Karnataka High Court
Shri. Sannamaktumshab M Nadaf vs The Assistant Registrar on 9 December, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2025:KHC-D:17686
WP No. 147833 of 2020
HC-KAR
IN THE HIGH COURT OF KARNATAKA,AT DHARWAD
DATED THIS THE 9TH DAY OF DECEMBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 147833 OF 2020 (CS-RES)
BETWEEN:
SHRI. SANNAMAKTUMSHAB M NADAF,
AGE: 66 YEARS, OCC: RETIRED,
R/O: ALAGAWADI, TQ: NAVALAGUND, DIST: DHARWAD.
...PETITIONER
(BY SRI. SHIVARAJ S. BALLOLI, ADVOCATE)
AND:
1. THE ASSISTANT REGISTRAR,
CO-OPERATIVE SOCIETIES, DHARWAD SUB-DIVISION,
DHARWAD AND DEPT OF PANCHAYATDARS,
DHARWAD 580 008.
2. THE PRIMARY AGRICULTURAL
CO-OPERATIVE SOCIETY NIYAMITA,
ALAGAWADI, R/BY CO-OPERATIVE DEVELOPMENTAL
OFFICER, NAVALAGUND - 582 208.
3. S. V. KORI,
SENIOR AUDITOR, CO-OPERATIVE SOCIETIES,
RAKESH HUBBALLI - 580 020.
S ...RESPONDENTS
HARIHAR (BY SMT. NANDINI SOMPAUR, AGA FOR R1;
Digitally signed
SRI. PRAKASH R. BADIGER, ADVOCATE FOR R2;
by RAKESH S R3 - SERVED)
HARIHAR
Date: 2025.12.11
16:39:24 +0530
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF
CERTIORARI FOR QUASHING THE COMPLAINT FILED UNDER SECTION
69 OF THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959 BY THE
SECOND RESPONDENT BEFORE THE FIRST RESPONDENT BEARING
NO.AR 15/ABN/ ADHIBAR/CR-/2020-21 VIDE 19.08.2020 VIDE
ANNEXURE-A AND ETC.,
THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING
B GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
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NC: 2025:KHC-D:17686
WP No. 147833 of 2020
HC-KAR
ORAL ORDER
(PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA)
1. The petitioner is before this Court seeking the following prayer.
I. To issue a writ of certiorari for quashing the complaint filed under section 69 of the Karnataka Co-operative Societies act, 1959 by the second respondent before the first respondent bearing no. AR 15/ABN/ ADHIBAR/CR-/2020-21 vide 19.08.2020 vide Annexure-A. II. To issue a writ of certiorari for quashing the impugned proceedings vide Annexure-A1 in no. ADHIBAR/application no.ar-15/adhibar/01/2020-21 pending before the first respondent. III. To issue a writ of certiorari for quashing the impugned audit report submitted by the third respondent dated 24.07.2020 vide Annexure-A2. IV. The Hon'ble Court may also be pleased to pass any other writ, order, direction etc in the above case to serve the ends of justice.
2. Heard the learned counsel Sri. Shivaraj S. Balloli appearing for the petitioner, the learned AGA Smt. Nandini Somapur for respondent No.1 and the learned counsel Sri. Prakash R. Badiger for respondent No.2.
3. The petitioner is said to have retired on attaining the age of superannuation on 31.05.2015. Long thereafter proceedings are instituted against the petitioner under Section 69 of the Karnataka Co-operative Societies Act, 1959 -3- NC: 2025:KHC-D:17686 WP No. 147833 of 2020 HC-KAR (hereinafter referred to as the Act for short). The petition is preferred on a slender score that Section 69 of the Act contemplates a notice to be issued or articles of charges to be served upon the person against whom Section 69 of the Act proceedings are instituted.
4. The learned counsel for the petitioner submits that the issue whether the articles of charge is to be issued or not in a surcharge proceedings is no longer res integra, as the Co- ordinate Bench of this court considers the said issue and has passed an order in W.P. No.28654 of 2018 disposed of on 15.09.2018.
5. The learned AGA though would seek to refute the submission, is not in a position to dispute the fact that there are no articles of charges issued against the petitioner and without the articles of charges being issued, no surcharge proceedings could have taken place.
6. In the light of the aforesaid circumstance, the only issue that falls for consideration is whether the petitioner Section 69 of the Act contemplates issuance of a show cause notice or -4- NC: 2025:KHC-D:17686 WP No. 147833 of 2020 HC-KAR the reply to be submitted to the show cause notice by the State. Section 69 of the Act reads as follows:
"[69. Surcharge.- (1) If in the course of an audit, inquiry, inspection or the winding up of a Co-operative society, it is found that the board of Management [including Government nominees and ex-officio members] of such society or the President, Vice-President, the Chairman, Vice-Chairman or any other member of the board of Management or any person who is or was entrusted with the organization or management of such co-operative society or who is or has at any time been an officer or an employee of a co-operative society has made any payment contrary to the Act, the rules or the bye- laws or has caused any deficiency in the assets of the co- operative society by breach of trust or [x x x] negligence or has misappropriated or fraudulently retained any money or other property belonging to 115 such Co- operative society, the Registrar may, of his own motion or on an application of the board, Liquidator or any creditor, frame charges against such person or persons and after giving such person and in the case of a deceased person, to his representative who inherits his estate, an opportunity of making representation, make an order requiring him to pay or restore the money or property or any part thereof with interest at such rate as he may determine or to contribute such sum to the assets of the co-operative society by way of compensation to such extent as he may consider just and equitable.
(2) This section shall apply, notwithstanding that the act is one for which the person concerned may be criminally liable.] [(3) The order made by the Registrar under sub-
section (1) may also provide for recovery of cost of surcharge proceeding from the person against whom the order is made at such rate and in such manner as may be prescribed.] [(4) The application under sub-section(1) shall be decided within a period of twelve months excluding the period of stay granted by the Court if any. However, the -5- NC: 2025:KHC-D:17686 WP No. 147833 of 2020 HC-KAR Registrar may for reasons to be recorded in writing extend the said period not exceeding eighteen months.] [Provided that the State Government shall, on a report made by the Registrar, may extend the period beyond eighteen months if it is satisfied that, there are genuine/valid grounds for such extension.]"
7. Section 69 of the Act ostensibly is based upon an audit report and a surcharge proceedings being instituted on the foundation of the said audit report. Therefore, the person against whom surcharge proceedings are instituted must necessarily be notified of such charge in the least. The Co-ordinate Bench considers the very issue and declines to accept the contention of the State that proceedings could be initiated without a show cause notice being issued. The Co-ordinate Bench is held as follows.
"5. It is contended by the learned counsel for the petitioner that the respondent erred in straight away initiating proceedings against the petitioner under Section 69 of the Act without following the proceedings as setout under the said provisions. He would contend that any person who has to be proceed under Section 69 of the Act requires to be put on notice and after obtaining explanation, the proceedings has to be initiated. In other words, he would submit that a Show Cause Notice is required to enable the parties to place the material in his defence. Hence, the impugned action is unsustainable and contrary to the very provisions of Section 69 of the Act.
6. Per contra, learned HCGP would contend that it is not in dispute that the petitioner was the Chief Executive Officer and that the irregularities have occurred under his supervision, though the two Branch Managers -6- NC: 2025:KHC-D:17686 WP No. 147833 of 2020 HC-KAR have been indicted and held responsible for the same. The petitioner having supervisory power and control over the sub-ordinates is also liable to be proceeded against them.
7. On a query from the Court, it is fairly admitted by the learned HCGP that no Articles of Charges nor any allegations of dereliction of duty has been levelled against the petitioner and no enquiry has been held to determine his culpability or to demonstrate the fact that he had abetted the two Branch Mangers. In the peculiar circumstances of the case, this Court is of the considered opinion that ends of justice would be served if the impugned proceedings is read down as a Show Cause Notice and petitioner be permitted to file his reply to the said Show Cause Notice.
8. Thereafter, respondent No.1 shall take a decision if the petitioner is a guilty of dereliction of duty or negligence and thereafter shall take a decision as to whether he could proceed further against the petitioner with the enquiry under Section 69 of the Act.
With the above observations, the petition stands disposed of. This order shall not construed as an order prohibiting the continuation of any proceedings as against the others.
The petitioner shall submit his reply to respondent No.1 within a period of four weeks from today."
(emphasis supplied)
8. In the light of the mandate of the statute and the interpretation of the said mandate by the Co-ordinate Bench, this Court need not delve deep into the matter, while it is an admitted fact that there is no show cause notice issued or -7- NC: 2025:KHC-D:17686 WP No. 147833 of 2020 HC-KAR articles of charge served upon the petitioner prior to initiation of surcharge proceedings under Section 69 of the Act.
9. In that light the petition deserves to succeed. For the aforesaid reasons, the following:
ORDER i. Writ Petition is allowed.
ii. The impugned complaint filed under Section 69 of the Karnataka Co-operative Societies Act, 1959 by the respondent No.1 before the Respondent No.1, the impugned proceedings vide Anenxure - A1 pending before the respondent No.1 and the impugned audit report submitted by the respondent No.3 dated 24.07.2020 stand quashed.
iii. This order shall not construe as an order prohibiting the continuation of any proceedings as against the others.
iv. The petitioner shall submit his reply to respondent No.1 within a period of four weeks from today.
All contentions left open.
Sd/-
(M.NAGAPRASANNA) JUDGE RSH/CT-ASC List No.: 1 Sl No.: 14