Dismissed

Sri. Bhaskar Reddy v. District Registrar of Societies

Karnataka HC21 Aug 2024WP/11753/2019

Case brief

AI extract

What is this about?

Petitioner challenged the Appellate Tribunal's setting aside of a Registrar's enquiry order that had declared illegal an alienation of property by a Parents Teachers Association and ordered re-conveyance. The High Court found the enquiry did not meet Section 25 requirements and that title matters belong to a civil court; it dismissed the petition.

What the court decided

AI extract

Sri. Bhaskar Reddy Vs District Registrar of Societies — Cooperative Societies | Karnataka HC (2024)

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NC: 2024:KHC:33519 WP No. 11753 of 2019

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 21^ST DAY OF AUGUST, 2024

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BEFORE

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THE HON'BLE MR JUSTICE M.G.S. KAMAL WRIT PETITION NO. 11753 OF 2019 (GM-KSR)

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BETWEEN:

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SRI. BHASKAR REDDY S/O LATE MUNINANJAPPA REDDY AGED ABOUT 52 YEARS, R/AT NO.8, HMT LAYOUT V V NAGARA CHOLANAYAKANAHALLI BENGALURU NORTH TALUK BENGALURU-560 032.

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…PETITIONER

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(BY SRI. K VIJAYA KUMAR.,ADVOCATE)

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AND:

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Digitally signed by SUMA B N Location: High Court of Karnataka

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DISTRICT REGISTRAR OF SOCIETIES 1^ST ZONE NO.32, KARNATAKA STATE CO OPERATIVE MAHAMANDALA BUILDING 2^ND FLOOR RACE COURSE ROAD, BENGALURU -560 001.

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PARENTS TEACHERS ASSOCIATION (R) HMT LAYOUT GANGANAGAR NEAR BMTC BUS DEPOT R T NAGAR, BENGALURU -560032 REPRESENTED BY ITS SECRETARY.

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…RESPONDENTS (BY SRI. SPOORTHY HEGDE N., HCGP FOR R1; SRI. P.M. NARAYANASWAMY., ADVOCATE FOR R2)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH/SET ASIDE THE ORDER DATED 22.10.2018 PASSED BY THE KARNATAKA APPELLANT TRIBUNAL IN APPEAL NO.135/2018 (ANNEXURE-A) AND CONSEQUENTLY UPHOLD THE ORDER 07.09.2017 IN DISPUTE PASSED BY THE R-1 (ANNEXURE-E).

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NC: 2024:KHC:33519 WP No. 11753 of 2019

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THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE M.G.S. KAMAL

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ORAL ORDER

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Petitioner is before this Court being aggrieved by the order dated 22.10.2018 passed by the Karnataka Appellate Tribunal in Appeal No.138/2018 by which the Appellate Tribunal has set-aside the order dated 07.09.2017 passed by the respondent No.1-District Registrar in Dispute No.DRB1/SS/Enquiry/1/2017-18.

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The brief facts of the case are that;

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2.1 The petitioner herein had filed three

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applications/complaints dated 18.04.2017, 02.05.2017 and 06.06.2017 before the respondent No.1-District Registrar alleging mis-management, irregularities etc., against the respondent No.2-Parents Teachers Association(R). Apparently at the instance of the said applications/complaints filed by the petitioner, an enquiry was taken up by the respondent No.1 and having found that the allegation made by the petitioner to have been proved, the respondent No.1 by order dated

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07.09.2017 held that there was a violation of Section 23 of the Karnataka Societies Registration Act, 1960 (hereinafter referred to 'the Act') and has further found that the alienation of the property bearing site No.12 in Sy.No.84/1 of Cholanayakanahalli, Bengaluru North Taluk, Bengaluru by respondent No.2-Assocation in favour of Mamatha Educational Cultural Trust was illegal and that the same has been directed to be re-conveyed in favour of the respondent No.2Association.

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Being aggrieved by the said order respondent No.2 preferred the above appeal in Appeal No.135/2018 before the Appellate Tribunal. The Appellate Tribunal considering the grounds urged in the memorandum of appeal framed the following points for its consideration:

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''(i). Whether the Appellant makes out sufficient grounds to condone the delay in filing the Appeal?

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(ii). Whether the Appeal is maintainable?

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(iii). Whether the Appellant makes out sufficient grounds to set aside the impugned order passed by the 1^st Respondent in Dispute No.DRB-1/SS/Enquiry/1/2017-18 dated 07.09.2017?

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(iv). What order?''

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On hearing the parties, answered the said points in affirmative. The Appellate Tribunal referring to Section 25 of the Act has held that the initiation of the proceedings by the petitioner herein was not in accordance with provisions contemplated under Section 25 of the Act. Further, the Appellate Tribunal has also found that the petitioner had vested interest in the matter in initiating the proceedings. The Appellate Tribunal further found that the very complaint had been filed by the petitioner herein with regard to registration of an immovable property by the respondent No.2-Association in favour of one Mamatha Educational and Cultural Trust on the ground that the petitioner herein had executed only a power of attorney in respect of his property in favour of respondent No.2-Association and said respondent No.2-Association did not have power to alienate the property to anybody. That the Tribunal has further found that the Registrar was not competent to adjudicate the issue with regard to any rights in alienating the property and same was to be decided only by the Competent Civil Court, as such, the conclusion arrived at by the respondent No.1Registrar was illegal and unsustainable. Consequently allowed the appeal, setting aside the order passed by the respondent

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NC: 2024:KHC:33519 WP No. 11753 of 2019

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No.1-Registrar. Being aggrieved by the same, the petitioner is before this Court.

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Learned counsel for the petitioner reiterating the grounds urged in the memorandum of the petition and also relying upon the Judgment of the Co-ordinate Bench of this Court in the case of Advocates Association Vs. District Registrar of Societies in W.P.No.2955/2006 decided on 17.04.2006 submitted that the proceedings in the instant case were indeed initiated by the respondent No.1 exercising its suomuto power and not at the instance of the petitioner. He submits it may be that the petitioner has filed the complaints but an enquiry was constituted who on satisfaction of the irregularities committed by the respondent No.2-Association has proceeded further. Therefore, he submits the action initiated by the respondent No.1 ought to be construed as one in exercising of suo-muto powers. He submits that in that view of matter the reasons assigned by the Appellate Tribunal to hold the proceedings were contrary to the requirement of provisions of Section 25 of the Act is illegal and unsustainable. Hence, seeks for allowing of the petition.

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Per contra, learned HCGP justifying the order impugned submits that the very reference in the order passed by the respondent No.1 indicate that said order was passed upon the complaints filed by the petitioner which has taken note of by the Appellate Tribunal and Section 25 of the Act does not provide for initiation of the enquiry at the instance of a member/non-member unless the requirement on the said sections are complied with. Hence, seeks for dismissal of the petition.

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Heard and perused the records.

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Section 25 of the Karnataka Societies Registration Act,

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1960 reads as under;

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''25. Enquiry by the Registrar, etc.-

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(1)The Registrar may on his own motion and shall on the application of the majority of the members of the governing body or of not less than one-third of the members of the society, hold an enquiry or direct some person authorised by him by order in writing in accordance with the rules made in this behalf to hold an enquiry into the constitution, working and financial condition of a registered society.

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(2)The Registrar or the person authorised by him under sub-section (1) shall have the following powers, namely,—

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(a)he shall, at all reasonable 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

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securities, cash or other properties to produce the same at any place at the headquarters of the society or any branch thereof;

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(b)he may summon any person who, he has reason to believe, has knowledge of any 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;

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(c) (i) he may, notwithstanding anything contained in this Act or in any rule or regulation prescribing the period of notice for a general meeting of the society, require the governing body 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. If the governing body of the society refuses or fails to call a meeting, he shall have power to call it himself;

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(ii)any meeting called under sub-clause (i) shall have all the powers of a general meeting called under the rules or regulations of the society and its proceedings shall be regulated by such rules or regulations;

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(iii)when an enquiry is made under this section, the Registrar shall communicate the result of the enquiry to the society concerned.''

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The very argument learned counsel for the petitioner

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that though the proceedings before the respondent No.1 were initiated and proceeded upon the applications/complaints filed by the petitioner, the subsequent mode of enquiry was in exercise of suo-muto powers contemplated under the Act and therefore the enquiry has to be considered as one under the exercise of suo-muto powers, cannot be countenanced. Perusal of Order of respondent No.1 dated 07.09.2017 produced at Annexure-E, indicates that said proceedings were initiated upon

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NC: 2024:KHC:33519 WP No. 11753 of 2019

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the complaints/applications dated 18.04.2017, 02.05.2017 and 06.06.2017 filed by the petitioner. The preamble of the order specifically refers to enquiry conducted upon the said complaints filed by the petitioner. Further, the allegations made in the complaint with regard to the membership of the petitioner and alienation of certain properties based on the power of attorney purported to have been executed by the petitioner in favour of the respondent No.2-Association. The respondent No.1-Registrar has found that the said allegations made by the petitioner were proved and that alienation of the property by the respondent No.2 as illegal and has further directed for re-conveyance of the property. Thus it is clear that very initiation of the proceedings, enquiry conducted and the conclusion arrived at by the respondent No.1 in the impugned order was based on the complaints and allegations made thereunder by the petitioner.

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As noted above, proceedings under Section 25 of the Act can be initiated by the respondent No.1-District Registrar, (1). on his own motion; or (2) acting at the instance of majority of the members of the governing body; or (3) acting on the request of 1/3^rd members of the society.

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This statutory requirement is lacking in the instant case. The reliance placed on by the learned counsel for the petitioner the Judgment of the Co-ordinate Bench of this Court

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in the case of Advocates Association(Supra) supports the case of the respondents instead of supporting the case of the petitioner. Paragraph No.19 of the said Judgment read as under;

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'' 19. Insofar as initiation of proceedings suo motu or on an application has also been set at rest by the Full Bench of this Court in the case of Bangalore Grain Merchants Association. Two questions were referred to the Full Bench for decision. What are the pre-conditions for the exercise of power of holding an enquiry by the Registrar and the other was whether the Registrar has exercised the power on his own motion on the basis of the complaint made by less than 1/3rd members of the society. In the said decision the law laid down in that it is always open for the registrar to initiate suo motu proceedings and also on the basis of complaint made by 1/3rd members of the society. Apparently in the case on hand, it is to be noticed that, initially a public interest petition was filed which was disposed of. In the said writ petition it was observed by this court that it is always open for the petitioner to make a necessary application before the competent Authority. It is no doubt true that this Court while disposing of the writ petition has made an observation that it has not pronounced any opinion regarding maintainability of the application or whether the Registrar has got power to go into the said question. But however what is required to be considered is whether the proceedings initiated by the Registrar are to be treated as suo motu proceedings or on the basis of a complaint made by 1/3rd members of the society. It is not in dispute that 1/3rd members of the association have nut made a complaint to the Registrar regarding functioning of the association. When that is the case, then the next question would be whether the first respondent was compelled to initiate suo motu proceedings. A perusal of Section 25 of the Act discloses that there are three different situations under which a Registrar can initiate and hold an enquiry: (1) on his own motion; (2)

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acting at the instance of majority of the members of the governing body; and (3) acting on the request of 1/3rd members of the society. Apparently, in the case on hand, as stated earlier, the last of the two conditions do not apply, inasmuch as, the members of the governing body or 1/3rd members of the association have not made a representation calling upon the Registrar to examine functioning of the association. It has to fall under the category of initiation of the proceedings on his own motion which is suo motu. Suo motu proceedings will have to be considered on its own motion. The dictionary meaning would be "on one's own initiative". Own motion obviously implies application of mind and formation of one's opinion. It does not matter how and from what source he gets the information. Apparently in the case on hand it is to be noticed that certain irregularities are stated to have been committed by the association while admitting the members to the association. On the basis of this information the proceedings were initiated which would fall under the category of suo motu proceedings. It is no doubt true that he cannot mechanically act at the behest of some persons or form an opinion that it is expedient for holding an enquiry. Apparently, in the case on hand the Registrar of societies was of the opinion that it is expedient to hold an enquiry into the functioning of the association, inasmuch as, according to him, he was prima fade of the opinion that certain alleged irregularities have been committed by the association while admitting the members to the society. Of course this Court is not called upon to pronounce on the fact whether admission of the members to the association is in violation of the bye- laws and the memorandum of association. Apparently this factor will have to be considered by the Registrar himself. What was required by the Registrar is a prima facie satisfaction before initiation of an enquiry. The Registrar was of the opinion that it is brought to his notice about the functioning of the association, which would necessarily entail an enquiry. This Court also is not called upon to pronounce as to whether any admission of the members of the society is in violation of the bye-laws as that falls in the realm of the enquiry to be conducted by the Registrar.''

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Further it is necessary to note that as rightly found

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and concluded by the Appellate Authority the respondent No.1 exceeded its jurisdiction in enquiring into transaction pertaining to the immovable property between the respondent No.2-

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Association and one Mamatha Educational and Cultural Trust and has further erred in canceling the said transaction and directing re-conveyance of the said property. Which is beyond his jurisdiction and could be done, as rightly taken note of by the Appellate Authority, through a Civil Court of Competent jurisdiction.

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In view of the aforesaid factual and legal aspect of the matter, no error or irregularities can be found in the order passed by the Appellate Tribunal. Accordingly, petition is

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dismissed .

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Sd/(M.G.S. KAMAL) JUDGE

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Sri. Bhaskar Reddy v. District Registrar of Societies

Case brief

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What the court decided

Sri. Bhaskar Reddy v. District Registrar of Societies

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