Allowed

Shri.Nagangouda S/O Goudappagouda Narendra v. Pujya Shri. Mahanthappa Urban

Karnataka HC8 Nov 2024WP/147371/2020

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed a writ petition quashing an order by the Deputy Registrar that dismissed a petitioners application for inspection of society bye-laws and audit reports. The Court held the order erroneous as the documents were crucial for validating the fraud defense raised by the petitioner in underlying recovery proceedings.

What did the court decide?

The impugned order dated 30.06.2020 is set aside. The petitioners application for production of bye-laws and audit reports is allowed, and the Society must furnish the documents within three weeks.

Shri.Nagangouda S/O Goudappagouda Narendra Vs Pujya… — Cooperative Societies | Karnataka HC (2024)

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NC: 2024:KHC-D:16344 WP No. 147371 of 2020

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 8^TH DAY OF NOVEMBER, 2024

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BEFORE

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THE HON'BLE MR. JUSTICE C.M. POONACHA

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WRIT PETITION NO.147371 OF 2020 (CS-RES)

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BETWEEN:

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SHRI NAGANGOUDA S/O. GOUDAPPAGOUDA NARENDRA, AGE: 51 YEARS, OCC: SECRTARY OF CO-OP SOCIETY, R/O: AMARGOL, TQ: NAVALGUND – 582 208 DIST: DHARWAD.

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…PETITIONER

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(BY SRI ABHISHEK B. MAREPPAGOL, SRI MADANMOHAN M. KHANNUR, ADVOCATES)

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AND:

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PUJYA SHRI MAHANTHAPPA URBAN, CO-OPERATIVE CREDIT SOCIETY LIMITED, DHARWAD, AT OSWAL TOWERS, SILVER JUBILEE CIRCLE, DHARWAD – 580 001, BY ITS MANAGING DIRECTOR.

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SHRI SIDDANAGOUDA S/O GOUDAPPAGOUDA NARENDRA, AGE: 49 YEARS, OCC: AGRICULTURE, R/O: AMARGOL, TQ: NAVALGUND – 582 208, DIST: DHARWAD.

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Digitally signed by SAROJA HANGARAKI Location: High Court of Karnataka

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SHRI SIDDANAGOUDA S/O. VEERANGOUDA CHIKKANGOUDAR, AGE: 45 YEARS, OCC: AGRICULTURE, R/O: AMARGOL, TQ: NAVALGUND – 582 208,

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DIST: DHARWAD.

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THE DEPUTY REGISTRAR, OF CO-OPERATYIVE SOCIETY, DHARWAD-580001

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…RESPONDENTS

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(BY SRI RAJASHEKHAR R. GUNJALLI, ADVOCATE FOR R1; NOTICE TO R2 AND R3 ARE SERVED; SMT. KIRTILATA R. PATIL, ADVOCATE FOR R4)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO, ISSUE A WRIT OF CERTIORARI QUASHING THE ORDER DATED 30.06.2020 IN NO.DRZ/ABN/DDS/45/2017-18 PASSED BY THE 4^TH RESPONDENT,

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2 - NC: 2024:KHC-D:16344 WP No. 147371 of 2020

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VIDE ANNEXURE – F AND ALLOW THE APPLICATION DATED 25.06.2019 VIDE ANNEXURE – D BY DIRECTING THE 1^ST RESPONDENT TO PRODUCE THE AUDIT REPORT FROM 2012-2018 WITH EXEMPLARY COSTS IN THE INTEREST OF JUSTICE AND EQUITY AND ETC.,

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THIS WRIT PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: THE HON'BLE MR. JUSTICE C.M. POONACHA

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ORAL ORDER

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(PER: THE HON'BLE MR. JUSTICE C.M. POONACHA)

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The present writ petition is filed seeking for the following reliefs:

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a) “Issue a Writ of Certiorari Quashing the order dated 30.06.2020 in No.DRZ/ABN/DDS/45/2017-2018 passed by the 4^th respondent, Vide Annexure-F and allow the application dated 25.06.2019 Vide Annexure-D by directing the 1^st respondent to produce the AUDIT REPORT from 2012-2018 with exemplary costs in the interest of justice and equity.

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b) Pass any other order or direction as this Hon’ble Court deems just and proper under the facts and circumstances of the case including award of cost in the interest of justice and equity.”

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The relevant facts leading to the present writ

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petition are that the 1^st respondent instituted proceedings

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NC: 2024:KHC-D:16344 WP No. 147371 of 2020

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under Section 70 of the Karnataka Co-operative Societies Act, 1959¹ for recovery of a sum of ₹54,11,725/- before the 4^th respondent-Deputy Registrar, wherein, the petitioner was arrayed as 1^st respondent, respondent No.2 herein was arrayed as 2^nd respondent and respondent No.3 herein was arrayed as 3^rd respondent. The petitioner, who was arrayed as 1^st respondent in the proceedings before the 4^th respondent, entered appearance in the said proceedings and filed his objections. In the said statement of objections, the petitioner has denied the assertions made by the 1^st respondent/Society regarding borrowing of the loan and further raised various grounds including the fact that the clause No.60 of the Bye laws provides maximum limit of ₹25,000/- for a personal loan to be granted. Other contentions that the Manager of the 1^st respondent-Society has mis-utilized the signature of the petitioner and prayed a fraud and miss-appropriated the

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1 Hereinafter referred to as the ‘Act’

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4 - NC: 2024:KHC-D:16344 WP No. 147371 of 2020

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amounts of the society in the name of the petitioner have also been taken.

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In the proceedings before the 4^th respondent, the petitioner filed an application under Order XI Rule 14 R/w Section 151 of the Code of Civil Procedure, 1908² (Annexure-D) for a direction to the Society to produce the Bye laws of the society as also the audit report from the year 2012-2018. The Society objected to the said application. The 4^th respondent, vide order dated 30.06.2020, dismissed the said application. Being

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aggrieved, the present writ petition is filed.

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Heard submissions of learned counsel Sri.Abhishek.B.Mareppagol appearing for learned counsel Sri.Madanmohan.M.Khannur for the petiitoner, learned counsel Sri.Rajashekhar.R.Gunjalli for respondent No.1Society and learned AGA for respondent No.4. Perused the material on record.

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2 Hereinafter referred to as the ‘CPC’

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The initiation of dispute No.45 of 2017-2018 by the 1^st respondent-Society under Section 70 of the Act is undisputed and a copy of the petition is produced as Annexure-A to the writ petition. The petitioner who has entered appearance in the said proceedings has filed his objections (Annexure-C), whereunder, various contentions have been taken place including that the Bye laws of the Society, which did not permit granting of loan to the extent as claimed by the Society.

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Vide I.A No.5 filed by the petitioner (Annexure-D)

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under Order XI Rule 14 R/w Section 151 of the CPC, two documents were sought i.e., (i) Bye laws of the society and (ii) Audit report from 2012 to 2018. The 4^th respondent while considering the said application has recorded a finding that the said documents are not necessary and the loan documents on the basis of which the application under Section 70 of the Act has been filed by the Society have been produced.

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It is relevant to note that both the documents sought for in the I.A No.5 (Annexure-D) are public

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6 - NC: 2024:KHC-D:16344 WP No. 147371 of 2020

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documents. Learned counsel for the 1^st respondent submits that the Bye laws of the Society has been already furnished and the audit report for the year 2012-2018 of the Society contains various other transactions, which are not necessary and the personal transactions which are the subject matter of the proceedings under Section 70 of the Act initiated by the Society will not be available in the same.

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It is relevant to note that the audit reports of the Society are statutorily mandatory requirements, which the Society is required to carry out in compliance of provisions of the Act. The question of the Society opposing for furnishing of the said audit reports is indeed surprising, more particularly having regard to the defense of fraud and mis-utilization that the petitioner has taken as defense in the proceedings initiated by the Society.

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The 4^th respondent has not appreciated the I.A No.5 (Annexure-D) from the perspective of the defense that the petitioner has taken in the proceedings initiated by the Society. Hence, the said order dated 30.06.2020 is

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7 - NC: 2024:KHC-D:16344 WP No. 147371 of 2020

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erroneous and liable to be interfered with. The I.A No.5 filed by the petitioner in the proceedings before the 4^th respondent is required to be favorably considered.

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In view of the aforementioned, the following:

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ORDER

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a) The writ petition is allowed .

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b) The order dated 30.06.2020 on I.A No.5 in proceedings bearing No.DRZ/ABN/DDS/45/2017-2018 by the 4^th

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respondent/Deputy Registrar, Dharwad is set aside.

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c) I.A No.5 filed by the petitioner (Annexure-D to the writ petition) in the proceedings bearing No. DRZ/ABN/DDS/45/2017-2018 initiated by the 1^st respondent/Society is allowed. The 1^st respondent/Society shall furnish the documents sought for vide I.A No.5 (Annexure-D) within three weeks from today before the 4^th respondent/Deputy Registrar after furnishing a

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NC: 2024:KHC-D:16344 WP No. 147371 of 2020

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copy of the same to the petitioner who is the 1^st respondent before the proceedings.

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d) All contentions of both parties are left open.

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e) In view of the disposal of the writ petition, I.A No.1/2020 is dismissed as not arising for consideration.

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Sd/(C.M. POONACHA) JUDGE

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PMP CT-ASC List No.: 1 Sl No.: 26

Shri.Nagangouda S/O Goudappagouda Narendra v. Pujya Shri. Mahanthappa Urban

Case brief

What is this about?

What did the court decide?

Shri.Nagangouda S/O Goudappagouda Narendra v. Pujya Shri. Mahanthappa Urban

Case brief

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What did the court decide?

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