Shetty was administered the oath of office by Governor Vajubhai R Vala at a ceremony at Raj Bhavan.
Chief Minister Siddaramaiah, state ministers, judges of the High Court and senior officials were present at the ceremony.
The Governor had given his assent to Shetty's appointment on Thursday after the government replied to clarifications sought by him.
Vala had returned the file seeking some clarifications, reportedly following allegations that Shetty's family owned a site in violation of norms.
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