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2025 Supreme(Kar) 3002

2025 KHC 44339 
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ, J.
Smt Jayanthi S Shetty – Appellant 
Versus 
State Of Karnataka By Its Principal Secretary, Department Of Co Operative – Respondent 
WRIT PETITION NO. 27349 OF 2024 (CS-RES), WRIT PETITION NO. 28076 OF 2024 (CS-RES)
Decided On : 29-10-2025
Advocates Appeared : 
For the Appellant : Sri. Ashok Haranahalli., Sr. Advocate For Sri. Ajith A Shetty., Advocate
For the Respondent : Sri. Yogesh D. Naik., Aga, Smt. Lakshmi Iyengar., Sr. Advocate For Sri. N. Goutham Raghunath., Advocate, Sri. Jaykumar S. Patil., Sr. Advocate For Sri. Rajesh Shettigar., Advocate, Sri. Vittal Shetty., Advocate 

The power of attorney authorized the attorney to mortgage the property, creating a binding mortgage valid against the family's claims, even if the borrowing parties did not own the property.

Headnote:(A) Karnataka Co-operative Societies Act, 1959 - Sections 60, 33, and 101 - Indian Contract Act, 1872 - Sections 182, 202, and 230 - Challenging the validity of auction sales conducted under cooperative societies' law and the authority of a power of attorney holder to mortgage property - Appellant claims that the mortgage executed by the attorney was void due to lack of express authorization, while the respondent argues the attorney had sufficient authority under the power of attorney - The court emphasizes that a principal-agent relationship existed, and the attorney had the right to manage and mortgage the property as requisite powers were included - Court validates the authority of the cooperative society to provide loans to the mortgagor despite ownership issues, ruling that a mortgage can be validly created by deposit of title deeds - All impugned orders and the auction process were deemed valid, and the petitions were dismissed with costs. (Paras 27.1-40.1)

(B) Agency and Mortgage Law - A mortgage executed under a power of attorney with express provisions authorizing the mortgage is binding; the authority was not rendered void merely because the property was not owned by the borrowers - The enforcement of a mortgage created by the attorney can be upheld even against the claims of family members of the original owner who received consideration for the property sold. (Paras 27.2-30.11)

Table of Content
1. petitioners seek to set aside multiple orders. (Para 1 , 3 , 4 , 12 , 13)
2. arguments contesting the validity of mortgages and agency. (Para 16 , 17 , 22 , 23)
3. judgment against the legality of mortgages executed by the power of attorney. (Para 27 , 29 , 31)
4. court's approval of auction sales and legal authority of banks. (Para 36 , 38 , 39)
5. writ petitions are dismissed as an abuse of court process. (Para 40)

ORDER :

SURAJ GOVINDARAJ, J.

1. The Petitioners in W.P.No.27349/2024 are before this court seeking for the following reliefs:

a. Issue a writ of certiorari, thereby setting aside the order dated 02nd September, 2021 passed by the Hon’ble Minister for Co-operation in Revision Petition/Appeal No. CO:31:CAP:2014, as per Annexure-X to this writ petition;

b. Issue a writ of certiorari, thereby setting aside the order dated 03rd January, 2013 passed by R3 in Appeal No.05/2012-13, as per Annexure-W to this Writ Petition;

c. Issue a writ of certiorari, thereby setting aside the awards dated 03rd January, 2004, passed in Dispute Numbers 1049/2003-04 and 1050/2003-04, passed by R2 as per Annexure-E and F respectively, to this writ petition.

d. Issue a writ of certiorari, thereby setting aside the auction sale dated 15th December, 2004 in CEP NO.467/2004-05 and CEP NO. 468/2004-04 in favour of R10 as per Annexure-G and H respectively.

e. Issue a writ of certiorari, thereby setting aside the confirmation of sale dated 01st September, 2005 as per Annexure-J made in favour of R10;

f. Grant such other relief’s as this Hon’ble Court would be pleased to grant under the facts and circumstances of the present case in the interest of justice and equity.

2. The Petitioners in W.P.No.28076/2024 are before this court seeking for the following reliefs:

a. Issue a writ of certiorari, thereby setting aside the order dated 02nd September, 2021 passed by the Hon’ble Minister for Co-operation in Revision Petition/Appeal No. CO:32:CAP:2014, as per Annexure-X to this writ petition;

b. Issue a writ of certiorari, thereby setting aside the order dated 13th February, 2014 passed by R3 in Appeal No.02/2013-14, as per Annexure-M to this Writ Petition;

c. Issue a writ of certiorari, thereby setting aside the awards dated 24th March, 2003, passed in Dispute Numbers 412/2002-03, passed by R2 as per Annexure-G, to this writ petition.

d. Issue a writ of certiorari, thereby setting aside the auction sale dated 20th September, 2007 made in Execution Petition No.CEP 39/2023-04;

e. Issue a writ of certiorari, thereby setting aside the confirmation of sale dated 05th November, 2007 as per Annexure-H made in favour of R10;

f. Grant such other relief’s as this Hon’ble Court would be pleased to grant under the facts and circumstances of the present case in the interest of justice and equity.

Facts in WP No.27349/2024.

3. The Petitioners claim to be the children of late Sadashiva Shetty. They claim that the lands in survey No. 127/6, 130/14, 130/3, 127/3 and 126/4 of Shivalli village, Udupi Taluk and District belonged to the ancestors of late Sadashiva Shetty on a leasehold basis.

4. With the amendment to the Karnataka Land Reforms Act 1971, the maternal uncle of late Sadashiva Shetty, namely Sri. Ellappa Shetty had put forth a claim for grant of occupancy rights, which was granted on 12.10.1981. Subsequently, a deed of partition came to be executed on 22.05.1990 between the family members, namely Ms Sunanda Shetty and Sadashiva Shetty, whereunder the lands bearing Survey Nos.130/3, 126/4, and 126/3, measuring 2 acres 32 cents/guntas, were allotted to Sadashiva Shetty, who had by then relocated himself from Udupi to Surat in Gujarat. There was an error in the order of the Land Tribunal; by mistake, the land in survey No.127/6 was mentioned, which was to be replaced with Survey No.126/5.

5. A general power of attorney was executed on15.04.1998 by late Sadashiva Shetty in favour of Vamana Baliga in respect of the aforesaid property.

6. In pursuance of the aforesaid p







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