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HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE R. NATARAJ WRIT PETITION NO. 31517 OF 2014 (CS-RES)
C/W WRIT PETITION NO. 31516 OF 2014 (CS-RES)
IN WP No. 31517/2014 BETWEEN:
SRI. A. RAMACHANDRA RAO S/O. ANANDA RAO, AGED ABOUT 64 YEARS, RESIDING AT NO.142, 5TH CROSS, LOWER PALACE ORCHARDS, BANGALORE-560 003.
…PETITIONER (BY SRI. SAILESH S.K., ADVOCATE)
AND:
11. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, URBAN BANKS CELL, Digitally signed by RCS OFFICE, NO.1, SUMA ALI ASKER ROAD, Location:
BANGALORE-560 001.
HIGH COURT OF KARNATAKA
2. SRI. M.CHANNABYRAIAH, EX-ASST. REGISTRAR OF CO-OPERATIVE SOCIETIES AND ENQUIRY OFFICER, FATHER'S NAME NOT KNOWN TO THE PETITIONER, MAJOR, MALLESWARAM CO-OPERATIVE BANK LTD., SOUTH CIRCLE, MALLESWARAM, BANGALORE-560 003.
HC-KAR
33. THE MALLESWARAM CO-OPERATIVE BANK LTD., NO.102, 7TH CROSS, MALLESWARAM, BANGALORE-560 003.
44. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, NO.1, ALI ASKER ROAD, BANGALORE-560 001.
55. RAMESH. B., S/O. BORAIAH, AGED ABOUT 67 YEARS, NO. 22, 'SAMRUDDI', 8TH CROSS, SUDENDRANAGAR, S.P. EXTENSION, BANGALORE-560 003.
66. DR. SHANKAR. V., S/O. VENKATARAYAPPACHARI, AGED ABOUT 67 YEARS, NO. 58, 'BALAJI', 2ND CROSS, SRIRAMPURAM, BANGALORE - 560 021.
77. SRI. ANANTHAN. A.R., S/O. A. RAMACHAR., AGED ABOUT 67 YEARS, NO. 398, 9TH CROSS, MAHALAKSHMI LAYOUT, BANGALORE-560 086.
88. DR. RANGEGOWDA. N.S., S/O. NANJEGOWDA, AGED ABOUT 78 YEARS, NO. 64, 14TH 'A' MAIN, 2ND STAGE, 2ND PHASE, MAHALAKSHMIPURAM, BANGALORE - 560 086.
PROPOSED RESPONDENT NO.8 IS DELETED VIDE ORDER DATED 11.09.2025 HC-KAR
99. SRI. SINGRA IYENGAR. R. A., S/O. THIRUNARAYANA IYENGAR, AGED ABOUT 90 YEARS, NO.14/1, WEST PARK ROAD, 8TH CROSS AND 9TH CROSS MIDDLE, MALLESWARAM, BANGALORE-560 003.
PROPOSED RESPONDENT NO.9 IS DELETED VIDE ORDER DATED 04.07.2025
1010. SMT. ARUNA. K.V., D/O. KRISHNAMACHAR VARADACHAR, AGED ABOUT 53 YEARS, NO. 59 G, GANESGA BLOCK, 1ST MAIN ROAD, 2ND CROSS, SHESHADRIPURAM, BANGALORE - 560 020.
1111. K.V.VENKATESH RAO, S/O.CHANDRASHEKAR RAO, AGED ABOUT 77 YEARS, 7TH CROSS, MALLESWARAM, BANGALORE - 560 003.
AMENDMENT CARRIED OUT AS PER ORDER OF COURT DATED 18.09.2025.
…RESPONDENTS (BY SRI. S.R.KHAMAROZ KHAN, ADDITIONAL GOVERNMENT ADVOCATE FOR RESPONDENT NOS.1 AND 4;
SRI. T. SHESHAGIRI RAO, ADVOCATE FOR RESPONDENT NO.3;
SRI. V. LAKSHMI NARAYANA, SENIOR ADVOCATE FOR SRI. VIKRAM BALAJI, ADVOCATE FOR RESPONDENT NO.7;
SRI. K.V.LOKESH, ADVOCATE FOR RESPONDENT NOS.5, 10 AND 11;
SRI. MANOJ S.N., ADVOCATE FOR RESPONDENT NO.6;
SRI VIKRAM BALAJI, ADVOCATE FOR RESPONDENT NO.7 VIDE ORDER DATED 04.07.2025, PROPOSED RESPONDENT NO.9 IS DELETED;
VIDE ORDER DATED 11.09.2025, PROPOSED RESPONDENT NO.8 IS DELETED;
NOTICE IS SERVED ON RESPONDENT NO.2)
HC-KAR THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED BY THE RESPONDENT NO.1 (STATED AS RESPONDENT NO.2 IN THE PRAYER PORTION OF THE PETITION) AT ANNEXURE-A DATED 31.10.2012 IN ENQUIRY BEARING NO.UBC/1/165/ENQUIRY/2009-10 AND ETC.
IN WP NO. 31516/2014 BETWEEN:
SRI. N.M. SURESH S/O. LATE SRI N.MOHAN, AGED ABOUT 53 YEARS, RESIDING AT NO.162, 3RD MAIN ROAD, 3RD CROSS, WEST OF CHORD ROAD, II STAGE, MAHALAKSHMIPURAM, BANGALORE-560086.
...PETITIONER (BY SRI. SAILESH S K., ADVOCATE)
AND:
1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, URBAN BANKS CELL, RCS OFFICE, NO.1, ALI ASKER ROAD, BANGALORE-560 001.
2. SRI. M.CHANNABYRAIAH, EX-ASST. REGISTRAR OF CO-OPERATIVE SOCIETIES AND ENQUIRY OFFICER, FATHER'S NAME NOT KNOWN TO THE PETITIONER, MAJOR, MALLESWARAM CO-OPERATIVE BANK LTD., SOUTH CIRCLE, MALLESWARAM, BANGALORE-560 003.
HC-KAR
3. THE MALLESWARAM CO-OPERATIVE BANK LTD., NO.102, 7TH CROSS, MALLESWARAM, BANGALORE-560 003.
4. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, NO.1, ALI ASKER ROAD, BANGALORE-560 001.
5. RAMESH. B., S/O. BORAIAH, AGED ABOUT 67 YEARS, NO. 22, 'SAMRUDDI', 8TH CROSS, SUDENDRANAGAR, S.P. EXTENSION, BANGALORE-560 003.
6. DR. SHANKAR. V., S/O. VENKATARAYAPPACHARI, AGED ABOUT 67 YEARS, NO. 58, 'BALAJI', 2ND CROSS, SRIRAMPURAM, BANGALORE - 560 021.
7. SRI. ANANTHAN. A.R., S/O. A. RAMACHAR., AGED ABOUT 67 YEARS, NO. 398, 9TH CROSS, MAHALAKSHMI LAYOUT, BANGALORE-560 086.
8. DR. RANGEGOWDA. N.S., S/O. NANJEGOWDA, AGED ABOUT 78 YEARS, NO. 64, 14TH 'A' MAIN, 2ND STAGE, 2ND PHASE, MAHALAKSHMIPURAM, BANGALORE - 560 086.
PROPOSED RESPONDENT NO.8 IS DELETED VIDE ORDER DATED 11.09.2025 HC-KAR
9. SRI. SINGRA IYENGAR. R. A., S/O. THIRUNARAYANA IYENGAR, AGED ABOUT 90 YEARS, NO.14/1, WEST PARK ROAD, 8TH CROSS AND 9TH CROSS MIDDLE, MALLESWARAM, BANGALORE-560 003.
PROPOSED RESPONDENT NO.9 IS DELETED VIDE ORDER DATED 04.07.2025
10. SMT. ARUNA. K.V., D/O. KRISHNAMACHAR VARADACHAR, AGED ABOUT 53 YEARS, NO. 59 G, GANESGA BLOCK, 1ST MAIN ROAD, 2ND CROSS, SHESHADRIPURAM, BANGALORE - 560 020.
11. K.V.VENKATESH RAO, S/O.CHANDRASHEKAR RAO, AGED ABOUT 77 YEARS, 7TH CROSS, MALLESWARAM, BANGALORE - 560 003.
1212. A. RAMACHANDRA RAO S/O ANANDA RAO, AGED ABOUT 74 YEARS, NO.142, 5TH CROSS, LOWER PALACE ORCHARDS BANGALORE-560 003.
VIDE ORDER DATED 17.04.2025, I.A. NO.1/2024 IS DISMISSED IN SO FAR AS PROPOSED RESPONDENT -
MR. A. RAMACHANDRA RAO IS CONCERNED AMENDMENT CARRIED OUT AS PER THE ORDER OF COURT DATED 18.09.2025.
...RESPONDENTS (BY SRI. S.R.KHAMAROZ KHAN, ADDITIONAL GOVERNMENT ADVOCATE FOR RESPONDENT NOS.1 AND 4;
SRI. T. SESHAGIRI RAO, ADVOCATE FOR RESPONDENT NO.3;
SRI. K.V.LOKESH, ADVOCATE FOR RESPONDENT NOS.5 TO 11;
HC-KAR NOTICE IS SERVED ON RESPONDENT NO.2;
VIDE ORDER DATED 04.07.2025, PROPOSED RESPONDENT NO.9 IS DELETED;
VIDE ORDER DATED 11.09.2025, PROPOSED RESPONDENT NO.8 IS DELETED;
VIDE ORDER DATED 17.04.2025, I.A. NO.1/2024 IS DISMISSED IN SO FAR AS PROPOSED RESPONDENT - MR. A. RAMACHANDRA RAO IS CONCERNED)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE FINDING OF THE RESPONDENT NO.2 AT ANNEXURE-A DATED 31.10.2012 IN ORDER BEARING NO.UBC/1/165/ENQUIRY/2009-10 AND ETC.
THESE PETITIONS, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE R. NATARAJ
ORAL ORDER
The petitioner in W.P. No.31517/2014 has challenged an order bearing No.AiÀÄÄ©¹-1/165/«ZÁgÀuÉ/2009-10 dated 31.10.2012 passed by the respondent No.1 under Section 68 of the Karnataka Co-operative Societies Act, 1959 (for short, ‘the Act, 1959’). He has also sought for a writ in the nature of certiorari to quash the order dated 06.06.2014 passed by the respondent No.4 in Appeal No.Dgï¹J¸ï/rJ¦/r1/1/2013-14.
2. The petitioner in W.P. No.31516/2014 has sought to quash the finding of respondent No.2 recorded in the order bearing No.AiÀÄÄ©¹-1/165/«ZÁgÀuÉ/2009-10 dated 31.10.2012 passed by the respondent No.1 under Section 68 of the Karnataka Co-operative Societies Act, 1959 (for short, ‘the Act, 1959’). He has also sought for a writ in the nature of certiorari to quash the order dated 06.06.2014 passed by the respondent No.4 in Appeal No.Dgï¹J¸ï/rJ¦/r1/2/2013-14.
3. The petitioner in W.P. No.31517/2014 was the Vice-President of the respondent No.3 while the petitioner in W.P. No.31516/2014 was the President of the respondent No.3. The petitioner in W.P. No.31517/2014 and W.P. No.31516/2014 will henceforth be referred to as 'petitioners'. Both of them were members of the Investment Committee in the respondent No.3 apart from the General Manager. The said Investment Committee held proceedings and proposed to invest a sum of Rs.2,50,00,000/- in the bonds of the Industrial Investment Bank of India Limited for a term of 20 years. Later, it came to the notice of the Reserve Bank of India (‘RBI’ for short) when an inspection was conducted that the value of the investment made was far less than the sum of Rs.2,50,00,000/-. The Reserve Bank of India also found various lapses in the investment made by the respondent No.3. The RBI, therefore, passed an order of penalty and directed the President and Vice President of the respondent No.3 to pay a sum of Rs.5,00,000/- which was accordingly paid. Later on a direction by the RBI to the Deputy Registrar of Co-operative Societies, steps were taken for an enquiry under Section 64 of the Karnataka Co- operative Societies Act, 1959 (for short, ‘the Act, 1959’). The respondent No.2 was appointed as an Enquiry Officer to conduct an enquiry under Section 64 of the Act, 1959. He submitted a report indicting the petitioners for wrongfully making an investment through a single broker at rates which were far higher than the prevalent market price. The respondent No.2 was of the opinion that the petitioners were responsible for making such a bad investment. It appears that the investment so made was redeemed by the respondent No.3 after four years which yielded a sum of Rs.2,17,02,766/-. The respondent No.2 therefore recommended action to recover a sum of Rs.40,00,000/- and penalty of Rs.5,00,000/- imposed by the RBI i.e. total sum of Rs.45,00,000/- with interest at
12% per annum from the petitioners jointly and severally/personally being the actual loss suffered by the respondent No.3, which included the partial loss of the principal amount invested and reasonable interest thereon. Following this report, the respondent No.1 passed an order under Section 68 of the Act, 1959, on 31.10.2012 directing the General Manager of the respondent No.3 - Bank to take steps for recovery of the loss suffered by the respondent No.3, in the light of the points mentioned in the preamble of the order, from the respective petitioners and to initiate disciplinary action against the staff of the respondent No.3 within 60 days from the date of the order i.e. 31.10.2012 and to submit a report in that regard. The petitioners challenged the said order/s before the respondent No.4 by preferring two separate appeals, which were dismissed in terms of the common order dated 06.06.2014 and therefore, the petitioners are before this Court challenging the said orders.
4. Learned counsel for the petitioners in both these writ petitions submitted that the petitioners were undoubtedly the members of the Investment Committee in the respond
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