- 1 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF DECEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE D K SINGH AND THE HON'BLE MS. JUSTICE TARA VITASTA GANJU WRIT PETITION NO. 45142 OF 2014 (CS-RES) BETWEEN: 1. ALDANGADI VYAVASAYA SEVA SAHAKARA SANGHA, ALADANGADI, BELTHANGADI TALUK, D.K.DISTRICT, BY ITS CHIEF EXECUTIVE OFFICER. 2. H.DHARMAPPA POOJARY S/O MUNDAPPA POOJARY, AGE 59 YEARS, R/O NALKOOR HOSAMANI, PO – BALANJE, BELTHANGADI TQ. DIRECTOR, ALADANGADI VYAVASAYA SEVA SAHAKARA SOCIETY, ALADANGADI. 3. H.SURESH KUMAR S/O NEMIRAJ HEGDE, AGED 60 YEARS, CEO., ALADANGADI VYAVASAYA SEVA SAHAKARA SOCIETY, ALADANGADI, R/O PERRADAL, NAVARA VILLAGE, - 2 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 PO – SULAKERI, BELTHANGADI TQ. …PETITIONERS (BY SRI. DEVI PRASAD SHETTY., ADVOCATE) AND: 1. GOVERNMENT OF KARNATAKA, DEPT OF CO-OPERATION, M.S.BUILDING, BANGALORE-560 001, BY ITS PRINCIPAL SECRETARY. 2. REGISTRAR OF CO-OPERATIVE SOCIETIES , NO.1, ALI ASKER ROAD, BANGALORE-560 003. 3. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, MYSORE REGION, MYSORE-570 001. 4. DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, JANATHA BAZAR, 1ST FLOOR, GANAPATHI HIGH SCHOOL ROAD, MANGALORE, DAKSHINA KANNADA DISTRICT-575 001. 5. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, PUTTUR, DAKSHINA KANNADA DISTRICT-544 101. 6. KARNATAKA LOKAYUKTHA, M.S.BUILDING, BY ITS REGISTRAR, BENGALURU-560 001. …RESPONDENTS (BY SRI. AGA FOR R1-R5.,ADVOCATE) THIS W.P. FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER DATED 13.6.2008 VIDE ANN-D PASSED BY R-3 IN SO FAR AS THE CONDITION NO.2 IS CONCERNED, QUASH THE - 3 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 COMMUNICATION DATED 10.7.2014 VIDE ANN-F AND THE REPORT DATED 3.7.2014 SUBMITTED BY THE R-6 VIDE ANN-F1 AND COMMUNICATION DATED 6.8.2014 ISSUED BY THE R-1 VIDE ANN-G. QUASH THE COMMUNICATION DATED 22.8.2014 ISSUED BY THE R-2 VIDE ANN-H AND COMMUNICATION DATED 30.8.2008 ISSUED BY THE R-4 VIDE ANN-JQUASH THE NOTICE ISSUED TO THE PETITIONERS NO.2 ON 2.9.2014 VIDE ANN-K AND THE NOTICE ISSUED BY THE R-5 DATED 2.9.2014 VIDE AN-K1 AND ETC. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: ORAL ORDER (PER: HON'BLE MR. JUSTICE D K SINGH) The present writ petition has been filed challenging the order dated 13.06.2008 passed by the Joint Registrar of Co-operative Societies, Mysuru, granting administrative permission to the petitioner No.1 – Society to construct a ground and first floor building for the Aladangadi Vyavasaya Seva Sahakara Sangha and Agriculture Service Co-operative Bank Limited. CORAM: HON'BLE MR. JUSTICE D K SINGH & HON'BLE MS. JUSTICE TARA VITASTA GANJU - 4 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 2. The petitioner has also prayed for quashing the communication dated 10.07.2014 issued by the Lokayukta enclosing the report under Section 12(3) of the Karnataka Lokayukta Act, 1984. The petitioner has further challenged the consequential orders and recommendations. 3. The petitioner is a Co-operative Society registered under the provisions of the Karnataka Co- operative Societies Act, 1959. An inquiry was conducted by the Assistant Registrar of Co-operative Societies, Sub- Division, regarding the functioning of the Society. The several allegations were made against the Society, including misappropriation of funds and irregularities concerning the proposal to construct a new building. 4. However, the Joint Registrar of Co-operative Societies, Mysuru Division, Mysuru, by order dated 13.06.2008, granted administrative sanction for constructing the ground and first floor building of the Co- operative Society, which runs a bank. Considering the - 5 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 various allegations, the order was passed with the following conditions: “Conditions: 1. Work shall be executed as per the S.R. rates of the Public Works Department for the year 2007-08; 2. Provisions of the Transparency Act shall be followed without fail; 3. Building construction work shall be carried out under the supervision of the management board of the bank; 4. The said work shall be completed well within the estimated cost of Rs.29.15 Lakhs. 5. Expenses incurred for the ground and 1st floor of the building works of the bank shall be meted out only from the following sources: 1. Welfare fund Rs.4,00,000-00 2. Building fund Rs.2,65,000-00 3. Subscription Rs.1,50,000-00 4. Loan from District Central Co-operative bank Rs.21,00,000-00 Total Rs.29,15,000-00 6. Prior permission shall be obtained by the Deputy Registrar, Dakshina Kannada district, Mangalore to utilize the welfare fund.” - 6 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 5. The building was constructed pursuant to the order dated 13.06.2008. The complaints were thereafter filed alleging that the building was constructed in violation of the conditions stipulated in the order of the Joint Registrar dated 13.06.2008. One of the principal allegations was that the provisions of the Corporate Transparency Act, 2021 had not been followed. 6. The Lokayukta conducted an inquiry and submitted a report under Section 12(3) of the Karnataka Lokayukta Act, 1984. 7. The Lokayukta has found that Sri.H.Suresh Kumar, Chief Executive Officer of the Society, and Sri.H.Dharmappa Poojary, Director of the Society, had not followed the Transparency Rules and norms in the construction of the building, and that the allegations were prima facie established. It was further observed that the documents on record prima facie showed dereliction of duty and misconduct by the said two persons. A recommendation for disciplinary proceedings against them - 7 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 under the relevant rules and to intimate the action proposed to be taken on the report was made. 8. Learned Senior Counsel for the petitioner submits that the Government does not have any financial stake in the Society and therefore, exercises no control over it. Consequently, the provisions of the Karnataka Transparency Act would not be applicable to the Society. It is therefore contended that even if the transparency Act and Rules were not followed in the construction of the building, no action can be taken against the Society on that ground. 9. It is further submitted that two earlier complaints had been dismissed, and hence the Lokayukta ought not to have entertained the third complaint filed by the Ex-Chief Executive Officer. Therefore, the inquiry and the subsequent report are without jurisdiction. 10. Learned AGA submits that serious allegations were made regarding the functioning of the Management - 8 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 Committee and that members of the Society were opposing the construction of the building by the current management. The Committee itself approached the Joint Registrar seeking administrative sanction for construction and represented that the building would be constructed strictly in accordance with law. Once the Joint Registrar granted sanction with specific conditions, the Society is estopped from contending that the conditions and rules are not applicable. 11. Learned counsel Sri.Joseph Anthony, appearing for the Lokayukta – respondent No.6, further submits that the third complaint was a detailed complaint regarding serious violations committed by the Management Committee. The Lokayukta found substance in the allegations, conducted an inquiry, and prima facie established the violations. It is submitted that there is no principle of res judicata under the provisions of the Karnataka Lokayukta Act that would bar the investigation of subsequent complaints. - 9 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 12. We have considered the submissions. Apart from the points raised by the learned Senior Counsel for the petitioner, it is relevant to take note of the order passed by the Joint Registrar in 2008. 13. The petitioner approached the Joint Registrar seeking administrative sanction for construction of the building. The Joint Registrar granted sanction subject to specific conditions which were not challenged at that time. After having accepted the order and constructed the building pursuant to it, the petitioner cannot now contend that the conditions are not binding. There is substance in the submission of Sri.G.S.Aruna, learned AGA, that the petitioner, having accepted the order and completed the construction, cannot challenge the conditions they did not challenge earlier. 14. There is no application of the principle of res judicata under the Karnataka Lokayukta Act to bar inquiry into subsequent complaints. Therefore, we do not find any merit in the writ petition, which is accordingly dismissed. - 10 - HC-KAR NC: 2025:KHC:52675-DB WP No. 45142 of 2014 15. Pending I.A’s does not survive for consideration. (D K SINGH) JUDGE (TARA VITASTA GANJU) JUDGE TIN List No.: 1 Sl No.: 7 Digitally signed by DINESH KUMAR SINGH Location: HIGH COURT OF KARNTAKA Digitally signed by TARA VITASTA GANJU Location: HIGH COURT OF KARNTAKA