Umesh S/O Ganapati Naik Vs Joint Registrar of… — Writ and Judicial Review | Karnataka HC (2025)

Umesh S/O Ganapati Naik Vs Joint Registrar of… — Writ and Judicial Review | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

Issue for consideration

Whether the petitioner can disclaim responsibility for the respondent society closing its accounts in June–July instead of 31st March (to conceal credit sales), on the ground that the practice was the society's and he merely kept quiet. +3 more

Court's answer

The petitioner, functioning as Second Division Clerk from 2004, First Division Clerk from 2009 and Supervisor from 2011, ought to have known that the methodology of closing accounts in June–July instead of 31st March is not in accordance with law.

Ratio / Principle

The petitioner's failure to bring the irregular June–July account closure to the notice of the concerned officers indicates that the petitioner is also part of the cover-up resorted to by the other officers of the society.

Key takeaways

It cannot be disputed that the petitioner was involved in the Fertilizer Section even prior to the society's resolution directing him to take charge of that section on 15.02.2016; he did not come to be involved with it only from that date.ratio¶¶149
The petitioner cannot take undue advantage of the preparation of the stock list subsequently (on 30.04.2016); such a stock list was required to be maintained on a continuous basis even while he was Supervisor.ratio¶¶150
Although the initial charge memo did not name the petitioner, upon completion of the enquiry a shortfall in fertiliser stock was found per the inventory of 30.04.2016; the petitioner, being the supervisor responsible for maintaining the stock who failed to bring the shortage to notice, was found involved in the misappropriation, and action against him was properly proposed.

Detailed headnote1 paragraphs

Karnataka High Court, Dharwad Bench (Suraj Govindaraj J), 11.09.2025 — WP No. 102014 of 2018 c/w WP No. 102015 of 2018: A Supervisor of a co-operative marketing society challenged by certiorari under Articles 226/227 (i) the Deputy Registrar's direction dated 21.07.2016 to initiate criminal proceedings and direction dated 15.06.2016 to recover the fertiliser-stock differential, and (ii) the Joint Registrar's orders dated 20.11.2017 dismissing his appeals under Section 106(1)(h) of the Karnataka Co-operative Societies Act, 1959. HELD, dismissing the petitions: (a) the petitioner, in service since 2004 and Supervisor since 2011 with responsibility for stocks, ought to have known that closing accounts in June–July instead of 31st March was not in accordance with law, and his silence indicated he was part of the cover-up of the society's illegal credit sales; (b) he was involved with the fertiliser section well before the 15.02.2016 resolution transferring charge, and cannot take advantage of the stock list first prepared on 30.04.2016, continuous stock records being his duty as Supervisor; (c) his omission from the initial charge memo (which named Sri. Subash N. Vaddar and others) ceased to assist him once the enquiry disclosed a shortfall of Rs.73,84,371/- per the 30.04.2016 inventory and his own involvement as the stock-maintenance supervisor; (d) the enquiry report indicated contra, the society's proposals could not be faulted, and the surcharge proceedings were proper and correct.

Issues for consideration

4 issues framed by the court

AI extract

1.
Whether the petitioner can disclaim responsibility for the respondent society closing its accounts in June–July instead of 31st March (to conceal credit sales), on the ground that the practice was the society's and he merely kept quiet.¶¶134
The court held
The petitioner, functioning as Second Division Clerk from 2004, First Division Clerk from 2009 and Supervisor from 2011, ought to have known that the methodology of closing accounts in June–July instead of 31st March is not in accordance with law.ratio¶¶145
2.
Whether the petitioner can be made liable for the fertiliser stock shortage of Rs.73,84,371/- when, per his contention, the shortage already existed when he took charge of the fertiliser business and the stock list was prepared only on 30.04.2016.¶¶139
The court held
It cannot be disputed that the petitioner was involved in the Fertilizer Section even prior to the society's resolution directing him to take charge of that section on 15.02.2016; he did not come to be involved with it only from that date.ratio¶¶149
3.
Whether action could be taken against the petitioner when the initial charge memo named only Sri. Subash N. Vaddar and certain others and contained no particular allegation against the petitioner.¶¶140
The court held
Although the initial charge memo did not name the petitioner, upon completion of the enquiry a shortfall in fertiliser stock was found per the inventory of 30.04.2016; the petitioner, being the supervisor responsible for maintaining the stock who failed to bring the shortage to notice, was found involved in the misappropriation, and action against him was properly proposed.ratio¶¶155
4.
Whether the impugned orders — the Deputy Registrar's direction dated 21.07.2016 to initiate criminal proceedings (WP 102014) and dated 15.06.2016 on recovery/action (WP 102015), and the Joint Registrar's appellate orders dated 20.11.2017 dismissing the Section 106(1)(h) KCS Act appeals — are liable to be quashed.¶¶88
The court held
None of the petitioner's contentions can be sustained; the enquiry report indicating contra, the proposals made by the respondent society cannot be found fault with, and the surcharge proceedings initiated are proper and correct.ratio¶¶159

Procedural history

How this case reached the court

AI extract

Order under challenge
In WP No. 102014 of 2018: order dated 21.07.2016 of respondent No.3 (Deputy Registrar) directing initiation of criminal proceedings (Annexure-Q); in WP No. 102015 of 2018: order dated 15.06.2016 of respondent No.3 directing action on the inspection report/recovery of the stock differential (Annexure-J). The appeals against both were dismissed by respondent No.1 (Joint Registrar) by orders dated 20.11.2017 (Annexure-T in WP 102014; Annexure-S in WP 102015). All four orders sought to be quashed by certiorari.¶¶25
Deputy Registrar of Co-operative Societies (respondent No.3) and Joint Registrar of Co-operative Societies (respondent No.1) · 21.07.2016 and 15.06.2016 (DRCS); 20.11.2017 (JRCS)
Prior proceeding
Service history: petitioner joined respondent No.2 Society as Second Division Clerk on 01.06.2004, was promoted First Division Clerk on 01.06.2009 and Supervisor on 01.06.2011 pursuant to work order issued 30.08.2011.¶¶133
Prior proceeding
KDCC Bank inspection in 2011–12 observed the society's practice of closing accounts in June–July to conceal credit sales; a reply was issued by the society.¶¶70
Prior proceeding
Deputy Registrar of Co-operative Societies appointed Shri B.D. D'Souza, Senior Inspector, as Enquiry Officer into the difference in stock and illegal credit activities.¶¶71
Prior proceeding
Show cause proceedings: separate notices including one to the petitioner; the Manager of the society replied to the show cause notice on 07.05.2016.¶¶76
Prior proceeding
By direction dated 15.06.2016 the Deputy Registrar (DRCS) directed the society to take action on the inspection report.¶¶77
Prior proceeding
On 18.06.2016 the Cooperative Society passed a resolution to take action as per the DRCS direction.¶¶77
Prior proceeding
Memo issued to the petitioner on 20.06.2016; the petitioner replied on 30.06.2016 denying all charges.¶¶78
Prior proceeding
Office memos dated 09.07.2016 and 13.07.2016 called upon the petitioner to pay the differential in fertiliser stocks.¶¶79
Prior proceeding
WP No. 102015 of 2018 chain: petitioner appealed to the Joint Registrar under Section 106(1)(h) KCS Act against the recovery memos; appeal dismissed on 20.11.2017.¶¶83
Prior proceeding
WP No. 102014 of 2018 chain: by order dated 21.07.2016 respondent No.3 DRCS directed initiation of criminal proceedings; petitioner challenged it in Appeal No.7/2016–17 before the JRCS under Section 106(1)(h) KCS Act.¶¶88
Prior proceeding
Appeal No.7/2016–17 dismissed by the JRCS by order dated 20.11.2017, leading to WP No. 102014 of 2018.¶¶91