Karnataka High Court
Nathashree Urban Co-Operative ... vs The Assistant Registrar Of on 13 December, 2023
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WP No. 104322 of 2017
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 13TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE
WRIT PETITION NO. 104322 OF 2017 (CS-RES)
BETWEEN:
NATHASHREE URBAN CO-OPERATIVE SOCIETIES LTD,
NIPANI, TQ: CHIKKODI, DIST: BELAGAVI,
REPRESENTED BY ITS SECRETARY,
SRI. MAHADEV S/O. LAXMAN JADAV,
AGE: 48 YEARS.
...PETITIONER
(BY SRI. SHIVARAJ P. MUDHOL, ADVOCATE)
AND:
1. THE ASSISTANT REGISTRAR OF CO-OPERATIVE
SOCIETY CHIKODI, SUB-DIVISION CHIKODI,
TALUK: CHIKODI, DISTRICT: BELAGAVI.
2. SAMBAJI S/O. RUPAJI GAIKWAD
AGE: 41 YEARS, OCC: AGRICULTURE,
R/O: YARANAL, TQ: CHIKODI, DIST: BELAGAVI.
...RESPONDENTS
MOHANKUMAR
B SHELAR (BY SMT. KIRTILATA R. PATIL, HCGP FOR RESP. NO.1,
SRI. MRUTYUNJAYA TATA BANGI, ADV. FOR RESP. NO.2)
Digitally signed by
MOHANKUMAR B
SHELAR THIS WRIT PETITION IS FILED UNDER ARTICLES 226
Date: 2023.12.14
15:38:28 +0530
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
ISSUE WRIT IN THE NATURE OF CERTIORARI TO QUASH THE
IMPUGNED JUDGMENT AND ORDER DATED 11.04.2016 IN APPEAL
NO.469/2013 PASSED BY THE KARNATAKA APPELLATE TRIBUNAL
BENGALURU VIDE ANNEXURE-B BY ALLOWING THIS WRIT PETITION.
THIS PETITION, COMING ON FOR FURTHER HEARING, THIS
DAY, THE COURT MADE THE FOLLOWING:
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WP No. 104322 of 2017
ORDER
1. Heard the learned counsel appearing for the
petitioner, the learned Government Advocate appearing
for respondent No.1 as well as the learned counsel
appearing for respondent No.2.
2. The petitioner is assailing the order dated
11.04.2019 passed by the Karnataka Appellate Tribunal in
Appeal No.469/2013. The said appeal is filed by the 2nd
respondent of this petition. The appeal is filed questioning
the award passed by the Assistant Registrar under Section
70 of the Karnataka Cooperative Societies Act, 1960 ('the
Act', for short), which is marked at Annexure-A. In terms
of the said award, liability to pay Rs.4,54,186.42 along
with interest at 18% per annum from 03.09.2007, till date
of payment, is passed against the 2nd respondent.
3. The basis for the petitioner-Society invoking
Section 70 of the Act is an order under Section 68 of the
Act. In the said order, after an enquiry under Section 64,
liability is fixed against the 2nd respondent to pay the
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aforementioned amount. Section 68 order further says
that since the action is not initiated against the 2nd
respondent by the Directors of the Society at the relevant
point of time, hence, the directors are also liable to
reimburse the amount.
4. Placing reliance on the aforementioned
observation, the award passed by the Arbitrator is set
aside and the petitioner Society is directed to raise fresh
dispute under Section 70 of the Act by impleading all the
directors.
5. Aggrieved by the aforementioned order, the
petitioner-Society is before this Court.
6. Sri.Shivaraj P. Mudhol, the learned counsel
appearing for the petitioner would contend that the order
of the Appellate Tribunal is erroneous inasmuch as the
award passed against the 2nd respondent, which is passed
on a finding under Section 64 enquiry and an order under
Section 68 of the Act, which has attained finality. Thus, he
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would contend that the order against the 2nd respondent
could not have been set aside.
7. Sri.Mrutyunjaya Tata Bangi, the learned counsel
appearing for the 2nd respondent would contend that since
the order under Section 68 of the Act also makes
reference to the liability of the Directors of the Society at
relevant point of time, the Tribunal is justified in allowing
the appeal.
8. This Court has considered the contentions
raised at the bar.
9. Since, the recovery proceeding initiated by the
petitioner-Society is pursuant to a finding under Section
64 enquiry and an order under Section 68 of the Act, the
doctrine of joint and several liability cannot be invoked.
The liability on the 2nd respondent is fixed and the said
order under Section 68 has attained finality. This being the
position, the Appellate Authority could not have found fault
with the action of the Society initiated under Section 70
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proceeding against the 2nd respondent. The action of the
petitioner-Society to proceed against the 2nd respondent,
does not render a proceeding initiated against the 2nd
respondent invalid merely against the Directors referred to
under Section 68 order are not impleaded in the
proceeding. The right to proceed against the Directors
referred to under Section 68 order is available to the
Society, subject to law of limitation, if any.
10. Under these circumstances, the impugned order
is set aside. The order of the arbitrator dated 11.04.2019
marked at Annexure-B, is restored. Writ petition is
allowed.
11. If action is not initiated and order under Section
68 is not complied by the Society, the Authorities under
the Act are at liberty to take such action against the
Society as advised in law.
Sd/-
JUDGE
