ORDER
D.V. Shylendra Kumar, J.
1. These two writ petitions are by a Co-operative Society known as Karnataka Milk Federation and represented by its Managing Director in WP No. 14153/2008 and by persons who are either in the management of this Federation or as the majority of the Management Committee of the very Federation, for the common object of quashing two orders mainly the order dated 3.11.2008 or the communication of this date originating from the State Government and addressed to the Director of Co-operative Audit (copy produced as Annexure-G to the Writ Petition No. 14153/2007), calling upon the Director to become active in respect of the transaction of the 1st petitioner-Federation for the year 2001-2002 to 2007-2008 and in exercise of the powers of the Director of Co-operative Audit available under Section 63 of the Karnataka Co-operative Societies Act, 1959 (hereinafter referred to as 'the Act' for brevity) and also for quashing the consequential order dated 5.11.2008 No. Tha.Pa.Gha/KA.Sa.Ha.U.Ma/Bem/ Ma.Pa/2008-09 (produced as Annexure-F to the Writ Petition No. 14153/2007) passed by the Director of Co-operative Audit, the State Government figuring as 1st respondent and the Director of Co-operative Audit figuring as 2nd second in this petition; quoting the very order of the Government and purporting to issue the order in exercise of his powers under Section 63(11) of the Act.
2. The common object of the petitioners is to prevent the proposed re-look into the transactions of the Society including the accounts which have undergone scrutiny as envisaged under the provisions of the Act and to have a second look at them and on the ground that the power exercised by the Government and the Director of Co-operative Audit for the purposes for which Annexures-G and F orders are passed are either not available to them under the provisions of the Act or has not been used for the purposes for which such powers are conferred on either of these respondents.
3. While in Writ Petition No. 14153/2008 all such legal grounds are urged to impugn the legality of these two orders, in Writ Petition No. 14183/2008 filed by the members of the Management of the Federation, apart from urging all these legal grounds, additional grounds are urged to contend that the power is exercised in a malafide manner for ulterior purposes only due to existing political rivalry between the petitioners in Writ Petition No. 14183/2008 on the one hand and persons who are at the helm of affairs and constituting the Government are persons belonging to a different political affiliation who have been instrumental in causing the issue of the communication at Annexure-G in Writ Petition No. 14153/2008 and produced as Annexure-L in Writ Petition No. 14183/2008.
4. Further argument is that the orders are issued not for any bonafide purposes but to tarnish the image of the persons and to settle political scores and therefore it is nothing but a colourable exercise of power vitiating not only the order of the Government at Annexure-L but also the consequential order passed by the Director of Co-operative Audit in Annexure-K.
5. Rule had been issued in these two writ petitions and an interim order had been granted.
6. It is now submitted by the learned Counsel appearing for the petitioners as well as respondents that such an interim order was the subject matter of Writ Appeal No. 1837/2008 and in the appeal, the interim order came to be vacated and the proceedings to go on pursuant to the impugned orders, but the consequences cannot be given effect to, during the pendency of these writ petitions and it can be subject to the result of these writ petitions.
7. In this view of the matter, examination of the merits of the petitions is also necessary.
8. On admission, respondents have entered appearance and on behalf of the 1st respondent-State and 3rd respondent-Registrar of Co-operative Societies, Statement of Objections have been filed by the learned Government Pleader and the learned Advocate General has appeared and made submissions on behalf of the State and its Officers.
9. On behalf of the 2nd respondent-Director of Cooperative Audit, while no counter has been filed, Counsel has appeared and submissions are made by Sri. Basavaprabhu S. Patil, learned Senior Counsel. But the stand taken in respect of the 2nd respondent is common in terms of the Statement of Objections filed on behalf of the State Government.
10. Grounds raised on behalf of the petitioners, particularly legal grounds, as indicated in the petition and as submitted by Sri. Jayakumar S. Patil, learned Senior Counsel appearing for the petitioner in Writ Petition No. 14153/2008 by drawing attention to the relevant statutory provisions of the Act, particularly the provisions of Section 63 of the Act are that the impugned order at Annexure-F in Writ Petition No. 14153/2008 being an order passed by the 2nd respondent- Director of Co-operative Audit, at the behest of the 1st respondent-State Government and even as indicated in the very order itself, the order is one which virtually betrays the surrender of power and functions of the 2nd respondent to the dictates of the 1st respondent and exercising power to act under Section 63(11) of the Act being merely mechanical, the order is bad in law.
11. The other facet of his arguments is that such course of action also indicates the total non-application of mind on the part of the 2nd respondent-Director of Co-operative Audit to the relevant requirements of Section 63(11) of the Act as the 2nd respondent-Director of Co-operative Audit has not given any independent reasons to support the exercise of power under Section 63(11) of the Act under the impugned order at Annexure-F.
12. It is also submitted that the State Government issuing directions of this nature to the 2nd respondent-Director of Co-operative Society is one virtually going beyond their statutory power, as under the scheme of the Act the State Government is given power under Section 63(10) of the Act, which is the special power to be exercised in special circumstances, as the exercise of power is conditioned under the very statutory provision and if the State Government seeks to exercise any power referable to Section 63 of the Act and not available under Section 63(10) of the Act itself, then it amounts to colourable exercise of the power and it virtually amounts to a malafide exercise of power under Section 63(10) of the Act in the garb of issuing directions to the 2nd respondent-Director of Co-operative Audit for the exercise of such powers of Director available to him under Section 63(11) of the Act.
13. It is also the contention of Sri. Jayakumar S. Patil that independent of Section 63 of the Act, the State Government has no other power under the scheme of the Act to issue directions to the 2nd respondent-Director of Co-operative Audit, particularly, in the matter of audit or re-audit of the accounts of a Co-operative Society. It is also submitted that such power cannot even be traced to the provisions of Section 2AA of the Act either to Sub-section (3) or Sub-section (4) of Section 2AA of the Act, as a mere reading of statutory provisions clearly indicates that such powers are not available to the State Government under Section 2AA of the Act for acting either to exercise the power traceable to Section 63 of the Act or to exercise a power in contravention or at crossroads with the provisions of Section 63 of the Act and purporting to exercise the superior power available under Section 2AA of the Act.
14. It is also the submission of the learned Counsel for the petitioner that the 1st petitioner-Society is an organisation of considerable repute and that it is in a sound state of health; that its past performance is proof to the good governance or efficient management of the affairs of the Society; that trying to fish out, some illegality purporting to be in the guise of re-audit or re-look into the concluded accounts of the Society which infact has earned 'A' class for its excellence in maintenance of the accounts in financial matters is nothing short of seeking vengeance or malafide exercise of power for collateral purpose and therefore, the impugned order of the Government under Annexure-G is clearly an order not sustainable in law which deserves to be quashed and once the order at Annexure-G is quashed consequently, Annexure-F, the order passed by the 2nd respondent-Director of Co-operative Audit automatically falls to ground and, therefore, the writ petitions should be allowed.
15. In support of such submission, Sri. Jayakumar S. Patil, learned Senior Counsel has placed reliance on the decision of the Supreme Court in Bangalore Medial Trust v. B.S. Muddappa and Ors. reported in : (1991) 4 SCC 54, particularly, attention is drawn to paragraphs.46, 47 and 48 to seek sustenance to the arguments of malafide exercise of power vitiating the govemmentai action, if it has violated or is in contravention of any statutory provision and to paragraph-52 of this judgment to support the argument that the power exercisable by the Government or even by the 2nd respondent-Director of Co-operative Audit are all statutory powers and, therefore, the 1st respondent-State cannot fall back on any general source of power to sustain the validity of Its communication dated 3.11.2008 (Annexure-G).
16. Learned Counsel appearing for the petitioners in Writ Petition No. 14183/2008 apart from adopting all such submissions made by Sri Jayakumar S. Patil, to impugn the legality of the very orders, it is farther submitted that the whole exercise is only for securing a political gain or point over the petitioners in Writ Petition No. 14183/2008; that all such actions though not warranted in law, is nevertheless generated only to project the petitioners in poor light just because they belong to different political affiliation than that of the present governance; that power available under the Act is being misused or abused only to cause adverse effect or to the detriment of the petitioners and therefore, the very manner and purpose for which the power is exercised even assuming feat it is available, is still abused to pass the orders at Annexures-K and L having regard to the nature and the manner in which it is exercised and, therefore, the impugned communications are required to be quashed.
17. On the other hand. Sri.Udaya Holla, learned Advocate General appearing on behalf of the 1st respondent-State and 3rd respondent-Registrar of Co-operative Societies submits that the State Government has not only acted with bonafides, but even within its powers; that while it is submitted that the State Government has not exercised any of its powers available to it under Section 63(10) of the Act, the exercise of power in the first instance was only because the 3rd respondent-Registrar had moved the Government in the wake of certain complaints about irregularity or illegality in the matter of appointment of certain staff in the petitioner -Federation; that the Government while did not see need to invoke its powers under Section 63(10) of the Act, thought it proper to direct the Director of Co-operative Audit to take suitable action in exercise of his power under Section 63(11) of the Act; that it was a communication only to activate the Director for exercising his power for corrective action; that with the mere communication as is in Annexure-G, by itself does not either contravene any of the statutory provisions nor does it amount to interference with the functioning of the Director of Co-operative Audit.
18. Learned Advocate General would further seek to submit that the very fact the Government has not chosen to exercise its more drastic power available under Section 63(10) of the Act, but has only activated the Director of Co-operative Audit for taking action in terms of Section 63(11) of the Act itself is proof of bonafide manner in which the Government has exercised its power; that the mere activation of the Director of Co-operative Audit does not in any way affect either the rights of interest of the Federation or persons in the Management of the affairs of the Federation; that when statutory power is sought to exercised in a manner as in the present case and for the very purpose of the statutory provisions and the further action being within the scope of the statutory provision, no complaint can be made of any adverse or deleterious effect even at this stage, by mere exercise of power for the examination of the past performance, and, therefore, submits that the Writ Petitions do not merit interference in exercise of Articles 226 and 227 power and submits that the Writ Petitions should be dismissed.
19. It is submitted that the power under the writ jurisdiction of this Court is not simply exercised as a matter of course or just because some illegality is pointed out and for interference, if not otherwise warranted or any action has not resulted in grave miscarriage of justice or flagrant violation of law; that the petitioners do not have an absolute right of interference in writ jurisdiction. In support of this submission, learned Advocate General has placed reliance on the decision of the Supreme Court in the case of D.N. Banarji v. P.R. Mukharjee and Ors. reported in : AIR 1953 SC 58. Also, submits that a writ of certiorari is not issued merely because it may be lawful to do so and this submission is sought to be supported by drawing sustenance from the decision of the Supreme Court in the case of Champalal Binami v. The Commissioner of Income Tax reported in : 1971(3) SCC 20.
20. Learned Advocate General would also submit that if the direction issued by the Government to activate the Director of Co-operative Audit to exercise his powers under Section 63(11) of the Act, even though not traceable to Section 63(10) of the Act or even under Section 63(11) of the Act, is traceable to provisions of Section 2AA of the Act and in this regard, submission is that the Director of Co-operative Audit is also an officer who is within the jurisdiction of the State Government in respect of whom administrative instructions can be issued in exercise of powers under Sub-section (4) of Section 2AA of the Act and the Director of Co-operative Audit is also an officer who is amenable to such instructions issued by the State Government in exercise of its powers under Section 2AA(4) of the Act.
21. It is therefore submitted, the exercise of power for issue of the impugned orders is a power which is available to the State Government and is exercised in a bonafide manner and for the purpose of causing a proper examination of the past accounts of the petitioner-Federation which is also a Federation assisted by the Government; that the Government has not only the power, but also the duty of overseeing the manner of functioning of such institutions and in this regard had drawn attention to Rule 29 of the Rules read with Section 63(2) of the Act.
22. Sri. Basavaprabhu S. Patil, learned Senior Counsel appearing on behalf of the 2nd respondent-Director of Cooperative Audit apart from adopting the submissions made by the learned Advocate General on behalf of the State and the Registrar, would further add that the Writ Petition No. 14183/2008 filed by persons claiming to be in the management of the affairs of the petitioner-Federation is not tenable in law, for the reason that in terms of the bye-laws of the Society particularly bye-law 29.2.3, a Society can be represented only by its Managing Director either for instituting any legal proceedings by it or against him, that a Writ Petition filed on behalf of the Society by persons claiming to be in the management is not tenable and therefore, Writ Petition No. 14183/2008 should be dismissed on this preliminary objection, only for this reason as it is mandate in Section 29G(4)(j) of the Act.
23. This objection apart, submission is that the Director of Co-operative Audit who has taken action in terms of the order at Annexure-F in Writ Petition No. 14153/2008 and Annexure-K has acted well within his power; that the power is traceable to statutory provisions and not merely it is recited in the order or otherwise and mere recitation in the communication of the Government calling upon the Director of Co-operative Audit to act in terms of Section 63(11) of the Act in the impugned order, can in no way detract from the powers that can be exercised by the 2nd respondent-Director of Cooperative Audit as available under the statute itself, and, therefore submits that the impugned order cannot be found fault with for want of power or the manner in which it is exercised.
24. It is further urged by Sri. Basavaprabhu S. Patil, learned Senior Counsel for the 2nd respondent-Director of Co operative Audit that mere exercise of power under Section 63(1) of the Act is not an end in itself, that it is only for the purpose of examination, re-examination of the (sic) books of accounts etc., that a mere re-examination of the accounts of the Society by itself cannot be characterised as an act adverse to the interest of either the Society or the persons who are in the management of the affairs of the Society; that the petitioners have approached this Court seeking for quashing of the communication at Annexure-F even when it is an innocuous order not causing any adverse impact on the petitioners at this stage, even when no adverse inferences are drawn against the petitioners; that the Writ Petition is more for a preemptive purpose than for a bonafide cause; that the Writ Petition is without any cause of action and, therefore deserves to be dismissed.
25. In support of the submission, Sri. Basavaprabhu S. Patil, learned Senior Counsel would seek sustenance from the following decisions:
i) : AIR 2007 SC 906 - Union of India v. Kunisetty Satyanarayana (para-14).
ii) : AIR 1996 SC 691 Executive Engineer, Bihar State Housing Board v. Ramesh Kumar Singh and Ors. (para-10)
and submits that the nature of complaint or grievance sought to be made in these Writ Petitions is either of no cause or of such insignificant cause that it does not merit examination or interference in writ jurisdiction even to pre-empt a possible scrutiny into the past state of affairs or the Society. It is also submitted that the so-called allegation of malafides sought to be urged in Writ Petition No. 14183/2008 against any un-named person is vague but merely on the assertion that petitioners belong to different political affiliation is the allegation is too vague and therefore, submits that the Writ Petition to be dismissed.
26. The controversy that arises in the Writ Petitions is clearly in the context of the action on the part of the Government and the consequential action on the part of the 2nd respondent - Director of Co-operative Audit both of whom have statutory powers as provided under the provisions of the Karnataka Co-operative Societies Act and whose actions are impugned in these two Writ Petitions.
27. To appreciate even the merits of the contentions, a look at the relevant statutory provisions will be necessary. Section 2AA of the Act reads as under:
Director of Co-operative Audit (Additional Director of Co-operative Audit), (Joint directors of Co-operative Audit), (Deputy Directors of Co-operative Audit and (Assistant Directors of Co-operative Audit): (1) The State Government may, appoint a person to be the Director of Co-operative Audi of Co-operative Societies for the State.
(2) The State Government may appoint an (Additional Director of Co-operative Audi) of Cooperative Societies and as many (Joint Directors of Co-operative Audit), (Deputy Directors of Cooperative Audit) and (Assistant Directors of Cooperative Audit) of Co-operative Societies, as it thinks fit, for the purpose of assisting the (Director of Co-operative Audit).
(3) The State Government may appoint such other officers with such designations as it deems fit to assist the (Director of Co-operative Audit).
(4) All officers and persons employed in the Administration of this Act relating to audit shall be subject to the superintendence, direction and control of the State Government and the (Director of co-operative audit) and the officer or officers to whom each officer appointed under this Section shall be subordinate shall be determined by the State Government.
Provided that the power vested in the State Government and the (Director of Co-operative Audit) under this Sub-section shall not be exercisable so as to interfere with the discretion of any authority in exercise of any quasi-judicial function whether as original or appellate Authority.
(5) The State Government may by general or special order confer on any person appointed as (Additional Director of Co-operative Audi) (joint Director of Co-operative Audit), (Deputy Director of Co-operative Audit) or (Assistant Director of Co-operative audit) of Co-operative Societies, all or any of the powers of the (Director of Cooperative Audi) under this Act.
(6) Notwithstanding anything contained in this Act, matters relating to audit of every Co-operative Society shall be subject to the supervision and control of the (Director of the Co-operative Audit).
Section 63 reads as under:
Audit: (1) The Director of Co-operative audit shall audit or cause to be audited by a person authorised by him by general or special order in writing in this behalf, the accounts of every society at lease once in a year.
(2) The audit under sub-section (1) shall include an examination of overdue debts, if any, the verification of the each balance and securities, a valuation of the assets and liabilities, and an examination of the working and the other prescribed particulars of the society;
(3) The Director of Co-op. Audi or the person authorised by him or the authorised person shall at all time have access to all the books, accounts, documents, papers, securities, cash and other properties belonging to, in the custody of the society and may summon any person in possession responsible for the custody of any such books, accounts, documents, paper, securities, cash or other properties, to produce the same at any public office at the headquarters of the society or any branch thereof.
(4) Every person who is, or has at any time been, an officer or employee of the society and every member and past member of the society shall furnish such information in regard to the transaction and working of the society as the Director of Co-operative Audit or the person authorised by him or the authorised person may require.
(4-A) Every Co-operative Society shall for each co-operative year prepare and furnish within two months from the end of that year, to the Registrar and the Director of Co-operative Audit, a statement showing the receipts and disbursements, profit and loss and the balance sheet for the year and such other statements and returns as the Registrar or the Director of Cooperative Audit and direct.
(5) The Director of Co-operative Audit or the authorised person shall send copies of the audit report and communicate the results of audit to the co-operative Society, the Registrar and to the financing bank or credit agency, and if the society is affiliated to any other co-operative society, to such co-operative society.
(6) The Director of Co-operative Audit or any officer authorised by him shall have right to receive all notices and every communication relating to the annual general meeting of a cooperative society and to attend such meeting and to be heard there at in respect of any part of the business with which he is concerned as auditor.
(7) If the result of the audit held under Sub-section (1) discloses any defects in the working of society, the society shall within six months from the date of the audit report explain to the Director of Co-operative Audit and to the Registrar the defects or the irregular is pointed out in audit, and take steps to rectify the defects and remedy the irregularities and report to the Registrar the action taken by it thereon. The Registrar may also make an order directing the society or its office bearers to take such action, as may be specified in the order to remedy the defects within the time specified therein.
(8)(a) Any society aggrieved by any items held under objection in the audit report may apply to the Director of Co-operative Audit for its deletion within six months of the receipt of the audit report.
(b) The Director of Co-operative Audit may on receipt of the application under Clause (a) summon the production of documents, if any, pertaining to the objection and examine the same. He may also examine any person including the auditor and order for deletion or confirmation of the audit objection and on deletion, the objection shall stand removed from the balance sheet of the society and on confirmation the amount held under objection shall be recoverable.
9) The Registrar shall submit half yearly reports to the State Government furnishing details of the number of defects disclosed in audit, number of defects rectified, action taken to remedy the defects and the reasons for pendency, if any. A copy of such report may be forwarded to the Director of Co-operative Audit.
10) If it appears to the State Government on an application by a Co-operative society or otherwise that it is necessary or expedient to re-audit any account of a society, the State Government may, by an order provide for such re-audit and the provisions of the Act and the Rules applicable to the audit shall apply to such re-audit.
(xxxx)
Provided also that such re-audit shall be ordered only when there is a prima facie case of fraud or mis-appropriation or embezzlement of funds not detected or property examined by the auditor during regular audit or misclassification of accounts or for any other valid reasons with a view to truly reflect the financial position of the Society;
11) Notwithstanding anything contained in the proceeding sub-sections, the Director of Cooperative Audi shall have power to re-examine or re-verify the audited accounts of any co-operative society pertaining to any year and incorporate the lapses observed during such re-examination or re-verification in the next audit report to be issued.
So also the other relevant statutory provisions such as Rules 29, 30 of the Rules, and Section 29G(4)(j) of the Act.
Rule 29. Subject matter of Audit: (1) The audit under Sub-section (1) of Section 63 shall include, in addition to the matters specified in Sub-section (2) of the said section, the following particulars-
a) a verification of the balances at the credit of the depositors and creditors, and of the amounts due by the society's debtors, of such proportion thereof any may be fixed by the Director of cooperative Audit.
b) An examination of the transactions of the members of the committee;
c) An examination of the statement of accounts of the society to be prepared by the committee in such form as may be determined by the Director of Cooperative Audit.
d) A certification of the profits actually realised or loss actually incurred and
e) Any other matter that may be directed by
the Director of co-operative Audit.
2) The Statement of accounts as audited under Sub-rule (1) together with the modifications, if any made therein by the Director of co-operative Audit, shall be final and binding on the society.
Rule 30. Audit Fees (1) Every co-operative Society shall pay to the State Government, a fee for the audit of its accounts for each co-operative year in accordance with the scale fixed by the Director of Co-operative Audit with the previous approval of the State Government in respect of the class of societies to which it belongs.
(1-A) Every co-operative society, where the Government decides to post audit staff for concurrent and final audit of accounts, shall pay audit cost in accordance with the provisions of Rule 441 of the Karnataka Civil Services Rules, 1959. The need to post such audit staff and its strength shall be decided by the Government either on receiving a recommendation in that effect from the society or otherwise.
(1-B) In the event of a co-operative Society failing to pay the fees or cost payable to the State Government under the provisions of Sub-rule (1) or (1A) the Director of co-operative Audit may call upon the Financing Bank of the concerned cooperative Society to remit the outstanding amount of fee or cost to the Government. On receipt of such demand, the Financing Bank shall remit the sum as audit fee or the cost to the Government out of the amount at the credit of the society and if there is no sufficient balance at the credit of such society to meet the demand to the extent of balance available and the remaining amount shall be remitted as and when it becomes available in the accounts of the society. The financing bank shall comply with the directions issued by the Director of Co-operative Audit and shall also furnish a certificate to the Director of Co-operative Audit indicating the particulars of the remittance of fees or cost so remitted on behalf of the society.
(2) All fees or costs payable under this Rule shall be recoverable in the manner specified in Section 104 of the Act.
(3) The Director of Co-operative Audit may, subject to such conditions as may be laid down by the State Government remit the whole or any part of the fees payable under Sub-rules (1) and (1A) by a particular society or by a particular class of societies for any year or other specified period.
Section 29G(4)(i): Appointment of Chief Executive:
(1)xxxx
(2) xxxx
(3) xxxx
(4) xxxx
(a) xxxx
(b) xxxx
(c) xxxx
(d) xxxx
(e) xxxx
(f) xxxx
(g) xxxx
(h) xxxx
(i) xxxx
(j) sue and be sued on behalf of the co-operative society.
28. Let me first examine the preliminary objection raised on behalf of the 2nd respondent-Director of Co-operative Audit in Writ Petition No. 14183/2008. The objection is that the Writ Petition is not tenable as the Society is not represented by its officers.
29. The objection appears to be mere technical in nature as the Society though incidentally figures as 5th respondent in this Writ Petition, the relief sought for is not against the 5th respondent but one questioning the action on the part of respondents 1 and 2 in this writ petition.
30. Submission of the learned Counsel for the petitioners is that this writ petition cannot be characterised as a Writ Petition either on behalf of the Society or against the Society. But more importantly in writ jurisdiction, question is more of the locus of the petitioners to maintain the petition against the State and its actions challenged in the petition. Petitioners are undoubtedly persons affected by the impugned orders and have locus to maintain the petitions. It is not as though the writ petitions are otherwise made not maintainable by any other constitutional or statutory provision. In this view of the matter, the preliminary objection raised by Sri. Basavaprabhu S. Patil, does not merit acceptance and it is rejected.
31. In so far as the legal contentions urged on behalf of the petitioners is concerned, a perusal of the statutory provisions indicate that a power is available to the Government under Section 63(10) of the Act for the purposes mentioned therein particularly for directing re-audit which in effect amounts to a re-look afresh into the entire accounts.
32. Of course, this power is circumscribed by the condition as indicated in the proviso. In the wake of this legal position, and the submission by the learned Advocate General is that the Government has not exercised this power, ft is not necessary to examine the scope of Section 63(10) of the Act in detail. But the power under Section 63(11) of the Act, the power conferred on the Director of Co-operative Audit is a power conferred on the Director for the purpose of reexamination to find out any lapses observed and for re-clarification or correction to be carried out later and to be so indicated in the next Audit report. The statutory provision only indicates that if some errors had taken place earlier and had been overlooked in the normal auditing activity, there can be a second look and even the earlier lapses can be mentioned for correction in the subsequent audit report.
33. Ultimately, if the power is exercised for a correction to correct an earlier lapse while the Director of Co-operative Audit can act under this provision, on becoming aware of some past irregularity or impropriety or whatever it is, if the Government by a communication as at Annexure-G in Writ Petition No. 14153/2008 alerts the statutory authority to take action in exercise of the power under Sub-section (11) of Section 63 of the Act, and if such power is exercised for such purpose neither any malafide can be attributed to the statutory authority nor can it be said that the authority had acted in violation and at cross purposes to the provisions of Sub-section 11 or even that the power is exercised without application of mind.
34. I say so, for the reason that the Government being a superior controlling authority even in respect of the Director of Co-operative Audit, in terms of Section 2AA of the Act, as Director of Co-operative Audit is also an officer who comes within the scope of administration, supervision of Government under Section 2AA(4) of the Act, if acts accordingly, it is a bonafide exercise of power and not otherwise. It is not as though the Director of Co-operative Audit can question the action of the Government. It is another aspect if the Government itself has exercised its power in a malafide manner and if that is made good any consequential action automatically falls to ground.
35. So far as the exercise of power by State Government is concerned, it is conceded by the learned Advocate General appearing for the State Government that the Government has not exercised its powers and Sub-section (10) of Section 63 of the Act, but has acted only to activate the Director of Co-operative Audit and in the wake of certain complaints that had been forwarded in the matter of appointments made to the Society and if in that context a re-look is required, then it cannot be said that the Government has exercised power not in a bonafide manner but in a malafide manner.
36. if such is the nature of power under the Statutory provision and ultimately if the consequential act only lead to a re-look into the audited accounts of the Society and if that can reveal any lapses for correction, I am of the considered opinion that it does not amount to a malafide exercise of power having such deleterious effect on the petitioner-Society to warrant any adverse inference about the manner of exercise of power, nor can be made a ground to invite interference by this Court in exercise of 226/227 jurisdiction.
37. A mere examination under Section 63(11) of the Act by itself is not an adverse circumstance and so also the order against the petitioner-Society or its office bearers passed for initiation of action under this provision. If the petitioner -Society being an organisation financed and controlled by the State Government and having been equated to the State within the meaning of Article 12 and managing public funds apart from its own affairs then its functioning, management whether this management or any other management should be transparent and should be open to public scrutiny at any point of time. If under the impugned order what at all is achieved is only to initiate a re-look into the manner of functioning of such a Society that in itself cannot be characterised as an action so adverse either to the Society or to the interest of the persons in the management of the affairs of the Society.
38. The scope and depth of scrutiny in writ jurisdiction particularly for issue of a writ of certiorari to quash the action and prevent further consequences is always dependent on the extent of affectation or violation of the rights of the petitioner who is complaining before the Court. Greater the affectation of the right, deeper the scrutiny; lesser the affectation, lesser the probity and in a situation where there is no consequence or is so very insignificant no interference it writ jurisdiction for issue of a writ by this Court which should serve a definite purpose and in the larger public interest.
39. It is not as though the present action by itself can in any way affect either the rights of the petitioner-Society or the rights of the members of the Managing Committee who figure as petitioners in the other Writ Petition.
40. I do not find any malafide exercise of power or exercise of power totally at variance with the statutory provision as is sought to be made out by the Sri. Jayakumar S. Patil, learned Senior Counsel for the petitioner based on which, interference is sought for in writ jurisdiction. Submission that the power is not exercised for the purpose and in the manner as provided under Section 63(10) and (11) of the Act, cannot accepted.
41. That only leaves the other question with regard to the malafides attributed in the exercise of power and particularly in the wake of the contention raised on behalf of the petitioner that the power is exercised only because of political rivalry that subsists between the petitioners in Writ Petition No. 14183/2008 and persons at the helm of affairs in the Government who are instrumental in causing the orders, to be examined.
42. It is pointed out that the power is exercised only to score political points over the petitioners. While Courts when scrutinizes the administrative action on the part of a public authority, the administrative action on the part of the State and its officers on the touchstone of the Constitution and the statutory provisions and there is definitely scope for judicial review of administrative action on the touchstone of the law, so far as scoring of political points are concerned that is not a matter either to be brought before Courts or matters for examination by Courts. Political scores are settled only at the hustings by the votes polled by the people of the Country and not in the Courts. Such scores can never be settled in Courts of law where examination is not based on political considerations or expediencies, but purely based on constitutional provisions and statutory provisions.
43. It is no doubt true that a malafide exercise of power is a colourable exercise of power either for any ulterior purpose or for causing harm or affectation of other persons and such causes are always examined by Courts where sufficient grounds are made out. But in the present case and the situation, I do not find the existence of either for the reasons as indicated above. The exercise of power cannot be characterised as a malafide exercise, as the Government on some materials whether it is adequate or otherwise acts for effectuating some statutory powers and functions, then no case is made for the Court to examine at this stage when the Government has only activated the audit and is otherwise also has such power, Therefore, the Government in reality has not exercised any of its power not referable to statute but independent of it. As such no malafide can be attributed when once no violation or deviation to the statutory provisions is found, the argument of malafide exercise of power cannot succeed.
44. So far as the argument about the colourable exercise of power is concerned, when once it is the clear stand of the State Government that it has not exercised any power under Section 63(10) of the Act and the power as such is not exercised, even such argument cannot succeed.
45. Ultimately, if the impugned action can only lead to a scrutiny into the affairs of an institution like the petitioner, a large Co-operative Society which is akin to State within the meaning of Article 12 and has vast control of finance and other powers. It is always in the larger public interest to have second look into the affairs of such an institution of importance and magnitude. If at all public interest is sub-served by such a scrutiny and it cannot be said public interest is in any way affected assuming there are some political persons are involved. It is well settled that private interest always yields to public interest. If the whole object and consequence of the impugned action can only lead to a scrutiny and possible corrective action. I do not find any need for interference and for issue of a writ of certiorari to quash such act at the threshold and even before it can be given, it is for this reason, the impugned orders are not interfered but the Writ Petitions are dismissed.
Rule discharged, Interim orders vacated.
Parties are left to bear their own costs.