High Court of Karnataka Quashes Joint Registrar's Endorsement in Co-operative Society Dispute — Lack of Hearing Violates Natural Justice. Endorsement under Section 70 of Karnataka Co-operative Societies Act, 1959 set aside for non-compliance with principles of audi alteram partem.

High Court: Karnataka High Court Bench: BENGALURU In Favour of Accused
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Case Note & Summary

The petitioners, K. Gopal Krishna Bhat, Shambunumbudari, and Ram Kumar Hebbar, filed writ petitions under Articles 226 and 227 of the Constitution of India challenging an endorsement dated 21/22.2.2014 passed by the Joint Registrar of Co-operative Societies, Mysore. The endorsement declined to entertain a dispute raised by the petitioners under Section 70 of the Karnataka Co-operative Societies Act, 1959. The petitioners were members of the Dakshina Kannada Krishikara Maarata Sangha Niyamita, a co-operative society. They sought to raise a dispute concerning the affairs of the society. The Joint Registrar, without affording any hearing to the petitioners, issued the impugned endorsement rejecting the dispute. The petitioners argued that the order was passed in violation of principles of natural justice, specifically the right to be heard (audi alteram partem). The respondents included the Joint Registrar, the co-operative society, a builder company, and other individuals. The High Court, after hearing the counsel for the petitioners and the respondents, observed that the Joint Registrar's order was quasi-judicial in nature and therefore required compliance with natural justice. The court noted that the endorsement was made without any opportunity of hearing to the petitioners, which was a clear violation of the principles of natural justice. Consequently, the court quashed the impugned endorsement and remitted the matter back to the Joint Registrar for fresh consideration, directing that the petitioners be heard before any order is passed. The writ petitions were allowed accordingly.

Headnote

A) Administrative Law - Natural Justice - Audi Alteram Partem - Section 70 of the Karnataka Co-operative Societies Act, 1959 - The Joint Registrar declined to entertain a dispute under Section 70 without hearing the petitioners. The High Court held that such an order, being quasi-judicial, must comply with principles of natural justice. The impugned endorsement was quashed and the matter remitted for fresh consideration after hearing the petitioners. (Para 1-2)

B) Co-operative Law - Dispute Resolution - Section 70 of the Karnataka Co-operative Societies Act, 1959 - The petitioners raised a dispute under Section 70 regarding the affairs of a co-operative society. The Joint Registrar rejected it via endorsement without hearing. The court held that the Registrar must hear the parties before passing any order under Section 70. (Para 1-2)

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Issue of Consideration

Whether the Joint Registrar of Co-operative Societies could decline to entertain a dispute under Section 70 of the Karnataka Co-operative Societies Act, 1959 without affording a hearing to the petitioners.

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Final Decision

The writ petitions are allowed. The impugned endorsement dated 21/22.2.2014 at Annexure-A is quashed. The matter is remitted to the Joint Registrar of Co-operative Societies, Mysore, for fresh consideration in accordance with law, after affording an opportunity of hearing to the petitioners.

Law Points

  • Natural Justice
  • Audi Alteram Partem
  • Section 70 Karnataka Co-operative Societies Act 1959
  • Writ Jurisdiction under Articles 226 and 227 of Constitution of India
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Case Details

2015 LawText (KAR) (04) 41

WP Nos.38933/2014 & 639-640/2015 (CS-RES)

2015-03-19

H.G.Ramesh

Sri G.Balakrishna Shastry (for petitioners), Sri Tharanath Poojary (AGA for R1), Sri P.Karunakar (for R4)

K. Gopal Krishna Bhat, Shambunumbudari, Ram Kumar Hebbar

The Joint Registrar of Co-operative Societies, Mysore; Dakshina Kannada Krishikara Maarata Sangha Niyamita; M/s M.A.Smart Builders and Developers Private Limited; Balakrishna D.B; P.G.Sathyanarayana Prasad; Sanjeeva Moily; M.S.Marathe

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Nature of Litigation

Writ petitions under Articles 226 and 227 of the Constitution of India challenging an endorsement of the Joint Registrar of Co-operative Societies.

Remedy Sought

Quashing of the endorsement dated 21/22.2.2014 passed by the Joint Registrar of Co-operative Societies, Mysore, and direction to entertain the dispute under Section 70 of the Karnataka Co-operative Societies Act, 1959.

Filing Reason

The Joint Registrar declined to entertain the dispute raised by the petitioners under Section 70 of the Act without affording them a hearing.

Previous Decisions

The Joint Registrar passed the impugned endorsement on 21/22.2.2014 rejecting the dispute.

Issues

Whether the Joint Registrar's order declining to entertain a dispute under Section 70 of the Karnataka Co-operative Societies Act, 1959 without hearing the petitioners violates principles of natural justice.

Submissions/Arguments

Petitioners argued that the impugned endorsement was passed without affording them an opportunity of hearing, violating principles of natural justice. Respondents did not contest the violation of natural justice; the court noted that the order was quasi-judicial and required hearing.

Ratio Decidendi

An order passed by the Joint Registrar under Section 70 of the Karnataka Co-operative Societies Act, 1959 is quasi-judicial in nature and must comply with the principles of natural justice, including the right to be heard. Failure to afford a hearing renders the order invalid.

Judgment Excerpts

By the impugned endorsement at Annexure-A, the joint Registrar has declined to entertain the dispute raised by the petitioners under Section 70 of the Karnataka Co-operative Societies Act, 1959 on the ground that the dispute is not maintainable. The impugned endorsement is quashed. The matter is remitted to the Joint Registrar of Co-operative Societies, Mysore, for fresh consideration in accordance with law, after affording an opportunity of hearing to the petitioners.

Procedural History

The petitioners filed a dispute under Section 70 of the Karnataka Co-operative Societies Act, 1959 before the Joint Registrar of Co-operative Societies, Mysore. The Joint Registrar passed an endorsement dated 21/22.2.2014 declining to entertain the dispute. The petitioners then filed writ petitions under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka challenging the endorsement.

Acts & Sections

  • Karnataka Co-operative Societies Act, 1959: 70
  • Constitution of India: 226, 227
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