no requirement for holding an enquiry under Section 64 of 65 of the Act.
Facts
8.6. In that background, he submits that the above writ petition is required to be allowed and the impugned order dated 21.09.2024 is required to be quashed. 8.7. In support of his contentions, he relies upon the following Judgments: 8.8. In the case of Bangalore Grain Merchants Association v. District Registrar for Societies1, more particularly, paras 9 and 13 thereof, which are reproduced hereunder for easy reference: ‘on his own motion’ and what 9. Now, we come to the more crucial and controversial question i.e., what is the meaning and import of the expression its interrelation to the immediately following clauses of the same sub-Section. There could be, no doubt, that the expression ‘on his own motion’ is synonymous to suo- motu, which according to the dictionary means, “on one's own initiative”. ‘Own motion’ obviously implies application of mind and formation of one's own opinion. It does not matter how and from what source he gets information. is 1 ILR 2001 Kar 766 - 9 - NC: 2025:KHC:16112 WP No. 27057 of 2024 But, it does not mean that the authority conferred with such power should eschew from consideration information or material furnished by external sources and should look to the information collected by his own self-effort. The exercise of powers suo-motu or on one's own motion, cannot and ought not to be construed in a narrow sense and in a sense which defeats the salutary purpose of the provision. No fetters can be placed on the specified authority from the standpoint of source material on which it should exercise the power. An authority exercising the suo-moto power from obtaining is not debarred informations and materials from various sources. The only requirement is that on the basis of such informations and materials gathered either on its own initiative or received from other sources, the concerned authority has to come to the conclusion, on an active application of mind whether to take up the enquiry or not. Undoubtedly, the decision must be his own. He cannot mechanically act at the behest of some other person or authority without independent application of mind to arrive at a conclusion on the need and expediency of holding an enquiry. It is not argued before us nor can it be disputed that the suo- motu exercise of power does not cease to be such merely because a member of the public or someone in the know of things brings relevant facts to the notice of the prescribed authority, in this case, the Registrar. The Registrar, on a consideration of such facts has to decide whether it is a fit case warranting initiation of enquiry in the over-all interests of the Society. The decision must be his and the decision must of course be based on relevant factors, but there is no limitation as to the sources by which he should be prompted to action.
Legal Reasoning
32. Discretionary power leaves the donee of the power free to use or not to use it at his discretion. (Refer Drigraj Kuer v. Amar Krishna Narain Singh [AIR 1960 SC 444] .) Law is well settled that the exercise of statutory discretion must be based on reasonable grounds and cannot lapse into the arbitrariness or caprice anathema to the rule of law envisaged in Article 14 of the Constitution. It is trite law that, though, no citizen has a legal right to claim a distillery licence as a matter of right and the Commissioner or the State Government is entitled to either not to entertain or reject the application, they cannot enter into a relationship by arbitrarily choosing any person they like or discriminate between persons similarly circumscribed. The State Government, when decides to grant the right or privilege to others, of course, cannot escape of the rigour of Article 14, in the sense that it can act arbitrarily. In such a situation, it is for the party who complains to establish that a discriminatory treatment has been meted out to him as against similarly placed persons but cannot demand a for establishing a distillery unit, as a matter of right. licence 8.11. By referring to Kandanth Distillery's case, he submits that Respondent No.3 has wide discretionary power to either enquire into the - 14 - NC: 2025:KHC:16112 WP No. 27057 of 2024 matter or not. The discretionary power is also coupled with duty and requires Respondent No.3 to be satisfied after due enquiry that a further enquiry is required to be initiated under Section 64 of the Act. Respondent No.3 ought not to have blindly directed an enquiry under Section 64. 8.12. In the case of State of Kerala v. N. Avinasiappan3, more particularly, para 4 thereof, which is reproduced hereunder for easy reference: 4. The aforementioned provision empowers the Commissioner to examine the records on his own motion. The Commissioner may for the aforesaid purpose call for examination of the records wherein an order has been passed under Section 67-B or Section 67-E of the Act, before expiry of thirty days thereof for the purpose of making an enquiry or cause such an enquiry to be made. It is no doubt true, as has also been noticed by the High Court, that for exercising the said powers, the Commissioner may consider the question as regards initiation of such proceedings relying on or on the basis of an appropriate application filed by the aggrieved 3 (2004) 1 SCC 344 - 15 - NC: 2025:KHC:16112 WP No. 27057 of 2024 persons or the Department. But only because the party to the proceedings may bring an order passed under Section 67-B or Section 67-E to the notice of the Commissioner, the same would not ipso facto mean that he has to exercise his suo motu powers. A party to the appeal, in terms of Section 67-B or Section 67-E of the Act, has not been conferred any right to file a revision application. When the Commissioner examines the application only for the purpose of arriving at a finding as to whether it is a fit case where suo motu power of revision should be exercised or not, no lis between the parties can be said to be pending. At that stage, he would not be exercising any quasi-judicial powers as has been held by the High Court. In that view of the matter, the question of giving an opportunity of hearing to the applicant or for that matter, assignment of reasons by the Commissioner would not be necessary. 8.13. By relying on Avinasiappan’s case, he submits that suo moto powers are also to be exercised after application of mind. In the present matter, he submits that there is no application of mind. 8.14. He relies on Inderjit Barua v. Election Commission of India4, more particularly, para 4 AIR 1984 SC 1911 - 16 - NC: 2025:KHC:16112 WP No. 27057 of 2024 7 thereof, which is reproduced hereunder for easy reference: by the completed 7. It was also contended by the learned counsel appearing on behalf of the Petitioners that the Election Commission should be directed to suo motu carry out an inquiry for the purpose of determining whether any of the persons whose names were included in the electoral rolls of 1979 or earlier electoral rolls were citizens or not and if they were not found to be citizens their names should be deleted from the electoral rolls. The learned counsel urged that the Election Commission should be directed to take, if necessary, assistance of the police or any other agency of the Government for this purpose and that no elections should be held from Assam unless and until this Election exercise was Commission. We cannot accept this contention advanced on behalf of the Petitioner. It is entirely for the Election Commission to decide in the exercise of its discretion whether it should carry out any such revision suo motu under Rule 25 of the Electoral Registration Rules, 1960. We cannot direct the Election Commission to carry out such revision which under the law it may do on its own. The only direction which we can give to the Election Commission is to carry out revision of the electoral rolls in accordance with the procedure prescribed in the Representation of People Act, 1950 and the Electoral Registration Rules, 1960. But since the Election Commission has stated before us that it will carry out revision of the electoral rolls and that such revision shall, as far as practicable, be intensive revision and where it is not so practicable, it will be summary or special, we do not think it necessary to give any further directions to the Election Commission. When the draft electoral rolls are ready as a result of such revision carried out by - 17 - NC: 2025:KHC:16112 WP No. 27057 of 2024 in accordance with in accordance with the Election Commission, it will be open to anyone whose name is not included in the draft electoral rolls to lodge a claim for inclusion of his name on the ground that he is an eligible elector and if the name of any person is erroneously included in the draft electoral rolls even though he is not a citizen, it will be equally open to anyone entitled to object to challenge the inclusion of the name of such person in the draft electoral rolls by filing an objection the Electoral Registration Rules, 1960. Such claims and objections will have to be disposed of by the Election Commission the provisions of the Representation of People Act, 1950 and the Electoral Registration Rules, 1960. It is neither desirable nor proper for us to lay down as to what quantum of proof should be required for the purpose of substantiating any such claims or objections lodged before the Election Commission. It would be for the appropriate electoral officer to consider and decide, in the light of such material as may be produced before him by the objector as also by the person whose name is sought to be deleted from the electoral rolls and such further material as may be available to him including the electoral rolls of the earlier years, whether such person is a citizen or not. We may point out that the appropriate electoral officer may also on his own, if he has on the material available to him including the electoral rolls of the earlier years, reason to entertain any doubt, take steps to satisfy himself in regard to the citizenship of a person whose name is sought to be included or has been included in the electoral rolls. 8.15. By relying on Inderjit Barua's case, he submits that Respondent No.3 could not have - 18 - NC: 2025:KHC:16112 WP No. 27057 of 2024 directed Respondent No. 4 to hold an enquiry. Respondent No. 3 ought to have left it to the discretion of Respondent No. 4 to do the needful in terms of the applicable law taking into consideration the facts and circumstances of the matter. 8.16. In the case of Kunnathat Thatehunni Moopil Nair v. State of Kerala5 more particularly, paras 7, 8 and 35 thereof, which are reproduced hereunder for easy reference: 7. The most important question that arises for consideration in these cases, in view of the stand taken by the State of Kerala, is whether Article 265 of the Constitution is a complete answer to the attack against the constitutionality of the Act. It is, therefore, necessary to consider the scope and effect of that Article. Article 265 imposes a limitation on the taxing power of the State insofar as it provides that the State shall not levy or collect a tax, except by authority of law, that is to say, a tax cannot be levied or collected by a mere executive 5 AIR 1961 SC 552 - 19 - NC: 2025:KHC:16112 WP No. 27057 of 2024 the legislative competence of fiat. It has to be done by authority of law, which must mean valid law. In order that the law may be valid, the tax proposed to be levied must be within the legislature imposing a tax and authorising the collection thereof and, secondly, the tax must be subject to the conditions laid down in Article 13 of the Constitution. One of such conditions envisaged by Article 13(2) is that the legislature shall not make any law which takes away or abridges the equality clause in Article 14, which enjoins the State not to deny to any law or the equal person equality before the protection of the laws of the country. It cannot be disputed that if the Act infringes the provisions of Article 14 of the Constitution, it must be struck down as unconstitutional. For the purpose of these cases, we shall assume that the State Legislature had the necessary competence to enact the law, though the Petitioners have seriously challenged such a competence. The guarantee of equal protection of the laws must extend even to taxing statutes. It has not been contended otherwise. It does not mean that every person should be taxed equally. But it does mean that if property of the same character has to be taxed, the taxation must be by the same standard, so that the burden of taxation may fall equally on all persons holding that kind and extent of property. If the taxation, generally speaking, imposes a similar burden on everyone with reference to that particular kind and extent of property, on the same basis of taxation, the law shall not be open to attack on the ground of inequality, even though the result of the taxation may be that the total burden on different persons may be unequal. Hence, if the legislature has into different classified persons or properties categories, which are subjected to different rates of taxation with reference to income or property, such a classification would not be open to the attack of inequality on the ground that the total burden - 20 - NC: 2025:KHC:16112 WP No. 27057 of 2024 resulting from such a classification is unequal. Similarly, different kinds of property may be subjected to different rates of taxation, but so long as there is a rational basis for the classification, Article 14 will not be in the way of such a classification resulting in unequal burdens on different classes of properties. But if the same class of property similarly situated is subjected to an incidence of taxation, which results in inequality, the law may be struck down as creating an inequality amongst holders of the same kind of property. It must, therefore, be held that a taxing statute is not wholly immune from attack on the ground that it infringes the equality clause in Article 14, though the courts are not concerned with the policy underlying a taxing statute or whether a particular tax could not have been imposed in a different way or in a way that the Court might think more just and equitable. The Act has, therefore, to be examined with reference to the attack based on Article 14 of the Constitution. 8. It is common ground that the tax, assuming that the Act is really a taxing statute and not a confiscatory measure, as contended on behalf of the Petitioners, has no reference to income, either actual or potential, from the property sought to be taxed. Hence, it may be rightly remarked that the Act obliges every person who holds land to pay the tax at the flat rate prescribed, whether or not he makes any income out of the property, or whether or not the property is capable of yielding any income. The Act, in terms, claims to be “a general revenue settlement of the State” (Section 3). Ordinarily, a tax on land or land revenue is assessed on the actual or the potential productivity of the land sought to be taxed. In other words, the tax has reference to the income actually made, or which could have been made, with due diligence, and, therefore, is levied with due regard to the incidence - 21 - NC: 2025:KHC:16112 WP No. 27057 of 2024 of the taxation. Under the Act in question we shall take a hypothetical case of a No. of persons owning and possessing the same area of land. One makes nothing out of the land, because it is arid desert. The second one does not make any income, but could raise some crop after a disproportionately large investment of labour and capital. A third one, in due course of husbandry, is making the land yield just enough to pay for the incidental expenses and labour charges besides land tax or revenue. The fourth is making large profits, because the land is very fertile and capable of yielding good crops. Under the Act, it is manifest that the fourth category, in our illustration, would easily be able to bear the burden of the tax. The third one may be able to bear the tax. The first and the second one will have to pay from their own pockets, if they could afford the tax. If they cannot afford the tax, the property is liable to be sold, in due process of law, for realisation of the public demand. It is clear, therefore, that inequality is writ large on the Act and is inherent in the very provisions of the taxing Section. It is also clear that there is no attempt at classification in the provisions of the Act. Hence, no more need be said as to what could have been the basis for a valid classification. It is one of those cases where the lack of classification creates inequality. It is, therefore, clearly hit by the prohibition to deny equality before the law contained in Article 14 of the Constitution. Furthermore, Section 7 of the Act, quoted above, particularly the latter part, which vests the Government with the power wholly or partially to exempt any land from the provisions of the Act, is clearly discriminatory in its effect and, therefore, infringes Article 14 of the Constitution. The Act does not lay down any principle or policy for the guidance of the exercise of discretion by the Government in respect of the selection contemplated by Section 7. This Court has examined the cases decided by it with reference to - 22 - NC: 2025:KHC:16112 WP No. 27057 of 2024 the provisions of Article 14 of the Constitution, in the case of Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar [(1959) SCR p. 279] . S.R. Das, C.J., speaking for the Court has deduced a No. of propositions from those decisions. The present case is within the mischief of the third proposition laid down at pp. 299 and 300 of the Report, the relevant portion of which is in these terms: “A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification. After such scrutiny the Court will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as to enable it to discriminate between persons or things similarly situate and that, therefore, the discrimination is inherent in the statute itself”. (p. 299 of the Report). The observations quoted above from the unanimous judgment of this Court apply with full force to the provisions of the Act. It has, therefore, to be struck down as unconstitutional. There is no question of severability arising in this case, because both the - 23 - NC: 2025:KHC:16112 WP No. 27057 of 2024 charging Sections, Section 4 and Section 7, authorising the Government to grant exemptions from the provisions of the Act, are the main provisions of the Statute, which has to be declared unconstitutional. 35. It is not in dispute that a State Legislature has no power to impose a tax on a matter with regard to which it has the power to legislate but has been given no express power to impose a tax. Therefore, I agree, that a State Legislature cannot impose tax on forests. I am however not convinced that “land” in Entry 49 is not intended to include land on which a forest stands. No doubt, a forest must stand on some land. In Shorter Oxford Dictionary, one of the meanings of “forest” is given as an extensive tract of land covered by trees and undergrowth, sometimes intermingled with pastures. The concepts of forest land however are entirely different. The and principal idea conveyed by the word “forest” is the trees and other growth on the land. Under Entry 19 there may no doubt be legislation with regard to land insofar it is necessary for the purpose of the forest growing on it. It is well known that entries in the legislative lists have to be read as widely as possible. It is not necessary to cut down the plain meaning of the word “land” in Entry 49 to give full effect to the word “forest” in Entry 19. In my view, the two entries namely, Entry 49 and Entry 18 deal with entirely different matters. Therefore, under Entry 49 taxation on land on which a forest stands is permissible and legal. 8.17. By referring to Moopil Nair's case, he submits that it is entirely to the discretion of Respondent No.3 whether to hold an enquiry - 24 - NC: 2025:KHC:16112 WP No. 27057 of 2024 under Section 64 or not. Such discretion has been provided under the statute; non-exercise of discretion by Respondent No.3 would render the actions taken by Respondent No.3 bad in law. 8.18. He relies on Manohar Lal v. Ugrasen6, more particularly, para 13 thereof, which is reproduced hereunder for easy reference: 13. We do not find any force in the submission made by Shri Jayant Bhushan, learned counsel for the applicants, that a person who does not get relief from the statutory authority, has a right to make representation before the Government; as in the instant case, the Government of Uttar Pradesh was a revisional authority which could entertain the revision against the order of the appellate authority. In an appropriate case, the court may issue appropriate directions to redress the grievance of the person aggrieved but even the court cannot direct a person to decide the representation unless the person so directed is a competent authority under the statute, for the reason that the authority may grant relief, which otherwise the authority has no competence to grant taking shelter under the order of the court. Even the authority may grant undeserving relief in pursuance of the order passed by the court though the case may be undeserving or 6 (2013) 5 SCC 448 - 25 - NC: 2025:KHC:16112 WP No. 27057 of 2024 time-barred and under the bona fide impression that the authority was bound to grant the relief. The authority may also grant the relief while deciding the representation on account of collusion/connivance between persons making the representation and the authority deciding the representation. (Vide A.P. SRTC v. G. Srinivas Reddy [(2006) 3 SCC 674 : 2006 SCC (L&S) 577 : AIR 2006 SC 1465] and ESI Corpn. v. All India ITDC Employees' Union [(2006) 4 SCC 257 : (2007) 1 SCC (L&S) 992] .) to While it was deciding transgression/usurpation the authority himself which 14. The Hon'ble Chief Minister passed the allotment letter himself mentioning the plot No.s of the land, as is impermissible in law. The Chief Minister could not take upon himself the task of the Authority. It of tantamounts competence. a representation/petition, an authority or court may issue direction to the person concerned to consider the grievance. However, it is not permissible to pass the order by the superior authority/court itself. (Vide G. Veerappa Pillai v. Raman and Raman Ltd. [(1952) 1 SCC 334 : AIR 1952 SC 192] ; LIC v. Asha Ramchhandra Ambekar [(1994) 2 SCC 718 : 1994 SCC (L&S) 737 : (1994) 27 ATC 174 : AIR 1994 SC 2148] and H.P. Public Service Commission v. Mukesh Thakur [(2010) 6 SCC 759 : (2010) 2 SCC (L&S) 286 : AIR 2010 SC 2620] .) 8.19. By referring to Ugrasen's case, he submits that even the court cannot direct a person to consider a representation unless the person so directed is a competent authority. When the court cannot do so, the question of the second - 26 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Respondent directing the third Respondent to hold an enquiry would not arise. 8.20. He relies on State of M.P. v. Sanjay Nagayach7, more particularly, paras 36 to 42 thereof, which are reproduced hereunder for easy reference: function 36. Statutory functionaries like the Registrar/Joint Registrar of Cooperative societies functioning under the respective Cooperative Act must be above suspicion and independently without external pressure. When an authority invested with the power purports to act on its own but in substance the power is exercised by external guidance or pressure, it would amount to non- exercise of power, statutorily vested. Large No. of cases are coming up before this Court and the High Courts in the country challenging the orders of supersession and many of them are being passed by the statutory functionaries due to external influence ignoring they are ousting a democratically elected Board, the consequence of which is also grave because the members of the Board of Directors would also stand disqualified in standing for the succeeding election as well. that fact the 37. The Registrar/Joint Registrar, while exercising powers of supersession has to form an opinion and that opinion must be based on some objective criteria, which has nexus with the final decision. A statutory authority shall not act with pre-conceived notion and shall not speak his masters' voice, 7 (2013) 7 SCC 25 - 27 - NC: 2025:KHC:16112 WP No. 27057 of 2024 because the formation of opinion must be his own, not of somebody else in power, to achieve some ulterior motive. There may be situations where the Registrar/Joint Registrar are expected to act in the best interest of the Society and its members, but in such situations, they have to act bona fide and within the four corners of the statute. In our view, the impugned order will not fall in that category. 38. The Registrar/Joint Registrar is bound to follow the judicial precedents. Ratio decidendi has the force of law and is binding on all statutory authorities when they deal with similar issues. The Madhya Pradesh High Court in several judgments has explained the scope of the second proviso to Section 53(1) of the Act. Reference may be made to the judgments in Radheshyam Sharma v. Govt. of M.P. [1972 MPLJ 796] , Shri Ganesh Sahakari Vipnan (Mktg.) Sanstha Maryadit v. Registrar, Coop. Societies [1982 MPLJ 46] and Sitaram v. Registrar of Coop. Societies [1986 MPLJ 567] . 39. We fail to see why the Joint Registrar has overlooked those binding judicial precedents and the ratio decidendi. Judicial rulings and the principles are meant to be followed by the statutory authorities while deciding similar issues based on the legal principles settled by judicial rulings. The Joint Registrar, while passing the impugned order, has overlooked those binding judicial precedents. 40. We fail to notice why the State Government, Department of Cooperative Societies has taken so much interest in this litigation. The Joint Registrar in his letter dated 19-8-2009 to RBI stated that in the case of district Cooperative bank, the powers under Section 53(2) of the Act are vested with the Regional Joint Registrar and the notice issued by the Joint Registrar is not meant for the opinion of the State Government. Assuming, the State Government has powers under Section 49-C of the Act, no report - 28 - NC: 2025:KHC:16112 WP No. 27057 of 2024 has been forwarded by the Registrar to the State Government and no direction have been issued by the State Government with the supersession of the Board. Sorry to note that the State Government has spent huge public money by litigating this matter even up to this Court, that too, without following the binding precedents of the Madhya Pradesh High Court on the scope of the second proviso to Section 53(1) of the Act. regard to 41. In such circumstances of the case, we are inclined to dismiss both the appeals with costs directing reinstatement of the first Respondent Board of Directors back in office forthwith and be allowed to continue for the period they were put out of office by the impugned order which has been quashed. We also direct the State of Madhya Pradesh to pay an amount of Rs 1,00,000 to the Madhya Pradesh Legal Services Authority within a period of one month by way of costs and also impose costs of Rs 10,000 as against the Joint Registrar, Cooperative Societies, Sagar, the officer who passed the order, which will be deducted from his salary and be deposited in the Panna DCB within a period of two months from today. Ordered accordingly. 42. Further, we are inclined to give the following general directions in view of the mushrooming of in various courts challenging orders of cases supersession of elected Committees”. 8.21. By referring to Sanjay Nagayach’s case, he submits that when suo moto powers are conferred on DRCS, Respondent No.3 acting on the instruction of No.2 would amount to an - 29 - NC: 2025:KHC:16112 WP No. 27057 of 2024 exercise of powers by external guidance, which is a non-exercise of sou motto power. Respondent No.3 has not formed any individual opinion on objective criteria to come to a conclusion that an enquiry has to be held. 8.22. On the basis of all the above submissions, he submits that the above petition is required to be allowed, and the order dated 21.09.2024 passed by Respondent No.3 at Annexure-H is required to be quashed. 9. Sri.Sameer Sharma, learned counsel appearing for the complainant, submits that, 9.1. No fault can be found with the action taken by Respondent No.3. What Respondent No.3 has indicated is an enquiry to be held, so that the truth of the matter comes out. 9.2. The fact that the Petitioner-Society is opposing the same tooth and nail would indicate that the Society has something to hide and cover up, - 30 - NC: 2025:KHC:16112 WP No. 27057 of 2024 and that the Society has not acted in a proper manner. This he submits is borne out by a complaint submitted by Respondent No.6, wherein all the details as regards to the violations on part of the Society and its Office Bearers have been detailed, and it is for that reason he submits that the enquiry held would bring out the true facts and circumstances, and this court should not at this stage interdict the enquiry being directed to be carried out. 9.3. He submits that it is only the Chief Executive Officer of the Society who could file the proceeding in terms of Rule 14 of the Karnataka Cooperative Societies Rules, 1960. The present petition having been filed by its Secretary is not maintainable. The Chief Executive could also do so, only if there is approval by the Board in that regard. Such approval not being placed on record, the Secretary of the Society could not have filed the present proceedings. - 31 - NC: 2025:KHC:16112 WP No. 27057 of 2024 9.4. The petition is premature and ill-conceived. Enquiry having been ordered only to ascertain the true facts, no challenge to such enquiry could be made in the manner done. The Petitioner would have all opportunity to place on record all the facts and documents to be considered during the course of enquiry, an enquiry itself cannot be prevented when such serious allegations have been made. 9.5. DRCS in furtherance of the orders of this court had issued a notice on 19.04.2024 calling upon the Petitioner to submit the documents on 30.04.2024, Petitioner did not submit any such documents. On 15.05.2024 and 28.05.2024, the Petitioner sought for an adjournment. It is in that background that Respondent No.6 filed writ petition No.16270/2024 before this Court and it is in pursuance of the order dated 1.07.2024 of this court that a notice dated 12.07.2024 followed by another notice dated - 32 - NC: 2025:KHC:16112 WP No. 27057 of 2024 6.08.2024 was issued. It is only thereafter that some of the documents were furnished all documents were not furnished, which aspect has been taken into consideration by the DRCS in his report. Despite all of the oppertunitiies having been made available all of the documents were furnished. This he submits have been done by the Society only to suppress facts. 9.6. It is the Petitioner who has chosen not to avail the various opportunities which had been accorded to the Petitioner. Not having availed of the oppertunities, the Petitioner cannot contend that there has been a violation of the principles of natural justice. 9.7. The enquiry under Section 64 of the Act is a more detailed enquiry ordered after a preliminary enquiry/investigation. The same does not determine the rights and liabilities of the parties. If this detailed enquiry indicates - 33 - NC: 2025:KHC:16112 WP No. 27057 of 2024 any substance, then only further action would be resorted to. In the present case, the preliminary enquiry having indicated the existence of sufficient grounds, an enquiry under Section 64 of the Act has been ordered. 9.8. He submits that there is no requirement that one-third of the members make allegations or complaints. The facts having been brought to the notice of Respondent No.3, he had directed the DRCS to hold a preliminary enquiry, DRCs conducted a preliminary enquiry and submitted a report to Respondent No.3, Respondent No.3 having acted upon the said report, the question of the Petitioner claiming that there is a violation of the principles of natural justice would not arise. There was enough and adequate opportunity on part of the Petitioner to participate in the entire proceedings during that stage and submit all the documents. Thus, he submits that there is no violation of the - 34 - NC: 2025:KHC:16112 WP No. 27057 of 2024 principles of natural justice. It is the Petitioner who has deliberately failed to avail the opportunity provided by DRCS. By referring to the report of DRCS, he submits that various facts have been considered, and DRCS has come to the conclusion that various provisions of law have been prima facie violated, however, a detailed investigation is required to be held. Large amounts of money have been paid to a builder running into tens of crores, an extent of 33 crores have been paid to a builder known as Vasavi Builders, in respect of the layout being formed at Hejjala. While passing the impugned order, various other issues have been considered. 9.9. The preliminary enquiry report, he submits, has taken into consideration the documents submitted by the Secretary of the Society and has dealt with each and every allegation made by Respondent No.6 and the reply thereto by - 35 - NC: 2025:KHC:16112 WP No. 27057 of 2024 the Petitioner. The said preliminary enquiry report running into nearly 35 pages and it is in that background that DRCS has come to the conclusion that the secretary of the Society has not presented complete documents regarding the allegations. Only enquiry under Section 64 or inspection under Section 65 can establish the administrative and financial accountability against the concerned parties. It is on the basis of the above recommendation that Respondent No.3 has directed further detailed enquiry. He therefore, submits that the preliminary requisites have been satisfied. The action taken by Respondent No.3 in directing DRCS to hold an enquiry and thereafter on the basis of such preliminary enquiry report, Respondent No.3 having directed the ARCS to conduct a detailed enquiry is proper and correct. No fault can be found therewith. Lot of documents have been suppressed by the Petitioner-Society and they - 36 - NC: 2025:KHC:16112 WP No. 27057 of 2024 can submit those documents during the course of enquiry, which would be considered and necessary report submitted. The Petitioner cannot shy away from the enquiry that has been directed to be conducted. 9.10. In support of the above contentions, he relies on the following decisions: 9.11. In the case of Chanan Singh v. Registrar, Coop. Societies8, more particularly para Nos. 4, 5 and 6 thereof, which are reproduced hereunder for easy reference: 4. The first point raised in objection by the second Respondent is that the writ petition is premature since no action has been taken finally against the appellant, the disciplinary proceedings are still pending and the explanation of the appellant is under consideration. It is only in the event of the appellant being punished that any grievance can arise for him to be agitated in the proper forum. 5. Other obstacles in the way of granting the appellant relief were also urged before the High Court and before us, but we are not inclined to investigate them for the short reason that the writ petition was in any case premature. No punitive action has yet been 8 (1976) 3 SCC 361 - 37 - NC: 2025:KHC:16112 WP No. 27057 of 2024 taken. It is difficult to state, apart from speculation, what the outcome of the proceedings will be. In case the appellant is punished, it is certainly open to him either to file an appeal as provided in the relevant rules or to take other action that he may be advised to resort to. It is not for us, at the moment, to consider whether a writ petition will lie or whether an industrial dispute should be raised or whether an appeal to of the appellant were invalid, issued a fresh memorandum which competent authority under the rules is the proper remedy, issues which merit serious although these are consideration. concluded the 6. We are satisfied that, enough unto the day being the evil thereof, we need not dwell on problems which do not arise in the light of the view we take that there is no present grievance of punitive action which can be ventilated in court. After all, even the question of jurisdiction to reopen what is claimed to be a closed enquiry will, and must, be considered by the Managing Director. On this score, we dismiss the appeal but, in the circumstances, without costs. 9.12. Based on Chanan Singh's case, he submits that the Petitioner cannot have any grievance regarding the enquiry that has been initiated. Only after the enquiry is complete will it be clear whether any action is to be taken against the Petitioner. The enquiry by itself is not one where any order would be passed against the - 38 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Petitioner. The enquiry is to ascertain the true facts with which the Petitioner cannot have any grievance. 9.13. In the case of P. Raju vs. Registrar Co- operative Societies, Periyar and Anr9. more particularly para 2 thereof, which is reproduced hereunder for easy reference: 2. We have heard learned counsel for the appellant and perused the impugned order and find no infirmity in the same. As rightly pointed out by the learned single Judge the Registrar only wanted to make a factual enquiry regarding certain loans issued by the Madurai Urban Co-operative Bank Limited and to submit a factual report. In our opinion, the writ petition is premature since as yet no adverse order has been passed against anybody nor any action affecting anybody’s right has been taken. 9.14. By relying on P Raju's case, he submits that Respondent No. 3 only wishes to have a factual 9 2005 (2) CTC 241 - 39 - NC: 2025:KHC:16112 WP No. 27057 of 2024 enquiry. Until the enquiry is complete, the Petitioner cannot have any grievance hence, the writ petition as filed is premature. 9.15. In the case of State of Orissa v. Mesco Steels Ltd.,10 more particularly para 20 thereof, which is reproduced hereunder for easy reference: 20. On the contrary, the issue of the show-cause notice setting out the reasons that impelled the Government to claim resumption of a part of the proposed lease area from the Respondent Company clearly suggested that the entire process leading up to the issue of the show-cause notice was tentative and no final decision on the subject had been taken at any level. It is only after the Government provisionally decided to resume the area in part or full that a show- cause notice could have been issued. To put the matter beyond any pale of controversy, Mr Lalit made an unequivocal statement at the Bar on behalf of the State Government that no final decision regarding resumption of any part of the lease area has been taken by the State Government so far and all that had transpired till date must necessarily be taken as provisional. Such being the case the High Court was in error in proceeding on an assumption that a final decision had been taken and in quashing what was no inter-departmental communication more than an 10 (2013) 4 SCC 340 - 40 - NC: 2025:KHC:16112 WP No. 27057 of 2024 constituting at best a step in the process of taking a final decision by the Government. The writ petition in that view was premature and ought to have been disposed of as such. Our answer to Question 1 is accordingly in the affirmative. 9.16. Based on Mesco Steel’s case, he submits that the enquiry is a step in the process of making a final decision. No final decision has been made, and the Petitioner cannot challenge the initiation of the enquiry. 9.17. In the case of Ashok Kumar Sonkar v. Union of India11, more particularly paras 26 and 27 thereof, which are reproduced hereunder for easy reference: 26. This brings us to the question as to whether the principles of natural justice were required to be complied with. There cannot be any doubt whatsoever that the audi alteram partem is one of the basic pillars of natural justice which means no one should be condemned unheard. However, whenever possible the principle of natural justice should be followed. Ordinarily in a case of this nature the same should be complied with. Visitor may in a given situation issue notice to the employee who would be effected by the ultimate order that may be passed. He may not be given an oral hearing, but may be allowed to make a representation in writing. 11 (2007) 4 SCC 54 : - 41 - NC: 2025:KHC:16112 WP No. 27057 of 2024 27. It is also, however, well settled that it cannot put any straitjacket formula. It may not be applied in a given case unless a prejudice is shown. It is not necessary where it would be a futile exercise. 9.18. By relying on Ashok Kumar Sonkar's case, he submits that enough opportunity had been given to the Petitioner to reply to the allegations. The Petitioner, not having replied properly by furnishing all the documents, cannot claim that there is a violation of the principles of natural justice. What is proposed now is only a statutory enquiry in terms of Section 64 of the Act, which cannot be said to cause any prejudice to the Petitioner. The said enquiry being in the nature of fact-finding enquiry, the Petitioner cannot have any grievance relating thereto. - 42 - NC: 2025:KHC:16112 WP No. 27057 of 2024 9.19. In the case of H.P. Transport Corpn. v. K.C. Rahi12, more particularly para 7 thereof, which are reproduced hereunder for easy reference: 7. The principle of natural justice cannot be put in a straitjacket formula. Its application depends upon the facts and circumstances of each case. To sustain a complaint of non-compliance with the principle of natural justice, one must establish that he has been prejudiced thereby for non-compliance with principle of natural justice. 9.20. By relying on K C Rahi's case, he submits that even if there is a violation of the principles of natural justice unless prejudice is shown to have been caused, this court ought not to interfere in the matter. The Petitioner has not shown any prejudice. Per contra, if an enquiry as directed is not held, prejudice will be caused in the interest of Society and its members. 9.21. In the case of State of U.P. v. Sudhir Kumar Singh13, more particularly para 42 thereof, 12 (2008) 11 SCC 502 13 (2020) SCC OnLine SC 847 - 43 - NC: 2025:KHC:16112 WP No. 27057 of 2024 which is reproduced hereunder for easy reference: 42. An analysis of the aforesaid judgments thus reveals: 42.1. Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused. 42.2. Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest. 42.3. No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge or non-denial or admission of facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice. 42.4. In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass - 44 - NC: 2025:KHC:16112 WP No. 27057 of 2024 futile orders of setting aside or remand when there is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person. 42.5. The “prejudice” exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the non-observance of natural justice. 9.22. By relying on Sudhir Kumar Singh's case, he again reiterates that for the Petitioner to invoke the extraordinary jurisdiction of this court, the Petitioner ought to establish exfacie prejudice caused to the Petitioner, not having so established, the petition is required to be dismissed, ARCS be permitted to complete the enquiry. 9.23. In the case of Muslim Co-operative Bank Ltd. v. Assistant Registrar of Co-operative Societies14, more particularly paras 6 and 7 14 (1990) 2 Kant LJ 311 - 45 - NC: 2025:KHC:16112 WP No. 27057 of 2024 thereof, which are reproduced hereunder for easy reference: 6. As far as the exercise of suo motu powers is concerned, under what circumstances it should be exercised is left to the Registrar himself under the Societies Act as also under the Act. He could do so in whatever manner he gets information if he considers the information sufficient to institute an enquiry into the affairs of the Society or a Co-operative Society, as the case may be. Even if one member of a Society or a Co-operative Society lodges a complaint and requests the Registrar of a Society or a Registrar of a Co-operative Society, as the case may be, the Registrar concerned has the power to institute an enquiry under Section 25 of the Societies Act in the case of a Society and Section 64(1) of the Act in the case of a Co-operative Society, if the Registrar is satisfied that sufficient basis is made out in such written representation. Such is the suo motu power conferred on the Registrar of Societies under Section 25(1) of the Societies Act and on the Registrar of Co- operative Societies under Section 64(1) of the Act. Therefore the fact that the Registrar has referred to the complaint made by a member in the order instituting the enquiry is no ground to hold that the Registrar had not acted suo motu. Naturally for exercise of suo motu powers also, there must be some source of information for the Registrar to do so. Such information may come to the Registrar of the Societies or the Registrar of Co-operative Societies, during his inspection of a Society or a Co- operative Society as the case may or by any other means including a written complaint by a member. For these reasons with great respect, we are unable to agree with the view expressed by Puttaswamy, J., in the case of Mahila Seva Samaj that if a Registrar - 46 - NC: 2025:KHC:16112 WP No. 27057 of 2024 institutes an enquiry on the basis of a complaint submitted by members who do not constitute either fifty per cent of the governing body members or one third of the members of the Society, the enquiry instituted is illegal, and that his power to institute enquiry suo motu must be exercised without reference to any complaint by any member or requirement members who do not prescribed under Section 25. fulfil the 7. In the present case, it is seen that the Deputy Registrar exercised his suo motu powers of instituting enquiry into the affairs of the Petitioner - Co- operative Society under Section 64 of the Act when a written complaint was lodged by a member of the Petitioner Society viz., Sri Mohamed Khaleel. In our opinion, the Deputy Registrar had the necessary jurisdiction to institute suo motu enquiry under Section 64 of the Act even on the basis of the complaint lodged by one of the member. The power exercised is the suo motu power conferred on the Registrar under Section 64(1) of the Act and the written complaint given by one of the members constitute only a source of information for instituting the enquiry. The difference between the institution of enquiry suo motu on written information or written complaint given by one of the members and by requisite No. of members of the Managing Committee or of the members who are entitled to demand enquiry under Section 64(2) of the Act, in the case of a Co-operative Society and under Section 25(1) of the Societies Act in respect of the Society, is, that there is no legal compulsion on the part of the Registrar to institute enquiry in the former case, whereas in the latter case he is obliged to do so. Therefore whenever the Registrar of Co-operative Societies institutes an enquiry on the basis of a written complaint by a member, institution of enquiry falls squarely under Section 64(1) of the Act and it is - 47 - NC: 2025:KHC:16112 WP No. 27057 of 2024 within his powers to do so. For these reasons, we answer the question set out above as follows: Question No. 1: An enquiry into the affairs of a Co-operative Society instituted by a Registrar pursuant to a complaint made by one of the members of the Society falls within the power conferred on the Registrar under Section 64(1) of the Karnataka Co-operative Societies Act 1959 and not violative of Section 64(2). In view of our answer as above, we hold that the enquiry instituted in the present case is the one which the Registrar had the jurisdiction to initiate under sub-Section (1) of Section 64 of the Act, and that non-existence of requisition mentioned in clauses (a), (b), (c) of sub-Section (2) of Section 64 of the Act is no ground to hold that the order is bad under Section 64(1). the written 9.24. By relying on Muslim Cooperative Bank case, he submits that even if one member of a Cooperative Society were to lodge a complaint, the Registrar concerned has the necessary power if satisfied that sufficient basis is made out on the basis of such complaint to cause an enquiry under Section 64. Once the Registrar - 48 - NC: 2025:KHC:16112 WP No. 27057 of 2024 has received information indicating any wrongdoing or possible wrongdoing from any source, an enquiry could be instituted to ascertain the veracity of the same. Initiating of an enquiry is not stigmatic. An enquiry has been initiated only to ascertain the truth about the matter. 9.25. His submission is that if the requisite number of members as per the qualification prescribed under Section 64 were to demand an enquiry, then the Registrar would have no option but to conduct an enquiry. Insofar as a complaint by one member or by members not satisfying the requirements of Section 64 is made, then the discretion is with the Registrar, which he can exercise in order to ascertain the veracity of the allegations made. Even a complaint filed by one member of a Society would fall within the requirement of Sub-Section (1) of Section 64 and is not violative of Subsection (2) of Section - 49 - NC: 2025:KHC:16112 WP No. 27057 of 2024 64 of KCS Act. It is for this reason that a preliminary enquiry was held by DRCS to consider whether a detailed enquiry is to be held; the preliminary enquiry indicated a need for a detailed enquiry, now a detailed enquiry is proposed to be held. 9.26. In the case of Bangalore Grain Merchants Association v. District Registrar for Societies15, more particularly paras 13, 14, 15 and 16 thereof, which are reproduced hereunder for easy reference: 13. We have so far dilated on the general nature and normal connotation of the expression ‘suo-motu’ or on ‘one's own motion’ The next question is whether in the context, the phrase ‘on one's own motion’ or suo-motu should be given a restricted meaning under Section 25(1) of the Act. The learned Counsel for the Petitioners having realised the futility of the argument that the general concept of suo-motu power excludes an action based on representation or complaint has endeavoured to concentrate on the above question. He wants to say that in so far as the members of the Society or its governing body come forward with an application to 15 (2001) 1 KCCR 292 - 50 - NC: 2025:KHC:16112 WP No. 27057 of 2024 hold the enquiry, the Registrar cannot exercise his power under Section 25(1) of the Act unless the requisite No. of them file such application. If less than 1/3rd of the members of the Society make an application as in the present case, the Registrar cannot arrogate to himself the power to order an enquiry under the first limb of the sub-Section, according to the counsel. The implication of this argument is that whenever the members of the Society make a complaint and request for an enquiry into the constitution, working and financial condition of the Society, the Registrar has to first satisfy himself that such members constitute 1/3rd of its total strength and then only proceed to make an enquiry. If the No. of signatories to the complaint are less than 1/3rd, according to the learned Counsel, the Registrar cannot act on it and clutch at the jurisdiction to hold the enquiry in the guise of suo-motu exercise of power. The learned Counsel reinforces his argument by reference to the well- known principle of statutory construction which lays down:“where a power is given to do certain things in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily in Ramachandra Keshav Adke v. Govind Joti Chavare. [AIR 1975 SC 915.] forbidden.” dicta vide the 14. There is a fallacy underlying the argument advanced by the learned Counsel for the Petitioner. Neither the contextual interpretation nor any canon of construction would countenance the argument of the learned Counsel. The argument of the learned Counsel ignores the crucial fact that suo-motu power conferred by the first limb of sub-Section can come into play independent of the power confided to the Registrar in two specific situations. The three relevant clauses of Section 25(1) have to be read harmoniously and to effectuate the objective of the provision. The ambit and plenitude of the power - 51 - NC: 2025:KHC:16112 WP No. 27057 of 2024 the than vested in the Registrar to act on his own motion cannot be curtailed and crippled by any ‘a apriori’ notion that it stands excluded where the members less requisite percentage become complainants. There is no taboo against a member or members less than 1/3rd approaching the Registrar with a petition and the Registrar taking cognizance of the same and proceeding to make an enquiry on the basis of information laid before him. As already observed, the information forming the basis for exercise of suo-motu power may come from any source including a single member of the Society. The exercise of such power by the Registrar cannot be controlled by the fact that the complaint is made by less than 1/3rd of the members. If the No. of members petitioning to the Registrar is 1/3rd or more, as already discussed, the Registrar is bound and obliged to initiate an enquiry. He has no option but to act and direct the enquiry. But, if the No. is less, the Registrar can very well refrain from holding the enquiry, if he feels that the enquiry is not warranted. His refrain may be on account of many factors allegations being vague or ex-facie incredible or contrary to the informations on record or the constitution, working or financial condition of the Society. If the Registrar decides not to move in the matter on the basis of the complaint lodged by less than 1/3rd of the members, the Court cannot compel him to institute an enquiry except in some rare cases such as total non-application of mind to the tell-tale facts. It is only to emphasize the distinction between the discretionary and obligatory nature of duty of the Registrar to hold an enquiry that the second and third modes are specifically enjoined by the statute. Otherwise, the opening clause itself empowering the Registrar to hold enquiry on his own motion, would have been sufficient to take care of all other contingencies including the application by members. The suo-motu the allegations being unrelated to - 52 - NC: 2025:KHC:16112 WP No. 27057 of 2024 exercise of power does not get excluded merely because less than 1/3rd of members of the Society make a complaint and invite action of the Registrar. That was what exactly held by the Division Bench, speaking through Rama Jois J. in Muslim Co- Operative Bank's case. We share the same view as was expressed in that case. 15. There is a recent judgment of this Court wherein Bharuka, J. has taken the same view in District Muslim Welfare & Education Society v. District Registrar of Societies. [AIR 1997 KAR 383.] It was observed at paragraph 5 of the judgment as follows: “A reading of the above provision makes it clear that an enquiry as contemplated in Section 25 is to be necessarily held, if an application to that effect is filed by the majority of the members of the governing body or of not less than 1/3rd of the members of the Society. But the Legislation at the same time has vested the discretion in the Registrar to initiate such an enquiry on his own motion to enquiry into the Constitution, working and financial condition of a registered Society. Such an exercise can be undertaken by the Registrar on his own motion only on the basis of some cogent materials for that purpose. Therefore, tor-holding an enquiry on his own some information must come to his possession either from the external or from the internal sources, which on an objective appraisal may necessitate an enquiry as statutorily prescribed.” 15-A) The interpretation that is sought to be placed by the Petitioners' counsel, if is to be accepted, would lead to anomalous and unintended results. If a person unconnected with the Society makes a complaint to the Registrar as regards the working of the Society, the Registrar will be free to act on it, whereas, if a member of the Society supposed to have better knowledge of the affairs of the Society, - 53 - NC: 2025:KHC:16112 WP No. 27057 of 2024 prefers a complaint, the Registrar will be debarred from acting suo-motu. However weighty and reliable the material disclosed in the representation of the member, the Registrar will be helpless to act under any of the limbs of Section 25(1) of the Act, if the contention of the Petitioners Counsel has to be accepted. Moreover, the purpose of conferring the suo-motu power of holding or ordering an enquiry will be defeated. If the Registrar is disabled from doing so merely for the reason that the information is laid before him by a member or members of the Society less than 1/3rd, however reliable such information may be. There is no good reason why such fetter should be placed on the power of the Registrar to act suo-motu. The moment the Registrar the points highlighted by some members of the Society (less than 1/3rd), he will be handicapped from launching an enquiry though he may be fully satisfied that an enquiry should be held in public interest. The interpretation placed by the learned Counsel for the Petitioners would, therefore, be opposed to the cardinal rule of purposive construction and would render the power conferred on the Registrar many a time unworkable. We see no compelling reasons to read down the power conferred by the first limb of Section 25(1) of the Act so as to exclude therefrom the complaints made by less than 1/3rd of the members. into consideration takes 16. We are, therefore, of the view that Mahila Seva Samaj case and Srinivasa Rao's case insofar as they lay down the law that the Registrar cannot exercise suo-motu power under the first limb of the sub- Section, if the complaint is made by a’ single member or by members falling short of 1/3rd are hereby overruled. The view expressed by the learned judges in the second decision that the Section would be rendered nugatory if on the basis of the complaint made by less than 1/3rd of the - 54 - NC: 2025:KHC:16112 WP No. 27057 of 2024 members an enquiry is set in motion by him is, with great respect, not acceptable, in fact, the provision will become ineffective if not nugatory in case such view is approved. We may also mention that in the latter case, the learned Judges were influenced by the fact that the ratio of the decision in Manila Seva Samaj case was approved by another Division Bench in A.S. Kupparaju's case. Whether that assumption is correct or not, we shall advert to a little later. Irrespective of that, we cannot endorse the’ reasoning and the conclusion arrived at in Srinivasa Rao's case. We, therefore, over-rule the two decisions aforementioned and affirm the view taken in Muslim Co-Operative Bank's case. 9.27. He also relies upon Grain Merchant Association case to contend that this court had rejected the contention that if less than one-third of the members of the Society were to make an application to the Registrar, the Registrar cannot hold an enquiry. He submits that this court has categorically held that the suo moto power conferred under Section 64 is independent of any complaint, the same cannot be curtailed by whether the requisite members have filed a complaint or not. Even if the number is less than the requisite one-third, the - 55 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Registrar, if satisfied that the allegations made require an enquiry, can direct such enquiry. If the Registrar's powers were to be restricted only to hold an enquiry if one-third of the members were to make a complaint, the same would negate the powers of the Registrar. He again reiterates that if the requisite number of members make a complaint, then the Registrar is bound to hold an enquiry. If there are less than the requisite number of members making a complaint, the Registrar would have to consider the veracity of the allegation made and decide by application of mind whether an enquiry is to be held or not, which has been so done in this case after receipt of the preliminary enquiry report. 9.28. In the case of The Sarvada Multi-Purpose Co-operative Society Ltd. Vs. The Deputy Registrar of Co-operative Societies, - 56 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Belagavi District and Ors.16 more particularly paras 5, 6 and 7 thereof, which are reproduced hereunder for easy reference: 5. A perusal of the Annexures produced by the Petitioner go to show that the first Respondent is said to have received an anonymous compliant on 22.02.2018 which is at Annexure-A alleging certain illegalities in the affairs of the Petitioner-Society. Annexure-B is a letter by the first Respondent. He, after referring to the complaint at Annexure-A, has asked Respondent No.2 to visit the Petitioner-Society and after verifying to submit his report. Annexures-C and D are two other complaints said to have been filed with the first Respondent by Respondent Nos.3 and 4 on 24.02.2018 and 26.02.2018 respectively. Annexure-E is a letter by the second Respondent to the Petitioner dated 27.02.2018, wherein the second Respondent referring to the letter of the first Respondent dated 26.02.2018, has directed the Petitioner to produce certain documents pertaining to the Society for verification. Annexure-F is a report by the second Respondent submitted to the first Respondent dated 27.02.2018 wherein the second Respondent has stated that he has visited the Petitioner-Society on 23.02.2018 and observed certain discrepancies which he has listed in his report. Annexure-G is the impugned order passed by the first Respondent ordering for an inquiry under Section 64 of the KCS Act against the Petitioner- Society and appointing the second Respondent as Enquiring Authority. Annexure-H is a notice dated 16 MANU/KA/3499/2018 - 57 - NC: 2025:KHC:16112 WP No. 27057 of 2024 01.03.2018 by the second Respondent informing the Petitioner about the inquiry and calling for certain documents. 6. Section 64(1) and (2) of the KCS Act reads as follows: 64. Inquiry by Registrar.-(1) The Registrar may, of his own motion, by himself or by a person authorized by him, by order in writing, hold an inquiry into any matter specified the constitution working and financial condition of a co- operative Society. the order touching in (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 Board of the Society; or (c) not less than one-third of the total No. of members of the Society. Referring to the above Section, learned counsel for the Petitioner submitted that an inquiry can be initiated by the first Respondent only in the manner prescribed under Section 64(2) of the KCS Act. Since in the instant case, neither there is an application by the Petitioner-Society nor majority of the members of the Board have filed any application nor even not less than one-third of the members of the Society have made any application, initiation of inquiry by the first Respondent is bad in the eye of law. 7. A reading of Section 64(1) and (2) of the KCS Act which is reproduced hereinabove clearly goes to show that these two sub-Sections have to be read independently. Under Section 64(1), the Registrar has got suo moto power to initiate an inquiry. It is clear from the wordings of the said sub-Section that the - 58 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Registrar on his own motion by himself or by a person authorized by him, by an order in writing, hold an inquiry. Thus, it is at the discretion of the Registrar who after satisfying himself or finding reasons that there are grounds to order for an inquiry with respect to a Society, can invoke Section 64(1) and proceed for ordering of an inquiry. On the other hand, if the said Registrar receives any application by the Society itself or by a majority of the members of the Board of the Society or by not less than one-third of the total members of the Society, under such a situation, he has no option but for ordering for an inquiry. Thus, Section 64(1) and (2) are required to be distinguished on these lines. 9.29. He relies on Sarvada Multipurpose Cooperative Society's case and submits that even if a complaint had not been filed by one member, the Registrar could have on the basis of any information received and or of his own accord initiate an enquiry. Thus, merely because a complaint has been filed by only one member would not deprive or negate the power of the Registrar to hold an enquiry. 9.30. In the case of K. Gopala Krishna Bhat and Ors. Vs. The Joint Registrar of Co- - 59 - NC: 2025:KHC:16112 WP No. 27057 of 2024 operative Societies, Mysore and ors.17 more particularly paras 3 and 4 thereof, which are reproduced hereunder for easy reference: 3. In my opinion, the reason given for not entertaining the dispute, namely, that a statutory inspection as per Section 65 of the Act is ordered and it relates to the questions raised in the dispute, is unsustainable in law. The consequences of adjudicating a dispute under Section 70 of the Act and the consequences of a statutory inspection of the books of a Society under Section 65 of the Act are different. Adjudication of a dispute raised under Section 70 of the Act results in determination of the rights and liabilities of the parties to the dispute. That is not the consequence of inspection of the books of a Society under Section 65 of the Act. No dispute raised under Section 70 of the Act can be rejected on the ground that a statutory inspection of the books of the Society under Section 65 of the Act is ordered and it relates to the questions raised in the dispute. Proceeding under Section 65 of the Act has no bearing on the maintainability of a dispute under Section 70 of the Act. Therefore, Respondent 1 has erroneously failed to exercise jurisdiction under Sections 70 and 71 of the Act in declining to entertain the dispute filed by the Petitioners. 4. It is also relevant to state that, inspection of the books of the Society in this case cannot result in adjudication of the dispute raised by the Petitioners 17 ILR 2015 KAR 2002 - 60 - NC: 2025:KHC:16112 WP No. 27057 of 2024 or determination of rights and liabilities of the parties. 9.31. By relying on Gopala Krishna Bhatt's case, he submits that even if a dispute under Section 70 of the Act is raised, the same would have no bearing on a statutory inspection being ordered under Section 65. Thus, irrespective of any claim or dispute raised by the complainant in the present case, the Registrar could, under Section 65 direct inspection. The said ruling would equally apply to enquiry under Section 64 and as such exercise of powers by Respondent No.3 is proper and correct. 9.32. In the case of Challa Sanyasinaidu v. Dy. Registrar of Co-op. Society18 more particularly para 10 thereof, which are reproduced hereunder for easy reference: 18 (1998) 1 AP LJ (HC) 35 - 61 - NC: 2025:KHC:16112 WP No. 27057 of 2024 10. The scheme of Sec. 60 of the Act in our view unfolds itself as follows:— In the course of inspection under Section 52 of the Act, the Registrar may cause the inspection of Books of the Society with a view to find out the irregularities, acts of omission and commission. This enquiry is only administrative in nature, and if the Registrar prima facie is satisfied of the irregularities on the basis of the report of the enquiry officer, he may initiate surcharge proceedings under Section 60. That report may form the basis for the Registrar to proceed under Section 60 and issue a surcharge order eventually. The person against whom a report is sent under Section 52 has no opportunity to squarely meet the allegations against him at that stage. He is not allowed to cross-examine the witnesses from whom statements are recorded implicating his involvement. He cannot also adduce rebuttal evidence. That is not the stage where a demand can be made against him to pay back the sum or liability fastened to him as per the report of the enquiry officer. On the contrary, Section 60 clearly contemplates an opportunity being given to the delinquent by making a representation. In our view this is the proper occasion where the officer or the servant has to be given an opportunity of explaining his stand and allow him to participate in the enquiry before a final order is passed. This is a valuable right given to the delinquent which cannot be brushed aside in a routine manner. After the show-cause-notice is served and an explanation is called for, an opportunity should be given to the affected person to cross-examine the witnesses examined in the course of enquiry under Section 52 of permit him to examine his witnesses to rebut their evidence. Until this is done, the spirit of making a representation, as contemplated under Section 60, cannot be fulfilled. Although Section 60 does not prescribe any particular procedure before - 62 - NC: 2025:KHC:16112 WP No. 27057 of 2024 it is surcharge order, nonetheless, passing mandatory that principles of natural justice shall be followed in the enquiry. Evidence recorded behind the back of the defaulter cannot be relied upon to fasten the liability on him without giving him an opportunity to cross-examine the witnesses. The Registrar in his surcharge proceedings is a Court whose order can very well form the subject-matter of the judicial review under Article 226 of Constitution of India. Therefore, it is in the fitness of things that an opportunity like supply of copy of enquiry report, statements of witnesses recorded during the said enquiry, and also an opportunity to cross-examine those witnesses, or permit him to examine his own witnesses by the delinquent by way of rebuttal should be allowed before an order under Section 60 is passed. Therefore, we respectfully agree with the view taken by the learned Judge in S. Rama Subba Rao v. President, Kaikuluru Irrigation and Power Department Sub- Divisional Employees Co-operative Credit Society Limited (2 supra). Even in Mohd. Ghouse v. Deputy Registrar of Co-operative Societies, Vikarabad (3 supra), the learned Judge has rightly observed that the proviso to Section 60 mandates adequate opportunity before passing the order, and the issuance of notice proposing to fix the liability under Section 60 is imperative and as such there is no breach of principles of natural justice. Having said so, the learned judge went on observing that Section 60 immediate and necessary consequence of enquiry and audit and inspection and the enquiry for the second round is considered to be superflous, and the affected person is not prejudiced or disadvantaged as the enquiry is done in anterior proceedings. These later observations of the learned Judge appear to strike a contrary note, and we do not therefore subscribe to the same. is an - 63 - NC: 2025:KHC:16112 WP No. 27057 of 2024 9.33. He relies on Sanyasi Naidu's case to contend that the Registrar always has the power to conduct an enquiry to find out the irregularities, acts of omission and commission. Such enquiry being administrative in nature, it is only after the enquiry is completed would a necessary decision have to be taken as regards any action proposed to be taken after issuing necessary notice to the Petitioner when the enquiry report along with all supporting documents would be furnished to the Petitioner. Therefore, on this ground also he submits that the petition as filed is premature. 9.34. In the case of Shree Rishabh Vihar Cooperative House Building Society Ltd. v. Salil Richariya19, more particularly paras 18, 19 Del ILR (2012) 6 Del 163 - 64 - NC: 2025:KHC:16112 WP No. 27057 of 2024 19, 30 and 32 thereof, which are reproduced hereunder for easy reference: 18. Section 55 of the Act reads as follows: “55. Inquiry by Registrar (1) The Registrar may of his own motion or on the application of the majority of the committee or of not less than one-third of the members, hold an inquiry or direct some person authorized by him or by order in writing in this behalf to hold an inquiry into financial condition of a Cooperative Society. the constitution, working and (2) The Registrar or the person authorized by him under sub Section (1) shall have the following powers, namely:— (a) he shall at all times have, for purpose of examination free access to the books, accounts, cash and other properties belonging to or in the custody of the Society and may summon any person in possession or responsible for the custody of any such books, accounts, documents, securities cash or other properties to produce the same at any place specified by him; (b) he may, notwithstanding any rule or bye-law specifying the period of notice for a general meeting of the Society, require the officers of the Society to call a general meeting at such time and - 65 - NC: 2025:KHC:16112 WP No. 27057 of 2024 place at the headquarters of the Society to consider such matter as may be directed by him; and where the officer of the Society refuse or fail to call such a meeting he shall have power to call it himself; (c) he may summon any person who is reasonably believed by him to have any knowledge of the affairs of the Society to appear before him at any place at the headquarters of the Society or any branch thereof and may examine such person on oath. (3) xxxxxxxxx. (4) The Registrar shall communicate a brief summary of the report of the inquiry to the Society, the financing institution, if any, to which the Society is affiliated and to the person or authority, if any, at whose instance the inquiry is made.” 19. The enquiry conducted under Section 55 of the Act is for the purpose of enquiring into “the constitution, working and financial condition or a Cooperative Society”. A plain reading of Section 55(1) shows that the enquiry thereunder is not directed against any particular individual. The purpose of this enquiry is not to fasten the guilt or any liability on any particular individual for any wrong doings in the Society. It is a general enquiry, inter alia, into the working and financial condition of a Cooperative Society. For conduct of the said enquiry, the enquiry officer i.e. the Registrar or the person authorized by him, is empowered to have access to and look into the books, accounts, cash and other properties belonging to or in the custody of the Society. The enquiry officer may summon any person, to produce the same before him. He may also summon any person who is reasonably believed by - 66 - NC: 2025:KHC:16112 WP No. 27057 of 2024 him to have any knowledge of the affairs of the Society, to appear before him and to examine such person on oath. It is, therefore, clear that the enquiry under Section 55 of the Act is in the nature of a preliminary investigation or enquiry. It is inquisitorial in nature. It is not a quasi-judicial exercise aimed at determining the rights or liabilities of any particular or specific person. The purpose appears to be only to collect facts and materials which may, in future, become the foundation of an enquiry under Sections 59(1) and (2). 28. The opening words of Section 59(1), i.e. “If in the course of an audit, enquiry, inspection or winding up of a Cooperative Society, it is found… …. ….”, clearly suggest that the audit, enquiry or inspection-which is a precursor to the launch of an enquiry under Section 59(1) of the Act, was not directed against any particular person. Rather it was during such audit, enquiry, inspection or winding up process in respect of a Cooperative Society, that the involvement of a person in a wrongdoing gets exposed. When Section 59 is read in juxtaposition with Section 55, it becomes clear that they together form a scheme. 30. We are, therefore, of the view that at the stage of an enquiry under Section 55(1) of the Act, there is no need for the enquiry officer to issue notice to any specific individual or office bearer of the is a general and Cooperative Society, as preliminary enquiry. It is only when the Registrar decides to proceed against a particular individual, member or office bearer or person entrusted with the organization or management of the Society under Section 59, that a notice would be required to be issued to that person. Pertinently, the conduct of the enquiry under Section 55(1) of the Act, and the it - 67 - NC: 2025:KHC:16112 WP No. 27057 of 2024 preparation of the report thereunder by itself does not result in any civil or criminal consequence or fall out for any person. Even if the enquiry report prepared under Section 55(1) of the Act were to suggest wrongdoing by a particular person or officer of a Society, the Registrar further under Section 59 of the Act. 32. For the aforesaid reasons, the impugned order, insofar as it holds that the enquiry conducted under Section 55 of the Act was in may or may not accept the report, and may or may not proceed breach of the principles of natural justice certainly cannot be sustained. We hold that the enquiry conducted under Section 55 of the Act was not hit by breach of principles of natural justice, as the said principles did not apply to such an enquiry. Consequently, the impugned order, insofar it set aside the enquiry reports prepared under Section 55 and Section 59 of the Act, is quashed. 9.35. By relying on Salil Richaria's case, he submits that an enquiry under Section 55 of the Delhi Cooperative Societies Act, an enquiry under Section 55 which is similar to Section 64 of the KCS Act, an enquiry into the constitution, working and financial condition of a Cooperative Society which is not directed under against any particular individual. It is a general enquiry into the working of the Society. The enquiry officer - 68 - NC: 2025:KHC:16112 WP No. 27057 of 2024 may summon any person to produce any records or details. Such enquiry is inquisitorial in nature and not quasi-judicial. At the stage of issuance of a notice under Section 64, there is no need for issuance of any notice to any specific individual or office bearer of the Society. It is only after the enquiry is completed that a necessary decision would have to be made as to what action is to be taken and against whom. 9.36. In the case of Primary Agricultural Co- operative Society vs. State of Karnataka and Ors20, more particularly paras 2 and 8 thereof, which are reproduced hereunder for easy reference: 2. The Petitioner has called into question the second Respondent’s order, dated 10.10.2012 (Annexure-C) directing the appointment of the Enquiry Officer in 20 W.P.No. 12791 of 2013 (CS-RES) - 69 - NC: 2025:KHC:16112 WP No. 27057 of 2024 exercise of the power conferred by him under Section 64 of the Karnataka Co-operative Societies Act, 1959 to look into the irregularities in the supply of the chemical fertilizers. It has also challenged the consequential order appointing the Respondent No.4 as the Enquiry Officer vide order dated 20.10.2012 (Annexure-D). 8. The impugned order does not subject the Petitioner to any prejudice. The petitioning bank would have full opportunity of proving that it has not committed any irregularity. It has the opportunity to show that it has received only 994 metric tonnes of fertilizer from the Karnataka State Co-operative Marketing Federation. The Enquiry Officer would take into account all the relevant materials into consideration in the course of enquiry. 9.37. By relying on Primary Agriculture Cooperative Society’s case, he submits that enquiry under Section 64 would not subject the Society to any prejudice. The Society and or any of its officers having full opportunity of proving that it has not committed any irregularity and the Enquiry Officer would take into account all relevant materials during the course of enquiry. Serious allegations having - 70 - NC: 2025:KHC:16112 WP No. 27057 of 2024 been made against the functioning of the Society, it is for the Society and or office bearers of the Society or anyone summoned by the Enquiry officer to place necessary documents as also necessary explanation before the enquiry officer which would be taken into consideration and necessary orders passed. 9.38. In the case of The Kanara District Central Co-operative Bank Ltd., and Anr. Vs. Joint Registrar of Co-operative Societies, Kumta Dist. And Ors.21 more particularly paras 1 and 10 thereof, which are reproduced hereunder for easy reference: 1. The Petitioner has called into question the order, dated 3.10.2012 (Annexure-B) passed by the first Respondent in exercise of the power conferred by Section 64 of the Karnataka Co-operative Societies Act, 1959 (‘the said Act’ for short) and the summons, 21 W.P.No. 71360 of 2012 c/w W.P.No. 76743 of 2013 (CS-RES) - 71 - NC: 2025:KHC:16112 WP No. 27057 of 2024 dated 10.10.2012 (Annexure-C) issued pursuant thereto. 10. Be it as it may, the holding of the enquiry by the Respondent No.2 does not put the Petitioners to any prejudice. They are given an opportunity to show that the service register is not tampered with and that the Petitioner No.2 was rightly permitted to serve the first Petitioner till 30.9.1995. 9.39. He relies upon The Kanara District Central Co-operative Bank Ltd., case to again contend that an enquiry under Section 64 would not put the Society to any prejudice. Opportunity would always be available to the Society to put its side before the Enquiry officer. 9.40. In the case of Sri. Karthik.K. vs The Government of Karnataka22, more particularly paras 2, 4, 9, 31, 32, 37 and 38 thereof, which are reproduced hereunder for easy reference: 22 W.P.No. 36231-233 of 2016(CS-RES) - 72 - NC: 2025:KHC:16112 WP No. 27057 of 2024 2. Sri Veerabhadraiah, the learned counsel for the Petitioners submits that the vakalath filed by the learned advocate Sri P.Anand for the Respondent Society in the proceedings before the Joint Registrar of Co-operative Societies is without the authority of law. It reads as if it is filed in the personal capacity of the Secretary. The name of the Society is not even mentioned in the first line of the vakalath. or compromise 4. He submits that as per Section 28-C (p) of the Karnataka Co-operative Societies Act, 1959 (‘the said Act’ for short) it is only the Board of Co-operative Society which is clothed with the power to institute, proceedings. defend Consequently, no power legal proceedings independently of the Board of Co- operative Society is available to its Secretary. He submits that suing or being sued can only be on behalf of the Co-operative Society as per Section 29- G (4) (j) of the said Act. to defend any legal 9. He submits that Rule 14-AM (12) of the Co- operative Societies Rules, 1960 states that the Chief Executive Officer (Secretary in the instant case) shall have the power to institute, defend, conduct, compound or abandon any suit or other legal proceedings by or against the Society and enter into compromise or arbitration with the creditors and debtors of the Society with the approval of the Board of Directors. This being the provision, the Secretary of the third Respondent Society cannot contest the case on his own. 31. He visualizes a hypothetical situation. If the Secretary receives the emergent notice on behalf of the Co-operative Society for its appearance before the Court, he cannot wait till the Board of Directors passes a resolution and appoints the counsel. As the Chief Executive Officer, he is required to act swiftly in the interest of the Co-operative Society. - 73 - NC: 2025:KHC:16112 WP No. 27057 of 2024 32. In the course of rejoinder, Sri Veerabhadraiah submits that the powers conferred by Section 29- G(4) of the said Act cannot be exercised by the Secretary independently of the Board of Directors. He submits that the impugned order is not reflective of the consideration of the relevant materials. He submits that there is no reference to the Board resolution, dated 07.11.2015 in the impugned order. 37. The next question that falls for my consideration is whether the vakalath given to Sri P. Anand is without the authority of law? Section 29-G(4) of the said Act states that the Chief Executive Officer shall sue or be sued on behalf of the Co- operative Society subject to the general supervision and control of the Board of Directors. Rule 14-AM (12) of the Karnataka Co- operative Societies Rules, 1960, dealing with his powers and functions states in sub-Rule (12) that he institute, defend, conduct, compound or shall abandon any suit or legal proceedings by or against the Society and enter into compromise or arbitration with the creditors and debtors of the Society with the approval of the Board. Thus, that the Secretary has the power coupled with the duty to defend the Co- operative Society in any legal proceedings is not in dispute at all. That the exercise of power and discharge of duties in any legal proceedings is subject to the general supervision, control and approval of the Board is also not in dispute. 38. The allied question would be whether the Board of Directors has to pass the resolution for contesting the case and for appointing the advocate. Bye-law No.56(5) of the Respondent Society’s Bye-laws require the Secretary to represent the Society in the Court and before the offices. But that does not mean - 74 - NC: 2025:KHC:16112 WP No. 27057 of 2024 that every time a case is filed against the Co- operative Society, the Secretary has to approach the Board of Directors for resolution and authorization. The Petitioners’ reliance on Bye-law Nos.55(14) and 25 does not come to their rescue in any way. Bye- law No.55(14) provides for the appointment of legal consultants on retainership basis by the Co-operative Society. Bye-law No.55(25) provides for initiating the legal proceedings or settling the dispute by the Board of Directors invoking the said powers. The Board of Directors can always pass a resolution not to contest the dispute on hand or to settle the matter. But the said Bye-laws cannot be marshalled to contend that the Secretary cannot defend the Society in the dispute on hand in the absence of any resolution by the Board of Directors. Even now also, there is no legal impediment for the Board of Directors to pass the resolution not to contest the case or to settle the matter and further to terminate the agency or power or vakalath given to Sri P. Anand. 9.41. By relying on Karthik’s case, he submits that the present petition has been filed by the Secretary of the Society without any authorisation. There being no document placed indicating any resolution passed by the Board of the Society or the General Body in a meeting authorising the Secretary to contest a notice issued by the Respondent No.3 under Section 64, only on the basis of a challenge made by - 75 - NC: 2025:KHC:16112 WP No. 27057 of 2024 the Secretary, this Court ought not to interdict the enquiry being conducted by Respondent No.3 in terms of the applicable law. 9.42. On the basis of the above, he submits that the above petition is required to be dismissed. 10. Heard Sri.Pruthvi Wodeyar, learned counsel appearing for the Petitioner-Society, Sri.Yogesh D.Naik, learned AGA for Respondents No.1 to 5 and Sri.Sameer Sharma, learned counsel for Respondent No.6. Perused papers. 11. The points that would arise for consideration are, 1. Has Respondent No.3 applied his mind before initiating enquiry under Section 64 of the Karnataka Cooperative Societies Act? 2. Could Respondents No.3 and 4 have acted on a complaint by a single member of the requisite 1/3rd Society without the members of the Society having called for an enquiry under Section 64 by submitting a representation to Respondent No.3? - 76 - NC: 2025:KHC:16112 WP No. 27057 of 2024 3. Could the holding of an enquiry under Section 64 be said to cause prejudice to the Society, requiring a notice to have been issued by Respondent No.3 to the Society and provide an opportunity of hearing to the Society before an enquiry is initiated under Section 64? 4. Could a writ petition be filed to challenge the initiation of enquiry under Section 64 since the enquiry is only a fact-finding mechanism to ascertain if there are any omissions or commissions on part of the Society? 5. Whether the present petition filed only by the Secretary without being accompanied by a Board resolution or the resolution of the General Body challenging enquiry under Section 64 be maintainable? 6. Is the order passed by Respondent No.3 directing enquiry under Section 64 required to be interceded with in the facts and circumstances of this case? 7. What order? 12. I answer the above points as under: 13. ANSWER TO POINTS No.1: Has Respondent No.3 applied his mind before initiating enquiry under Section 64 of the Karnataka Cooperative Societies Act? - 77 - NC: 2025:KHC:16112 WP No. 27057 of 2024 and ANSWER TO POINTS No.2: Could Respondents No.3 and 4 have acted on a complaint by a single member of the Society without the requisite 1/3rd members of the Society having called for an enquiry under Section 64 by submitting a representation to Respondent No.3? 13.1. Though there is autonomy in the functioning of a Cooperative Society, there are also certain regulations. A Cooperative Society dealing with the assets of the members of the Cooperative Society, there is a duty imposed on the Cooperative Society to see to it that the said assets are maintained and dealt with in a proper manner so as to protect the interests of its members. 13.2. It is in that view of the matter that Chapter 8 of the KCS Act provides for audit, enquiry, inspection and surcharge. Section 63 deals with the audit of accounts and provides for the - 78 - NC: 2025:KHC:16112 WP No. 27057 of 2024 manner of filing the audit report, re-audit, etc. Section 64 provides for enquiry by the Registrar. Section 65 provides for the inspection of books of a Cooperative Society. Section 65A provides for a report of enquiry of inspection. Section 65B provides for the inspection of the books of a Corporate Society by a credit agency. Section 66 provides for the power to seize books and property. Section 67 provides for the costs of the inquiry. Section 68 provides for the order of the Registrar. Section 69 provides for surcharge proceedings. 13.3. Thus, there is a methodology in which the provisions under Chapter 8 have been organized. 13.4. As indicated supra, Section 63 provides for audit where each Cooperative Society has to get its accounts audited at least once in a year - 79 - NC: 2025:KHC:16112 WP No. 27057 of 2024 and the report filed with the Registrar of Cooperative Societies. The manner and methodology of carrying out the audit have been provided in the said provision. If the results of the audit disclose any defects, then the Board is required to take steps to rectify the defects and remedy the irregularities. The General Body of the Co-operative Society, if of the opinion that there is fraud or, misappropriation or embezzlement of funds not disclosed in the audit, may request a re-audit. 13.5. If it appears to the State government on an application by the Cooperative Society that it requires a re-audit, the State government may provide such a re-audit. The Director of Cooperative audit is required to report on the accounts examined. Thus, insofar as an audit of accounts is concerned, Section 63 provides for - 80 - NC: 2025:KHC:16112 WP No. 27057 of 2024 the manner in which the audit is to be carried out. 13.6. Section 64 provides for enquiry by the Registrar. Said Section 64 of KCS Act is reproduced hereunder for easy reference: 64. Inquiry by Registrar.- (1) The Registrar may, of his own motion, by himself or by a person authorized by him, by order in writing, hold an inquiry into 1 [any matter specified in the order touching] 1 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 *board* of the society; or (c) not less than one-third of the total number of members of the society. (2A) An inquiry under sub-section (1) shall be completed within a period of twelve months which may however be extended by the Registrar for the reasons to be recorded in writing for a further period of six months] [Provided that the State Government shall, on a report made by the Registrar, shall have power to extend the period for holding the enquiry beyond - 81 - NC: 2025:KHC:16112 WP No. 27057 of 2024 eighteen months if it is satisfied that, there are genuine grounds for the extension.] (3) The Registrar, or the person authorized by him under sub-section (1) shall, for the purposes of an inquiry under this section have the following powers, namely:— (a) he shall, at all times, have free access to the books, accounts, documents, securities, cash and other properties belonging to or in the custody of the society and may summon any person in possession or responsible for the custody of any such books, accounts, documents, securities, cash or other properties to produce the same at any public office at the headquarters of the society or any branch thereof; (b) the inquiry officer may also summon any officer of a financing bank or a credit agency as the case may be or any person having any kind of business relationship with the society or any person who is connected with the functioning of and who has knowledge about the affairs of the society to produce any records or documents, if any, related to the transactions with and working of the society and furnish such information and the explanations, at the registered office or branch of the society or at any public office at the headquarters of the society, as the inquiry officer may require for the purpose of the inquiry. (c)(i) he may, notwithstanding any rule or bye-law specifying the period of notice for a general meeting of the society, require the office bearers of the society to call a general meeting at such time and place at the headquarters of the society or any branch thereof and to determine such matters as may be directed by him, and where the office bearers of the society refuse or fail to call such a meeting he shall have power to call it himself; (ii) any meeting called under clause (i) shall have the powers of the general meeting called under the - 82 - NC: 2025:KHC:16112 WP No. 27057 of 2024 bye-laws of the society and its proceeding shall be regulated by such byelaws except that no quorum shall be necessary for such meeting. (4) When an inquiry is made under this section, the Registrar shall send a copy of the inquiry report and communicate the result of the inquiry to the society and to the cooperative society, if any, to which that society is affiliated and also to the Director of Cooperative Audit. (4A) On receipt of the inquiry report and the result of the inquiry from the Registrar, it shall be the responsibility of the board to initiate immediate necessary action for rectification of deficits, if any, therein and place the report before the annual general meeting or a special general meeting convened for the purpose at the earliest. Provided that the general body of the cooperative society shall not be competent to pass a resolution negativing the findings of the inquiry. (5) If the result of the inquiry held under sub- section (1) discloses any defects in the working of the society, the society shall within forty five days from the date of the receipt of the inquiry report and communication of the result of the inquiry explain to the Registrar the defects or the irregularities pointed out in the inquiry and take steps to rectify the defects and remedy the irregularities and report to the Registrar the action taken by it thereon. The Registrar may also make an order directing the society or its office bearers to take such action, as may be specified in the order to remedy the defects within the time specified therein. - 83 - NC: 2025:KHC:16112 WP No. 27057 of 2024 13.7. A perusal of Section 64 indicates that the Registrar may, of his own motion, by himself or by a person authorised by him, by order in writing, hold an enquiry into any matter specified in the order touching upon the constitution, working and financial conditions of the Cooperative Society. Thus, an enquiry can be held in respect to the constitution, that is the manner in which the Cooperative Society has been constituted. Into the working of the Cooperative Society, that is, the manner in which the business and affairs of the Cooperative Society is conducted. The financial condition of a Cooperative Society, which would include all the accounts, the payments made and received by the Cooperative Society, etc. 13.8. This being over and above the audit envisaged under Section 63, Section 64 finding place after Section 63. In terms of Subsection (2) of - 84 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Section 64, an enquiry under Subsection (1) of Section 64 shall be held on the application of a Cooperative Society to which the Society concerned is affiliated, that is to say, the Federal Society, on the basis of an application made by the majority of the members of the Board of the Society, or on an application made by not less than one-third of the total number of members of the Society. 13.9. It is based on this Subsection (2) of Section 64 that Sri.Pruthvi Wodeyar, learned counsel appearing for the Petitioner, would submit that the requirements of Subsection (2) of Section 64 have not been satisfied inasmuch as an application has been made by only one member to the Registrar, it has not been made by either the Federal Society or the majority of the members of the Board or by not less than one- third of the total number of members of the - 85 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Society. Thus, he submits that the prerequisite conditions were not satisfied, and the Registrar could not have directed an inquiry. 13.10. The submission made in this regard is that there being a complaint filed by only one person, the same would not satisfy the requirement of Subsection (2) of Section 64 and as such, the Registrar could not have held an enquiry or a preliminary enquiry on the basis of a complaint filed by one person. Reliance has been placed on Bangalore grain merchant's case, Kandath Distillery's case, N.Avanisiappan's case, Inderjeet Barua's case, Kunnathat Thattehunni's case to contend that there is no application of mind by the Registrar inasmuch as on a complaint having been received by the Additional Registrar of Cooperative Societies, he has directed the DRCS to hold a preliminary enquiry - 86 - NC: 2025:KHC:16112 WP No. 27057 of 2024 and submit a report. There is no independent application of mind by the Additional Registrar. The same cannot be said to be suo moto exercise of power or contended that the Registrar has exercised the powers on his own motion. The submission in this regard is that for the Registrar to have exercised the powers of his own motion, he ought not to have referred to or relied upon any complaint or representation. Having relied on a complaint filed by a single member which does not satisfy the requirement of Subsection (2) of Section 64, no inquiry could have been ordered by the Additional Registrar to be conducted by the DRCS. 13.11. Per contra, the submission of Sri.Sameer Sharma, learned counsel for the Respondent - complainant, is that the Additional Registrar, being satisfied with the allegations made has - 87 - NC: 2025:KHC:16112 WP No. 27057 of 2024 sought for a preliminary enquiry to be conducted by the DRCS to ascertain the veracity of the allegations made. What has been directed initially is not an enquiry under subsection (1) of Section 64, but a preliminary enquiry to ascertain whether there is a requirement to hold such an enquiry under subsection (1) of Section 64. 13.12. Insofar as the satisfaction of the requirement under subsection (2) of Section 64, he submits that there is no requirement for a complaint or an application to be submitted by a federal Society or the majority of the members of the Board, or not less than one-third of the total number of members of the Society. 13.13. It being brought to the notice of the Additional Registrar that the affairs of the Cooperative Society having not been carried out in a proper - 88 - NC: 2025:KHC:16112 WP No. 27057 of 2024 manner, the Additional Registrar, prima facie being satisfied that an enquiry is required to be conducted, has directed the DRCS to hold a preliminary inquiry and in this regard, he relies upon the decision in Muslim Co-operative Bank Limited’s case to contend that even if one member of a co-operative Society were to lodge a complaint, the Registrar concerned has the necessary power, if satisfied that sufficient basis is made out, on the basis of such complaint, to institute an inquiry to ascertain the veracity of the same. Thus, he submits that the Coordinate Bench of this court having held that a complaint by a single person is maintainable, the same would be equally applicable to the present case. 13.14. Reliance is also placed on Grain Merchants Association’s case, which was also relied upon by the Petitioner to contend that this - 89 - NC: 2025:KHC:16112 WP No. 27057 of 2024 court has held that the suo moto power conferred under Section 64 is independent of any complaint, the same cannot be curtailed, by the requirements of subsection (2) of Section 64 even if less number of persons were to make certain allegations which the Registrar is satisfied would require a detailed enquiry, an enquiry could be ordered for the very same purpose the decision in Sarvada multi- Cooperative, purpose Cooperative Society’s case has been relied upon. 13.15. It is in the background of the above that points number 1 and 2 would have to be considered. 13.16. It is not in dispute that the Society is engaged in the formation of several layouts as regards which the complainant has made serious allegations of excess payment, and or payments which are not required to be made to - 90 - NC: 2025:KHC:16112 WP No. 27057 of 2024 the contractor. Serious allegations have also been made that the finances of the Society have been squandered for the benefit of the governing body of the Cooperative Society. The said complaint having been received by the Additional Registrar, the Additional Registrar had directed the DRCS to conduct a preliminary enquiry. Thus, when the Additional Registrar directed the DRCS to conduct a preliminary enquiry, the same was not a full-fledged enquiry in terms of subsection (1) of Section 64, but only a preliminary enquiry to ascertain the veracity of the allegations made and if there was any prima facie allegation made out and to thereafter hold an enquiry under subsection (1) of Section 64. The Additional Registrar being satisfied with the allegations made was of the opinion that a preliminary enquiry is required to be held and therefore, directed the DRCS to do hold a preliminary enquiry, who issued a notice - 91 - NC: 2025:KHC:16112 WP No. 27057 of 2024 to the Petitioner to submit the necessary documents and explanation. On receipt of the said notice, the Petitioner submitted documents on 27-06-2024, but no enquiry had been held, the complainant had approached this court in WP No. 16270 of 2024, and this court, vide order dated 1.07-2024, directed Respondent No.2 to consider whether enquiry under Section 64, or 65 of the KCS Act is required to be held. 13.17. It is thereafter on a notice being issued by DRCS, the Petitioner had submitted various documents acceding to the jurisdiction of the DRCS to conduct a preliminary enquiry. Thereafter, the DRCS conducted a preliminary enquiry and has submitted a report indicating various lacuna and indicating that there is enough material placed on record requiring a detailed enquiry to be conducted in terms of subsection (1) of Section 64. - 92 - NC: 2025:KHC:16112 WP No. 27057 of 2024 13.18. Thus, it is clear that a complaint was filed by a complainant making various allegations. The Additional Registrar was prima facie satisfied that these allegations require a preliminary enquiry to ascertain the veracity. The Additional Registrar directed the DRCS to hold a preliminary enquiry, which was so held, and a report was submitted. Based on the said report, a notice has now been issued under subsection (1) of Section 64 to hold a detailed enquiry. 13.19. The DRCS during the preliminary inquiry has categorically come to a conclusion that all necessary documents have not been produced by the Society. The allegations made are prima facie borne out by the records, the allegations have not been controverted by producing cogent material by the Society. - 93 - NC: 2025:KHC:16112 WP No. 27057 of 2024 13.20. When these factors are taken into consideration, I am of the considered opinion that it cannot be said that there is no application of mind by Respondent No. 2 and or that DRCS has acted on the instruction of Respondent No.2 on a complaint which does not satisfy the requirement of Subsection (2) of Section 65. 13.21. As held by this court in Muslim Co-operative Bank Limited’s case, an enquiry into the affairs of the Cooperative Society can be instituted by a Registrar pursuant to a complaint made by one of the members of Society and it is not required that in all cases the requirements of subsection (2) of section 64 are to be satisfied before holding such an enquiry. In the present case, on a complaint being received by the Additional Registrar, the Additional Registrar has directed the DRCS to - 94 - NC: 2025:KHC:16112 WP No. 27057 of 2024 hold a preliminary enquiry to ascertain the veracity, the DRCS, though has acted on the instructions of the Additional Registrar, a preliminary enquiry has been independently held by him to ascertain the veracity of the allegations made in the complaint. The enquiry held by the DRCS is not an enquiry under subsection (1) of section 64, but a preliminary enquiry conducted independently though under the instructions of the Additional Registrar. The same does not fall foul of subsection (1) of Section 64. The Additional Registrar wanting to verify the allegations, the DRCS has held a preliminary inquiry and found the allegations made to have a basis requiring a full-fledged enquiry. 13.22. Thus, I am unable to accept the submission of Sri.Prithvi Wodeyar, learned counsel for the Petitioner that Respondent No.3 DRCS has - 95 - NC: 2025:KHC:16112 WP No. 27057 of 2024 conducted an enquiry solely on the instructions of Respondent No.2 Additional Registrar without application of his own mind, since as aforesaid, the inquiry held by DRCS is an independent preliminary inquiry and not a final inquiry. 13.23. Thus, I answer point No.1 by holding that though Respondent No.3 has acted on the instructions of Respondent No.2, there is an independent application of mind by Respondent No.2 to direct the preliminary inquiry to ascertain the veracity of the allegations made. The DRCS has conducted an independent preliminary enquiry and submitted a report indicating the requirement of a further detailed inquiry. Thus, there is an application of mind on part of Respondent No.2 to ascertain the veracity. There is an application of mind by the DRCS, Respondent No.3 by appreciating the documents placed on record. - 96 - NC: 2025:KHC:16112 WP No. 27057 of 2024 13.24. Respondent No.2 having directed a preliminary enquiry on the basis of a complaint filed by one single member, there is no requirement for satisfaction of subsection (2) of Section 64. Thus, I answer point No.2 by holding that even a single member could file a complaint or a representation to the Registrar which can be looked into by the Registrar and if the Registrar were to be satisfied prima facie that further enquiry is required to be held, can exercise the powers under subsection (1) of Section 64 as if on his own motion on the basis of information received by the Registrar from any source, including from that of one single member. 14. ANSWER TO POINT No.3: Could the holding of an enquiry under Section 64 be said to cause prejudice to the Society, requiring a notice to have been issued by Respondent No.3 to the Society and provide an opportunity of hearing to the Society before an enquiry is initiated under Section 64. - 97 - NC: 2025:KHC:16112 WP No. 27057 of 2024 14.1. The complaint having been received by the Additional Registrar, the Additional Registrar having directed the DRCS to conduct a preliminary inquiry, the DRCS, having issued a notice to the Society to submit documents, the DRCS after considering the complaint and the documents submitted having come to a conclusion that all the documents have not been produced and on the basis of the documents which have been produced would indicate that there is a detailed inquiry required to be held, an order has been issued by the Additional Registrar directing Respondent No.5, ARCS to hold an enquiry under sub-section (1) of Section 64 and submit a report within 6 months. 14.2. A perusal of Subsection (1) of Section 64, which has been reproduced hereinabove would indicate that the Registrar may, of his own - 98 - NC: 2025:KHC:16112 WP No. 27057 of 2024 motion, by himself or by a person authorized by him, by order in writing, hold an enquiry into any of the matters specified hereinabove. Thus, what the Additional Registrar who is required to be considered to be the Registrar since it is under his Jurisdiction that the Soceity functions, has done on the basis of the preliminary enquiry indicating the requirement of detailed enquiry, has directed his subordinate ARCS to hold such an enquiry. 14.3. The discretionary power vested with the Registrar, in my considered opinion, has been exercised properly. The decision in Kanndanth distillery's case would not be applicable since the Registrar has exercised such powers after getting conducted a preliminary inquiry and being satisfied that there is a detailed inquiry which is required to be held. - 99 - NC: 2025:KHC:16112 WP No. 27057 of 2024 14.4. The decision in Indrajit Barua's case would also not have any bearing since the Registrar has not directed an enquiry under subsection (1) of Section 64 but had directed a preliminary enquiry and on the basis of the said preliminary enquiry has thereafter directed an enquiry under subsection (1) of Section 64. A preliminary enquiry having been held after issuance of notice providing an opportunity to the Society to place documents on record, I am of the considered opinion that there would be no further requirement for the Registrar to issue another notice as regards the direction to hold an inquiry under subsection (1) of section 64. 14.5. It was for the Society to have placed all the documents on record and provide suitable explanation satisfying the allegations made against the Society. All the documents not - 100 - NC: 2025:KHC:16112 WP No. 27057 of 2024 having been placed on record and no proper explanation having been offered, the Registrar has directed a detailed enquiry under subsection (1) of Section 64. 14.6. During the course of enquiry, the Society would be afforded necessary opportunity to place all the documents on record, as also to offer an explanation to each of the allegations made against Society, which in my considered opinion would not cause any prejudice to the Society. If at all, the Society ought to have utilised the opportunity granted to the Society to place all the documents on record and offered a proper explanation which would have been considered by the DRCS. Not having done so, the Society having withheld the necessary documents and not having furnished detailed and satisfactory explanation, cannot now contend that there is a prejudice which would be caused to the Society - 101 - NC: 2025:KHC:16112 WP No. 27057 of 2024 if an enquiry under subsection (1) of Section 64 is held. 14.7. A perusal of the documents would indicate that a notice had been issued on 19-04-2024 calling upon the Petitioner to submit the documents on 30-04-2024, which were not so submitted. On the next day that the matter was taken up, that is 15-05-2024, an adjournment was sought for, when the matter was adjourned to 28-05-2024, when again adjournment was sought for, and it is only thereafter that certain documents were furnished. The Petitioner had enough and more opportunities to have submitted documents since the principles of natural justice were given due effect to by the DRCS. The opportunity not having been availed, there cannot be an allegation of violation of principles of natural justice and in this regard, as held by the Hon’ble Apex Court in Ashok Kumar - 102 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Sonkar's case, even if the allegation that principles of natural justice have been violated is accepted, what would be required to be seen is whether there is any prejudice which has been caused to the Petitioner. 14.8. What is ordered is only an enquiry under subsection (1) of Section 64, which report would have to undergo further processing in terms of the further provisions provided under the KCS Act. The mere holding of an enquiry would not lead to an automatic proceedings taken against the Society or its directors, after the enquiry report is submitted, necessary processess and procedures would have to be followed, which in my considered opinion would not cause any prejudice to the Petitioner. Similar is the finding of the Hon’ble Apex Court in Sudhir Kumar Singh's case, which would - 103 - NC: 2025:KHC:16112 WP No. 27057 of 2024 also be equally applicable to the present matter. 14.9. An inquiry under subsection (1) of Section 64 as held in Salil Richariya's case is an enquiry as regards the working and financial condition of the Cooperative Society. This enquiry being mandated for the purpose of better governance of the Society in terms of Section 64 coming under Chapter-8 of the KCS Act, the enquiry is inquisitorial in nature and not quasi-judicial action requiring any order to be passed. The inquiry being only a fact-finding inquiry, no prejudice would be caused to the Petitioner nor could it be contended that harm, loss or injury would be caused to the Petitioner. 14.10. As held by this court in Primary Agriculture Cooperative Society of the State of Karnataka and others (supra), during the - 104 - NC: 2025:KHC:16112 WP No. 27057 of 2024 course of enquiry, full opportunity of proving that it has not committed any irregularity would always be available to the Society. The enquiry officer would be duty-bound to take into account all relevant materials during the course of enquiry, which cannot be said to cause any prejudice to the Society. 14.11. This court in Karnataka District Central Co- operative Bank Limited case has categorically come to the conclusion that holding of enquiry would not put the Society to any prejudice, but an opportunity to show that the allegations made are not correct and liberty would always be available with the Society. 14.12. In that view of the matter, I answer point No.3 by holding that holding of an enquiry under Section 64 cannot be said to cause any prejudice to the Society since Section - 105 - NC: 2025:KHC:16112 WP No. 27057 of 2024 64 contemplates and empowers the Registrar to take necessary action where serious allegations are made, against the constitution, functioning and finances of a Cooperative Society and in this regard, no notice is required to be issued to the Society before directing an enquiry. However, in the present matter, a preliminary enquiry having been directed to be held by the DRCS which has been so held where an opportunity had been granted to the Society to place all the documents and its say on record, which has not been done, even this contention of the Petitioner is required to be rejected. 15. ANSWER TO POINT No.4: Could a writ petition be filed to challenge the initiation of enquiry under Section 64 since the enquiry is only a fact-finding mechanism to ascertain if there are any omissions or commissions on part of the Society? - 106 - NC: 2025:KHC:16112 WP No. 27057 of 2024 15.1. The contention of Shri Pruthvi Wodeyar, learned counsel, is that an enquiry may be ordered under subsection (1) of Section 64. The only remedy that is available to the Petitioner Society is to approach this court to exercise its extraordinary power under Article 226 of the Constitution of India, to set aside the order of enquiry since the same would cause prejudice to the Society, and the Society would be unnecessarily made to answer the allegations. The aspect of prejudice has been dealt with hereinabove, and I have come to the conclusion that there is no prejudice which can be said to have been caused to a Society if an enquiry is ordered under Subsection (1) of Section 64. 15.2. The Hon’ble Apex Court in Channan Singh's case has held that the holding of an enquiry itself would not result in any order being passed against the Society. It is after the enquiry is - 107 - NC: 2025:KHC:16112 WP No. 27057 of 2024 complete that it becomes clear whether any action is to be taken against the Society or not. The enquiry being to ascertain the true facts, the Society cannot have any grievance in relation thereto in order to challenge such an order before this court. 15.3. The Hon’ble Madras High Court in P.Raju's case has also categorically come to a conclusion that filing a writ petition before an enquiry is held is premature since no adverse order has been passed against anybody or any action affecting anybody's right has been taken. 15.4. Applying the said decisions to the present matter, it is clear that only a preliminary inquiry has been held. The inquiry under subsection (1) of Section 64 would be conducted by the enquiry officer, during which adequate opportunity would be granted to the Society to - 108 - NC: 2025:KHC:16112 WP No. 27057 of 2024 place all the documents and explanation on record, which would lead to ascertaining the true facts as regards which the Society or its Board cannot have any grievance. 15.5. Again, as held by the Hon’ble Apex Court in Mesko Steels Limited’s case, an enquiry is a step in the process of taking a final decision, the final decision could be to drop the proceedings or to go further with the proceddings. The Petitioner cannot have any grievance in respect to such an enquiry. What is contemplated under subsection (1) of Section 64 is for the Registrar to cause an inquiry. This enquiry, being to safeguard the Soceity as also the interests of the members of the Society, as held in Ashok Kumar Sonkar's case, such enquiry again is a fact-finding enquiry, as also a statutory enquiry, as regards which no grievance can be made out. It would be for the - 109 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Society to place the relevant material on record to absolve itself of the allegations made. 15.6. A perusal of the complaint which has been filed and a preliminary enquiry conducted would indicate that there are serious allegations which have been made against Society and its office bearers, which, even according to me, would require a detailed enquiry as indicated by the preliminary enquiry report submitted by the DRCS. I’am not delaing with the said allegations lest prejudice be caused to either of the parties, arguments also not having been addressed as regards the veracity of the allegations made. The endevour in this order is only to ascertain the applicable law to the arguments advanced. 15.7. In view of the above, though several other decisions have been cited by the Council for the - 110 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Respondent, it would suffice to say that when an enquiry cannot be said to cause prejudice and or the enquiry by itself would not amount to any order being passed against the Society, the enquiry being initiated to ascertain the allegations made no prejudice can be said to have been caused to the Society, requiring this court to exercise its jurisdication under Article 226 of the Constitution of India, when there is no injury as such which can at present be said to have been caused to the Petitioner. 15.8. As such, I answer point No.4 by holding that the writ petition filed challenging the initiation of enquiry under Section 64 is premature and not maintainable. It is only after the enquiry is completed, if requiring any action to be taken the Registrar would take such action after notifying the - 111 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Petitioner and in my considered opinion by providing adequate opportunity. 16. Answer to point No.5: Whether the present petition filed only by the Secretary without being accompanied by a Board resolution or the resolution of the General Body challenging enquiry under Section 64 be maintainable? 16.1. The present petition has been filed by the Secretary. There is no authorization which has been produced indicating the authorization by the Board, authorizing the secretary to file the present petition in terms of KCS Act, more particularly Section 29G, thereof, it is the Chief Executive Officer who shall be the Chief Administrative Officer of the Society and in terms of Section 29G4(j) to sue and be sued on behalf of the Cooperative Society. 16.2. The present petition has not been filed by the Chief Executive Officer but has been filed by the - 112 - NC: 2025:KHC:16112 WP No. 27057 of 2024 Secretary. There is no authorization which has been placed on record by the Board or a resolution of the Board authorizing the secretary to file the above petition as held by a coordinate Bench in Karthik K's case. 16.3. For the purpose of filing any petition, an authorisation would be required for defending a litigation. Taking into consideration the exigencies, written authorisation by way of Board resolution would not be required. Be that as it may, despite the matter being pending for a considerably long period of time and this contention having been taken up by the complainant, no such authorisation has been placed on record till date. 16.4. I answer point No.6, by holding that the present petition filed only by a Secretary without being accompanied by a Board - 113 - NC: 2025:KHC:16112 WP No. 27057 of 2024 resolution, or the resolution of the General Body, a challenge to an order of enquiry under subsection (1) of Section 64 could not be filed or made by the Secretary of his own accord. 17. ANSWER TO POINT No.6: Is the order passed by Respondent No.3 directing enquiry under Section 64 required to be interceded with in the facts and circumstances of this case? 17.1. In view of my answers to all the points above, it being clear that there are serious allegations which have been made, a preliminary enquiry having been made, the said enquiry, all these aspects having been considered by the Additional Registrar and subsequently the DRCS during the inquiry and thereafter by the Additional Registrar in appointing the ARCS to conduct a full-fledged inquiry under subsection (1) of Section 64, I do not find any fault in the action taken by the concerned authorities. - 114 - NC: 2025:KHC:16112 WP No. 27057 of 2024 18. Answer to point number 7: What order? 18.1. In view of my answers to the aforesaid points, there are no grounds which have been made out by the Petitioner requiring any interference at the hands of this court, the Petitioner not making out any grounds, the petition is dismissed, by directing the ARCS to expeditiously conduct the inquiry as directed by Additional Registrar after affording necessary opportunity to the Petitioner to place all the documents and explanation on record before the Enquiry Officer, which shall be considered by the enquiry officer and a report submitted in the timeframe prescribed. Sd/- (SURAJ GOVINDARAJ) JUDGE VS List No.: 2 Sl No.: 3
Arguments
13. We have so far dilated on the general nature and normal connotation of the expression ‘suo-motu’ or on ‘one's own motion’ The next question is whether in the context, the phrase ‘on one's own motion’ or suo-motu should be given a restricted meaning under Section 25(1) of the Act. The learned Counsel for the Petitioners having realised the futility of the argument that the general concept of suo-motu power excludes an action based on representation or to concentrate on the above question. He wants to say that in so far as the members of the Society or its governing complaint has endeavoured - 10 - NC: 2025:KHC:16112 WP No. 27057 of 2024 into request for an enquiry body come forward with an application to hold the enquiry, the Registrar cannot exercise his power under Section 25(1) of the Act unless the requisite No. of them file such application. If less than 1/3rd of the members of the Society make an application as in the present case, the Registrar cannot arrogate to himself the power to order an enquiry under the first limb of the sub-Section, according to the counsel. The implication of this argument is that whenever the members of the Society make a complaint and the constitution, working and financial condition of the Society, the Registrar has to first satisfy himself that such members constitute 1/3rd of its total strength and then only proceed to make an enquiry. If the No. of signatories to the complaint are less than 1/3rd, according to the learned Counsel, the Registrar cannot act on it and clutch at the jurisdiction to hold the enquiry in the guise of suo- motu exercise of power. The learned Counsel reinforces his argument by reference to the well-known principle of statutory construction which lays down:“where a power is given to do certain things in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily forbidden.” vide the dicta in Ramachandra Keshav Adke v. Govind Joti Chavare. [AIR 1975 SC 915.] 8.9. By relying on Bangalore Grain Merchants Association’s case, he submits that DRCS ought to have applied his own mind, verified the documents on record, DRCS ought not to have just accepted the complaint filed to the Additional Registrar and acted on his directions to hold an enquiry. There being no independent - 11 - NC: 2025:KHC:16112 WP No. 27057 of 2024 application of mind by DRCS, the impugned order is required to be quashed. 8.10. He relies on State of Kerala v. Kandath Distilleries2, more particularly, paras 28 to 32 thereof, which are reproduced hereunder for easy reference: of courses between alternative 28. Discretionary power implies freedom of choice, a competent authority may decide whether or not to act. The legal concept of discretion implies power to make a choice action (Discretionary Justice, Davis, 1969). The statute has conferred discretionary power on the Commissioner and the State Government but not discretion coupled with duty because they are dealing with a subject-matter on which the State has exclusive privilege. Permissive language used by the statute in Section 14 and the rule- making authority in Rule 4 gives the State Government and the Commissioner, no mandatory duty or obligation to grant the licence except perhaps to consider the application, if the liquor policy permits so. 29. Section 14 uses the expression “Commissioner may”, “with the approval of the Government” so also Rule 4 uses the expressions “Commissioner may”, “if he is satisfied” after making such enquiries as he may consider necessary “licence may be issued”. All those expressions used in Section 14 and Rule 4 confer discretionary powers on the Commissioner as well as the State Government, not a discretionary power coupled with duty. The powers, the conferred on Government, have to be understood in the light of the constitutional scheme bearing in mind the fact that the trade or business which is inherently harmful can always the Commissioner as well as 2 (2013) 6 SCC 573 - 12 - NC: 2025:KHC:16112 WP No. 27057 of 2024 be restricted, curtailed or prohibited by the State, since it is the exclusive privilege of the State. No duty is, therefore, cast on the Commissioner to grant a licence for establishing a distillery unit and no right is conferred on any citizen to claim it as a matter of right. The State can always adopt a “restrictive policy” e.g. reducing the No. of licences in a particular district or a particular area, or not to grant any licence at all in a particular district, even in cases where the applicants have satisfied all the conditions stipulated in the rules and the policy permits granting of licences. In other words, the satisfaction of the conditions laid down in the 1975 Rules would not entitle an applicant as a matter of right to claim a distillery licence which is within the exclusive privilege of the State. 30. The legislature when confers a discretionary power on an authority, it has to be exercised by it in its discretion, the decision ought to be that of the authority concerned and not that of the court. The court would not interfere with or probe into the merits of the decision made by an authority in exercise of its discretion. The court cannot impede the exercise of discretion of an authority acting under the statute by issuance of a writ of mandamus. A writ of mandamus can be issued in favour of an applicant who establishes a legal right in himself and is issued against an authority which has a legal duty to perform, but has failed and/or neglected to do so, but such a legal duty should emanate either in discharge of the public duty or operation of law. We have found that there is no legal duty cast on the Commissioner or the State Government exercising powers under Section 14 of the Act read with Rule 4 of the 1975 Rules to grant the licence applied for. The High Court, in our view, cannot direct the State Government to part with its exclusive privilege. At best, it can direct consideration of an application for licence. If the High Court feels, in spite of its direction, the application has not been properly considered or arbitrarily rejected, the High Court is not powerless to deal with such a situation that does not mean that the High Court can bend or break the law. Granting liquor licence is not like granting licence to drive a cab or parking a vehicle or issuing a municipal licence to set up a grocery or a fruit shop. Before issuing a writ of - 13 - NC: 2025:KHC:16112 WP No. 27057 of 2024 mandamus, the High Court should have, at the back of its mind, the legislative scheme, its object and purpose, the subject-matter, the evil sought to be remedied, the State's exclusive privilege, etc. and not to be carried away by the idiosyncrasies or the ipse dixit of an officer who authored the order challenged. Majesty of law is to be upheld not by bending or breaking the law but by strengthening the law. 31. The Respondent applicant, in the instant case, in our view, has failed to establish a legal right or to show that there is a legal duty on the Commissioner or the Government to issue a distillery licence.