- 1 - HC-KAR NC: 2025:KHC:25328-DB MFA No. 3694 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF JULY, 2025 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE DR. JUSTICE K.MANMADHA RAO MISCELLANEOUS FIRST APPEAL NO. 3694 OF 2025 (KPIDFA) BETWEEN: 1. SRI SHANKAR VENKAPPA NAIKAR, AGE 56 YEARS, OPPOSITE FLOUR MILLS, NEAR DR. B.R. AMBEDKAR CIRCLE, BILAGI, BILAGI TALUK, BAGALAKOTE - 587 101. 2. SRI. SANTAPPA YASHAVANTAPPA SURYAVAMSHI AGE ABOUT 58 YEARS, BILAGI VILLAGE, BILAGI TALUK, BAGALAKOTE - 587 101. …APPELLANTS (BY SRI. B.B. SAGAR, ADVOCATE FOR SRI. CHETAN JADHAV, ADVOCATE) AND: 1. THE COMPETENT AUTHORITY AND ADDITIONAL REGIONAL COMMISSIONER, FOR S.M.N CREDIT SOUHARDA SAHAKARI NIYAMITHA, VIJAYAPURA, REPRESENTED BY THE SPECIAL PUBLIC PROSECUTOR. Digitally signed by SHARADAVANI B Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:25328-DB MFA No. 3694 of 2025 2. S.M.N CREDIT SOUHARDHA SAHAKARI NIYAMITHA, JAHANGIRDHAR COMPLEX, 1ST FLOOR, NEAR CHAITANYA HOTEL, M.G. ROAD, VIJAYAPURA - 586 101. 3. SRI. ANIL KUMAR KESHAVRAO DESHPANDE, AGE: MAJOR, KILLAGALLI, BILAGI, BILAGI TALUK, BAGALKOTE - 587 101. 4. SRI. PRADEEP B. MUNJANE AGE: MAJOR, SOUHARDHA SAHAKARI NIYAMITHA PLD BANK MAIN ROAD, BASAVANA BAGEWADI - 586 203. 5. KUM. RAMYA DESHPANDE AGE: MAJOR, R/AT NO. 2260, WARD NO.5, KILLA GALLI, BILAGI TOWN, BAGALAKOT DISTRICT. 6. SHRIHARI DESHPANDE AGE: MAJOR, R/AT NO.21, SUMUKHA, D SOUZA NAGAR, HOSKEREHALLI, BENGALURU - 560 085. …RESPONDENTS (BY SRI. VEERESH R. BUDIHAL, ADVOCATE FOR R1) THIS MFA IS FILED U/S.16 OF THE KARNATAKA PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL ESTABLISHMENTS ACT, AGAINST THE ORDER DATED 22.03.2025 PASSED IN MISC.NO.550/2023 ON THE FILE OF THE XCI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, SPECIAL JUDGE FOR KPIDFE CASES, BENGALURU CCH-92 - 3 - HC-KAR NC: 2025:KHC:25328-DB MFA No. 3694 of 2025 ALLOWING THE PETITIONS FILED U/S.5(2) OF THE KPIDFE CASES 2004. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE DR. JUSTICE K.MANMADHA RAO ORAL JUDGMENT (PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN) 1. The appeal is filed against an order of the Special Court under the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPIDFE Act). 2. The learned counsel for the appellants submits that Notification under Section 3(2) of the KPIDFE Act was issued on 11.11.2021 and an order of interim attachment was passed, since it is submitted petition under Section 5(2) of the KPIDFE Act was filed by the competent Authority before the Special Court only on 05.02.2022 and that the said application was belated, since the period provided under Section 5(2) for the competent Authority - 4 - HC-KAR NC: 2025:KHC:25328-DB MFA No. 3694 of 2025 to make the application is 30 days from the date of receipt of the order passed under Section 3(2) of the KPIDFE Act. 3. It is submitted that even going by the pleadings on record, the order under Section 3(2) of the KPIDFE Act was received on 21.12.2021 and, therefore, the time of 30 days would expire on 20.01.2022. It is stated that the application filed on 05.02.2022 is, therefore, obviously belated. The Special Court had proceeded to examine the dates and had held that the Special Court had considered the contentions raised and had held as follows- “12. As provided under Section 5(2) of the KPIDFE Act, the Competent Authority shall, within 30 days from the date of receipt of the order made under Section 3(2) of the said KPIDFE Act, apply to the Special Court for a further order of attachment absolute. However. by Amendment Act-2020, the proviso is added to this provision to extend the said period of 30 days by another 15 days by the Secretary to the Government, Revenue Department, on the request of the Competent Authority if there is a valid reason and based on the merits - 5 - HC-KAR NC: 2025:KHC:25328-DB MFA No. 3694 of 2025 of the case. In the instant case, as per the documents, the attachment order was passed by the Government on 11.11.2021, and the same was received by the competent authority on 21.12.2021. Further, Document No. 1 reveals that the Assistant Commissioner, Vijayapura, has been appointed as the Competent Authority under Sec. 5(1) of the KPIDFE Act vide Notification No. RD-50.GRC.2020 dated 30.12.2020 and again some clarification was issued in a fresh notification dated 30.12.2020, and the said notification was received by the Competent Authority on 07.01.2021, whereas the present petition was filed on 05.02.2022 before the Prl. District and Sessions Judge. Vijayapura, within 30 days from the date of receiving the notification. Therefore, it is clear that there is no delay in filing the petition, and it is within the period of limitation.” 4. Having considered the contentions advanced, we notice that the order under Section 3(2) of the KPIDFE Act was passed on 11.11.2021 and was admittedly received by the Competent Authority on 21.12.2021. If that be so, the time would have expired in January 2022 and the - 6 - HC-KAR NC: 2025:KHC:25328-DB MFA No. 3694 of 2025 application under Section 5(2) filed on 05.02.2022 would be belated. 5. In the above view of the matter, this appeal stands allowed. The order under challenge is set aside and the matter is remanded to the Special Court for a consideration of the application taking note of the contentions of the parties. All contentions of the parties are left open to be decided in the said proceedings. In view of the disposal of the appeal, all pending interlocutory applications, if any, stand disposed of. Sd/- (ANU SIVARAMAN) JUDGE Sd/- (DR.K.MANMADHA RAO) JUDGE HNM, List No.: 1 Sl No.: 28 CT: BHK