Authority: Supreme Court of India, Civil Appellate Jurisdiction

Order Date: 17 September 2026

Case Overview

  • Parties: Appellant – The Fisheries and Fish Products Manufacturing Co-operative Society Limited; Respondent – The Director of Co-operative Audit & Others.
  • Civil Appeal No.: /2026 (Special Leave Petition (C) No. 9580/2026).
  • Background: A writ petition (Writ Appeal No. 1436/2025, CS‑SUR) before the Karnataka High Court was filed by a private respondent (the society’s president for 2009‑10 and 2012‑13) seeking a re‑audit of the society’s accounts for FY 2012‑13. The dispute originated from an audit report dated 22‑05‑2015 prepared by the Departmental Auditor, which alleged that the former president had obtained an overdraft facility without the Managing Committee’s sanction, resulting in misappropriation of funds used for constructing an ice‑plant.
  • Surcharge Proceedings: Under Section 69 of the Karnataka Cooperative Societies Act, 1959, surcharge proceedings concluded that the society was entitled to recover Rs 68,85,675 from the private respondent, with interest at 15 % per annum. The surcharge order was dated 18‑10‑2022.
  • Pending Statutory Appeal: The private respondent filed an appeal under Section 105 of the 1959 Act before the Karnataka Appellate Tribunal, which remains pending.
  • High Court Action: The private respondent later filed a representation on 28‑10‑2022 seeking a re‑audit, which was not decided. The Single Judge of the Karnataka High Court allowed the re‑audit, and the Division Bench dismissed the society’s writ appeal. The society then appealed to the Supreme Court.
  • Supreme Court Consideration: The Court examined the High Court’s judgment dated 26‑11‑2025 and the question whether a writ of mandamus could be issued while the statutory appeal before the Karnataka Appellate Tribunal was pending. The Court observed that the High Court conducted a roving enquiry into the 2015 surcharge proceedings, which is impermissible; “what cannot be done directly, cannot be done indirectly.” The Court emphasized that the issues must be raised in the pending statutory appeal, and that the discretion under Article 226 of the Constitution should not have been exercised.

Final Outcome

  • The Supreme Court set aside the impugned judgment of the Karnataka High Court dated 26‑11‑2025.
  • The appeal is allowed; the High Court’s writ of mandamus is vacated.
  • The private respondent may continue to raise all contentions, including challenging the audit report of 22‑05‑2015, before the Karnataka Appellate Tribunal.
  • Any pending applications, if any, are ordered disposed of.

Topics: Co‑operative Law, Surcharge Proceedings, Judicial Review