HON’BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.10159 of 2005 Dated: 19-08-2010 Between: Sri Mahayoti Lakshmamma Co-operative Bank Ltd., Adoni, Kurnool District, rep. by its Chief Executive Officer. … Petitioner And The Registrar, A.P.Mutually Aided Co-operative Societies & others. … Respondents HON’BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.10159 of 2005 ORDER: The petitioner is a Co-operative Bank, registered under the A.P. Mutually Aided Co-operative Societies Act, 1995. In this writ petition, the petitioner-Bank questions the validity of the order of the 1st respondent-Registrar of Co-operative Societies, dated 16th February 2005, passed in Proceedings Rc.No.16398/03-UB-II. Respondents 4 and 5 are the members of the petitioner-Bank. They have filed a complaint, dated 31.01.2005, against the management of the Bank, with regard to grant of loan for construction of a house in an assigned land. It is complained by respondents 4 and 5 that though initially it was rejected, but subsequently, loan was sanctioned irregularly. The Commissioner for Co- operation has forwarded the said complaint to the District Co-operative Officer, Kurnool, asking him to inquire into the matter and take further action. However, referring to the order passed by the 1st respondent-Registrar of Co- operative Societies, a further communication is made by the Joint Registrar/District Co-operative Officer, directing the Divisional Co-operative Officer, Adoni, to conduct inquiry and submit report. In the said proceedings, it is also stated that the inquiry was to be conducted before the applicants i.e. respondents 4 and 5. In this writ petition, it is the case of the petitioner that based on the complaint of only two persons, it is not permissible to conduct any inquiry. In any event, it is submitted by Dr. P.B.Vijay Kumar, learned counsel for petitioner, that respondents 4 and 5 are in the habit of making false complaints. Earlier also, they made complaints against the petitioner-Bank, to the Reserve Bank of India, and ultimately, it was found false. There is also one other complaint made by respondents 4 and 5, questioning the membership in the petitioner-Bank and the same was inquired into by the Divisional Co-operative Officer, Adoni, who had submitted a report stating that the said complaint was also false. Under the provisions of the A.P.Mutually Aided Co- operative Societies Act, 1995, an inquiry is contemplated under Section 29 of the Act. The Registrar is empowered to conduct inquiry only in specified instances stated under Section 29(2) of the Act. It is appropriate to extract Section 29(2) of the Act, which read as under: “The Registrar may, of his own motion, and shall on the application, of a federation to which the Co-operative Society concerned is affiliated, or of a creditor to whom the Co-operative Society is indebted or of not less than one-third of the Director, or of not less than one-tenth of the members, hold an inquiry or cause an inquiry to be made into the specific matter or matters relating to any gross violation of any of the provisions of this Act by the Co-operative Society.” From a perusal of the aforesaid provision, it is clear that unless there is an application by not less than 1/10th of the total members of the Society, it is not permissible for the Registrar to take up any inquiry. As much as it is not in dispute that the complaint is made by only official respondents, two in number, the Registrar is not competent to take up any inquiry based on such complaint. It is also to be noticed that from the counter affidavit filed by the respondents, it is clear that the earlier complaint made against the petitioner-Bank by the very same respondent No.4, to Reserve Bank of India, was found to be false. In yet another instance, where the complaint is lodged by respondents 4 and 5 regarding the membership in the petitioner-Bank, was also found false by the Divisional Co-operative Officer, Adoni, who inquired into the same. In view of the above, there appears no valid reason for initiating any inquiry against the petitioner-Bank pursuant to the impugned proceedings, dated 16th February 2005, issued by the 1st respondent-Registrar in Proceedings Rc.No.16398/03-UB-II, as the inquiry is not a suo motu inquiry and it is not covered by any of the specified instances covered under Section 29(2) of the Act, and hence, the same are liable to be quashed. Accordingly, proceedings issued by respondent No.1 in Rc.No.16398/03-UB-II, dated 16th February 2005, and the proceedings of the 2nd respondent-Joint Registrar/District Co-operative Officer, dated 23rd February 2005, issued in Ref.No.599/2005-F, are hereby quashed. Writ petition is allowed accordingly. No order as to costs. ___________________ R. SUBHASH REDDY, J 19th August 2010 ajr