Case Note & Summary
The petitioner, Anand Balkrishna Appugol, was the Chairman of Shree Krantiveer Sangolli Rayanna Co-operative Society Limited, a co-operative society registered under the Karnataka Co-operative Societies Act, 1959. A complaint was filed by respondent No.1, Nana Dhondiba Desai, alleging that the society had defaulted in repaying deposits, leading to the registration of Special Case No.14 of 2018 before the Principal District and Sessions Judge, Belagavi, for offences under Sections 3, 4, 6, 7, 8 and 9 of the Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004 (KPID Act). The petitioner filed a petition under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) seeking quashing of the proceedings on the ground that the society was a co-operative society governed by the Karnataka Co-operative Societies Act, 1959, and therefore not a 'financial establishment' under the KPID Act. The court examined the definition of 'financial establishment' under Section 2(2) of the KPID Act, which excludes entities governed by any other state or central enactment. Since the society was registered under the KCS Act, it fell within the exclusion. The court also noted that the remedy for depositors lies under the KCS Act and not the KPID Act. Accordingly, the court allowed the petition and quashed the proceedings in Special Case No.14 of 2018.
Headnote
A) Criminal Law - Quashing of Proceedings - Section 482 CrPC - Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004 - Co-operative Society - The petitioner, Chairman of a co-operative society registered under the Karnataka Co-operative Societies Act, 1959, sought quashing of proceedings under Sections 3, 4, 6, 7, 8 and 9 of KPID Act. The court held that a co-operative society governed by the KCS Act is not a 'financial establishment' under the KPID Act, as the KPID Act specifically excludes entities governed by other state or central enactments. Consequently, the proceedings were quashed. (Paras 1-5)
Issue of Consideration
Whether a co-operative society registered under the Karnataka Co-operative Societies Act, 1959 can be considered a 'financial establishment' under the Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004, and whether proceedings under the KPID Act against the petitioner are liable to be quashed.
Final Decision
The court allowed the petition and quashed the proceedings in Special Case No.14 of 2018 pending before the Principal District and Sessions Judge, Belagavi.
Law Points
- Co-operative society registered under Karnataka Co-operative Societies Act
- 1959 is not a 'financial establishment' under Karnataka Protection of Interest of Depositors in Financial Establishment Act
- 2004
- KPID Act does not apply to co-operative societies
- Section 482 CrPC quashing of proceedings
Case Details
2018 LawText (KAR) (06) 37
Criminal Petition No.100819/2018
Dr. Justice H.B. Prabhakara Sastry
Sri. Hemant Chandangoudar (for petitioner), Sri. Nana Dhondiba Desai (party-in-person for R-1), Sri. Praveen K. Uppar (HCGP for R-2)
Nana Dhondiba Desai and The State of Karnataka
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Nature of Litigation
Criminal petition under Section 482 CrPC seeking quashing of proceedings in a special case under the KPID Act.
Remedy Sought
Petitioner sought quashing of proceedings in Special Case No.14 of 2018 pending before the Principal District and Sessions Judge, Belagavi.
Filing Reason
The petitioner, Chairman of a co-operative society, was facing prosecution under the KPID Act for alleged default in repayment of deposits. He contended that the society was not a 'financial establishment' under the KPID Act as it was governed by the KCS Act.
Issues
Whether a co-operative society registered under the Karnataka Co-operative Societies Act, 1959 is a 'financial establishment' under the Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004.
Submissions/Arguments
Petitioner argued that the society is a co-operative society governed by the KCS Act and therefore excluded from the definition of 'financial establishment' under Section 2(2) of the KPID Act.
Respondent No.1 (complainant) appeared in person and opposed the petition.
Ratio Decidendi
A co-operative society registered under the Karnataka Co-operative Societies Act, 1959 is not a 'financial establishment' under the Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004, as the definition under Section 2(2) of the KPID Act excludes entities governed by any other state or central enactment. Therefore, proceedings under the KPID Act against such a society or its office bearers are not maintainable and are liable to be quashed under Section 482 CrPC.
Judgment Excerpts
The petitioner has filed this petition under Section 482 of Code of Criminal Procedure seeking to quash the proceedings pending before the Principal District and Sessions Judge, Belagavi in Special Case No.14 of 2018 for the offence punishable under Sections 3, 4, 6, 7, 8 and 9 of the Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004.
The summary of the case which has lead the present petitioner to file this petition is that, the present petitioner is said to be the Chairman of Sri. Krantiveera Sangolli Rayanna Co-operative Society Ltd., a Co-operative Society registered under the provisions of Karnataka Co-operative Societies Act, 1959 and governed by the provisions of the said Act and bye-laws framed under it.
Procedural History
The petitioner filed a petition under Section 482 CrPC before the High Court of Karnataka, Dharwad Bench, seeking quashing of proceedings in Special Case No.14 of 2018 pending before the Principal District and Sessions Judge, Belagavi. The court heard the matter and passed the order on 20 June 2018.
Acts & Sections
- Code of Criminal Procedure, 1973 (CrPC): Section 482
- Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004 (KPID Act): Sections 2(2), 3, 4, 6, 7, 8, 9
- Karnataka Co-operative Societies Act, 1959 (KCS Act):
