- 1 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JANUARY, 2026 BEFORE THE HON'BLE MR. JUSTICE M.G.S. KAMAL WRIT PETITION NO. 49960 OF 2019 (GM-KSR) BETWEEN: 1. VEERSHAIRA VIDYAVARDAKA SANGH SMT. ALLUMSUMANAYALAMMA ROAD, GANDHI NAGAR, BALLARI - 583 103. BY ITS SECRETARY, T. KOTRAPPA, S/O. T K BASAVARAJAPPA, AGED ABOUT 63 YEARS. 2. UDEDABASAVARAJ S/O. U SHIVAKUMAR, AGED ABOUT 61 YEARS, PRESIDENT, V.V. SANGHA, BALLARI - 583 103. 3. K. MALLIKARJUNA GOWDA S/O PAMPANN GOWDA, AGED ABOUT 61 YEARS TREASURER, V.V. SANGHA, BALLARI - 583 103. 4. J BASAVARAJ S/O. VIRUPAKSHAPPA, AGED ABOUT 65 YEARS MEMBER, MANAGING COMMITTEE, VV SANGHA, BALLARI - 583 103. …PETITIONERS (BY SRI. JAYAKUMAR S. PATIL SENIOR COUNSEL FOR SRI. VARUN J. PATIL, ADVOCATE) Digitally signed by SUMA B N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 AND: 1. THE PRINCIPAL SECRETARY DEPARTMENT OF CO OPERATIION, VIDHANA SOUDHA, BANGALORE - 560 001. 2. THE DISTRICT REGISTRAR OF SOCIETIES THE DEPUTY REGISTRAR OF SOCIETIES, JANATA BAZAR BUILDING, STATION ROAD, BALLARI - 583 103. 3. THE CO-OPERATIVE DEVELOPMENT OFFICER OF THE DEPUTY REGISTRAR OF SOCIETIES, JANATA BAZAR BUILDING, STATION ROAD, BALLARI - 583 103. 4. THE JOINT REGISTRAR OF CO-OPERATION SOCIETIES RAICHUR DISTRICT, RAICHUR - 584 101. 5. THE STATE OF KARNATAKA BY ITS SECRETARY, DEPARTMENT OF CO-OPERATION, VIDHANA SOUDHA, BANGALORE - 560 001. …RESPONDENTS (BY SMT. B. SUKANYA BALIGA., AGA FOR R1 TO R5) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH ORDER AT ANNEXURE-F DATED 06.08.2019 PASSED BY R-1 AND ANNEXURE-E DATED 02.07.2019 PASSED BY R-4 JOINT REGISTRAR; QUASH THE ORDER VIDE ANNEXURE-D DATED 20.08.2019 PASSED BY THE R-2 AND THE NOTICE VIDE ANNEXURE-G DATED 30.09.2019 PASSED BY THE RESPONDENT. - 3 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL ORAL ORDER Petitioners are before this Court being aggrieved by the order dated 06.08.2019 produced at Annexure-F and consequent order dated 20.08.2019 produced at Annexure-D. 2. The case of the petitioners is that petitioner No.1 is a society registered under the Societies Registration Act, 1860 running several educational institutions, providing education facilities in the District of Ballari. Upon a complaint filed by some member of the Society, alleging financial irregularities an enquiry under Section 25 of the Karnataka Societies Registration Act, 1960 (for short `Act, 1960') was initiated by an order dated 11.09.2015 and a report was submitted by the enquiry officer holding none of the allegations made against society with regard to financial transactions had been proved. The said report was submitted by the enquiry officer to the Deputy Registrar-respondent No.2 herein, which was accepted. - 4 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 Thereafter, at the instance of one Mr.Gali Rajashekar, who purportedly made a complaint to the respondent No. 1- Principal Secretary, Department of Co-operation on 26.09.2018 complaining impropriety in the enquiry conducted earlier, Respondent No.1 directed respondent No.4-Joint Registrar to hold a fresh enquiry particularly with regard to the shortcomings in the earlier enquiry report. In furtherance to which respondent No.4 submitted the report as per Annexure- E. Thereafter an order dated 20.08.2019 was passed initiating fresh enquiry under Section 25 of the Act, appointing respondent No.3-Co-operative Development Officer as enquiry officer purportedly in furtherance to the direction issued by respondent No.1. Being aggrieved, the petitioners are before this Court. 3. Sri.Jayakumar S. Patil, learned Senior Counsel appearing for the petitioners taking this Court through the impugned orders, notices and also referring to provisions of Sections 25 and 27A of the Act, 1960, submitted that the very initiation of the impugned enquiry, purportedly under Section 25 of the Act, 1960 is one without authority. He submits that once the Registrar had accepted the earlier enquiry report - 5 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 dated 01.04.2017 produced at Annexure-B, there is no occasion or provision for the respondent-state to have referred the very same matter to the Registrar of Co-operative Societies, who is completely unconnected with the affairs of the society registered under the Societies Registration Act, 1860. He submits such an order and direction is not traceable to any of the provisions of the Societies Registration Act. Thus anything followed thereafter is a complete nullity. Referring to paragraphs 26, 27 and 28 of the judgment of the Apex Court in the case of Joint Action Committee of Airline Pilots' Association of India and others (ALPAI) Vs Director General of Civil Aviationand others reported in (2011) 5 SCC 435 and also referring to paragraph 7A and 9 of the Judgment of Full Bench of this Court, in the case of Bangalore Grain Merchants Association Vs the District Registrar for Societies and another reported in ILR 2001 Karnataka 766 the learned Senior counsel insists that unless and until the requirement of law as clarified in the judgments are met with, there is no question of initiating the second enquiry under the facts and circumstances as involved in the case at hand. Hence seeks for allowing of the petition. - 6 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 4. In response, learned AGA submits that the impugned order for conducting enquiry has been initiated upon the direction issued by the respondent No.1 since there were irregularities in the earlier enquiry and the report submitted as per Annexure-B. She submits that the respondent-state under the Act has the power to delegate and appoint the officer for enquiry to be conducted under Section 25 and the same cannot be found fault with. 5. Heard and perused the records. 6. There is no dispute of the fact that on an earlier occasion, an enquiry under Section 25 of the Act had been initiated and a report in this regard has been submitted on 01.04.2017 as per Annexure-C. Relevant portion of the said report as found is as under: "ೕಲಂಡಂೆ ಅಂಶಾರು ವರಗೆ ಾರೆಯ ದೂರುಾರರು ಸದ ದೂರುಗಳ ಾವ!ೇ ಅಂಶಗೆ ಸಂಬಂಧಪಟ& ಸೂPÀÛ ಾಖ(ಾ)ಗ*ೆ+ಂ,ೆ ತಮ/ ದೂ0ನ ಅಂಶಗಳ ಬೆ2 ಮನವ03ೆ 4ಾ53ೊಡುವ ಫಲ7ಾದುದ0ಂದ ಸದ0 ದೂರು ಅ89ಗಳನು: ಸಂಘದ 3ಾಯ9ದ<9 ಸರುವ ಾಖ(ೆಗಳ ಆ>ಾರದ ೕ(ೆ (ೕನಂೆ ಲಗತು?: 1 0ಂದ 11 ರವ7ೆೆ) ಮಶ9ೆ 4ಾ5 ದೂರುಾರರ ಅ89ಗಳನು: ವ@ಾೊಸುಬುಹುಾBೆ ಎಂಬ ಅDEಾFಯೊಂ,ೆ ಈ ವರ,ಯನು: ಸಸ(ಾBೆ. (<Fೕಮ) H.H. ಸ7ೋಜ, JೕಜKಾ Lೇ9ಶಕರು, 8(ಾ - 7 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 ನಗ7ಾDವೃ,O 3ೋಶ, 8(ಾP3ಾ0ಗಳ 3ಾ ಾ9ಲಯ, ಬ*ಾQ0 ರವರ ಕRೇ0 Sಾಗೂ ಈ ಕRೇ0ಯ Lವ9Tರುವ ಆೇಶದ ಪ!ಟಗಳನು: ವರ,ೆ ಲಗ)?ೆ". 7. The said report has been accepted by the Registrar of Societies who is the authority under Section 25. In other words, since no recommendation requiring any further action was made in the report, the matter was set at rest. Two years, thereafter, apparently at the instance of certain Gali Rajashekar, respondent No.1 has issued direction to the Joint Registrar of co-operative societies as seen at Annexure-E dated 02.07.2019 to verify the report and to submit a report on its shortcomings. Pursuant to which the Assistant Registrar of Co- operative Society-respondent No.3 had apparently submitted a report pointing out the so called shortcomings in the earlier enquiry report. Consequent upon which a fresh enquiry has been directed to be conducted under Section 25 by the very same Assistant Registrar of Co-operative Society who has issued notice dated 30.09.2019 as per Annexure-G calling upon the petitioner to be present and to submit reply. - 8 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 8. Full Bench of this Court in the case of Bangalore Grain Merchants Association (supra) while dealing with the provisions of Section 25 and the situation contemplated thereunder requiring Registrar to initiate and hold an enquiry at paragraph 7A has held as under: "7-A) An analysis of Section 25(1) also discloses that there are three situations in which the Registrar can initiate and hold an enquiry. These are:- (1) the Registrar acting on his own motion, (2) the Registrar acting at the instance of the majority of the members of the governing body and (3) the Registrar acting on the request of 1/3rd of the members of the Society. In the first contingency, the exercise of power is discretionary and enabling, as denoted by the word 'may' whereas in the latter two cases, it is obligatory to hold an enquiry as seen from the word 'shall'. If the second and third requisites are satisfied, the Registrar has no option but to trigger off an enquiry in deference to the wishes of the requisite number of members unless, of course the allegations are alien to the working of the Society. In the first case, the Registrar can act on his own motion irrespective of any application by the majority of the members of the governing body or 1/3rd of the members of the Society. The Registrar, however is not compelled to act, if the situations 2 and 3 are absent. He can exercise his discretion whether to act or not on the basis of the material or information in his possession. It is significant to note that the expressions 'may' and 'shall' are used in the same sub-section in contradistinction to each other to emphasize the distinction, which we have earlier pointed out supra. In the context, 'may' and 'shall' mean what they ordinarily mean, though it is not uncommon to read one for the other. Of course, the discretion vested in the Registrar under the opening clause may not be absolute and unchannelised. The exercise of discretion is by implication conditioned and moulded by the statutory purpose underlying conferment of such power. Depending on the facts and circumstances - 9 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 of the case, the discretion may be coupled with a duty to act, if such action is warranted. Even in the first situation, therefore, the Registrar cannot exercise or refuse to exercise the power to hold the enquiry on his whim and fancy. It has also dealt with the expression ‘on his own motion’ found in the said provision at paragraph 9 which reads as under: 9. Now, we come to the more crucial and controversial question i.e., what is the meaning and import of the expression 'on his own motion' and what is its interrelation to the immediately following clauses of the same sub- section. There could be, no doubt, that the expression 'on his own motion' is synonymous to suo-motu, which according to the dictionary means, "on one's own initiative". "Own motion' obviously implies application of mind and formation of one's own opinion. It does not matter how and from what source he gets information. But, it does not mean that the authority conferred with such power should eschew from consideration information or material furnished by external sources and should look to the information collected by his own self-effort. The exercise of powers suo-motu or on one's own motion, cannot and ought not to be construed in a narrow sense and in a sense which defeats the salutary purpose of the provision. No letters can be placed on the specified authority from the stand point of source material on which it should exercise the power. An authority exercising the suo-moto power is not debarred from obtaining informations and materials from various sources. The only requirement is that on the basis of such informations and materials gathered either on its own initiative or received from other sources, the concerned authority has to come to the conclusion, on an active application of mind whether to take up the enquiry or not. Undoubtedly, the decision must be his own. He cannot mechanically act at the behest of some other person or authority without independent application of mind to arrive at a conclusion on the need - 10 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 and expediency of holding an enquiry. It is not argued before us nor can it be disputed that the suo-motu exercise of power does not cease to be such merely because a member of the public or someone in the know of things brings relevant facts to the notice of the prescribed authority, in this case, the Registrar. The Registrar, on a consideration of such facts has to decide whether it is a fit case warranting initiation of enquiry in the over-all interests of the society. The decision must be his and the decision must of course be based on relevant factors, but there is no limitation as to the sources by which he should be prompted to action". 9. Clearly, an enquiry under Section 25 can be initiated only on fulfillment of the circumstances and requirements as contemplated thereunder and explained by the Full Bench of this Court above. 10. As regards competence of the authority, Section 25 provides for initiation of enquiry, acceptance and rejection of report which is in the exclusive domain of the Registrar under the Act 1960. Useful to refer to the judgment of the Apex Court in the case of Joint Action Committee (Supra), adverting to the competency of the authority under a statute at paragraphs 26, 27 and 28 the Apex Court has held as under: "26. The contention was raised before the High Court that the Circular dated 29.5.2008 has been issued by the authority having no competence, thus cannot be enforced. It is a settled legal proposition that the authority which has been conferred with the competence under the statute alone can pass the order. No other person, even a superior authority, can - 11 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 interfere with the functioning of the Statutory Authority. In a democratic set up like ours, persons occupying key positions are not supposed to mortgage their discretion, volition and decision making authority and be prepared to give way to carry out commands having no sanctity in law. Thus, if any decision is taken by a statutory authority at the behest or on suggestion of a person who has no statutory role to play, the same would be patently illegal. (Vide:Purtabpore Co., Ltd. v. Cane Commissioner of Bihar & Ors., AIR 1970 SC 1896; Chandrika Jha v. State of Bihar & Ors., AIR 1984 SC 322; Tarlochan Dev Sharma v. State of Punjab & Ors., AIR 2001 SC 2524; and Manohar Lal (D) by L.Rs. v. Ugrasen (D) by L.Rs. & Ors., AIR 2010 SC 2210). 27. Similar view has been reiterated by this Court in Commissioner of Police, Bombay v. Gordhandas Bhanji, AIR 1952 SC 16; Bahadursinh Lakhubhai Gohil v. Jagdishbhai M. Kamalia & Ors., AIR 2004 SC 1159; and Pancham Chand & Ors. v. State of Himachal Pradesh & Ors., AIR 2008 SC 1888, observing that an authority vested with the power to act under the statute alone should exercise its discretion following the procedure prescribed therein and interference on the part of any authority upon whom the statute does not confer any jurisdiction, is wholly unwarranted in law. It violates the constitutional scheme. 28. In view of the above, the legal position emerges that the authority who has been vested with the power to exercise its discretion alone can pass the order. Even senior official cannot provide for any guideline or direction to the authority under the statute to act in a particular manner." 11. Provisions of Section 25 read in the light of the enunciation of law by the Full Bench of this Court and the Apex Court referred to above would indicate that it is only Registrar and none else is vested with the statutory power of initiating enquiry, submitting or accepting the report thereunder. In the instant case, the enquiry which was initiated on 24.09.2016, culminating in the report filed as per Annexure-C as extracted - 12 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 herein above, was accepted by the Registrar. Any subsequent enquiry, though not prohibited, could have only been in terms of the provisions of Section 25. However, as seen Annexures-E, F and G which indicate that the subsequent enquiry has been initiated upon the direction issued by the respondent No.1 at the instance of certain Gali Rajasekar that too for the purpose of reviewing /verifying the findings/ shortcomings in the earlier report. Such a course of action is clearly not contemplated under the provisions of Societies Registration Act as rightly contended by learned counsel for the petitioners. 12. An impleading application in I.A.2/2019 has been filed by certain Siddabasappa Jadai and A.Bheemanagoud, who claim to be the members of the society seeking to come on record as party respondents. 13. Sri.R.B.Sadashivappa, learned counsel appearing for the impleading applicants submits that though they were the persons at whose instance the first enquiry was initiated, they have not been given opportunity of being heard. That they had raised the issue with regard to financial impropriety committed by the Managing Committee involving enormous amount to the - 13 - HC-KAR NC: 2026:KHC:4730 WP No. 49960 of 2019 tune of Rs.4 crores. Hence he submits the application be allowed. 14. In the light of this Court having come to the conclusion of initiation of impugned enquiry, second enquiry not being sustainable, this Court do not find it appropriate to consider the application filed seeking impleadment. I.A.2/2019 is rejected. Accordingly, following: ORDER 1. Petition is allowed. 2. Impugned order dated 06.08.2019 at Annexure-F, order dated 02.07.2019 at Annexure-E and order dated 20.08.2019 at Annexure-D and notice dated 30.09.2019 at Annexure-G are quashed. 3. It is however made clear, allowing of this petition, quashing of impugned enquiry shall not come in the way of authorities initiating enquiry as contemplated under the Act if need be and if so advised. Sd/- (M.G.S. KAMAL) JUDGE SBN List No.: 1 Sl No.: 21