- 1 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 12TH DAY OF FEBRUARY, 2025 PRESENT THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD AND THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR WRIT APPEAL NO. 100174 OF 2023 (CS-RES) BETWEEN: GANAPATI S/O. VISHWESHWAR BHAT, AGE: 69 YEARS, OCC: AGRICULTURE, R/O. BHAIRUMBE, TQ: SIRSI, DIST: UTTARA KANNADA-581402 …APPELLANTS (BY SRI. NANDISH PATIL, ADVOCATE FOR, SRI. F. V. PATIL, ADVOCATE) AND: 1. HULAGOL SERVICE CO-OPERATIVE SOCIETY LTD., BAIRUMBE, REP. BY CHIEF EXECUTIVE OFFICER, TQ: SIRSI,, DIST: UTTARA KANNADA-581402 2. PRESIDENT / CHAIRMAN, HULAGOL SERVICE CO-OPERATIVE SOCIETY LTD., BAIRUMBE, R/BY CHIEF EXECUTIVE OFFICER, TQ: SIRSI, DIST: UTTARA KANNADA-581402 3. RAGHUPATI S/O. SHIVARAM BHAT, AGED ABOUT: 73 YEARS, OCC: AGRICULTURIST, MEMBER OF DISCIPLINARY COMMITTEE, HULAGOL SERVICE CO-OPERATIVE SOCIETY LTD., Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 NIDAGODU, TQ: SIRSI, DIST: UTTARA KANNADA-581402 4. MAHABALESHWAR S/O. RAMACHANDRA HEGDE, AGED ABOUT: 74 YEARS, OCC: AGRICULTURIST, MEMBER OF DISCIPLINARY COMMITTEE, HULAGOL SERVICE CO-OPERATIVE SOCIETY LTD., BAIRUMBE, TQ: SIRSI, DIST: UTTARA KANNADA-581402 5. GAJANAN S/O. MAHABALESHWAR HEGDE AGED ABOUT: 82 YEARS, OCC: AGRICULTURIST, MEMBER OF DISCIPLINARY COMMITTEE, HULAGOL SERVICE CO-OPERATIVE SOCIETY LTD., BAIRUMBE, TQ: SIRSI, DIST: UTTARA KANNADA-581402 6. RAMACHANDRA S/O. MAHABALESHWAR HEGDE, AGED ABOUT: 70 YEARS, OCC: AGRICULTURIST, MEMBER OF DISCIPLINARY COMMITTEE, HULAGOL SERVICE CO-OPERATIVE SOCIETY LTD., BAIRUMBE, TQ. SIRSI, DIST. UTTARA KANNADA-581402 7. ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, SIRSI DIVISION, TQ: SIRSI, DIST: UTTARA KANNADA-581401 …RESPONDENTS (BY SRI. MALLIKARJUNSWAMY B. HIREMATH, AND SRI. VUSHWANATH HEGDE ADVOCATES FOR R1 TO R6, SRI. PRAVEEN K. UPPAR, AGA FOR R7,) THIS WRIT APPEAL IS FILED U/S. 4 OF KARNATAKA HIGH COURT ACT, 1961, PRAYING TO, SET ASIDE THE ORDER DATED 08.02.2023 IN WP NO. 108637/2018 (CS-RES) AND ALLOW THE APPEAL AND GRANT INTEREST ON THE DELAYED PAYMENT OF - 3 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 RETIREMENT BENEFITS AND ALL ENTITLEMENTS AND ETC. THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, THE JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE B.M. SHYAM PRASAD AND THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE B.M. SHYAM PRASAD) The appellant, while he was working as a cashier with the first respondent, is served with notice of enquiry contemplated against him on certain charges. The appellant has challenged this notice and the charge memo in WP.No.62841/2012, but he has withdrawn this petition on 28.11.2012 with liberty to avail his remedy under Section 70 of the Karnataka Co-operative Societies Act, 1959 [for short, ‘the Co-operative Societies Act’]. In the meantime, the appellant had filed his response to the notice, and he was also informed about the enquiry being scheduled on 10.06.2012. - 4 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 2. The enquiry has resulted in the order dated 27.06.2012 for the appellant’s compulsory retirement. The appellant has successfully challenged this order dated 27.06.2012 under Section 70 of the Co-operative Societies Act. The first respondent is unsuccessful in the appeal with the Appellate Authority as against such order. The appellant has applied for execution relying upon the Recovery Certificate issued by the concerned Assistant Registrar of Co-operative Societies. This Certificate is for a sum of Rs.10,88,241/- with the observation that the order under Section 70 of the Co-operative Societies Act does not provide for payment of any interest. The Executing Court in such proceedings in Ex.No.6/2018 has issued attachment warrant for a sum of Rs.20,43,900/- which is presented as amount due including the interest asserted by the appellant. 3. It is at this stage that the Society and its Office bearers have filed a petition in - 5 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 W.P.No.108637/2018 calling in question the order under Section 70 of the Societies Act and the order in appeal. The Society and its Officers are granted the benefit of interim order by the writ Court subject to the condition that it deposits a sum of Rs.20,43,900/- with liberty to the appellant to withdraw 50% of such amount. The Society and its officers have deposited Rs.20,43,900/- and the appellant has withdrawn Rs.10,21,950/-. 4. The writ Court, by the impugned order dated 08.02.2023, has interfered with these two orders restoring the proceedings for reconsideration by the first respondent. The writ Court has accepted the appellant’s assertion that though the enquiry was scheduled to be held on 10.06.2012, there was no hearing on that day and that he was not issued with notice of any further hearing dates of the enquiry. However, the writ Court has interfered essentially on - 6 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 the ground that the proceedings under Section 70 of the Co-operative Societies Act are closed in violation of principles of natural justice and that there could not have been an order on merits. 5. The writ Court by the impugned order has directed the appellant to refund the amount received by him in terms of the aforesaid interim order while directing the Registry to refund the amount in favour of the Society. This Court has stayed the direction to refund. The further undisputed fact is that the appellant, who was on the verge of completing the age of superannuation [58 years] as on the date of the show cause notice, has superannuated. 6. Sri. Nandish Patil, the learned counsel for the appellant, and Sri. Mallikarjun Swamy B. Hiremath, the learned counsel for the Society and its Officers, have endeavored to substantiate their respective cases against and for the writ Court’s order. Sri. Nandish Patil contends that the writ Court - 7 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 could not have relied upon an exposition in a labour dispute to opine that once there was a finding on violation of the principle of natural justice, the enquiry should be remanded for re-consideration, but Sri.Mallikarjun Swamy B. Hiremath contends that the exposition must apply because of the similarity in the proceedings and the consequence. 7. If this is the first part of the controversy, the next part of the controversy is about what is the amount that the appellant would be entitled to receive even if he is compulsorily retired. The appellant undisputedly would be entitled to statutory benefits such as gratuity and other service benefits admissible to him. According to the Society, the appellant will only be entitled to a sum of Rs.8,91,688/-, subject to deduction towards what it alleges is the loss that is caused by the appellant. The appellant relies upon the amount as certified in - 8 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 the Recovery Certificate and the interest payable for the period from the date of the Certificate. 8. This Court has enquired with the learned counsels to find out whether it would be worthwhile for the appellant to agitate the matter on remand, or to receive some amount so that there is an early disposal without further protraction. In response, the appellant has filed a memo stating that he would not pursue his grievance with the remand order if he can retain the amount which is already received and he is paid a further sum of Rs.5,00,000/- out of the amount which is in deposit in the Writ Petition. Sri. Mallikarjun Swamy B. Hiremath submits that he has no instructions to make any concession on behalf of the Society and its officers. 9. This Court must examine whether the proceedings must be brought to a closure with the appellant being permitted to withdraw some part of the amount in deposit as the appellant is aged above - 9 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 70 years and the charges against him is that he has delayed the deposit of certain receipts received from the local authorities. Of course, the Society proposes to rely on the charge memo to contend that it is not just a matter of delay in depositing the cash receipts but also loss of funds with the lack of interest payable for the delayed period. 10. This Court, in the circumstances discussed, does not see any purpose being achieved in the dispute being presented for reconsideration firstly by the disciplinary authority subject to further scrutiny in the hierarchy that would be available to the appellant/Society. Further, even if the punishment of compulsory retirement is sustained, the appellant will have to be paid the admissible gratuity and other service benefits, which even according to the Society and its Officers, is an excess in a sum of Rs.10,00,000/. On a holistic consideration of the circumstances, this Court is of - 10 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 the view that the proceedings must be closed without stigma on the appellant and permitted to retain the amount that he has already received during the pendency of the petition in WP.No.108367/2018 and be entitled to receive a further sum of Rs.5,00,000/- out of the amount in deposit with the remaining amount being refunded to the first respondent. In the light of the afore, the following: ORDER i. The appeal stands disposed of modifying the impugned order dated 08.02.2023 in WP.No.108637/2018 declaring that the proceedings resulting in the show cause notice dated 28.05.2012 shall not be any stigmatic, and the appellant will be entitled to receive a total sum of Rs.15,21,950/- (Rs.10,21,950/- + Rs.5,00,000/-). - 11 - NC: 2025:KHC-D:2805-DB WA No. 100174 of 2023 ii. Consequentially, the Registry is directed to transfer a sum of Rs.5,00,000/- out of the amount in deposit in WP.No.108637/2018 to the appellant subject to the appellant furnishing his bank account details for necessary transfer. iii. The Registry is further directed to transfer the remaining amount in the deposit to the first respondent, and once again subject to the Society furnishing the bank account details necessary for transfer. Sd/- (B.M.SHYAM PRASAD) JUDGE Sd/- (RAMACHANDRA D. HUDDAR) JUDGE AM/CT-VG LIST NO.: 1 SL NO.: 50