Sita Kanta Sarma v. Assistant Registrar of Co-operative Societies Cum Sale Officer, Co-operative Land Mortgage Bank Ltd.
1971-02-19
D.M.SEN, P.K.GOSWAMI
body1971
DigiLaw.ai
GOSWAMI, C. J.:- This application under Article 226 of the Constitution of India is directed against an order of the Assistant Registrar of Co-operative Societies Cum Sale Officer, Co-operative Land Mortgage Bank Ltd., Gauhati, dated 23-11-68 by which he held an auction sale of certain immovable property belonging to the petitioner which was subject to a mortgage to the Co-operative Land Mortgage Bank Ltd. 2. It is stated that the mortgagor failed to pay the dues and the mortgaged property was put to auction sale after giving requisite notice to the mortgagor. Annexure 'B' is a notice under Section 11 (2) (b) of the Assam Co-operative Land Mortgage Bank Act, 1960, hereinafter called 'the Act'. This notice shows that the land was sold in public auction under Section 12 of the Act. It is, therefore, difficult to appreciate the submission of Mr. K. P. Sen on behalf of the Bank that the sale did not take place under the provisions of this Act. Mr. Sen on behalf of the Bank has urged that we should not look into the provisions of the Act but should be guided^ by the provisions of the Assam Co-operative Societies Act, 1949. In view of the very notice (Annexure *B'), this submission is absolutely without any force. The Respondent No. 1 acted in conformity with the provisions of this Act and, therefore, we will have to take into consideration only the provisions of this Act and not of the Assam Co-operative Societies Act, as urged by Mr. Sen. Mr. B. M. Goswami, the learned Counsel for the petitioner, submits that before recourse is taken to S. 11 (1) of this Act, there are certain conditions precedent which have to be fulfilled. We will, therefore, read this section: "11. (1) Notwithstanding anything contained in the Transfer of Property Act, 1882, where a power of sale without the intervention of the Court is expressly conferred on the Mortgage Bank by the mortgage deed, the Committee of such bank or any person authorised by such Committee in this behalf shall, in case of default of payment of the mortgage money or any part thereof, have power in addition to any other remedy available to the Bank to bring the mortgaged property to sale without the intervention or the Court.
(2) No such power shall be exercised unless and until- (a) the Board has previously authorised the exercise of the power conferred by sub-section (1) after hearing the objections, if any, of the mortgagor: (b) * (c) • We have asked Mr. Sen whether the Board in this case, the Board of Directors of the Gauhati Co-operative Land Mortgage Bank Ltd., had previously authorised the exercise of the power under Section 11 (1) of the Act. The learned Counsel frankly admits that no such authorisation has been given by the Board. Faced with this position, the learned Counsel did not like to rely upon the provisions of this Act but took recourse to the provisions of the Assam Cooperative Societies Act to which we have already adverted. 3. Mr. Sen next contends that Section 18, at any rate, would bar adjudication of any question of title of the purchaser on the ground of irregularity of the sale etc. We may, therefore, read that section. "18. Where any property is sold in the exercise or purported exercise of a power of sale under the provision of this Act, the title of the purchaser shall not be questioned on the ground that- (a) the circumstances required for authorising the sale had arisen; or (b) due notice of the sale was not given; or (c) the power of sale was otherwise improperly or irregularly exercised; but any person who has suffered any damage by an unauthorised, improper or irregular exercise of any such power shall have a remedy in damages against the mortgage Bank. Such property, shall vest in the purchaser free from all encumbrances. ' 4. Taking the second submission first, before Section 18 of the Act can be called in aid in an appropriate proceeding, there must be an exercise of the power under Section 11 (1) of the Act. Section 11 (2) in terms gives a mandate that no such power shall be exercised unless and until the Board has authorised the exercise of such power under Section 11 (1) of the Act. In view of the clear mandate in the section itself, not to exercise the power under Section 11 (1) unless there has been a prior authorisation by the Board, the exercise of power in this case by the respondent No. 1 is no exercise of power in law under the provisions of this Act.
In view of the clear mandate in the section itself, not to exercise the power under Section 11 (1) unless there has been a prior authorisation by the Board, the exercise of power in this case by the respondent No. 1 is no exercise of power in law under the provisions of this Act. Therefore, Sec. 18 cannot be pleaded as a bar at all. We should, however, observe that although we have dealt with the submission of Mr, Sen under Section 18 of the Act, that section will not be a bar to the exercise of the power under Art. 226 of the Constitution in an appropriate case. 5. Regarding the first submission, it is apparent that in this case there is no express provision in the mortgage deed that the mortgagee-bank has the power to sell without the intervention of the Court. When this power is not expressly conferred by the terms of the mortgage deed, Section 11 (1) is not attracted. Before Sec. 11 of the Act is resorted to, there must firstly be an express empowerment in the deed, upon the mortgagee to sell the mortgage-property without intervention of the Court., and secondly there must be, a previous authorisation by the Board of Directors to sell the property. There are also other conditions in Section 11 (2), which we may not refer to in this case. In any view of the matter, the entire sale is unauthorised under the provisions of this Act and is liable to be quashed, which we hereby do, in exercise of the powers under Article 226 of the Constitution. 6. Mr. T. C. Das, the learned Counsel appearing for the respondent No. 4, submits that we should give a direction to the Bank to return the money which he had deposited in pursuance of the sale of the property. We do not like to give any direction to the Bank in this matter in absence of a specific application by this respondent. Since, however, the sale has been quashed, all the advantages, which any of the parties may be entitled to, will be available to him under the law. 7. The application is accordingly allowed. The impugned order, namely the order dated 23rd November, 1968, is accordingly quashed. There will be no order as to costs. D.M.Sen, J.:- 8. I agree. Application allowed.