Peoples Urban Co-op. Bank Ltd. v. Mohanan — 1992 DIGILAW 357 (KER)

Judgment :- Petitioner is the Chairman of People's Urban Co-operative Bank Ltd. No.51, a co-operative society registered under the Kerala Co-operative Societies Act. Action was initiated against respondents 1 and 2 to realise the loan amount taken by them from the Society. First respondent had taken a loan of Rs.5,000/- on 18-5-1983 under the housing loan scheme on mortgage of five cents of land. As the first respondent failed to repay the principal amount with interest as per the terms of the loan agreement despite repeated demands Society initiated arbitration proceedings against him as per AR.C. 589 of 1989. Society obtained arbitration award dated 28-7-1989 for the recovery of Rs.8,227.25 with interest at the rate of 19% from 1-2-1989. As the first respondent failed to remit the award amount, Society initiated execution proceedings by filing E.P. 108 of 1991 before the 4th respondent. 3rd respondent was appointed as the Sale Officer for the sale of the immovable property in execution of the award. Though similar action was taken against the second respondent for realisation of the loan amount/she had taken from the Society, she had paid the entire money due to the society. 2. Petitioner challenges Ext.P5 order passed by the third respondent dated 21-2-1992. Third respondent held that the proclamation has not been carried out in accordance with the procedure laid down under R.81(e) of the Kerala Co-operative Societies Rules, 1969 and hence the auction held on 20-2-1992 is not in order. Accordingly the auction was cancelled. 3. Contention of the petitioner is that the 3rd respondent was not justified in doing so. Counsel for the petitioner contended that all formalities under the Act and Rules were complied with and hence Ext.P-8 order cannot be legally sustained. It I is also contended by the petitioner's counsel that the 3rd respondent has no power to set aside the auction especially when the 1st respondent did not make any motion in that behalf. Counsel for the 1st respondent pointed out that the averments in the Original Petition would disclose non-compliance of R.81(e) and so the petitioner cannot legally sustain the petition. It is also contended that the impugned order is an appealable one and as the petitioner has an alternative effective remedy open to him the writ petition is not maintainable. 4. Rule 81(e) envisages procedures to be followed with regard to proclamation of sale. It is also contended that the impugned order is an appealable one and as the petitioner has an alternative effective remedy open to him the writ petition is not maintainable. 4. Rule 81(e) envisages procedures to be followed with regard to proclamation of sale. They are: (1) Proclamation of sale shall be published by affixing a notice in the offices of the Registrar, the Tahsildar and of the society concerned, (2) It should be done at least thirty days before the date fixed for the sale. (3) Publication must also be done by the beating of tom-tom in the villages. (4) That should be done on two consecutive days previous to the date of sale and on the I date of sale prior to the commencement of the sale. (5) Notice shall also be given to the decree-holder and the defaulter. (6) Date, time and place of sale must be specified. (7) Property to be sold, any incurnbrance to which the property is liable, the amount for the recovery of which sale is ordered and every other matter which the sale officer considers material for a purchaser to know in order to judge the nature and value of the property must be fairly and accurately specified as far as possible. 5. In the Original petition itself petitioner has no case that proclamation of sale was published by the beat of tom-tom on two consecutive days previous to the date of the sale and on the date of sale prior to the commencement of the sale. What has been stated in the Original Petition is that the Society has arranged for proclamation by the beat of tom-tom in all the villages on 19-2-1992 and 20-2-1992. That by itself is sufficient to hold that what has been provided under R.81(e) with regard to beat of tom-tom was not complied with. Contention of the petitioner is that the proclamation of sale was published in the newspaper and so the obsolete mode of beating of tom-tom was quite unnecessary. The above contention is not tenable as it is against the specific provision under R.81(e). When the Statute says the observance of a specific thing in a particular manner that cannot be circumvented by adopting any other method on the ground that the statutory provision is outmoded. Evidently, such a discretion is not given to the 3rd respondent. The above contention is not tenable as it is against the specific provision under R.81(e). When the Statute says the observance of a specific thing in a particular manner that cannot be circumvented by adopting any other method on the ground that the statutory provision is outmoded. Evidently, such a discretion is not given to the 3rd respondent. Non-compliance of Rule 81 (e) cannot be considered to be a mere irregularity to be ignored. 6. Counsel for the first respondent pointed out that no notice was given to the first respondent as provided under R.74(3). Rule 74 provides for the procedure for execution of the decision, award or order. R.74(1) provides that if any decision, award or order has to be executed as provided under clause (c) of S.76 the holder of such order, decision or award (hereinafter referred to as the "decree holder") shall apply to the Registrar. Rule 74(3) empowers the Registrar to verify the correctness and genuineness of the particulars set forth in the application, with the records if any available in his office and forward it to the Sale Officer for action. It is incumbent upon the Sale Officer to serve a demand notice in writing to the defaulter concerned. Counsel for the petitioner submitted that the demand notice was in fact sent to the first respondent but it was received by his sister, as he was not available. Counsel submitted that as the notice was received by the first respondent's sister it would amount to proper service of notice. Such a contention is not tenable in view of the specific provision in R.74(3) that the demand notice should be served on the defaulter. There is no rule under the Act to the effect that in a case where the defaulter is not available the notice could be served upon any adult member of his family. Failure to serve the demand notice to the first respondent has vitiated the consequent proclamation of sale and the auction. 7. Contention of the petitioner that the first respondent has not chosen to challenge the auction and so the third respondent was not in any way justified in cancelling the sale is equally untenable. Rule 83 provides for the application to set aside sale on ground of irregularity or fraud. 7. Contention of the petitioner that the first respondent has not chosen to challenge the auction and so the third respondent was not in any way justified in cancelling the sale is equally untenable. Rule 83 provides for the application to set aside sale on ground of irregularity or fraud. Rule 83(3) states that on the expiration of thirty days from the date of sale, if no application to have the sale set aside is made or if such application has been aide and rejected, Registrar shall make an order confirming the sale. The proviso is to the effect (hat if the Registrar has reason to think that the sale ought to be set aside notwithstanding that no such application which has been made or on ground other than those alleged in any application which has been made and rejected, he may, after recording his reason in writing set aside the sale. The proviso makes the position clear that the third respondent has the power to set aside the sale even though first respondent had not made any application in that regard. In view of the non-compliance of R.81(e) it cannot be held that the third respondent was not justified in passing the impugned order. I find no reason to interfere. The Original Petition is dismissed. There is no order as to costs.