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JUBILEE HILLS CO-OPERATIVE HOUSE BUILDING SOCIETY LTD. , HYDERABAD V/S STATE OF ANDHRA PRADESH, REP. BY ITS SECRETARY, HOUSING DEPARTMENT, HYDERABAD , decided on Tuesday, March 15, 1994.
[ In the High Court of Andhra Pradesh, W. P. 6547 Of 1993 . ] 15/03/1994
Judge(s) : B. SUBHASHAN REDDY
Advocate(s) : A.Ramanarayan, J.Chelamesvar, .
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  "1994 CTJ 621"  







judgment - B. SUBHASHAN REDDY J.( 1 ) IN this Writ Petition the proceedings of the 3rd respondent. e. The Commissioner of Co-operation and the Registrar of co-operative Societies dated 20-4-1993 appointing the 4th respondent as the enquiry officer in exercise of the powers under Section 51 of the A. P. Cooperative societies Act 1964 (hereinafter referred to as the Act) have been questioned. ( 2 ) MR. A Ramnarayana the learned Counsel for the petitioner raises threefold contention namely (1) that the ingredients of Section 51 of the Act are not satisfied as the impugned order is neither the result of a suo motu exercise of power nor is it on the requisition of the requisite members of either the committee or of the General Body : (2) that already such an enquiry was ordered under Section 51 of the Act and the question of calling for another report by initiating a fresh enquiry under Section 51 of the Act is uncalled for and without jurisdiction : and (3) inasmuch as the arbitration proceedings are going on. parallel proceedings under Section 51 of the Act cannot be invoked. In support of his contentions Mr. Ramnarayana has taken me to the impugned order and the other material papers including that of the provisions of the statute. He contends that the impugned order ex facie appears that it is not in exercise of suo motu powers but it is under the directions of the government and even if such a direction is traceable to Section 131 of the act the power under Section 51 cannot be invoked as in that case it cannot be called as suo motu but only at the instance of the Government. ( 3 ) THE learned Advocate-General appearing for the State and the official respondents and Mr D V. Bhadram appearing for implead-petitioners contend that the form of the impugned order is not the criterion but it is the substance which is criterion and if the substance is taken into consideration it is crystal clear that the power is exercised by the 3rd respondent by applying his mind and the information being the report of the Vigilance Officer qua the government. The Director of Vigilance has sent up his report to the government and that has been forwarded to the 3rd respondent and that can only be construed as an information upon which suo motu enquiry can be initiated. I accept this contention as if the impugned order is read in its entirety it only connotes that the 3rd respondent is appraised of the irregularities said to have been committed by the society in its functioning and that he felt it desirable to have a full-fledged and comprehensive report covering several aspects. With regard to the second contention the argument of the learned Counsel for the respondents is that while the first report was a truncated one covering only two aspects. e. the transactions made by the society for the period from 1984 to 1988 and also the irregularities in allotment of some of the plots for the said period the instant enquiry under the impugned order is very comprehensive covering several aspects and for a larger period both enterior and posterior to the first enquiry pertaining to the period from 1984-1988 and as such if some of the aspects here and there overlap there is no disabling provision under the Act for initiating the instant enquiry. I also accept this contention as the earlier report which was not even taken cognizance of was not a full-fledged report as the references for report were truncated for the period above mentioned and was not a comprehensive one. In fact one of the vita! aspects. e. financial irregularities were never a part of the respect submitted by the earlier enquiry officer and in any event the financial irregularity in the instant enquiry is not for any particular period as it is for the entire period and it cannot be said that financial irregularity is not a serious matter. In fact the avowed object of formation of societies by inducting the statutes like the instant one was to further the co-operative movement as the father of the nation had dreamt has already proved to be not fruitful because of large-scale violations and misappropriations and underhand dealings committed by the office bearers of the societies particularly co-operative housing societies. If that be so nobody can find fault with the effort of the 3rd respondent in getting know of the things particularly on the financial side as to whether society has performed its functions without committing any financial irregularities resulting in any unjust enrichment either to the members of the managing committee or to the allotees of the plots. With regard to the 3rd argument of the parallel proceedings while it is true that in the earlier writ proceedings resulting in writ appeal and to which judgment I was a party the only issue was whether particular number of members who were enrolled were genuine or not or as to whether it was valid in accordance with bye-laws. In my considered view the said enquiry even in arbitration proceedings under Section 61 of the Act do not bar has enquiry under Section 51 as here not only that number of members but with regard to the genuineness and other aspects of all the members will be gone into on comprehensive basis including the transfer of plots. ( 4 ) MR A. Ramnarayana the learned Counsel for the petitioners also submits that the several arguments advanced by the learned Advocate-General and Mr. Bhadram are not even part of the pleadings and the said arguments have got no basis and that he is not put on notice. But a reading of the impugned order and the arguments advanced by the learned Counsel for the petitioner itself shows that the enquiry has been ordered and more glaring feature of which is the financial irregularities and even according to Mr. A. Ramnarayana the learned Counsel for the petitioner the earlier report did not touch upon the financial irregularities at ail as can be seen from the impugned order. If that be so the aspect of financial irregularities can also be enquired into and there cannot be any embargo for the same. ( 5 ) IN the circumstances I do not see any merit in the writ petition seeking a restraint on the enquiry initiated under the impugned order. The writ petition is dismissed. No costs. The interim orders stand vacated. Writ Petition dismissed.