Dismissed

B L Shamala v. Deputy Registrar of Co-Operative Societies

Karnataka HC27 Nov 2023WP/11783/2019

Case brief

AI extract

What is this about?

This High Court dismissed a writ petition challenging an order attaching the petitioner's property under the Karnataka Souharda Sahakari Act. The court found that the Registrar was satisfied regarding apprehension of creating third-party rights and held that factual disputes regarding surety status warrant adjudication in the proceedings below.

What the court decided

AI extract

B L Shamala Vs Deputy Registrar of Co-Operative Societies — Property and Title | Karnataka HC (2023)

¶1

1 - NC: 2023:KHC:42819 WP No. 11783 of 2019

¶2

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶3

DATED THIS THE 27^TH DAY OF NOVEMBER, 2023

¶4

BEFORE

¶5

THE HON'BLE MR JUSTICE C.M. POONACHA WRIT PETITION NO. 11783 OF 2019 (CS-DAS)

¶6

BETWEEN:

¶7

B L SHAMALA W/O B MURALI AGED ABOUT 48 YEARS R/A NO.39/2, 3RD CROSS ROAD 4TH MAIN ROAD KUMARA PARK WEST SHESHADRIPURAM BENGALURU-560020

¶8

…PETITIONER

¶9

(BY SRI RAMACHANDRA N, ADVOCATE)

¶10

AND:

¶11

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

¶12

DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES KARNATAKA STATE SOUHARDA SAHAKARI FEDERATION LIMITED (U/R-441) NO.62, 2ND FLOOR, MARGOSA ROAD 3RD MAIN, 18TH CROSS PIPE LINE ROAD MALLESHWARAM BENGALURU-560055

¶13

SHREE LAKSHMI MAHILA SOUHARDA CREDIT CO OPERATIVE LTD, MYLANAHALLI VILLAGE UDUKUNTE POST, SOLURU HOBLI MAGADI TALUK RAMANAGARA DISTRICT-562120 REP BY ITS CHIEF EXECUTIVE OFFICER

¶14

JAYALAKSHMI W/O RANGANATH

¶15

2 - NC: 2023:KHC:42819 WP No. 11783 of 2019

¶16

R/A 559, 23RD CROSS ROAD MARUTHI BAR ROAD BAGALKOTE NAGASANDRA POST BENGALURU-560073

¶17

…RESPONDENTS

¶18

(BY SRI MILIND DANGE FOR R1 SRI G NATARAJA, ADVOCATE FOR C/R2 SRI B R PRABHULINGA MURTHY, ADVOCATE FOR R2 R3 SERVED)

¶19

THIS W.P. IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DTD 25.02.2019 PASSED BY THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, KARNATAKA STATE SOUHARDA SAHAKARI FEDERATION LIMITED, (U/R-441) IN DISPUTE ON THE APPLICATION FILED UNDER SECTION 44(2) OF THE KARNATAKA SOUHARDA SHAKARI ACT 1997 VIDE ANNX-G CONSEQUENTLY DISMISS THE APPLICATION FILED BY THE R-2 UNDER SECTION 41(3) OF THE K.S.S. ACT 1997 AND ETC.

¶20

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

¶21

ORDER

¶22

The present petition is filed challenging the order dated 25.2.2019 passed by the first respondent in Dispute No.JRD.KSSFC/3200/2017-18.

¶23

The relevant facts necessary for consideration of the present petition are that the third respondent availed a credit facility from the second respondent - society. Since the same was not repaid, the second respondent initiated proceedings under Section 41(3) and 44 of the Karnataka Souharda Sahakari Act, 1997 (hereinafter referred to as ‘the

¶24

3 - NC: 2023:KHC:42819 WP No. 11783 of 2019

¶25

Act’). In the said proceedings, the second respondent filed an application under Sections 41 and 44 of the Act to attach the property of the petitioner herein, who was arrayed as the second respondent in the proceedings before the first respondent. The first respondent, vide order dated 25.2.2019 allowed the said application and attached the property as sought for in the application filed by the second respondent herein. Being aggrieved, the present writ petition is filed.

¶26

Learned counsel for the petitioner assailing the order passed by the first respondent vehemently contends that the petitioner, who was arrayed as second respondent in the proceedings before the first respondent is in no way concerned with the loan transaction of the third respondent and has not offered any surety for the loan availed by the third respondent. He further contends that the second respondent has not produced any document to show that the petitioner has stood as surety for the loan transaction. He submits that the attachment made by the first respondent is erroneous since the requisite criteria as stipulated under Section 44 of the Act has not been satisfied by the second respondent.

¶27

¶28

NC: 2023:KHC:42819 WP No. 11783 of 2019

¶29

Per contra, learned counsel for the second respondent opposing the relief sought for in the present writ petition submits that the petitioner stood as a surety to the loan availed by the third respondent and the requisite documents in that regard have been produced in the proceedings before the first respondent and copies of the same have been furnished along with the statement of objections field by the second respondent in the present writ petition. He further submits that the requisite averments regarding the fact that the petitioner has stood as a surety for the loan transaction of the third respondent have been made in the proceedings before the first respondent. He submits that in the application for attachment, the requisite averments to satisfy the criteria stipulated under Section 44 of the Act have also been made.

¶30

The submissions of the learned counsel for the parties have been considered and the material on record has been perused.

¶31

The essential fact situation insofar as it relates to the second respondent initiating proceedings under the provisions of the Act before the first respondent for recovery of

¶32

5 - NC: 2023:KHC:42819 WP No. 11783 of 2019

¶33

moneys from the third respondent and the petitioner are a matter of record.

¶34

The second respondent has specifically averred at para 3 of its petition in the proceedings before the first respondent that the petitioner herein, who is arrayed as second respondent in the said proceedings, has stood as surety for the loan transaction of the third respondent. It is further forthcoming that at para 3 of the affidavit filed in support of the application for attachment, the second respondent has averred that the petitioner has stood as guarantor/surety to the loan transaction. It is further forthcoming from para 8 of the affidavit accompanying the application for attachment that the apprehension of the second respondent herein that the petitioner herein, who is the owner of the property is going to create third party rights over the schedule property by alienating the same has been expressed. The first respondent, after considering the relevant aspects has, by order dated 25.2.2019 allowed the application filed by the second respondent and attached the property of the petitioner.

¶35

It is forthcoming that there is material on record to show that the second respondent has made necessary

¶36

6 - NC: 2023:KHC:42819 WP No. 11783 of 2019

¶37

averments that the petitioner, has stood as guarantor to the loan transaction availed by the third respondent and there is documentary material to demonstrate the same. Notwithstanding the fact that the learned counsel for the petitioner vehemently contends that the petitioner is in no way concerned with the loan transaction, the same being a question of fact, consideration of the same in the present writ petition does not arise. The said aspect is required to be considered during the course of the trial in the proceedings before the first respondent.

¶38

Further with regard to attachment, it is relevant to notice Section 44(1) of the Act, which reads as under:

¶39

“ 44. Attachment of property before award or order.- (1) If the Registrar is satisfied on an application, report, enquiry or otherwise, that any person with intent to delay or obstruct the enforcement of any order, decision or award that may be made against him under the provisions of this Act,-

¶40

(a) is about to dispose of the whole or any part of his property; or

¶41

(b) is about to remove the whole or any part of his property from the jurisdiction of the Registrar, the arbitrator or Liquidator, as the case may be, he may, unless adequate security is furnished, direct the attachment of the said property and such attachment shall have the same effect as if made by a competent civil court.”

¶42

(emphasis supplied)

¶43

¶44

NC: 2023:KHC:42819 WP No. 11783 of 2019

¶45

The second respondent in the application has clearly averred regarding its apprehension that third party rights may be created over the schedule property.

¶46

Learned counsel for the petitioner submits that the property has already been mortgaged by the petitioner in respect of another loan transaction which has been availed by the petitioner. Notwithstanding the contention of the petitioner with regard to the same that the property of the petitioner being mortgaged in another loan transaction, having regard to the discretion that is stipulated in Section 44 of the Act and the apprehension having been expressed by the second respondent in the affidavit accompanying the application for attachment and the same having been considered by the first respondent, the petitioner has failed in demonstrating that the order dated 25.2.2019 passed by the first respondent is liable to be interfered with by this Court in exercise of its equitable discretionary jurisdiction contained under Articles 226 and 227 of the Constitution of India.

¶47

In view of the aforementioned, the writ petition is dismissed as being devoid of merit.

¶48

NC: 2023:KHC:42819 WP No. 11783 of 2019

¶49

¶50

The observations made by this Court in the present writ petition are only for consideration of the present writ petition. The first respondent shall adjudicate the dispute pending before it uninfluenced by any of the observations made in the present writ petition or the order dated 25.02.2019.

¶51

Sd/JUDGE

¶52

¶53

List No.: 1 Sl No.: 30

B L Shamala v. Deputy Registrar of Co-Operative Societies

Case brief

What is this about?

What the court decided

B L Shamala v. Deputy Registrar of Co-Operative Societies

Case brief

What is this about?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

N.Krishna Murthy Vs Chandra Spinning and Weaving Mills Private Limited

Vardhman Yarns and Threads Limited Vs Indus Garments (India)Private Limited

Smt Shakuntala Vs the State of Karnataka

Mr Syed Pacha Sab Vs the Joint Registrar of Co-Op. Societies

M. Hanumantharaju Vs the Recovery Officer

M/S Padupanamboor Co. Operative Agricultural Society Ltd. Vs the State of Karnataka