2008 Supreme(Kar) 382
2008 (4) KLO 2772 (DB)
IN THE HIGH COURT OF KARNATAKA
K. L. Manjunath and B. V. Nagarathna, JJ.
W.A. No. 313 of 2008
K.G. Rajashekar - Appellant
Vs.
The State of Karnataka and Others - Respondents
Decided on 24-6-2008
Appellant: Sri S. Prakash Shetty, Adv.
Result: Appeal dismissed.
Headnote:KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959 - Section 34 (1) & (2): [K.L.Manjunath & B.V.Nagarathna, JJ] Deduction from salary to meet Society’s claim -Whether there is any prohibition for a creditor to invoke Section 34 (1) & (2) of the Act, even after obtaining an award - Held, It is clear from the provisions of Section 34 that there is no prohibition for a creditor to invoke Section 34 (1) & (2), even though an award is obtained by him against the Debtor. Filing of a dispute under Section 70, is to obtain an award by raising a dispute within the stipulated time and thereafter also it is open for a creditor to invoke Section 34 and request the employer of the Debtor to deduct the amount as agreed upon out of his salary and therefore Section 34 can be pressed into service by a creditor either before raising a dispute and also after raising a dispute. By mere reading of Section 34(1) (2) of the Act, it is clear that there is no prohibition for a creditor to invoke Section 34(1) & (2) of the Act even after obtaining an award.
K.L. Manjunath, J.
The Appellant was respondent No. 4 in Writ Petition No.9764/2007. The aforesaid Writ Petition was filed by the respondent-4 in this appeal.
2. According to the Writ Petitioner, it is a Co-operative Society registered under the provisions of the Karnataka Co-operative Societies Act (hereinafter referred to as the Society). The appellant herein has borrowed a sum of Rs.5,000/- as loan on 25.11.1994 and he also stood as surety for one K.R. Ramachandraiah who had also borrowed a loan of Rs.5,000/- on 21.10.1994 and that the appellant herein had executed an agreement in favour of the Society giving liberty for it to recover at the rate of Rs.1,000/- per month out of his salary through his employer. The Society raised a dispute under Section 70 of the Karnataka Co-operative Societies Act against the appellant herein for recovery of the loan amount and an award has been passed. Thereafter an order of attachment is also obtained by the Society. Thereafter the society requested the employer of the appellant herein to deduct an amount Rs.1,000/- per month from out of the salary of the appellant invoking the provision of Section 34 of the KCS Act, 1959. Since the employer of the appellant did not deduct the amount as requested by the Society inspite of an order of attachment, the aforesaid Writ Petition was filed requesting the Court to issue a writ of mandamus directing the respondents-2 and 3 herein to deduct the amount from out of the salary of the appellant in terms of Section 34 of the KCS Act. The appellant herein did not file any objections to the Writ Petition. The writ petition was heard on merits. The learned Single Judge after considering the provisions of Section 34 of the KCS Act, 1959 and relying upon Annexure-B which is an authorisation issued by the appellant to the society to recover out of his salary as required under Section 34(1) and (2) of the KCS Act, allowed the Writ Petition. Being aggrieved by the same, the present appeal is filed.
3. According to Mr. Prakash Shetty, the learned Single Judge has committed an error in not considering the effect of obtaining an award under Section 70 of the KCS Act raised by the society. According to him, when an award is passed, Section 34 cannot be pressed into service by the creditor of the appellant. He further submits that there was no privity of contract between the employer of the appellant and the society. Therefore, he requests the Court to set aside the order passed by the learned Single Judge.
4. After hearing the appellant’s Counsel, we are of the opinion that there is no substance in the arguments advanced by the learned Counsel for the appellant for the following reasons:
The Appellant has not filed any objection denying the execution of Annexure-B by him in favour of the society. From Annexure-B, it is clear to us that the appellant herein has given a consent in favour of the Society to recover a sum of Rs.1,000/- per month out of his salary in accordance with Section 34(1) and (2) of the KCS Act. Annexure-B is addressed to the employer-Bharathi Credit Co-operative Society Limited. From this, it is clear that the appellant voluntarily has given consent for the 4th respondent to recover sum of Rs.1,000/- per month out of his salary under Section 34(1) and (2) of the KCS Act authorising the Society to request the employer to deduct the amount and send it to the 4th respondent. When the appellant has not disputed this document, now it is not open for him to contend that the society cannot invoke Section 34(1) and (2) of the KCS Act. The only grievance of him is that when society has obtained an award under Section 70 of the KCS Act, such award has to be executed in accordance with other provision of the KCS Act and Section 34(1) and (2) cannot be pressed into service. Section 34 of the KCS Act reads as hereunder:
“34. Deduction from salary to meet society’s claim in certain cases:
(1) Notwithstanding anything contained in any law for the time b