Bheemanakone Prathamika Sahakari Krishi and Gramina Abiruddi Bank Niyamitha Vs Hon'Ble Minister of Co-Operation

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1 - NC: 2025:KHC:725 WP No. 4830 of 2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 8^TH DAY OF JANUARY, 2025 BEFORE

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THE HON'BLE MRS JUSTICE K.S. HEMALEKHA

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WRIT PETITION NO.4830 OF 2022 (CS-RES)

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BETWEEN:

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BHEEMANAKONE PRATHAMIKA SAHAKARI KRISHI AND GRAMINA ABIRUDDI BANK NIYAMITHA REPRESENTED BY ITS MANAGER SRI BHARATH KUMAR M.H. BHEEMANKONE, SAGAR TALUK, SHIVAMOGGA DISTRICT – 577 417. ... PETITIONER

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(BY SRI HARISH KUMAR M.S., ADVOCATE)

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AND:

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Digitally signed by YAMUNA K L Location: HIGH COURT OF KARNATAKA

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HON’BLE MINISTER OF CO-OPERATION GOVERNMENT OF KARNATAKA DEPARTMENT OF CO-OPERATIVE VIKASA SOUDHA, DR. B.R. AMBEDKAR VEEDHI, BENGALURU – 560 001.

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GOVERNMENT OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY DEPARTMENT OF CO-OPERATIVE VIKASA SOUDHA, DR. B.R. AMBEDKAR VEEDHI, BENGALURU – 560 001.

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JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES BANGALORE REGION, BANGALORE ‘SAHAKARA SOUDHA’, 8^TH CROSS, MALLESHWARAM, BANGALORE – 560 003.

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THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES SHIVAMOGGA DISTRICT, SHIVAMOGGA

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NC: 2025:KHC:725 WP No. 4830 of 2022

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SAVALANGA ROAD, SHIVAMOGGA – 577 201.

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SRI B.V. SRINIVAS

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SENIOR INSPECTOR AND ENQUIRY OFFICER DEPARTMENT OF CO-OPERATIVE SOCIETIES OFFICE OF DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, SHIVAMOGGA DISTRICT, SAVALANGA ROAD, SHIVAMOGGA – 577 201.

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(AS PER THE COURT ORDER DATED 21/03/2022 THE R-5 HAS BEEN DELETED)

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SRI M.K. THIMMAPPA S/O. KRISHNAPPA AGED ABOUT YEARS, R/O. MAVINASARA, SAGAR TALUK, SHIVAMOGGA DISTRICT- 577 401. ... RESPONDENTS

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(BY SRI SIDHARTH BABURAO, AGA FOR R-1 TO R-4; V/O. DATED 21/03/2022 R-5 IS DELETED; SRI S.R. HEGDE HUDLAMANE, ADVOCATE FOR R-6)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER OF THE RESPONDENT NO.1-HON’BLE MINISTER FOR CO-OPERATION, GOVERNMENT OF KARNATAKA IN CO:05:CAP:2016 DATED 25.01.2022 VIDE ANNEXURE-G REVERSING THE ORDER PASSED BY THE RESPONDENT NO.3 IN APPEAL NO.JRB/APPEAL/08/2014-15 DATED 05.02.2016 VIDE ANNEXURE-F AND THE RESPONDENT NO.4 IN DRS/SECTION.64/CR23/2014-15/569 DATED 16.06.2014 VIDE ANNEXURE-C.

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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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3 - NC: 2025:KHC:725 WP No. 4830 of 2022

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ORAL ORDER

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Knocking the doors of this Court the Bheemanakone Prathamika Sahakari Krishi and Gramina Abivruddi Bank Niyamitha (hereinafter referred to as ‘Bank’ for short) is before this Court in this writ petition assailing the order passed by respondent No.1-Minister of Co-Operation, Government of Karnataka dated 25.01.2022 reversing the order passed by respondent No.3-Joint Registrar of Co-operative Societies (JRCS) dated 05.02.2016 and the order passed by respondent No.4-Deputy Registrar of the Co-operative Societies (DRCS) dated 16.06.2014.

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Heard the learned counsel for the petitioner and

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learned counsel for the respondents.

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Learned counsel for the petitioner submits that respondent No.1 is not the Competent Authority under Section 108 of the Karnataka Co-Operative Societies Act, 1959 (‘the KCS Act’ for short) to hear the revision. Respondent No.1 has erroneously exercised its power and set aside the orders passed by respondent Nos.3 and 4,

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when the fact remains that the Principal Secretary of the Department of Co-Operation is the Competent Authority. That the impugned order is passed without affording an opportunity of hearing to the petitioner to put forth his case, therefore, the impugned order is unsustainable.

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Per contra, learned counsel for the respondents

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reiterating the grounds urged in the statement of objections submits that remanding the matter on a technical ground that the petitioner is not heard before respondent No.1 is nothing but a futile exercise to harass and humiliate the respondents.

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5. Having heard the learned counsel on both sides,

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the question that falls for consideration is:

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“Whether in the given situation there exists a legal issue involving the violation of principles of natural justice?”

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The brief facts which need to be narrated here

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for adjudication of this petition are;

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The petitioner is a Co-Operative Society incorporated under the provisions of the KCS Act, 1959. A complaint came to be lodged by one C N Lakshminarayana in the year 2013 about the misappropriation of the loan amount by respondent No.6, the concerned authority, after holding an enquiry to verify the loan sanctioned by the management for the period of 2007 to 2009 under the “Self Business Scheme” of the bank, noticed that a sum of Rs.85 to Rs.88 lakhs loan granted under the scheme has not been returned as on 28.02.2013.

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The Deputy Registrar of Co-Operative Societies,

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Shivamogga, exercising its power under Section 64 of the KCS Act, 1959, ordered for enquiry by appointing an Enquiry Officer. The Enquiry Officer has conducted an enquiry and arrived at a conclusion that all the charges levelled against respondent No.6-Ex-President and others were proved and recommended for initiation of recovery proceedings and as well as for the initiation of the criminal

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proceedings against respondent No.6 and one Vasanth P.

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Kalingarao.

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This being so, respondent No.4-DRCS, on receipt of the report from the Enquiry Officer and noticing the violation committed, directed the petitioner and the Manager of the petitioner-Bank to rectify the defect and to submit the compliance report. The DRCS also permitted the petitioner-Bank to file the criminal case against respondent No.6 and Vasanth P. Kalingarao.

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As the fact stood thus, respondent No.6, aggrieved by the order passed by respondent No.4-DRCS, filed the appeal under Section 106 of the KCS Act, 1959 before the JRCS. The appeal was heard by the Appellate Authority and on contest, the appeal was dismissed. Being dissatisfied with the order passed by the JRCS, respondent No.6 preferred the revision before the State Government-respondent No.1 under Section 108 of KCS Act, 1959. The revision petition was allowed by respondent No.1 and held that respondent No.6 is not

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NC: 2025:KHC:725 WP No. 4830 of 2022

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responsible for the illegal distribution of the loan amount and set aside the order of the Appellate Authority and the original Authority and also the report submitted by the Enquiry Officer under Section 64 of the KCS Act, 1959.

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As stated supra, the grievance of the petitioner is that the impugned order is passed without jurisdiction

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and without hearing the petitioner and is in violation of principles of natural justice and draws attention of this Court to the proceedings conducted by respondent No.1. The material on record, more particularly, the order sheet of respondent No.1 indicates that on 27.01.2021, the matter was taken up by respondent No.1 and the petitioner was arrayed as respondent No.3, the petitioner who was arrayed as respondent No.3 was present and the matter stood adjourned to 18.02.2021 to be called at 3.00 p.m. The matter was called on 18.02.2021 at 3.00 p.m., it was noted that on the said date, respondent No.3petitioner herein was remained absent and last opportunity was accorded to the petitioner to submit his

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say and the matter stood adjourned to 10.03.2021 to be called at 3.00 p.m. On the said date, i.e., 10.03.2021, there was no sitting and the matter was adjourned to 07.04.2021. On 07.04.2021, there was no sitting and it was adjourned to 05.05.2021 to be called at 3.00 p.m. The order sheet indicates that the matter was not listed on 05.05.2021 but was called on 03.12.2021. On 03.12.2021, the matter was adjourned to 06.01.2022. On 06.01.2022, the matter was not called out again and the matter was called on 25.0.1.2022, on which day, the revision petition was allowed.

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The perusal of the order sheet indicates that the petitioner was not afforded an opportunity, the impugned order at Annexure-G was passed without issuance of notice as to the next date of hearing and proceeded to pass the impugned order. The Principle of “a udi alteram partem” (hear the other side) is the cornerstone of natural justice. Respondent No.1 passed the impugned order

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without hearing the petitioner violating the principles of natural justice.

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“Right of Audience” refers to a remedy or a legal recourse and is a legal term which is available to the party. The DRCS and the JRCS upheld the findings recorded by the Enquiry Officer under Section 64 of the KCS Act, 1959 against respondent No.6 and others. The State Government-respondent No.1 decision to set aside these orders is without providing adequate reasons and without hearing the society, which this Court stands for judicial scrutiny. The procedural fairness is necessary and to uphold the integrity of the Governance system, making this Court to interfere and set aside the order passed by respondent No.1 and remitting the matter back to respondent No.1 for fresh consideration in accordance with law.

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For the foregoing reasons, this Court pass the following:

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ORDER

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i. The writ petition is allowed .

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ii. The impugned order passed by respondent No.1 is set aside , matter is remitted back to respondent No.1 for fresh consideration in accordance with law including to consider the maintainability of the revision petition before respondent No.1.

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iii. Parties to appear on 27/01/2025 , respondent No.1 to pass appropriate order after affording sufficient and reasonable opportunity to the petitioner and respondent No.6.

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iv. All the contentions of the parties are kept open to be urged before respondent No.1.

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v. This Court has not expressed the merits and demerits of the case and any observation made is only to the extent of consideration of this writ petition.

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Sd/-

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MBM/List No.: 1 Sl No.: 31

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________________________ JUSTICE K.S. HEMALEKHA

Bheemanakone Prathamika Sahakari Krishi and Gramina Abiruddi Bank Niyamitha v. Hon'Ble Minister of Co-Operation

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Bheemanakone Prathamika Sahakari Krishi and Gramina Abiruddi Bank Niyamitha v. Hon'Ble Minister of Co-Operation

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