Karnataka High Court
Sri. Damodar V Shenoy vs The State Of Karnataka on 10 February, 2025
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NC: 2025:KHC:5939
WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MRS JUSTICE K.S. HEMALEKHA
WRIT PETITION NO. 35908 OF 2024 (CS-RES)
C/W
WRIT PETITION NO. 31823 OF 2024 (CS-RES)
WRIT PETITION NO. 35947 OF 2024 (CS-RES)
IN WP No. 35908/2024
BETWEEN:
1. SHANKAR DEVADIGA,
S/O. NANDAYYA DEVADIGA,
AGED ABOUT 57 YEARS,
R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
BYNDUR POST, UPPUNDA DISTRICT - 576 214.
2. SMT. DEVAMMA,
W/O NANDAYYA DEVAADIGA,
AGED ABOUT 47 YEARS,
Digitally signed by
MAHALAKSHMI B M R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
Location: HIGH BYNDUR POST, UPPUNDA DISTRICT - 576 214.
COURT OF
KARNATAKA ...PETITIONERS
(BY SRI. VASANTH RAJ, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA,
DEPARTMENT OF CO-OPERATION,
M.S BUILDING, DR. B.R AMBEDKAR VEEDHI,
BENGALURU - 560 001.
REPRESENTED BY ITS PRINCIPAL SECRETARY.
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WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
2. THE ASSISTANT REGISTRAR OF
CO-OPERATIVE SOCIETIES,
KUNDAPURA SUB-DIVISION,
KUNDAPURA TALUK,
UDUPI DISTRICT - 576 217.
3. SRI. DURGA GANESH CREDIT
CO-OPERATIVE SOCIETY LTD.,
UPPUNDA, BYNDUR TALUK,
UDUPI DISTRICT - 576 214.
REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER.
REGISTERED UNDER CO-OPERATIVE
SOCIETIES ACT 1956.
4. SRI. ASHOKA KOTARI,
S/O. LATE NARAYANA KOTARI,
AGED ABOUT 52 YEARS,
R/AT SHUBHASHREE, HUDAR HOUSE,
YADTHARE, BYNDUR - 576 214.
5. SMT. PRATHIMA SHENOY
W/O. RAGHUVEER SHYANUBOG,
AGED ABOUT 54 YEARS,
R/AT SHRI SHANTA VIJAYA NILAYA,
AMBABAGILU POST, UPPUNDA - 576 214.
6. SHRI. CHANDRASHEKAR B,
S/O. NANDAYYA DEVAADIGA,
AGED ABOUT 48 YEARS,
R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
BYNDUR POST, UPPUNDA DISTRICT - 576 214.
7. SRI. DAMODAR V. SHENOY
S/O. LATE K. VITTALDAS SHENOY,
AGED ABOUT 74 YEARS,
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NC: 2025:KHC:5939
WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
R/AT UPPUNDA VILLAGE,
BYNDUR TALUK, UDUPI DISTRICT - 576 214.
8. SRI. B. SADASHIVA KOTARI,
S/O. B. BASAVA KOTARI,
AGED ABOUT 56 YEARS,
KOTARI HOUSE, YADTHARE,
BYNDUR - 576 214.
9. SRI. B. SADASHIVA KOTARI,
C/O ANNAYYA KOTARI,
AGED ABOUT 53 YEARS,
YADTHADI POST, SAIBARAKATTE - 576 214.
10. SHIVARAMA KOTARI,
S/O. LATE NARAYANA KOTARI,
AGED ABOUT 50 YEARS,
11. SMT.ARUN KOTARI
S/O. LATE NARAYANA KOTARI,
AGED ABOUT 48 YEARS,
12. RAJEEVI KOTARI,
D/O. LATE NARAYANA KOTARI,
AGED ABOUT 47 YEARS,
13. VISHALAKSHI KOTARI,
D/O. LATE NARAYANA KOTARI,
AGED ABOUT 45 YEARS,
RESPONDENT NO.10 TO 13 ARE
R/AT HUDAR HOUSE,
YADTHARE, BYNDUR - 576 214.
...RESPONDENTS
(BY SRI. YOGESH D. NAIK, AGA FOR R1 AND R2;
SRI. PURNACHANDRA M, ADVOCATE FOR
SMT. SARADA B.N, ADVOCATE FOR C/R3)
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NC: 2025:KHC:5939
WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER
DATED 17.09.2024 PASSED BY THE R2 IN SURCHARGE
PROCEEDINGS NO.02/2024 PRODUCED AT ANN-A AND ETC.
IN WP NO. 31823/2024
BETWEEN:
SRI. DAMODAR V. SHENOY
S/O LATE K. VITTALDAS SHENOY,
AGED ABOUT 74 YEARS,
R/AT UPPUNDA VILLAGE,
BYNDUR TALUK,
UDUPI DISTRICT - 576 214.
...PETITIONER
(BY SRI. VASANTH RAJ, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA,
DEPARTMENT OF CO-OPERATION,
M.S. BUILDING, DR. B.R. AMBEKDAR VEEDHI,
BENGALURU - 560 001.
REPRESENTED BY ITS PRINCIPAL SECRETARY.
2. THE ASSISTANT REGISTRAR OF
CO-OPERATIVE SOCIETIES,
KUNDAPURA SUB DIVISION,
KUNDAPURA TALUK,
UDUPI DISTRICT - 576 217.
3. SRI DURGA GANESH CREDIT
CO-OPERATIVE SOCIETY LTD.,
UPPUNDA, BYNDUR TALUK,
UDUPI DISTRICT - 576 214,
REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER.
(REGISTERED CO-OPERATIVE SOCIETY 1956)
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NC: 2025:KHC:5939
WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
4. SRI. ASHOKA KOTARI,
S/O LATE NARAYANA KOTARI,
AGED ABOUT 52 YEARS,
R/AT SHUBHASHREE HUDAR HOUSE,
YADTHARE, BYNDUR - 576 214.
5. SMT. PRATHIMA SHENOY,
W/O RAGHUVEER SHYANUBOG,
AGED ABOUT 54 YEARS,
R/AT SHRI SHANTA VIJAYA NILAYA,
AMBABAGILU POST, UPPUNDA - 576 214.
6. SHRI. CHANDRASHEKAR B,
S/O NANDAYYA DEVAADIGA
R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
BYNDUR POST, UPPUNDA DISTRICT - 576 214.
7. SHIVARAMA KOTARI
S/O LATE NARAYANA KOTARI,
AGED ABOUT 50 YEARS,
8. SMT. ARUN KOTARI
S/O LATE NARAYANA KOTARI,
AGED ABOUT 48 YEARS,
9. RAJEEVI KOTARI
D/O LATE NARAYANA KOTARI,
AGED ABOUT 47 YEARS,
10. VISHALAKSHI KOTARI
D/O LATE NARAYANA KOTARI,
AGED ABOUT 45 YEARS,
RESPONDENT NO.7 TO 10 ARE
R/AT HUDAR HOUSE,
YADTHARE, BYNDUR - 576 214.
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WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
11. SRI. B. SADASHIVA KOTARI,
S/O B BASAVA KOTARI,
AGED ABOUT 56 YEARS,
KOTARI HOUSE,
YADTHARE, BYNDUR - 576 214.
12. SRI. B. SADASHIVA KOTARI
C/O ANNAYYA KOTARI,
AGED ABOUT 53 YEARS,
YADTHADI POST,
SAIBARAKATTE - 576 214.
13. SMT. DEVAMMA,
W/O NANDAYYA DEVAADIGA,
AGED ABOUT 47 YEARS,
R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
BYNDUR POST, UPPUNDA DISTRICT - 576 214.
14. SHANKAR DEVADIGA
S/O NANDAYYA DEVAADIGA,
AGED ABOUT 47 YEARS,
R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
BYNDUR POST, UPPUNDA DISTRICT - 576 214.
...RESPONDENTS
(BY SRI. PURNACHANDRA M, ADVOCATE FOR C/R3;
SRI. YOGESH D. NAIK, AGA FOR R1 AND R2;
VIDE ORDER DATED 03.12.2024 NOTICE TO R4 TO R14
IS DEFERRED)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO DIRECTION BY
QUASHING THE ORDER DATED 17.09.2024 PASSED BY THE
2ND RESPONDENT IN SURCHARGE PROCEEDINGS
NO.02/2024-25, PRODUCED AT ANNEXURE-A AND ETC.
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NC: 2025:KHC:5939
WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
IN WP NO. 35947/2024
BETWEEN:
1. SHIVARAMA KOTARI,
S/O. LATE NARAYANA KOTARI,
AGED ABOUT 55 YEARS,
2. SMT. ARUN KOTARI,
S/O. LATE NARAYANA KOTARI,
AGED ABOUT 48 YEARS,
3. RAJEEVI KOTARI,
D/O. LATE NARAYANA KOTARI,
AGED ABOUT 47 YEARS,
4. VISHALAKSHI KOTARI,
D/O. LATE NARAYANA KOTARI,
AGED ABOUT 45 YEARS,
PETITIONER NO.1 TO 4 ARE
R/AT HUDAR HOUSE, YADTHARE,
BYNDUR - 576 214.
...PETITIONERS
(BY SRI. VASANTH RAJ, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA,
DEPARTMENT OF CO-OPERATION,
M.S. BUILDING, DR. B.R. AMBEDKAR VEEDHI,
BENGALURU - 560 001,
REPRESENTED BY ITS PRINCIPAL SECRETARY.
2. THE ASSISTANT REGISTRAR OF
CO-OPERATIVE SOCIETIES,
KUNDAPURA SUB-DIVISION,
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NC: 2025:KHC:5939
WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
KUNDAPURA TALUK, UDUPI DISTRICT - 576 217.
3. SRI. DURGA GANESH CREDIT
CO-OPERATIVE SOCIETY LTD.,
UPPUNDA, BYNDUR TALUK,
UDUPI DISTRICT - 576 214,
REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER,
REGISTERED UNDER CO-OPERATIVE
SOCIETIES ACT 1956.
4. SRI. ASHOKA KOTARI,
S/O. LATE NARAYANA KOTARI,
AGED ABOUT 52 YEARS,
R/AT SHUBHASHREE, HUDAR HOUSE,
YADTHARE, BYNDUR - 576 214.
5. SMT. PRATHIMA SHENOY,
W/O. RAGHUVEER SHYANUBOG,
AGED ABOUT 54 YEARS,
R/AT SHRI SHANTA VIJAYA NILAYA,
AMBABAGILU POST, UPPUNDA - 576 214.
6. SHRI. CHANDRASHEKAR. B
S/O. NANDAYYA DEVAADIGA,
R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
BYNDUR POST, UPPUNDA DISTRICT - 576 214.
7. SRI DAMODAR V SHENOY
S/O. LATE K. VITTALDAS SHENOY,
AGED ABOUT 74 YEARS,
R/AT UPPUNDA VILLAGE, BYNDUR TALUK,
UDUPI DISTRICT - 576 214.
8. SRI. B. SADASHIVA KOTARI,
S/O. B. BASAVA KOTARI,
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NC: 2025:KHC:5939
WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
AGED ABOUT 56 YEARS
KOTARI HOUSE, YADTHARE,
BYNDUR - 576 214.
9. SRI. B. SADASHIVA KOTARI,
C/O ANNAYYA KOTARI,
AGED ABOUT 53 YEARS,
YADTHADI POST, SAIBARAKATTE - 576 214.
10. SMT. DEVAMMA,
W/O NANDAYYA DEVAADIGA,
AGED ABOUT 47 YEARS,
R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
BYNDUR POST, UPPUNDA DISTRICT - 576 214.
11. SHANKAR DEVADIGA,
S/O. NANDAYYA DEVADIGA,
AGED ABOUT 47 YEARS,
R/AT BALEHITHLU, JUNIOR COLLEGE ROAD,
BYNDUR POST, UPPUNDA DISTRICT - 576 214.
...RESPONDENTS
(BY SRI. PURNACHANDRA M, ADVOCATE FOR
SMT. SARADA B.N, ADVOCATE FOR C/R3;
SRI. YOGESH D. NAIK, AGA FOR R1 AND R2;
VIDE ORDER DATED 31.12.2024, NOTICE TO R4 TO
R11 DISPENSED WITH)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO-DIRECT BY
QUASHING THE ORDER DATED 17.09.2024 PASSED BY THE
R-2 IN SURCHARGE PROCEEDINGS NO. 02/2024
PRODUCED AT ANNX-A AND ETC.
THESE PETITIONS, COMING ON FOR ORDERS, THIS DAY,
ORDER WAS MADE THEREIN AS UNDER:
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NC: 2025:KHC:5939
WP No. 35908 of 2024
C/W WP No. 31823 of 2024
WP No. 35947 of 2024
CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA
ORAL ORDER
1. The petitioners are questioning the order dated 17.09.2024 passed by respondent No.2 under Section 69 (2) of the Karnataka Co-operative Societies Act, 1959 (hereinafter referred to as "Act" for short) in surcharge proceedings No.2/2024.
2. Heard Sri. R. S. Ravi, learned Senior Counsel for the petitioners and Sri. Purnchandra M. learned counsel for Smt. Sarada B. N., learned counsel for respondent No.3.
3. Respondent No.3-Society initiated proceedings under section 69(1) of the Act against the petitioners and employees and sought to recover the amount of Rs.59,05,605/- along with interest on the ground that the employees of respondent No.3-Society during that term as employees have misused an amount of Rs.94,38,648/-, out of which Rs.63,66,203/- is recovered and an amount of Rs.59,05,605/- is yet due from the employees.
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4. It is the case of respondent No.3-Society that the petitioners and respondent Nos.7 to 13 in WP No.35908/2024, respondent Nos.7 to 14 in WP No.31823/2024 and respondent Nos.7 to 11 in WP No.35947/2024 have executed fidelity bond in favour of respondent No.3-Society at the time of recruitment of respondent Nos.4 to 6 as the employees to respondent No.3-Society, indicating that for any loss to the society in discharge of their duties, the persons would indemnify the loss caused to the society.
5. On contest respondent No.2 allowed the petition and directed the petitioners along with the employees, who had misappropriated the amount to make the good the loss made to respondent No.3-Society. Aggrieved by which, the petitioners are before this Court.
6. Learned Senior Counsel appearing for the petitioners vehemently submits that respondent No.2 has failed to notice that the proceedings under Section 69(1) of the Act cannot be initiated against the petitioners as
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NC: 2025:KHC:5939 WP No. 35908 of 2024 C/W WP No. 31823 of 2024 WP No. 35947 of 2024 Section 69(1) of the Act is very clear that it can be initiated against the persons or the Board of the management. The petitioners do not fall under any of the heads mentioned under Section 69(1) of the Act and as such, the proceedings against the petitioners are contrary to the provisions of the Act and the impugned order is liable to be set aside.
7. Learned AGA and learned counsel appearing for respondent No.3-Society would submit that the petitioners have an alternative efficacious remedy provided under Section 105(1) (f) of the Act, which clearly indicates that any order passed under Section 69(1) of the Act, the remedy available is to file an appeal before the appropriate authority. Learned counsels would submit that availability of an alternative efficacious remedy, the petitioners have not made out any exceptional circumstances for this Court to exercise the extraordinary jurisdiction under Article 226 of the Constitution of India.
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8. Learned Senior Counsel would submit that mere availability of alternative efficacious remedy does not bar the writ jurisdiction when the authority has not acted in accordance with the provisions of the law, or acted in defiance of fundamental principle of judicial procedure; or has resorted to invoke provisions, which are repealed; or where an order has been placed in violation of principles of natural justice. Learned Senior Counsel submits that the petitioners falls in the exceptional and the Rule of alternative remedy is not applicable and the writ Court has got jurisdiction as the proceedings are initiated against the petitioners not in accordance with the provisions of the Act and placed reliance on the decision of the Apex Court in the case of M/s Radha Krishana Industries vs. The State of Himachal Pradesh1 (M/s Radha Krishana Industries).
9. This Court has carefully considered the rival contention urged by the learned counsel for the parties 1 AIR 2021 SC 2114.
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NC: 2025:KHC:5939 WP No. 35908 of 2024 C/W WP No. 31823 of 2024 WP No. 35947 of 2024 and on hearing, the point that arises for consideration is "whether the writ Court has got jurisdiction in the present facts and circumstances in light of the alternative efficacious remedy provided under the Act."
10. The undisputed fact is that the petitioners stood as a guarantor and executed a fidelity bond in favour of respondent No.3-Society for the employees at the time of recruitment. The terms of the fidelity bond reads as under:
"Now this condition of the above written bond or obligation is such that is if the said Employee while in Employment whether in the original of in any promotion of transferred post under the said Employer or the surviver of or other person or persons for the time being constituting the Employer shall duly and faithfully devote to and execute, perform and discharge all the duties of his office without causing and injury, loss or damage by reason of any act, default, negligence or error in judgement to the employer or in the alternative if the said Employee and/or the surety of any act, default, negligence or error in judgement to the employer or in the alternative if the said employee and/or the surety of either of them shall from time to
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NC: 2025:KHC:5939 WP No. 35908 of 2024 C/W WP No. 31823 of 2024 WP No. 35947 of 2024 time and at all times hereafter indemnity and keep indemnified the said Employer against all loss, damage, costs, charges and expenses which he or they or any of them shall of may sustain by reason of any act, default misconduct, negligence, error in judgement, breach of duty, embezzlement and mismanagement on the part of the said employee, then and in such an event the above written bond shall stand void and cancelled and be of the effect, Otherwise the same shall remain in full force."
(Emphasis supplied)
11. The fidelity bond executed by the petitioners was to indemnify the loss, injury or damage for any reason of any act, default, negligence or error of an employee and the surety would indemnify the employer against all the loss, damages caused charges and expenses. The fidelity bond was executed at the time of the employment of the employees in respondent No.3-Society, the surcharge proceedings were initiated by respondent No.3-Society based on an audit report, which disclosed misappropriation of funds. The petitioners raised contention that the proceedings initiated against the petitioners was not
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NC: 2025:KHC:5939 WP No. 35908 of 2024 C/W WP No. 31823 of 2024 WP No. 35947 of 2024 maintainable as the petitioners do not come under any of the heads as indicated under Section 69(1) of the Act. The law is well settled that if an aggrieved person as an alternative efficacious remedy available in law, the petition under Article 226 of the constitution of India is not maintainable subject to the exceptional circumstances i.e.,
i) statutory authority has not acted in accordance with the provisions of the law;
ii) acted in defiance of the fundamental principles of judicial procedure or;
iii) resorted to invoke propositions which are repealed or where there has been an order passed in violation of the principles of natural justice.
12. The High Court would exercise the writ jurisdiction despite availability of alternative remedy are also well settled only when there is an exceptional case made out, the contention of the petitioners that the petitioners do not fall under any of the heads of Section 69(1) of the Act, this Court is of the considered view that
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NC: 2025:KHC:5939 WP No. 35908 of 2024 C/W WP No. 31823 of 2024 WP No. 35947 of 2024 the said contention is always open for the petitioners to be urged before the appropriate authority and the petitioners have not made out any exceptional cases and the judgment relied by the petitioners in the case of M/s Radha Krishana Industries is distinguishable and not applicable to the present facts. The proceedings initiated against the petitioners under Section 69(1) of the Act, provides for an alternative efficacious remedy and the petitioners having made out no exceptional ground to entertain this petition, and the point framed for consideration is answered accordingly and this Court pass the following:
ORDER i. The writ petitions are dismissed.
ii. It is needless to observe that the petitioners are at liberty to approach the Appellate Authority by filing an appeal under Section 105(1)(f) of the Act.
iii. It is made clear that this Court has not expressed the merits and demerits of the case.
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NC: 2025:KHC:5939 WP No. 35908 of 2024 C/W WP No. 31823 of 2024 WP No. 35947 of 2024 iv. In the event an appeal is preferred, time consumed by the petitioners before this Court to be considered by the Appellate Authority while considering the delay, and the Appellate Authority shall consider the appeal on merits without being influenced by any observations made in this writ petition.
v. All contentions of the parties are kept open.
Sd/-
_____________________ JUSTICE K.S. HEMALEKHA AT List No.: 1 Sl No.: 12 CT: BHK