IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF MARCH, 2019 BEFORE THE HON’BLE MR. JUSTICE S.N.SATYANARAYANA WRIT PETITION No.41711/2013(CS-RES) BETWEEN:
THE LIQUIDATOR THE SIMPSON & GROUP OF COMPANIES EMPLOYEES WHOLESALE CO-OPERATIVE SOCIETY LTD., NO.146, 8TH CROSS, III MAIN ROAD, MAROSA ROAD, MALLESWARAM, BANGALORE-560003. ... PETITIONER (BY SRI. R.CHANDRANNA, ADVOCATE) AND 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, BANGALORE DIVISION, PAMPA MAHAKAVI ROAD, CHAMARAJPET, BANGALORE-560018.
2. SRI.P.K.CHANDRAN AGED ABOUT 57 YEARS, S/O LATE N.K.MANI IYER, C/O K.SHAMALA, NO.145, "AMMA", DODDABOMMASANDRA, VIDYARANYAPURA POST, BANGALORE – 560 097.
3. SRI.R.MUNISHWARAIAH AGED ABOUT 57 YEARS, S/O LATE RANGANATHAN, NO.1993, O.M.H.COLONY, JALAHALLI WEST, BANGALORE CITY- 560 015.
4. S.R.NAIK MAJOR, THE ENQUIRY OFFICER, THE SIMPSON & GROUP OF COMPANIES EMPLOYEES WHOLESALE CO-OPERATIVE SOCIETY LTD., NO.139, INFANTRY ROAD, BANGALORE-560 001. ... RESPONDENTS (BY SRI.A.K.VASANTH, GOVT.ADV. FOR R-1 SRI.M.R.RAJAGOPAL, ADV. FOR R-2 NOTICE TO R-4 DISPENSED WITH V/O DT. 17.10.2014, APPLS., TO BRING LR’S OF R3 ARE REJECTED V/O DT.22.1.16) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 27.3.2012 MADE IN APPEAL NO.840/2007 VIDE ANNEXURE-A PASSED BY THE KARNATAKA APPELLATE TRIBUNAL, BANGALORE.
THIS WRIT PETITION COMING ON FOR DICTATING ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER The liquidator of M/s Simpson and Group of Companies Employees Wholesale Co-operative Society Limited has come up in this writ petition impugning the order dated 27.03.2012 in Appeal No.840/2007 on the file of Karnataka Appellate Tribunal, Bengaluru.
2. Brief facts leading to this writ petition are as under:
The petitioner-Company herein is a co-operative society presently under the administration of liquidator. When the said company was functioning under Board of Directors being appointed to conduct its business, respondents No.2 and 3 herein were working as its godown managers. During the period when respondents 2 and 3 were looking after the business of the 1st petitioner- Society in its Indirananagar and Jewellers Stree branches, respectively, they said to have committed breach in short remittances for the period from 7.4.1993 to 30.4.1993 amounting to a sum Rs.12,21,544.09 ps together.
3. In this background, charge memo was issued to them on 20.12.1993 for which explanation was given by them on 29.12.1993 and 25.12.1993, respectively. Thereafter, it is stated that one Sri.Ganesh Bhat, advocate was appointed as enquiry officer to inquire into the misappropriation committed by respondents 2 and 3. The said Ganesh Bhat expressed his inability to go on with the enquiry. Hence, Sri.B.K.Nagaraj was subsequently appointed as enquiry officer and enquiry was proceeded and report was filed by him on 24.01.2007. After the report was submitted to the Society, when the liquidator of the society was on leave, in his absence, the person in- charge is said to have accepted the report on 26.2.2007. The acceptance of report in acquitting respondents No.2 and 3 of the charges alleged against them by in-charge liquidator was recalled by the liquidator by order dated 5.5.2007. Thereafter, the liquidator on 17.5.2007 passed an order for fresh enquiry against the petitioner herein by appointing Sri.S.R.Naik- as enquiry officer. The said appointment of 4th respondent as enquiry officer was subject matter of dispute before the 1st respondent.
4. In the said dispute, recalling of the order of in- charge liquidator accepting the report of enquiry officer B.K.Nagaraj was challenged. That dispute came to be dismissed by order dated 5.10.2007. Thereafter, it is seen that an appeal is filed before the KAT in Appeal No.840/2007 by respondents 2 and 3 challenging the order of 1st respondent-Joint Registrar of Co-operative Societies in dismissing their dispute in JRB/MD/10/2007-98. It is seen that in the said proceedings before the KAT, the order of dismissal of the dispute dated 5.10.2007 is set-aside and consequently order dated 5.5.2007 passed by in-charge liquidator in accepting the report of earlier enquiry officer dated 26.2.2007 and consequently, the order dated 17.5.2007 in ordering fresh enquiry are set-aside by the KAT which is sought to be challenged in this writ petition.
5. Heard the learned counsel for the petitioner as well as learned counsel for contesting respondents 2 and 3.
6. When the entire matter is looked into, this court would observe that serious error is committed by the KAT in considering the appeal filed by respondents 2 and 3 in Appeal No.840/2007 where the Tribunal has misdirected itself in appreciating the material available on record in holding that there is an error on the part of the Society in not entrusting the matter for enquiry up to 2007 and as if for the first time, the matter is referred to the enquiry officer-respondent No.4 for enquiry without looking into the fact that earlier the said matter was entrusted to one Ganesh Bhat as enquiry officer, who subsequently expressed his inability to go on with the matter and same was entrusted to B.K.Nagaraj, enquiry officer, who having kept the matter from 1994 to 2007 has submitted his report in the year 2007, which required the consideration of the liquidator.
7. When the matter stood thus, it is seen the in- charge liquidator though did not have the authority to take a decision with reference to this matter and exercise the power of regular liquidator, in his absence, he has clandestinely accepted the report, which is rightly set- aside by the liquidator by order dated 5.5.2007 and consequently, it is ordered for re-enquiry by order dated 17.5.2007, which is not rightly appreciated by the Tribunal. The Tribunal has proceeded on the premise as if enquiry ordered on 17.5.2007 itself is a fresh enquiry, which order is passed after delay of more than 14 years. Without looking into the record properly, the said order is passed.
8. Therefore, in the aforesaid circumstances, the order dated 27.3.2012 passed in Appeal No.840/2007 by the Karnataka Appellate Tribunal is required to be quashed and the earlier order passed by the liquidator on 5.5.2007 in setting aside the order passed by the in- charge liquidator in accepting the report of earlier enquiry officer B.K.Nagaraj is required to be upheld and consequently, ordering a fresh enquiry against respondents 2 and 3 by order dated 17.5.2007 should be given effect to.
9. While doing so, this Court would direct 4th respondent-S.R.Naik to take up this matter for enquiry and dispose of the same within one year from the date of commencement of the enquiry as directed by this Court in this proceedings. It is needless to state that in the said enquiry, the contesting respondents herein are entitled to take all permissible defence to establish their innocence.
Accordingly, the petition is allowed.
Sd/ JUDGE ln.