HON'BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION Nos.7162 and 8227 of 2006 Date : 03.03.2011 Between : M. Kamala Kumari & others. …..Petitioners And The Government of A.P., rep. by its Secretary, Co- operation (Housing-C.H) & others. …..Respondents HON'BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION Nos.7162 and 8227 of 2006 COMMON ORDER : In both these writ petitions, as the petitioners have questioned the proceedings, dated 19.12.2005, issued in Rc.No.35170/2005/H-1, by the 2nd respondent, they are heard together and are being disposed of by this common order. For the purpose of disposal, I refer to the facts as arise in W.P.No.7162 of 2006. The petitioners are members of the 3rd respondent- Society and they are either purchasers of residential sites or the allottees of sites from the 3rd respondent-Society. The said plots are registered in their favour by executing registered sale deeds. When they applied for issuance of no objection certificates so as to enclose to the application seeking construction permission from Municipal Corporation, Hyderabad, they were not issued in view of the proceedings of the 2nd respondent, dated 19th December 2005, issued in Rc.No.35170/2005/H-1, as such, they have questioned such orders. The Commissioner for Co-operation and Registrar of Co-operative Societies, A.P., has issued the impugned proceedings, dated 19.12.2005, in Rc.No.35170/2005/H-1, in exercise of powers under Section 4(2) of the A.P. Co-operative Societies Act, 1964 (hereinafter referred to as ‘the Act’). By the aforesaid orders, series of directions were issued to the 3rd respondent-Society, alleging that it has allotted residential sites to ineligible persons and eligible members were denied house sites. Allegations are also made that some plots were allotted to non-members, as such, directions were issued to cancel such allotments and take further action on such allotments. When the matter is taken up, it is submitted by the learned counsel for petitioners that in these writ petitions, there were interim directions directing the 3rd respondent- Society to issue no objection letters to the petitioners, and in view of the said directions, the 3rd respondent-Society has already granted no objection certificates, based on which, by obtaining permissions, the petitioners have already constructed houses. It is the case of the petitioners that though they acquired their sites by valid transfers affected by the 3rd respondent-Society in their favour, no notice was issued to them before passing the impugned orders. It is their case that the 2nd respondent is not empowered to issue such directions in exercise of powers under Section 4(2) of the A.P.Co-operative Societies Act, 1964. It is also the case of the petitioners that earlier, inspections were made into the affairs of the Society under Sections 51/52 of the Act on the same set of allegations but no illegalities were proved, and inspite of the same, referring to certain reports of Hon’ble A.P. Lok Ayukta, the impugned directions were issued without any authority or jurisdiction. In the counter affidavit filed by the respondents, while denying the various allegations made by the petitioners, the respondents have admitted that earlier, an inquiry was conducted under Sections 51/52 of the Act, but no irregularities were detected in the said inquiry. In the counter, respondents have also not denied the allegation of the petitioners that they were not issued any notice before issuing the impugned proceedings. Section 4(2) of the A.P. Co-operative Societies Act, 1964, reads as under : “Every Society registered or deemed to be registered under this Act shall function subject to such directions as may be issued by the Registrar, from time to time, in the interests of the Co-operative movement or the public interest or in order to prevent the affairs of the Society from being conducted in a manner detrimental to the interests of the members or of the depositors or creditors thereof, and the Society shall comply with such directions.” From a perusal of the aforesaid provision, it is clear that the Commissioner for Co-operation and Registrar of Co- operative Societies is empowered to issue general directions in the interest of Co-operative movement or in public interest, in order to prevent the affairs of the Society from being conducted in the manner detrimental to the interests of the Members or the depositors or the creditors. However, it is to be noticed that in exercise of powers under Section 4(2) of the Act, the Registrar is not empowered to record any findings exparte, more so, when allegations are made about irregular allotment of sites to ineligible persons. When petitioners are the owners of sites, which are already transferred as per the records of the Society, it is not open to the Commissioner/Registrar of Co-operative Societies, to record any findings, which will deprive the petitioners of such plots. It is also to be noticed that on similar set of allegations, when an inquiry was conducted earlier, no irregularities were noticed. In that view of the matter, and in the absence of issuance of notices to the affected parties, the Registrar is not empowered to issue directions as issued in the impugned proceedings, in exercise of powers under Section 4(2) of the Act. Further, it is to be noticed that during the pendency of the writ petitions, this Court passed interim orders for issuance of no objection certificates, and in compliance thereof, such no objection certificates were issued, based on which, petitioners have already obtained permissions from the competent authority and made constructions. For the aforesaid reasons, as the impugned proceedings are issued in violation of the principles of natural justice and are beyond the scope of the power of the Registrar under Section 4(2) of the Act, the writ petitions are liable to be allowed and are accordingly allowed and the proceedings, dated 19th December 2005, issued by the 2nd respondent in Rc.No.35170/2005/H-1, are hereby quashed. No costs. ______________________ R. SUBHASH REDDY, J 3rd March 2011 ajr