Duplicative audit report cannot stand when the first report has already been acted upon and proceedings continue from it

A second audit report on the same accounts was unsustainable where the first report under Section 63(5) of the Karnataka Co-operative Societies Act had already been acted upon and later audit steps were taken on that basis. The court treated the second report as unnecessary duplication that would create confusion, particularly because proceedings under Sections 64 and 68 could continue from the first report alone. The second audit report was therefore liable to be quashed, and the matter was permitted to proceed in accordance with law on the basis of the first audit report.

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Issues: Whether the second audit report could be sustained when the first audit report had already been acted upon and subsequent audit exercise had been carried on the basis of the first report.

Analysis: The dispute concerned two parallel audit reports on the same accounts. The first audit report under Section 63(5) of the Karnataka Co-operative Societies Act had already formed the basis for later audit work and further proceedings. The second audit report was not necessary for the administration of the matter and would only create duplication and confusion. The availability of proceedings under Sections 64 and 68 of the Act also meant that the matter could proceed on the basis of the first report without reference to the second report.

Conclusion: The second audit report was liable to be quashed, and the matter was to proceed in accordance with law on the basis of the first audit report alone.

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