Karnataka High Court
Shashikala W/O. Shekharagouda Patil vs The Deputy Registrar on 24 November, 2021
Author: N.S.Sanjay Gowda
Bench: N.S.Sanjay Gowda
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 24th DAY OF NOVEMBER 2021
BEFORE
THE HON'BLE MR.JUSTICE N.S.SANJAY GOWDA
W.P.No.81532/2013 (CS-DAS)
C/W W.P.No.80079/2013
IN W.P.No.81532/2013:
BETWEEN
MALLIKARJUNAPPA S/O PARVATAPPA NOOLVI,
AGE: 59 YEARS, OCC: BUSINESS,
MUDAGAI STREET,GANGAVATHI-583277,
DIST: KOPPAL.
...PETITIONER
(BY SRI.MALLIKARJUNSWAMY B HIREMATH, ADV.)
AND
1. THE DEPUTY REGISTRAR,
OF CO-OPERATIVE SOCICTIES AND
DEPARTMENTA ARBITRATOR,
KOPPAL.
2. THE CHIEF MANAGER,
SRI.CHANNABASAVA SWAMY
SOUHARDHA PATTINA SAHAAKRI
BANK LTD., CBS COMPLEX,
GANGAVATHI-583277,
TQ: GANGAVATHI, DIST: KOPPAL.
3. MAHABALESHARA PATIL S/O SHIVANGOUDA PATIL,
AGE:MAJOR, OCC: EX-EMPLOYEE,
(MANAGER BANKING SECTION)
R/O.NEAR SRI KANNIKA
:2:
PARAMESHWARI TEMPLE
HIRE JANTAKAL, GANGAVATHI-583277,
DIST: KOPPAL.
4. SHEKARGOUDA S/O BHIMANAGOUDA,
SINCE DECEASED BY HIS LRS.
4A. SMT.SHASHIKALA W/O SHEKHARGOUDA PATIL
AGE ABOUT 48 YEARS,
R/O.SANTE BAYALU,
GANGAVATHI, TQ: GANGAVATHI
DIST: KOPPAL.
4B. SRI.BASAVARAJ S/O SHEKHARGOUDA PATIL
AGE ABOUT 38 YEARS,
R/O.SANTE BAYALU, GANGAVATHI,
TQ: GANGAVATHI DIST: KOPPAL.
4C. SRI.RAJASHEKAR S/O SHEKHARGOUDA PATIL
AGE ABOUT 36 YEARS,
R/O.SANTE BAYALU, GANGAVATHI,
TQ: GANGAVATHI DIST: KOPPAL.
4D. SRI.UMESH S/O SHEKHARGOUDA PATIL
AGE ABOUT 31 YEARS,
R/O.SANTE BAYALU, GANGAVATHI,
TQ: GANGAVATHI DIST: KOPPAL.
4E. MUTTURAJ S/O SHEKHARGOUD PATIL
AGE ABOUT 48 YEARS,
R/O.SANTE BAYALU, GANGAVATHI,
TQ: GANGAVATHI DIST: KOPPAL.
4F. SANDEEP S/O SHEKHARGOUDA PATIL
AGE ABOUT 48 YEARS,
R/O.SANTE BAYALU, GANGAVATHI,
TQ: GANGAVATHI DIST: KOPPAL.
...RESPONDENTS
(BY SRI.V S KALASURMATH, HCGP FOR R1;
SRI.S.S.BETURMATH, ADV. FOR R2;
R3, R4B, R4C & R4D ARE SERVED & UNREPRESENTED;
R4A, R4E & R4F-PETITION IS DISMISSED)
:3:
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH
THE IMPUGNED ORDER DTAED:23/05/2013 PASSED BY THE
1st RESPONDENT IN SOUHARDHA DISPUTE NO.1/2010-11 AT
ANNEXURE-G IN SO FAR AS PETITIONER IS CONCERNED.
IN W.P.No.80079/2013:
BETWEEN
1. SRI.SHASHIKALA W/O. SHEKHARAGOUDA PATIL
AGE: 48 YEARS, OCC:HOUSEHOLD WORK,
R/O. SANTE BAYALU, GANGAVATHI,
DIST: KOPPAL.
2. SRI.BASAVARAJ S/O. SHEKHARAGOUDA PATIL
AGE: 38 YEARS, OCC: BUSINESS,
R/O.ILAHI COLONY, GANGAVATHI,
DIST: KOPPAL.
3. SRI.RAJASHEKHAR S/O. SHEKHARAGOUDA PATIL
AGE: 36 YEARS, OCC: BUSINESS,
R/O.ILAHI COLONY, GANGAVATHI,
DIST: KOPPAL.
4. SRI.UMESH S/O. SHEKHARAGOUDA PATIL
AGE: 31 YEARS, OCC: BUSINESS,
R/O.ILAHI COLONY, GANGAVATHI,
DIST: KOPPAL.
5. MUTTURAJ S/O. SHEKHARAGOUDA PATIL
AGE: 21 YEARS, OCC: PRIVATE EMPLOYEE,
R/O.SANTE BAYALU,
GANGAVATHI, DIST: KOPPAL.
6. SANDEEP S/O. SHEKHARAGOUDA PATIL
AGE: 20 YEARS, OCC: STUDENT,
R/O.SANTE BAYALU, GANGAVATHI,
DIST: KOPPAL.
...PETITIONERS
:4:
(BY SRI.B SHARANABASAWA, ADV.)
AND
1. THE DEPUTY REGISTRAR
OF CO-OPERATIVE SOCIETIES
AND DEPARTMENTAL ARBITRATOR
KOPPAL,DIST: KOPPAL.
2. THE CHIEF MANAGER
SRI CHANNABASAVA SWAMY
SOUHARDHA PATTNA SAHAAKRI
BANK LTD., CBS COMPLEX,
GANGAVATHI, TQ: GANGAVATHI-583227
DIST: KOPPAL.
3. MAHABALESHARA PATIL
S/O.SHIVANAGOUDA PATIL
AGE:MAJOR, OCC: EX EMPLOYEE
(MANAGER BANKING SECTION)
R/O. NEAR SRI KANNIKA
PARAMESHWARI TEMPLE,
HIRE JANTAKAL, GANGAVATHI-583227
DIST:KOPPAL.
4. SRI.MALLIKARJUNAPPA S/O. PARVATAPPA NOOLVI
AGE: MAJOR, OCC: BUSINESS
MUDGAL STREET, GANGAVATHI-583227,
TQ: GANGAVATHI, DIST: KOPPAL.
....RESPONDENTS
(BY SRI.V.S.KALASURMATH, HCGP FOR R1;
SRI.S.S.BETURMATH, ADV. FOR R2;
NOTICE TO R3 & R4 SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH
THE IMPUGNED AWARD/ORDER DTD.23.05.2013, PASSED BY
THE 1ST RESPONDENT, IN SOUHARDHA DISPUTE,
NO.1/2010-11 VIDE ANNEXURE-J ONLY IN RESPECT OF THE
DECEASED SHEKHARAGOUDA PATIL AND THE PETITIONERS.
:5:
THESE PETITIONS COMING ON FOR PRELIMINARY
HEARING 'B GROUP', THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
1. In these writ petitions, an award passed by the Deputy Registrar in a proceeding under Section 39 of the Karnataka Souharda Sahakari Act, 1997 (hereinafter referred to as 'the Act') is called in question.
2. The 2nd respondent herein initiated proceedings under Section 39 of the Act against its employee-Mahabaleshwara Patil alleging that he had caused misappropriation of funds to the tune of Rs.49,22,254/- and the Society was entitled to recover the same.
3. In the said dispute, Shekharagouda Patil (the wife and father of the petitioners in Writ Petition No.80079/2013) and Mallikarjun Noolvi (petitioner in Writ Petition No.81532/2013) were arrayed as respondent Nos.2 and 3.
4. It was the case of the petitioners that at the time of securing employment, its employee Mahabaleshwara Patil had executed an indemnity bond and in the said indemnity bond :6: the said Shekharagouda Patil and Mallikarjun Noolvi had signed as guarantors.
5. It was the case of the Bank before the Deputy Register that virtue of being the guarantors to the employment of Mahabaleshwara Patil, they had become jointly and severally liable for the alleged misappropriation of funds by Mahabaleshwara Patil.
6. It is the specific contention of the petitioners herein that assuming that an indemnity bond was executed, the same could not be used by the Bank to recover any financial loss caused to the Bank for any alleged misappropriation by the employee. It is contended that the indemnity bond was fundamentally executed by the employee and in the indemnity bond there is no guarantee given by the petitioners and they have merely signed the same as witnesses, though it has been stated as "the name and address of the guarantors". It is contended that in the absence of any specific guarantee to make good any financial loss caused by any act of the employee, the Bank cannot proceed against the petitioners. :7:
7. It is also contended that the proceedings under Section 39 of the Act can be invoked only against the employee and since the petitioners are in no way relatable to the Bank and are not the employees, by any stretch of imagination, the entire proceeding against them was null and void.
8. Learned counsel for the 2nd respondent on the other hand contended that the Service Rules require the execution of the indemnity bond by the employee and since in the instant case such an indemnity bond had been executed and the petitioners had signed the same as guarantors, they would be liable.
9. Learned counsel contends that since they are guarantors, the dispute can be raised against them under Section 39 of the Act.
10. He also contended that the petitioners are required to challenge the order passed by the Deputy Registrar since there is a statutory appeal provided and this question of jurisdiction can also be raised in the appeal.
11. I have considered the submission of the learned counsel and also the materials placed on record.
:8:
12. Section 39 of the Act states which of the disputes can be referred to the Registrar for decision. Section 39(2) (d) of the Act reads as under:
"39.Disputes which may be referred to the Registrar for decision.-(1) Notwithstanding anything contained in any law for the time being in force, if any dispute, touching the constitution, management or the business of a Co-operative or the Federal Co-operative arises,-
(a) among members, past members and persons claiming through members, past members and deceased members; or
(b) between a member, past member or person claiming through a member, past member or deceased member and the Co-operative or the Federal Co-
operative, its board or any office bearer, agent or employee of the Co-operative or the Federal Co- operative; or
(c) between the Co-operative or the Federal Co- operative or its board and any past board, any office bearer, agent or employee, or any past office bearer, past agent or past employee, or the nominee, heirs or legal representatives of any deceased office bearer, deceased agent, or deceased employee of the Co- operative or the Federal Co-operative; or
(d) between the Co-operative or the Federal Co- operative and any other Co-operative or a credit agency, such dispute shall be referred to the Registrar for decision [1] [xxx] (2) For the purposes of subsection (1), the following shall be deemed to be disputes touching the constitution, management or the business of a Co- operative or Federal Co-operative, namely:- :9:
(a) a claim by the Co-operative or the Federal Co-
operative for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor where the Co-operative or the Federal Co-operative has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor, as a result of the default of the principal debtor whether such debt or demand be admitted or not;
(c) any dispute arising in connection with the election of a President or Chairperson, Vice-President or Vice Chairperson or director of the Co-operative or the Federal Co-operative.
(d) any dispute between a Co-operative or Federal Co- operative and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a Co-operative or Federal Co- operative, notwithstanding anything contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947);
(e) a claim by a Co-operative or Federal Co-operative for any deficiency caused in the assets of the Co- operative or Federal Co-operative by a member, past member, deceased member or deceased office bearer, past agent or deceased agent or by any servant, past servant or deceased servant or by its board, past or present whether such loss be admitted or not.
(3) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the constitution, management or the business of a Co-operative or the Federal Co- operative, the decision of the Registrar thereon shall be final and shall not be called in question in any court."
: 10 :
13. As could be seen from the said provision, any dispute between a co-operative and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action, can be referred to the Registrar for a decision.
14. It is also clear from the above that it is only an inter-se dispute between a co-operative and its employee, which can be the subject matter of the dispute under Section 39 of the Act. It therefore follows that persons who are not employees of co-operative, cannot be made amenable to the decision rendered by the Registrar under Section 39 of the Act.
15. Leaned counsel for the petitioners is therefore justified in contending that the entire proceedings initiated against them, was one without jurisdiction.
16. As far as the contention of the 2nd respondent regarding the alternative remedy in filing an appeal is concerned, the question of jurisdiction which goes to the very root of the matter can be examined in a petition under Article 226 of the Constitution of India. If the proceedings initiated against the : 11 : petitioners are totally without jurisdiction, the petitioners would be entitled to invoke the remedy under Article 226 and they cannot be compelled to invoke the statutory remedy of appeal provided under the Act. It is also to be kept in mind that the statutory appeal has been provided in respect of a challenge to the merits of the decision and not to the very competence of the Register to render a decision. The competence of the Registrar to render a decision, being purely a jurisdictional issue, the same can be examined in a writ petition. In this view of the matter, the contention raised by the petitioners and the 2nd respondent is rejected.
17. As stated above, since the proceedings initiated against the petitioners herein are totally without jurisdiction, the same are set aside insofar as the petitioners are concerned.
18. The Bank would be at liberty to proceed against its employee on the basis of the order passed by the Registrar. It cannot however proceed against the petitioners herein on the basis of the award.
19. In Writ Petition No.80079/2013, it is brought to my notice that the 2ndrespondent before the Registrar was no : 12 : more when the matter was posted and therefore the award was a nullity. In the light of the fact that I have held that the Co-operative could not have initiated proceedings against the guarantors mentioned in the indemnity bond, this question has not been considered. These writ petitions are accordingly allowed.
Sd/-
JUDGE KGK