Case Note & Summary
The petitioners, former office bearers of the National Technological Institutions Housing Cooperative Society Ltd., challenged an order dated 06.04.2018 passed by the Joint Registrar of Cooperative Societies, Bangalore Region, directing an inquiry under Section 64 of the Karnataka Cooperative Societies Act, 1965. The inquiry was ordered based on a complaint by respondent No.4 alleging misappropriation of funds during the petitioners' tenure. The petitioners contended that the Joint Registrar did not record any satisfaction as to the existence of a prima facie case before ordering the inquiry, and that the order was passed without affording them an opportunity of being heard. The court examined the scope of Section 64 and held that the power to order an inquiry is quasi-judicial and requires the Registrar to apply his mind and record satisfaction that an inquiry is necessary. Since the impugned order did not reflect any such satisfaction, it was held to be without jurisdiction. Additionally, the court noted that the alleged misappropriation occurred in 2013-2014, and the inquiry was ordered in 2018, which was inordinate delay. The court also held that the principles of natural justice were violated as the petitioners were not heard before the order. Consequently, the writ petition was allowed, and the impugned order was quashed. The court, however, granted liberty to the Registrar to pass a fresh order after complying with the requirements of law.
Headnote
A) Cooperative Law - Inquiry under Section 64 - Jurisdiction - The Joint Registrar ordered an inquiry under Section 64 of the Karnataka Cooperative Societies Act, 1965, against former office bearers of a housing cooperative society. The court held that the Registrar must record satisfaction regarding the existence of a prima facie case before ordering an inquiry, and failure to do so renders the order without jurisdiction. (Paras 10-15) B) Cooperative Law - Limitation - Inquiry under Section 64 - The inquiry was ordered more than three years after the alleged misappropriation, and the court noted that Section 64 does not prescribe a limitation period, but the delay coupled with lack of satisfaction vitiates the order. (Paras 16-18) C) Cooperative Law - Natural Justice - Inquiry under Section 64 - The petitioners were not given an opportunity of being heard before the inquiry was ordered, which violates principles of natural justice. (Paras 19-20)
Issue of Consideration
Whether the Joint Registrar of Cooperative Societies had jurisdiction to order an inquiry under Section 64 of the Karnataka Cooperative Societies Act, 1965, without recording satisfaction as to the existence of a prima facie case, and whether the inquiry order was barred by limitation.
Final Decision
The writ petition is allowed. The order dated 06.04.2018 passed by the Joint Registrar of Cooperative Societies, Bangalore Region, in JRB/Section 64/25/2016-17 is quashed. Liberty is reserved to the Registrar to pass a fresh order after complying with the requirements of law.
Law Points
- Jurisdiction of Joint Registrar under Section 64 of Karnataka Cooperative Societies Act
- 1965
- Requirement of satisfaction before ordering inquiry
- Scope of inquiry under Section 64
- Limitation period for inquiry
- Natural justice in inquiry proceedings
