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Karnataka High Court
Daivajna Credit Cooperative Society ... vs The Joint Registrar Of Cooperative ... on 8 December, 2025
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WP No. 9178 of 2021
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8TH DAY OF DECEMBER, 2025
BEFORE
THE HON'BLE MRS. JUSTICE M G UMA
WRIT PETITION NO. 9178 OF 2021 (CS-RES)
BETWEEN:
1. DAIVAJNA CREDIT COOPERATIVE
SOCIETY LTD, NO.35, FIRST FLOOR
KILLARI ROAD, BENGALURU-560053
REPRESENTED BY ITS SECRETARY
SRI PRADEEP M
2. DAIVAJNA CREDIT COOPERATIVE
SOCIETY LTD, NO.35, FIRST FLOOR
KILLARI ROAD, BENGALURU-560053
REPRESENTED BY ITS PRESIDENT
SRI SUNIL Y REVANKAR
... PETITIONERS
(BY SRI. VENUGOPAL M.S., ADVOCATE (ABSENT))
AND:
Digitally signed
by NANDINI B
G 1. THE JOINT REGISTRAR OF
Location: High COOPERATIVE SOCIETIES
Court of BENGALURU REGION
Karnataka
SAHAKARA SOUDHA
MALLESHWARAM
CO OPERATIVE SOCIETY
BUILDING, NO.8,
MARGOSA ROAD,
MALLESHWARAM
BENGALURU - 560 003
2. SRI. R. ASHOK
S/O LATE SRI RAMESH
AGED ABOUT 58 YEARS,
BANAGIRI NAGAR
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WP No. 9178 of 2021
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BSK 3RD STAGE
BENGALURU - 560 085
... RESPONDENTS
(BY SRI. S.B. MUKKANNAPPA, ADVOCATE FOR R2
SMT. CHANDINI .S., HCGP FOR R1 )
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER
DTD.5.5.2018 AT ANNEXURE-T PASSED BY THE R-1 JOINT
REGISTRAR OF CO-OPERATIVE SOCIETIES BENGALURU AND QUASH
THE ORDER DTD.27.5.2020 IN APPEAL NO.136/2018 AT ANNEXURE-
V PASSED BY THE KARNATAKA APPELLATE TRIBUNAL BENGALURU
AND ETC.,
THIS WRIT PETITION, COMING ON FOR FURTHER HEARING,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MRS. JUSTICE M G UMA
ORAL ORDER
The petitioner being the Daivajna Credit Co-operative
Society Ltd., represented by its President and Secretary, is
seeking issuance of Writ in the nature of Certiorari, to quash
the order dated 05.05.2018 passed by respondent No.1-the
Joint Registrar of Cooperative Societies, Bengaluru, produced
as per Annexure-T, the order dated 27.05.2020 passed by the
Karnataka Appellate Tribunal (for short, 'the KAT') in Appeal
No.136/2018 produced as per Annexure-V and to direct
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respondent No.2 to pay a sum of Rs.29,60,954/- in respect of 5
gold loans as detailed in Annexure-F or in the alternative to
remand the matter to respondent No.1 for adjudication of the
charges on merits afresh.
2. Facts of the case in brief are that, the petitioner is a
Credit Co-operative Society registered under the Provisions of
Karnataka Cooperative Societies Act (for short, 'the KCS Act').
Respondent No.2 joined the service with the petitioner's society
as temporary Secretary on 07.04.1992 and his services was
regularized with effect from 01.09.1992. The petitioner's
Society got its service Rules approved by respondent No.1 on
21.02.2012. Respondent No.2 being the employee of the
Society is bound by such Service Rules.
3. It is contended that respondent No.2 was having an
account with the petitioner's Society in between 2009 to 2013
and heavy remittance from the account of respondent No.2 was
noticed. It shows that he is carrying on other activities even
while working as Secretary in the petitioner's Society. He was
also indulged in availing gold loans very frequently. On enquiry,
it was found that he had availed a gold loan on 12.06.2013.
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The Board of Directors decided to revalue the gold jewelleries
pledged for the purpose. Accordingly, such gold articles were
re-valued on 19.06.2013 in the presence of respondent No.2 by
the approved valuers. The office bearers of the petitioner's
Society were also present and 5 gold loans pertaining to
respondent No.2 and his subordinate staff were found to be by
pledging spurious / low quality / substandard jewelleries
containing only 60% of gold as estimated by the approved
valuers. It was also found that the gold loan in the name of one
Sri. Anantha Padmanabha, bearing No.728 was obtained, who
is none other than the attender working under respondent
Nos.2 and 3. The other subordinate staff working under
respondent No.2 have also availed gold loans.
4. It is stated that the gold loans obtained by
respondent No.2 and his subordinate staffs were over and
above the limit prescribed under Clause 11.8.1 of Service
Rules, which prescribes the limit of only Rs.50,000/- per
employee. Therefore, the borrowers were directed to repay the
loan amount and close the loan accounts. Three of the
employees gave their reply that it was respondent No.2 as
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Secretary of the petitioner's Society had taken 3 gold loans in
their respective names and their entire loan amount was
received by respondent No.2. They also stated that the articles
pledged for obtaining loan does not belong to them and in fact
belongs to respondent No.2, who played undue influence over
them. He being the official supervisor in the position of
Secretary managed to get 3 gold loans in the names of his
subordinate staffs making them scapegoats.
5. It is contended that respondent No.2 set up his wife
Smt.Bharathi an employee with KSRTC who gave a
representation dated 06.03.2014 suggesting that she had taken
2 gold loans of Rs.2,95,000/- and Rs.1,95,000/- respectively in
the names of Smt.Nirmala, Clerk and Sri. Anantha
Padmanabha, Attender. Similarly, respondent No.2 set up one
Sri.Vishweshwaraiah claiming to be his friend who contended
that he had taken the gold loan of Rs.75,000/- in the name of
Sri. Kashi Vishwanatha- the Recovery Officer. On enquiry, it is
revealed neither Smt.Bharathi, wife of respondent No.2 nor Sri.
Vishweshwariah-the friend of respondent No.2 have came to
the petitioner's Society at any point of time. But it was
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respondent No.2 who had taken the signatures of his
employees on the loan applications to obtain the loan in their
names. Therefore, the claim of Smt.Bharathi and
Sri.Vishweshwaraiah seeking to return the gold jewelleries was
rejected. The said Smt.Bharathi and Vishweshwaraiah have
even approached the District Consumer Redressal Forum,
Bengaluru by filing complaint Nos.870/2014, 871/2014 and
872/2014 claiming the gold jewelleries pledged with the
Society, wherein they conceded that it was at the instance of
respondent No.2, they had taken 3 gold loans in the names of
his subordinate staffs. The said complaints came to be
dismissed by the District Consumer Redressal Forum on
21.07.2015 as the complainants were neither the borrowers nor
the guarantors for the loans.
6. It is contended by the petitioner that respondent
No.2 submitted a representation on 31.10.2015 produced as
per Annexure E, stating that he himself pledged the gold
jewelleries in the names of his 3 subordinate staff members for
the purpose of taking gold loans. Respondent No.2 stated that
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he is ready to pay the loan amount and wanted to close the
loan accounts.
7. It is contended that respondent No.2 by misusing
his authority as Secretary of the petitioner's Society, availed
various gold loans totaling to Rs.9,65,000/-, which is much
above the maximum limit of Rs.50,000/- provided under Clause
11.8.1 of Service Rules. The said loan amount along with
outstanding interest was Rs.29,60,954/- which was due by
respondent No.2.
8. It is stated that respondent No.2 had not submitted
the details of gold loans obtained by him, but only placed
summary of loans before the Board. He has not revealed that
he availed more than Rs.9,00,000/- to get sanctioned 2 gold
loans in his own name and 3 loans in the names of his
subordinate staffs. The Board Resolution was written by
respondent No.2 himself being the Secretary and managed in
sanctioning of loan.
9. It is contended that the Board after considering
misconduct of respondent No.2, kept him under suspension as
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per order dated 17.06.2013 (Annexure-G). The Articles of
Charge (Annexure-J) was approved by the Board as per its
proceedings dated 10.08.2013 (Annexure-H). The Articles of
Charge was served on respondent No.2. He has submitted his
reply as per Annexure-K. In the reply, he has not disputed
availing of such loans in his name as well as in the names of his
subordinate staffs. Therefore, an Enquiry Officer was appointed
who was the retired Assistant Registrar of Cooperative Audit.
10. The Enquiry Officer held an enquiry, framed as
many as 16 charges. After recording the oral evidence and
getting the documents marked, the Enquiry Officer submitted
his report on 29.11.2013 holding that except charge Nos.9, 11
and 14, all other 13 charges were proved.
11. A notice as per Annexure-L1 was issued to
respondent No.2 supplying the enquiry report and calling upon
his reply. The second show-cause notice as per Annexure-L2
was issued asking his reply about the report and the
punishment. Respondent No.2 has not submitted any reply
except stating as per his letter dated 16.12.2013 (Annexure-M)
that his statement submitted before the Enquiry Officer may be
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considered as his reply. Therefore, it is the contention of the
petitioner - Society that respondent No.2 had never raised any
objection about the manner in which the enquiry was held. He
has not raised any issue that he has been prejudiced in any
manner or that there is violation of any of the law or the Rules.
Therefore, the petitioner - Society as per Resolution dated
17.12.2013 (Annexure-N) passed by the Board dismissed
respondent No.2 from service.
12. Being aggrieved by the same, respondent No.2
raised a dispute under Section 70 of KCS Act as per Annexure -
P. Respondent No.1 has passed an order as per Annexure-T on
05.05.2018 allowing the dispute and setting aside the dismissal
order of respondent No.2 as the same is untenable on technical
grounds. There is not even a direction to respondent No.2 to
repay the loan amount of Rs.9,65,000/- along with interest.
13. Being aggrieved by the order passed by respondent
No.1, the petitioner - Society approached the KAT, Bengaluru.
The said appeal came to be dismissed vide Annexure-V which
confirmed the order passed by respondent No.1 directing
reinstatement of respondent No.2 with back wages and all
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monetary benefits. Being aggrieved by the same, the petitioner
is before this Court.
14. Heard Sri. Venugopal M.S., learned counsel for the
petitioners and Sri. S.B.Mukkannappa, learned counsel for
respondent No.2. Perused the materials on record.
15. Learned counsel for the petitioner contended that
the petitioner is a Credit Co-operative Society. Respondent
No.2 was the Secretary and CEO of the petitioner's Society.
This fact is not in dispute. It is also not in dispute that
respondent No.2 had availed 2 gold loans in his own name
which was beyond the maximum limit provided under the
service Rules. The materials on record disclose that respondent
No.2 managed to get gold loans in the names of his
subordinate staffs by pledging his own jewelleries. The gold
jewelleries pledged by respondent No.2 in his own name and in
the names of his subordinate staffs were spurious / low quality
/ substandard. Therefore, approved valuers have valued these
jewelleries in the presence of respondent No.2 and the Board
members. Respondent No.2 had not raised any dispute with
regard to the valuation of the jewelleries.
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16. Learned counsel contended that even when the
Articles of Charge was served on respondent No.2, he has not
raised any serious dispute except denying that he had not
caused any loss to the Society. Even when the departmental
enquiry was held by the Enquiry Officer, he has not alleged any
miscarriage of justice. He has not alleged that there is violation
of any principles of natural justice. On the other hand, he
participated in the enquiry throughout by cross-examining the
witnesses. The Enquiry Officer after holding detailed enquiry,
submitted a report holding that charges at Sl.Nos.1 to 8, 10,
12, 13, 15 and 16 are proved, while charge Nos.9, 11 and 14
are not proved.
17. It is contended that, Annexures-L1 and L2 are the 2
show-cause notices issued to respondent No.2. Annexure-M is
the reply by respondent No.2. There is nothing in Annexure-M
except saying that the stand taken by him in his reply
submitted when the enquiry had begun may be treated as his
reply. He has nothing to say about the enquiry held by the
Enquiry Officer and the findings recorded against him on
various charges. Under such circumstances, the final order was
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passed by the Disciplinary Authority as per Annexure-N and
respondent No.2 was dismissed from service.
18. It is stated that, even though respondent No.2 had
raised a dispute before respondent No.1 under Section 70 of
KCS Act, he never raised any ground that he was not provided
with reasonable opportunity and the second show-cause notice
served on him was bad in any manner. No prejudice is alleged
by respondent No.2. In-spite of that, respondent No.1 and KAT
proceeded to allow the dispute on flimsy grounds, making a
new grounds for respondent No.2, which he never raised.
19. It is also contended by the learned counsel for the
petitioner that no preliminary point was framed by respondent
No.1 with regard to the fairness or otherwise of the enquiry to
record a finding in that regard and to afford an opportunity to
the petitioner, to prove conducting of the enquiry in accordance
with law, but proceeded to dispose of the dispute on merits
denying an opportunity to the petitioner to prove its contention.
The impugned order passed by respondent No.1 is against the
principles laid down by the Hon'ble Apex Court in State Bank
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of Patiala -vs- S.K. Sharma1, which was also followed by the
Co-ordinate Bench of this Court in Hassan Co-operative Milk
Producers Societies Union Ltd. -vs- The ARCS and Sri
Subbaiah2. Therefore, it is contended by the learned counsel
for the petitioner that the order passed by respondent No.1 is
liable to be quashed.
20. Learned counsel for the petitioner further
contended that the KAT has gone out of the way to record few
findings without any basis. It has gone to the extent of
recording that approved valuers were not examined by the
Enquiry Officer which is blatantly false. Therefore, the findings
recorded by respondent No.1 and the KAT is against the
materials placed on record and also against the settled
principles of law. Hence, the same are liable to be quashed.
Accordingly, he prays for allowing the writ petition in the
interest of justice.
21. Alternatively, learned counsel for the petitioner
contended that even if this Court finds that the enquiry held is
not in accordance with law or that the second show-cause
2018 (4) SCC 483
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notice issued by the petitioner was not in accordance with law,
the matter may be remanded back for fresh enquiry in
accordance with law and prays for passing appropriate orders.
22. Per contra, learned counsel for respondent No.2
opposing the petition submitted that necessary grounds were
raised by respondent No.2 in the dispute regarding defect in
the enquiry and non-issuance of show-cause notice as required
under Article 6 -- 1 -- 1 to 6 of the Subsidiary Rules before
passing the final orders by imposing major punishment.
23. Learned counsel for respondent No.2 further
contended that even though as many as 14 witnesses were
cited in the list of witnesses, only 8 witnesses were examined
and 2 such witnesses were not cited in the list, which has
resulted in grave injustice. Learned counsel contended that
some of the witnesses were examined in the absence of the
respondent and they were not permitted to be cross-examined.
24. Learned counsel referring to the order passed by
the Registrar in the dispute and by KAT contended that the
Trial Court records are called for to verify the validity of such
observations made by the Registrar in the dispute and also by
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KAT. There is justification for setting aside the enquiry report.
Therefore, prays for dismissal of the petition.
25. Respondent No.2 is admittedly working as
Secretary and CEO of the petitioner - Society. He was
responsible for the administration of the Society and was very
well aware of the Rules and Regulations and the byelaws
governing the Society. The materials on record disclose that he
joined petitioner's - Society as temporary Secretary on
07.04.1992 and his service was regularised on 01.09.1992 and
he served the Society till he was suspended on serious charge
of misconduct.
26. The allegations made against respondent No.2 is
that he was having an account with petitioner's - Society during
2009 to 2013 and heavy remittances were noticed from the
said account, which was very unusual. Thereafter, it is also
noticed by petitioner's - Society that respondent No.2 being the
Secretary, who was at the helm of affairs to advice and guide
the Board managed to avail various gold loans. A few gold
loans were availed in his own name and some of them in the
name of his subordinates, including the attender. When the
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petitioner's Society noticed that several gold loans were
obtained in the name of respondent No.2 and his subordinates,
a notice was issued calling upon them to close the loan
account, since such borrowals was against Clause 11.8.1 of the
service Rules prescribing maximum limit of only Rs.50,000/-
that could be borrowed by an employee of the Society which is
applicable to respondent No.2 as well. Such notices were issued
to all the borrowers, who were suspected to be only the name
lenders for respondent No.2 for availing the loan.
27. Three of the employees working under respondent
No.2, who were the borrowers from petitioner's Society gave
their reply categorically stating that they are only name lenders
for respondent No.2 to avail the loan and that they never
borrowed any loan for their personal use, nor they have
pledged any gold ornaments. All the three employees have
categorically stated that the articles pledged for obtaining loans
in their names were in fact belonging to respondent No.2.
Therefore, prima-facie, it was found that respondent No.2 being
the Secretary and CEO, who was officially superior and
managing the affairs of Society, managed to get two gold loans
in his name exceeding the prescribed limits under Service Rules
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and managed to get three other gold loans in the names of his
subordinate staffs by pledging the articles belonging to him.
28. As per Clause 11.8.1 of Service Rules, the limit of
loan that can be obtained by respondent No.2 is only
Rs.50,000/-. However, respondent No.2 obtained loan of
Rs.4,70,000/-. Borrowing of loan exceeding the limit and
pledging of jewelleries was never disputed, rather it is
admitted. Re-valuation of the jewelleries by the approved
valuers examined before the Investigating Officer was never
disputed by respondent No.2.
29. In the final order, there is reference to unanimous
Resolution passed by the Board to take a decision to dismiss
respondent No.2. The Board has authorized the President of the
Society to pass such order as punishment. Accordingly, the
President passed the order dismissing respondent No.2 from
service.
30. The materials on record also disclose that the wife
of respondent No.2 by name Smt. Bharati, who was an
employee in KSRTC appears to have given representation
contending that it was she, who took two gold loans of
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Rs.2,95,000/- and Rs.1,95,000/- respectively in the names of
one Smt. Nirmala and Anantha Padmanabha, the clerk and
attender working under respondent No.2. One Vishweshwaraiah
also gave a representation in the name of Recovery Officer.
When an enquiry was held in that regard, it was revealed that
Vishweshwaraiah is none other than the friend of respondent
No.2 and Smt. Bharati being the wife of respondent No.2 made
efforts to save the skin of respondent No.2 for obvious reasons.
It is also found neither Smt. Bharathi nor Vishweshwaraiah
have came to petitioner's - Society for availing loan at any
point of time either for submission of application or for
obtaining loan. The claim made by the said Smt.Bharathi and
Vishweshwaraiah for returning gold jewelleries in their favour
was thus rejected by the petitioner's - Society.
31. The materials on record also discloses that Smt.
Bharathi and Vishweshwaraiah not being satisfied with the
rejection of their claim for return of jewelleries, approached
District Consumer Disputes Redressal Forum, Bengaluru by
filing the complaint claiming that gold jewellery pledged with
Society. In the said complaint, they conceded that it was at
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the instance of respondent No.2, they had taken three gold
loans in the names of his subordinate staff. Noting the same,
the complaints came to be dismissed by the District Consumer
Redressal Forum, Bengaluru on 21.07.2015 by recording the
findings that the complainants were neither the borrowers nor
guarantors of loan and therefore, not entitled to claim back the
jewelleries.
32. It is the specific contention of the petitioners -
Society that respondent No.2 had submitted a representation
dated 31.10.2015 admitting in clear terms that it was, he who
pledged gold jewelleries in the names of his three subordinate
staff members for the purpose of availing gold loans. Further,
respondent No.2 has undertaken to repay the loan amount and
to close the loan account. The said representation is produced
as per Annexure -E.
33. The contents of Annexure - 'E' do not give rise to
any shred of doubt regarding misconduct committed by
respondent No.2. The lame excuses given by respondent No.2
cannot be accepted as a ground for committing such grave
misconduct of availing the gold loans exceeding the maximum
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limit permitted under the Rules, that too in the names of his
subordinates.
34. It is the contention of the petitioner's - Society that
even the gold pledged by respondent No.2 while availing as
many as five gold loans were of spurious/low quality/sub
standard articles. When such a reasonable doubt had arisen
about the quality of the jewelleries pledged, the same were re-
valued in the presence of respondent No.2 and the Board
members through the approved valuers. The report given by
such approved valuer discloses that the gold jewelleries
pledged by respondent No.2 to avail two loans is his own name,
and 3 other loans in the name of his subordinate staff were not
of standard quality. It is stated that one of the article was not
of gold. Serious doubt arises as to how such spurious articles
could be taken as a pledge for providing gold loan in favour of
respondent No.2 or his subordinate staffs. All these facts and
circumstances lead to a reasonable conclusion that respondent
No.2 who was at the helm of affairs as Secretary and CEO of
the petitioner's -Society managed the entire show for his
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benefit. In doing so, definitely he must have misled the Board
members.
35. It is the contention of respondent No.2 that the
Board has approved sanctioning of the loan and therefore,
availing of the loan cannot be viewed as a misconduct on his
part. Since respondent No.2 was the Secretary and CEO and
since the members of the Board were acting at the advice of
the Secretary, getting sanction from the Board for various loans
without disclosing the details or the misconduct committed by
respondent No.2 in availing the loans in his name beyond the
maximum limit provided under the Rules and other three loans
in the names of his subordinates by pledging spurious articles
as gold is not a difficult task for the purpose of getting approval
from the Board. Therefore even getting the approval from the
Board for sanction of such loan is also part of misconduct on
the part of respondent No.2. Respondent No.2 being the
Secretary and CEO had played one man show in the entire
episode of availing as many as five gold loans in various names
by pledging low quality gold article. There is a clear case of
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misuse of power and authority by respondent No.2 by
misleading the members of the Board as a whole.
36. It is pertinent to note that when a notice was
issued initially by the petitioner's - Society, to respondent No.2
bringing it to his notice that he had availed loans in violation of
the service Rules to which he is bound, and also alleging that
he managed to avail three other gold loans in the name of his
subordinates, the other borrowers who are the subordinates to
respondent No.2, he gave the reply categorically admitting the
role played by him in availing the loans in their names by
pledging his own articles, which were subsequently proved to
be spurious. Interestingly, respondent No.2 has never disputed
this fact while issuing the reply in the form of representation.
Therefore, availing of loan beyond the permitted limit in
violation of Service Rules is demonstrated by the petitioner's -
Society, availing of three more gold loans in the names of his
subordinates by pledging spurious articles was also never
disputed by respondent No.2, which will have very serious
consequences. It is a very serious degree of misconduct
committed by respondent No.2, taking advantage of his
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position as a Secretary and CEO of the Society and could
manage to get the approval for various loans from the Board
members.
37. Since these facts came to light, an enquiry was
ordered against respondent No.2 and he was kept under
suspension as per Annexure - G. The articles of charges as per
Annexure - J was approved by the Board. As per Annexure - H,
admittedly, the articles of charge was served on respondent
No.2 calling upon for his reply. Annexure - K is the reply
submitted by respondent No.2. By issuing Annexure - K,
respondent No.2 in categorical terms admitted availing of loan
as alleged by pledging his own articles, but pleaded that he was
not aware of the standard of gold, which he pledged. He also
asserts that as he used to arrange the loan, availed it again up
to the limit of Rs.5,00,000/-, which is apparently in violation of
the service Rules. His only justification for such misdeeds is
that such borrowals were approved by the Board, which cannot
be a justification at all in view of his position in the petitioner's
- Society. The other justification given in Annexure - K is that
he has not caused any loss to the Society. The said justification
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also cannot be accepted for any reason, as due to his
misconduct, heavy loss is caused to the petitioner's - Society
in conducting the enquiry, defending the dispute, prosecuting
the appeal and filing and prosecuting the writ petition against
him and also defending the complaints before the District
Consumer Forums. Annexure - K, the reply issued by
respondent No.2 with his own signature substantiate the
allegations made against him by petitioner's - Society. Even
then, petitioner's - Society proceeded with the enquiry by
appointing an Enquiry Officer, who framed as many as 16
charges. The enquiry report is as per Annexure - L.
38. As per Annexure - L - the enquiry report, many
witnesses were examined and cross-examined at the instance
of respondent No.2. Even the approved valuer is one of the
witnesses, who spoke about revaluation of the articles pledged
by respondent No.2 for availing various loans and stated that
two gold bracelets pledged towards loan account No.596 and
597 were having only 85% of the gold contents. However, he
stated that, after pledging the gold articles, the articles must
have been replaced.
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39. The approver has also referred to the gold loan
No.469, where 4 bracelets were pledged to take loan of
Rs.3,50,000/- and he approved the ornaments by referring to
its weight, value etc. As stated by respondent No.2, he was the
Secretary of the Society. When such is the evidence of the
approved valuer that is available on record, I do not find any
reason to reject the enquiry report, according to which, the
petitioner's - Society is successful in proving all the 13 charges,
except charge Nos.9, 11 and 14. I do not have any shred of
doubt about proof of misconduct committed by respondent
No.2 that was found by the Enquiry Officer.
40. Admittedly, the first notice as per Annexure 'L1'
was issued enclosing the enquiry report, calling upon the
response from respondent No.2. Annexure - L2 is the second
show-cause notice asking for his reply on the enquiry report
and to have his say in the matter of further action that is
required to be taken on such report. Admittedly, Annexure - M
dated 16.12.2013 is the reply given by respondent No.2, where
he does not dispute the receipt of two show-cause notices as
referred to above along with the enquiry report. He is not
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disputing conducting of the enquiry by the Enquiry Officer. He
never raises any question about the manner in which the
enquiry was held. He never disputes that the principles of
natural justice was followed in conducting such enquiry. He
never disputes the findings recorded by the Enquiry Officer
regarding proof of various charges. His only reply is that the
reply submitted to the articles of charge may be considered as
his reply given to the enquiry report.
41. Framing of articles of charges, serving the same on
respondent No.2 and calling upon him to have his response was
at the initial stage and it would serve a different purpose. Since
response from respondent No. 2 was not satisfactory, the
Enquiry Officer came to be appointed and a detailed enquiry
was held by examining several witnesses. A detailed report as
per Annexure - L was submitted by the Enquiry Officer. But
respondent No.2 even though served with copy of the said
report calling upon his response by issuing two show-cause
notices as required under law, respondent No.2 has nothing to
say about the enquiry or the enquiry report holding that the
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misconduct alleged against him in various charges referred to
above are proved.
42. Respondent No.2 had an opportunity not once, but
twice to give the reply to Annexure L1 and L2 when he had not
availed the same by taking any specific stand, he cannot be
permitted to raise any such grounds at the belated stage.
When respondent No.2 has nothing to say either about the
enquiry or about the enquiry report, naturally, the petitioner's -
Society proceeded to pass the order dismissing respondent
No.2 from service. Considering the nature and seriousness of
the allegations which is proved against him, the order of
dismissal imposed is proportionate and there are no grounds to
interfere with the same.
43. It is for the first time respondent No.2 raised
several grounds to challenge the order of dismissal while
raising the dispute under Section 70(2)(d) of KCS Act before
respondent No.1 - Joint Registrar of Cooperative Societies as
per Annexure - P. As many as 18 grounds are urged in the
memorandum of dispute for the first time on 23.01.2014, which
were never raised before, in spite of giving repeated
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opportunity. There is absolutely no reason as to why
respondent No.2, who was working as Secretary and CEO could
not raise any of those objections at the initial stage, when a
notice was issued to him calling upon repayment of the loan
amount or when articles of charge was served on him or atleast
when the enquiry was held and an opportunity was given to
him to have his defence and even when two show-cause
notices as per Annexures - L1 and L2 were served on him,
furnishing the enquiry report. This conduct of respondent No.2
speaks in volumes about his intention only to drag on the
matter indefinitely. I do not find any substance in any of the
grounds urged by him in light of the discussions held above.
44. Annexure - T is the order passed by respondent
No.1 and the dispute raised under Section 70 of KCS Act. Even
though respondent No.2 had not raised his little finger about
the manner in which the enquiry was held by the Enquiry
Officer, he never alleged denial of principles of natural justice in
conducting such inquiry. Even after service of show cause
notices as per Annexures - L1 and L2, respondent No.1
proceeded to consider the objections raised in the
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memorandum of dispute for the first time, without framing a
preliminary point for consideration regarding the validity of the
procedure adopted by the Enquiry Officer. It was never an issue
till filing of the dispute. Even though respondent No.2 has
repeatedly responded to various notices issued by the
petitioner's - Society, I do not find any justifiable cause for
respondent No.2 for not having raised any such dispute at the
initial stage. It is pertinent to note that respondent No.2 is not
a village restrict or Class - IV employee in the petitioner's -
Society. But he was the employee of highest rank being the
Secretary and the CEO, and who was suppose to know the
byelaws and service Rules. He was at the helm of affairs having
authority to guide and advice the members of the Board. Under
such circumstances, I do not find any justification for
respondent No.1 in going into the manner in which, the enquiry
was held and to record a finding against petitioner's - Society.
45. The reasons assigned by respondent No.1 for
allowing the dispute are also very strange and unsustainable.
The observations made in the impugned order Annexure - T
that the approved valuer was never examined by the Enquiry
Officer is patently wrong. Even if respondent No.1 was of the
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opinion that the enquiry held against respondent No.2 was
either illegal or without following any of the procedure, it could
have set-aside the enquiry report and could have directed the
petitioner's - Society to hold the enquiry afresh. Even such an
order was not passed for the reasons best known to respondent
No.1. On the other hand, the order of dismissal was set-aside
and it is ordered for reinstatement of respondent No.2 with all
benefits. This order is not sustainable on any count.
46. When petitioner's - Society preferred an appeal
before KAT, highlighting all these facts and circumstances for
challenging the order passed by respondent No.1 as per
Annexure T, even though it noticed that there is an admission
on the part of respondent No.2 regarding availing of gold loans,
contravening the service Rules and there is an admission on the
part of respondent No.2 about the allegations made against
him by pledging spurious articles and even one of the chain
made up of copper under the guise of pledging the gold
ornaments, proceeded to form the opinion regarding the
conduct of the Society to hold that the conduct of the advocate
would amount to contempt of Court and he is answerable. To
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form such an opinion, the KAT extracted a portion of the order
dated 21.07.2015 passed by the District Consumer Forum,
Bengaluru. Unfortunately, it has lost sight of the contentions
taken by the petitioner's - Society. The materials that are
placed before the Enquiry Officer, appreciation of such
materials by the Enquiry Officer, where it is highlighted that
even though the gold loans were obtained in the names of
other persons, they are only name lenders. But it was for the
benefit of respondent No.2. It is also highlighted that
respondent No.2 projected his wife Smt. Bharathi and his friend
one Vishweshwaraiah to file two complaints before the District
Consumer Forum seeking to withdraw the ornaments, which
were pledged while availing the loan. The said complaints came
to be rejected by assigning reasons. Admittedly, the said
judgment was never challenged by any of the parties. Under
such circumstances, I do not find any justification for the First
Appellate Court to make such observations in paragraph 16 of
its order.
47. The opinion expressed by the First Appellate Court
that the Society has framed five charges at Sl.Nos.1 to 5, and
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the same are falsified and therefore, respondent No.2 cannot
be held responsible, is also without any basis. The observation
of the First Appellate Court that no reasonable opportunity was
given to respondent No.2 by the Enquiry Officer by furnishing
copies of the proceedings of the day to day enquiry, is factually
incorrect. At the cost of repetition it is to be stated that
respondent No.2 had never raised such objection at any point
of time before raising the dispute before respondent No.1. If at
all respondent No.2 has not offered reasonable opportunity to
defend and he had not furnished with copies of any of the
documents or proceedings, then respondent No.2 could have
raised the objection and sought for redressal of the same. Even
when Annexures - L1 and L2 notices were issued to him, he has
not made any such allegations. Therefore, it is clear that the
grounds urged in the dispute, which was highlighted before the
First Appellate Court are sheer afterthought to regal out of the
situation and to get reinstated in respondent No.1 - Society.
The entire order of the First Appellate Court was to find fault
with the Enquiry Officer in holding the enquiry which is not
justifiable.
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48. Even though respondent No.2 had no grievance
when he participated in such proceedings and served with two
notices, respondent No.1 and the First Appellate Court ignored
the fact that respondent No.2 literally admitted availing of loan
beyond the maximum limit prescribed under the byelaws in the
names of various staff members, who are his subordinates, by
pledging the ornaments, which are of low quality or spurious.
However, they have not passed any order to repay the said
amount. When such is the evidence on record, I do not find
any justification for respondent No.2 to defend himself to
contend that he has not caused any loss to the petitioner's -
Society. It is to be borne in mind that the procedures are
handmade and minor deviations even if it is there in holding
enquiry will not go to the root of the matter when respondent
No.2 willingly participated in the proceedings without raising
any objection even after receipt of the enquiry report. No such
irregularities were pointed out before this Court that could
vitiate the enquiry or the report. Therefore, I am of the opinion
that Annexures - T and V passed by respondent No.1 and the
First Appellate Court - Authority respectively are liable to be set
aside. Accordingly I proceed to pass the following;
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ORDER
(i) The writ petition is allowed.
(ii) The Order dated 05.05.2018 passed by
respondent No.1 produced as per Annexure - T
and Order dated 27.05.2020 passed in Appeal
No.136/2018 by the Karnataka Appellate Tribunal,
Bengaluru produced as per Annexure - V are set
aside.
(iii) Order dated 17.12.2013 passed by
petitioner's - Society dismissing respondent No.2
from service is upheld.
(iv) It is made clear that respondent No.2 is
liable to pay the loan amount with upto-date
interest, which is due to be paid to petitioner's -
Society.
SD/-
(M G UMA)
JUDGE
MKM/ BH
List No.: 1 Sl No.: 13
