- 1 - NC: 2025:KHC:9055 WP No. 35956 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MRS JUSTICE K.S. HEMALEKHA WRIT PETITION NO.35956 OF 2024 (CS-RES) BETWEEN: MR. VIJAYA PRABHU S/O SANJEEVA PRABHU, AGED ABOUT 42 YEARS, R/AT 2-102, GRAMADA BETTU HOUSE, KAVALAKATTE POST, KAVALAMUDUR, DAKSHINA KANNADA - 574 265. … PETITIONER (BY SRI DHANANJAY KUMAR, ADVOCATE) AND: 1. THE STATE OF KARNATAKA, DEPARTMENT OF CO-OPERATION, REP. BY ITS PRINCIPAL SECRETARY, M.S. BUILDING, DR. B.R. AMBEDKAR VEEDHI, BENGALURU - 560 001. 2. THE RETURNING OFFICER, KAVALAMUDURU PRIMARY AGRICULTURAL CO-OPERATIVE SOCIETY LTD., KAVALAKATTE, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. 3. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, MANGALORE SUB-DIVISION, MANGALORE, DAKSHINA KANNADA - 575 001. 4. THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, MANGALORE, DAKSHINA KANNADA - 575 001. Digitally signed by MAHALAKSHMI B M Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:9055 WP No. 35956 of 2024 5. MR. VISHWANATHA POOJARY, S/O RAMAPPA POOJARY, AGED ABOUT 42 YEARS, R/AT PIRYA HOUSE, KAVALAMUDUR VILLAGE, KAVALAKATTE POST, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. 6. MR. UMANA S/O MAADHU MUGERA, AGED ABOUT 45 YEARS, R/AT KAANDHRODI HOUSE, KAVALAMUDUR VILLAGE, KAVALAKATTE POST, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. 7. MR. HEMANTH KUMAR, S/O MAYILAPPA POOJARY, AGED ABOUT 48 YEARS, R/AT DADDIKANDA HOUSE, MOODUPADUKODI POST, MOODUPADUKODI VILLAGE, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. 8. MR. PADMASHEKAR KUMAR, S/O SANATH KUMAR JAIN, AGED ABOUT 36 YEARS, BALLODIGUTTHU HOUSE, KAVALAMUDUR VILLAGE, KAVALAKATTE POST, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. 9. MR. DAYANANDA SHETTY S/O NARAYANA SHETTY, AGED ABOUT 44 YEARS, R/AT AMAI HOUSE, DEVASYA MUDUR VILLAGE, MANINALKUR POST, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. 10. MR. PRAMOD KUMAR S/O VASUDEVA POOJARY, AGED ABOUT 42 YEARS, R/AT PADATANTHRABETTU HOUSE, KAVALAMUDUR VILLAGE, KAVALAKATTE POST, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. - 3 - NC: 2025:KHC:9055 WP No. 35956 of 2024 11. SMT. GAYATHRI ARUN, W/O. ARUN BHAT, AGED ABOUT 38 YEARS, R/AT KALLANJE HOUSE, KAVALAMUDUR VILLAGE, KAVALAKATTE POST, BANTWAL TALUK, D.K. DAKSHINA KANNADA - 574 265. 12. KRSHNA NAIKA, S/O. SOMAIAH NAIKA, AGED ABOUT 45 YEARS, R/AT PERUVARU HOUSE, KAVALAMUDUR VILLAGE, KAVALAKATTE POST, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. 13. MR. MOHAMMED SALIYA, S/O ADAM SAHIB, AGED ABOUT 43 YEARS, R/AT BOMMIKKU HOUSE, KAVALAMUDUR VILLAGE, KAVALAKATTE POST, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. 14. MR. CHANDRAHASA, S/O HOOVAIAH NAIKA, AGED ABOUT 40 YEARS, R/AT BIYANADKA HOUSE, KAVALAMUDUR VILLAGE, KAVALAKATTE POST, BANTWAL TALUK, DAKSHINA KANNADA - 574 265. …RESPONDENTS (BY SRI YOGESH D. NAIK, AGA FOR R-1 TO R-4; SRI A. KESHAVA BHAT, ADVOCATE FOR R-5 TO R-14) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE FINAL LIST OF CANDIDATES DATED 29.12.2024 ISSUED BY THE RESPONDENT NO.2/THE RETURNING OFFICER, KAVALAMUDURU PRIMARY AGRICULTURAL CO-OPERATIVE SOCIETY LTD., VIDE ANNEXURE-A. - 4 - NC: 2025:KHC:9055 WP No. 35956 of 2024 THIS WRIT PETITION COMING ON FOR FURTHER HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA ORAL ORDER The Co-operative Society by name Kavalamuduru Primary Agriculturist (hereinafter referred to as ‘society’ for short) has been formed for the welfare of the agriculturist hailing from Kavalamudur Village. The petitioner herein is the member of the society and respondent Nos.5 to 14 are the Board of Directors of the society. The petitioner submitted a representation to respondent Nos.3 and 4 seeking an enquiry regarding the misappropriation of funds by respondent Nos.5 to 14 who were the Board of Directors of the society and also filed a private complaint against respondent Nos.5 to 14 alleging misappropriation of funds and cheating which is pending before the criminal Court. 2. The Enquiry Officer submitted the enquiry report regarding the misappropriation of funds by respondent Nos.5 to 14, wherein recommendation is being - 5 - NC: 2025:KHC:9055 WP No. 35956 of 2024 made to initiate proceedings against respondent Nos.5 to 14 under Section 29-C of the Karnataka Co-Operative Societies Act, 1959 (‘Act’ for short). In the interregnum, the tenure of the elected members of the society, that is, respondent Nos.5 to 14 has expired. Respondent No.2 issued the calendar of events and published the election of the society to be scheduled on 05.01.2024. Respondent Nos.5 to 14 submitted their nominations to contest the election, the nomination was submitted on 29.12.2024, the petitioner filed objections to the nomination. The Returning Officer-respondent No.2 included the names of respondent Nos.5 to 14 in the final list of candidates. 3. It is the contention of the petitioner that there being strong evidences to show that respondent Nos.5 to 14 have misappropriated the funds of the society, respondent No.2 could not have accepted the nomination and issued a final list of candidates including the names of respondent Nos.5 to 14. - 6 - NC: 2025:KHC:9055 WP No. 35956 of 2024 4. Learned counsel appearing for the respondents submits that the enquiry report submitted only recommends the initiation of proceedings against respondent Nos.5 to 14 and respondents cannot be restrained from contesting the election. It is submitted that respondent No.2 has rightly accepted the nomination of respondent Nos.5 to 14 and the nominations cannot be rejected based on the complaint or objections of the petitioner until there is a final disqualification under Section 29-C of the Act. It is submitted that the process of the election of the society commenced on 20.12.2024 by publication of a calendar of events and once the process has been started, at any event, the election process cannot be stayed. 5. Having heard the learned counsel appearing for the parties and on perusal of the material on record, the point that falls for consideration is: “Whether the process of election of the society having been commenced by publication of calendar of events, process can be stayed on the ground that - 7 - NC: 2025:KHC:9055 WP No. 35956 of 2024 the enquiry report recommended the initiation of proceedings against respondent Nos.5 to 14 under Section 29-C of the Act?” 6. Section 29-C of the Act states disqualification of the membership of the Board of Co-Operative Societies. Reasons for such disqualification are prescribed under sub- sections (1), (2), (3) and (5). In the instant case, the enquiry report recommended initiation of proceedings against respondent Nos.5 to 14 under Section 29-C of the Act. At this stage, it is appropriate to extract sub-section 8 of Section 29-C upon which the petitioner has placed reliance to contend that the nomination of respondent Nos.5 to 14 could not have been considered. 7. Section 29-C (8) of the Act reads as under: 29-C.Disqualification for membership of the[board].- Xxxx xxx xxx (8) If any member of a [board] of a co-operative society during the term of his office.- - 8 - NC: 2025:KHC:9055 WP No. 35956 of 2024 (a) becomes subject to any disqualifications specified in sub sections (1),(2) and (5); or (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 without the sanction of the [board] of the co- operative society where such sanction is necessary or contrary to the resolution of the co-operative society or its [board] or in any way prejudicial to the interest of the co-operative society; or (c) has acted or has been acting persistently against the directions or order issued under this Act, rules or bye-laws; or (d) is not discharging his duties satisfactorily, the Registrar may either on a report made to him or otherwise, by order remove such member, and in cases falling under clauses (A), (b),(c), and (d) of this sub-section disqualify him from holding any office in the co- - 9 - NC: 2025:KHC:9055 WP No. 35956 of 2024 operative society for such period not exceeding five years, as may be specified in such order: Provided that no order shall be made under this sub- section unless a reasonable opportunity of being heard, is given to the person against whom the order is to be made.” 8. A plain reading of sub-section 8 would indicate that if any member of a board of a cooperative society during the term of his office, becomes subject to any disqualification specified in sub-sections (1), (2) and (5), then clause (d) of sub-section (8) of Section 29-C would empower the Registrar to disqualify such person from holding any office in the cooperative society for such period not exceeding five years as may be specified in the order. The proviso to Section 29-C (8) is that no order shall be made under this sub-section unless a reasonable opportunity of being heard, is given to the person against whom the order is to be made as indicated in proviso to clause (d) of sub-section (8) of Section 29-C. For the Registrar to disqualify a person from holding any office - 10 - NC: 2025:KHC:9055 WP No. 35956 of 2024 would be on basis of disqualification earned by such members being traceable to sub-section (1), (2) and (5). It means to state that until and unless disqualification is so earned, or such disqualification order has been passed, the Registrar would not get power to disqualify such a person from holding any office in the cooperative society for such period as may be prescribed in the order which cannot exceed five years. 9. In the instant case, the question whether the member of the board has become a subject to any disqualifications under the section is to be decided by the Registrar after giving the person concerned a reasonable opportunity of being heard. In the instant case, there is no such order of disqualification and it is an enquiry report which recommended proceedings to be initiated under Section 29-C. The Co-Ordinate Bench of this Court in the case of Edigara Gangappa Vs. The State of Karnataka - 11 - NC: 2025:KHC:9055 WP No. 35956 of 2024 and others1 (Gangappa) has held at paragraph No.12 as under: “12. A plain reading of sub-section (8) would indicate that if any member of a board of co- operative society during the term of his office becomes subject to any disqualification specified in sub-sections (1), (2) & (5), then Clause (d) of sub- section (8) Section 29C would empower the Registrar to disqualify such person from holding any office in a co-operative society for such period not exceeding five years as may be specified in the order. However, such order cannot be made unless a reasonable opportunity of being heard is given or extended to the person against whom order is to be made as indicated in proviso to clause (d) of sub-section (8) of Section 29C. For the Registrar to disqualify a person from holding any office would be on the basis of disqualification earned by such members being traceable to sub- sections (1), (2) & (5). In other words, until and unless disqualification is so earned or such disqualification order has been passed, Registrar would not get power to further disqualify such person from holding any office in the co- operative society for such period as may be prescribed in the order which cannot exceed five years. Thus, it would be apt at this juncture to note 1 WP No.30/2019 dated 13.09.2019 - 12 - NC: 2025:KHC:9055 WP No. 35956 of 2024 sub-section (7) of section 29C which would clearly indicate that question as to whether member of the board was or has become or subject to any of the disqualification under this section is to be decided by the Registrar after giving person concerned a reasonable opportunity of being heard. Thus, for any of the disqualification prescribed under sub-sections (1), (2) and (5), if proceedings are to be initiated, show cause notice has to be issued and order disqualifying such member would be passed. Once such order of disqualification is passed, Registrar is clothed with additional power to disqualify such person from holding any office of the co-operative society for a period not exceeding 5 years. For exercising such power under sub-section (8), again, show cause notice deserves to be issued as required under proviso to clause (d) or in other words, it is second opportunity which the aggrieved person would be entitled to, inasmuch as, civil rights being taken away by such an order. To put it differently, if the show cause issued is comprehensive enough to disclose that disqualification proposed to be inflicted on the member would be both for having earned disqualification under sub-sections (1), (2) & (5) of Section 29C as well as for disqualifying such member from holding office for a specified period not exceeding five years, it would suffice. Then, show cause notice so issued should specify the details of - 13 - NC: 2025:KHC:9055 WP No. 35956 of 2024 proposed steps or action to be taken, as otherwise, opportunity of being heard prescribed under sub- section (7) as well as under proviso (d) to sub- section (8) would become otiose or redundant.” 10. The Co-Ordinate Bench of this Court held that insofar as it would not disqualify the person from contesting the election until there is an order being passed under Section 29-C sub-clause (8), it cannot indicate that a proposed action to be a disqualification under sub- section (8) of Section 29-C. The election proceedings having been initiated at Annexure-F, the stalling of election process at this stage is not appropriate and accordingly, the point framed for consideration is answered and this Court pass the following: ORDER i. The writ petition is dismissed. ii. The Returning Officer to conduct the election by publication of a fresh calendar of events. Sd/- ________________________ JUSTICE K.S. HEMALEKHA MBM/List No.: 1 Sl No.: 59