IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9^TH DAY OF MARCH, 2026 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL MISCELLANEOUS FIRST APPEAL NO.2959 OF 2023 (KPIDFA)

BETWEEN:

SRI. N. SHIVAPRASAD S/O SRI. NANJAPPA, AGED ABOUT 59 YEARS, R/AT NO.415, 6^TH A MAIN, HRBR LAYOUT, BANASWADI, BENGALURU-560 043.

...APPELLANT (BY SRI.M.T.NANAIAH, SR. ADV. FOR SRI. SHIVAKUMAR V., ADV.)

AND:

1 . THE COMPETENT AUTHORITY FOR M/S. SHREE SHAKTHI CREDIT SOUHARDHA CO-OPERATIVE LTD., REPRESENTED BY ITS COMPETENT AUTHORITY, JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, 3^RD FLOOR, 'A' BLOCK, TTMC BUILDING, SHANTINAGAR, BENGALURU-560 027.

2 . M/S. SHREE SHAKTHI CREDIT SOUHARDHA CO-OPERAITVE LTD., NO.171/1, 6^TH CROSS, 8^TH MAIN ROAD, MALLESHWARAM, BENGALURU-560 003.

REPRESENTED BY ITS OFFICIAL LIQUIDATOR, SOUHARDHA SAHAKARI SOUDHA, NO.68, 1^ST FLOOR, BETWEEN 17^TH AND 18^TH CROSS, MARGOSA ROAD, MALLESHWARAM, BENGALURU-560 055.

...RESPONDENTS (BY SRI.VEERESH R. BUDIHAL, ADV. FOR R1;

SRI. A. DEVARAJA, ADV. FOR R2)

THIS MFA IS FILED UNDER SECTION 16 OF THE KARNATAKA PROTECTION OF INTEREST OF DEPOSITORS IN FINANCIAL ESTABLISHMENTS ACT, 2004, AGAINST THE ORDER DATED 05.04.2023 PASSED IN MISC.NO. 1596/2022 ON THE FILE OF THE XCI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AND SPECIAL JUDGE FOR KPIDFE CASES, BENGALURU, (CCH-92), ALLOWING THE PETITION FILED UNDER SECTION 5(2)

OF THE KPIDFE ACT-2004.

THIS MFA HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 21.02.2026 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)

The appeal is filed against the Order dated 05.04.2023 passed by the XCI Additional City Civil and Sessions Judge, Bengaluru (CCH-92) ('Special Court' for short) passed in Misc.No.1596/2022. The appellant herein was respondent No.2 in the Miscellaneous Petition filed under Section 5(2) of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 ('KPIDFE Act' for short).

2. We have heard Shri. M.T. Nanaiah, learned senior counsel appearing for Shri. Shivakumar. V, learned advocate appearing for the appellant as well as Shri. Veeresh R Budihal, learned counsel appearing for respondent No.1 - Competent Authority appointed in respect of M/s. Shree Shakthi Credit Souhardha Co-Operative Society Limited.

3. The brief facts are as follows:-

Respondent No.1 is M/s. Shree Shakthi Credit Souhardha Co-operative Limited ('Co-operative Limited' for short) and the appellant herein was its President. It was alleged that the Co-operative Limited had defrauded its creditors and investors by siphoning off its funds for purchasing properties and by transferring funds to the names of firms owned by the appellant and his family members. In view of the inability of the Co-operative Limited to return the amounts to the depositors, Notification under Section 3(2) of the KPIDFE Act was published on 07.02.2019 and published in the Official Gazette on 28.02.2019, in two daily newspapers and was also affixed on a conspicuous part of the schedule property for public notice. The previous Competent Authority had filed a petition under Section 5(2) of the KPIDFE Act within the prescribed period seeking confirmation of the interim order of attachment, which was registered as Misc.No.616/2019. During the proceedings, an application was filed seeking withdrawal of the petition with liberty to file afresh on the same cause of action after curing the defects. By order dated 16.07.2022, the application was allowed, granting liberty to file a fresh petition within 30 days. Thereafter, the petition was filed afresh by the Competent Authority on 09.12.2022.

4. The appellant herein purchased the petition schedule property under a Registered Sale Deed dated 27.09.2013 for a consideration of Rs.1,87,50,000/- along with Shri. A.N. Kumar. The Sa