A suit for damages against a co-operative society or its officers regarding business matters requires mandatory notice under Section 125 of the Karnataka Co-operative Societies Act, 1959.

ORDER :

Lalitha Kanneganti, J.

Aggrieved by the order dated 21.03.2023 passed in O.S. No.194/2020 by the I Additional Senior Civil Judge and JMFC, Bagalkot, defendant No.3 is before the Court.

2. Respondent No.1 herein, who is the plaintiff before the Trial Court, filed the suit seeking an amount of Rs.2,00,00,000/- as damages to be recovered from defendants No.1 to 3 along with interest at 18% per annum from the date of the suit till the date of payment to the plaintiff firm. The plaintiff also sought for the relief of permanent injunction restraining the defendants from writing, publishing or circulating any false or defamatory statements and objections about the plaintiff firm either before any government departments, business circles, friends and relatives, either through written objection or through news papers. The plaintiff further sought for a mandatory injunction directing the defendants to tender an unconditional written apology to the plaintiff firm and to publish the same in the first page of daily news paper or in some prominent place.

3. The case of the plaintiff is that it is a licensed trader and a proprietary concern running the business in the name and style of “M/s Prabhu Trading Corporation” at Bagalkot. Defendant No.2 is a Co-operative Society registered under the Co-operative Societies Act, and defendants No.2 & 3 are engaged in the business of supply of food materials/consumables to various government departments after procuring materials from its members. Defendant No.3 procured food materials from the plaintiff from 2013-14 to 2016-17. From 2017 onwards, the plaintiff did not subscribe to his annual membership and as such plaintiff ceased to be member of defendant No.2-Federation. Plaintiff had supplied food material to defendant No.3 from 2013-14 to 2016-17 and hence he sought for Satisfaction and Experience Certificate from defendant No.3 and Defendant No.1, being Branch Manager of defendant No.3, issued the Satisfaction and Experience Certificate on 25.07.2018.

4. It is the case of the plaintiff that the Deputy Commissioner, Bagalkot, initiated the tender process for procurement of food materials for Social Welfare Department, Bagalkot in the year 2018. The plaintiff for supplying the same, participated in the tender process by enclosing the Satisfaction & Experience Certificate issued by defendant No.1. Defendant No.3 also participated in the tender proceedings. Defendants No.1 to 3 became hostile and, with a mala fide intention to dislodge the plaintiff from the tender, made false allegations against the plaintiff in objections statement dated 11.02.2019 before the Deputy Commissioner, Bagalkot, stating that the Satisfaction & Experience Certificate enclosed by the plaintiff is fake and forged and sought to cancel plaintiff’s tender. Defendants No.1 to 3 and Members of defendant No.3, in order to eliminate the plaintiff from the field of contracting the supply of food materials to government institutions, went ahead to blacklist the plaintiff on 28.02.2019. The Forensic Experts from Truth Lab, Bengaluru after due and thorough verification opined that the seal and signatures over the Satisfaction & Experience Certificate are genuine. Thereafter, the plaintiff had approached this Court by filing W.P. No.20854/2019. This Court stayed the order dated 28.02.2019 by interim order dated 03.05.2019. It is the case of the plaintiff that the defendants have published false and defamatory statements before the procurement authorities and defamed the plaintiff; and that the false and defamatory statement published by defendant No.1 on 27.02.2020 in ‘Praja Vani’ Kannada daily news paper, which is widely circulated in Bagalkot District and other parts of Karnataka, has destroyed the credibility of plaintiff’s business amongst the members of civil society, friends, relatives, various authorities of government departments and members of business community. The cause of action to file the suit arose when the defendants