NITIN Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) The petitioner is a private limited company engaged in the business inter alia of supply machineries for industries. Respondent No.3-Co-operative society engaged the services of the petitioner Company for the purpose of expansion of its sugar plant in terms of an agreement dtd. 24/7/2018. The said agreement was entered into pursuant to tender process initiated by respondent No.3- Co-operative society. There was certain delay in completion of the expansion project purportedly on account of delayed payment by respondent No.3-Co- opeartive society. While the petitioner was in the process of seeking redressal of its grievance against respondent No.3, it received a notice from respondent No.2 Joint Registrar of Co-operative Societies under Sec. 64 of the Karnataka Cooperative Societies Act, 1959 [hereinafter referred to as 'the KCS Act, 1959' for brevity] on the premise of respondent No.3-Co-operative society sustaining financial losses on, one of the reasons being, expansion of work not having been completed by the petitioner within the stipulated period.

(2.) The learned Senior counsel appearing for the petitioner taking this Court through the records and also the provisions of Sec. 64 of the KCS Act, 1959 submits the tenor of the notices produced in Annexures-C and D to the writ petition and the threat posed therein, apart from being illegal and unsustainable, also without any authority of law. He submits that in the said notice produced at Annexure-C, the respondent No.2-Joint Registrar of Co- operative society is intending to enquire into the affairs of the petitioner Company though with reference to the contract that it has entered into with respondent No.3-Co- opeartive society. That in furtherance to notice at Annexure-D, calling upon the petitioner to participate in the purported enquiry, it is threatened that if the petitioner did not cooperate and failed to submit its explanation, petitioner would be made liable for the financial losses and the same would be recovered in accordance with law. He thus submits there is no provision under the Co-operative Societies Act, much less under provisions of Sec. 64 of the KCS Act, 1959, enabling respondent No.2-Joint Registrar to issue such notices, intending to fix the liability on the petitioner Company which is an independent entity, except having transaction in terms of the agreement entered into with respondent No.3 Society. Thus, he submits that the scope and purport of the notices issued exceeds the object contemplated under Sec. 64(3)(b) of the KCS Act, 1959 warranting interference at the hands of this Court.

(3.) Learned Additional Government Advocate submits that though the language applied in notices at Annexures 'C' and 'D' indicate petitioner Company being subjected to the enquiry, the purpose of issuance of said notices is only summoning the petitioner Company to participate in the enquiry by furnishing the details and other information pertaining to the transaction which the petitioner -Company has had with the respondent No.3- Co-operative society. He submits that the notices at Annexures 'C' and 'D' shall be read only to the limited extent of calling upon the petitioner Company to appear in the enquiry for the purpose of production of records and furnishing information pertaining to the transaction which it had entered into with respondent No.3-Co-opeartaive Society and nothing more. Hence, he submits that there is no requirement of any interference in the matter.