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2024 DIGILAW 37 (KAR)

H. N. Girish v. Joint Registrar of Co Operative Societies Karnataka State Souharda Sahakari Federation Limited

2024-01-11

ANANT RAMANATH HEGDE

body2024
ORDER : Mr. Anant Ramanath Hegde, J. - Heard the learned counsel appearing for the petitioners and the learned counsel appearing for the respondents. 2. Though this case is listed for orders on the application for vacating the interim order, with the consent of both the learned counsels for the parties, the petition is heard on merits and taken up for final disposal. 3. The petitioners are aggrieved by the order dated 22.05.2023 passed by the first respondent. The dispute was raised before the first respondent, challenging the resolution dated 13.09.2022 passed in the Emergency Board Meeting of the second respondent - Souharda Credit Sahakari Niyamitha. In the said Board Meeting, in addition to the various decision, the decision is taken to induct 405 members and apart from that, the decision is also taken to waive a part of the loan availed by one of the borrowers of the second respondent. 4. In the said proceedings before the second respondent raised under Section 39 of the Karnataka Souharda Sahakari Act 1997, an application is filed under Section 41 seeking interim measure. The petitioners prayed for an interim order to stay the operation of the resolution dated 13.09.2022. The authority after considering the submissions of both sides refused to grant the interim measure and consequentially rejected the interim application. Aggrieved by the said order, the petitioners are before this Court. 5. Sri. Sridhar Prabhu, learned counsel for the petitioners, would contend that the Special General Body Meeting alleged to have been scheduled on 13.09.2022 is illegal and contrary to the mandatory Rules. The procedures as contemplated for convening the meeting are not followed and the agenda has not been properly notified and sufficient time contemplated under the Rules has not been given and notice is not sent in the manner prescribed. It is also his contention that without mentioning two matters on the agenda namely, the induction of new members and waiver of loan to one of the borrowers, the decision is alleged to have been taken by the Board on 13.09.2022 admitting 405 persons as the new members of the second respondent - Sahakari Bank and a loan waiver of Rs. 53,00,000/- is granted without any justification to one of the borrowers. 53,00,000/- is granted without any justification to one of the borrowers. He would further point out that instead of granting interim order as prayed for, to ensure that there is no further obligation pursuant to the resolution under challenge, the authority has dismissed the application by giving a finding that the Board has the power to pass the impugned resolution. Hence, he would contend that the impugned order be set aside and the operation of the impugned resolution be stayed. 6. The learned counsel for the respondents would contend that the Board has the power to induct new members by calling the Special General Body Meeting and also has the power to waive the loan availed by one of the borrowers as the borrower does not have any means to repay the amount and the property belonging to the borrower/guarantor was auctioned and the amount of Rs. 72,00,000/- was realized and waiver is granted to the tune of Rs18,00,000/-. Thus, the authority is justified in rejecting the application seeking interim prayer. 7. This Court has considered the contentions raised at the Bar. 8. As could be seen from the contentions raised, the petitioners are aggrieved by the two decisions of the Board of the second respondent namely induction of 405 new members and waiver of loan granted to one of the borrowers/guarantors. Admittedly, the members, who were allegedly inducted as members, are not parties before the authority. It is stated that the newly inducted members have availed the loan from the respondent. At this juncture, this Court is of the view that since the members are not made parties to the proceedings before the authority, no interim order can be granted which would affect the interest of the members who are allegedly inducted in the meeting pursuant to the resolution dated 13.09.2022. 9. Insofar as the second contention relating to the waiver of loan is concerned, it is noticed that this petition is only against the interim order where the interim application seeking interim order is declined. This Court is of the considered view that in the interest of justice, the authority may be directed to hear the main petition on merits and pass appropriate orders. 10. This Court is of the considered view that in the interest of justice, the authority may be directed to hear the main petition on merits and pass appropriate orders. 10. However, it is to be observed that in the interim order, which is impugned before this Court, the authority has concluded that the General Body under Section 23 of the Act has got the power to pass appropriate orders. It is required to be noticed that the procedure followed in conducting the meeting as well as the decision taken in the General Body Meeting held on 13.09.2022 are called in question. This being the position, at the interim stage, the authority could not have given a finding that the General Body has the power to pass the impugned resolution. Whether the meeting is properly convened or not or the impugned resolution is properly passed or not or whether the General Body has the power to pass the said resolution has to be decided after considering the case on merits and the finding cannot be given at the interim stage. Even if a prima facie finding is given, same should not influence the consideration of the claim on merits. 11. Under these circumstances, the direction is issued to the authority to consider the claim of the petitioner on merits without being influenced by any observation made in the order dated 22.05.2023. It is also made clear that this Court has not expressed any opinion on the merits of the case. 12. If an application is filed to implead any of the parties who will be affected by the final order, same be allowed, subject to just exceptions. The petition is disposed of accordingly.