A. M. Kushalappa v. State of Karnataka By Its Secretary Department of Co-Operation
2019-02-01
L.NARAYANA SWAMY, P.S.DINESH KUMAR
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DigiLaw.ai
JUDGMENT : P.S. DINESH KUMAR, J. 1. These appeals are presented by unsuccessful petitioners in Writ Petition No.39484/2018 and Writ Petition No.37225/2018, which have been dismissed by the Hon'ble Single Judge by common order dated 27.11.2018. 2. We have heard Shri S. Vijay Shankar and Shri. G. Krishna Murthy, learned Senior Advocates for the appellants, Shri S.S. Mahendra, learned AGA for the State, Shri. Bipin Hegde, learned advocate and Shri Jayakumar S. Patil, learned Senior Advocate for private Respondents. 3. For the sake of convenience, parties shall be referred as per their status before the Hon'ble Single Judge. 4. Briefly stated the facts of the case are, the Joint Registrar of Co-operative Societies, Bengaluru, issued a notice on 14.8.2018, calling upon the petitioners to appear on 25.8.2018 and answer the eight imputations. Petitioners challenged the said notice in separate writ petitions which have been rejected. Hence these appeals. 5. The main submission of learned Senior Advocates Shri Vijay Shankar and Shri Krishnamurthy are summarized as follows: that the imputations recorded in the notice under challenge are vague and do not disclose any irregularity contemplated under Section 29-C of the Karnataka Co-operative Societies Act, 1959 ('Act' for short); that the notice discloses that instant proceedings have been initiated by the Joint Registrar, pursuant to a complaint dated 17.7.2018 given by one Shri Doddaiah B.K, and two others and they are rival members in the society; that Section 29-C of the Act is clear and unambiguous. Any proceedings initiated under the said provision and orders passed thereon may seriously affect continuance of a member in the office. Therefore, the Joint Registrar, who is a quasi-judicial authority ought to have satisfied himself, whether the complainants had made out a strong prima facie case warranting issuance of notice in question; and that the appellants, who are law abiding citizen cannot be compelled to answer frivolous charges through an ostensible notice, issued at the instance of rival members in the Society. With these principal submissions, learned Senior Advocates prayed for allowing these appeals. 6. Shri Jayakumar S. Patil, learned Senior Advocate, supporting the notice adverted to Section 29-C(8)(b) of the Act and argued that the charges contained in the notice clearly shows that appellants have been acting in fraudulent manner with gross negligence and the same is prejudicial to the interest of the Society and urged that these appeals do not merit any consideration. 7.
7. We have carefully considered the submissions of learned Senior Advocates for the respective parties, learned AGA for the State and perused the records. 8. In the conspectus of facts and the submissions of learned Senior Advocates, the point that arises for our consideration is: Whether the notice issued by the Joint Registrar requires any interference? 9. The main charges contained in the notice are as follows: that appellant - A.M. Kushalappa had paid a sum of Rs. 15,00,000/- to a private person for development of a Society, but no development has taken place; that appellant - A.M. Kushalappa had paid a sum of Rs. 70,00,000/- to M/s. Foresight Developers without any authorization; that he had spent money for resurveying of land without authorization and no survey was conducted; that despite dissent by the Board, appellant - A.M. Kushalappa has paid a sum of Rs. 65,00,000/- to one Shri Ganesh Prasad; that both Shri A.M. Kushalappa and Shri S. Sadashivappa have misappropriated money without purchasing electric transformers; that A.M. Kushalappa has got elected contrary to bye-law No.(a)(iii); that A.M. Kushalappa had colluded with the former land holder - Smt Dhanalakshmi in proceedings before the Supreme Court of India; and that both Shri A.M. Kushalappa and Shri S. Sadashivappa, have illegally given up two sites worth Rs. 1 Crore in favour of Shri Gunda Reddy, former owner of Sy.No.46. 10. The notice issued by the Joint Registrar has been issued pursuant to registration of dispute by Shri Doddaiah B.K. and two others, who are private respondents in these appeals. 11. Thus, the principal contention urged on behalf of the appellants is, the charges levelled against them are not attributable to any one of the contingencies described in Section 29-C of the Act. Therefore, they are being compelled to answer irrelevant charges based on a false and motivated complaint. In addition, they contend that the Joint Registrar, who is a quasi-judicial authority ought to have examined the charges carefully and considered issuing notice, only, if he were satisfied that the complaint contained any specific charges and the alleged charges, if proved, would entail disqualification. It is further urged that the Joint Registrar has issued the notices in a very casual and mechanical manner. 12.
It is further urged that the Joint Registrar has issued the notices in a very casual and mechanical manner. 12. Section 29-C(8)(b) of the Act reads as follows: (b) has acted or has been acting fraudulently or with gross negligence or in contravention of the provisions of this Act, the rules or the bye-laws of the co-operative society or without the sanction of the [board] of the co-operative society where such sanction is necessary or contrary of the resolution of the co-operative society or its [board] or in any way prejudicial to the interest of the co-operative society; or (emphasis supplied) 13. Shri Vijaya Shankar placed reliance on paragraphs No.8 & 9 in Siemens Ltd. v. State of Maharashtra and others, (2006) 12 SCC 33 and Shri Krishnamurthy relied upon paragraph No.31 in ORYX Fisheries Private Limited v. Union of India (UOI) and Ors, (2010) 13 SCC 427 . 14. The notice under challenge contains inter alia allegations of financial irregularities and transferring/giving up sites to one Shri Gunda Reddy, former owner of land. 15. In Siemens, it is held as follows: 8. The question as to whether jurisdictional fact existed for issuance of the said notice, the order passed by the respondent was in question in the said writ petition. 9. Although ordinarily a writ court may not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause unless the same inter alia appears to have been without jurisdiction as has been held by this Court in some decisions including State of U.P. v. Brahm Datt Sharma, Special Director v. Mohd. Ghulam Ghouse and Union of India v. Kunisetty Satyanarayana, but the question herein has to be considered from a different angle viz. when a notice is issued with premeditation, a writ petition would be maintainable. In such an event, even if the court directs the statutory authority to hear the matter afresh, ordinarily such hearing would not yield any fruitful purpose, (See K.I. Shephard v. Union of India.) It is evident in the instant case that the respondent has clearly made up its mind. It explicitly said so both in the counter-affidavit as also in its purported show-cause notice. (emphasis supplied) 16. In ORYX Fisheries, it is held as follows: 31.
It explicitly said so both in the counter-affidavit as also in its purported show-cause notice. (emphasis supplied) 16. In ORYX Fisheries, it is held as follows: 31. It is of course true that the show cause notice cannot be read hyper-technically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. 17. It is not disputed at the bar that the Joint Registrar does not have jurisdiction to issue the notice in question. Therefore, the ratio in Siemens is not applicable to the facts of this case inasmuch as there is no jurisdictional error. With regard to authority in ORYX Fisheries, except placing reliance on paragraph No.31, no demonstrable prejudice is shown which could lead to an inference that a person of ordinary prudence would get a feeling that his reply to show-cause notice would be an empty ceremony. Therefore, in our considered view, both authorities cited at the bar are inapplicable to the facts of these cases. 18. To sum up, the private respondents have initiated proceedings by alleging aforementioned charges before the Joint Registrar, who admittedly has jurisdiction to entertain the dispute. Language employed in Section 29-C(8)(b) entails consideration of allegations of activities prejudicial to the interest of the Society. 19. In the light of above discussions, the grounds urged in support of these appeals are too fragile to be countenanced. 20. Resultantly, these appeals fail and they are accordingly dismissed.