Case Note & Summary
The petitioner, Bherya Primary Agriculture Credit Co-operative Society Ltd., filed a writ petition under Articles 226 and 227 of the Constitution of India seeking to quash a notice of enquiry dated 26.09.2024 issued by the Assistant Registrar of Co-operative Societies (respondent No.3) under Section 64 of the Karnataka Cooperative Societies Act, 1959. The petitioner's grievance was that a re-audit under Section 63 of the Act had already been ordered on 25.10.2023, and therefore, the parallel enquiry under Section 64 was premature and unsustainable. The court examined the provisions and noted that Section 63 deals with re-audit, while Section 64 deals with enquiry into the affairs of a society. The court observed that the re-audit process must be completed before an enquiry under Section 64 can be initiated, as the two are sequential steps. Since the re-audit was already ordered and pending, the notice of enquiry under Section 64 was held to be premature. The court allowed the petition, quashed the notice dated 26.09.2024, and granted liberty to the respondents to proceed with an enquiry under Section 64 after the completion of the re-audit under Section 63.
Headnote
A) Cooperative Law - Enquiry under Section 64 - Re-audit under Section 63 - The petitioner society challenged a notice of enquiry under Section 64 of the Karnataka Cooperative Societies Act, 1959 issued by the Assistant Registrar on 26.09.2024, when a re-audit under Section 63 had already been ordered on 25.10.2023. The court held that the re-audit process must be completed before any enquiry under Section 64 can be initiated, as the two provisions are sequential. The notice was quashed with liberty to proceed after re-audit. (Paras 3-5)
Issue of Consideration
Whether a notice of enquiry under Section 64 of the Karnataka Cooperative Societies Act, 1959 can be sustained when a re-audit under Section 63 of the Act has already been ordered.
Final Decision
The writ petition is allowed. The notice bearing No.SaNi-43/Adalitha/64 enquiry/CR-26/2024-25 dated 26.09.2024 passed by respondent No.3 (Annexure-B) is quashed. Liberty is reserved to the respondents to proceed with an enquiry under Section 64 of the Karnataka Cooperative Societies Act, 1959 after the completion of the re-audit under Section 63 of the Act.
Law Points
- Section 64 enquiry cannot be initiated when re-audit under Section 63 is already ordered
- Re-audit and enquiry under Section 64 are distinct but sequential processes
- Notice of enquiry without completion of re-audit is premature and liable to be quashed
