Writ Petition No. 30812 of 2024 · The High Court
Case Details
- 1 - NC: 2025:KHC:3850 WP No. 30812 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MRS JUSTICE K.S. HEMALEKHA WRIT PETITION NO. 30812 OF 2024 (CS-RES) BETWEEN: 1. SMT. KASTURI, W/O SRI KASHINATH PRABHU, AGED ABOUT 47 YEARS, R/AT NANDIGUDDE, NEAR BABBUSWAMY TEMPLE, BRAHMAVARA, UDUPI TALUK, UDUPI DISTRICT - 576 213. 2. SRI KASHINATH PRABHU, S/O SANJEEVA PRABHU, AGED ABOUT 51 YEARS, R/AT NANDIGUDDE, NEAR BABBUSWAMY TEMPLE, BRAHMAVARA, UDUPI TALUK, UDUPI DISTRICT - 576 213. Digitally signed by MAHALAKSHMI B M Location: HIGH COURT OF KARNATAKA …PETITIONERS (BY SRI. PRASANNA V R.,ADVOCATE) AND: 1. THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, CO-OPERATIVE SOCIETIES NO.441, KARNATAKA RAJYA SOUHARDA SAMYUKTA SAHAKARI NIYAMITA, O.62, 2ND FLOOR, MARGOSA ROAD, RD MAIN, 18TH CROSS, MALLESHWARAM, BENGALURU - 560 055. - 2 - NC: 2025:KHC:3850 WP No. 30812 of 2024 2. HAMSA CHAITANYA SOUHARDA SAHAKARI NIYAMITHA, REPRESENTED BY THE CHIEF EXECUTIVE OFFICER, NO.10-F(A), 3RD FLOOR, MAITHRI COMPLEX, NEAR SERVICE BUS STAND, UDUPI - 576 101. KARNATAKA SOUHARDA SHAKARI ACT, 1997.
Legal Reasoning
(BY SRI.SIDDARTH BABURAO., AGA FOR R-1) …RESPONDENTS
Decision
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER NO. DRD/KA.RA.SOU/SAM.NI/7063/2021-22 PASSED BY THE R1 DyRCS, VIDE ANN-A AND CONSEQUENTLY QUASH THE ENTIRE PROCEEDINGS THEREOF AND ETC., 18/10/2024 DISPUTE DATED IN THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA ORAL ORDER The petitioners are seeking for the following prayer: (i) Writ of Certiorari, quashing the Order dated:18.10.2024 in Dispute No.DRD/ Ka.Ra.Sou.Sam.Ni/7063/2021-22 passed by the Respondent No.1 DyRCS, Vide Annexure-A and consequently quash the entire proceedings thereof, (ii) Any other writ or direction to meet the ends of justice. - 3 - NC: 2025:KHC:3850 WP No. 30812 of 2024 2. Heard learned counsel appearing for the petitioners and learned AGA appearing for respondent No.1 and perused the material on record. 3. Respondent No.2 though served with the notice has chosen to remain absent. 4. Brief facts of the case are that respondent No.2-society filed claim petition before DyRCS-respondent No.1 under Section 39 of the Karnataka Souharda Sahakari Act, 1997 (‘KSSA Act’ for short) seeking to recover a sum of Rs.2,89,633/-. Simultaneously, respondent No.1 initiated proceeding against petitioner No.1 under the provisions of Section 138 of Negotiable Instruments Act, 1881 ('NI Act' for short) in CC No.3516/2018 before the Civil Judge and JMFC, Udupi. When the matter stood thus, the petitioners and respondent No.2-Society filed a joint memo in CC.No.3516/2018 entering into a compromise with certain terms towards the loan amount and in the default of payment of agreed terms by the petitioners, the - 4 - NC: 2025:KHC:3850 WP No. 30812 of 2024 complainant-society was reserved with a right to initiate the proceedings as per Sections 421 and 431 of Code of Criminal Procedure, 1973 (‘Cr.P.C’ for short), in view of the settlement arrived between the parties in CC No.3516/2018, the matter was referred to Lok Adalat and before the Lok Adalat, the order came to be passed and the proceedings came to be disposed of in terms of the joint memo. 5. In the meanwhile, the proceedings which were pending before the DyRCS set down for evidence of the society. The officer of respondent No.2-Society was examined as P.W.1 and in his cross-examination, he admitted about the settlement arrived at between the petitioner and respondent No.2-Society in respect of the entire loan amount by filing a joint memo in CC.No.3516/2018 and also about the disposal of the criminal proceedings. 6. The petitioner also filed a memo before the DyRCS indicating that the matter has been settled in - 5 - NC: 2025:KHC:3850 WP No. 30812 of 2024 terms of the joint memo dated 05.07.2023 in CC No.3516/2018 and sought to dismiss the proceedings initiated by the society. The DyRCS by the impugned order without application of mind rejected the memo filed by the petitioner. 7. Learned counsel for the petitioners drawing the attention of this Court to the joint memo in CC No.3516/2018, the order passed by the Lok-Adalat at Annexure-E1, and the relevant portion of the cross- examination of P.W.1-the officer of respondent No.2- society, submits that the proceedings in CC No.3516/2018 and the proceedings before the DyRCS were pertaining towards the loan amount and before the Lok-Adalat the parties have filed joint memo dated 05.07.2023 admitting that, towards the settlement of the loan account, the accused therein has to pay in all a sum of Rs.1,60,000/- in 32 installments of Rs.5,000/- each, which was accepted by both the parties and as per the terms of the memo, Lok- - 6 - NC: 2025:KHC:3850 WP No. 30812 of 2024 Adalat award came to be passed, which culminated in closure of proceedings and the loan account as well. 8. The petitioner and respondent No.2-Society filed joint memo at Annexure-E which reads as under: “The complainant and accused have filed the joint memo as follows. That the accused has agreed to pay a sum of Rs.1,60,000/- (One Lakh Sixty Thousand only) in 32 monthly installments commencing from 16-08-2023 to 16-03-2026. The accused has agreed to pay Rs.5,000/-as monthly installments towards the full and final settlement of the loan account. The complainant has also agreed for the same. Further the complainant has agreed to issue and acknowledge the receipt of money for each installment to the accused. That in default of payment of monthly instalment as agreed above, the complainant reserves his right to intiate legal proceedings as per sec.421 and 431 of CrPC, 1973. Hence both the complainant and accused pray before this Hon'ble Court to close above case in terms of joint memo in the interest of justice.” (Emphasis supplied) - 7 - NC: 2025:KHC:3850 WP No. 30812 of 2024 9. The memo clearly indicates that the settlement arrived at between the parties is towards a full and final settlement of the loan account. This fact is not disputed by respondent No.2-societ, P.W.1-official of respondent No.2-society in unequivocal terms has clearly admitted about the settlement arrived and the closure of the NI proceedings. The relevant portion of the cross- examination of P.W.1 before the DyRCS is as under: “(cid:1)(cid:2)(cid:3)(cid:4) (cid:6)(cid:7)(cid:8)(cid:9)(cid:10)(cid:11)(cid:3) (cid:12)(cid:13)PÀëöå(cid:14)(cid:13)(cid:15)(cid:16)(cid:17)(cid:18)(cid:19)(cid:13)(cid:20) (cid:1)(cid:21)(cid:13)(cid:22)(cid:17) (cid:23)-1 (cid:25)(cid:26)(cid:20) 8(cid:10)(cid:3)(cid:27)(cid:17)(cid:28)(cid:29) (cid:14)(cid:13)(cid:15)(cid:16)(cid:17)(cid:18)(cid:30)(cid:29)(cid:11)(cid:31) (cid:1)(cid:2) (cid:17)(cid:2) (cid:1)!" #(cid:10)(cid:3)$%(cid:17)&(cid:26)(cid:20) #(cid:27)(cid:17)’(cid:10)(cid:11)()(cid:2)(cid:25) *(cid:26)(cid:20)(cid:27)(cid:17) +,(cid:8). ./( (cid:13)’%(cid:17) !0(cid:11)) (cid:13)’%(cid:17) 1(cid:13)(cid:3)(cid:4)(cid:14)(cid:17)(cid:2) (cid:25)(cid:2)(2 345(cid:13)(cid:9)(cid:29) (cid:3)6(cid:3)7(cid:13)(cid:10) +,(cid:8) *(cid:26)(cid:20)(cid:27)(cid:17) (cid:6)(cid:25)2,(cid:8), ./( (cid:13)’%(cid:17) (cid:1)!"(cid:14)(cid:17)(cid:2) 8(cid:20) !9(cid:17):)(cid:26)(cid:20)(cid:11) (cid:6)(cid:26)(cid:12)(cid:17);1(cid:13)(cid:20) <0(cid:11)=> ?@A .(cid:26)B C(cid:17)D (cid:17)@ (cid:7)EF(cid:17)B +(cid:20)5(cid:17)G 345(cid:13)(cid:9)(cid:29) (cid:3)6(cid:3)7(cid:13)(cid:10) +(cid:10)(cid:11)0)(cid:14)(cid:17) *(cid:26)(cid:20)(cid:27)(cid:17) (cid:6)(cid:25)2,(cid:8). (cid:1)(cid:2)(cid:3)(cid:4) (cid:14)(cid:13)(cid:15)(cid:7)(cid:9)(cid:20) !:, (cid:14)(cid:13) (cid:17)2(cid:7)(cid:8)(cid:10)(cid:11)(cid:3) ./( (cid:13)’(cid:18)(cid:30) H(cid:19)(cid:13)(cid:6)(cid:3)(cid:4) (cid:6)(cid:25)1(cid:13)(cid:20) H(cid:19)(cid:13)(cid:6) 8(cid:28)(cid:10)(cid:11)0)(cid:14)(cid:17) *(cid:26)(cid:20)(cid:27)(cid:17) 7I(cid:20)(cid:11). (cid:12)(cid:13),(cid:20) (cid:6)(cid:26)#(cid:26)J (cid:6)(cid:7)(cid:8)(cid:9)(cid:10)(cid:11)(cid:3) (cid:14)(cid:13)(cid:15)(cid:16)(cid:17)(cid:18)(cid:30)(cid:7)(cid:8) 1(cid:13)(cid:3)(cid:4)(cid:14)(cid:17)(cid:2) (cid:25)(cid:2)( ./( (cid:13)’(cid:18)(cid:30) #(cid:10)(cid:3)$%(cid:17)2(cid:29)(cid:11)(cid:31) #(cid:27)(cid:17)’(cid:10)(cid:11)(cid:3)(cid:4)’,(cid:8) *(cid:26)(cid:20)(cid:27)(cid:17) (cid:6)(cid:11)(cid:30)KL, ./( (cid:13)’(cid:18)(cid:30)K (cid:6)(cid:20)(cid:25) (cid:14)(cid:13)(cid:15)(cid:16)(cid:17)2(cid:7)(cid:8) (cid:6)M N(cid:13)O(cid:10)(cid:11)9(cid:13))(cid:27)(cid:17). (cid:14)(cid:13) (cid:17)2(cid:29)(cid:11)(cid:31) (cid:14)(cid:13)(cid:15)(cid:7)(cid:6)(cid:11)(cid:3) .P(cid:3)>(cid:20)(cid:7)(cid:8) ./( (cid:13)’(cid:18)Q%(cid:17) 1(cid:13)(cid:3)(cid:4)(cid:14)(cid:17)(cid:2) (cid:22)(cid:17):(cid:2)R(cid:2)S (cid:1)(cid:2)O,(cid:8) *(cid:26)(cid:20)(cid:27)(cid:17) (cid:6)(cid:25)2,(cid:8). (cid:22)(cid:17):(cid:2)R(cid:2)S (cid:1)(cid:2)T(cid:16)(cid:13)(cid:28)(cid:14)(cid:17). ./( (cid:13)’(cid:18)(cid:30) H(cid:10)(cid:11)(cid:20)U, VT(cid:11)(cid:23) (cid:23)/(cid:1)A.W (cid:9)HW XBY Z(cid:26)B (cid:22)(cid:17)%(cid:17):(cid:2)]2#W +^ (cid:6):_‘(cid:26)@ [(cid:17)*(cid:26)*\ (cid:9) 5(cid:13)ab2(cid:29)c2 ./( (cid:13)’(cid:18)(cid:30) H(cid:10)(cid:11)(cid:20)U (cid:14)(cid:13) (cid:17) (cid:14)(cid:13)(cid:15)(cid:7)(cid:9)(cid:10)(cid:11)()(cid:2)(cid:25) *(cid:26)(cid:20)(cid:27)(cid:17) (cid:6)(cid:25), (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) (cid:6)(cid:20)(cid:25) (cid:14)(cid:13) (cid:17)2(cid:11) (cid:6)3 +(cid:14)(cid:17)(cid:2) Hd25(cid:17)G (cid:6)(cid:26)#(cid:26)J.Re(cid:14)(cid:13)b(cid:28)(cid:14)(cid:17) *(cid:26)(cid:20)(cid:27)(cid:17) (cid:6)(cid:25). (cid:6)(cid:20)(cid:25) (cid:14)(cid:13) (cid:17)2 (cid:6)(cid:26)f(cid:17)6 1(cid:13)(cid:3)(cid:4)(cid:20)(cid:11) *(cid:26)(cid:20)(cid:27)(cid:17) (cid:9)(cid:9) 3516/2020, (cid:6)(cid:20)(cid:25) (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) ’: 08.07.2023 (cid:10)(cid:26)(cid:20)(cid:11) X(cid:26)R ‘h(cid:2) (cid:6)(cid:7)(cid:8)(cid:9)(cid:20) 5(cid:13)(cid:10)4 - 8 - NC: 2025:KHC:3850 WP No. 30812 of 2024 +06i> (cid:13)(cid:28)(cid:14)(cid:17) *(cid:26)(cid:20)(cid:27)(cid:17) 7I(cid:20)(cid:11); (cid:6)(cid:20)(cid:25) (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) (cid:6)(cid:7)(cid:8)(cid:9)(cid:20) X(cid:26)R ‘h(cid:2) (cid:25)9(cid:13)" ./( (cid:13)’(cid:18)(cid:30)K (cid:12)(cid:13),(cid:20) h0)(cid:3)(cid:29)(cid:11)(cid:31) C(cid:13)(cid:3)((cid:9)(cid:10)(cid:11)(cid:3)(cid:4)’,(cid:8). X(cid:26)R ‘h(cid:2) (cid:25)(cid:2)9(cid:13)6 ./( (cid:13)’(cid:18)(cid:30)K (cid:12)(cid:13),(cid:20) h0)(cid:3)(cid:29)(cid:11)(cid:31) C(cid:13)(cid:3)((cid:9)(cid:10)(cid:11)9(cid:13))(cid:27)(cid:17) *(cid:26)(cid:20)(cid:27)(cid:17) ((cid:2).(cid:4)> 8(cid:20) (cid:29)(cid:26)0(cid:10) j(cid:26)(cid:20)(cid:11) k(cid:26)0(cid:11) h0)(cid:3)(cid:29)(cid:11)(cid:31) N(cid:13)0/ (cid:6)(cid:7)(cid:8)(cid:9)(cid:10)(cid:11)9(cid:13))(cid:27)(cid:17). (cid:6)(cid:20)(cid:25) (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) X(cid:26)R ‘h(cid:2) (cid:6)(cid:7)(cid:8)(cid:9)(cid:20) (cid:6)(cid:26)(cid:20)l>(cid:20)(cid:7)(cid:8) (cid:1)(cid:2)(cid:3)(cid:4) m (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) (cid:14)(cid:13)(cid:15)(cid:7)(cid:9)(cid:20) ./k(cid:10)4(cid:3)(cid:29)(cid:11)(cid:31) (cid:13).(cid:6)(cid:11)A .n(cid:17)2(cid:11)(cid:3)(cid:4)(cid:14)(cid:13)(cid:28) (Q(cid:9)(cid:10)(cid:11)()(cid:2)(cid:25) *(cid:26)(cid:20)(cid:27)(cid:17) 7I(cid:20)(cid:11), 8(cid:20)(cid:27)(cid:17) ./( (cid:13)’(cid:18)(cid:30)K (cid:13)’ (cid:6)35(cid:13)(cid:25)%(cid:17) C(cid:13)(cid:3)((cid:6)o(cid:17)(cid:2)5(cid:13)(cid:28)(cid:10)(cid:11)(cid:3) (cid:12)(cid:13),(cid:20) h0)(cid:3)(cid:29)(cid:11)(cid:31) (cid:22)(cid:13)61(cid:13),2(cid:20) ((cid:2)(cid:23)>(cid:29)(cid:26)9(cid:17) C(cid:13)(cid:3)((cid:6),(cid:11) j(cid:23)_(cid:10)(cid:11)(cid:3)(cid:4)(cid:20)(cid:25)(cid:26)(cid:20) (cid:22)(cid:13)(cid:3)(cid:4) Z(cid:20)5(cid:17)G j(cid:23)_(cid:10)(cid:11)9(cid:17))(cid:2) (cid:17). 8(cid:20)(cid:27)(cid:17) ./( (cid:13)’(cid:18)(cid:30)K X(cid:26)R ‘h(cid:2) (cid:25)(cid:2)9(cid:13)6 (cid:12)(cid:13),(cid:20) h0) C(cid:13)(cid:3)((cid:9)(cid:10)(cid:11)(cid:3)(cid:4)’,(cid:8). m (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) !0(cid:11)) ‘(cid:2)(cid:16)(cid:17) (Q(cid:9)(cid:20) (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) (cid:14)(cid:13)(cid:15)(cid:7)(cid:9)(cid:10)(cid:11)(cid:3) (cid:14)(cid:13) (cid:17)(cid:18): j(cid:26)(cid:14)(cid:17)(cid:2) Hd25(cid:17)G (cid:6)(cid:26)#(cid:26)p(cid:9)(cid:14)(cid:13)b(cid:28)(cid:14)(cid:17) *(cid:26)(cid:20)(cid:27)(cid:17) m (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) (cid:12)(cid:13), (cid:3)(cid:6):(cid:16)(cid:13)(%(cid:13)(cid:28) !0(cid:11)) VT(cid:11)(cid:23) (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) q(cid:17)r oI^A ./k(cid:10)4 (cid:14)(cid:13)(cid:15)(cid:7)(cid:6)(cid:16)(cid:13)(cid:28)(cid:14)(cid:17). j(cid:26)(cid:14)(cid:17)(cid:2) Hd25(cid:17)G (cid:6)(cid:26)#(cid:26)J.se(cid:26)9(cid:17) *(cid:10)n(cid:17)(cid:10)T(cid:11) (cid:14)(cid:13) (cid:17) 3:T,(cid:11) 5(cid:13)(cid:29):(cid:1)(cid:29)(cid:7)(cid:8) Z(cid:3)5(cid:13)t +,(cid:8) *(cid:26)(cid:20)(cid:27)(cid:17) (cid:6)(cid:25)2,(cid:8). ./( (cid:13)’(cid:18)(cid:30)K j(cid:26)(cid:20)(cid:11) k(cid:26)0(cid:29)(cid:11)(cid:31) C(cid:13)(cid:3)((cid:9)!" VQ(cid:20) h0)(cid:3)(cid:29)(cid:11)(cid:31) C(cid:13)(cid:3)((cid:6),(cid:11) (cid:9)(cid:20)UH(cid:20)b(cid:10): (cid:6)3 (cid:1)(cid:2)(cid:3)(cid:4) (cid:20)(cid:11)(cid:10)(cid:11)(cid:14)(cid:17)b(cid:2)t’(cid:26)(cid:20) m (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) ./k(cid:10)4(cid:3)(cid:29)(cid:11)(cid:31) ªÀÄÄAzÀĪÀj¸ÀÄwÛ¢ÝÃj JAzÀgÉ ¸ÀjAiÀÄ®è. MAzÉà ªÉÆvÀÛzÀ ªÀ¸ÀƯÁwUÁV JgÀqÀÄ (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) *(cid:10)T(cid:11) (cid:14)(cid:13) (cid:17) 3:O’b(cid:2)(cid:25) *(cid:26)(cid:20)(cid:27)(cid:17) 7I(cid:20)(cid:11). m (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) (cid:12)(cid:13), (cid:3)(cid:6):(cid:16)(cid:13)(%(cid:13)(cid:28), VT(cid:11)(cid:23) (cid:22)(cid:13)61(cid:13),2(cid:20)(cid:7)(cid:8) q(cid:17)r oI^A ./k(cid:10)4 (cid:14)(cid:13)(cid:15)(cid:7)(cid:6)(cid:16)(cid:13)(cid:28)(cid:14)(cid:17).” (Emphasis supplied) 10. In terms of the joint memo, the matter was referred to Lok-Adalat and before the Lok-adalath the following order was passed, which reads as under: “Perused the joint memo filed in before the court by the complainant and accused through their respective advocates. - 9 - NC: 2025:KHC:3850 WP No. 30812 of 2024 In view of the settlement arrived between parties as per the terms and conditions of the joint memo it is prayed to close the above case before the lok adalath. Further the complainant has reserved the right to recover money in case of default u/sec.421 and 431 CrPC. Accordingly the following order is passed. The above case is closed and disposed of in terms of joint memo.” (Emphasis supplied) 11. The liberty was reserved to the complainant- society to recover the money in case of default under Sections 421 and 431 of Cr.PC. The said fact was brought to the notice of DyRCS by the petitioners by filing a memo, the DyRCS, without considering that the settlement has been arrived at by the petitioner and respondent No.2- Society about closure of the loan amount, has proceeded with the matter and passed the impugned order at Annexure-A. 12. Two parallel proceedings for the same underlying transaction were initiated by respondent No.2- - 10 - NC: 2025:KHC:3850 WP No. 30812 of 2024 society, the original complaint under Section 138 of NI Act was in light of dishonor of the cheque, which was issued towards the loan amount. The settlement terms before the criminal proceedings were towards the full and final settlement of the loan amount. After the settlement was reached, the proceedings were not continued and any breach of settlement terms provided liberty to take action in accordance with law. The settlement agreement/joint memo explicitly addresses the term that the settlement arrived at is towards the full and final settlement of the loan account. This being clearly defined, the proceedings before the DyRCS cannot proceed, and the proceedings should be concluded as rightly presented by the petitioner. 13. For the foregoing reasons, the impugned order passed by respondent No.1-DyRCS is unsustainable and contrary to the material on record warranting interference by this Court and this Court pass the following: - 11 - NC: 2025:KHC:3850 WP No. 30812 of 2024 i. ii. ORDER The writ petition is allowed. The impugned order dated 18.10.2024 passed by respondent No.1 at Annexure-A is set aside. iii. The proceedings initiated by respondent No.2- society before the DyRCS stands concluded in light of the settlement arrived at by the petitioner and respondent No.2-society before the Lok-Adalat towards a full and final settlement of the loan amount. iv. It is needless to observe that if the terms of the joint memo is violated, respondent No.1 is always at liberty to initiate appropriate action as indicated in the joint memo. Sd/- ________________________ JUSTICE K.S. HEMALEKHA KVR List No.: 1 Sl No.: 36