Mr Sridhar B S Vs State of Karnataka

MR. SRIDHAR B.S. S/O. LATE SHIVALINGAIAH, EX. DIRECTOR, SIRI VAIBHAVA SUNDARAM PATTINA SAHAKARI NIYAMITA AGED ABOUT 49 YEARS, R/AT NO.374, 9^TH MAIN ROAD, OPP: GOVT. PRIMARY SCHOOL, VIJAYANAGAR, BANGALORE – 90. ... PETITIONER (BY SRI. JAYAPRAKASH SHETTY B., ADVOCATE)

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AND:

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STATE OF KARNATAKA Digitally signed by MAHALAKSHMI B M REP. BY ITS PRINCIPAL SECRETARY Location: HIGH DEPARTMENT OF CO-OPERATION COURT OF KARNATAKA M.S. BUILDING, DR. AMBEDKAR VEEDHI, BENGALURU – 560 001.

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JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES SOUHARDA CO-OPERATIVE ARBITRATION COURT KARNATAKA STATE SOUHARDA FEDERAL CO-OPERATIVE LTD., SOUHARDA SAHAKARA SOUDHA 17^TH & 18^TH MAIN ROAD, 18^TH CROSS MAIN ROAD, MALLESHWARAM, BENGALURU – 560 055.

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V. MANAMOHAN

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S/O. LATE VIJAYENDRA RAO AGED ABOUT 76 YEARS, R/AT NO.G -4, S/M/R DEVAMUKHA APART, 9^TH MAIN, VIJAYA BANK LAYOUT, BILEKAHALLI, BANGALORE – 560 076.

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M. ANUPAMA D/O. V. MANAMOHAN, AGE ABOUT 46 YEARS, R/AT NO.70 C -1, 2^ND MAIN DOLLARS COLONY, J.P. NAGAR 45^TH PHASE, BANGALORE – 78.

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C.N. DHARANISH S/O. C.S. NARASIMHAIAH, AGED ABOUT 50 YEARS, SON-IN-LAW OF V MANAMOHAN R/AT NO.70 C- 1, 2^ND MAIN DOLLARS, J.P. NAGAR 45^TH PHASE, BANGALORE – 78.

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SIRIVAIBHAVA SOUHARDA PATTINA SAHAKARI NIYAMITA NO.18/19, 1^ST FLOOR, MUNIRAMASWAMY BUILDING, OPP. MASALA HOTEL, UTTARAHALLI MAIN ROAD, CHIKKALASANDRA, BANGALORE – 560 061.

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THE PRESIDENT- SMT. NAGAVALLI V.R. W/O. V.R. RAJESH, AGED ABOUT 47 YEARS, SRIVAIBHAVA SOUHARDA PATTINA SAHAKARI NIYAMITA, NO.18/19, 1^ST FLOOR, MUNIRAMASWAMY BUILDING, OPP. MASALA HOTEL, UTTARAHALLI MAIN ROAD,

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CHIKKALASANDRA, BANGALORE – 560 061.

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THE CEO- SRI RAJESH V.R. S/O. V. RAMAMURTHY AGED ABOUT 50 YEARS, SRIVAIBHAVA SOUHARDA PATTINA SAHAKARI NIYAMITA, NO.18/19, 1^ST FLOOR, MUNIRAMASWAMY BUILDING, OPP: MASALA HOTEL, UTTARAHALLI MAIN ROAD, CHIKKALASANDRA BANGALORE – 560 061. ... RESPONDENTS

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(BY SRI YOGESH D. NAIK, AGA FOR R-1 & R-2; SRI C.N. DHARNISH, ADVOCATE FOR R-3, SRI ADITYA CHATTERJEE, ADVOCATE FOR R-4 & R-5)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR THE RECORDS WHICH ULTIMATELY RESULTED IN PASSING THE IMPUGNED ORDER PASSED IN DISPUTE-NO. DRD/KAM.RAA.SAM.SA.NI/658/2022-23 DATED 27.03.2023 BY THE R-2 ANNEXURE-E; QUASH IMPUGNED ORDER PASSED IN DISPUTE-NO.DRD/KAM.RAA.SAM.SA.NI/658/2022-23 DATED 27.03.2023 BY THE R-2 ANNEXURE-E; DECLARE THAT THE DISPUTE RAISED UNDER SEC 39 OF THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 BY THE R-3 TO 5, IS ILLEGAL, WITHOUT JURISDICTION.

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

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CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA

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ORAL ORDER

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The petitioner challenges the order passed by the Joint Registrar of Co-operative Society -respondent No.2 in dispute No.JRD/8:932/658/2022-23 dated 27.03.2023 on the ground of jurisdiction, legality and for violation of principles of natural justice.

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Heard the learned counsel for the petitioner and

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learned counsel appearing for respondent Nos.3, 4 and 5.

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The respondent Nos.3 to 5 filed a complaint under Section 39 of the Karnataka Souharda Sanyuktha Sahakari Act, 1997 (‘ KSS Act 1997 ’ for short) against the petitioner and 15 others including respondent Nos.6 to 8 seeking recovery of the amount due to respondent Nos.3 to 5 to the tune of Rs.39,08,026/- individually and collectively and to seize and recover the movable and the immovable assets of the petitioner and 15 other respondents including respondent Nos.6 to 8. The respondent No.2 by the impugned order jointly directed

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the petitioner and the other respondents to pay a sum of

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Rs.42,92,464/- with interest at the rate of 12%.

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In the proceedings before the respondent No.2, notice was issued to the petitioner, which was returned ‘unclaimed’ and hence, the notice to the petitioner was held sufficient.

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On consideration of the material on record, the award was passed by respondent No.2 directing the petitioner along with Srivaibhava Souharda Patina Sahakari Niyamita ( ‘Society’ for short) and other board members having found guilty, jointly and severally liable for Rs.42,92,464/- along with interest at the rate of 12% per annum.

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Learned counsel for the petitioner submits that the proper remedy for such claim lies before the Karnataka Protection of Interest of Depositors in the Financial Establishment Act, 2004 (KPIDFE, Act) and not under the KSS Act, 1997 as approached by respondent Nos.3 to 5

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since, respondent Nos.3 to 5 are not the secured creditors or members of the respondent No.6 – Society. It is further submitted that the petitioner was not properly served with the notice for the dispute proceedings as the notice was returned undelivered and there was no attempt made by the respondent Nos.3 to 5 to serve the petitioner at his correct address and hence, the principles of natural justice have been violated. Further, it is stated that respondent Nos.3 to 5 have filed an execution petition for attachment of the petitioner’s property based on the impugned order as the decree is null and void due to lack of jurisdiction, the impugned order and execution is not sustainable.

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Per contra, learned counsel appearing for respondent Nos.3 to 5 by way of preliminary objection submits that the writ petition is not maintainable as there is an alternative and equally efficacious remedy available to the petitioner by invoking Section 46 of the KSS Act, 1997 and the present writ petition under Article 226 of the Constitution of India is not maintainable and all the

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contentions including the applicability of the statute can be raised before the appellate authority. Learned counsel further submits that respondent Nos.3 to 5 had filed execution proceedings against all the judgment debtors including the petitioner who was arrayed as judgment debtor No.13 and the petitioner having entered appearance before the executing court filed objections and the objections raised by the petitioner has been outrightly rejected by the executing court specifically observing that the impugned award having passed exparte against the petitioner and the award has remained unchallenged.

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That the petitioner is blatantly attempting to circumvent these conditions under appeal through this writ petition what the petitioner could not do directly and he cannot be permitted to do indirectly. It is submitted that the pre-requisite for an appeal to be heard under Section 46 of the KSS Act, 1997 is that 25% of the amount due under the award must be deposited and an appeal against

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the impugned award in the guise of a writ petition is not maintainable.

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That the impugned award has attained finality

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way back in the year 2023 and the award has remained unchallenged. It is stated that the petitioner has suppressed the material facts about the past litigation related to the dispute and hence, the present writ petition has to be dismissed on the said ground itself for suppression of material facts. In support of his contention, learned counsel has placed reliance on the following decisions:

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1. K.JAYARAM AND ORS. VS. BANGALORE DEVELOPMENT AUTHORITY AND ORS.¹ (K.JAYARAM)

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2. PANDYA MANISHANKER DHANJIBHAI AND ORS. VS. STATE OF GUJARAT AND ORS.² (PANDYA MANISHANKER DHANJIBHAI)

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3. CENTRAL BANK OF INDIA VS. STATE OF KERALA.³ (CENTRAL BANK OF INDIA)

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1 (2022) 12 SCC 815

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2 2021 SCC ONLINE GUJ 543

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4. UNION OF INDIA VS. GM KOKIL.⁴ (UNION

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OF INDIA)

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5. ORIENT PAPER AND INDUSTRIES LTD AND

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ANOTHER VS. STATE OF ORISSA AND OTHERS.⁵ (ORIENT PAPER AND INDSUTRIES LTD)

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6. CICILY KALLARACKAL VS. VEHICLE

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FACTORY.⁶ (CICILY KALLARACKAL)

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Learned counsel for respondent No.3 adopts the

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submissions made by learned counsel for respondent Nos.4 and 5.

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Having heard the learned counsel for the

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parties, the point that arises for consideration is,

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(i) Whether the exparte order passed under Section 41 of KSS Act, 1997 is justifiable?

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3 (2009) 4 SCC 94

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4 1984 (SUPP) SCC 196

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5 1991 SUPP (1) SCC 81

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6 (2012) 8 SCC 524

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(ii) Whether the present writ petition is maintainable in the present facts and circumstances of this case?

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Re: Both the points are taken up together to avoid

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repetition of facts.

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The award being passed under Section 41 of the KSS Act, 1997, the remedy available to the petitioner is by filing an appeal under Section 46 of the KSS Act, 1997 including the ground raised regarding the applicability of the statue. The Apex Court in the case of CICILY KALLARACKAL stated supra has held at para 4 and 9 as under:

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4. Despite this, we cannot help but state in absolute terms that it is not appropriate for the High Courts to entertain writ petitions under Article 226 of the Constitution of India against eth orders passed by the Commission, as a statutory appeal is provided and lies to this court under the provisions of the Consumer Protection Act, 1986. Once the legislature has provided for a statutory appeal to a higher court, it cannot be proper exercise of jurisdiction to permit the parties to bypass the statutory appeal to such higher court and entertain

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petitions in exercise of its powers under Article 226 of the Constitution of India. Even in the present case, the High Court has not exercised its jurisdiction in accordance with law. The case is one of improper exercise of jurisdiction. It is not expected of us to deal with this issue at any greater length as we are dismissing this petition on other grounds.

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9 . While declining to interfere in the present special leave petition preferred against the order passed by the High Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India, we hereby make it clear that the orders of the Commission are incapable of being questioned under the writ jurisdiction of the High Court, as a statutory appeal in terms of Section 27-A(1)(c) lies to this Court. Therefore, we have no hesitation in issuing a direction of caution that it will not be a proper exercise of jurisdiction by the High Courts to entertain writ petitions against such orders of the Commission.

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Emphasis supplied 13. Statutory appeal in terms of Section 46 is provided under the KSS Act, 1997, there being an alternative efficacious remedy provided, it is not open for the petitioner to invoke jurisdiction under Article 226 of

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the Constitution and the present writ petition is not maintainable, including the question regarding the maintainability of the dispute under Section 39 of the KSS

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Act, 1997 by respondent Nos.3 to 5 was within the jurisdiction of respondent No.2, and points framed for consideration are answered accordingly and for the foregoing reasons, the following:

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O R D E R

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(i) The writ petition is dismissed as not maintainable.

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(ii) Liberty is reserved to approach the appropriate authority in accordance with law, if so advised.

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(iii) All the contentions are kept open.

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(iii) It is made clear that this court has not expressed the merits or demerits of the case, other than the maintainability of the claim under the KSS Act,1997.

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Sd/-

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________________________ JUSTICE K.S. HEMALEKHA

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SS

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List No.: 1 Sl No.: 23

Mr Sridhar B S v. State of Karnataka

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Mr Sridhar B S v. State of Karnataka

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