IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20^TH DAY OF JANUARY, 2026 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL MISCELLANEOUS FIRST APPEAL NO.380 OF 2025 (KPIDFA)

BETWEEN:

1 . SMT. YASHODA W/O LATE GANAPATHI M.

AGED ABOUT 68 YEARS RESIDING AT No.5/1

1^ST CROSS, CHIKKANNA GARDEN SHANKARAPURAM BENGALURU-560 004.

2 . SRI. RAMANARAYANA SHARMA S/O LATE GANAPATHI M.

AGED ABOUT 49 YEARS RESIDING AT No.5/1

1^ST CROSS, CHIKKANNA GARDEN SHANKARAPURAM BENGALURU-560 004.

3 . MALATHI D/O LATE GANAPATHI M.

AGED ABOUT 48 YEARS RESIDING AT No.5/1

1^ST CROSS, CHIKKANNA GARDEN SHANKARAPURAM BENGALURU-560 004.

...APPELLANTS (BY SRI. KIRAN S. JAVALI, SR. ADVOCATE FOR SRI. SRINIVAS S.V., ADVOCATE)

AND:

1 . THE COMPETENT AUTHORITY FOR M/S. SRI VASISTA CREDIT SOUHARDA CO-OPERATIVE LTD., 2^ND FLOOR, 'C' BLOCK TTMC BUILDING, SHANTHINAGAR BENGALURU-560 027.

REPRESENTED BY COMPETENT AUTHORITY SRI. SUDARSHAN B.K.

ASSISTANT COMMISSIONER OFFICE OF SPECIAL OFFICER AGED ABOUT 33 YEARS

2 . M/S. SRI VASISTA CREDIT SOUHARDA CO-OPERATIVE LTD., REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER (CEO)

VENKATANARAYANA K.V.

No.01, FIRST FLOOR RAMANJANEYA ROAD, HANUMANTH NAGAR BENGALURU-560 061.

...RESPONDENTS (BY SRI. VEERESH R. BUDIHAL, ADVOCATE FOR C/R1)

THIS MFA IS FILED UNDER SECTION 16 OF THE KARNATAKA PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL ESTABLISHMENTS ACT, AGAINST THE ORDER DATED 20.12.2024 PASSED IN MISC.No.248/2024 ON THE FILE OF XCI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, AND SPECIAL JUDGE FOR KPIDFE CASES, BENGALURU, (CCH-92), ALLOWING THE PETITIONS FILED U/S.5(2) OF THE KPIDFE ACT, 2004. THIS MFA HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 05.12.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, ANU SIVARAMAN J., PRONOUNCED THE FOLLOWING:

CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL

CAV JUDGMENT

(PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN)

This Miscellaneous First Appeal is preferred by the appellants assailing the order dated 20.12.2024 passed by the XCI Additional City Civil and Sessions Judge, and Special Judge for KPIDFE cases, Bengaluru (CCH-92) ('Special Court' for short) in Misc.No.248/2024 filed by respondent No.1 under Section 5(2) of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004, (‘KPIDFE Act’ for short) thereby confirming the interim order of attachment dated 13.09.2023 in respect of the suit schedule property.

2. We have heard Shri. Kiran S. Javali, learned senior counsel as instructed by Shri. Srinivas S.V, learned Advocate appearing for the appellants and Shri. Veeresh R. Budihal, learned counsel appearing for the caveator/respondent No.1.

3. The brief facts of the case are as follows:-

The appellants herein are the legal representatives of late Shri. M. Ganapathi, who was arrayed as respondent No.2 before the Special Court. It is alleged that Shri. M. Ganapathi was a loan defaulter to respondent No.2 - Society. The Society is stated to have failed to recover the alleged loan amount and has further contended that the deposit amounts collected from the depositors were not returned. Shri. M. Ganapathi purchased the subject property under a registered Sale Deed dated 02.05.2001 and became its absolute owner. The said purchase was made much prior to the registration or existence of respondent No.2- Society.

Shri. M. Ganapathi availed a loan of Rs.1,55,00,000/-

from respondent No.2 - Society on behalf of one Shri. B. N.Prakash on 07.07.2010. A sum of Rs.1,50,00,000/- was disbursed into the bank account of Shri. M. Ganapathi, who thereafter transferred the amount to Shri. B. N. Prakash as instructed. Shri. M. Ganapathi, subsequently made payments to the Society in respect of the said loan. Despite repeated requests made by Shri. M. Ganapathi and his son for loan account statements, the Society failed to furnish proper or correct statements reflecting accurate figures.

It is alleged by respondent No.2 - Society tha