- 1 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 2ND DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 102450 OF 2025 (CS-RES) BETWEEN: KRISHI AND KRISHI KAIGARIKA UTPADAKARA VIVIDODDESHA SAHAKARI SANGHA NIYAMITA BATKAL 581336, TAL. SIRSI, UTTARA KANNADA DISTRICT, REP. BY ITS CHIEF EXECUTIVE OFFICER, DATTATRAYA PARAMESHWAR HEGDE, A/A. 56 YEARS, CHIEF EXECUTIVE OFFICER …PETITIONER (BY SRI. VIJAY M. MALALI, ADVOCATE) AND: 1. STATE OF KARNATAKA, CO OPERATIVE DEPARTMENT, REP. BY ITS SECRETARY, M S BUILDING, BANGALORE 2. DEPUTY REGISTRAR OF CO OPERATIVE SOCIETIES UTTARA KANNADA DISTRICT, KARWAR 581301 3. ASSISTANT REGISTRAR OF CO OPERATIVE SOCIETIES SIRSI, UTTARA KANNDA, DISTRICT 580401 4. DATTATRAYA DHARMA NAIK S/O DHARMA BASAPPA NAIK A/A 49 YEARS, AGRICULTURIST, R/O. KAYGUDDI, POST. KORALAKATTA, TAL. SIRSI, U K DIST. PIN 581318 …RESPONDENTS (BY SMT. NANDINI SOMAPUR, AGA FOR R1 TO R3, SRI. R.H. ANGADI, ADV. FOR R4) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE APPROPRIATE WRIT, ORDER OR DIRECTION IN THE NATURE OF CERTIORARI TO QUASH THE IMPUGNED ORDER PASSED BY KARNATAKA APPELLATE TRIBUNAL, BANGALORE DATED 29-10-2024 IN CO-OPERATIVE APPEAL NO.40/2021 (ANNEXURE-C) AND ETC. Digitally signed by RAKESH S HARIHAR Location: High Court of Karnataka, Dharwad Bench, Dharwad - 2 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: ORAL ORDER (PER: THE HON'BLE MR. JUSTICE M.NAGAPRASANNA) 1. The petitioner is before this Court seeking the following prayer. “I. Quash the impugned order passed by Karnataka Appellate Tribunal, Bangalore dated 29-10- 2024 in Co-operative Appeal No.40/2021 (Annexure-C). II. Pass such other orders as this Hon’ble Court deems fit under the facts and circumstances of the case including the award of costs in the interest of justice and equity.” 2. Heard the learned counsel Sri. Vijay M. Malali appearing for the petitioner, learned AGA Smt. Nandini Somapur representing respondent Nos.1 to 3 and the learned counsel Sri. R.H. Angadi for respondent No.4. 3. The petitioner is a Co-operative Society registered under the Karnataka Co-operative Societies Act. The respondent No.4 is said to be the member of the society and has borrowed a loan of ₹33,51,671/-. The respondent No.4 committing default of the loan leads the society to the Assistant Registrar of Co- operative Society seeking auction of the property that was - 3 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 mortgaged. The Assistant Registrar of the Co-operative Society allows the petition in favour of the present petitioner, which is challenged by the respondent before the Karnataka Appellate Tribunal. The Karnataka Appellate Tribunal despite granting of several adjournments and the respondent not appearing before the Appellate Tribunal, remits the matter back to the hands of the Assistant Registrar of Co-operative Society for a fresh consideration. The society feeling aggrieved by the said order is before this Court in the subject petition. 4. The learned counsel appearing for the petitioner submits that the respondent No.4 did not appear before the Tribunal despite 40 adjournments being granted. Notwithstanding the same, the delay of filing the appeal which was six years before the Tribunal is condoned without any reasons and an order of remand is passed. Therefore, it requires interference and closure of the proceedings at the hands of this Court is the submission of the learned counsel by the petitioner. 5. Per contra, the learned counsel Sri. Pranav appearing for the respondent would vehemently refute the submission in contending that the property mortgaged towards the loan comes - 4 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 into possession of the respondent No.4 only in the year 2007 and the loan is granted in 2007 before the sale of the property into the hands of the respondent. Therefore, a property that was not in his possession could not have been the subject matter of mortgage is the submission. 6. The learned counsel submits that the Tribunal noticing the fact that it was the signature of the respondent No.4 was not the one that was found in the records has remitted the matter back to the hands of the Assistant Registrar of the Co- operative Society for a fresh consideration. He would submit that the fresh consideration must happen, as the respondent No.4 has not at all availed the loan by mortgaging the property. 7. In the light of the aforesaid submission, the order of the Tribunal requires to be noticed and the order is rendered with cogent reasons. The reasons are as follows: “7. Point No.1: We have examined the Trial Court records with regard to the contention of the appellant that the appellant had not received any communication of passing of the impugned award from the Arbitrator as required under rule 31(7) (a) of KCS Rules, 1960 which is mandatory as per the decision of Hon'ble High Court of Karnataka reported in ILR 1988 KAR page-2528. - 5 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 In the Trial Court records, there is no document to establish that such a notice of intimation of passing of the impugned award as required u/r 31 (7) (a) of KCS Rules, 1960, is served to the appellant and hence we are of the opinion that the appellant herein had no knowledge of the award till the execution proceedings were filed in the year 2018. Since he had contested the execution petition which had subsequently led to the attachment of his property on 07.02.2020 and later due to Covid-19 restrictions in place, and in view of the Hon'ble Supreme Court's order in Suo moto Writ Petition (Civil) No.3/2020 where exemption for computation of delay between 15.03.2020 and 28.02.2022 in all judicial and quasi judicial cases was granted, we are inclined to condone the delay of 5 years, 1 month and 11 days by the appellant in filing this appeal. Also, in view of our observations on the impugned order in the point No.2 below, we are of the opinion that this is an appeal which has substantive merits and hence a liberal view of the delay caused in filing this appeal needs to be taken. The delay seems to be unintentional and hence for the above said reasons, we answer this point in the Affirmative. 8. Point No.2: Some of the important contentions raised by the appellant in support of his appeal are- 1) That the appellant is not a member of the society and that he has been falsely admitted as a member and that the 1st respondent society has not produced any document to establish that the appellant is a member of the 1st respondent society. We have examined the Trial Court records in this regard and notice that there is no document produced by the 1st respondent pertaining to membership of the appellant in the 1st respondent society, and hence this contention of the appellant appears true. But the learned 2nd respondent has - 6 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 not considered this issue at all in the impugned order. 2) The appellant has contended that the appellant had not applied for loan of Rs.8 lakhs from the 1st respondent society, but that the 1st respondent society has created forged loan application with his signature and also that though the appellant had stated the same in his objections to the dispute loan petition filed by the 1st respondent society against him, the learned 2nd respondent had not at all considered this issue which adjudicating the dispute in favour of the 1st respondent society. We have perused the Trial Court records in this regard and observe that the appellant herein had submitted to the court that his signature has been forged by the 1st respondent society on loan documents and that he had not obtained any loan from the 1st respondent society and that the documents need to be sent for the opinion of a Handwriting is seen that except Exhibit P-4 (which also is mentioned as True copy- AiÀÄxÁ ¥Àæw), all the Exhibits No.1 to 8 marked and taken on record as evidence of the 1st respondent society by the learned 2nd respondent are Xerox copies certified by Chief Executive Officer of the 1st respondent society and not the original documents. This procedure is wrong and creates suspicion on the actual genuineness of the alleged loan documents. Hence we are convinced that the claim or the contention of the appellant regarding the genuineness of the documents produced has some merit and further we are of the opinion that the learned 2nd respondent has ignored this crucial issue and has wrongly marked Xerox copies as Exhibits of the 1st respondent's evidence. To that extent definitely the Trial suffers from unlawful procedure. 3) The appellant has further contended that on the Demand pro-note dated: 27.07.2009 - 7 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 produced by the 1st respondent society in the dispute (Exhibit P-2), a sum of Rs. 33,51,671/- is shown as against the loan sanctioned for a sum of Rs. 6,50,000/- (Exhibit P-1) and that the signatures of the appellant on these documents are forged. On perusal of the Trial Court records, it is found to be true and hence this further confirms suspicion of the entire loan transaction. 4) The appellant's another ground of appeal is that the alleged Joan Agreement Bond produced as evidence by the 1st 1 respondent society states that an earlier old loan of Rs.27,01,671/- exists and further states that the total loan would be Rs. 33,51,671/- including the future loan of Rs.6,50,000/- to be availed by the appellant herein. The appellant contends that he had neither taken earlier loan of Rs. 27,01,671/- as stated in the alleged loan agreement nor availed the 2nd loan of Rs. 6,50,000/- as alleged by the 1st respondent society in the loan dispute petition and argues that none of the alleged documents produced by the 1st respondent society in the Trial were signed by him and claims that they were all forged documents. When we examined the copies of the alleged documents in question, the allegation of the appellant that earlier alleged loan amount Rs.27,01,671/- is carried over in the alleged loan agreement document is found to be true and such a carryover of the earlier liability in a new loan document appears to be a strange practice and raises doubts about the veracity of the said documents. 5) The appellant further alleged that as per the endorsement given by the Tahsildar, Sirsi Taluk, there is no entry in R.T.C stating that the property of appellant was mortgaged with respect to the alleged loan transaction. We have examined the endorsement of the Tahsildar, Sirsi produced by the appellant herein and find that the said submission - 8 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 made by the appellant in this regard is true, which further raises serious doubts as to whether the alleged loan was transacted or not. 6) The appellant submitted that the 1st respondent has not taken any surety for the sanction of the alleged loan and not even got executed memorandum of Deposition of Title deed (mortgage deed) in respect of the property of the appellant which shows that the alleged loan was not given by the 1st respondent society to the appellant. When we have examined the Trial Court records, the submission of the appellant in this regard is found to be true as no document is found regarding surety for the alleged loan transaction and no document is seen with respect to any mortgage deed executed in respect of property of the appellant. In view of this, we are of the opinion that the entire loan transaction looks suspicious and needs a detailed enquiry. 7) The appellant has urged that since he had submitted in his objection to the loan petition that all his signatures in the alleged loan documents are forged, he had requested the Arbitrator to send those documents for opinion of a Handwriting expert. However, we notice that the appellant herein had merely stated in his objections and had not pursued his claim through a proper application. 8) The appellant further contended that the learned 2nd respondent had not conducted the Trial fairly and in accordance with principles of natural justice as borne out of the following submission regarding the proceedings in the Trial - "On 09.10.2015 the case was adjourned for cross examination of the 1st respondent witness finally, on that day the counsel for appellant was present and the case was adjourned to 30.10.2015. On 30.10.2015 the appellant's counsel remained absent and case was posted for orders on 03.11.2015. Instead of posting the case for respondent 350 - 9 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 Devidence, on 03.11.2015 the case was called and the 2nd respondent Assistant Registrar has directed the 1st respondent thus, “ªÁ¢UÉ ¥ÀæwªÁ¢ PÀqɬÄAzÀ ªÀ¸ÀÆ° §gÀvÀPÀÌ ¨ÁQ gÀRA PÀÄjvÀÄ °TvÀ ºÉýPÉ ¸À°è¸À®Ä ¸ÀÆa¸À¯Á¬ÄvÀÄ.” It is submitted that the 1st respondent society had not submitted written statement with regarding recovery of loan from the appellant. But strangely and surprisingly on the very same day, the impugned award under appeal was passed without giving sufficient and fair opportunity to the appellant to cross examine the 1st respondent on the statement filed by it as directed by the Assistant Registrar." We have perused the case notes of the Trial proceedings and observe that on 03.11.2015, the learned 2nd respondent without earlier concluding the stage of cross-examination of the 1st respondent society by the appellant and stage of evidence on behalf of appellant as nil, has asked for written statement from the 1st respondent society and passed the impugned order on the same day i.e. 03.11.2015, which clearly shows that the Trial was concluded in hurry and improperly without following the fair Japrinciples of Trial. The 1st respondent society has not countered any of the above 0-56contentions of the appellant forcefully during the appeal. Also, 8 we have perused the impugned order dated: 03.11.2015 and observe that the Arbitrator, i.e. the learned 1st respondent has hota passed a very sketchy, non-speaking order, without so much as a brief mention of the documents marked as evidence and a brief analysis before passing the award. We are dismayed that the learned 1st respondent has passed such a callous, non- speaking award and as such the impugned order by itself is not sustainable. - 10 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 In view of our above mentioned observations and taking into consideration the lacunae in the Trial Court proceedings, we are of the firm opinion that the impugned order has to be set aside and matter remanded back to the 1st respondent for fresh hearing with a direction to the 1st respondent to re- conduct the Trial fairly keeping in view the observations made by this Tribunal on the point regarding the genuineness of the alleged loan transaction. Accordingly we hold the above point in the Affirmative. 9. Point No.3: In view of the above stated reasons while answering Point No.1 and 2 we proceed to pass the following: ORDER ➤ The limitation application filed by the appellant society u/s 5 of the Limitation Act is hereby allowed. Accordingly the delay of 5 years 1 month and 11 days in filing this appeal by the appellant is hereby condoned. ➤ The Appeal filed by the appellant u/s 105 of Karnataka Co-operative Societies Act, 1959 is hereby allowed and the impugned order passed by the 2nd respondent in 21/BA/ABN/1144/2012-13, 03.11.2015 is Dispute No.SANI set aside. dated: ➤ The 1st respondent society is hereby directed to refund the pre deposit made by the appellant with the 1st respondent society in compliance of mandatory 25% of the disputed award amount u/s 105 (2) of the KCS Act, within seven days of the date of the receipt of this order. ➤ The matter is remanded to the 2nd respondent for hearing afresh and it is hereby directed that the 2nd respondent shall afford reasonable opportunity to both the parties and decide the matter in accordance - 11 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 with law expeditiously keeping in view the observations made by this Tribunal in respect of the genuineness of the loan transaction. ➤ The Registrar of the Tribunal is directed to comply with Regulation 53(a) of Chapter IX Karnataka Appellate Tribunal Regulations, 1979 by communicating the order and send back records to the concerned authority immediately.” 8. In the light of the reasoned order of the Tribunal noticing the contentions of both the parties, there is no warrant of interference at the hands of this Court at this juncture, as whether the loan is taken or not, what is the property mortgaged and whether the property that was mortgaged was in the possession of the respondent No.4 all of which will have to be trashed by way of evidence, which opportunity that the respondent No.4 did not have when the matter was considered by the Assistant Registrar of Co-operative Society. 9. The learned counsel for the petitioner also submits that the petitioner was not even cross-examined by the respondent. Therefore, the order had to be passed by the Assistant Registrar of Co-operative Society. 10. Be that as it may, in the light of the remand by the Tribunal, there is no warrant of interference. It is the Assistant - 12 - HC-KAR NC: 2025:KHC-D:17058 WP No. 102450 of 2025 Registrar of Co-operative Society shall conclude the proceedings within an outer limit of three months from the date of receipt of the copy of the order in accordance with law. 11. All contentions remain open. It is made clear that this Court has not considered any submission on the merit of the matter except the one considered in the course of the order. Ordered accordingly. Sd/- (M.NAGAPRASANNA) JUDGE RSH / CT: ASC LIST NO.: 1 SL NO.: 34