1 Misc.No.

221/2024

KABC010042072024

IN THE COURT OF THE XCI ADDITIONAL CITY CIVIL AND

SESSIONS JUDGE, BENGALURU (CCH-92)

Present: SHRIDHAR GOPALAKRISHNA BHAT

XCI Addl. City Civil & Sessions Judge
& Spl. Judge for KPIDFE Cases, Bengaluru.

Dated this the 18 th day of March, 2024

Misc. No: 221 /2024

Petitioner:- Sri. Ravindra Sheshale

S/o Annasaheb
Aged about 60 years,
R/at No.401, Plot No.620/27,
4th Cross, Ganesh Smurti Apartment
Bhagyanagar, Tilakwadi,
Hukeri, Belgaum – 590 006.

(By Smt. Shobha .R – Adv for petitioner)

V/S

Respondent:- Office of the Special Officer

Competent Authority
M/s. The Krantiveer Sangolli Rayanna
Urban Co-Operative Credit Society Ltd.,
 2 Misc.No.221/2024

Podium Block, 4th Floor,

Vishweshwaraiah Small Tower,
Bengaluru – 560 001.

(By the Special Public Prosecutor Sri. K. Rudraswamy)

--------------

Date of Institution of the Petition 15/02/2024

Section 11(2) of the KPIDFE Act-2004,

Nature of the Petition application seeking direction to the
Competent Authority to accept the claim
forms of the petitioner

Date of the commencement of

recording of the Evidence. ----

Date on which the order is

18/03/2024
pronounced.

Year/s Month/s Day/s

Total duration 00 01 03

---------

ORDER
The petitioner has filed the petition under section 11(2) of the
Karnataka Protection of Interest of Depositors in Financial
Establishments Act - 2004, (KPIDFE Act-2004 for short) seeking
direction to the respondent Competent Authority to accept his delayed
 3 Misc.No.221/2024

claim form within a stipulated period by condoning the delay .

2. It is contended in the petition that, the Petitioner had

deposited an amount of Rs.4,29,000/- (Rupees Four Lakhs Twenty
Nine Thousand) with the Financial Establishment i.e., M/s Krantiveer
Sangolli Rayanna Urban Co-Operative Credit Society Ltd. However
the said Financial Establishment has defrauded the Petitioner and
other depositors. On the basis of the various complaints from the
depositors, the Government of Karnataka was pleased to appoint the
competent authority for the said Financial Establishment under Section
5(1) of the KPIDFE Act. By Government Order No. RD 17 GRC 2022,
Dated 12/10/2022, the Respondent is appointed as the competent
authority in the place of previous competent authority.

3. It is further case of the Petitioner that the competent

authority had issued public notice on 27/11/2023 under Section 7(2) of
the KPIDFE Act in English as well as in Kannada Daily News paper
and one month time was granted from 06/12/2023 to 05/01/2024 for
submitting the claims. Immediately after expiry of the said 30 days, the
competent authority has stopped accepting the claim forms of the
depositors. It is further case of the petitioner that, the notification
published by the respondent had limited circulation at Bengaluru and
no individual notice was given to the petitioner. Therefore the petitioner
was not aware of the public notice published by the respondent
competent authority and thereby he could not submit his claim form
 4 Misc.No.221/2024

within prescribed period.

4. It is further stated by the petitioner that, recently he came to

know about submission of the claim form and when he got the
knowledge about submission of the claim forms immediately, he
rushed to submit his claim form before the Competent Authority, but by
then the time was expired. Since, the time was expired the Competent
Authority has not accepted the claim form and informed that, he has to
get the permission from the court to accept the claim. Further,
verification process is not yet completed by the Competent Authority
and as such no delay or prejudice will be caused to the respondent
authority. The Financial Establishment has defrauded him and his hard
earned money is in stake. This court being a Special Court is having
power to grant the relief claimed, for effective implementation of the
provisions of KPIDFE Act. The Petitioner has further stated that he
has not filed any other petition for the same relief on the same cause
of action. Accordingly on these grounds the petitioner has prayed for
allowing this petition to meet the ends of justice.

5. After receiving the file made over for disposal in accordance

with law, the learned Special Public Prosecutor who is appointed by
the Government to deal with KPIDFE Act matters on behalf of the
Competent Authority was directed to take notice of the petition on
behalf of the respondent Competent Authority. The learned Special
Public Prosecutor has taken notice of the petition on behalf of the
 5 Misc.No.221/2024

respondent authority and filed Memo of appearance. The Learned

Special Public Prosecutor has filed objection on behalf of the
respondent authority.
6. In the objection statement the respondent has contended
that the petition filed by the Petitioner is not maintainable either in law
or on facts. The depositors are required to submit their claims within
prescribed period and belated claims cannot be entertained. The
Petitioner has not given proper explanation for inordinate delay.
Further the respondent would have completed the process of
verification and again doing the same process will hinder the progress
of the case. Accordingly prayed for dismissal of the petition.

7. Heard the arguments of the learned counsel for the

petitioner and the Learned Special Public Prosecutor appearing for the
respondent authority.

8. On hearing the learned counsels and considering the

materials available on the file, the points that would arise for the
consideration are :
Point No.1):- Whether the petitioner had made out the
grounds for granting the relief sought for in
this petition by condoning the delay in
submitting the claim form before the
respondent authority?

Point No.2):- What order?

 6 Misc.No.221/2024

9. The above points are answered as under:-

Point No.1: in the affirmative,
Point No.2: as per final order for the following:-
REASONS

10 . Point No.1:- The petitioner has approached this court with

a prayer to invoke the power of this Special Court under Section 11 (2)
of the KPIDFE Act-2004, directing the respondent authority to receive
his delayed claim forms to meet the ends of justice. The petitioner has
produced notarized copies of his Aadhar card, PAN Card, Term
Deposit Receipts issued by the Financial Establishment i.e., The
Krantiveer Sangolli Rayanna Urban Co-Operative Credit Society Ltd.,
Belagavi, copy of the Public notice published by the respondent
authority under Section 7(2) of the KPIDFE Act, Publication dated
27/11/2023 issued by the respondent competent authority, the
Government Order bearing No. E RD 17 GRC 2022, Bengaluru dated
25/02/2022, wherein the Government was pleased to appoint the
respondent as the Competent Authority under section 5(1) of the
KPIDFE Act-2004 to support his contentions. The Learned counsel for
the Petitioner has submitted that all original required documents will be
produced before the competent authority if the permission is accorded
as prayed in the petition.

11. It is the specific case of the petitioner that, he had

deposited the amount with the M/s Krantiveer Sangolli Rayanna Urban
 7 Misc.No.221/2024

Co-Operative Credit Society Ltd, Belagavi. Since the said Financial

Establishment, fraudulently defaulted in making repayment of the
invested amount with interest, the Government has taken steps in that
regard and appointed the respondent as the Competent Authority. The
notarized copies of the Term Deposit receipts produced by the
Petitioner reveal that he had deposited the amount with the said
Financial Establishment as contended. The main contention of the
petitioner is that, though the respondent authority had issued public
notice to the depositors of the Financial Establishment in question,
calling upon them to submit their claim with proper proof, he could not
submit his claim form with proper proof within time prescribed as he
was not aware of the public notice issued by the respondent authority
and very recently he came to know about the public notice issued by
the respondent authority to submit the claim form. No individual notice
was given to him by the competent authority. The respondent has not
opted to deny/dispute the said factual aspects put up by the petitioner.
Moreover so far as the present petition is concerned, the only
questions involved are that, whether the delay in filing the claims, by
the petitioner could be condoned or not? and whether the respondent
authority could be directed to receive his claim form?.

12. As contemplated under section 7 of the KPIDFE Act-2004,

the Competent Authority shall assess the deposit liabilities and the
assets of the Financial Establishment within a period of 60 days(earlier
it was 30 days) from the date of its appointment and submit the report
thereof to the Special Court and thereafter, the Competent Authority
 8 Misc.No.221/2024

shall issue notice either individually or by means of effective media

publication, inviting the claims by secured creditors, if any, and also
the depositors of the said Financial Establishment to submit their claim
with proper proof to establish the same.

13. With the above aspects, it is appropriate to refer the

provisions of section 7(3) of the KPIDFE Act-2004 which reads as
under:-

“ Sec.7(3):- Every notice under sub-section (2) sent

to or deemed to have been effected to claimants shall
state that if the statement or claim is not sent to the
Competent Authority before the expiry of the period of
one month from the date of notice, the claim shall not
be treated as claim entitled to be paid under the
provisions of this Act.”

14. From the meticulous reading of the above extracted

provisions of law, it is quite clear that the claim submitted after the
expiry of one month from the date of issuance of notice under section
7(2), shall not be treated as a claim to be paid under the provisions
of KPIDFE Act. It is not in dispute that, the respondent Competent
Authority had issued notice as required under section 7(2), but the
petitioner contended that the same has not came to his knowledge.
Further it is not the case of the respondent authority that an individual
notice was issued and served on the petitioner. Therefore under the
 9 Misc.No.221/2024

attending circumstances, there are no such grounds to dis-believe the

contentions raised by the petitioner that he came to know about the
said notice issued under section 7 (2) of the KPIDFE Act-2004, by
way of notification recently as contended by him.

15. Now, the point that is to be considered is whether this

Special Court has got power to condone the delay in submitting the
claim by the depositors before the Competent Authority as
contemplated under section 7(3) of the KPIDFE Act-2004. No doubt
as submitted by the learned Special Public Prosecutor, the petitioner
has not submitted his claim form in time and there is delay on his
part. Though section 7(3) prescribes time limit of one month for
making claim by the depositors or by secured creditors before the
Competent Authority, the entire Act is very much silent as to the
power of the Competent Authority to condone the delay in filing such
claim either by the depositors or by the secured creditors. Section
7(3) provides only to the effect that the claims filed after prescribed
period of one month, shall not be treated as claim entitled to be paid
under the provisions of the KPIDFE Act-2004. However section 11 of
the KPIDFE Act-2004, deals with power of the Special Court
regarding realisation of the assets and payment to the depositors.
Section 11(1) provides for general powers to the Special Court for
giving effect to the provisions of KPIDFE Act-2004. Section 11(2)
provides for various powers of the Special Court. It is appropriate to
refer the provisions of section 11 (1) & (2) (a) of the said Act, in
 10 Misc.No.221/2024

connection with the present petition. Section 11(1) & (2) (a) reads as
under:-

Sec.11(1):- The Special Court shall have all the powers

for giving effect to the provision of this Act.

(2) Without prejudice to the generality of sub-section (1),

the Special Court may -

(a) give any direction to the Competent Authority as it

deems fit, for effective implementation of the provisions
of this Act.

The above provisions of law reveal that the power is given to

the Special Court for effective implementation of the provisions of
KPIDFE Act-2004, which is wide enough to direct the Competent
Authority to receive the claims of the depositors or the secured
creditors submitted even after the lapse of one month from the date of
issuance of notice under section 7(2) of the KPIDFE Act-2004.
Therefore, having regard to the said general power conferred upon
the Special Court under section 11 (1) & (2) (a) of the KPIDFE Act-
2004, this court is of the considered view that, this court can condone
the delay in making claim by the depositors before the Competent
Authority and can issue necessary direction to the Competent
Authority to receive the same for effective implementation of the
provisions of the Act.
 11 Misc.No.221/2024

16. As already observed, according to the petitioner, he

came to know about the issuance of notice under section 7(2) of the
KPIDFE Act-2004 recently and there is nothing on record to dis-
believe the said stand of the petitioner. The very purpose of enacting
this statute i.e. KPIDFE Act, is to protect and safeguard the interest
of the depositors in Financial Establishments as the name of the Act
itself suggests. Further, if the petitioner is not permitted to submit his
claim form, he can't urge his grievance before any other authority and
he will loose his right to claim his hard earned deposited amount
forever. On the other hand, under the circumstances of the case, the
respondent Competent Authority will not be put to any loss or
hardship or subjected to any prejudice even if the permission is
accorded as sought-for. Even it is not the case of the respondent that,
already process is completed. There are no reasons to hold that there
is any intentional or deliberate delay on the part of the Petitioner.
Therefore, considering all these aspects this court of the considered
view that, it is just and proper to condone the delay in filing the claim
forms by the petitioner before the respondent Competent Authority
and to direct the respondent authority to receive the claims of the
petitioner along with supporting documents to be made within
specified period. Thus, for these reasons, this court is of the
considered view that, the petitioner has made out sufficient grounds
to allow this petition and as such point no.1 is required to be
answered in affirmative and answered accordingly.
 12 Misc.No.221/2024

17. Point No.2:- As discussed in connection with point no.1,

and findings given thereon, this court proceed to pass the following:-

ORDER
The petition filed by the petitioner under section
11(2) of the KPIDFE Act-2004 is hereby allowed.
The delay in making the claim by the petitioner
before the Competent Authority is condoned.

The petitioner is permitted to submit his claim with

proper proof and documents before the respondent
Competent Authority for M/s Krantiveer Sangolli
Rayanna Urban Co-Operative Credit Society Ltd
within 15 days from this date.

The Competent Authority is hereby directed to

issue claim form if any in favour of the Petitioner and
to receive the claim to be made by the petitioner as
ordered and thereafter to accept his claim, only if the
Competent Authority is satisfied that, the Petitioner is
the depositor as provided under section 2(2) of the
KPIDFE Act-2004, on the basis of the proof produced
before it and to deal with the same in accordance with
law without being influenced by any observations
made in this order.
 13 Misc.No.221/2024

No order as to costs.

(Directly dictated to the Stenographer on computer, corrected and signed, then pronounced by
me in open court, on this the 18 th day of March 2024)
Digitally signed by
SHRIDHAR SHRIDHAR G BHAT
G BHAT Date: 2024.03.18
13:07:26 +0530
(Shridhar Gopalakrishna Bhat)
XCI Addl. City Civil & Sessions Judge
and Spl. Judge for KPIDFE Cases, Bengaluru.
WITNESSES EXAMINED FOR THE PETITIONER:-

- NIL -

DOCUMENTS MARKED FOR THE PETITIONER:-

- NIL -

WITNESSES EXAMINED FOR THE RESPONDENT:-

- NIL -

DOCUMENTS MARKED FOR THE RESPONDENT :-

- NIL - Digitally signed

by SHRIDHAR G
SHRIDHAR BHAT
G BHAT Date: 2024.03.18
13:07:31 +0530
(Shridhar Gopalakrishna Bhat)
XCI Addl. City Civil & Sessions Judge
and Spl. Judge for KPIDFE Cases, Bengaluru.