H.K. Gopalkrishna vs The Registrar of Co-operative Societies

B.S. Patil, J.—In this writ petition, petitioner is calling in question the order dated 14.07.2014 passed by the 1st respondent-Registrar of Co-operative Societies, Bangalore, vide Annexure-G thereby dismissing the appeal filed by the petitioner. The Registrar has affirmed the order dated 03.10.2013 passed by the 2nd respondent-Additional Registrar of Co-operative Societies, Bangalore, as per Annexure-D thereby disqualifying the petitioner to continue as Director or to become the Director for a period of 5 years as per Section 29(1)(c)(8) of the Karnataka Co-operative Societies Act, 1959 (for short the Act'').

Petitioner was elected as one of the Directors of the 3rd respondent-Society for which elections were held in the year 2010. A notice was issued on 13.09.2013 by the 2nd respondent exercising suo motu powers u/s 29(c)(8) of the Act calling upon the petitioner to submit his explanation regarding the allegation of misappropriation found in the annual audit report. According to the petitioner he received the notice only on 17.09.2013 and appeared before the 2nd respondent on 28.09.2013 and requested the 2nd respondent to provide him copies of the audit report, based on which the 2nd respondent-Authority had issued the notice. He also sought time to engage the services of an advocate.

However, the 2nd respondent did not provide any opportunity to the petitioner as sought for, but proceeded to post the matter to 03.10.2013, on which date, without there being any enquiry whatsoever, he passed an order disqualifying the petitioner holding him guilty of the allegations made and the findings recorded in the audit report. This order was challenged by filing an appeal before the 1st respondent.

The 1st respondent, as can be seen from the impugned order produced at Annexure-G had directed the Society to produce certain documents vide its order dated 18.03.2014. The documents that were directed to be produced pertained to the alleged misappropriation of the funds by the petitioner. Time was granted to the Society on 28.03.2014, 15.04.2014, 28.04.2014 and on 06.06.2014 so that the said documents could be produced by the Society before the Appellate Authority. However, the society did not produce the documents. The Appellate Authority without considering the effect of non-production of such documents proceeded solely on the basis that petitioner had failed to file objections before the Original Authority pursuant to the notice issued and therefore, allegations made against the petitioner were found established and hence, there was no need to interfere with the order of disqualification passed by the 2nd respondent. It is in this background, petitioner has challenged the order of disqualification passed by the Original Authority as affirmed by the Appellate Authority.

Learned senior counsel appearing for the petitioner contends that neither the Original Authority nor the Appellate Authority have given a fair and reasonable opportunity to the petitioner to have his say in the matter. He invites the attention of the Court to the proceedings as maintained by the 2nd respondent at Annexure-B to contend that on the very first day, that is, when the matter was listed before the 2nd respondent on 28.09.32013, the matter was adjourned to 03.10.2013 recording that petitioner had nothing to say in the matter although he had sought for furnishing certain documents and for permission to engage the services of an advocate. He further points out that although the matter was adjourned to 03.10.2013 for further enquiry, the 2nd respondent did not conduct any enquiry on 03.10.2013 but pronounced the order disqualifying the petitioner which disclosed that not only there has been denial of fair opportunity but the Authority has acted in a hasty manner without even conducting an enquiry recording the evidence of the parties.

Learned counsel for the respondent including the learned Additional Government Advocate have strongly defended the order passed by the 2nd respondent. It is contended by them that petitioner has not chosen to file any objections, therefore, question of denying opportunity to the petitioner to have his say in the matter does not arise.

So far as the procedure adopted by the 2nd respondent-Original Authority in passing the impugned order, I find from the materials on record, particularly, Annexure-B proceedings sheet maintained by him that the matter was posted on 28.09.2013 for the first time for the appearance of the petitioner and for his reply. No doubt, he did not file his reply on the said date but the matter was adjourned to 03.10.2013 for further enquiry. It is apparent that the enquiry in the matter was not closed on 28.9.2013 and the case was not adjourned for pronouncement of the orders. Therefore, there was no justification for the 2nd respondent to pronounce the order on 03.10.2013 having posted the matter for further enquiry to that date. It is in this background, assertion made by petitioner stating that he has been denied of fair and reasonable opportunity assumes significance. Since the matter pertains to serious allegations of misappropriation, petitioner ought to have been given a fair and reasonable opportunity to defend himself. The 2nd respondent was, therefore, not justified in pronouncing the order on 03.10.2013 without holding any enquiry.

The Appellate Authority perhaps having noticed this aspect entertained the request of the petitioner herein for a direction to the Society to produce certain documents pertaining to the alleged misappropriation. This is evident from the impugned order. The matter was adjourned on several occasions to enable the Society to produce the said documents. The society did not produce the documents. But the appellant authority did not ensure that the relevant documents were produced. This also shows that petitioner was not given a fair opportunity even at the appellate stage to have the benefit of examining the documents, on which the respondent-Society had based its allegations, so as to defend himself and convince the Appellate Authority that the allegations were not correct. The Appellate Authority, ignoring its own direction and the omission on the part of the Society to make available the records has proceeded to affirm the order passed by the Original Authority on the ground that petitioner had failed to file his objections on 28.09.2013. Thus, there is denial of opportunity to the petitioner. The matter, therefore, requires interference.

It is well established that a person cannot be condemned unheard. He shall be given a fair and reasonable opportunity of being heard. Though there are different facets of principles of natural justice, atleast the basic requirement of fair hearing has to be satisfied. In the instant case, such an opportunity has not been given. Therefore, the impugned orders deserve to be set aside.

The matter does not brook further delay as serious allegations made have to be unearthed and the guilty has to be dealt with. Therefore, the parties have to appear before the Additional Registrar - 2nd respondent on a specified date, so that the matter can be expeditiously disposed of.

Hence, I pass the following

Order:

(a) Writ petition is partly allowed. Impugned orders are set aside.

(b) The matter is remitted for fresh consideration to the 2nd respondent.

(c) Petitioner and the 3rd respondent-Society are directed to appear before the 2nd respondent on 27.10.2014 at 3.00 PM.

(d) The 3rd respondent shall furnish the copies of the agenda and the resolution passed by the Managing Committee of the 3rd respondent from 01.04.2007 till 31.05.2013 to the petitioner within four weeks from today.

(e) Petitioner shall file his objections on 27.10.2014 before the 2nd respondent by furnishing copy to the 3rd respondent.

(f) The 2nd respondent shall hold enquiry in accordance with law by giving opportunity to both parties and pass a reasoned order as expeditiously as possible at any rate within a period of three months thereafter.