Karnataka High Court
Sri H Hanumaiah vs State Of Karnataka on 21 August, 2014
Author: B.S.Patil
Bench: B.S.Patil
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 21ST DAY OF AUGUST, 2014
BEFORE
THE HON'BLE MR.JUSTICE B.S.PATIL
W.P.No.53887/2013 (CS-RES)
BETWEEN
SRI H HANUMAIAH
S/O LATE HUNUMANTHAIAH
SINCE DECEASED BY L.Rs.
(a) CHIKKAMMA W/O LATE HANUMAIAH
AGED ABOUT 70 YEARS
(b) ANJANAPPA
S/O LATE HANUMAIAH
AGED ABOUT 38 YEAR
(c) HANUMANTHARAJU
S/O LATE HANUMAIAH
AGED ABOUT 35 YEARS
(d) ANAND KUMAR
S/O LATE HANUMAIAH
AGED ABOUT 33 YEARS
ALL ARE R/O ALUR VILLAGE,
DASANAPURA HOBLI
BANGALORE NORTH TALUK
... PETITIONERS
(By Sri.ARUN PATIL & Sri CHANDRAKANTH H R, ADVS.)
AND
1. STATE OF KARNATAKA
REP. BY ITS SECRETARY TO THE GOVERNMENT OF
COOPERATION
2
M.S. BUILDING
BANGALORE 01
2. THE ASSISTANT REGISTRAR OF COOPERATIVE SOCIETIES
I CIRCLE
CHAMARAJAPET
BANGALORE 18
3. THE SECRETARY
THE ALUR VYASAYA SEVE SAHAKARA BANK LIMITED
ALUR DASANAPURA HOBLI
BANGALORE NORTH TALUK
4. SRI RAMANJANAPPA H
S/O H. HANUMAHAH
MAJOR, ALUR VILLAGE
DASANAPURA HOBLI
BANGALORE NORTH TALUK
BANGALORE RURAL DISTRICT
... RESPONDENTS
(By Smt.S.SUSHEELA, AGA FOR R1 & 2,
R3- SERVED; R4- SERVICE H/S)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH & NOT TO
ENFORCE THE "FIDERLITY BOND" DT.17.1.1997 EXECUTED BY
THE R4, IN FAVOUR OF THE R3, SOCIETY,PRODUCED AT ANN-B.
THIS PETITION IS COMING ON FOR ORDERS THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
1. This writ petition is filed by late H. Hanumaiah. Challenge is laid to the Fidelity Bond dated 17.01.1997 executed by the 4th respondent - Ramanjanappa in favour of the 3rd respondent - Bank. Copy of the Fidelity Bond is produced at Annexure-B. Challenge is also laid to the award 3 dated 10.07.2003 passed by the Assistant Registrar of Co- operative Societies, I Circle, Chamarajpet - 2nd respondent herein vide Annexure-C holding that the 4th respondent - Ramanjanappa and his father - deceased petitioner herein were jointly and severally liable to pay a sum of Rs.4,72,863.33 along with interest being the amount said to have been misappropriated by the 4th respondent as an employee of the 3rd respondent - Bank. Petitioner has also challenged the order passed by the Karnataka Appellate Tribunal in appeal No.1326/2003 dated 29.10.2013 dismissing the appeal filed by the petitioner against the award passed by the 2nd respondent.
2. Facts which are not in dispute, stated in nutshell disclose that petitioner is the father of the 4th respondent. The 4th respondent was employed on temporary basis under the 3rd respondent - Bank initially as a clerk. He was assigned the duties of cashier and bill collector. To ensure his good conduct and to safeguard the interest of the 3rd respondent - Bank, he was called upon to furnish a Fidelity Bond. He agreed to reimburse the loss, if any to be caused to the 3rd respondent - Bank and authorized the Bank to proceed against the land bearing No.141 and 165 of Alur Village owned by his father to 4 the extent of his (4th respondent's) share apart from giving security deposit of Rs.40,000/-.
3. Allegations were made against the 4th respondent of having misappropriated the funds of the 3rd respondent -Bank. A dispute was raised. The 2nd respondent passed an award dated 10.07.2003 holding that an amount of Rs.4,72,863.33 was the amount payable by the 4th respondent. Deceased petitioner - Hanumaiah was also arrayed as party respondent to the dispute. The Assistant Registrar of Co-operative Societies fastened the liability on the petitioner (father) jointly and severally along with the 4th respondent directing that the properties owned and possessed by both of them can be proceeded against to recover the amount. The 4th respondent challenged the award by filing an appeal No.1047/2003. He did not pursue the same. The said appeal was dismissed as withdrawn. Father of the 4th respondent - deceased petitioner herein filed an appeal No.1326/2003 before the Tribunal challenging the award. The Tribunal has dismissed the appeal vide its order dated 29.10.2013. In this background, the present writ petition is filed seeking the aforementioned reliefs. 5
4. I have heard the learned counsel for the petitioner and the learned Additional Government Advocate.
5. As can be seen from the Fidelity Bond, what has been agreed is that the share of the 4th respondent in the properties could be proceeded against in case there was any misappropriation by the employee - 4th respondent. As the properties were undivided properties standing in the name of the father, he had also signed the indemnity bond / fidelity bond. Therefore, as rightly contended by the petitioner, the Assistant Registrar was not right and justified in fastening the liability jointly and severally on the 4th respondent along with deceased Hanumaiah. This is not a case of father executing a contract of guarantee for indemnifying the loss to be caused to the 3rd respondent on account of the anticipated acts of misconduct from his son - 4th respondent. Fidelity Bond makes it very clear that though the properties stood in the name of the father, insofar as the share of the son was concerned, the same could be proceeded against for recovering the loss that might be caused due to the misconduct and acts of misappropriation of the 4th respondent. Therefore, to this extent, award passed by the Assistant Registrar ordering that the 3rd respondent - Bank 6 can proceed against the properties of Hanumaiah cannot be sustained. The share of the 4th respondent in the properties which is the subject matter of attachment can only be proceeded against.
6. Contention of the learned counsel for the petitioner that the Fidelity Bond executed by the 4th respondent itself cannot be legally recognized and such a contract is void cannot be countenanced, particularly, at the instance of Hanumaiah. The Fidelity Bond has been executed by the 4th respondent - Ramanjanappa in respect of his share in the properties. Hanumaiah has signed the document because the property was standing in his name. Ramanjanappa himself had challenged the award but did not pursue the same. The appeal filed by him was dismissed as withdrawn. Therefore, it is not open for Hanumaiah or for that matter, his legal representatives who have now come on record to contend that Fidelity Bond itself was void and the same cannot be made basis for proceeding against the property of Ramanjanappa. Therefore, this contention cannot be accepted.
7. The Tribunal has committed an error in not noticing the fact that deceased petitioner's share in the property was not the 7 subject matter of Fidelity Bond and that it was only the share of Ramanjanappa which was the subject matter of the Fidelity Bond. Therefore, to this extent, award passed by the Assistant Registrar as affirmed by the Tribunal deserves to be modified.
8. Therefore, this writ petition is partly allowed. It is made clear that the 3rd respondent can proceed to recover the amount by proceeding against the share of Ramanjanappa - 4th respondent in the properties in question and also by proceeding against him in any other manner as recognized in law.
Sd/-
JUDGE VP