A director of a co-operative society is liable for disqualification under Section 29-C of the KCS Act upon defaulting on loan repayments, provided a reasonable opportunity of being heard is granted, regardless of whether the default is cured after the initiation of disqualification proceedings.

THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE

KARNATAKA HIGH COURT ACT PRAYING TO ALLOW THE WRIT

APPEAL AND SET ASIDE THE ORDER DATED 03/03/2026 PASSED

IN W.P NO.20351/2022 (CS-RES) BY THE LEARNED SINGLE JUDGE

OF THIS HON'BLE COURT & ETC.

THIS APPEAL, COMING ON FOR PRELIMINARY HEARING,

THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE

and

HON'BLE MR. JUSTICE C.M. POONACHA

ORAL JUDGMENT

(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

1. For the reasons stated in the application – I.A No.1/2026, the same is allowed. The delay of 5 days in filing the appeal is condoned.

2. The appellant has filed present appeal impugning an order dated 03.03.2026 passed by the learned Single Judge in Writ Petition Nos.20351-20352 of 2022 (CS-RES).

3. The present appeal arises from the impugned order insofar as it relates to Writ Petition No.20351/2022 (CS-RES). The appellant had filed the said writ petition impugning an order dated 27.09.2022 passed by respondent No.1 [Deputy Registrar rejecting the appeal preferred by the appellant against the order dated 14.03.2022 passed by respondent No.2 [Assistant Registrar]]. By the said order dated 14.03.2022, the Assistant Registrar had disqualified the appellant from holding the office of a Director of Primary Agriculture Credit Co-operative Society Limited [the Society] for a period of five years in terms of Section 29-C of the Karnataka Co-operative Societies Act, 1959 [KCS Act].

4. The learned Single Judge found no fault with the Assistant Registrar's order disqualifying the appellant, and the Deputy Registrar’s rejection of the appellant's appeal against the said order.

5. The material facts are not disputed. The appellant is a member of the Society and was elected as a Director for a period of five years from 20.01.2020 to 19.01.2025. Prior to his appointment as a Director, he had taken a business loan of `3,00,000/- on 24.10.2019 from the Society. The said loan was to be repaid within a period of twelve months along with interest at the rate of 14% per annum.

6. Admittedly, the appellant defaulted in repaying the loan within the stipulated period. Consequently, on 31.08.2021, the Chief Executive Officer [CEO] of the Society [respondent No.3] furnished a report to the Assistant Registrar, inter alia, reporting that the appellant had incurred disqualification under Section 29-C (1)(a) of the KCS Act.

7. In view of the above, the Assistant Registrar issued a show cause notice dated 02.09.2021 calling upon the appellant to show cause why he should not be disqualified from the post of the Director of the Society, as he was a defaulter. The appellant had placed a copy of the show case notice on record. The said notice indicates that the appellant was called upon to submit an explanation, if any, along with the supporting documents to the Assistant Registrar. The appellant was also afforded an opportunity to be heard, scheduled for 27.09.2021 at 11.00 a.m.

8. The appellant appeared before the Assistant Registrar on 27.09.2021. The appellant has stated in his writ petition that on the said date, the Assistant Registrar recorded his statement, that of the CEO, and also exhibited documents. The matter was thereafter listed for the pronouncement of orders.

9. The Assistant Regi