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2009 DIGILAW 460 (KAR)

S. Sandeep v. N. Srinivasa Reddy

2009-07-01

S.N.SATYANARAYANA

body2009
JUDGMENT S.N. Satyanarayana, J: This is plaintiffs' second appeal challenging the Judgment and Decree dated 05.07.2003 on the file of the Principal District Judge, Bangalore Rural District, Bangalore in R.A.No 7/2001 wherein the Judgment and Decree dated 21.07.2000 in O.S. No 485/1994 on the file of Principal Civil Judge, Bangalore Rural District, Bangalore, rejecting plaint of the appellants herein, was confirmed. 2. The essential facts leading to this appeal are that the appellants 1 to 3 are respectively the son, daughter and wife of the 1st respondent herein, who was the 1st defendant in the original suit wherein the plaintiffs have challenged the award secured by the 2nd defendant (who is the 2nd respondent herein) in dispute No.DRB.988/92-93 against the 1st defendant and also for the relief that the 2nd defendant should not seek sale of 3/4th share of the plaintiffs in the suit schedule property for satisfying the aforesaid award passed in favour of the plaintiffs. In the said proceeding the 1't defendant did not contest the suit. It is only the 2nd defendant who entered appearance and filed written statement stating that the 1st defendant borrowed money from the 2nd defendant on the security of the suit schedule properties and for recovery of the same proceedings were initiated before the Deputy Registrar of Co-operative Societies in dispute No. DRB.988/92-93 which came to be allowed by an award against which the 1't defendant filed appeal before the Karnataka Appellate Tribunal in appeal No.449/1994 wherein at the time of filing of the appeal the award amount that was due from the 1st defendant to the 2nd defendant was Rs. 11,89,114.65 and in the said proceeding before the Tribunal an interim order was passed staying the auction of item No.1 of the suit schedule property subject to the 1"t defendant depositing Rs. 7,50,000/- with the 2nd defendant Bank within four weeks from the date of the said order of stay i.e., 28.07.1994, which was not complied with by the 1st defendant. Thereafter, the plaintiffs have filed the suit in O.S. No.. 485/1994 stating that the plaintiffs and 1't defendant together constitute a co-parcenary joint family, the suit schedule properties are coparcenary properties, as such, each one of them have 1/4th share in the suit schedule properties and the 2nd defendant Bank cannot execute the award so far as it pertains to 3/4th share of the plaintiffs in the suit schedule properties. 485/1994 stating that the plaintiffs and 1't defendant together constitute a co-parcenary joint family, the suit schedule properties are coparcenary properties, as such, each one of them have 1/4th share in the suit schedule properties and the 2nd defendant Bank cannot execute the award so far as it pertains to 3/4th share of the plaintiffs in the suit schedule properties. 3. The 2nd defendant denied the fact that the suit schedule properties are co-parcenary properties and the existence of joint family status among them. It took up a specific contention that the suit is not maintainable in view of Section 118 of the Karnataka Co-operative Societies Act, which Bar the jurisdiction of Civil Court so far as it pertains to the dispute referred to in Section 70 of the Karnataka Co-operative Societies Act, 1959. 4. After the pleadings were complete, the Trial Court framed the following issues: 1. Whether the plaintiffs prove that the loan borrowed by the first defendant from the 2nd defendant is not for legal necessity of the family and the award decree in DRP 988/92-93 obtained by the 2nd defendant is not binding on them? 2. Whether the plaintiffs prove that they have got 3/4th share in the suit schedule properties? 3. Whether the suit is liable to be dismissed for the reasons stated at para 5 of written statement of the 2nd defendant? 4. Whether the suit is barred under Section 118 of the Karnataka co-operative Societies Act? 5. Whether the suit is liable to be dismissed for the not making the registrar of Co-operative Society as a party to the suit? 6. Whether the suit has been properly valued and the Court fee paid is sufficient? 7. Whether the plaintiffs are entitled for the relief of declaration sought by them? 8. Whether the plaintiffs are entitled for permanent injunction sought by them? 9. What order?" 5. Out of the said 9 issues, issue Nos. 3 and 4 were regarding maintainability of the suit before the Civil Court and the Trial Court decided to hear the said issues and posted the matter for hearing on 12.08.1998 and adjourned the same from time to time till 13.07.2000. On 13.07.2000 also the plaintiffs did not appear and did not go on with the matter. Therefore the Trial Court without hearing the parties proceeded to pass order on issue Nos. On 13.07.2000 also the plaintiffs did not appear and did not go on with the matter. Therefore the Trial Court without hearing the parties proceeded to pass order on issue Nos. 3 and 4 holding that the suit is not maintainable and accordingly, dismissed the suit filed by the plaintiffs. Against which, the plaintiffs filed appeal in R.A.No. 7/2001. In the said appeal two of the grounds that were urged by the plaintiffs are that dismissing of the suit on merits without hearing the plaintiffs is bad in law, contrary to the provisions of Order 17, Rule 2 of CPC which specifically prohibits the Court from disposing of the suit on its merits and it should be dismissal for non prosecution only. The second one is that the Bar of suit as contemplated under Section 118 of the Karnataka Co-operative Societies Act pursuant to the provisions of Section 70 does not arise for the reason that the plaintiffs are not the members of any of the Co-operative Societies and that the plaintiffs in this suit are not seeking title to the property in dispute from the pt defendant :1g:1inst whom there is an award passed under the provisions of the K . 11ataka Co-operative Societies Act. The pt Appellate Court framed the following points for consideration and answered the said points in the negative thereby dismissed the regular appeal filed by the plaintiffs. The plaintiffs are before this Court challenging the said Judgment and Decree. 6. At the time of admission after hearing the Counsel for the appellants this Court has framed the following substantial question of law for consideration. "Whether the finding of the Trial Court that the suit is not maintainable under Section 118 of the Karnataka Co-operative Societies Act, is contrary to the Division Bench decision of this Court in 1970(2) Mys. L.J. 344 (Jyotiba Yellappa Jadhav Vs. Hubli Co-operative Cotton Sale Society Ltd. and Others)? When the appeal is taken up for hearing this Court felt that one more substantial question of law is required to be answered in this proceeding and it is framed as under: "Whether the Trial Court was justified in dismissing the suit on merits without hearing the plaintiffs? 7. After framing of the additional substantial question of law, the Counsel for both the parties to the appeal were heard on both substantial question of law framed in this appeal. 7. After framing of the additional substantial question of law, the Counsel for both the parties to the appeal were heard on both substantial question of law framed in this appeal. The arguments of the plaintiffs so far as the 1't question of law is concerned is that the award said to have been passed by the Deputy Registrar of Co-operative Societies in favour of 2nd respondent in dispute No.DRB.988/92-93 is in respect of loan transaction that was between the 1st defendant and the 2nd defendant in the Trial Court. The plaintiffs are not parties to the said proceeding. However, the property that is sought to be attached for satisfaction of the award amount is suit schedule 1 and 2 properties which according to the plaintiffs is a coparcenary property in the hands of the 1st defendant in which the appellants 1 to 3 have a share, that the plaintiffs neither seek share in the suit schedule properties either through or under the 1st defendant, who is a member of the 2nd defendant Co-operative Society. Therefore, the respondent No.2 cannot proceed to attach and sell the property on which plaintiffs have a share and that the share of plaintiffs in suit schedule property is not available to satisfy the award passed against the 1st defendant and the same is not binding on them, that they are not obliged to challenge the same before the Registrar of Co-operative Societies instead of going to the Court as stated in Section 70 of the Karnataka Co-operative Societies Act. Since the plaintiffs are not the members of any of the co-operative Society arid as they are not seeking right over the suit schedule property through the 1st defendant, they have an independent right, which could be adjudicated in a competent Civil Court. This contention of the plaintiffs has reasonable force. 8. Section 118 of the Co-operative Societies Act clearly states in which of the matter there is a bar regarding jurisdiction of the Civil Court. They are as under: "118. Bar of jurisdiction of Courts.-(l) Save as provided in this Act, no Civil, labour or revenue Court of Industrial Tribunal shall have any jurisdiction in respect of. 8. Section 118 of the Co-operative Societies Act clearly states in which of the matter there is a bar regarding jurisdiction of the Civil Court. They are as under: "118. Bar of jurisdiction of Courts.-(l) Save as provided in this Act, no Civil, labour or revenue Court of Industrial Tribunal shall have any jurisdiction in respect of. - (a) the registration of a co-operative society or bye-laws or of an amendment of a bye-law; (b) the removal of a committee or member therefor; (c) any dispute required under Section 70 to be referred to the Registrar or the recovery of moneys under Section 100; (d) any matter concerning the winding up and the dissolution of a co-operative society; (2) While a co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with, or instituted against, the Liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose. (3) Save as provided in this Act, no order, decision or award made under this Act shall be questioned in any Court on any ground whatsoever." 9. According to the 2nd defendant the dispute between the 2nd defendant and the 1st defendant falls under Section 118(1)(C) of the Act i.e., dispute regarding recovery of monies pursuant to an award passed in his favour and the Competent Authority to challenge the same is the Registrar before whom the said award should be referred to and adjudicated. The contention of the 2nd defendant does not appear to be just and proper. 10. In the instant case this provision applies only if the Trial Court comes to a conclusion that the suit schedule properties are the absolute properties of the 1st defendant. 11. It is elicited in the evidence of DWs. 1 and 2 that DW.2 does not know to read and write any language, much less Kannada language. Further, first defendant can speak Malayalam and Kannada and second defendant can speak only Malayalam and they are not in a position to read, write and understand the agreement of sale, which is typed in English. 1 and 2 that DW.2 does not know to read and write any language, much less Kannada language. Further, first defendant can speak Malayalam and Kannada and second defendant can speak only Malayalam and they are not in a position to read, write and understand the agreement of sale, which is typed in English. However, it is seen that the signature of first defendant on Ex.P1 is in English, for which the explanation he has given in his evidence is that he can only put his signature in English but he cannot read and write English. 12. Further, it is seen that plaintiff has not properly explained the circumstances under which he could get the suit schedule property purchased for a smaller sum of Rs. 45,000/- when he himself admits that his property which is situated adjacent to suit schedule property is valued at Rs. 2 to 5 lakhs as on the date when he entered into agreement of sale of the suit schedule property. Incidentally, the property of defendants, which was purchased around that time, also measured the same extent with a construction of similar extent on the said property. This for hearing of the said preliminary issues. It is seen that on 13.07.2000 also the plaintiffs or their Counsel did not appear before the Court and addressed arguments regarding the said two preliminary issues. At that juncture, the Trial Court has proceeded to post the matter for 21.07.2000 and dismissed the said suit on merits giving a finding on the said Issues 3 and 4 holding the same against the plaintiffs. The procedure adopted by the Court below in disposing of the suit on merits in the absence of any proper representation by the plaintiffs is contrary to the provisions of Order 17, Rule 2 of CPC. Order 17, Rule 2 of CPC reads as under: "Procedure if parties fail to appear on day fixed - Where, on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear, the Court may proceed to dispose of the suit in one of the modes directed in that behalf by Order IX or make such other orders as it thinks fit." 13. A reading of the said provision clearly indicates that when the case is posted for the plaintiffs to appear, the only option that is available to the Court below is to dismiss the suit for non prosecution and not to proceed with the suit on its merits and pass the Judgment and Decree on its merits. Therefore, the Court below has grossly erred in deciding issues 3 and 4 on its merits when the plaintiffs have not argued the same. It is seen that the Appellate Court in its judgment agrees with this proposition of law and holds that the Trial Court should not have dismissed the suit on its merits when the plaintiffs failed to appear before the Court and addressed arguments on merits. Instead of holding that the procedure adopted by the Trial Court in deciding the matter on merits is incorrect the 1st Appellate Court proceeds to give a finding as under: "Still I do not think that the matter is required to be remanded to the Trial Court. This is for the simple reason that an opportunity has been given to the plaintiffs before the Trial Court who are appellants before me and the learned Counsel has addressed elaborate arguments on the question to be decided and I have held that the suit is barred. When that is so, there is no point in remanding the suit to the Trial Court again for consideration of the same point on which I have given my decision after hearing elaborately the plaintiffs' Advocate in this appeal". The finding of the 1,t Appellate Court on this aspect is grossly erroneous. When the 1st Appellate Court has rightly come to the conclusion that the Trial Court has failed to follow the procedure in disposing of the suit, it ought to have set aside the Judgment and. Decree and ought to have remanded back the matter for fresh consideration on merits to the Trial Court. Therefore, the Judgment and Decree passed by the 1st Appellate Court confirming the Judgment and Decree passed by the Trial Court is erroneous, incorrect for the reasons stated above and the same is required to he remanded back to the Trial Court for fresh consideration of all the issues and to give a finding whether the suit schedule properties are the co-parcenary or the absolute properties of the 1st defendant. If the suit schedule properties are the abs9lute properties of the 1st defendant then the Trial Court would be justified in holding that the suit is not maintainable for the reason that Section 118 of the Co-operative Societies Act bars filing of suit before Civil Court in which the right of the properties as contemplated under Section 70 of the Act is required to be decided by the Registrar of the Co-operative Societies and not the Civil Court. In the present case until and unless the right of the plaintiffs to the suit schedule property is decided, the question of answering the maintainability does not arise. 14. For the reasons stated above, the appeal is allowed. The Judgment and Decree passed by the Courts below i.e., the Judgment and Decree dated 05.07.2003 on the file of the Principal District Judge, Bangalore Rural District. Bangalore in R.A.No 7/2001 and the Judgment and Decree dated 2107 2000 in O.S.No.485/1994 on the file of Principal Civil Judge. Bangalore Rural District, Bangalore, are set aside. The matter is remitted back to the Trial Court for fresh consideration of all the issues that are framed in the suit and the Trial Court is directed to dispose of the matter within one year from the date of receipt of copy of this Judgment.